About merrittolson

I have been selling wine for independent wineries both on the supplier side and in state distribution in the Northwest for over 15 years.

“Will You Accept this Rosé” : How to Write a Blind Query Email to A Potential Wholesale Partner

I have been on maternity leave for the last seven weeks, and for the duration (including the day I got home from the hospital), I’ve been getting terse voicemails on my cellphone from a winery representative (one who my company does not represent) complaining that they need me to call them back about getting their wines into the wholesaler I work for, and that it’s very rude of me not to call them back because they’re on a sensitive timeline. Let me just say this now: if you’re trying to make a good impression on a potential wholesaler, don’t do this.

Having said that, one of the most common discussions I have with my winery friends is about finding and establishing a relationship with a good distributor in various markets throughout the country.

As someone who receives multiple queries a week, and who spent many years building distribution networks, I’d like to share my thoughts on the best way to do it, whether you are a newer winery looking to establish distribution for the first time, or your relationship with your current wholesaler has run its course. These suggestions apply only to those seeking distributor relationships in the USA. International relationships are a different story and worthy of an entirely different post.

First, you need to figure out how many cases you need to sell in that market and what kind of wholesaler partnership you are looking for. I will address that in a separate post.

Once you have identified a potential wholesale partner and you have not met them in person or have not been formally introduced you will most likely need to send a query email. Email is my communication method of choice because it allows me to address it on my time, it is a record of all the information so I can easily search for it in my inbox if I have questions or want to share information with more team members (and is probably better as a record than my note keeping), and if for some reason we decide that now is not the time to work together, but some months down the road I want to re-open the conversation, I will be able to go back to the email and find your information.

The Blind Query Email

#1 most important rule: Keep it brief.

Pro tip: Before you write it, find out to whom it should be addressed. A simple call to the wholesaler or a click on their website should get you the requisite info.

In the body of the email, include the following information:

  • Start with a concise statement about the winery and its history – 3 sentences tops. You can attach more info and pictures, but don’t make the files too large.

 

  • Pricing and priority wines – I can’t tell you how many people send queries without including FOB pricing on their wines. Additionally, you may make 47 different wines, but I need to know what wines are the sales drivers (don’t say all of them). You should ideally have 2-3, but 5 tops – the rest you should be selling to your mailing list or via direct sales.

 

  • Volume/Where you see your wines fitting — How many cases you produce, how many cases you are currently selling in that market (if you don’t have it established yet, share volumes for comparable markets), and how many you would like to sell (and generally what channel mix you see – mostly on or mostly off premise, or what percentage mix). DO NOT BE COY here. I have picked up brands I may otherwise have not have given a second look because I saw how much their existing distributor was doing and thought to myself, “Huh. If THEY can do that much, we must be able to do better.” Additionally, it’s important to be as transparent as possible in all of your communication with your wholesale partner, so if these are the people you will be working with (for years to come, hopefully), you will need to set clear expectations and get off on the right foot.

 

  • Scores from Wine Spectator, Advocate, Tanzer, Galloni, Enthusiast or W&S. They don’t necessarily mean much to distributors, but they can help. Do not include any gold medals won or anything from wine competitions. No one in the wine trade cares about these. Seriously, do not include them. They make you look like a hack.

Some Don’ts:

  • Don’t send samples blind, unless you are cool with admin staff using them for their party on Friday night
  • Don’t call or text the brand manager/owner on their cell
  • Don’t try to get distributor sales reps involved – it puts them in the middle and they usually don’t have much sway over what brands get picked up
  • Don’t offer to spend time in the market unless you are willing to either send principals to do sales meetings and wine events, or if you are a rep that is willing to stand in a retail shop and do in-store demos and go on crappy ride-withs or do work on your own. Offering to go on ride withs is something LITERALLY every winery person will do. That won’t help your distributor, other than to say you will do what literally everyone else will do.

 

Finally: If you are contemplating leaving an existing relationship with a wholesaler, be prepared. First make sure you are following all the state laws to the letter – you do not want to open yourself up to a lawsuit, especially in franchise markets. Make sure you are current with them (ie make sure you get paid for everything they owe you before you part ways with them). Be prepared to have them dump their inventory of your wine at or below their cost – this can potentially affect your depletions for the next 12-18 months. Lastly, be aware that those “friendships” you created with the wholesaler you’re leaving and all their reps may be completely done. It’s the saddest, most heartbreaking part of doing business in our industry.

