Top 10 Reasons Wineries Hate Their Wholesalers
In examining the latest Wine Conditions Survey published by Silicon Valley Bank, WineBusiness.com noticed something interesting and asked, “What’s behind that?”
What WineBusiness.com noticed was that wineries’ satisfaction level with their wholesalers has declined significantly from just two years ago. The percent of wineries reporting being satisfied with their wholesalers has dropped from 60% to 37% since 2012. Meanwhile, the percent of wineries reporting they are unsatisfied with their wholesalers has risen from 26% to 41% since 2012.
What’s behind this is a very good question.
When talking about how one feels about any commercial relationship, the issue of satisfaction and disappointment always revolves around one thing: Value. What’s clear is that wineries are finding less and less value in their relationships with wholesalers.We could discuss the obvious weakness with the three-tier system in general — the system that in most states requires that producers engage a wholesaler to bring their products to market whether they want to use one or not. But the deficiency of this “system” is well-known.
Instead, this issue got me thinking about all the various complaints I’ve heard from winemakers over the years about their wholesalers. Below are those complaints about wine and spirit wholesalers that are quite common in the wine industry and most likely have a bearing on the pitiful view of wholesalers that the Silicon Valley Survey shows exists.
1. My wholesaler made promises about sales they never kept
2. They justify their slow sales record by claiming our ratings aren’t high enough
3. They only time my wine gets focused on by sales wholesaler sales people is when I travel to their state to help the sell my wine
4. They never use or lose the collateral material we produce for them
5. I can’t get timely depletion reports from my wholesalers
6. They don’t pay me on time
7. They undermine me by pushing regulatory changes that hurt my direct sales
8. Most of the salespeople don’t know anything about fine wine
9. They keep adding new producers to their book that are direct competitors
10. They tell me I need to “program” my wines in order to get the sales people behind them
Originally published at fermentationwineblog.com on December 12, 2014.