For independently owned and operated wine producers, pitching labels to distributors in new markets can be exasperating. Distributors are offered hundreds of SKUs every week and getting a distributor to even consider your brand is often a tough task. When you finally land a meeting with a buyer after countless hours of emails and cold calls, you might find your brands rejected anyway, leaving you to start all over again.
This is the reality of the competitive US drinks industry. However, knowing how to position your brands and understanding what distributors need from you will make things easier.
Here are the five things you need to have in place before you pitch to a US wine distributor.
A unique selling point
Before you contact a distributor, get to know their portfolio and figure out how your brands will fit in their overall business plan. Distributors are looking for new products that follow developing trends or address a hole in their range. Once you know the company’s profile, approach the distributor by presenting your brand as a solution to one of the challenges they face in their everyday operations. Don’t use a ‘copy-and-paste’ method – personalise each contact and use specific details that show you understand their company’s profile.
Remember that every distributor selects the majority of their portfolio at specific price points. If you are importing exclusive, low volume, limited vintage wines that will only hit retail shelves at the above $20.00 category, make sure you are contacting distributors that specialise in boutique wines. Furthermore, make sure the retail accounts they service are a good fit for your labels. If you land a distributor who specialises in chain accounts, your labels might end up lost at the back of their warehouse or disappear amongst the competition at grocery stores. The reality is that distributors are in the business of making money and, generally speaking, are looking for a margin of at least 25%. Remember, any potential partner will be looking for monetary motivation to take on your brands.
Talk with your target distributor’s key retail accounts prior to pitching your brand. Your goal is to generate interest from them, to prove that you can penetrate the market. This way, you can you’re your distributor that there is already market demand for your products. You can do this by leveraging recommendations from successful retail partnerships in other territories, bringing in promotional teams to generate consumer interest in their markets, or showcasing your retail support programs (like in-store tastings, shelf talkers, retailer incentive programs, etc.) that you have customized to their accounts.
Having an exceptional product in quality packaging will open the door to a distributor, but it will take incentives to close the deal. You need to get your wines flying off the shelf, which you can encourage by offering case discounts and distributor incentive programs that both reward your distributor representatives while developing a long term growth strategy for your labels. A good approach is to structure your reward systems in such a way that tracks your distributor representative’s case depletion growth year-over-year rather than rewarding new accounts. This type of program ensures your distributor representatives focus on increasing sales, as well as growing your geographical footprint.
Finally, you can’t expect to leave everything in the hands of your distributor – you also have to be dedicated to building your new market. Show your distributor an agenda for the programs you have planned for your brands, as it’s a great way to demonstrate your devotion to their territory. Develop a PowerPoint presentation that clearly outlines how the budget allotted to marketing campaigns will be used at both the trade and consumer level. Outlining your in-store promotions, discount neck talkers, merchandising, event sponsorship and trade show attendance is a requisite for a sure-win distributor pitch.
There are no shortcuts to landing the right distributor. Although it’s a lot of work, thinking through the marketing and strategy will also help you to draft a better deal when you do find a distributor.
Sid Patel, CEO and founder, Beverage Trade Network, which organises the USA Trade Tasting.
USA Trade Tasting (USATT) (link is external) is an annual specialist trade tasting and business conference that promotes sustainable growth in the independent beverage industry by helping international boutique wineries, craft breweries, and distilleries connect with importers, distributors, and retailers. Find out more about how you can participate. (link is external)
FONT: Meininger’s Wine Business International is a media partner of the USA Trade Tasting.