• Bevology’s Steve Raye on how to make it big in the United States

    The United States has proved to be the graveyard for many a famous international brand or pop star down the years. For every Beatles, U2 or Yellow Tail that have cracked the US market, there is many a tale of those who have tried and quickly failed. So how do you make your mark in the seemingly impregnable three-tier distribution system? Who better to explain than Steve Raye of Bevology who specialises in helping overseas drinks brands do just that.

    The United States has proved to be the graveyard for many a famous international brand or pop star down the years. For every Beatles, U2 or Yellow Tail that have cracked the US market, there is many a tale of those who have tried and quickly failed. So how do you make your mark in the seemingly impregnable three-tier distribution system? Who better to explain than Steve Raye of Bevology who specialises in helping overseas drinks brands do just that.

    mm By July 6, 2017

    You might have a best selling wine, beer or spirit in the UK or key European markets, but that will count for nothing when you try and sell it in the United States, says Steve Raye from Bevology.

    To be a successful international wine or spirits brand these days you have to have the knowhow of a diplomat to work out how to do business in different markets around the world. If the average winery or spirits brand finds the UK a complicated market with its different channels, on and off-trades, wine shops that also act as wholesalers, restaurants that run their own e-commerce sites, then working in the United States really can feel like another planet.

    Particularly when you consider its drinks distribution network, known as the three-tier system, effectively means the US operates 50 different markets for every state in the country.

    Thankfully there are those who have set themselves up in business to take drinks brands by the hand and try and help them get a foothold in the US. One of which is Steve Raye, who runs his own wine broking, marketing and consultancy business, Bevology. Whilst he admits it is certainly a challenge to get into America, and you will have to be at your sharpest and most creative to even stand a fighting chance, there are also a variety of ways for brands to find their mark.

    hugh-grant-2

    And who knows enjoy the kind of success that the likes of Wham, Hugh Grant and Duran Duran have enjoyed  over the years. 

    Speaking at a special seminar at last month’s Vinexpo, Raye took producers through a series of steps they need to take to even have a standing chance of succeeding in the US. We pick out seven of his top tips. 

    1 Do your homework

    The US drinks distribution network is complicated and hard to fathom to outsiders. Its three-tier system has been set up to ensure each state is able to manage and control its own drinks industry. But within that there are state by state differences that make the whole process even more complicated. There are 18 controlled states, where drinks distribution is handled by the state and sold through its drinks stores, and 33 open states where it is organised by independent distributors. It is why it is vital, stressed Raye, that producers work hand in hand with a constancy or broking business to act as their mouth and ears on the ground

    2 Understanding the three-tier system

    Before getting into the detail of how different states operate you have to understand, completely, how the three-tier system operates. Which, in a nutshell, means you have to first find an importer willing to take your product in the first place. It is only through an importer that you can access the all important distributors and wholesalers that are then going to push and market your brands to supermarkets, liquor stores, restaurants or bars. Each tier adds its own margin to your product meaning a €3 wine could end up costing €12 by the time it is sold to the consumer.

    Australia's Yellow Tail was the first wine brand to advertise at the Super Bowl in its 40 year history
    Australia’s Yellow Tail was the first wine brand to advertise at the Super Bowl in its 40 year history

    3 It’s all about relationships

    When it comes to cracking the US it’s not just how good your product is, it’s who you know, and what they can do for you. The consolidated drinks distribution industry in the US means only 10 distributors control 73% of all products sold in the US. They are inundated with thousands of product requests every year. You need to know the right people in the right places to stand a chance of being heard.

    4 What’s in it for them

    Don’t approach a US importer or distributor with your tried and trusted story about how long you have been making wine, how unique your terroir is and how many awards you have got. That is the window dressing. To get a seat at the table, said Raye, you have to think like an importer or distributor. What can you offer them that is going to excite them, make their lives easier and want to list you.

    5 Be creative

    That means being genuinely different from all the other wines or products in your category. Not necessarily in the way it is made, but how it is marketed, promoted, what key trend is it addressing, what engagement rate do you have with your target customer on social media. You have to be more creative than the last producer to walk through a distributor’s doors.

    U2 were actually more successful in the US than they were in the UK in their early days
    U2 were actually more successful in the US than they were in the UK in their early days

    6 E-commerce can crack a market for you

    With such a closed traditional distribution route to market, the new e-commerce industry is “changing the landscape” in the US, said Raye. It has also opened the doors to imported wines. Whilst there are 23% of imported wines in the overall market, they make up 535 of e-commerce sales. Its because e-commerce allows you to get past the gatekeepers and go direct to consumers.

    7 Influence the influencers

    It is why wine apps and wine review platforms like Vivino and Wine Searcher are now so important int the US. In the space of 10 minutes you can create your own section on Vivino, listing all your wines, giving all the back story you want, ready and waiting for the millions of Vivino customers looking to cut through the system to find wines they want. It is arguably more important to have a presence on the likes of  Vivino as it is to get a good points score in Wine Spectator. It allows you go cut through the middle men and go direct to consumer. 

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