Issue link: http://winesandvines.uberflip.com/i/629061
20 WINES&VINES February 2016 WINE INDUSTRY NEWS Southern Wine & Spirits and Glaz- er's," said Roger Trinchero, CEO and chairman. "We believe a broader national footprint will positively impact our brands and satisfy the needs of suppliers and our customers. We congratulate them on this new merger and wish them every success." It's another matter for smaller wineries and those trying to find or build distribution. The Napa Valley Vintners, whose 500-plus members are mostly fam- ily-owned small or medium-size wineries, acknowledged possible negatives. "We regularly hear from our members that consolidation has made it increasingly difficult for small brands to get distribution and attention from wholesalers," said Patsy McGaughy, spokesper- son for the group. As distributors focus on their bigger accounts, many wineries are attempting to increase direct sales to consumers—both by at- tracting more visitors (the largest source of direct sales) and by building Internet, mail-order and club sales. While smaller wineries in areas like Napa and Sonoma, Calif., say that attracting more visitors is one of their only viable alternatives as distributors consolidate and focus on their biggest accounts, neigh- bors are concerned about the push to a DtC model. Other wineries may turn to specialty distributors, brokers and marketing firms to both pro- vide distribution and promote their products within retail chan- nels. In today's environment of almost instant shipping, distribu- tors may not be as important in delivering wine to stores and restaurants, but they do provide vital sales efforts, local oversight and revenue collection. Some wineries will try direct sales to the trade where it's al- lowed. That's legal in California, but few other states. "With nearly 80% of Napa Val- ley Vintners members making 10,000 cases or fewer annually, we expect direct to consumer and direct to trade to remain impor- tant alternative channels and see our role as an information re- source," McGaughy said, adding, "In fact, we just announced a member workshop on the topic of navigating the world of selling wine to trade." In California, a number of wine producers even own distribution companies, including Bronco (Classic Wines of California), Jackson Family (Majestic Fine Wines) and Foley (Epic Wines). The Southern-Glazer's merger could benefit retailers both on- and off-premise by reducing the number of suppliers they have to deal with. The biggest retailer of them all, Costco, could especially benefit. "Southern and Glazer's are good partners with Costco," said Annette Alvarez-Peters, as- sistant general merchandise man- ager for beverage alcohol at Costco Wholesale headquarters in Issaquah, Wash. "I would suspect with the merger, we will be able to gain synergies between all par- ties on the planning of our mutual businesses." It should be noted, however, that many large retailers including Costco have attempted to change state laws to allow them to buy directly from wineries. —Paul Franson RIVERCAP USA 5301 Industrial Way, Benicia, CA 94510, USA www.rivercap.com PRODUCED BY RIVERCAP USA Pallets of wine move through Southern's warehouse in Northern California.