The following is a guest post by Mitch Schwartz, consultant to the wine industry focused specifically on helping small to mid-sized wineries increase their distribution through Direct to Trade channel sales initiatives.

Much has been written about the consolidation of the middle tier –distributors - in the three tier system.  The continued consolidation within the middle tier has led to fewer opportunities for wine brands, especially smaller boutique brands, to gain representation in the market.  In response to this narrowing of the playing field, many wineries have pursued two strategies to build their brand awareness and grow their distribution; 1) increase the size of their Direct to Consumer (DTC) sales, and 2) for some, pursue a Direct to Trade (DTT) initiative.

Addressing the later specifically, DTT sales can be a tough path to hoe.  Many wineries have successfully built a DTT business in their home state, but they do not have the bandwidth, sales skills, or contacts to pursue this strategy in additional markets.  Admittedly there are obstacles to selling direct out of state, but a handful of wineries are solving this puzzle as we speak, and out of necessity, more and more are leaping into the fray.

In order to fully leverage the possibilities of both DTC and DTT initiatives, a winery should see them as a single strategy, supporting each other.   There are opportunities to use the knowledge gained through each initiative, the relationships with both consumer and trade accounts on your list, and to leverage the possibilities made available through each to build momentum and drive more sales overall. What do I mean by this? Well, here are just a couple of ideas for doing so:

I know one winery that sells to the trade through their DTT initiative exclusively - no distributors. They attend as many consumer events around the country as they have the time and budget to support.  However, when doing a consumer tasting, and the consumer asks where to purchase their wine locally, they don’t direct them to their website; instead, they provide the consumer with a list of local retail accounts (often only two or three) and restaurants where they can purchase their wine.  This, in turn, creates pull for the retailer, who becomes more inclined to both carry the brand and recommend it to their additional customers.  The winery still maintains contact information for the consumer, adds them to their mailing list and markets relevant information to them (winemaker dinners in their local market, consumer events they will be pouring at, and even online purchase offers on their website).  The winery believes that the best customer is one who purchases their wines through multiple channels; both direct and through their trade partners.  

Another idea for consideration is to use your mailing list, or allocation membership list, to encourage incremental and new trade placements.  Suppose you contacted your mailing list and asked for suggestions on favorite restaurant/s, more specifically those in which they’d like to see your wine made available.  With this information, a winery could contact the restaurant directly, and use this data to not only encourage the restaurant to consider your wine (at minimum), but perhaps to offer to host a winemaker dinner or more.  With enough club or mailing list members in a specific market, the dinner could be “Invite Only” for your members and a guest.  The winery should encourage the restaurant to add your wine to their list, and your guests would be given the opportunity to move to the front of your waiting list (if using an allocation list).  The possibilities are yours to create and execute.

In an economy in which restaurants are seeing lower than expected seatings, with a trade down in wine consumption, and in which wineries are looking to actively increase their sales, as well, why not bring the two channels together to help encourage growth and sales on both sides.  By combining your DTC and DTT strategies into one, your chance of success can only increase.