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March 17, 2008 | Direct-To-Trade , WineDirect Products and Services | WineDirect Admin

Diversify your sales channels

The Federal Reserves rate-setting committee is meeting once again this week and is expected to lower its key interest rate to a projected 2.5%. The rate now stands at 3% and just six short months ago it was at 5.25%. All this is in response to a frail U.S. economy and the deteriorating condition of global financial markets.
The wine industry is not immune to economic woes and as this wave of uncertainty rolls upon us we all need to prepare for what lies ahead, and how do we do this? We look into the past, and industry trends seem to suggest one thing that we’re all going to be happy to hear; per-capita consumption of alcohol has a propensity to increase during economic recessions. Although this is not wine industry specific, as wine’s share of overall alcohol consumption increases it becomes more relevant. Wine industry specific trends include:

- Disposable income tends to be spent at home during economic downturns. This may mean that while restaurant wine sales may see a lag, off premise sales could increase, channel volume may see some dramatic changes.

- Trading down. While we may not see an overall decrease of wine consumption we may see sales of high price point wines decrease while the “value wines” may find sales spikes

Aside from tracking historical trends and planning accordingly now would be a good time to re-access your sales channels. We all know the economic benefits of selling Direct-to-Consumer, are you allocating proper resources to the Direct-to-Trade channel?


 

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