 

Good luck and happy selling!

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Wine Industry New Year’s Resolutions

New Year’s resolutions are usually about losing weight, eating better, drinking less and are often focused on health and fitness. But I like to use this time at the end of the year to take stock of my work habits, and think about how I can do them better or change in the new year. Below is a short list of things I think everyone in wine sales can use to be more successful in 2018. Let me know if I have missed anything!

Respond with a sense of urgency

I’ve said it before and I will say it again. Get back to emails within 24 hours. If it’s a text about wine availability it’s probably urgent. Within minutes if you can is best!

Bonus point if you don’t apologize for not responding because you’ve been suuuuper busy but your Instagram suggests you were day drinking champagne at some hot NYC hangout (superstar somms/winemakers tagged)

Assume everyone is doing their best

People aren’t (usually) ignoring you intentionally*. Everyone’s just trying their best, so approach your colleagues with a sense of positivity. My amazing hair stylist, Armando, recently told me something so true: your vibe attracts your tribe. A corollary to that: you catch more flies with honey.

Stop talking about yourself (and how busy you are!) and listen

Asking questions about the needs of others can help you tremendously in your business and solve a lot of the problems you can’t stop talking about. It also helps you understand where your employees, customers, brand managers and other colleagues are coming from.

Come prepared

Know your business. Read wine industry news. Keep up to date on trends and happenings in your market(s).

Be proactive

It’s a lot easier to be successful when you’re ahead of the game!

Try more wines, especially those of your competitors

So many people in the wine industry only drink their own wines. They don’t know who their real competitors are or what their wines taste like. And they LOVE to bash natural wines/American wines/legacy brands even though they’ve never had any. Try something new. Regularly.

Take care of yourself

We have lost a lot of great people in the wine industry this year. Traveling, over-scheduling yourself, eating and drinking in restaurants every night – they take their toll. Remind yourself to pause, to get outside and move**, to choose the healthy option, to say no to that last nightcap every once in a while. Hug your loved ones tight and tell the people who mean something to you that they mean something to you!

*Remind me to write about box-checkers and time-wasters in the New Year

** This year I started using the Peloton app for at home work-outs. You don’t actually need their bike to use it – if you have a tablet, you can do the workout in any hotel gym on a stationary bike – you won’t have the ability to see your output/torque, but it’s still a great thing to do to get your body moving. I highly recommend it.

 

I Just Called to Say…[ ]

One of my old bosses used to call me up and ask me random questions, like what my brand manager’s children were named and how old they were, or what featured wineries were on the pre-recorded promo tape that played on XYZ Distributor’s phone line while you were on hold. If I didn’t know the answer, he’d accuse me of being out of touch, and therefore on thin ice with my territory’s sales. I was so paranoid that I started getting into the habit of randomly calling up my brand managers just to say hello so I could check the box. I literally would ring them up and ask them, “So… how’s it going?” And then I would wait for the awkward pause because I had no agenda or any real business to discuss with them, and we’d shoot the breeze for a few minutes before the whole uncomfortable phone call was over. But at the time, I just knew I was supposed to be getting “mind share” from my brand manager and that was how I thought you did it.

If you know me, you know I am obsessed with reading Wine Industry business publications, and something I have been thinking about a lot lately is a picture I saw in the September 2017 issue of Wines&Vines.

Screen_Shot_2017-08-31_at_12_13_05_PM

If you sell wine for a small or mid-sized family winery, you are already painfully aware of this – competing for attention not just from your brand manager, but with distributor sales reps AND accounts, up against hundreds of other wineries in the same portfolio.

Obviously as someone who works on the wholesale side of the (fine wine) business, I believe in the need for wholesalers – the ones who do it well are partners with their wineries and believe in the stories they have to tell and the value it adds to everyone’s business. But the three-tier system is harder than ever to navigate. Consolidation is happening everywhere, and getting time and attention from anyone at a distributor is a challenge. With hundreds of brands in books, and managers stretched thin, time with a distributor brand manager is critical, but how do you make it count? As one friend who works for a winery recently asked me, “How often should I be reaching out to my distributor, and when I do, what do they want to hear?”

