© Bevology 2015
U.S. Drinks Market:
Options for Suppliers to
Enter the American Wine
and Spirits Market
© Bevology 2015
Hope is Not a Strategy
© Bevology 2015
Model Has Changed
Suppliers
Distributors
Importers
Consumers
From To
© Bevology 2015
What Importers Want
• The right “CHEMISTRY”
• Fills an identified void in portfolio
– Brands with existing...
© Bevology 2015
Presenting Your Brand to Importers
• Company description/history
• Product description – varietals, style,...
© Bevology 2015
Read the Book
© Bevology 2015
Your Options
1. Large
National
Importer
4. Specialist
Company that
both Imports
and Distributes
3. Regiona...
© Bevology 2015
1. Large/National
Importer
© Bevology 2015
1. Large/National
Importer
Pros Cons
Existing national distribution network Small brands get lost in portf...
© Bevology 2015
2. Specialist
National Importer
© Bevology 2015
2. Specialist
National Importer
Pros Cons
Existing national distribution network Smaller brands less impor...
© Bevology 2015
3. Specialist,
Regional or Multi-
State Importer
© Bevology 2015
3. Specialist, Regional or
Multi-State Importer
Pros Cons
Smaller, more focused and nimble Limited geograp...
© Bevology 2015
4. Specialist
Company that
both Imports and
Distributes
© Bevology 2015
4. Specialist Company that
both Imports and Distributes
Pros Cons
More motivated to work with you because
...
© Bevology 2015
5. Set Up Your
Own Import
Company
© Bevology 2015
Pros Cons
100% of attention to your brand. Bear the complete cost of everything, can’t
amortize anything, ...
© Bevology 2015
6. National
Licensing, Import
and Related
Services
© Bevology 2015
6. National Licensing,
Import and Related Services
Pros Cons
Very efficient at what they do Do not do mark...
© Bevology 2015
7. Large
Distributor that
also Imports
© Bevology 2015
7. Large Distributor that also
Imports
Pros Cons
Built-in distribution network, integration Distributor is...
© Bevology 2015
8. Chain, Retailer
Exclusive Brand
73 stores, 11 states
Anakena
500 stores, 17 states, 39
retailers
© Bevology 2015
8. Chain, Retailer
Exclusive Brand
Pros Cons
“Shadow” distributor works on very low
margin, so retailer ha...
© Bevology 2015
9. Direct Import
thru Control State
© Bevology 2015
9. Direct Import thru
Control State
Pros Cons
Getting “traction” in one state can get the
interest, credib...
© Bevology 2015
10. Wine Club/E-
comm/ Flash Site
Wine Clubs E-Commerce Sites Flash Sites
© Bevology 2015
10. Wine Club/
Ecomm/
Flash Sites
Pros Cons
An option…to at least get a beachhead. Limited reach to only t...
© Bevology 2015
11. Other ideas
• How to get U.S.-based ratings and reviews. Some will work with
brands that do not have a...
© Bevology 2015
Words to the Wise
• Always get a written contract
• When exploring existing importer options,
check the im...
© Bevology 2015
US Competitions
Do not need a US importer to enter Need a US importer to enter
Ultimate Beverage Challenge...
© Bevology 2015
U.S. Market Industry Newsletters
Wine and Spirit Daily (WSD) http://www.winespiritsdaily.com/subscribe.php...
© Bevology 2015
Contact
Steve Raye
Managing Partner
Brand Action Team
1 Darling Dr.
Avon, CT 06001
860-676-7900
sraye@comc...
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Us drinks market import options for suppliers looking to enter the american wine and spirit market.

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Overview of options for wine and spirit exporters to find an import solution for their products in the U.S.

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Us drinks market import options for suppliers looking to enter the american wine and spirit market.

  1. 1. © Bevology 2015 U.S. Drinks Market: Options for Suppliers to Enter the American Wine and Spirits Market
  2. 2. © Bevology 2015 Hope is Not a Strategy
  3. 3. © Bevology 2015 Model Has Changed Suppliers Distributors Importers Consumers From To
  4. 4. © Bevology 2015 What Importers Want • The right “CHEMISTRY” • Fills an identified void in portfolio – Brands with existing US volume they can grow – New brands they feel their expertise can develop and grow – Brands that have a unique positioning • Enhances image, value and profitability (Synergy with importer’s mission) • Strengthens importer’s position within the trade • Supplier understands the U.S. Three-Tier system • Financially sound, budget to invest and support the brand.
