Insightful presentation with practical information for wine and spirit suppliers looking to enter the U.S. market. Presented by Steve Raye, President of Bevology Inc.

1. Steve Raye, Pres., Bevology Inc., steve@bevologyinc.com
© 2015 Steve Raye
U.S. Wine Market:
Strategic Opportunities for Exporters
Watch Webinar:
http://beveragetradenetwork.com/en/
btn-academy/webinars/the-us-
market-disrupting-the-system-
415.htm

2. Steve Raye
Marketing Consulting Company:
 Helping wine brands break into
and grow in the U.S. Market
 Brand Development: new-to-the-
U.S., new-to-the-world
 Trade Marketing
 Digital, Social and non-traditional
media
Steve Raye
President
Bevology Inc.
Steve@BevologyInc.com
+1 860-833-6272

3. Think Differently, Competitive Advantage
Zig
© 2015 Steve Raye

4. Think Differently
Zig Zag
© 2015 Steve Raye

5. Marketing Manifesto
Measure what matters: Traditional media metrics such as reach and impressions have value,
but they don’t necessarily correlate with or drive volume. Here’s what really matters:
• Sales on- and off-premise—cases, value, velocity
• Depletions vs. shipments/exports
• Distribution on- and off-premise
• Reorder rates, wine lists and BTG programs
Don’t market to empty shelves: Distribution
is critical, make sure consumers are able to
buy what you’re selling, even if it’s not in
stock in-store.
Get it in, get it out: Getting distribution
on- and off-premise is only the first step.
Drive consumer purchase.
Help the importer and distributor do
their jobs: Drive consumer demand at
retail is job 1. Then ensure the trade is aware of
the demand and pull you’ve built.
Target audience: You can’t be all things to all people.
Determine your target and focus on it rigorously.
Defining who’s not your audience is as important as
who is.
Identify, then leverage your brand’s unique
strengths:
Have a POD that MAD:
point of difference that makes a
difference.
© 2015 Steve Raye

6. Guiding Principle
Align programs with account needs…help them
build their business: WIIFM
“What’s in it for ME?”
•Increase sales (volume and profitability)
•Increase customer frequency
•Increase new traffic
© 2015 Steve Raye

7. Trends in the U.S Market

8. Total Table Wine Consumption Growing

9. Top Ten Wine States = 61% Total Vol.
Top 10 Wine States (000 9-Liter Cases)
State Cases Share Growth
California 60,318 18.3% 3.0%
Florida 26,818 8.3% 1.2%
New York 26,152 8.0% 2.2%
New Jersey 14,848 4.5% 2.3%
Texas 14,730 4.5% 2.3%
Illinois 14,665 4.5% 2.2%
Massachusetts 12,595 3.9% 2.3%
Washington 10,040 3.1% 2.9%
Virginia 9,901 3.0% 3.5%
Ohio 9,254 2.8% 2.9%
Top 10 Total 199,319 60.8% 0.0%
U.S. Total 327,600 100.0% 0.0%
• Important at the macro level for
nationally distributed products.
• If your goal is only 5,000 cases, you
might find a market like Boston to be a
smarter target.

10. Industry Trends (continued)
• # of wine selling channels continues to grow
• Wine/liquor stores represent the largest number of off-premise outlets (wine sales
in supermarkets is allowed in only 35 states and notably NOT permitted in NY and
effectively in NJ.)
• Wine/liquor stores account for disproportionately higher percentage of $12-$20
wines vs. supermarkets
• People shop at retail stores more frequently for wine
Source: Sonoma State Univ., American Wine Consumer Survey 2014

11. Retail Channels Fragmenting, Multiplying

12. Growth Above $9.00
Consumers drinking a little more, but a lot better

13. Growth Above $9.00 (cont’d)

14. Trend: Apps
 Online access to news, recommendations, where-to-buy
have displaced traditional print, especially for Millennials.
They now seek information on Wine-Searcher, Delectable,
Vivino, Wine4me, Snooth, Hello Vino et al.
• Vivino has 10 million members
• Wine-Searcher gets 3 million unique visitors per month
• Delectable: 2.1 million downloads per month
By comparison print mag. circulations:
Wine Spectator: 400,000
Saveur: 290,000
Wine Enthusiast: 180,000
Wine Advocate: 48,000

15. Smartphone Reach
Source: Sonoma State Univ., American Wine Consumer Survey 2014

16. E-Commerce Growth: skews imports
E-commerce and new/non-traditional distribution channels
are rapidly growing: Notably Wine.com does 53% of its business with
imported wines vs. 27% for traditional retail.