On average, wholesalers should be getting monthly emailed updates about inventory and any pertinent vintage changes/releases/personnel news you have going on at the winery. Depending on how much wine you sell in a given market, you may speak to your brand manager once a week, or two times a year. Any time you reach out, you should be adding value to the business relationship by providing useful information in a timely, expedient manner.

To that end:

  1. If you are emailing, keep it short and sweet. The sweet spot for email length is between 50-125 words. Otherwise it’s TL;DR. If you have extra information you just HAVE to share, like a story about the inception of a new wine, or something like that, include it as an attached PDF.
  2. If you are calling, have an agenda and be prepared. Distributors send you depletion data that takes a lot of energy to compile. Please use it and familiarize yourself with the market you are calling about instead of asking them to do it again for you. For example, if you are emailed monthly depletion reports by account, you probably shouldn’t call up your brand manager to ask what restaurants are good supporters so you know where to dine when you visit their market in x amount of days. Just look at the reports.
  3. Call with good news occasionally. Use that depletion data to say, “Hey, I noticed that you made 8 new placements of our Red Blend in restaurants last month. That’s fantastic!” Sometimes brand managers don’t have time to look at data that granular on a daily basis, so being reminded of specific successes helps keep certain wines at the front of their mind and can lead to further sales. Also, most of the time wineries call to complain or push for more business. I am a firm believer that you catch more flies with honey. Recognizing when things are working well often is inspiring enough to get people to continue doing what they are doing, and do more of it!
  4. If you are sending excel files, please for the love of god – format them correctly so they are easy to read. The formatting should be uniform and pages should be optimized for printing (headers repeat across pages, formulas line up. My biggest pet peeve is #DIV/O!. If you don’t know how to fix this, use Google to find out how, or just take a few online tutorials. Excel is the greatest business tool in the world, but only if you use it right. I love when winery reps send me beautiful spreadsheets.
  5. Never call just to ask, “So, how’s it going?” Your job is to know your business – if it’s up or down, and you’re not sure why after going over depletions and IRI/Nielsen data (if you buy it – if you don’t, this is a great resource to look at trends around the country), ask them about specifics. Brand managers appreciate when wineries take the time to learn about their market and understand their business – it feels like a partnership when wineries are familiar with the market, it’s laws, quirks and customers/key players.
  6. Don’t send important business information in a text message. Send it in an email. Otherwise it will be forgotten/ignored/misplaced.

How to Have a Successful Year End Planning Meeting

I have this really clear memory of a distributor review meeting, sometime in my mid-twenties, that makes me cringe every time I think about it. Not because of the ridiculous outfit I was wearing, though it was – I have pictures of myself from this time period and for some reason I thought super flared jeans and wispy bangs were a good look – but because, knowing what I do now after many years of brand/sales management on the wholesale side of the wine business, basically everything I said in that meeting was a complete waste of my distributor’s time.

Y Tho

Y tho

I think I showed up to the meeting with a legal pad and a pencil, and only possibly my laptop with a wifi connection so I could glance at some shipment reports, but really I just thought you showed, up, asked for increased shipments, and gave the distributor a target list (I think I literally copied and pasted something from Wine Spectator’s restaurant awards) and hoped for the best.

I remember sitting there, asking the owner of the distributor why their numbers were so far down and getting an exasperated sigh after he walked me through their depletions (way up) and accounts sold (also way up). Evidently I hadn’t thought that loading up a distributor the previous year on wine that they didn’t need yet didn’t necessarily translate into increased depletions. (Andy Pates, I am so sorry. I owe you so many cocktails for your insane levels of patience and politeness.)

To come full circle, I had lunch recently with a girlfriend of mine recently who runs sales for her family’s winery. We don’t work together, but she did ask my advice about how to successfully execute a year end planning meeting with her distributors, and so, upon reflection of my many poorly planned meetings of yore, I have come up with a list that, while no means exhaustive, should be a good jumping off point for your own planning meetings.

