Issue link: http://winesandvines.uberflip.com/i/867389
September 2017 WINES&VINES 51 DISTRIBUTOR MARKET 2017 Marketing companies are motivated to have the best possible portfolio to represent the most compelling story to the increasingly powerful distributors they work with. "We have a great weight with the distributors because we come with the cumulative value of the portfolio," says Rocco Lombardo, president of Napa Val- ley-based Wilson Daniels. Because marketing companies represent multiple brands, they have a finite amount of time to work with each one. So they benefit from brands that have intrinsic brand strength that will appeal both to distributors and their own clients: the restaurants, bars, retailers and ultimately the consumers that buy them. "We have brands that distributor, wholesalers and buyers know, respect and are interested in," says Paolo Battegazzore, CEO of Folio Fine Wine Partners. "They also are wines consumers ask for at a retail and restaurant level." Some marketing companies also own some of the brands they sell, or have equity stakes in them. To some producers, offering similar products can be seen as a conflict. "If I could give one piece of advice," says Durzy, "don't go with anyone that owns their own brands. When push comes to shove, you'll get pushed aside." The model requires balance, where the market- ing companies act as the sales arm and advisor to brands and products that fit distinctly in their assortment, and the producer focuses on their product and brand. "There's a lot of added value that we bring for that added step up in margin," Lombardo says, "allowing wineries to focus on product, quality control and marketing." Distributors have become increasingly picky about the brands they represent; some industry insiders have mentioned their belief that they reject far more brands than they accept. Lom- bardo says Wilson Daniels is still looking for new brands with "a focus on France and Italy," but multiple marketing companies we contacted chose not to offer comment or "participate" in this article, likely because they were not actively looking for new brands or were hesitant to be deluged by wineries seeking their aid. Ben Narasin is a venture capitalist and freelance wine journalist. His work has appeared in the San Francisco Chronicle, Wine Enthusiast and other media outlets. Distribute directly to out-of-state retailers Some states allow wineries to distribute directly to retailers if they comply with regulations regarding winery size and secure all the necessary permits. A few states also regulate how any wine entering the state can be shipped. (Source: Wine Institute) ARIZONA Wineries producing less than 20,000 gallons of wine in a calendar year can sell to Arizona-licensed retailers and to consumers. ARKANSAS Wineries producing no more than 250,000 gallons per year may apply for a license to sell directly to grocery stores CALIFORNIA Licensed wineries can sell and transport wine to retailers. CONNECTICUT Wineries producing less than 100,000 gallons of wine per year can sell and ship wine to retailers if the wine is shipped in the original sealed containers of no more than 15 gallons per container. ILLINOIS Wineries producing less than 25,000 gallons per year may apply for a self-distribution exemption to sell no more than 5,000 gallons to retailers per year. MARYLAND Wineries producing less than 27,500 gallons of wine per year can sell and deliver wine to authorized retailers. MONTANA Wineries may obtain a permit to self-distribute up to 4,500 cases annually via common carrier to Montana retailers. NEW HAMPSHIRE Wineries with a valid direct-ship permit may self-distribute a limited amount of wine to a licensee if that licensee has obtained prior ap- proval from the New Hampshire Liquor Commission. NEW JERSEY Wineries producing less than 250,000 gallons per year can sell to licensed retailers as well as establish a tasting room. NORTH DAKOTA Wineries producing no more than 50,000 gallons per year may sell directly to licensed retailers. Deliveries by the winery and common carrier cannot exceed 4,500 cases with each case no larger than 2.38 gallons each. Retailers are not allowed to transport wine purchased directly from wineries. OHIO Wineries producing less than 250,000 gallons per year can obtain a permit to sell to retailers. OKLAHOMA Wineries producing less than 10,000 gallons a year may apply for a self-distribution permit and non-resident seller license. The permit holder must transport wine from the winery to the retailer only in vehicles owned or leased by the winery. OREGON State issued self-distribution permit allows a manufacturer of wine in a U.S. state other than Oregon to sell and ship wine directly to an Oregon retail licensee with a permit authorizing the receipt of wine from the holder of a self-distribution permit. VERMONT Wineries may apply for a direct-to-retail license that allows sales of 2,000 gallons annually to retail licensees and no more than 40 gallons per month, per licensee. WASHINGTON State-issued license allows a U.S. winery to ship to retailers. WYOMING Licensed wineries may ship any wine not listed with the Wyoming Department of Revenue Liquor Division directly to any retailer that holds a liquor license. All wines listed with the state liquor division are distributed solely by the division. —continued from page 48