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48 WINES&VINES September 2017 DISTRIBUTOR MARKET 2017 MARKETING COMPANIES AT A GLANCE The following are leading U.S. marketing companies for which domestic brands are an important component in their portfolios. Note that the brands represented are partial lists for each. T he three-tier system has long created complexity for wineries trying to get their product to market. Recent con- solidation among major distributors and the ever-increasing number of wine brands vying for on- and off-premise attention has made the job even harder. To navigate this complexity without building out a national sales force, many wine brands have relied on outside sales and marketing companies— sometimes known as "brand aggregators" or the "fourth tier"—to represent them. Marketing companies aggregate brands to offer a complete range to buyers and better capture their attention. By maintaining rela- tionships with disparate distributors and main- taining a staff more varied in size and geography than all but the largest wine produc- ers could provide on their own, they do a ser- vice to both wineries and distributors. Marketing companies make money either through taking a percentage of the sale or by buying products in advance at volume prices and marking them up. Some focus purely on imported brands, others on domestic, but most focus on both. Marketing companies that are also importers, where the concept started, help navigate the reali- ties of importing. "We provide legal entrée to the vast and extremely complicated U.S. market," says Dennis Kreps, co-owner of Quintessential. "We have an experienced compliance department that helps our producers navigate the many rules and regulations governing beverage alcohol sales, from labeling issues through U.S. Customs clearance, not to mention the different laws in every state." Access and sales to all states is a strong draw for domestic producers as well, but the model requires partnership and brand building on the part of the producer. "Our partnership with Wilson Daniels has worked well reciprocally, as we provide them with a brand to work with that has an established fan base gradually built since 1965," says Hugh Davies, vintner at Schrams- berg Vineyards & Davies Vineyards in Napa Valley. "They have strong roots in the national wholesale distribution system and have been a good fit for us over these past 21 years. We've steadily grown our business, distributing to over 10,000 accounts in all 50 states." Not everyone feels marketing companies can effectively represent smaller brands. Cheryl Murphy Durzy, CEO of startup digital distribu- tor LibDib (see page 52 for more details) worked with a marketing company while man- aging Clos la Chance's wholesale sales and dubbed the effort a "massive failure." Clos la Chance, an 80,000-case winery in San Martin, Calif., had "done everything from our own sales force," Durzy says, "but distributor consolidation increased. We couldn't get the attention of the distribu- tors; that's when we decided to go with fourth tier. We figured they'd have more clout with a bigger book, but consolidation continued, and even those guys had a hard time getting attention." Even strong brands need help telling their story to the domestic distributor market, and many value the service that marketing compa- nies offer. Stephen Leroux, general manager of Champagne Charles Heidsieck, which is represented by Folio Fine Wine Partners, said: "We value ethics and a more traditional way to do business. The entire Folio ownership and management are a fully committed, profes- sional and experienced team who convey our values in the U.S. market." Help for Gaining Entrée Marketing companies act as sales arm and advisor for wineries seeking better distribution By Ben Narasin WILSON DANIELS St. Helena, Calif. wilsondaniels.com Domestic brands represented Schramsberg, Arista Imported brands represented Domaine de la Romanée-Conti, Champagne Gosset, Royal Tokaji President Rocco Lombardo Description Founded in 1978 by Win Wilson and Jack Daniels, Wilson Daniels is a family-owned, fully integrated marketing and sales company with 48 sales and marketing professionals in the United States. Wilson Daniels works with distributors nationally and holds its own wholesale licenses in New York and New Jersey. —continues on page 51