One of the highlights of the U.S. Drinks Conference was the distributor panel moderated by Ted Roman, EVP of William Grant, with panelists Kevin Fennessey, CMO of Southern Wine and Spirits; Efren Puente, VP of Marketing at Charmer Sunbelt; Bob Hendrickson, President of RNDC, and Jeffrey Altschuler, President of Allied Beverages.
Here are the key takeaways:
· There was general agreement and recognition that entrepreneurs are the ones driving innovation, not the major multinationals, so distributors have to be open to new ideas that may come from people outside the industry. industry outsiders need to bring in folks with industry experience for credibility and practical advice.
· For brands trying to pitch a wholesaler to take their products:
o Primary question you’ll get asked: “Is the proposition unique, does it fill a new niche distributor does not have a current entry in”. If the answer is yes, then follow ups will be “do you have industry experience or are you working with someone who does?”, “Is the marketing plan complete and comprehensive, not relying on one gimmick?”, “Do you have sales management people with industry experience, and do you also have street sales people (brand ambassadors/market managers) with industry experience, trained, on the ground, and supported with a good budget?”,
o Come to the distributor with the flexibility that allows them to help shape the idea /be willing to listen to and respond to distributor advice
o Midcourse corrections need to be anticipated…you will NOT get it right from the beginning, probably won’t even get it close
o Have we done business with this person or company before…wholesalers will always take a meeting from people we have worked with
o Ask for one market, not the whole system. You need to prove your concept, and accept the fact that however well planned and executed, you’ll learn and adjust. It’s unlikely you’d get more than one or two markets anyway, asking for the whole system is naïve at best and impractical and probably not executable by you at worst.
o The bigger you go the harder it is to see results and make changes
o FOCUS, FOCUS, FOCUS Stay focused on a limited number of accounts, don’t do promo in one and then move on.
o Do not pipeline volume…it may generate a big number at first, but it will hurt you in the long term…distribution is just the first step; customer and retailer reorders are what the distributor wants to see.
o The best way to expand in a given wholesaler’s network is to have a testimonial from a state GM. Prove it works in our system, “works” being defined as repeat orders at retail and on premise.
· Chocovine is a new product that has surprised everyone…It may have received a smirk in the first presentations to the importer, but the astonishing success it has had reinforces the point that a new idea that connects with consumers, and fills a new niche, has potential.
· Local market themes and approach will be much more interesting to a distributor than a generic national program. So be prepared to work with distributor to do POS around local events. Retailers love it because they want to be unique and not have the same thing as everyone else. Most distributors have the internal graphic resources to help you.
· That said you still need to have sufficient quantity of flow materials, but recognize most won’t get used.
· It’s imperative to allocate a budget for local or Account Specific POS materials rather than flow.
· Wine brands should recognize that small wineries will find a home in mall houses first.
· There’s an inherent paradox that if you go to a small wholesaler and build your brand, they won’t be too pleased if you end up pulling it to go to a major. By the same token, most majors won’t take one-off small volume brands because there’s little upside potential for the time and attention they take.
· A wholesaler agreement (contract) is absolutely necessary. Recognize for a new brand or company, the distributor will dictate terms.
· DEMONSTRATE PASSION don’t just talk it. Wholesalers are much more likely to work with you if you’ve got skin in the game, or you’ve burned your ships.
· They also want to see a commitment of as much of your people’s time as possible. Have people stationed in the market, don’t think you can fly in and out and make an impact.
· Should you include an incentive program in your plans? Not early on…distributors don’t want suppliers managing their staffs or taking them out of the market on trips as a regular program. However there are two circumstances where they are important: When you can define very specific targeted distribution (but not loading), or secondly, where a product is close to the tipping point and incentive program will help it get there.
· Steve Luttman of Leblon Cachaca…who came out of Moet Hennessey and knows his stuff said it’s taken him three times as long and cost three times as much as he anticipated.)