17. Getting to the Point
“I know half my
advertising doesn’t
work…I just don’t
know which half”
Pure online
marketing/
Ecommerce:
Measureable
ROI

18. Delivery-Within-An-Hour
 Drizly, Minibar Delivery, Drync, Thirstie, Saucey
 Laser-Targeted to Millennials: immediate, no
shipping upcharge
 Geographically targetable down to metro market
and even neighborhood
 Tool to drive retail distribution, support
wholesaler/importer
 E-commerce solution
© 2015 Steve Raye

19. E-Commerce
 Allows you to sell in multiple states, nearly
nationally, when you may only have
distribution in one
 Strong penetration with Baby Boomers,
average purchase is 3X typical physical store
purchase
 E-comm recognized as having a better
selection of hard-to-find wines
 New models: Amazon, Flash sale sites

20. Varietal Popularity Differs by
Channel20

21. Where to Buy Functionality: Mandatory

22. Importers

23. • Importer
– Licensed to import a wine brand from a supplier
outside the U.S. into the U.S.
– May or may not have distributor licenses or
operations in individual states
• Distributor/Wholesaler (synonyms)
– Licensed to buy wine from an importer and sell to
an on- or off-premise retailer
Definitions:
Importer vs. Distributor (Wholesaler)

24. Suppliers
Importers
Distributors
Consumers
From To
The Model Has Changed

25. Large
National
Importer
(Diageo)
You Have Options!
Specialist
National
Importer
(Winebow)
Regional
Multi-State
Importer
(TGIC)
Specialist, that
also distributes
(Slocum)
Set Up Your
Own Import
Company
National
Licensing
Import and
Services
(MHW)
Large
Distributor
that also
Imports
(Glazer’s)
Chain
Retailer
Exclusive Brand
(Total Wine)
Direct
Import through
Control State
E-Comm/
Wine Club/
Flash Site

26. Importers: What They Want
• Fills an identified void in portfolio
• Brands with existing U.S. volume they can grow
• New brands they feel their expertise can develop and grow
• Brands that have a unique positioning
• The right “CHEMISTRY”
• Enhances image, value and profitability (synergy with importer’s mission)
• Strengthens importer’s position within the trade
• Supplier understands the U.S. Three-Tier system
• Financially sound, budget to invest and support the brand

27. Presenting Your Brand to Importers
• Brand point of difference/value proposition for consumer; why
THIS importer should be interested in you
• Company description/history
• Product description: varietals, style, ranges, proposed U.S. retail
price by line/SKU
• Marketing materials as background
• A defined target audience
• Production info
• Past history of importers, distribution agreements, list of
distributors/brokers of products and volumes by state
• Price structure for U.S.
• Marketing support budget
• Sample budget