  5. 5. © Bevology 2015 Presenting Your Brand to Importers • Company description/history • Product description – varietals, style, ranges, proposed US retail price by line/sku, and price structures • Brand point of difference/value proposition for consumer; why THIS importer should be interested in you. • Marketing materials as background • A defined target audience • Production Info • Past history of importers, distribution agreements, list of distributors/brokers of products and volumes by state • Price structure for U.S. • Marketing support budget • Samples
  6. 6. © Bevology 2015 Read the Book
  7. 7. © Bevology 2015 Your Options 1. Large National Importer 4. Specialist Company that both Imports and Distributes 3. Regional or Multi-State Importer 5. Set Up Your Own Import Company 8. Chain Retailer Exclusive Brand 9. Direct Import thru Control State 7. Large Distributor that also Imports 2. Specialist National Importer 6. Nat’l Licensing, Import and Services 10. Wine Club/ E-Comm/ Flash Site
  8. 8. © Bevology 2015 1. Large/National Importer
  9. 9. © Bevology 2015 1. Large/National Importer Pros Cons Existing national distribution network Small brands get lost in portfolio. Clout with distributors, your brand benefits from their portfolio strength Agency brand gets lower priority than owned brands. Large sales force Importer controls pricing, margins On staff marketing department, existing ad and PR agencies Internal competition for company resources Participate in their sponsored events: portfolio tastings that attract more and more important trade, press than you could reach on your own. Importer determines marketing strategy, creative, promo, POS…fits your product into their portfolio Existing business with chain accounts Set up to work with bigger suppliers, focus on big volume brands Use importer’s existing licenses Margins to winery will be lower/shared with importer.
  10. 10. © Bevology 2015 2. Specialist National Importer
  11. 11. © Bevology 2015 2. Specialist National Importer Pros Cons Existing national distribution network Smaller brands less important to distributors. Participate in their sponsored events: portfolio tastings that attract more and more important trade, press than you could reach on your own. Importer controls pricing, margins, brand priority, creative look and feel, fits your product into their portfolio Category expertise Specialization may mean limited appeal On staff marketing personnel Limited in house marketing and sales resources Existing business with chain accounts Sales management presence in multiple states limited.
  12. 12. © Bevology 2015 3. Specialist, Regional or Multi- State Importer
  13. 13. © Bevology 2015 3. Specialist, Regional or Multi-State Importer Pros Cons Smaller, more focused and nimble Limited geographic reach Get more attention/not lost in the portfolio Limited capital, credit, payment history may be a problem. Specialize in specific area (country of origin, indigenous varietals, price) Smaller/limited resources, limited capital availability, often no marketing staff, small sales staff, hire out PR on project basis. The smaller you are, the smaller the importer should be Tend to be with smaller, specialty distributors so don’t get wide off and on premise distribution. If you only make 50,000 btls, you don’t need national distribution, you need strength in a limited set of markets. Limited interest in investing in the brand, likely that the majority of marketing has to come from brand owner. If you have multiple importers, will need multiple labels …implications on inventory, compliance
  14. 14. © Bevology 2015 4. Specialist Company that both Imports and Distributes
  15. 15. © Bevology 2015 4. Specialist Company that both Imports and Distributes Pros Cons More motivated to work with you because they control two levels of margin Relatively limited sales force Focus on major markets/cities, not outlying areas. Limited geographic reach Specialize/known for something: country of origin, wine style Different importers in different states require separate labels…inventory management issues Smaller/limited resources, often no marketing staff, small sales staff, hire out PR as projects. May take lower margins at each tier because keep both. Not sustainable price structure if move to traditional importer/distributor relationship Marketing has to come from brand owner.
  16. 16. © Bevology 2015 5. Set Up Your Own Import Company
  17. 17. © Bevology 2015 Pros Cons 100% of attention to your brand. Bear the complete cost of everything, can’t amortize anything, need volume to make it work. Have complete control of everything: marketing, sales, pricing, distribution, margin, focus, message. Need people with lots of skills: marketing sales, import logistics, warehousing, which can take your eye of what you should be doing…promoting and selling. Works better for spirits than wine. Not your expertise Keep importer margin 5. Set Up Your Own Import Company
  18. 18. © Bevology 2015 6. National Licensing, Import and Related Services
  19. 19. © Bevology 2015 6. National Licensing, Import and Related Services Pros Cons Very efficient at what they do Do not do marketing. Cost savings in logistics, freight consolidation, etc. You will need either a rep in country or you’ll have to hire someone who can do the things below Only pay for services you need Need to do everything else yourself: marketing, sales planning, distributor management, marketing, inventory, pricing etc. “Incubator” distribution services in NY, NJ, CA Handle cash flow, invoicing, billbacks and other price modifications and distributor deals. Need to find/set up distribution network. Quicker market entry
  20. 20. © Bevology 2015 7. Large Distributor that also Imports
  21. 21. © Bevology 2015 7. Large Distributor that also Imports Pros Cons Built-in distribution network, integration Distributor is focused on satisfying needs of big internationals like Diageo, Bacardi, Pernod. You will never be a priority. Existing sales force Not in the brand building business Efficiencies and margins of having combined functions of importer and distributor Can’t/don’t work with multi-state chains on or off premise if have operations outside their markets. May get more attention here than with a large national importer. Difficult to get distributors in states where this distributor does not operate. Dist’s are not interested in helping competitive distributors make money Primary business is distribution and sales Not their primary business
  22. 22. © Bevology 2015 8. Chain, Retailer Exclusive Brand 73 stores, 11 states Anakena 500 stores, 17 states, 39 retailers
  23. 23. © Bevology 2015 8. Chain, Retailer Exclusive Brand Pros Cons “Shadow” distributor works on very low margin, so retailer has more room to price aggressively Extra margin does not usually accrue to supplier Establish distribution in multiple states quickly Limited to selling through only that retailer or retailer group Minimal marketing costs (Don’t need to fund distributor incentives, consumer awareness programs) Limited opportunity to grow brand outside dedicated distribution, no on premise business. Immediate volume with first order Business limited to the states in which the retailer operates. In Total Wine example, no opportunity for sales in NY or IL.
