D AVID AVID,, GOLIATH GOLIATH,, OR DO IT YOURSELF? C HOOSING THE RIGHT SIZED DISTRIBUTOR WRITTEN BY GEORGE B. CATALLO
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irst and foremost, every locale is different. You will have dif ferent rules, laws, and options to you than I am going to be covering. My paradigm is that of someone in New York State, where the indus try is heavily regulated by the state but independently operating. Wine and spirits are sold exclusively in independent specialty shops; fran chises are not technically allowed. Beer and only beer is in grocery stores. In my day-to-day function, I work in one of these specialty shops. We work with somewhere between 30 and 40 different im porters and distributors of varying sizes and focuses, and over my nearly a decade of experience in my role I have become intimate ly familiar with the practices, strengths, and weaknesses of each type of wholesaler. You have a great product, you’ve grown enough and have the supply to sell beyond your tasting room. Who you gonna call? The answer to that question is very dependent on what you want for yourself, where you are as a brand, and how you want to move forward with your growth. My aim is not to answer that question for you but to give you a greater perspective before deciding.
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BIG DISTRIBUTOR Pros: The great thing about a top-of-the-foodchain distributor is that they literally own the marketplace. There won't be a single account in your desired distribution area that doesn’t do business with them, because they need to. A store can’t just not carry Jack Daniel’s and succeed, like it or not. Not only will they have the most open accounts per capita, their area of operation will be the largest as well, potentially spanning numerous states or regions. These distributors will also have dedicated sales forces that focus only on off-premise or on-premise accounts to better serve those different ends of the industry. They have the greatest reach, deepest pockets, and largest sales force ready to work for you. Not to mention they have trucks and the logistics to ship. Cons: If you are too small, you will never be a priority for the company or their sales representatives. Goals and incentives are placed on items from their largest suppliers and those are the items that get the most attention. As much as they work for you, they work far more for the ones who pay their mortgages. Your products will just be another line in the book that can often be glossed right over. Little fish, big pond. A really big pond, full of whales and sharks. And in most circumstances a good chunk of your profit margin is given up to them because they obviously don’t work for free. How to make it work: Despite the daunting nature of the cons, there is a huge opportunity in going with a larger distributor. The thing is, you’ll have to do a lot of the work yourself. It is of paramount importance that you have a brand representative who is able to work in the field for a significant amount of time. This person will have to work both in tandem with, and independently of, the distributor’s sales force. Ride-alongs are a useful tool to focus your brand with in-the field-support to the distributor’s salesperson. These ride-alongs are great for both new accounts being opened, as well as revisiting loyal accounts with first looks at new products or exclusive single barrel offerings. This brand representative will also have to do numerous events and tastings to drive brand awareness. Customers looking for your brand are your best bet to get stores to take in your products from the distributor.
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