Zero to four in twelve months
Not too impressive for cars, but for finding wine importers it’s huge.
At the beginning of 2011 our winery had no US importers and no promises of any in the near future. By the end of 2011 we had shipped containers to four importers in major markets and have orders placed into the future. Here is how.
The effort began in late 2010, with absolutely no prospects I did a mass emailing to importers. Surprisingly, I got a few kind responses and I sent out 6 sample sets but closed no deals.
I began to use social media, particularly Youtube.com, to create a presence, to show our production facility, our people, and our products and to share who we are with potential customers at all levels. These videos were done in POV style, not at all slick or commercial, rather hands on as if the viewer is with us in the winery, tasting room, or bottling facility. You can see the videos here: http://www.youtube.com/user/BradLaRochelle
I employed all major Social Media sites, including LinkedIn, Twitter and Facebook but understand that none of these resources can convince an importer to risk their reputation or money on you. The value of social media was to improve opportunities that were created in other venues and to solidify relationships and to remind buyers why they want to spend $60,000 on a container of our wine.
The next phase was to get in front of decision makers, Importers, Distributors and Retailers. In some parts of the world you can sit in front of someone’s office until they see you. In the US that will get you a restraining order. The wine shows allow me to talk to all levels and get an understanding of what they like and don’t like, label ideas, price ideas and how we stack up against other wines.
Two importer relationships began at shows and there are at least two more that I expect to finalize in early 2012. I budgeted the shows at $6,000 each and spent substantially less.
Wine tours are also extremely productive. Asking an importer to invest a large sum of money in you and your winery means he has to know you have the capacity, the integrity and the desire to do exactly what you say you will do. His entire season is wrapped up in your wine. It better be what he tasted and it better be on time. There is no better way to show your importer who you are than to tour him through your facility. Let him see the vineyard and see how you cultivate each varietal, how you irrigate, how you harvest. Let him meet your artist, your winemaker; let the importer engage the passion.
Two importers came to us after tours and there are several more that I am in discussions with. The cost of wine tours varies but they are without doubt the best way to secure a deal; it doesn’t hurt to tour the Importers warehouse either.
Looking into someone’s eyes and talking to them is invaluable in creating relationships and deals. Connecting with potential customers face-to-face is cost effective but not free, but all of our import deals were made over a glass of wine, in our tasting rooms or at a show. Email is free and useless unless there is a relationship. Social Media campaigns are extremely effective if you have an international brand, but if you are trying to build a brand it requires a human touch.
After we began to get serious inquiries from importers, I realized I had to take a step back. We had to identify the consumer, who we wanted to buy our wine and what our price strategy would be.
The wine buyer (consumer) in the US is segmented into 3 groups: Juice Buyers, Connoisseurs, and Hipsters.
Juice Buyers are just buying the cheapest juice out there, in the US that is around $3 bottle – this is not our customer.
The Connoisseur buys expensive wine, usually has favorite vineyards and likes to show off that knowledge to impress others. They are very knowledgeable and spend a lot of money on wine but they are not our customers, they usually prefer old world wines.
The Hipster is a partygoer, they drink wine because they like the taste, maybe they can’t identify the region or varietal or if it has oak or not, but they like wine. They share wine with friends and drink wine with dinner. The magic price point is below $9.99, sure they buy some more expensive wines but in an unrated wine they are most likely to stick to $9.99 and less. This is our customer and probably yours.
Once we established who our consumer was we could market, to them, through our labels, our print and web presence and establish relationships with Importers, Distributors and Retailers who market to this consumer. Never underestimate the value of real estate, and being in the right piece of real estate requires you know who you want to sell to.
Now comes the most important part: How do we produce our wines at a landed cost that allows the retailer to shelve the wine at $9.99 or less so the Hipster will try it?
I have created a spreadsheet that shows the landed cost at any US port and the expected retail, including Importer and Distributor add-ons (taxes, storage, drayage, commissions and margins) it is attached at the bottom.
The complexity is added to with marketing costs. I have offered every Importer the best price and let them know this does not include marketing costs. Sure I can charge you an extra .50 per bottle and then give you .40 cents back as marketing, but isn’t it better to just have the lowest and cleanest price? Two Importers said “yes” and two said “no”. I do have a small sample budget but it is very small. Many US Importers use the “Sample Budget” as a discount, so you may have to factor in 6% free wine on each order; it’s not clean and not the lowest price but it is customary.
The biggest obstacle I have faced is human. Cultural obstacles are always huge, when moving in different parts of the world, different customs, behaviors, and languages make every transaction edgy. Business rules in the US seem simple to those of us raised in it, but it’s harder for others, especially when you move from being in production to sales, or from being King of the Mountain in your valley to just another of the 4000 unrepresented wineries trying to get into the US Market.
There are some basic business rules in the US:
1) Expect people to make money, never do business with someone who does not expect to make money, they are either lying to you or to themselves.
2) Be honest, humble, kind and courageous and expect the same from people you deal with; someone who is not is probably not going to be a good partner.
3) Answer the phone messages and emails within 2 hours, especially in off hours and weekends; if someone emails you at 1 AM on a Saturday night, they must really need you. Stay in contact and not just when someone owes you money.
4) Keep everything simple.
5) Expect mistakes, accept them and learn from them and don’t repeat them.
6) When there is a problem, solve it regardless of who is at fault, even if it is not your company. If you cannot solve it, let everyone know what the problem is and how it needs to be solved and by whom.
Everyone on your team dealing with the US will need to heed these rules. Make sure your US Partners know what to expect when dealing with your Region as well because it may be foreign to them.
Make sure samples are available in the US so they can be shipped quickly. You may have to hire someone in the US to do this; you should also submit your wines to the Wine Enthusiast, Wine Advocate, and Wine Spectator magazine for ratings. Regardless of other awards, these ratings can be very influential.
There are several pieces of the puzzle that need to be handled as well before you jump into the market. Make sure you have FDA approvals, starting here at the FDA International Activities page: http://www.fda.gov/Food/InternationalActivities/default.htm
Remember that labels are approved by the TTB and it takes 90 days if they are perfect. Most Importers will know exactly what needs to be on your label and font sizes, etc. You can look at the TTB page here: http://ttb.gov/
For 2012 I intend to continue to grow the brand and take on new wineries that want to come to the US Market. I will use my own Import License along with other Importers to introduce new wineries that want to do Direct Importing to larger customers, chain Restaurants and large grocery clients.
Feel free to contact me for advice or information and I am always looking for new wineries to partner with.
Brad LaRochelle
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