Thursday, November 5, 2009

Intrepid Importer Explorers

Birthed from the end of the prohibition against alcohol in the 1920s, the United States alcohol distribution laws force at least 2 and more commonly 3 middlemen between winery and wine drinker (unless you purchase from a tasting room, of course). Called the Three Tiered System, the international wine you purchase at a grocery store passes from a winery to an importer (who brings it across the border), from the importer to a distributor (who manage the in-country shipping trucks), from the distributor to a retailer (Safeway, Trader Joes, etc.), and finally from the retailer to your table. It functions a bit differently in each state, but this tiered system has many functions. First, it prevents large monopolies by forcing the product to move through many hands. Second, it keeps consumption low by keeping costs high (each middleman takes a cut). Third, it generates a lot of tax revenue (a bottle of wine is taxed at each level).

In the global supply chain, Ryan and I are the importers. When we decided to enter this industry we considered going into business at each of the levels. Being the wine maker has always been a dream. The margins are arguably the best for the distributor. And wine shop owners have the joy of talking with and educating the wine drinkers. So why be the importer? The answer to this question arguably says more about Ryan and I than anything else. Our top 3 reasons are:
  1. Importers are the intrepid explorers. Finding new wine to introduce to the US market is actually a lot harder than you’d think – especially when you want to do it right. It takes an extremely outgoing personality to make connections with people on the ground. It takes a savvy traveler to navigate in hard to reach corners of the world, communicate with people who don’t speak much English, and look cool and confident while doing it. It takes learning to say no while still being open to saying yes when the right wine comes along – in multiple different languages. But of course, for Ryan and me…this is the fun part.
  2. Importers manage fewer but deeper and more complicated relationships. Distributors will at any given time have hundreds and hundreds of customers because each one only purchases small amounts of wine. An importers’ customer is the distributor, and generally you have 1 or 2 per state. At the most, an importer will have only 100 customers. What this means is that you have the time and the responsibility to get to know your customers well. They are deeper relationships that we try to build on trust and mutually beneficial transactions. In our personal lives, Ryan and I like to nurture these kinds of friendships, so it made sense that we did this in our business.
  3. Importers are wine marketers – not necessarily wine salesmen. Yes we sell wine, but we focus on creating a comprehensive marketing campaign for each wine that includes a lot more than simply being salesmen. From garnering press to crafting a story that resonates with customers, we help build the image of the brand. I enjoy this because it requires creativity, and I believe creativity feeds the soul.

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