Something New is Demanded for Wine Distribution

Posted by Tom Wark on Jan 18, 2007

News is out that the MKF Research Study on the American Wine Industry demonstrates that wine and grapes contribute more than $162 Billion to the American economy.

Pretty staggering!

There is so much interesting information in this report it’s hard to really talk about it all. So I want to focus on one piece of interesting information:

Between 2000 and 2005 the number of wineries in the United States increase from 2,904 to 4,929: A 70% INCREASE in the number of wineries in the United States.

70 PERCENT!!!

There is no distribution system or company or set of companies anywhere in any of the states that can offer all the wines from all these wineries to the folks in those states. It simply cannot be done. Furthermore, no set of retailers in any particular state can offer that state access to all the wines that are produced from the 4,929 wineries across the country.

Wait…I misspoke..  There is in fact a distribution system that allows anyone anywhere to have access to all these wines: it’s called direct sales.

Yet, across the country there are some very well-healed folks in the wine business who know they can’t offer all these wines and at the same time telling regulators that consumers have no need to have access to all these wines, whether the consumer wants to find a retailer or the winery to sell it to them direct.

Thank God we have wholesalers looking out for the interests of consumers. Thank God wholesalers are there to tell consumers what they need.

When you take together all the wineries and all the retailers willing to sell direct, and you combine them with search engine technology, what you get is an amazing distribution system you can imagine. It’s a distribution system that puts the power in the hands of the consumer, creates amazing opportunity for progressive retailers and smart wineries, provides huge opportunity for age verification services, likely increased the potential tax revenue for states, and, in the end, creates the perfect model of distribution for the 21st century….not the early 20th century.

The vast majority of wine sold in the United States comes from a relatively few number of wineries, distributed by wholesalers. Without the distributors to get these popular wines to market, we’d have no ready access to wine at all. So, no worries. The wholesalers aren’t going anywhere.

However, it is time to consider major changes to the wine distribution system in America. We nee a new system that opens up the 4,929 wineries to consumers across the country, whether they buy these wines at local stores, from on-line retailers or from the wineries themselves. We need to assure that consumer choice is not blocked by unfair, discriminatory and monopolistic regulations meant to enrich a few and shut out the many.