Maximizing Wholesale Sales Strategies in Beverage Alcohol Industry

In the dynamic and competitive world of the beverage alcohol industry, maximizing wholesale sales strategies is crucial for success. Wholesale channels play a significant role in reaching a broader market and increasing brand visibility. Cultivar Marketing, a reputable consulting business specializing in sales channel strategy and management, offers valuable insights into how to optimize wholesale sales strategies in the beverage alcohol industry.

The first thing to recognize is that wholesale and DTC sales channels have a symbiotic relationship as opposed to a parasitic relationship.

Distributors have fought for years and continue to push against winery and spirits DTC channels because they believe they are "cannibalizing" their own sales in a given market.

But the opposite is actually true. Numerous studies at both a national, Credit card universe and winery specific have shown that club members purchase 38-42% of the brand they are a member of, in traditional retail channels.

One key aspect to consider when developing wholesale sales strategies is understanding that you need to have a well defined brand strategy.

1. Do you know your brand's core values?

2. Do you know the position it occupies on a consumers "brand ladder"

3. Is all of your Marketing communication (Mar-com) consistent not only in message and imaging but type face and color palate?

A fine tuned brand need to create enough marketing "noise" to allow your brands to be "pulled through" the retail channels. That means you have to create the "push" to make consumers aware of your brand and be effective in positioning it in the mind of your target consumer to create "sell through".

Noise: Think advertising, social media and PR.

Finally, don't assume your distributor is going to do this for you. As the wholesale channel consolidates, (three distribution companies control 67% of all wine sales in the U.S.) distributors act more like logistics managers than marketing professionals. That is not to say that their sales reps are not out dragging a bag and pounding the pavement to make sales. The reality is, your brand needs to be in that bag because it is desired by retailers in both on- and off premise, and it's your responsibility to make that happen.

It is a given that a brand ("supplier") needs to maximize and build strong relationships with wholesale partners.

Some strategies that have proven effective include:

1. Vary your communication messages with your distributor partners. Try not to make every contact confrontational

2. Build relationships with the "middle managers". this may include area or district managers--the level below the executive sales people in a distribution company. It's important to know and communication with the exec level, but know that most of the hard work is done by the middle managers.

3. Meet quarterly--in person--with your distribution partners in your top five markets every year. Review deletions, pricing programs, incentives, new accounts, and re-order rates.

4. When traveling to market, plan your trips months in advance foloowing the distributors market visit planning guidelines. Since COVID, distribution companies have become more wary of in-market work and have refined their processes to restrict visits.

Additionally, pricing strategies play a crucial role in wholesale sales success. Setting competitive prices that provide value to both the wholesaler and the end consumer is key to driving sales volume and maintaining profitability. Offering discounts, promotions, and incentives can also help incentivize wholesalers to push products and drive sales. However, it is critical that you maintain a 10,000 foot POV on all of your channel pricing. For example if you have a strong DTC program with robust club, you want to ensure that your wholesale pricing does not create a retail markup that could cannibalize your club member pricing.

i.e. You have a $100 retail Cabernet that you sell to the wholesale channel for $70. Your club price on the wine is approx 15% less, or $85. It is critical to keep your price high enough that your club member does not see that wine on a retail shelf or in a "flash sale" (Wine Spies, Last Bottle) for less than your club member price of $85.

Same example: Your distributor now asks for support on this wine, as it's not moving well, that will take the retail shelf price below $85. Depending on the scope of the program, you may risk "blow back" from your club members when they see their wine "on-sale" for less than they paid per bottle. (remember also, club members are paying for shipping!)

Furthermore, having a well-defined marketing and branding strategy is essential for successful wholesale sales. Creating a strong brand identity, developing effective marketing collateral, and implementing targeted marketing campaigns can help increase brand visibility and attract the attention of wholesalers and consumers alike.