Transforming Supplier-Distributor Relationships: A Reality Check

Do you think you know your wine & spirits distributors? You better think again.

Expectations Versus Reality

Expectations are funny things.

Especially when they vary so drastically from reality.

You think you know someone. Then they do something that completely surprises you, and you realize you either never really knew them or they somehow changed.

In the wine and spirits industry, expectations and reality are notably apparent. Suppliers often enter distribution partnerships with the expectation of seamless collaboration, envisioning their products reaching a broader market with ease.

Not too long ago, a strong working partnership between suppliers and distributors was the norm. The ratio of brands to distributors were more evenly balanced, enabling effective collaboration and goal achievement. Those who fail to acknowledge this new reality are likely to experience frustration and disappointment.

If you are part of the team responsible for generating revenue but don’t know or understand the key driver of your revenue (your distributors), then your expectations will not meet reality.

It doesn’t have to be this way. This article will help align reality with expectations.

The Ghost of Holiday Trade Shows Past

If you’ve been in this industry for a while, you remember a time not too long ago (about eight or nine years ago) when a strong working partnership with a distributor was very attainable and effective.

The reason this was so attainable was because the ratio of brands to distributors and the total number of distributors was at a much healthier level. Suppliers and distributors were able to work together towards common goals.

In this environment, suppliers that excelled were those who came to the table well-organized and truly established a partnership with their sleeves rolled up, ready to do their part. Working together, the two entities could achieve high levels of success.

The defining characteristic of this era could best be described as “capabilities.” With a reasonable number of brands to represent, distributors were more than capable of assisting their supplier partners in achieving their goals.

And THAT is what has changed so profoundly.

Held Hostage by a Vintage Idea

If, as a supplier, you’re still operating as you did when distributors had a smaller number of brands to sell, you are bound to be frustrated and disappointed.

It’s fair to say that modern wine and spirits distributors, regardless of their size, are faced with a considerable task when it comes to managing their brand portfolios. The challenge persists as the consistent need to manage a large volume of brands while maintaining a high level of effectiveness and efficiency in their operations.

As a supplier, it’s important to acknowledge this reality, as doing so can be instrumental in achieving your sales objective through these partnerships.

It’s worth recognizing that distributors are also often dealing with a significant workload, and while education, motivation, and encouragement are valuable, it’s essential to appreciate the practical limitations they face in managing these partnerships as equally important for fostering successful collaboration.

“He hates these cans!”

In the classic comedy film The Jerk, Steve Martin’s character (Nathan) works as a gas station attendant. A sniper hidden in the hills above with a long rifle and scope tries to assassinate Nathan. The inept sniper keeps missing and hitting the stack of oil cans beside Nathan’s head. Nathan assesses the situation and declares, “He hates these cans!”

In 2023, this astute observation can be witnessed in some suppliers who, with high hopes, turn to their distributors, only to wonder why their distributors can’t seem to meet their expectations and come to the traditional fail-safe insights. “They require additional training!” “They require extra motivation!” “They need more refined sales materials!

What they “need” is a partnership with empathy. They “need” their suppliers to accept and adjust to their new reality to work within a collaborative environment.

It’s a case of the supplier’s fantasy versus the distributor’s reality.

New Era. New Rules. (a.k.a. “Adapt or Fail”)

The word “fail” might seem harsh, but given the new reality outlined above, the “failure” of a brand is not out of the question for partners who fail to make the necessary adjustments to their game plan. Examples abound.

While the failure of a brand due to lack of adaptation might be avoided, the failed execution of a career is very much in play.

Consider these bullet points taken from the actual job description in Winejobs.com:

“Manage wholesalers’ capabilities to adopt and implement our brand strategies.”
“Address distributors’ poor performance.”
“Hold distributors accountable for the execution of our brand standards.”
“Take corrective action if distributor goals are not met.”

That last one is our favorite. Could this be any more disconnected from reality?

Don’t be the Blockbuster of the wine, the Kodak of the spirits, or the Myspace of beer.

Here are some substitute bullet points for your next job descriptions:

Leverage data and technology to enable seamless collaboration with your distributors.
Provide a (digital) clear line of sight into all sales activities so both parties can execute faster and more effectively.
Facilitate field sales execution by eliminating unnecessary phone calls, meetings, and emails and replacing them with modern data management systems/platforms.

Bottling Empathy: Walking a Mile in the Distributors’ Shoes

In today’s competitive landscape, suppliers and distributor partnerships who excel tend to exhibit common key attributes:

Acknowledgment of Distributor Challenges: They demonstrate a key awareness of the challenges faced by their distributor partners. This understanding is seen in genuine empathy, enabling them to adapt their strategies and support accordingly.
Redefined Partnership Dynamics: These suppliers redefine the concept of “partnership” with their distributors. Instead of merely expecting results, they actively engage in collaborative efforts, sharing the workload and maintaining realistic expectations of their distributor’s capabilities.
Hands-On Involvement: When a particular task or initiative holds significant importance or value, they participate in their own direct action rather than delegating it entirely to the distributor.
Embrace of Technology and Digital Collaboration: They embrace technology and digital tools to streamline operations and enhance communication with their distributor partners. This forward-thinking approach leverages digital data insights to improve efficiency and adapt to changing market dynamics.

It all boils down to embracing change; what the expectations are versus reality.

If your wine and spirits distributors are not performing up to your expectations, it’s time to look inward and become a contributor in your own reality. Is it possible it isn’t them could it be you?

Welcome to the Age of Digital Collaboration

We truly do live in a marvelous age! Software and systems exist now that can facilitate seamless collaboration on a large scale – just what current distributor/supplier partnerships need.

Adapting to the new environment of distributors’ reality is made much easier by letting go of old, outdated, and inefficient ways of collaborating and communicating and replacing them with data management systems that take sales execution to “scalable” levels! Exciting times indeed.

Dinosaur, Dilettante, or Doyen?

Our industry is on the brink of a great separation that is happening right before our eyes.

There are those stuck in the past and will remain with traditional methods.

Some dabble or feign interest in technology showing surface-level interest and leaving the execution to others, simply following without truly understanding its value.

A rare few have fully embraced the power of technology throughout their entire organization and leveraged it to prosper despite the modern realities facing all brands/suppliers.

These times require a fresh approach to thinking, working, and partnering in business. First, acknowledge the changing landscape, and second, embrace and adapt to this new reality by making essential adjustments, as detailed in our Survival Guide feature.

Get a clue. Get the guide.

We think there’s a dire need for a new guide for partnering with wine and spirits distributors. So, we created one; “The 3-Tier Survival Guide,” – and it’s free. Click here to get your copy.

We realize there is a severe shortage of materials available to suppliers and distributors alike that help bring the new reality into focus. It can be challenging to ascend through the learning curve without specialized training.

We hope our new “3-Tier Survival Guide” provides much-needed information and guidance in this new age of supplier-distributor partnerships.