THE REORDER 03/20/20

Salescraft: What to do in an Economic Downturn

Salescraft: What to do in an Economic Downturn

The current pandemic is the worst market event I have witnessed since September 11th. There is a complete restructuring of the marketplace and the future looks uncertain and at times, downright scary.

What do you do when an economic downturn like this forces your hand and you have to adapt?

These are choppy waters, and the challenge is to observe what is going on, stay present and enter these waters without flinching.

Some ideas and thoughts below. Do not despair.


Zen and the Art of Sales in a Crisis

I vividly remember walking out of the restaurant called Bolo during the economic meltdown more than a decade ago and wondering if I would ever sell a drop of wine again and be able to support myself. I was as scared as I had ever been. The moment I stopped scaring myself, other avenues opened and possibilities arose. I saw the edges and the spaces available clearly.

While the future is uncertain, what we are in today shall pass. If I could hug you, grab you by the shoulders, look you in the eye and tell you that the fight or flight response will not serve anyone, especially you, I would.

It is easy to get tied up in your imagination and think about what has been lost as a forever kind of thing – but the truth of the matter is that you don’t know. What will be reborn, rebuilt and revitalized will surprise you.

What is vital in times like these is to continue to envision a better future.

SALESCRAFT – WHAT TO DO

Retail

Retailers have understandably gotten a positive bump in these turbulent times. If I am sitting down and considering what would be best to offer – it looks like this:

Reaching out thoughtfully with both ideas AND inquiring about needs. Putting up ideas like the ones below. Start here if you are locked up.

Any wine that retails under $24.99 in “good” Inventory that can be a  go to core item.

Any wine or spirit on special deal.

A wine or spirit that will be on special deal in the future.

A wine or spirit that has been overlooked for no good reason.

Rosé that can be on deck for when the weather breaks (Most have probably sent offers by now, but I would encourage sending a follow up offer or two now to gauge the temperature/reaction).

Any wine or spirit that is a “call category.”

Restaurant

Get involved. Call your representatives and go to saverestaurants.co to be a part of saving the restaurant industry.

And, reach out to friends and colleagues in this diverse industry that are currently unemployed. There is massive uncertainty, so please extend a hand and support however you can. Give to the gofundme pages that are all over social media supporting various restaurant staffs, if you are in the position to give.

These are choppy waters, and the challenge is to observe what is going on, stay present and enter these waters without flinching.

 Company

Some companies are in straight up survival mode and they will do whatever they have to do to stay afloat in this trying time. Realize that you probably don’t know what is truly behind the curtain and that the better you can adapt, the better you will fare long term. Also, don’t be afraid to ask to help so you can understand the challenges and what you can offer to get through them.

IMPORTANT NOTE: If companies start adjusting commission and/or salaries down in order to endure, it can potentially set off a domino effect of panic. This type of survival move can have a culture shattering effect unless it is messaged properly and the messaging is exceptionally difficult because no one wants to lose anything in a downturn.

Personal

Be thankful – consider that whatever the future holds, it is a gift.
Immediately scale down any extraneous spending.
Learn something new that you have always wanted to, but never had the time. Challenge yourself to think forward, not back.

THE REORDER 03/01/20

The Concrete Ceiling of Sales

The Concrete Ceiling of Sales

There is nothing worse than being stuck and feeling like your head is hitting the concrete ceiling in sales.
As an artisan salesperson – while you expand your world and as you exceed expectations, the volumes will go up and the connections will accelerate, bringing more references and more accounts. Eventually, you are going to run into a problem: the concrete ceiling of sales.

I can tell you with certainty that it is difficult situation when you’re doing well but you also know clearly the effort required to do more. You are at capacity within the system that you work in. This is the hamster wheel of the high performing sales rep.

The typical symptoms

Feeling like you have to hit a home run every month.

Making deals that benefit everyone but you.

Setting up systems for growth that are undone by the functionality of the company you work for.

Asking to help and not being heard.

Placing and processing orders becomes a problem and not a pleasure.

The stuck sales soldier is the hamster in the wheel and the artisan salesperson is at choice.

Once you sell a certain amount and you are connecting a viable quantity of wine and spirits to a group of steady customers, you are hedged to the functionality of the company you work for.

Put yourself in these shoes: there is only one way to get out of the hamster wheel and that is to change a company from the inside or move on.
Both of these are worthy paths you can take, and both are difficult.

The stuck sales soldier is the hamster in the wheel and the artisan salesperson can make change – remember that you are always at choice.

