Editor's Letter

 

Why We're Focusing on the Wholesale Tier

September 2017
 
by Jim Gordon
 
 

The crush will be well underway when you get this issue, and you’ll be busy. But be sure to save your magazine if you don’t have time to read it right away. Please don’t pitch it into the recycling bin. This issue is a keeper.

It contains the most ambitious special report that Wines & Vines has published in many years: Distributor Market 2017, a 25-page special section that names the top 10 wine distributors and examines the current challenges in distribution from multiple angles.

Since Wines & Vines typically focuses on the production end of the wine business, why did we wade so deeply into the middle of the wine trade? Because distribution is a big, growing and ongoing challenge for thousands of our readers who own or work in wineries.

Key surveys over the past year have asked owners and winemakers: What issues are most concerning to your business? The answers were water, labor and distributor consolidation. Of those three, distributor consolidation is the one that most directly affects their bottom lines.

Not that this was a new revelation. In fact, for several years our company has been developing a data tool to help both wineries and distributors understand the many and varied state wholesale markets. Much of the information in this issue comes from what we’ve learned in compiling this tool, the Distributor Market Service. 

Our data team, Wines Vines Analytics, built the Distributor Market Service to provide wineries visibility on distributors and their portfolios. Drawing on our comprehensive winery and distributor databases, the DMS enables users to quickly analyze a state market to determine the active distributors and see their wine offerings.

The service was designed to give winery clients a better understanding of where their brands could fit into a particular state and which wholesalers might be the most interested in representing their wines.  

Grounded in that kind of data, and supplemented by old-fashioned news reporting, we think the Distributor Market 2017 will become a “franchise” issue. It’s a special report about the top U.S. wine distributor companies and the complexities of the channel itself.

It will be an indispensable guide for growing wineries of all sizes that need a better understanding of the fast-changing second tier of the traditional three-tier distribution system.

Senior editor Andrew Adams, contributing writer Ben Narasin and I did the reporting and writing based on dozens of interviews and gigabytes of data collected and crunched by our vice president of data management, Lynne Skinner, and her team at Wines Vines Analytics.

One thing we heard time and time again from wineries was that they need distributors. They find the three-tier system indispensable—even when they also may sell wine directly to consumers.

It means that even if the production tier and the wholesale tier are sometimes at odds, it’s in the best interest of both tiers to work more closely together. We hope that this issue can help to encourage that kind of cooperation.

 
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