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April 14, 2009 | Direct-To-Trade | WineDirect Admin

It’s A Tough Market Out There

As part of the Inertia Direct-to-Trade (DTT) initiative, I’ve recently spent time on the street in various markets calling on restaurants and retailers, introducing our DTT program and, ultimately, selling wine. As you all know, it’s a difficult market right now.

To give some perspective to my comments, I’ve been selling wine for 31 years, starting with carrying a bag for a Gallo wholesaler. I’ve called on thousands of accounts, selling wines of all prices, and this is hands down the toughest market I’ve seen. Okay, so you already know this. The question is, what to do about it.

First thing to keep in mind is that consumers are still buying, drinking, and enjoying wine. There was a study done in 1981, the last of the Carter years, that said that consumption of alcohol beverages will only decline when unemployment exceeds 11%. Last I saw current unemployment is around 8.5%, so we are good there.

However, while volume of consumption doesn’t decline, price point does. The consumer is buying less expensive wines today than they were a year ago. No great revelation. But again, what can you do to keep your wine moving?

If you have distributors, I’m sure they are telling you that the market is awful. My suggestion is don’t take their word for it; they are selling wine. In many cases, they are decreasing their inventory, so while they are selling wine, they’re just not buying as much. Your job is to make sure they sell your brand, not just the other brands in their portfolio. How? Be aggressive. Make market visits. In tough times, it’s all about getting distributor share of mind.

Next, I would consider adding markets you’re not already in. Is there a market or state that you have no representation in, but would like to? Maybe the Inertia Direct-to-Trade program could help. In the same vein, make an effort to sell to trade accounts in your area. Right now the trade is in control. Give them attention, feed their egos. They still need wine to sell.

The other avenue to consider is your Direct-to-Consumer business. Inertia will be holding a Workshop for our clients on May 14th, specifically focused on how to grow your Direct-to-Consumer business in these tough times. If you are an Inertia client, look for announcements on the dashboard of your RTE.

Lastly, this is a time to be patient. However, being patient doesn’t mean accepting current results without trying to counteract the trends. And, it does mean not damaging your brand by selling wine at prices so low, you’ll never recover from. At all costs, you must protect your brand equity.

My guess is that we are in an inventory correction right now, and by holiday 2009, we will start seeing a return to recent form. At least I hope so.
Good selling.
 

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