The ‘Big-Game Hunt’ for producers is on and this year it will be different.
Today we are in the most muddled and fast-evolving wine market I have ever seen. In distribution, the fastest way to grab attention and a bump in the NYC market is to go on a big-game hunt and pull a prominent producer from their current import/distribution* partner. In many cases, these prominent producers are represented by historic importer/distributors and have been for years.
The chase to represent top producers is not at all new–it is as old as the wine business. However, last year saw some notable shifts in distribution that hint strongly at a domino effect towards a new paradigm: Smaller distribution players now have a stronger shot at taking an important, top-tier producer.
So what is different now? There are three primary reasons for the shift:
Old and slow
Up until recently, old-school, historic importers and distributors were close to untouchable. Approaching and taking the top producers from their portfolio was damn near impossible. Their relationships were strong, their numbers were rising, and their market penetration was deep. Further, there used to be a gentleman’s agreement among the historic players in the biz that poaching a producer was bad form**. That is definitely over. Over time, many of these old-school distributors have grown in size and are now starting to show wear and tear. They are the big, rusty ship with the small rudder: Immense power with slow turns.
The Brand mid-life crisis
After an incredible run of more than a decade in this market, highly successful producers are coming to a decision point. The proverbial fork in the road. At the winery, many are experiencing a shift in leadership via a change in ownership or the owner/winemaker is passing along to the next generation. In turn, the next stewards of these well-regarded estates are being forced to make difficult decisions about how their wines will be distributed. Do they stay with their current relationship, or make a move to a smaller, more up-and-coming distributor? It is likely that they have witnessed the change in the distribution landscape of the NYC market from afar and also likely that they understand enough to know that the market is more competitive and complex than ever. Making a change could provide a much-needed brand reset…
Rampant growth over the years in the sheer number of distributors in combination with the NYC Market volatility creates immense pressure on the importer/distributor. In this climate, the middle players in distribution have to make a move up, or it gets difficult to retain your current producers, salespeople, etc. They NEED to get aggressive and pick up some attention, or they begin to go the way of the dodo…
“ The tide has turned and now a smaller player has a stronger shot at grabbing a historic producer.
The once untouchable, top distributors are going to continue to get beat up this year by up-and-comers. Which producers will be with whom is up in the air, but for the first time in a decade, the big-game hunt from importer/distributors coincides with a free agency of producers, so I think we see some surprises.
Will these producers and their new distributors get the short-term attention bump and then the mid-term slump? Only time will tell. But I guarantee it will be fascinating to watch.
Note: Agility in distribution will win much more going forward. Like a great linebacker: You need enough size (but not too much), intelligence, speed, AND agility.
*Above I have avoided addressing the nuances between the importer that is also the distributor (one that works directly), the importer that works with a distribution partner, and national distribution. There will be changes in all, and I refer to them generally as ‘importer/distributor’.
**The term ‘poaching’ also refers to stealing producers. It is used often and is more complicated than it seems. A producer has to go through legal shifts, etc. to make a change, and changing distribution is always a two-way street.