I recently had to explain the phrase “to have your cake and eat it” to my young son, and it got me thinking about the wine trade.
There seems to be a received wisdom in some areas of the trade, often driven by wishful thinking, that the way to build a brand is to start in specialist retailers, mostly independents, and, once established with a loyal consumer following, make the switch to the supermarkets and multiples, where a ready audience will snap up the brand.
Suppliers assume that it will still be available in all those loyal retailers who helped establish the brand in the first place.
There are many brands that have fallen foul of this incorrect assumption. As any salesperson who works in the specialist sector knows, customers routinely look at the internet when considering a listing, to see if the wine is available in the multiples.
Independent retailers need to be respected as much as large multiples, and hoping they won’t notice when you get that big retailers’ listing in Tesco is not going to cut it.
Specialist retailers' success is often built on the fact that they offer different wines to the mainstream, and their customers seek them out because they want something different, something out of the ordinary, as well as great service and advice.
The danger here is not just a delisting of the brand but a loss of integrity for the supplier. Why should a retailer trust a salesman who didn’t keep his word?
It’s easy to see how it happens though. Even when suppliers have segregated lists, with products they intend to keep for specialists only, there is always the temptation to push for that big listing, which will result in hundreds or thousands of cases in one relatively easy deal – a quick result compared to the hard graft of selling and delivering to all those small customers.
In my experience, this “channel strategy” approach to a portfolio is one of the hardest and most misunderstood areas for suppliers.
But it is becoming increasingly apparent that there is now a choice between small, niche wines – often selling for good margins to specialist retailers – and larger volume wines, tailor made for multiple retailers, with margin only coming from the sheer volume of units. Few are able to have a foot in both camps.