SPLASH DECANT 02/13/20

The Dangerous Domino Effect of the Wine Tariffs

Pres. Macron and Pres. DJT - Wine Tariff

The Dangerous Domino Effect of the Wine Tariffs

Many articles have been written about the threat to the wine industry from the 25 percent wine tariffs imposed in October of last year and the threat of the up to 100 percent proposed in December. But not enough attention has been given to the dangerous domino effect the tariffs have initiated.

These tariffs – both proposed and already imposed – have acted like a string of napalm bombs.  The lingering impact is more destructive than anything I have ever witnessed in the wine business previously. The after-shocks have shook the very foundation of the wine distribution chain and left a looming shadow of the grim reaper hovering over the whole industry.

It would be impossible to fully illuminate the panic that has set in on the U. S. importers and the subsequent reaction of business actions/decisions that have occurred in response – but below are a few of the major shifts I have seen in the game.

In response to the proposed tariffs, there was a giant effort by the industry assembled opposing them, but it may not be enough as we go into the second supposed decision moment on Tuesday.

I hope everyone keeps the pressure on their representatives, because the threat is definitely not over.

What is certain is that there is immense confusion about which tariffs are still in play and a palpable fear among those in the wine industry that realize that the heavy tariff hammer could still come crashing down.


The Facts

On October 18th of 2019, in retaliation for the Airbus/Boeing ruling by the W.T.O., the U.S. imposed a 25% tariff on products from Germany, France, Spain, and the United Kingdom, including wines of 14% or lower.  These tariffs are due when the products pass customs. For a full list of the October tariff products, click here.

In December, less than two months later, the U.S. formally proposed to escalate and expand the tariffs to up to 100% tariffs on all wines from the EU (and other EU products). These proposed tariffs are also related to the W. T.O. ruling in favor of the U.S. This tariff threat is still active and could still be imposed. Click to view the proposed list here.

French President Emannuel Macron apparently had a “great conversation” with our president and they agreed to a truce (announced via twitterfor 2020. This supposed truce is in response to the 3% digital tax that was passed into law last year in France and retaliatory “extra” tariffs threatened by the U.S that do not relate to the W. T.O ruling. This truce apparently means (color me dubious) that French sparkling wines like Champagne, Crémant, etc., are spared from this retaliatory tariff – at least for now.

Contrary to some confusing press coverage and social media posts, this “twitter truce” has nothing to do with the up to 100% tariff proposal that is still in play. 


A Shape-Shifting Moment

If the emotional mindset of market were reflected in the stock market, it would be in a free-fall full sell off. Importers are straight up shook.

What happens during these moments? A massive reorganization of the whole shape of the industry, followed by acquisitions and consolidation.

Cadence Alteration

This is a business that works on a cadence – there is a tempo to importing wine from Europe in shipping containers.

The 25 percent tariffs that were imposed in October came as a surprise and put immediate pressure on countless importers with wine already on the water.

The timing of the October 25% tariff (going into the busy season of ’19) cut into 2019 profits and likely pushed some importers into the red.

With the imposed 25% and subsequently threatened up to 100% tariffs, the cadence of the entire wine import business became immediately corrupted, leading to significant bear trap scenarios highlighted below. In short, it is already real messy and will get nasty before it gets any better.

Right now, importers are actively trying to share the current tariff costs by asking for discounts from the wineries, putting new wineries they were planning to launch on hold and most alarmingly…questioning whether to put wine on the water at all.

Scale Trouble

There are a plethora of “small” importers in the game. The small, specialist importer segment is one of the largest growth segments of the past decade. Many of these smaller operations don’t hold a lot of stateside inventory or have large cash reserves. The currently imposed 25% tariffs impose a major strain, and in many cases, the threatened tariffs put a halt to any ordering in the new year…which brings me to the next problem:

Out of Stocks Galore

Normally the first months of the year (January/February) are naturally lean in inventory. Importers are re-upping after the high velocity buying/selling of the holidays and there are some end of year tax considerations.

Because of the imposed 25% and threatening prospect of up to 100% tariff threats, many importers were horrified to order more wine for the new year. The idea of re-ordering wine presented an incredible risk.

This dynamic is creating a shocking amount of stock outages and once-in-a-sales-lifetime opportunities for those with inventory to fill the open spaces on lists and shelves.

Sadly, as of this moment, a few notable importers are still waiting to order wine. They are afraid to get hit with a higher tariff that is imposed while wine is on the water, and can you blame them?

Pricing Push

Importers and their distributors are going to start to raise pricing in response to the imposed 25%. This has already started to ripple through the marketplace and will continue to over the coming months.

