Before You Talk To a Wine PR Professional…

Winetelephone It is this time of year when I, and other independent PR people, find themselves speaking to a variety of potential clients who are exploring the idea of engaging a public relations/communications professional for the new year. Inevitably, the very first question that I ask these folks and that must be answered is this:

"How do you currently sell your wine and how do you want to sell your wine?"

In general this is a question of percentages. What percent of your wine is currently sold direct to the consumer? What percent is sold direct to the retailer or restaurant? What percent is sold to wholesalers? Does this breakdown satisfy you?

The reason this is the first question that has to be answered by wineries considering a new, updated or augmented marketing approach is that it will determine if they are embarking on a strategy to support a transition or a strategy to support an ongoing distribution approach.

But here's something that won't surprise anyone: In almost every single case, the winery that is talking to me tells me they want to increase their direct to consumer sales. And those who don't say this admit they want to decrease their sales to distributors.

This shouldn't surprise anyone because when a winery sells directly to consumers they tend to get 100% to 85% of their stated suggested retail price.  But when they sell to distributors they almost never get more than 50% of their stated retail price. This isn't because their stated retail price is an inflated number that has no relationship to the value of their wine. It's because wholesalers and distributors have the unearned leverage to ask this price due to the welfare they receive from the state in the form of a monopoly on distribution in most states. Since they are the only legal avenue to reach retailers and restaurants in most states, they can charge fees that far outweigh the value they provide.

So, here are some generalities that result from the expectations and strategies I might be told by prospective clients:

"I want to sell everything direct".
Then we'll be employing more intensive direct mail, social media, public event and tasting room-based strategies.

"I want to sell 50% through the three tier system into about 25 states via wholesalers"
Then we'll be employing more secondary market media communications

"I want to sell more directly to retail and restaurant accounts in only a few states"
Then we'll be employing more in-market media communications.

The point of course is that the kind of distribution a winery either has or wants dictates in large part the kind of public relations and communications projects they undertake. Wineries should know the answer this question before they talk to me or any other PR professional

5 Responses

  1. Joe - January 5, 2010

    Makes sense to me. I need to have an idea of what the sales side of our organization wants to accomplish before I can write out the supporting marketing plan.

  2. Marcia - January 5, 2010

    All too true. And for many, the choice is already made by the System. If you can’t picked up for distribution due to size and other reasons, then that leaves DTC, restaurants and smaller retailers. Decision made!
    Nice graphic. Does the wine go in one ear and out the other?

  3. Wally - January 6, 2010

    As a retailer, I’ve always looked at wineries and distributors as partners. When the winery becomes my competion, it’s no longer in my best interest to represent them in the store. The choice, as I see it is three tier or V. Sattui.

  4. Wally - January 6, 2010

    As a retailer, I’ve always viewed wineries and distributors as partners. When a winery makes the conscious choice to become my competitor it is no longer in my best interest to represent them in the store. Three tier or V. Sattui, a winery doesn’t get to have it both ways.

  5. Wally - January 6, 2010

    Apolgies. Would you delete the first one?

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