Getting your passport dirty 25 July 2007

Go and talk to the Americans, is Chris Mullineux's advice to producers

If you were to compare the passports of the winemakers who currently have their heads above water with the passports of those who are struggling, I’m certain you’d find a big difference in the wear and tear of their respective travel documents.  This shouldn’t be surprising – it’s obvious that those who make the effort to regularly visit their important foreign markets will be more successful than those who sit at home hoping their importers, agents, or even WOSA will do the job for them.

Nowhere is it more important to regularly visit than the USA, and although one hears this from many people, it’s not immediately obvious why. Having just returned from a two-week road trip to the US, I quickly learned the reasoning, and, as many South African wineries are pinning their hopes on this massive market to soak up their excess stocks, it might be good to explain just why they really have to make the effort to get over there to succeed.

Though it springs from the complexity of the US market, the reason itself is very straightforward. There is a three-tier system. By law, sales have to first go through (1) an importer, who sells to (2) distributors in each state, who then sell to (3) retailers within each state. This means there are more steps involved in selling your wine, and more steps means more people to motivate. It’s as simple as that.

In relatively uncomplicated markets such as the UK or the Netherlands (two of South Africa’s traditionally largest markets), it is relatively easy to get motivation running through the sales chain, as the chain itself is not that long. Normally a winery sets up a contract with an importer, and the importer is able to sell the wine directly to retailers in that country. As long as the winery sets itself up with a reputable importer, and gets them sufficiently motivated about the wines, then the importer and his staff should be able to get retailers excited about the wines, and have it flowing off their shelves.

The three-tier system of the US makes it much more difficult to motivate everybody in the sales chain about your wine, especially those at the end – the ones who are responsible for the final sell to the consumer.

If a winery takes the traditional approach of simply bringing the importer out to the Cape to see their cellar first hand, braaing him a couple of gemsbok chops and taking him to the rugby, they will probably get some wine out of the country with the first order. What happens then, though, is the importer shows the wine to distributors in various states of the US, and has to get the positive message and excitement across. If he succeeds, the wine will be taken on by the distributors. The problem is that the sales teams of the distributors are the ones who go out and motivate the retailer to buy and sell the wine, and these important people will have never visited the winery. They have no idea how the wines are made, or what makes them unique.

Without some support in the market from the winery (getting over there to pound the streets of New York, Chicago, etc together with the distributors), it is very easy to see how the message is diluted, and the sales teams of the distributors have a difficult time selling something they have no reference or feeling for. Sales will slow down to a trickle, and future orders from the importer will take agonisingly long to materialise.

The message is clear. To succeed in the US, winemakers must be prepared to roll up their sleeves, get their passports dirty, and pound the streets together with the distributors. The days of easy sales are long gone, but for those who are prepared to make the effort, the US is indeed a promising market.