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42 WINES&VINES September 2017 DISTRIBUTOR MARKET 2017 F or those opening a new winery or try- ing to get a brand to the next level, the news of every additional distributor merger may seem like another obstacle on an already challenging road. As difficult as it may seem, there are proven ways to find the freeway to wholesale success. Adam Lee, founder of 30,000-case Siduri Wines of Santa Rosa, Calif., navigated the wholesale market and the direct-to-consumer route for years as he built a brand he'd eventu- ally sell to Jackson Family Wines (JFW) in 2015. Despite his success, Lee, who enjoyed excellent reviews and was in the right place to catch the rising wave of Pinot Noir's popularity, still recalled the challenges of working the wholesale sales channel. In addition to his ongoing work with Si- duri for JFW, Lee said his non-compete agree- ment allows him to consult for a few small wineries in sales and marketing. He agreed that consolidation and a changing wine media landscape have made it even harder to gain distribution. Positive reviews don't carry the same weight they used to. He men- tioned one of his clients recently earned stel- lar scores from The Wine Advocate; while it helped sales, it wasn't the guaranteed, in- stant sell-out that such reviews used to bring. "No one writer possesses the weight that they used to," he said. But good press and reviews are still valu- able, so Lee said wineries should get as many as possible from traditional publications and bloggers, then use those to create a sheet of testimonials that can help convince retailers and restaurants to carry their wine. If a win- ery owner can land a few accounts himself, then it makes that brand much more desir- able to a distributor. "That helps tremen- dously," Lee said. Direct-to-consumer (DtC) sales are often branded as the best way around the three-tier system. Lee agreed, but to a point. "I think it's ideal, but it doesn't always work that way, depending on how much wine you have and what you have to sell," he said. A winery shouldn't be in the business of com- peting with its distributors on price through DtC. And in the wake of a tough harvest or a sudden windfall of publicity that sends demand sky- rocketing, he advised keeping a portion back for wholesale even if the profits are tempting. "Don't cut out the distributors entirely," he said. "Even if you could sell it all direct at a higher margin, screwing them around in one year to make a quick dollar is not smart." Lee said one strategy that worked for him in distant markets was renting a house through Airbnb or a similar service and throwing a party. He said one could hold a tasting for consumers early in the day and then keep the party going until 10 p.m. or later for somme- liers and sales reps when they are done with their shifts. He said he frequently could cover the cost of the house with DtC sales while bol- stering trade relations, too. Build wholesale and DtC As more states have opened up to DtC sales, Jason Haas, partner and general manager of Tablas Creek Winery in Paso Robles, Calif., said that trend also improved his wholesale sales. Haas said despite the large mergers, one should consider that several key states now allow DtC shipments for the first time. "With states open- ing up to DtC, it makes it more attractive to do wholesale and DtC there," he said. For a state like Massachusetts, which changed its laws to allow direct shipping in 2014, Haas can work the market with distributor reps during the day and host a dinner for consumers that evening. "We can make much more efficient use of a trip," he said. "That's something we've found in every state that has opened to direct shipping: Our wholesale business has improved." He doesn't see a need to choose one or the other. "If a state is worth focusing on for DtC, it's worth focusing on wholesale," he said. "That's just because you only have a certain number of hours in the day." Tablas Creek produces around 30,000 cases per year using Rhone grape varieties, and that's split about evenly between DtC sales and dis- tribution. The wines are distributed in all 50 states through 40 companies. Haas said the winery's sales infrastructure has been affected by consolidation, although the effects of a merger aren't always the same. Sometimes a KEY POINTS Stay consistent with your brand and winemaking. Securing a few restaurant or retail accounts can help leverage a distributor relationship. Don't build direct-to-consumer sales at the expense of wholesale sales. Navigating a Changing Wholesale Landscape Wineries from Paso Robles to the Willamette Valley share their strategies for success By Andrew Adams Rolin Soles of Roco and Wynne Peterson-Nedry of Chehalem lead a tasting for wine buyers during Oregon Pinot Camp. EASTON RICHMOND PHOTOGRAPHY