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THE PALMATEER BLOG

October 27, 2016

Recruiting: 3 Paths To Hiring Your New Sales Manager

Posted by under Business Advice

Recruiting: 3 Paths To Hiring Your New Sales Manager

As you know, hiring the right sales manager for your winery is essential to building your brand in today’s market.  Here are three paths to lead you to the best suited candidate.

  1. Retain a recruiting firm. This approach is perfect if you are busy, believe in leaving recruiting to the experts, and cost is not an issue.

 Pros: For wineries who can afford to retain a recruiting firm, I wholeheartedly recommend this route. These firms keep current on best practices, maintain a large database, and can help you secure the right candidate in 2-3 months. I have had successful relationships with executives Chet Hutchison, Dawn Bardessono, and Amy Gardner.

Cons: Can be expensive, costing up to 30% of the new hire’s first year compensation.

  1. Do-It-Yourself (DIY) recruiting. The DIY approach (asking colleagues for referrals, promoting internally, posting on a job search website) is good if you have limited money and a strong network.

Pros: You are in control and the monetary cost is low.

Cons: Sample size, perspective, and time. Likely, your network will help identify a dozen or so candidates. It is hard to find the best candidate in this small of a pool. Plus, you must be wary of a conflict of interest, e.g., a distributor’s recommendation may be good for them and not as good for you. If you promote internally, expect 1 to 2 years before anyone without established buyer relationships to earn their trust.  And, while the monetary cost of DIY recruiting is low, you will spend more time finding that perfect candidate. We all know, time is money.

  1. Choose a happy medium. Palmateer Consulting offers a hybrid service between hiring a recruiting firm and DIY. This path is great if you want an experienced professional to help you secure the best suited candidate at a fraction of the cost of recruiting firms.

Pros:

  • Palmateer Consulting is structured differently than a single-focused recruiting firm. This allows us to help wineries find the right new hire at a much lower cost.
  • Gordon Palmateer has extensive recruiting experience and walks with clients hand-in-hand through each step of the 2-3 month process. Throughout his 35 year career he has successfully recruited and hired hundreds of wine industry professionals. He has a strong network to tap into and maintains a list of possible candidates within the wine industry.
  • Having worked for Importers, wineries, and distributors, Palmateer uses his unique perspective and strong network to help his clients evaluate their sales needs and find the right fit candidates.
  • As a third party, it is easier for Palmateer to maintain objectivity to find the right candidate to fit your company, your needs, and to help build brands in the market.

Please reach out to us at Gordon@palmateerwinegroup.com if you have recruiting needs. We look forward to hearing from you and helping you find your next new hire.

September 21, 2016

Go-to-Market Basics for Wine Brands: Securing Partnerships with Distributors and Trade Buyers

Posted by under Business Advice

Go-to-Market Basics for Wine Brands: Securing Partnerships with Distributors and Trade Buyers

The Problem:  Success = A+ B 

It’s that time of year when wineries are scrambling to solidify new agreements with existing and new distributors and trade accounts (buyers). In today’s hyper-competitive market, this can be challenging.

The situation can be especially daunting for small to medium-sized brands (< 50,000 cases) that don’t have 95+ scoring wines or the muscle to force their way into the distribution market. Today’s overloaded buyers are seeking brands that have a track record of success and sell with minimal effort or risk. Too often, smaller wineries struggle to penetrate the distribution market or rely on selling the majority of their product direct to consumer.

Breaking Down the Formula for Success

What to do? If you are a small to medium-sized producer, here is the formula for successfully securing distribution and trade partnerships in this saturated market:

Success = high-quality, authentic product + realistic pricing + modest expectation and production in the short run + current vintages + commitment + patience + A STRONG AND BROAD NETWORK

High-quality, authentic product: If you are taking a new wine to a buyer that already sells similar brands, chances are slim that they will add you to their portfolio solely based on the quality of your product. In addition to having a high-quality product, you must also have a unique story and demonstrate authenticity.

Realistic pricing: Even if your wine is worth the retail price of $35 and is priced with parity to similar mature brands, in our post-recession world, buyers will be shy of taking on your wines unless you have very strong accolades and selling propositions. Often, this takes time. I highly recommend getting reliable, expert feedback on your pricing strategy to position your brand to grow successfully. (Look for a future blog on pricing.)

Modest expectation and production in the short run: Take the long view to building your brand and ramping up production. Start with a modest production forecast or chances are you are going to be calling “Larry the Liquidator” to sell a surplus of wine at distressed prices.

Current vintages: The argument that wine sells better with more bottle aging does not work in the U.S. distribution and trade market. What buyers hear is “I have an older vintage and I am ready to sell it at a low price.” Sell your mature wine directly to consumers; get your current vintage to distributors.

Commitment: If you are reading this, then you know selling wine requires a bigger commitment than a romantic weekend hobby. Buyers are looking for partners who will sell wines in the trenches with them.

