TDG Wine Camp: The Food (wine) Chain

[Craig Camp]

Once a bastion of wide-open competition and independent family-owned distributorships, the invasion of the Godzilla-distributorships, like Southern, Glazers, and Charmer, has reduced competition to a trickle and created a huge problem for small wine producers and consumers who want to buy those wines.

Click below for Wine Camp:

The Wine Chain - Enological Darwinism and the birth of a new species

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[Brad Ballinger]

I like that the article shows light at the end of the tunnel in that these niche distributors are starting to fill in the gap resulting from distributor consolidation. Here in the Twin Cities, we have about 20 distributors (still). I'm sure consolidation is coming. I've already seen it hit where I buy most of my Italian wine. Certain producers are no longer being carried by the distributors that provide this retailer with their wine. It's good for me that I can get what's being closed out for pennies on the dollar, but then that will be it for those wines unless I look to out of state sources (provided the wines are still being brought into the US).

The mega-distributors, though, are not catering to us. By us, I mean the less than 5% of the wine-drinking public that are geeks about this stuff. They (and some retailers as well) have moved to a heavily volume-based business model. Right now, it's working for them. There are plenty of wine buyers who are happy with McWine; who don't care to learn about the crus of Burgundy; who don't want to try and decipher the wine labels of Germany, Austria, and Italy; who still buy wine to drink it that day or within the week. And there's loads of money to be made there.

Fortunately, for the geeks of the world, we are seeing more and more legislation open up borders for direct purchases from wineries, and for purchases from retailers in other states. And many are finding some deals through the auction houses, which are doing a booming business. As long as there is a market for them, the artisanal wines will find their way to consumers. It may require more work on both ends, and it could mean we do our part -- 1) let retailers know the types of wines we want more of (and hope they can do something about it); 2) continue to buy wines we want to see remain available from whatever source; 3) don't feed the monster.

[sput]

I sell wine in Northern Florida and Southern sends me shipments, even in the summer, in non-refrigerated trucks. The last time I did business with them, when the wine arrived, I took a bottle from a random case opened it and the temperature read 97 Degrees! Ouch... Two other cases were at least two vintages out of date, and we are not talking about ageable wines here either...

This is but one example of the kind of service I recieve from these conglomerates...

It did not take long to find the three or so distributors who service my area that treat their wine (and me) well. Two are independents, one of which is being sold to a larger company, so we will have to wait and see what happens there.

I would like to think that I am not at the mercy of the big boys, since my wine selection is small and tailored to the cheese and meats that I retail, yet, I refuse to carry some of the wines I would like to because their poor service and results.

Certainly me not supporting these companies will not affect their bottom line, yet it does give me peace of mind and assures me of a pretty good level of consistency in what I recieve from my better distributors.

Restaurateurs and retailers DO have a choice in whom they deal with, which, of course, gets more and more difficult the larger you are and your customer base is.

My independent guys just seem to care more about their wines than the big boys do. My Southern rep shows up with a portfolio about three inches thick, and I am

constantly wondering how she could possibly know what they have. I guess if you sell enough Yellowtail it really doesn't matter.

I get more charge turning people, wine savvy or not, onto a smaller or lesser known producer with great juice from my independents, than I do to something I could just stock and watch it sell itself.

I hope that constant searching and researching of quailty minded producers, passion for selling these and choice will overcome the great Goliath, at least on my scale anyway...

[Brad Ballinger]

Bravo! Bravo, I say! I hope you continue to remain successful with your business strategy. And I hope there are many others that will, too.

We used to have a retailer here that was great for getting interesting wines for the geek crowd. In recent years they've shifted to primarily volume -- particularly with their sales. They've lost my business, but there are plenty of other places around yet.

[Mark Sommelier]

The consolidation of the distribution channels has been going on here in the Washington, DC market for several years. I believe that I use more distributors than anyone around - somewhere around 15. I am lucky to have several friends who are importers. In this area, they are allowed to hold distributor licenses also, so I can effectively cut out at least one of the middlemen. These small importer/distributors are an excellent source for good Burgundy and Rhone wine at very decent prices. To be fair, I do receive very good service from the large companies I do business with most of the time, but that's because I have been in the business long enough to have made lots of relationships with the management of these companies. The large company I deal with has incredible close-outs every so often, which small importers can't match. It all comes out in the wash.

[Craig Camp]

As there are many professional wine buyers that both lurk and post on eGullet it would be helpful if we could post the names (and market) of excellent small distributors here so that serious buyers can better find them.

Also for those not familiar with the three tier system of distribution you can read Wine Camp: Salmon and Merlot which outlines how the system works - or perhaps "doesn't work" is a better phrase.

[winebill]

Here's a few in Connecticut

Michael Skurnik

Martin Scott

Worldwide wines

[sput]

In Florida:

Stacole Fine Wines - Great French, Alsatian, Champagne, Spanish, Italian and California...

Agustan - Being merged with Premier, not sure if good or bad...

Opici - The one fairly big guy I consistently deal with but great fill, service and selection...

[Brad Ballinger]

In Minnesota - New France Wine Company

[Lew_Bryson]

It did not take long to find the three or so distributors who service my area that treat their wine (and me) well. Two are independents, one of which is being sold to a larger company, so we will have to wait and see what happens there.

This same evolution is taking place with beer distributors, with identical results on the artisanal beers I love.

What I'm seeing, and what I would ask Craig, is what is the lifespan of the "small, fast fish"? Small, independent beer wholesalers who started particularly to carry high-end beers (imports and craft brews) generally follow a pattern of starting up, taking off like a rocket fueled by hard work and a genuine demand for their beers...and then being bought by a huge wholesaler who promptly drops their brands, or worse, keeps them and refuses to sell them.

The three-tier system is far from all bad, it's the tangle of laws and regulations that have grown up around it, laws that heavily favor the wholesaler, that are the real problem. Wine is different in that the price/volume ratio and margin make it more reasonable, financially, to do direct shipping than it is with beer. But direct shipping means costs and complications as well.

I dread the big retailers doing direct buys from producers; it will resemble the situation with Wal-Mart and the toy manufacturers. Wal-Mart has such buying and selling power that they can dictate prices to the manufacturers. The manufacturers are being squeezed out of business...or out of the business of making quality toys. You may be seeing the future of wine and beer sales.

[Craig Camp]

What I'm seeing, and what I would ask Craig, is what is the lifespan of the "small, fast fish"? Small, independent beer wholesalers who started particularly to carry high-end beers (imports and craft brews) generally follow a pattern of starting up, taking off like a rocket fueled by hard work and a genuine demand for their beers...and then being bought by a huge wholesaler who promptly drops their brands, or worse, keeps them and refuses to sell them.

Unfortunately their lifespan is often not long. They are often purchased by large distributors trying to eliminate competition. All to often, start-up distributorships are under-capitalized which means that as they expand they reach a point where selling becomes an economic necessity.

[tcizma]

As there are many professional wine buyers that both lurk and post on eGullet it would be helpful if we could post the names (and market) of excellent small distributors here so that serious buyers can better find them.

In Chicago:

Maverick Wine company

Frugal Wine

Pure Wine Company

Vintage Wine

TC

cheftedcizma.com

foodandwinetours.com