New territories represent new opportunities and that’s always exciting, but Michael Cook has learned to proceed with caution.
“Our reality is that we need distributors to get the wine to the accounts for us,” the Director of Sales for Lieb Cellars & Bridge Lane Wine told Vintner Mag, adding that true “direct” sales would be a logistical nightmare for the Long Island, New York winery when it comes to fulfillment.
Cook’s first rule is that he’d rather have no distributor than the wrong distributor.
“The next rule is that you need to build carefully and make sure to support existing markets and partners before you focus on new territory,” he said, stressing a ‘building, not adding’ mantra. “We can add new markets no problem — we need solid partnerships to build markets.”
There are a few different approaches and considerations in creating a territory “target list” for Cook.
“The obvious starting point is geography and proximity to our existing markets,” he said. ”It’s nice to be able to connect the dots on the map consecutively. After that it’s a balance of ’wish list’ versus ’who’s listening to us’ versus ’who’s asking for us.’ “
In the winery’s case, self-distribution would not be viable from a logistics standpoint. So Cook said finding a good distributor fit can look very different in different markets.
”Start with the goal in that market and work from there,” he said. ”If we need ’wine nerds’ to focus on particular products with the goal of on-premise placements in a certain area (versus retail volume), we’re looking for small boutique, quality-focused distributors.”
Sometimes the question is who can best handle the logistics and geography.
Texas was an example Cook gave for his winery where they found the best of both worlds with a quality-focused partner that is also set up to service the entire state.
”In my experience though, whether a larger or smaller house, the “good” conversations start with the wines, the winery, the winemaker, the philosophy at the winery and in the vineyards, and the goals that we share with the potential partner,” Cook said. “The “bad” or “wrong” conversations often start with ’marketing and promo budgets, product placement budgets, and incentive programs.’
”If they are more concerned with how much money we’re ready to throw at them to pay attention to us, we’re moving on.”
Although more of a hurdle to get over more than than a deterrent, working with each state’s laws and regulations
“It would be hugely helpful from an admin standpoint if we had some national standardization to the ABC laws and regulations,” he said. ”Very thankfully for me, our General Manager, Ami handles all of the compliance issues for us. It’s complicated and it’s all written in “lawyer speak” and every state seems to have it’s own quirks and limitations.
”Sometimes the ’jumping through hoops’ with a state agency can really slow down the progress, particularly in launching new markets.”
Cook said that a good friend in the business who’s helped the winery out a lot recently gave him some great perspective on exploring territory options.
”He said, ’Make the wish list and pursue it, but the goal is to find good people who are truly interested and supportive of what you’re doing, regardless of where that might be,’ ” Cook pointed out.