Beverage Samples - Selling and Marketing Your Supplier's Wines

(And craft beers and spirits too!)

A primer for small- and medium-size distributors: “Choices? Yes, we have choices alright!” 

Today, using Google and Bing, I entered the search argument, “How many wine choices are available in the US?”  Google gave me about 15,800,000 entries (not wine choices).  Bing said “16,500,000.”

Before continuing, I should tell you that I did have an approximate number already in mind since we at OnTrak Software have small, medium and large wine distributors as customers.  The largest number I have seen in terms of unique wine stock keeping units (SKU’s) is about 48,000.

Because wine choices seem to endlessly multiply, it is challenging to find any two data sources that agree on the number of actual wine SKU’s in the US.

• One 2008 “wine expert” report indicated over 32,000 wine choices, and 20,000 of those were imports
• Another research firm estimates that US wine consumption will exceed 871,000,000 gallons by 2013 (about $34 billion); and that US wine consumption will surpass France’s in 2012.
• Wine Spectator identifies the availability of over 7,000 individual brand names
• Robert Mondavi estimated, in 2007, some 60,000 wine choices were available to the American wine consumer 

Since I was on a roll, I checked out several other wine professionals’ web posts.

According to wine variety expert Steve de Long in “Vino Diversity” (www.vinodiversity.com/wine-variety-table.html), there are over 10,000 distinct varieties of grapes!  In addition, many new varietals are being produced (and a few are dying out) all the time; meaning the true number of varieties of unique wine choices is likely unknowable. 

“Without promotion something terrible happens.... Nothing!” — P.T. Barnum

With the vast number of wine brands and varieties already on the market; and with more becoming available every day, what can a small- or medium-size wine distributor do to get their wines noticed?

Large wine suppliers have the budgets for both national advertising and local promotions.  Most small- to medium-size wine distributors don’t have access to suppliers who provide generous marketing co-op programs or allowances.  A supplier who sells less than 25,000 cases of wine can’t compensate their wholesale distribution channel for the expenses involved with creating custom wine menus, expensive ads, or TV advertising.

Fortunately for these suppliers and distributors there are still low cost ways to promote the thousands of choices of wonderful relatively small case volume wines.  The most cost-effective marketing at-retail methods are:

1. The placement of bottle neckers or other inexpensive point-of-sales (POS) signage materials

2. Starting or expanding product sampling efforts - Something we call liquid POS

Smaller Wine Brands Lead Growth in U.S.

Smaller wine brands are expected to significantly outperform their much bigger counterparts.  So small suppliers and distributors are hardly a lost cause — on the contrary, many of these “smaller” brands represent growth.

According to the U.S. Wine Market: Impact Databank Review and Forecast:

“The weak global economy has slowed wine-industry growth considerably, but total wine consumption is projected to once again surpass 300 million cases.  Smaller brands will continue to drive the U.S. market.  The hottest segment, comprising the 118 brands that sold between 100,000 and 250,000 cases, surged 8.2 percent last year.”

Solutions for small- to medium size distributors

For many small- and medium-size distributors and suppliers, the lack of a sample tracking and reporting tool makes sampling, although invaluable, more expensive than they would like.  Lack of control over how many customers are sampled per bottle or the results of the sampling, are two areas that increase costs and defeat the benefits of good sampling.  Inside-industry humor suggests that distributor’s wine reps have the best wine cellars in town.  A story fostered by the historic lack of wine sample management tools.

One small wine distributor (20 reps, and less than 2,000 SKU’s) recently shared that he could add up to 15% to his bottom line if he had a way to track and manage his wine sampling program.  Fortunately, there are software tools that do manage and measure the entire wine sampling process — Starting with sample inventory requests; tracking rep accountability; and concluding with timely and auditable supplier requests for sample rebate allowances.  These tools provide the both the distributors and the supplier with valuable product survey information to help drive market growth.

— Mark Fullerton