Competition and Consolidation
In 2006, it has been estimated that the top 10 wine producers (who control about 82% of the market) introduced 41 new brands - for a total of 157 new SKUs - all to a network of distributors and retail chains that is consolidating and shrinking at an unprecedented rate.
Think about that - 157 new SKUs from the most powerful players in the wine business in one year! And that doesn’t even take into consideration all of the new wineries and brands from the other 18% of the market, or what’s been released so far in 2007. Those are truly amazing numbers… but think about the implications.
If you are a 3-50K case wine brand without guaranteed placement at retail, it means that it’s getting tougher and tougher for the average consumer to find to your brand at a brick and mortar wine store.
It reminds me of the music business in the early 90’s: a shrinking number of distributors and retail chains, with the major labels releasing new records at an astonishing rate. If you were an independent record label then with a new release looking for placement at retail, it was like concocting a new granola recipe in your kitchen and calling on Safeway for shelf space.
So what’s a winery to do? Well, for starters, be happy that your customers can’t download a bottle of wine over the internet.
They can, however, easily find you - and all that makes you you - with a couple clicks of their mouse. They can also buy your wine on-line. It just stands to reason that with available brands at an all time high and available SKU space at traditional distribution/retail getting smaller and smaller, consumers will be looking for choice wherever they can find it. And the internet is such a beautiful place for choice.
If you’re a winery wondering how in the world people are supposed to find your life’s passion, consider this: at Inertia, we’re the industry-leading experts in providing you with the tools and resources to help you manage all of your Direct sales- to both Consumer and Trade.
You’d be amazed at how quickly you can grow your Direct to Consumer business with dedicated planning and execution.
And our exclusive and patent-pending Direct to Trade program helps you sell Direct to retailers and restaurants in 11 States (and growing), without having to line up traditional distribution, all within compliance of local and federal laws. Talk about choice…
Breaking down the barriers between you and your customer is why we started, where we excel, and how we can help you grow your business in an increasingly competitive landscape.