 

  • Do not bring up shipments. These are irrelevant to any wholesaler. They make their money off depletions and in theory, if the wine is depleting well, shipments should follow.
  • A year end meeting is not a chance to air all your grievances – if there are serious issues, by all means, bring them up. But this is not a time to nitpick every small detail.
  • Come prepared with depletion data so you are both on the same page. This means:
    1. Sampling data (ie how many sample bottles vs how many sold – if the number is low, offer to support 100% sampling for certain periods or certain wines. If the wines are not being shown, the wines will not sell. If sampling is high, and sales are soft, perhaps the problem is with your wine)
    2. Overall depletions by wine
    3. Your account universe – is it getting bigger or smaller? What about sales by channel? Are sales to one retailer or restaurant disproportionately large? If you have targets for accounts sold or actual accounts, have these ready too.
    4. A comparison of your sales in that state with your other national markets
  • Be transparent about goals – starting with sharing your production levels, what your winery growth for the year (and years ahead) looks like, and understand that though 2016 might be the biggest vintage you’ve ever had and it was unexpected, just because your production grew 20% doesn’t mean your distributor can grow 20% too, unless the market/distributor is new for you and is also having explosive growth.
  • Make sure you have pricing information/price grid* and any budget for incentives or deals already figured out. It’s always better to be proactive than reactive – and also to let your distributor know that if you DO have to be reactive, that you have a budget to work with if you need to stimulate sales by dropping prices for a short period, or support sampling, or run incentives.
    1. To that end, if you want to run incentives, have them ready before the meeting. Hammering out details of these things during planning meetings takes an inordinate amount of time and 99% of them are rarely effective anyway.
  • Don’t ask, “how can we help?” unless you mean it. Are you prepared to either pour at retail tastings (or pay to have someone do it for you), work with reps in parts of the market that don’t have all the cool somms and Instagram-worthy restaurants but nonetheless have potential for sales, or host wine dinners at clubs where most people will be drunk before the first course, but again, you still might sell a lot of wine (but you also might not)?
  • Don’t go over an hour. Anything beyond that is a waste of time for one winery.

 

Did I miss anything?

 

*To figure out the gross profit margin and gross profit margin percentage your distributor is making on one of your wines, here’s how you calculate:

Wholesale Price minus FOB (with taxes/freight)=gross profit

then

Gross profit/wholesale price=gross profit margin percentage

So, for example on WINE XYZ:

The distributor’s wholesale price is $13.99 (that would put the wine at $19.99 retail on a shelf)= $167.88/case wholesale

WINE XYZ FOB price is $120/case.

Distributor laid in costs are $120 (FOB) + $5/cs freight/taxes=$125 (freight and taxes vary wildly from state to state so please check with your distributor. This is merely an example)

Gross profit on a case of the wine is therefore $167.88-$125=$42.88

Margin is the gross profit divided by the case price $42.88/$167.88=.255 or 25.5%

Who Buys My Wine, and Where Do They Buy It?

This past summer, I had the opportunity to attend Oregon Pinot Camp for the first time, and while I learned a lot about Oregon wine, I learned even more about what’s going on in the wine business around the country these days.

One of the people in my cohort was a guy from Chattanooga, Tennessee. He owns a group of restaurants and several retail stores, and in one of our conversations he told me about how he had just purchased a huge volume of wines from (what I would consider to be) a niche importer of natural wines. I was blown away by the quantity, but he assured me there were plenty of people in his city that would happily purchase the wines, either from his retail stores or from restaurants he owned.

Let me remind you that I did national sales for years. I never once set foot in Chattanooga in all those years, and now this guy was telling me he could sell pallets of natural wine to a thirsty and growing market. Of course I immediately jumped onto the internet and started looking around at population and economic trends in the Southeast and it led me to this book: Upside: Profiting from the Profound Demographic Shifts Ahead, by Kenneth Gronbach.

The most important planning question any small to medium-sized winery can ask themselves is: “How big is my market and is it getting bigger or smaller?” And further, how do you determine where you focus your energy/resources when you travel around the country opening markets, and how do you spend your travel dollars when you are trying to figure out how to get the most bang for your buck?

Wineries can use demographics as part of their research to help answer these questions and strategize – forecast sales for each market, and plan spends for each based on potential. The book, particularly relevant to the wine industry, is a fascinating look at how populations are shifting in our country; we’re in the midst of many big sea-changes both in terms of who is buying wine, and where they are buying it.