  24. 24. © Bevology 2015 9. Direct Import thru Control State
  25. 25. © Bevology 2015 9. Direct Import thru Control State Pros Cons Getting “traction” in one state can get the interest, credibility with other import options. Only works in one state An experienced broker with relationships in that specific state can facilitate. Broker generally only knows that one state. Not a scalable strategy.
  26. 26. © Bevology 2015 10. Wine Club/E- comm/ Flash Site Wine Clubs E-Commerce Sites Flash Sites
  27. 27. © Bevology 2015 10. Wine Club/ Ecomm/ Flash Sites Pros Cons An option…to at least get a beachhead. Limited reach to only their customer base Low support costs for supplier. Retailer assumes burden of marketing, securing customers. No real brand building for the long term. Can represent good volume via a simple sales, shipping, inventory, labeling process to a single customer. Every sale involves a DTC shipping cost to retailer, meaning a lower margin to supplier. E-commerce allows you sell in states even where you don’t have a distributor. E-commerce represents limited volume potential…now. Off premise solution only
  28. 28. © Bevology 2015 11. Other ideas • How to get U.S.-based ratings and reviews. Some will work with brands that do not have a current importer. (Great way to legally import samples) – BTI – Ultimate wine/spirit competition – New York International Wine Competition. • US trade shows: – WSWA/Beverage Alcohol Forum, Nightclub and Bar Show, Manhattan Cocktail Classic, Holiday Buying Show, Tales of the Cocktail. (updated list available at https://www.linkedin.com/pulse/upcoming-wine-spirits- events-competitions-steve-raye?trk=mp-author-card ) • Data on U.S. market, brands, volumes, share, trends: Beverage Information Group Handbooks for Wine, Liquor, Beer, On-premise; M. Shanken Impact Databank.
  29. 29. © Bevology 2015 Words to the Wise • Always get a written contract • When exploring existing importer options, check the importer’s: – credit history – States in distribution network – Litigation history
  30. 30. © Bevology 2015 US Competitions Do not need a US importer to enter Need a US importer to enter Ultimate Beverage Challenge Beverage Testing Institute Wine Enthusiast’s Importer Connection MicroLiquor Awards NY International Spirit Awards Indie Spirits Competition San Francisco International Wine Comp. Spirits International Prestige Award (SIP)
  31. 31. © Bevology 2015 U.S. Market Industry Newsletters Wine and Spirit Daily (WSD) http://www.winespiritsdaily.com/subscribe.php ($380/year) Shanken News Daily http://newsletters.shankennewsdaily.com/ Industry News Update Also known as “Mark Brown’s Newsletter” or “Buffalo Trace”. Email mbrown@buffalotrace.com to be put on the mailing list. Wine Business Daily News https://secure.winebusiness.com/u/index.cfm?go=ul &re=subscribe&sourceid=1000002&pubid=3&ref=rn _news&listingid= Modern Distillery Age www.distilleryage.com WSWA Smartbrief https://www2.smartbrief.com/signupSystem/subscri be.action?pageSequence=1&briefName=wswa&utm _source=brief Wine Industry Insight http://wineindustryinsight.com/ Wine Industry Advisor Afternoon Brief (Published by Wine Industry Network) http://www.wineindustryadvisor.com Just-Drinks http://www.just-drinks.com/ (Subscription fee)
  32. 32. © Bevology 2015 Contact Steve Raye Managing Partner Brand Action Team 1 Darling Dr. Avon, CT 06001 860-676-7900 sraye@comcast.net www.TheBrandActionTeam.com www.BATChat.net (blog)

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