Breaking Up is Hard to Do

I can remember the first time I ever had to “fire” a distributor—I was given the directive by my boss, and for a week, I sat and stewed about how I would do it. I finally wrote myself a little script, and with some resolve got my nerve to pick up the phone to call—my stomach was in my throat, my heart was beating rapidly and my mouth was dry. As the phone rang, I silently recited what I would say. The person on the end of the line answered so good-naturedly—I felt awful for what I was about to do. We exchanged some pleasantries and I awkwardly blurted out, “The reason I called is because I have some bad news. Unfortunately, we have decided we’d like to take the winery in another direction and we have decided to move to another distributor.” Of course, this is when the conversation veered off script. The person on the other end of the line started throwing out numbers and percentages about how our business had grown, and how this was a complete and total shock. As they talked, I realized that they were probably right—that they HAD done what they thought was, at the very least, a decent job, and that the winery had never approached them about the fact that we were unhappy with their performance and given a chance to try to change it.

I mostly just included this picture because it came up when I did a google image search for “awkward phone conversation.”

Even though I’m not working right now, I see my friends at wineries around the country wrapping up their fall travels, and begin looking towards the New Year, while taking stock of the progress and challenges of the previous one. This is a time where people start forecasting for their year-end meetings, and in some cases, start making plans to change distributors. The worst conversation you can possibly have in the wine business is the one where you tell a distributor you are planning to leave, and they have no idea that you were unhappy. I had a friend tell me once that when she left a distributor, it felt like a breakup—they weren’t even on speaking terms anymore.

So before you decide to make a move, please learn from my mistakes and consider the following:

Have you told them exactly what you expect?

  • No one can read minds—and even if it might be obvious to you, remember that distributors have hundreds or thousands of wines they represent so being pointedly honest and well prepared about what exactly it is that you expect is extremely important.

Have you asked them if they think your expectations are reasonable?

  • The sales you want to achieve might seem like a no-brainer to you, but distributors know their business and their market better than you do. They are your partners and so it’s important to remember that you need to listen to their side of the story and take into account their honest assessment of what can reasonably be done.

Have you visited the market regularly or supported them in any way?

  • If you haven’t been to their market, how can you even conceive of how much business they can do for you? San Francisco and Indianapolis have roughly the same population, but the markets are drastically different. Evaluating what one market might against one of a comparable size is like apples to oranges.

Do you have relationships with their Reps?

  • They can often offer valuable feedback about how your wines are received, or if they take them out regularly, if at all.

Have you gone over pricing? Have you offered any programs? Samples?

  • No one can sell your wine if no one knows what it tastes like.

Have you been consistent in your follow up?

  • People have a lot on their plates these days. Gentle reminders (maybe once every month, not daily as I have heard from some brand managers) can be effective—spreadsheets with information on depletions and shipments against expectations have proved helpful for me.

If ultimately you decide you need to make a change, I offer the following suggestions for a smooth transition:

  1. Make sure you are not breaking any franchise laws.
  2. Make sure that before you tell them you are moving, you have paid them for all bill-backs and that they do not have any outstanding invoices.
  3. You have a plan and the money to pay them for their existing inventory—will your new distributor buy it? Will you buy it back?
  4. Make sure IT IS NOT A SURPRISE. One of the people I admire greatly is a guy who has left any number of distributors over the years, but he has been able to do it with class, grace and a sense of dignity—each of the companies he has left has not been surprised—they’ve been a part of the conversation, have been given ample chance to correct or improve business, and ultimately both parties came to the table mutually agreeing that while it was sad, the winery was not a fit for them any more. In all cases, they have remained friendly years down the road. I think that’s something we should all aspire to.