Remember when you entered the winemaking industry with dreams of living amongst grape-laden vines, spending the days out in the sunshine with your fingers in the dirt? You might have envisioned wandering around a vineyard, sipping and sampling your exclusive, small-batch product and making plans to perfect it. Once you did, you knew your phone would ring off the hook with restaurants and high-end wine retailers clamoring for it.
After some time in the business, experienced winemakers know the truth: producing a quality product takes time and tenacity. From growing quality grapes to turning them into a high-quality wine, the process is lengthy and unforgiving.
And that process doesn’t stop once the wine is in the bottle. After that, you need to make a profit.
Once you’ve crafted your product, the work begins to find someone to buy it. If you’re planning to sell in the U.S., you’ll need to break through several barriers of red tape. This means acquiring the proper permissions and licenses from the Alcohol and Tobacco Tax and Trade Bureau (TTB). You must track your sales in order to pay excise taxes. Even your wine’s label is subject to scrutiny, as it’s subject to TTB approval. In addition to this, laws governing the sale of alcohol differ from state to state.
Once you’ve cleared these hurdles, next comes the footwork: traveling to different restaurants, stores, and distributors in search of someone to give your wine a platform. Medium-sized wineries will need a distributor in each state. Once you’ve scored a distributor or landed in a store or restaurant, the work doesn’t end there. Wine brands have to constantly work to maintain and improve their position – doing market visits and constantly communicating with restaurant owners, for example.
The costs in time, marketing, and distributor/product placement fees begin to add up incredibly quickly. If you’re a winemaker, you are already aware of this.
What you may not have considered is that one possible path to success is selling your product in bulk.
Benefits of Bulk Wine Sales
Far from focusing on small batches and exclusivity, bulk wine makers seek to make a large amount of product that is sold off in large parcels. Bulk wine buyers can be wineries, bottling facilities or owners of private label brands. Retail and grocery store chains also buy bulk wines and sell them as their own “private label” brands. They may also be wine importers or exporters.
In the past, becoming a bulk seller sounded like a surefire disaster for serious winemakers who wanted to make a profit. Then Trader Joe’s “Two Buck Chuck” exploded onto the scene. The wine, actually called Charles Shaw, currently retails at $2.99 a bottle. It developed a cult-like following upon its release – selling almost two million cases in its first year – and has been a stunning success ever since.
Supermarket chain Aldi has seen similar success with its bulk wine selections. In fact, in 2015, they had to set a limit of four bottles per customer for their newly-launched Lot Series. Aldi wines not only sell well; they’re also picking up nods from critics. In 2016, they won 16 awards at the International Wine Challenge. While the past couple of years have seen declines in the purchasing of bulk wine, Ciatti, a brokerage that specializes in bulk wine sales, expects those declines to begin leveling off in 2017.
Bulk wine sales are more than just a way to boost sales; they’re a way to set your company free from battling restrictive red tape as you go about expanding your territory from one US state to another. It also takes you out of the constant race to get new sales. By selling in bulk, you’ll deal with fewer clients and get off the sales hamster wheel. This will allow you to place more focus on producing a high-quality product – the whole reason you got into the wine industry in the first place.
The best part? You don’t have to alter your infrastructure to be able to sell in bulk. Rather than sell case-by-case, scrambling to find customers to buy individual bottles, cases and pallets, you will be able to make fewer large lot sales to meet your numbers and make profits. Simply produce your wine as you already are and package it per your bulk client’s specifications. The end result? Steady clients and income.
Finding those clients will take time and effort but it is not impossible. You won’t have to do as much footwork to sell wine in bulk because you will be able to enlist the help of a brokerage firm. Companies like Turrentine and Ciatti are experts in the bulk wine market and assist in finding the right buyers for your product. They handle the negotiations for each sale. They’re also highly skilled at providing guidance to wine manufacturers based on the supply and demand patterns they see happening throughout the market. Whether you’re hoping to sell your wine in bulk on a short-term or long-term basis, a broker is a valuable part of the process.
Tips to Succeed in the Bulk Industry
Because Turrentine has worked with bulk wine buyers and sellers for years, they know what’s necessary for success in this competitive business. According to Turrentine CEO Steve Fredricks, making a quality product isn’t enough. In an interview with BTN, he provided useful tips to wine manufacturers who are interested in selling their product by bulk.
Fredericks reminds bulk manufacturers not to forget to provide exceptional customer service just as they would with any other customer. He insists that just because you’re selling a bulk wine product doesn’t meant that you shouldn’t work with it and experiment in order to make it the best-quality wine you can possibly produce from that batch. He reminds sellers that bulk buyers are often suspicious of the product they’re purchasing, so all samples must be absolutely perfect. Finally, he highlights the importance of a strategic partnership with a reputable broker who can help guide you through the process.
The US is the largest domestic wine market in the world. In California alone, over 81 million gallons of bulk wine was sold – back in 2007. In the decade since, the industry has continued to expand. By building the right relationships with customers and an experienced broker, you can remove some of the sales-related stress off of your shoulders. Bulk sales can boost your profits and expand your sales while allowing you to get back to doing what you love: making a high-quality product for people to share and enjoy.