Marketing your products and services
Market entry
The US market for alcoholic beverages and wine is relatively mature, with a few dominant players in the wine market. In most cases, foreign producers who wish to enter the US market have done so through licencing agreements or joint ventures with a domestic manufacturer who is already established in the market.
Mergers, acquisitions, joint ventures and other financial agreements have become common occurrences in the US alcoholic beverage market. An agreement with a US producer is likely to provide the best opportunities for exporters to enter this wine market.
Alcoholic beverages, including wine, are regulated by both federal and state governments. In most cases (due to US distribution laws for products containing alcohol), alcoholic beverages must be distributed using licensed wholesalers or distributors. Manufacturers must take the initiative to ensure that products meet the US import and labelling regulations.
With a large number of domestic and international wines competing in the US market, it is important that your product is appealing to customers on the shelf. Although wine quality is a prime consideration, product presentation, especially labels, are critical in selling your wine to the public.
To make your product stand out with the distribution and retail sales people, you will need to provide them with tools to sell your wine. This will include marketing items such as shelf-talkers with technical and taste information on the wine. Most importantly, they need a ‘story’, which will help them remember your wine amongst all the competition, and provide a point of interest for the customers they are trying to sell to.
You will need to prepare an export price list with FOB prices in Australian and US dollars. This price list should only be presented to importers.
Many importers will ask for ratings. Importers are referring to ratings from US critics and publications such as ‘Robert Parker’, ‘Wine Enthusiast’ and ‘Wine Spectator’. You may submit wines to the first two prior to having secured an importer, and the ratings will help you to obtain interest of importers. Australian medals and rating are not given the same level of consideration as ratings from US rating authorities. Contact Austrade for information on submission requirements and schedules.
It is important not to overlook the need for a professional looking webpage with descriptions of your wines and an email address, which uses your company name as the domain, rather than Hotmail or BigPond.
Market visits based around the key buying time of January to July are recommended.
Samples can only be sent to the US through a licensed importer. Austrade has arrangements with importers in New York, North Carolina and California who may import your samples for a fee.
Distribution channels
The three-tier system continues to be the predominant distribution model in the US, encompassing importers, distributors and end retailers. Movement of product and access to individual state markets can be complicated by demarcation in the roles of these channels.
Brokers, Internet sales and other innovative sales channels are developing their influence as competition increases.
While retail sales hold an 80 per cent market share, wine sales through bars and restaurants account for roughly 20 per cent of the total volume of wine sales. However, bars and restaurants account for over 30 per cent of wine sales in value terms.
The difference between the value and volume of wine sales through various distribution channels results from a preference for higher-quality wine purchases when dining out. Whether dining out personally or for business purposes, consumers have shown a tendency to purchase higher-quality wines than those purchased through retail channels.
When seeking the services of a distributor or wholesaler, exporters should consider the relationship that they have with local governments, buyers and banks, the facilities, and their willingness and ability to keep inventory.
Currently there are an estimated 4500 liquor distributors in the US.
The largest alcohol wholesalers are:
- Southern Wine and Spirits of America
- Charmer Industries/Sunbelt Beverage
- National Distributing Co.
- Young's Market Co.
- Glazer's Wholesale Distributors
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