Will we reach the Sancerre ceiling? Will some categories start to fail because they will inch past the consumer comfort zone with pricing? I think it is a wine by wine situation, but there will surely be strong changes. Additionally, certain “on fire” categories will move past the sweet spot on lists and start to stagnate – they just won’t fly off lists like they used to.

Here’s what I know for sure: the action of moving a customer from one category to another is much harder than it seems. The Touraine Sauv Blanc customer doesn’t automatically start buying the New Zealand Sauv Blanc.

Further, if the currently imposed tariffs are upped to 100% and/or expanded to other countries in the EU, the category discomforts get amplified exponentially.

Collector Heaven

Collectors are secretly loving this. A collector with wine in their cellar stateside looking to sell is in wine heaven. All of the notable/collectible wine is worth more now and can be sold or consigned at a premium to restaurants and retailers in NYC.

...there is immense confusion about which tariffs are still in play and a palpable fear among those in the wine industry that realize that the heavy tariff hammer could still come crashing down.

Rep Moves

No one in this business enjoys being out of stock and it isn’t ever a good look with any customer. Bring up stock outages/inventory problems to a sales rep and there is always a twitch. It is the strobe light of beverage sales.

Sales reps don’t like sales haircuts. They hate the prospect of the sales floor dropping out from under them because of short inventory.

For this reason, you are going to see some sales rep movement; reps are going to look for greener grass.

Producer Shuffle

Producers are going to move to new importers for the U.S. and/or allocate more wine into other markets around the world. They HAVE to look for the right place to keep stable sales.

This is exceedingly complex because coveted producers are often smaller production and they don’t necessarily have to sell to the U.S., but the past ten years are a good argument that they would be risking quite a bit if they choose to not be represented in the thirsty U.S. market.

What does this do for the natural wine tribe? It isn’t good for availability or representation and the pricing increases are going to be a heavy burden. Think about the Loire Valley in particular…

The DI Model Danger

Going direct is another trend of the past decade – it means cutting out an importer (or distributor) tier, controlling pricing, and ultimately making more profit margin. I have written about the responsibility of import and distribution before; it isn’t as easy as it looks. Retailers and Direct-to-Consumer operations have been using email campaign programming to pre-sell, import, then deliver the wine to customers. Now they are going to face the same difficult and existential question the classic importer faces: do we risk it? Do we risk the chance that there will be more tariffs imposed on wine on the water that we have already sold and then have to pay the tariff on it when it arrives?

For now, this model or any variation of this model looks exceedingly dangerous.

 

Who wins?

Simple answer: Stateside inventory plus cash for buying power (or the possibility of borrowing cash), and consistent payment patterns over the past few years with producers equals a major upper hand. Some might even call it a wealth of inventory – I call it the model that will win every time.

THE REORDER 01/31/20

The Blueprint of the Artisan Salesperson

The Blueprint of the Artisan Salesperson

I used to think there would be a time where things would just happen and it would be near automatic.  Wine would flow like a river, spirits would tumble into cocktails and an ease would be ever present as you influence/witness/serve as the salesperson. It would get “easier.”

The truth is that the artisan salesperson never arrives at this heavenly place. You have to always keep reinventing your practice, rethinking why and how – not just with your customers but with what you do on the regular.

Below are five fundamentals that will open the door to being an artisan salesperson – a salesperson that wants to do right.

If you get off track – start here.


#1 Philosophy – It starts with you.

You cannot do this at a high level without a philosophy. You have to know where you start and where the work finishes. You have to know why you are choosing to do the practice of sales. If it is just for commission, at your best you will only ever be just good enough.

#2 The Customer – never a number

Customers are not randoms or black and white numbers in a cell that could be raised 3 percent, they are people. Even in this persona over personal technological world where it can be difficult to know people, and many want to just click and buy, it is better to have a personal connection. I would argue further that you need to have a feel of what it smells like in that restaurant or why that retailer does so well on that block. These observations cannot be faked – get to know who you serve by showing up.

#3 What are you selling?

What is the context of the products? All technical details aside, where does what you offer fit in? Who are the competitors? What makes yours unique? Why this one over that one? This takes effort and you must taste more than you talk to acquire reference points. Actually taste the competitors and see what comes. Have a way that looks at the wine beyond the quality call. Look at the style.

Hint: pricing is almost always the last thing to sell first

Most salespeople (often at no fault of their own) get hyper-fixated.

#4 Buyer thinking – Think like a buyer.

Think like a buyer and you will be able to be a savvy matchmaker. It is not easy to do and takes real intention, but if you can put yourself in the buyer’s shoes, you can truly see what drives their choices; not just product or what they like, but something deeper.

