Things have changed quite a bit for me since I started this blog—the change in employment being the most obvious, pervasive and blog-worthy. I was, and still am, excited to work in a completely different kind of wine retail environment because, in part, it offers me the opportunity to gain understanding of operating on a larger scale than I have been familiar with in this industry. These last few months have been a period of observation and assessment of the differences in the thought processes involved between a tiny, urban, neighborhood shop and a suburban destination store three-times its size. It has been an eye-opening experience that offers new revelations and challenges every day.
Working in a big, largely national-brand focused store such as I am now, I see several elements that I could fairly easily ignore or kick to the curb in the autonomous boutique environment but are part of the accepted, daily routine here. However, most of these practices of the American three-tier wine production/import & distribution/retail industry are outdated constructs and generate unnecessary stress on both sides of the retail counter. I must note that the distributor representatives I refer to here are, by-and-large, good people trying to make a living operating within the bounds of an ugly system within which they have no real power. (Most of the following are more-or-less third-party observations as I deal almost exclusively with the smaller distributors and small, family and/or boutique wines and don’t directly interact with the reps for the large distributors.)
- “You are not special. You are not exceptional.”: There is simply too much wine in the market. The number of different labels (note that I did not say, “wines”) available in the US today falls somewhere between 20,000 and 30,000. The store I buy for currently stocks around 10% of those (a ridiculous number, really). The number of available wines grows every day. The store’s available square footage stays roughly the same. I guess that I taste about 50 wines (as well as five spirits and five beers) a week on average. They come from all over the globe, from various provenances, from producers of all sizes and philosophies. Wine requires both a physical and intellectual buy-in at all levels.
Your task: convince me to buy your product so that I can sell it to my customers.
It’s OK. I’m not going anywhere. I’ll wait for your pitch while you consider these questions:
What makes the wine you want to sell to me one that I (and my customers) should even consider?
Does your wine differ sufficiently from what I already stock to justify its presence on my shelf?
My answer lies in that I am not going to answer those questions for you. If you have never considered these questions, or have been fed standardized answers by your employer, at least you can be comfortable knowing that you are in vast the majority of your peers.
- “Cold equals sold”: An old axiom to be sure, but it’s true and that cooler is a battleground—between one distrep and another and between many distreps and me. This, perhaps, is a personal pet-peeve of mine, but it speaks to larger issues of entitlement and courtesy as well as being a symptom of the ill of the three-tier system.
It’s the store’s cooler—not the distributor’s. We purchased it—it is our property and it is within our property. The cooler would still exist if the distributor ceased to. Therefore, we who operate the store get to decide what goes in and what does not. The products we deem worthy of the cooler are a mixture of mostly high-turn products that we should have chilled to sate regular customers and a handful of products we feel need the extra push for whatever reason (we owe no one any explanation). The space in those coolers is extremely finite. If a rep wants consideration for a placement there she should ask us…politely… as a professional courtesy and show of general good-will. She should not just pull stuff out and put her stuff in. That act, in effect, indicates that the rep thinks we’re too stupid to notice and/or that she is too disrespectful to care if we do. This is not a winning tactic for generating more sales.
Last week, one rep (of a few with this complaint) who was upset that I continually pulled his wine from the cooler approached the store’s GM and said something to the effect of, “based on sales volume, you owe me X amount of cooler space”. He already had about 15% of the cooler space by happenstance and the products he wanted to place in the cooler sell exceptionally well whether they are cold or not. He has facings and floorspace and, as a result, a healthy chunk of his commission check. That is the beginning and end of our transactional relationship—we do not owe him anything else. Any other considerations are favors or acts of kindness.The lesson: simply be courteous and we may look favorably upon you the next time you make any request.
I believe that this discourteous, cut-throat behavior is a direct result of the pressures inherent in the three-tier system by the large producers placed upon the distributors to make placements and sell, sell, sell. Some sales reps seem to operate in abject fear of losing their jobs through perceived under-performance and will do anything to assure job security. There is no way that this is healthy or sustainable.
- “Rats leaving a sinking ship”: The competition for facings and square-footage between the big-player distributor reps is ridiculous and cut-throat at this level. Mostly, they push, elbow, and trample through a crowd of their peers in order to sell, essentially, hundreds of different labels of virtually (and, at times, literally) the same uninspired excess juice while I long for a lounge chair, some chips, and a beer to sit back and smirk at the inanity of it all. The silly and over-the-top wrangling for a fleeting 20-case drop for a front-of-store display of focus brand A’s stuff that no one really wants at a virtual give-away discount is often painful to watch. Nearly every sales rep recognizes that it is an unsustainable strategy to push untenable quantities of product that isn’t particularly good on the same accounts every month.
So why do they continue to do it? Because daddy’s gotta bring home the bacon and there is little incentive to fight an engrained system if it could cost him his job. So, it persists on the hope that, next month, another store will pick up the slack while this store is still trying to sell through the mountain of high-margin but low-turn garbage he sold to us so he could have at least one month this quarter up against last year and, thereby, keep his territory or his job.
How is this a healthy or sustainable business practice?!? No industry would accept this method once recognized and have yet to understand why it persists in this one. Unfortunately, for now, it starts at the top with the big, multinational wine conglomerates (Gallo, Constellation, The Wine Group, Treasury) threatening to pull their lines from distributors if they don’t sell to meet unrealistic quotas. As we speak, those companies are starting to slip, divesting and reigning-in their focus and it’s not due to a weakened economy.
In the rapidly changing wine market (change borne primarily on interconnectedness and open availability of information—a topic I’ll certainly cover in a later post), large producers and distributors who continue this practice are the “sinking ship” and their sales representatives are the doomed “rats”. The hull cannot sustain the pressure and will breach as the largest wine-drinking demographic in American history takes hold during the period of the greatest open dissemination of information in human history. The inconsequential wines of zero character, fabricated in a lab and driven by marketing to counter qualitative failings that are the bread-and-butter of these producers can not subsist in this new environment. Information and opinion sharing will, ultimately, be the undoing of this model.
This is just a handful of the more important things I have picked up on—there are many others. I understood they existed, but was not aware of the pervasiveness until recently.
For me, the same basic ideology has always been true and, I believe, is on the cusp of becoming the universally prevailing ideology: Wine is personal. We put it into our bodies—it doesn’t get more personal than that. Wine involves all of the senses and has the potential to engage us or even envelop us. This is an incredible power—one that is all too frequently abused.
As more information is spread via more accessible means every day, individual concern over what we consume and its personal impact on us begins to become universal. Ex.: I post a wine review on my blog. A friend picks up on it and buys the wine. She loves it and suggests it to hundreds of friends via Facebook. Several of those friends do exactly the same, ad infinitum. This happens every day hundreds of times over. But it must be real. We may not be all that smart as a populace and we are certainly susceptible to suggestion, but we also resent being sold to, the wool being pulled over our eyes. We quickly recognize when a suggestion is not genuine, when there is a shill in our midst. When such an affront is recognized, the punishment is swift and decisive and a label fades.
There is a rate of diminishing returns on continually using the same practices to try to sell us things we don’t want. Super-large producers are just now beginning to see hints of the effects of this but I do not believe they recognize the “why” or the measure the considerable threat as yet. A broad philosophical adjustment is required for these companies to survive in any form. The three-tier system will persist, with tweaks, largely the same as it does now. The change will, ultimately, be in its players.
I have strongly held theories on where this is headed. Feel free to sit with me at a wine bar somewhere and we’ll discuss it over a bottle.