The beverage alcohol industry has several large distributors that represent the majority of wineries in the United States. With such muscle power at the top of the pyramid, how can smaller distributors survive?
Tweet: How small distributors can thrive in a competitive market
In a competitive market, it often seems there are no advantages to being a smaller and less-known organization. However, the size of your organization will not break your success; a small mindset will. Instead of being intimidated by larger distributors, celebrate what makes your organization different. What can your smaller organization accomplish that a larger distributor can’t?
Utilize your size to fit the space
Celebrating what you can do allows you to focus on the market specific to your organization’s current size. For some, this may mean narrowing your efforts to local stores and small restaurants where you can offer better margins. Smaller wine and spirits suppliers often prefer to use a distributor that will guarantee their placement in smaller shops rather than rely on a larger one that may not even guarantee a place on their shelves.
Recognize what makes you unique
Smaller stores thrive off of exclusive products. Matt Robertson, a B2B salesperson for specialty food brands, believes that “independent stores base their business on the uniqueness of their selection. If you start selling to larger retailers through a distributor, or if your distributor places you in every store in their territory, your independent stores may start dropping you in favor of your harder-to-find competitor.”
If you want to stand out, try being more selective with the brands that you choose to represent. This way, those hard to find brands that generate a cult following will naturally associate you with them. In a Wines & Vines article, Erle Martin, executive vice president-wholesale west for the Winebow Group emphasizes the importance of being selective with representation. “I can’t comment on the specifics, but the proportion of brands we accept compared to those presented is getting smaller with each passing day. We are very disciplined with regard to which brands we elect to represent, and the choices feel virtually endless.”
Provide quality over quantity
Earning the trust of your buyers begins with ensuring quality. For a small distributor, your job is to manage the products that your producers produce. If their numbers exceed what you can handle, the products become unmanageable and naturally, the quality degrades.
Eric Stewart, president of Vanguard Wines, shares in a recent Wine Business Monthly article the importance of quality. He says, “We are very focused on the types of wineries and vineyards and customers where we can be meaningful to the wine program and their businesses. We are 100 percent focused on quality. A domestic winery producing 750,000 cases is just too big for us.” By keeping your numbers small, you can focus on ensuring top quality for what you will be distributing.
How can analytics help?
As a smaller distributor, how do you measure success and shortcomings? In a competitive market with larger key players, you should always be curious as to how you’re performing. With an analytics tool that is perfectly suited for your organization, you will be able to identify key metrics and overcome common challenges giving you the confidence to make your next move.
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