Patience: Plan on 1.5 to 2 years of strategic sales and marketing before you know if buyers will support and be loyal to your brand.  At that point, you can start the process of planning your production forecast with a level of confidence.

A STRONG AND BROAD NETWORK: Even with all of the above in place, there is still a high level of competition at every price point with every varietal. Often, it comes down to who you know and being at the right place at the right time. Leveraging your network or finding a company that has time for your brand as well as a strong network will help you succeed over time.

Gordon Palmateer is an expert sales and distribution strategy for domestic and imported wines brands in the US and president of Palmateer Wine Group. Email him at info@palmateerwinegroup.com for more information on this topic.

August 21, 2016

Go-to-Market Basics for Emerging Wine Brands: Pricing Wine for the Distribution Market

Posted by under Business Advice

Go-to-Market Basics for Emerging Wine Brands: Pricing Wine for the Distribution Market

Why FOB ≠ Retail x 50%

Based on numerous conversations I have had with wine producers who are struggling to penetrate the distribution market, I have come to believe that there is someone out there spreading the fallacy that in the distribution market, a product’s FOB = winery retail x 50%.

The short explanation as to why this is untrue is that cost and margin have gone up throughout the selling channel. Plus (and this is a big one) post-recession level of competition has created opportunities for distributor and retailer margin enhancement.

Let’s take a real life scenario.

Your winery retail is $40, so you were told by a trusted long-time industry veteran that the product’s FOB should be $20.

In the table, that bottle of wine that used to retail for less than $40 is now retailing for $43. This model is only an example and there are many variables that differ from market to market and from buyer to buyer.

So, if a winery employs the philosophy of FOB = retail x 50%, it will be essentially undercutting those distributors and retailers that he is asking to sell and support the wine. If a winery wants to be successful in the distribution market, I would not recommend undercutting your trade customer. Remember, in today’s market, the internet tells all and your price is public knowledge.

Gordon Palmateer is an expert sales and distribution strategy for domestic and imported wines brands in the US and president of Palmateer Wine Group. Email him at info@palmateerwinegroup.com for more information on this topic.

July 21, 2016

Go-to-Market strategy for brands on the move: Taking the next steps to catapult your wine brand

Posted by under Business Advice

Go-to-Market strategy for brands on the move: Taking the next steps to catapult your wine brand

In the past year, I have worked with wineries that achieved above average sales in the distribution market, but are now experiencing flat sales because they can neither keep up with the additional production expense nor increased needs of their channel partners. Sound familiar?

 Typical winery profile

  • Brands that are selling between 15,000 and 55,000 cases.
  • One sales manager covers the entire US.
  • Sales success due to tapping into a distribution and trade market that embraced its brands.
  • Product’s consistent quality, creative packaging and appropriate pricing appeals to multiple buyers.
  • Once vibrant sales are now flat as more product and marketplace support is needed.
  • Limited financial resources.
  • Dilemma is whether to change its production curve or invest more money on sales managers.

Are you in this situation?

You feel good about the sales growth you’ve achieved; however, you’re concerned about the increased investment required (production and labor) to maintain a similar growth curve and achieve far greater results.

However, just because you produce more wine, doesn’t mean it will sell. Due to a crowded and competitive distribution market, if you do not have the appropriate sales representation, then you won’t get the attention needed to reach your new sales goals. You will fall victim to competing brands that have the resources to devote to developing the market.

Demands of success

The only sales manager you have got you off to a great start as you entered new markets and sales grew fast. However, you are left with the challenge of supporting current markets plus the ones that come on line. As the brand starts to sell more, it becomes a bit more important to the customers, so they demand more of the sales manager’s time and attention. The sales manager’s time in markets becomes more valuable as it is essential to take advantage of sales opportunities.

Sales manager overload

No matter how good your sales manager is, there is only so much he or she can do in a day and eventually unrealistic demands lead to burn out and reduced productivity. A sign that a sales manager is getting burned out is when he or she starts asking for additional money to spend with a distributor so they can obtain a lower price instead of working the market. Distributors don’t have extra time to focus on selling your brand, so their quick and easy solution to moving cases is to recommend that you lower your price.

The solution

At this point, it is clear that having one sales manager to cover the US no longer cuts it. In my consulting work, I have hired many sales managers at all price ranges. While everyone loves a bargain, and there are sales professionals who will work at any price, the old adage, “you get what you pay for,” certainly holds true. At the lower end of the salary range are sales professionals who lack the network and ability that is necessary to get sales past the first milestone, and at the higher end of the rage are super competent sales managers who have great contacts and know-how. Yet, don’t despair if you have limited resources. The best way to maximize your dollars may be to retain a sales and marking company that has the caliber of sales managers you desire, but at a fraction of the cost.

Gordon Palmateer is an expert sales and distribution strategy for domestic and imported wines brands in the US and president of Palmateer Wine Group. Email him at info@palmateerwinegroup.com for more information on this topic.

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  • san rafael, ca
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