By Laura Ness, Wine Industry Advisor. This article is part of the Bold Predictions series.
Cheryl Durzy, CEO and founder of Liberation Distribution (LibDib), thinks the time for real consumer choice in the alcoholic beverage industry is about to dawn as consumer behavior, retailer services, and increased 3-tier access trends converge. For wineries this presents an opportunity, but is no slam dunk.
Durzy’s disappointment with the efficacy of the 3-tier distribution system from the point of view of a small winery trying to move product led to her creation of LibDib, which is now an important factor in consumers’ ability to access small brands.
“I was involved in sales for Clos La Chance Winery for 20 years, and felt the frustration of the 3-tier system. I was super disappointed with the consolidation, from 40 major distributors to only 14,” says Durzy. “One night, I drank a bottle of wine and came up with a business plan. The premise was, how can we use technology to make it easier for distributors and retailers to connect with suppliers?”
Now about 1,000 winery and distillery clients are signed up on the LibDib platform, along with somewhere near 8,000 retailers nationwide. Makers create a free account, and then enter the products they want to sell, along with a suggested price, making it possible for any brand to get 3-tier distribution. Retailers can see which products they can legally purchase in their area and can then place orders. LibDib takes a 15% cut, and makers pay for shipping.
This present and opportunity not only for makers, but also for retailers. Durzy notes that consumers are changing, and smart retailers are changing with them; stores are constantly reaching out asking for specific wineries and distilleries to be added to LibDibs platform, so they can access their products. Younger consumers are curious about anything new, and the easier you can make it for them to try it, the better.
Retailers are also learning from the wineries. While many consumers might visit a winery and buy wine, most don’t join clubs. “If retailers can offer experiences, like tastings and pickup parties, they can provide consumers with another venue for accessing small brands.” She mentions Binny’s in Chicago and Total Wine as places that offer tastings, which can really help pull-through for small brands.
Instant access to alcohol is becoming more of a reality as more retailers start offering delivery services. “In New York, we’re seeing more independent retailers offering one-hour delivery within metropolitan areas.”
“My goal is for every brand to be able to sell one case at a time within the 3-tier system. While 3-tier will continue to exist, everyone will be able to work within it, using our technology. The way we built our platform will open up markets to everyone,” says Durzy.
But she cautions that access to distribution does not equal sales.
Makers need to take responsibility for marketing their brand, both to retailers and end consumers. “You have to work your contacts. We have guidelines to train people in best practices. I talk a lot about direct to consumer when doing trade marketing. We need to apply consumer tools to dealing with the trade. Everyone who buys is a consumer,” says Durzy.
LibDib is currently selling to accounts throughout California, Colorado, New York, and Wisconsin, with expansion to 14 new markets on the horizon. A partnership with Republic National Distributing Company will help open up new territory.
“Arizona, Illinois, Florida, and Texas are my next targets. We are solving the problem that all three tiers are dealing with,” says Durzy. “I thought I would get pushback from the distributors, but we all do the same thing. I am not going after the big brands, just the small ones, with under 5,000 case productions.”
She advises makers to hire companies who specialize in in-store sampling. Or hire an ambassador to get out there and talk to the trade and schmooze with bartenders. “Getting liquid into people is the key!”
Bottom line: small brands have a choice—and a chance—they never had before. And consumers will be making their choices felt in the industry.
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