#5 Look for the spaces

You must pan out and look more broadly to see the spaces. Most salespeople (often at no fault of their own) get hyper-fixated. I have often. The only way to really be “in it” is to pan out and look at the edges.

The customer just inquired about a pallet of this – why did that happen? What is really going on? If you can figure that out – you will always have a head start.

SPLASH DECANT 12/31/19

The Best of 2019 – a List

The Best of 2019 – a List

I give you the best of 2019…


Best Restaurant Conversation – Heard at Bar Pisellino

Q: What’s the name mean?
A: It means little dick.
Q: Oh, do you have lattes?

BTW, this is a brilliant Bar for Vermouth and cocktails in the evening and incredible coffee and pastries during the day.

Best Wine Service – Andrew Newlin, Raouls

I was lucky to be served by so many greats this year, but Andrew Newlin (now working for Thomas Keller in Miami @ Surf Club) is about as fast on his feet with table side banter as it gets and in my mind, he made wine service great again. Watching him serve wine multiple tables at Raoul’s looked not only like a blast – but he made it look real easy. Slow clap for Newlin.

Best New Restaurant – The Banty Rooster

This was a tough one. The Banty was a late entry and offers a brilliant and delicious menu of southwestern food (you need anything with Hatch Green chiles, thank me later), a room with a purpose, and the most charismatic, intelligent and lovely proprietor and chef team you could imagine. Go here yesterday.
Infatuation review here.

Best dish – Estela

Not really a shocker, but the red shrimp and mushroom dish from chef Ignacio Mattos and the team at Estela was an epic and sensual wave of umami, texture and balance. The dish is James Brown’s Get On Up meets the Mozart Requiem Lachrymosa; a religious experience of dark and light.

And Smeltz + somm crew know how to have fun and pair wines as well as any wine team in the city.

Best Cocktail – Momofuku Ko (Bar)

The 3/4 cocktail at the Momofuku Ko bar could be served anywhere and would be loved. Simplicity and beauty in one cocktail. I drank it and couldn’t help think – “why didn’t I think of that?”

Recipe:
¾ oz. white rum
¾ oz. bourbon
¾ oz. Braulio
¾ oz. Nonino

Stirred, served over large rock. Lemon twist expressed, but not in the drink.

Best Wine – Capellano Super Barolo 1947

Super Barolo from Capellano 1947 shared by a trusted and generous friend. This wine that whispered “carpe diem” like that scene in dead poets society and I didn’t laugh – I took it friggin’ seriously.

Best Winemaker – Nate Ready of Hiyu/Smockshop Band

I admit, I am biased. I also have the pleasure of working with many epic winemakers. But the winemaker challenging current viewpoints while changing the future of American wine is Nate Ready of Hiyu and Smockshop band. The work he is doing is without category and evades the easy bucket we all want to place wine in. He also shepherds (along with a wonderful team), a place that is equal parts faviken, permaculture farm, and monastic meditational dream where the team creates a bit of art everyday with nature.  The wines are not for everyone, but isn’t that the point?

Best Wine Event – Running of the Scales, De Maison Selections

Andre Tamers of De Maison Selections pulled of the most incredible wine event that will ever be put on.
This was like pulling off the fyre festival of wine and spirits that actually worked – ran smoothly and completely as planned.

This was like pulling off the fyre festival of wine and spirits that actually worked - ransmoothly and completely as planned.

Best lunch – Alain Passard Farmhouse in Normandie

Lunch at Alain Passard’s garden and farmhouse in Normandy.
Jedi service, incredible company that understood the nuance, execution and soul of the food in an open and generous setting. The farm tour was pretty awesome, even in the rain.
This was a lunch for the history books. Note: you can believe the hype – Alain Passard is not just a charismatic showman, but one helluva cook. Watching him is like watching a Cata. He knows every move, every subtlety.

Best Dinner – Olmsted

After eating at Olmsted this year, it embarrassed me that I hadn’t been there before.
Casual, warm and pulsing – this room and the charming outdoor space is perpetually packed for a reason. All of the food was layered and delicious. And Bonus -the Wine Director, Zwann Gray, could be the most smile inducing and intentional somm you encounter in the city. Go here yesterday. A total must.

THE REORDER 12/01/19

The Fluid Salesperson vs. The Tweaked Salesperson

The Fluid Salesperson vs. The Tweaked Salesperson

I was sitting with a fluid, jedi beverage salesperson recently and he said something to me that made immense sense.

He said:

“I sacrifice earnings for quality of life.”

While this may seem like an obvious statement, to most owners of importer/distributors, it would sound like heresy.

