In case you slept through the latest happenings, we have good news and bad news. Good news is that Southern-Glazers is not in the latest merger news. On the other hand, your distribution options in California just decreased, as the Winebow Group has acquired the Henry Wine Group.
This consolidation is on pace to accelerate, leaving fewer and fewer route-to-market options for small, mid, and even reasonably large scale brands. As well, for those brands in these portfolios, the post merger transition is a solid 3-5 years, where sales tend to tank as new priorities and mandates are set, and teams are shaken up. This is a fact, and not theory. From logistical to personnel challenges, at s minimum, focus is challenged and mostly lost as the new reality for the merged entity takes shape.
For imported brands, the continued distribution consolidation means that importers are less confident in managing and maintaining their portfolios with distribution partners. Importers will look at their overall portfolio performance, and as distributors will only allow for a few priorities, many brands will fall off the cliff. This is easily seen in the tepid and infrequent PO's that have taken a downturn.
It is not possible to manage a brand via an importer, nor is it plausible to believe that a distributor will randomly take out a wine that is not programmed and managed. This can't be done from thousands of miles away, as emails and calls will be mostly unanswered. For domestic brands there is the opportunity to sell direct, however to be really successful, it requires a serious and sophisticated marketing approach. Not the comfort zone of the wine sector, as per previous article.
FMG was created to provide a platform of affordable brand management and sales support to wine and spirits companies looking to accelerate and expand their current sales exposure within their import and distribution networks. As day-to-day market representatives with an integrated marketing communication platform, FMG provides brands with market insight, sales support and execution.
To have a knowledgable sales person working to manage your distribution and sales is critical. At FMG, we have a great team and a cost effective solution to help you manage and grow your U.S. business.
About the Author: FMG's CEO Monika Elling started her career in New York's advertising and publishing sector, which led to nearly a decade of international trade and investment promotion activity. She entered the wine and spirits industry in 2000, and has spent the last 15 years on the supply, import and wholesale sides of the business, lastly as PR Director of the Lauber Imports Division of Southern Wines and Spirits. She is also a leader at the forefront of the utilization of Social and Digital Media to drive brand value for her clients in the Wine & Spirits sector.