In the book, Mr. Gronbach outlines the major population groups – Boomers, Gen X and millenials (which he calls Gen Y) are the primary focus near-term for economic impact – and he goes in depth on the four regional quadrants that shape our economy: the West, the Northeast, the Midwest and the South.

Boomers, who have been the most important consumer group for many small to medium sized wineries, particularly those in the ultra-premium category, are now at the end of their consumption heyday. If you’ve put all your eggs in this basket you will (if you have not done so already) see a decline in sales over the next few years. However, Gronbach points out that many Boomers will be retiring to sunnier locales – namely Florida and the SE, so I would wager that if you wanted to keep those sales going for a bit longer, you’d do well to invest in boots on the ground in those markets. For more detailed sales data that backs this up, check out this fascinating article.

Gen X is a much smaller consumer group though they are still worth paying attention to because they are in their peak spending years, but the most important consumer group is Gen Y. They are consuming at 500% of the rate of their boomer parents in adjusted dollars, and there are a LOT of them, particularly in the South. In fact, North Carolina has seen its population nearly doubled since 1990, with a median age steadily DECLINING to around 36.

In fact, the South as a region has seen explosive population growth in the past 25 years. Texas, Georgia, Florida and North Carolina have all seen increases of 50%, and Tennessee? 35%. It would follow that these should become, if they are not already, extremely important wine markets for all wineries with national sales.

These are just a few of the takeaways I’ve gleaned from the book – in practical terms, if I were doing sales/forecasting for a winery with national sales again, depending on the maturity of its distribution network, I would use this demographic information, along with national IRI or Tradepulse/Nielsen data to figure out where to focus my efforts for opening new distribution relationships, where I should spend time doing market visits, and where I could expect to see declines in sales due to shifting population trends in the long term.

There are many exciting things happening around the country – from my outpost here in Oregon, it appears that although consolidation seems to be happening with distribution networks throughout the country, new and interesting distribution companies are popping up every day (particularly in the South and West). New restaurants and dining trends are showing up in places I probably wouldn’t have dreamed of ten years ago, and perhaps most importantly, new wine lovers are entering the market each year.

Figuring out who and where your key consumers are (and how to market to them, though that’s a whole other topic of discussion) starts with understanding, at least in part, with the important topic of demographics.

Everyone Hates Your Powerpoint Presentation

I took a bit of a hiatus the last couple of months because I started a new job, and then I got really sick (which sucked . It’s like, “Hey, I just started, and even though it’s less than a month in, can I please take some sick days?!” Nice first impression.) Side bar–If you don’t know me very well, then you might not have heard that the new job I started is on the distribution side as a brand manager. So far I love it.

Each week in my new job revolves around a sales meeting that happens every Monday afternoon and generally lasts for an hour or two. During that time, we go over sales numbers, new items, upcoming releases and any important information that needs to be shared. We also have suppliers visit and make presentations to our sales staff.

Which has reminded me of a time in my past when I was living in Chicago, dating a guy who worked for a huge, national distribution company. He used to tell me about the hellish marathon sales meetings he’d have to attend every Friday from 7 in the morning until 5 or 6 at night. I remember a time when he came home super psyched up, wearing a ridiculously hideous, tie-dyed t-shirt from some new “lifestyle” winery (the brainchild subsidiary of a mega-corporation’s marketing department, of course). He excitedly told me about how the man representing the brand was super cool—he wore casual “surfer” clothes, and even had long hair (I think I remember that it was later revealed to be a wig). This “dude” was completely out of place in a room filled with guys wearing bad pleated slacks, dress shirts and mandatory ties. Instead of discussing what the wine tasted like or, as was the usual case, numbers and sales projections in a powerpoint presentation, the salesman wanted to promote the bohemian attitude of the wines and winery (completely fabricated, of course). The pitch at the meeting completely won over my former boyfriend, and probably got the attention of many of his counterparts as well (for my part, I mercilessly teased him about drinking the kool-aid, which probably explains the direction our relationship took–the fast train to Nowheresville).