28. Distributors

29. Continued Distributor
Consolidation
2013E 2014P 2014E 2013P
Southern Wine & Spirits of
America
AL, AL, AZ, CA, CO, DE, FL, HI, ID,
IL, IN, IA, KY, ME, MD, MI, MN, MI,
MT, NV, NH, NM, NY, NC, OH, OR,
PA, SC, UT, VT, VA, WA, DC, WV,
WY
$ 11,390 $ 11,750 3.2% 22.1% 22.3%
Republic National
Distributing Co.
AL, AZ, CO, FL, GA, IN, KY, LA, MD,
MI, MI, NE, NM, NC, ND, OH, OK,
$ 6,095 $ 6,480 6.3% 11.8% 12.3%
Charmer Sunbelt Group AL, AZ, CO, CT, DE, FL, MD, MI, $ 5,380 $ 5,575 3.6% 10.4% 10.6%
Glazer´s Family of
Companies
AL, AZ, AR, IN, IL, IA, KS, LA, MS,
MO, OH, OK, TN, TX
$ 3,475 $ 3,655 5.2% 6.7% 6.9%
Young´s Market Co.
AK, AZ, CA, HI, ID, MT, OR, UT,
WA, WY
$ 2,820 $ 2,925 3.7% 5.5% 5.6%
Wirtz Beverage Group IL, IA, MN, MO, NV, WI $ 1,775 $ 1,860 4.8% 3.4% 3.5%
Johnson Brothers Liquor Co.
AL, AZ, CA, CT, FL, HI, IL, IN, IA,
KY, MA, MN, NE, NV, NM, NY, NC,
$ 1,660 $ 1,735 4.5% 3.2% 3.3%
Martignetti Companies MA, ME, NH, RI, VT $ 1,200 $ 1,200 0.0% 2.3% 2.3%
Allied Beverage Group NJ $ 750 $ 775 3.3% 1.5% 1.5%
Fedway Associates NJ $ 735 $ 760 3.4% 1.4% 1.4%
$35,280 $36,715 4.1% 68.4% 69.7%
$16,300 $15,975 -2.0% 31.6% 30.3%
$51,580 $52,690 2.2% 100.0% 100%
Source, Impact, April 1, 2015
Distributor Markets % Chg.
Sales Revenue Market Share

30. What Distributors Want
• Money
• Margin
• Manpower
• Marketing
• Media
• Commitment

31. The chicken is involved, but the pig is committed.
Involved vs. Committed

32. Distributors:
Okay, I’ve Got One. Now What?
• Recognize you’re not a priority…you (and
your importer) will need do the heavy lifting
yourself
• Recruit/focus on a limited set of salespeople
dedicated to your brand
– Product training programs for accounts
– Sampling on- and off-premise
– Leverage Brand Ambassadors,
winemaker/winery owner visits vs. work-
with’s

33. U.S. competitions accepting wines
that are not currently imported
BTI (Beverage Testing Institute)
Deadline: Dates vary by region
http://us6.campaign-
archive2.com/?u=da8603c0af6040dcc7e4d9ed2&id=8fdf91dae4&e=
Ultimate Wine Challenge
Deadline: May 15
http://www.ultimate-beverage.com/ultimate-wine-challenge-UWC/2015-
wine-entry-forms/
San Francisco Wine Competition
Deadline May 22, 2015
http://www.sfwinecomp.com/
New York International Wine Competition
May 17-18, 2015 (Deadline for entries May 12)
https://www.nyiwinecompetition.com/
© 2015 Steve Raye

34. Resources
Key industry newsletters:
- Industry News Update
- Wine and Spirits Daily: www.winespiritsdaily.com
- Shanken News Daily: www.shankennewsdaily.com
- Wine Industry Insight: wineindustryinsight.com
- Wine Industry Network/Advisor: wineindustrynetwork.com
- WineBusiness.com: www.winebusiness.com
- Wines and Vines: www.winesandvines.com
Key trade publications:
– Beverage Media: www.Bevmedia.com
– Tasting Panel: www.tastingpanelmag.com
– Somm Journal: www.sommjournal.com
– Wine and Spirits:
http://wineandspiritsmagazine.com/
– Santé: www.Isantemagazine.com
– Beverage Dynamics, Cheers, Stateways
– Beverage Industry News
www.binmag.com
– Market Watch, Impact (print only)

35. Read the Book
© 2015 Steve Raye

36. Contact
© 2015 Steve Raye
Steve Raye
President
Bevology Inc.
401 Park Ave. South
9th Floor
New York, NY 10016
+1-860-833-6272 (m)
+1 212-613-2713 (o)
steve@bevologyinc.com
Drinks Industry Marketing Consulting