What a Modern Wine Importer Does For the Industry
Alcohol distribution in the US is what’s called a “3-tier system” of distribution. There are tons of articles out there describing what that is and what that means. Like this one and this one. So we won’t get into detail on that here. However, the key takeaway from that is that the three-tier system was put into place to distance the consumer from the source of alcoholic beverages post-prohibition.
In itself, that system is dated and inefficient resulting in higher prices to consumers, restricted access to products, monopolization of [large] distribution, and almost impossible entry into the market for the small producer or supplier to be in the industry.
The fact that the three-tier system is designed to keep products as far away from the consumer as possible completely goes against how our current economy works and what modern consumers demand. What’s worse, it’s not designed for each tier to add value to the distribution chain. It is pure distance from the consumer.
Given all that, I say this is an exciting time to be in the industry. The market is shifting naturally to remove the “tiers”. Technology and consumer demand are leveling or even taking away the tiers to provide access and transparency to the consumer more easily. Changes are inevitable and if the pandemic taught us anything, it’s that everything can change in a minute.
The traditional perceived value of an importer in the three-tier model is purely to pay for and hold the appropriate licenses to source products beyond the US borders. Once sourced, the wine is sold to a distributor who then makes the decisions on how it is marketed, priced, and sold in each market. The importer loses control (legally speaking) even though it’s their name on the bottle label.
Maybe even worse, some importers don’t take “sourcing” too seriously. Often they’ve never seen the winery or met the winemaker. They find products they can sell fast and easily, often focusing on price over quality. Leading to a lack of understanding of what’s in the bottle and the loss of the history or story that goes along with each bottle. In the age of transparency and authenticity - this is a contradiction.
This is why we feel we are in the category of modern wine importers. Focusing on adding value to the process, we don’t feel sourcing is our only responsibility. We choose to not just be a link in the chain to keep consumers distanced from wine. We are dedicated to bringing value-added service that enables brands to find success in the market and new wines of value to consumers.
Using our software background for an analogy - it’s like how the OEM models work. One company focuses on the development of a great product. They build a better mousetrap. They then work with partners to package, add-on, position, configure and tailor that product to specific markets. That model is how the wine industry is evolving. Winemakers get to focus on what they do best - making brilliant wine. And us importers are on the hook to price, package, and tailor the offering to best fit the markets served.
Here’s the value a modern wine importer brings to the industry.
For Winemakers
Branding - How the market perceives your brand is important. This includes everything from visual branding (what does your label or bottling portray?), to pricing and packaging (else price will be how you are judged). Your importer is the key to ensuring your brand equity is maintained and your story is told consistently across markets in the US.
Price integrity - Discounting price is the easy way to win the first sale. If an importer doesn’t see your wines’ price/value equation, they will ultimately continue to discount your wines to move them out of stock.
For Distributors
Sales enablement - This includes everything your sales team needs to be effective. The usual are the POS materials like shelf talkers and tech sheets, but they should be providing things to make your team stand out from the line of reps their customers are seeing every week. Creative collateral to provide at a tasting, giveaways, or tools for consumer events, we love giving stickers to our teams to give out and have a little fun with tasting meetings. Anything goes here and they should be offering ideas and working collaboratively with you.
Marketing air cover - I’ll write more on how the wine importer is effectively a marketing agency. But in short what I mean here is the importer should be investing in marketing to build awareness and demand for the brands you’ve taken on. In some cases, this means educating and evangelizing regions (hello, Czech wine) or styles (biodynamic anyone?).
For Restaurants and Retailers
Demand generation - We invest in PPC advertising, social media marketing, and email marketing for our brands, among other lead-generating activities. We feel helping to drive sell-through is the best use of our time and investment to build loyal customers.
Education & evangelism - Whether it be a pairing dinner, a public tasting, or other wine events, your importer should be available to speak to guests, make presentations, and otherwise ensure you have a successful event. This includes creating tasting cards or other materials for the event to ensure guests are informed and entertained.
For Consumers
Education - Transparency is important, and it’s on the importer to help you know what’s in the bottle since labeling is their responsibility. They are also the closest to the winemaker to share the stories and philosophies of how the wine is made.
Consistency - If you know your importer, you likely share similar tastes in style. For example, Ahtel Wines doesn’t carry any sweet or highly oaked wines. They just aren’t our style. And if we don’t love a wine and wouldn’t drink it ourselves, we won’t sell it.
Access - There is a myriad of wines in the world that the typical American consumer has never even been exposed to because of our archaic distribution laws in the US. While that is slowly changing, it’s the importers who are scouring the world, visiting the wineries, and bringing back the wines of the world for you to enjoy. I don’t know about you, but the minute someone tells me I can’t have something, I want it. :)
The new paradigm of wine distribution not only still includes the importer, but it might also actually be a more important role in the industry than ever. Marketing, sales, and business skills are key to successfully represent winemakers, enable sales teams, drive demand, and educate a market. This ensures the right wines get into the right hands for optimum enjoyment and success at all tiers.
What are your thoughts? Did we miss key activities of the modern importer? Contact us and let us know your thoughts!