While I have always felt that the “wines” my ex-boyfriend sold might as well have been widgets, and that the two of us were basically in only mildly-related industries (my opinion was that I sold “real” wine, and he just shipped cases of meaningless, industrial crap, which might make me a snob, but I’ll live with it), it certainly made me recognize that a well-planned sales presentation can do wonders for a brand. Though I was unimpressed with the pitch and quality of those “lifestyle wines,” the guy I was dating seemed to love them, and was more than happy to promote and sell them. While I thought the presentation sounded ridiculous and fake, to the people there it was real, relatable and made an impact on sales.

So, after sitting through a number of them in the last 8 weeks, I have found that a few things consistently make a presentation stand out:

  • Know your audience

Who are you talking to? In my company, most of the sales reps are extremely passionate about wine. They see through the bullsh*t. The things they care about and want to know are things like: what makes you and your winery real? Why do your wines matter to this market? and most of all, what makes them worth selling? Of course, there are other companies like the one my former boyfriend worked for where the reps care much less about authenticity and are more interested in gimmicks, flashiness or packaging. It really helps to understand what gets the mojo going when you’re talking to different sales teams.

  • Why are you here?

You should make this abundantly clear, to show that you have a very good reason for the time you’re taking up. Are you: Launching a new brand or product? Pushing for sales improvements on a certain wine? Re-introducing a wine with a new vintage? Offering new pricing or discounts?

  • What are your expectations?

Have clear and concise information about how much wine you made, how much you have available to sell, and how long it will be around.

  • Why should I sell your wine?

What makes it unique? Who are the competitors and why does this wine stand out? So many suppliers these days seem to know very little about their own wines, and even less about their competitors. The reps I work with are pretty knowledgeable about winemaking and wines from all over the world. If you say your California Tempranillo tastes just as good as one at a similar price from Spain you better be sure you can back it up, or the staff (though, maybe not to your face) will call BS on you.

Be succinct, don’t take more than 20-30 minutes, and make sure you are straightforward and genuine.

Finally, I’d wager that 99% of Power Point presentations are a complete waste of time. 

Franchise States Part Deux: Breaking up is REALLY Hard to Do

In the last couple of weeks, I have had a number of conversations with friends in the industry about dissolving relationships with distributors in franchise states. As I have written about before, franchise laws can be extremely tricky. I have gone through a few instances of making changes in those states so here are a few quick tips I have to offer:

1. Although there are laws in many franchise states that allow wineries some recourse, and those laws may seem cut and dried to you, the state heavily favors the side of the distributor and nearly all lawsuits show this as precedence. Do you see provisions that state that if a distributor is a late or slow/no pay, they don’t adequately market wine, or they don’t buy wine at all, then that qualifies as “just cause” for a release? Sorry. It’s hard to win on this one.

2.  If you can prove you have “just cause,” and your existing distributor agrees to a release, it’s common practice in many franchise states that in order to obtain a letter of release, you must buy out your franchise agreement. This means that the winery pays its old, under-performing distributor a year+ of gross or net profits. Even if the distributor still owes thousands of dollars!

3. How about waiting periods? In many franchise states, once a release letter is obtained, they still have 30, 60, 90+ days to sell their remaining product and the newly appointed distributor must sit on their hands and wait to sell your wines until that waiting period is up. Of course, the old distributor will offer a fire sale, which means that for months afterward, who will want to purchase them at regular wholesale prices? This can cause slow shipments, depletions and months of pain for a winery that has finally obtained a release, not to mention a frustrated and dejected newly appointed distributor sales force.

4. Have you considered lawsuits? Many distributors (particularly the big ones) in franchise states retain franchise attorneys to specifically go after wineries that have dropped them. Although you may eventually win the suit and be granted a release, consider that you may end up spending tens of thousands of dollars, and while the suit drags on, you will have months without your product being sold in that particular market. Also consider that your emails are NOT your personal property, so during a lawsuit, anything you have ever written to anyone in that franchise state becomes public record if it is included in the suit.

My biggest piece of advice: leaving distributors in franchise states is rarely easy and commonly very expensive. Do not consult other distributors in a franchise state for recommendations on what to do. Call up a qualified franchise attorney, spend the $2-5k it will likely cost to evaluate your position and possibly obtain a release letter, and do things the RIGHT WAY.