This is a strong salesperson who has been doing this a really long time – I don’t mean a few big years, I mean 25 plus years of present and high “earner” work. He is a legend.

Ten minutes later I ran into a young and up and coming salesperson. One who has talent pouring out of his wine bag and immense potential. His eyes couldn’t focus, his gaze and manner went towards the ground and he couldn’t bear to listen to more than three words before interrupting.

“I am so busy,” he said.

He was tweaked to the gills. No focus, no balance, and as he tripped over his words, he less than casually mentioned that he was “way up” over last year.

...His eyes couldn't focus, his gaze and manner went towards the ground and he couldn't bear to listen to more than three words before interrupting.

This is the image I want to stay with you: your number could be sexy as fuck, but what if for a little less you could last a lot longer?

What if you could run at a steady clip and not tire as much? Compounded interest works.

If you are so tweaked as a salesperson that you can’t concentrate and it seems so hard you can barely get through, chances are it is you who are adding pressure and constraints. You are the problem.

Try doing less. Try finding another way. Try looking at the possibilities instead of the daily numbers.

SPLASH DECANT 11/15/19

NYC Beverage Market Quickfire – November 2019

NYC Beverage Market Quickfire – September 2019

We are in the last quarter of 2019 and the NYC Beverage landscape is wacky as F#$(&.

Below are some broad trends that are shaping the market today.


Mayday Mayday Rosé

Was this a good Rosé season? Maybe for some, but saturation is pushing the rosé category into the danger zone. For a while, selling Rosé seemed like a sure thing. Not anymore. If we want to Maké Rosé Great Again, the buyers are going to have to adjust – and the importer/distributor is going to have to be smarter.

I will tell you this – my earlier Rosé article holds true; if you DI’d Rosé and let the rest of the season go you are probably laughing at those that have thousands of cases left.

Portuguese Wine…WTW?

Portuguese wine has been building over the last year, but more and more real wine coming from Portugal is flowing through the market. Luis Seabra broke through on the top end and premier NYC retailers are putting Portugal on offers and selling them out like crazy.  Quality, story, price, well-launched. I see this continuing to grow. Look for Importers to start looking for more…

Natty Wine Story – The Tribe and OG’s

Natural Wine is not built on the wine, but the Tribe. Sick of hearing about Natural Wine? So what. What about all the people that are just hearing about it? That’s the build and trajectory. The definition of Natural wine isn’t what everyone says it is or isn’t. IT ISN’T THE WINE. It is the people that make and drink it that define the movement. This is BeBop – it ain’t for everyone, and that is part of the strength.

There are going to be more tussles about who the cool kids are in the natural wine cafeteria and who the uncool folks are; the Natural Wine version of what do you bench…And heads up, the OG Natural Wine ambassadors are not too keen on stepping to the side so the young and new can jump in. Look for some Fratty Natty hazing.

I take over your bar, you take my wines…

There have been and will continue to be many wine takeovers, so many your head will spin.

And they will always be the best deal on wine and food and work out well for everyone involved. Kidding…

Alt-Burgundy

Since the one-percenters burgundies are getting even more expensive as demand grows and the wines are traded like baseball cards at auction, alternative Burgundy is having a moment. Any ghetto category that used to be laughed at like Rully or Givry now has a chance at some play.

Is the Orange Man in the white house driving the NYC crowd to drink?  UMMM...HELL YES.

Educate the People

A few wily marketers in the restaurant biz have attempted to stake a claim on educating the consumer at low cost and with a very high impact/return.

Education isn’t just for the retailer anymore – and this will continue to expand. Another interesting attention-grabbing move. Bravo.

The Trump Bump

Is the Orange man driving the NYC crowd to drink?  UMMM…HELL YES. The press got more subscribers and we got the uptick in consumption. This will most likely keep going until he is out.

Wait, we can’t taste that?

Act now or this wine will be gone! Email me for an allocation, this is so rare and hard to get.

Alice Feiring put up a post on instagram about the email blast and the comments are hilarious and at times insightful.

The truth is that smaller importers are starting to get used to offering a few cases here and a few cases there – acting like there is so much demand for the wines they represent that the wines sell out immediately. This model only resonates with me unless they are being honest. So I ask you…are they being honest? Are they using the word allocation as a manipulation?

My take is this: sometimes the wine does actually sell out before release. And if you have an addiction to these wines and want to support them, you should respond. Ask if you can pop a bottle to check out the new vintage.

BUT, anyone who engages with a dishonest messenger or HAS to have that wine (as if there are no other options), or chooses to work with importers who can only buy small amounts for the whole US and fake allocate has decided their own fate.