Predictions For Direct Shipping of Wine in 2009
I think the development of the direct shipping channel is still in its early stages. I think a great number of changes will come to this channel. Issues of access, technology, legality and logistics are still in flux. The profit upside for committed and smart players in the business of direct shipping of wine is pretty big, be they wineries, logistics companies, service providers or tech companies. And I think that 2009 will be an important year in the development of this channel.
With that said, here are my predictions for what will happen in 2009 around the issue of the direct shipping of wine:
1. Michigan, Illinois, New Mexico, Iowa, Florida, Massachusetts, New Jersey and Washington State will all alter their legal posture toward direct shipment of wine.
2. A major expose will be written in a large daily newspaper about the excessive and inappropriate control wine distributors have over consumer access to wine.
3. At least 2 Circuit Courts of Appeal will rule that states may not discriminate against out-of-state wine retailers where the direct shipment of wine is concerned.
4. The Supreme Court will not accept a case in 2009 regarding wine shipments
5. Consumers will begin to become much more vocal about their desire to have access to wine via direct shipment and will become more involved in the political process that revolves around direct shipments of wine.
6. Importers will begin to question the wisdom and legality of their exclusion from the direct shipment channel
7. The entire online wine shipping sector will find a higher profile as more, larger entities finally enter the market and begin marketing wine nationally.
8. "Manager of Online Marketing and Hospitality" will be a position that wineries across the country begin to aggressively recruit for, bringing into the wine industry individuals previously unassociated with wine.
9. Wholesalers will make another set of creative and last ditched efforts to impose self-serving regulations on the direct shipment of wine in states where regulations are set to change.
10. By year's end, the issue of Winery Self Distribution will become a critical issue for wineries in numerous states, leading to more lawsuits and severe political battles.
11. FERMENTATION will publish an editorial condemning the cynical, self-serving and anti-consumer elements of the wholesale tier.
Nice post Tom…This issue hurts my business more than most as custom labeled wine simply cannot be handled via wholesalers/distributors. Customers (or should I say potential customers) in states like New Jersey of Pennsylvania, among many others, simply cannot access our product. Surely this is unconstitutional. You do an awesome job Tom…keep it up.
12. Fermentation will issue a report on wine in grocery stores in New York State.
The governor plans to put the idea into his 2009 budget, and the fight has already begun…
Thanks for raising that point, Thomas. Let’s hope it passes through. Tom, thank you for the exhaustive research you’ve put into these issues. This blog has kept me most informed regarding this news and I look forward to future posts on the evolving nature of these events.
Regarding #11…just ONE?? Ahh…Christmas early!
Thanks Tom After nearly opening a vein after reading yesterday’s blog this one was down right positive by comparison.
Regarding #8, I think the position will be Director of Online Sales and Marketing.
And I think this person, if well connected and savvy could move more cases than the Director of National Accounts for many wineries and importers. I agree this will become a key position soon for forward thinking wine companies.
10.1 – I hope this includes Virginia. Although we currently have a solution here in the Commonwealth to help smaller wineries, I think having self distribution back would be a big boost to the industry.
cheers
One more prediction. In the luxury category wineries will find that their direct customers are more loyal and dependable than their wholesalers. This is already happening as wholesalers are making buying decisions on what they perceive they can sell in the future, while direct customers continue to make decisions based on what they want to drink.
New Mexico could go in the opposite direction as we will have a staunch pro exciese tax anti-alcohol govenoress named Diane Denish. Add in the fact that Governor Richardson soon to be your Commerce Secretary let a shipper permit bill die on his desk, based on the recomendation of his appointed Alcohol and Gaming Director Gary Tomada. Note: New Mexico is one of the last reciprocity? states.
Tom: Excellent post. Beyond wine sales and consumer price impacts, the distribution lobby also impacts viability of small wineries. The Alabama alcohol distribution lobby has stymied a Boutique Winery industry in that state. After 4-5 years of lobbying their state legislature for small winery relief from the 3-tire alcohol distribution network, the President of the Alabama Wineries and Grape Growers Association, Alan Norden, advised his and many wineries simply gave up and sold off their equipment. They simply couldn’t break through the legislative influence maintained by the alcohol distribution lobby’s dollars.