Highlights from Day 2 of USATT 2017

After an exciting first day at the USATT 2017 conference that featured nearly 1,500 attendees, 138 exhibitors and the first-ever public U.S. tasting of wines from Chateau Rongzi in China, the second day continued with two new Master Classes, two VIP expert panels and a number of different speaker presentations focusing on how emerging brands can enter the U.S. wine and spirits market.

The second day kicked off with an interactive audience Q&A that focused on the specific problems and needs of foreign wine and spirits brands attempting to enter the U.S. market. The panel, moderated by Steve Raye of Bevology, featured Martin Sinkoff of Frederick Wildman, Michael Votto of Votto Vines, Michael Yurch of Blue Sky Group and Rob Bradshaw of Cape Classics. This group of experienced wine industry veterans shared their perspectives of what importers and distributors are really looking for when selecting a new brand for their portfolio.

As the panelists explained at the outset, importers and distributors get lots of cold calls, so you need to be interesting and stand out. As Rob Bradshaw pointed out, unique stories can instantly connect you with importers and distributors, so you need to make some kind of emotional bond with a buyer. Always have your story ready when talking with importers and distributors. Michael Votto emphasized that you always need to know what your specific category looks like in the U.S market and what your competitors are doing. And Martin Sinkoff suggested that you need to understand where your product fits within an importer’s portfolio.

Along the way, the panel’s participants fielded questions on everything from how global warming and climate change are impacting the wine industry to a discussion of new, non-traditional routes to navigate a very complex U.S. market. Michael Yurch noted that the bigger the distributor’s portfolio, the harder you have to work to become an important part of that portfolio. You need to be your own advocate. The difficulty, says Martin Sinkoff, is that, “The wine business is not one thing. It’s a very complex organism. Each retailer is looking for something different.” So you have to be constantly innovating.

The morning session also featured a Master Class on Portuguese wines, focusing on the wines of the Tejo region. Participants learned about Portugal’s winegrowing tradition and how the wines of the Tejo region are distinct. They also had a unique chance to sample some of the best wines from the region.

As on Day 1, the United States Trade Tasting 2017 event also featured a busy day on the showroom floor. Over 130 exhibitors from 20 countries showcased their products. Alongside wines from traditional wine producing countries like France and Italy were new wines from Eastern Europe (including Slovenia and Moldova), South Africa and China.

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In the afternoon session of the conference, participants had a chance to hear from Thomas Barfoed, Managing Director of JF Hillebrand USA, who discussed the “7 Ways That Brands Can Optimize Their Domestic and International Logistics.” For example, he discussed how small and mid-size brands can optimize their shipments to the U.S., what logistical factors might impact margins and pricing, and how different modes of transportation can impact your go-to-market strategy.

Gerry Schweitzer, the legendary marketing genius behind Leblon Cachaca, made a special appearance in the afternoon. He illustrated the right way to go about pitching a distributor, focusing on how to tell a convincing brand story. Your brand story, he says, has to be compelling, personal and easy to remember. It has to explain why your brand is unique and how to build your brand.

In some cases, as in the example of Leblon, you can own not just a category, but also the entire drink (as in the example of cachaca and the Brazilian caipirinha). Schweitzer provided plenty of relevant marketing examples from Leblon, including many tactics that today’s marketers might refer to as “guerilla marketing” (e.g. re-painting a DHL delivery truck as a hip and trendy cachaca delivery truck).

Richard Halstead, Chief Operating Officer of Wine Intelligence, then gave a talk on, “How to Win Retailers and Influence Them With Effective Merchandising and Programming.” He was joined on stage by Stephen Fahy of Wine Library, who was also a special guest during Day 1 of the event. The two talked about the best strategies and tactics for getting specialist retail stores to carry your specific product.

When thinking about specialist wine retailers that might carry your product, they suggested, it’s important to think in terms of two very different types of consumers – the consumers who are very brand-driven and the ones who are very “involved” and care a lot about how a specific product fits into their lifestyle. In general, these more involved consumers are younger, and they are starting to account for a larger and larger percentage of retail wine consumers.

Then, a press panel on “The Do’s and Don’ts For Getting Press Coverage For Your Brand in the USA” featured moderator Steve Raye of Bevology; Gregg Glaser, Publisher/Editor of Modern Distillery Age; William Tish, Managing Editor of Beverage Media; and David Spencer, Publisher, and Editor of iSante. The panel covered both the big picture view of how to generate media buzz for your product, as well as some of the granular details of marketing, such as how to prepare a pitch e-mail for editors of both online and offline publications.

The afternoon session concluded with a Beaujolais Master Class, in which participants had a chance to re-discover the light red wines of the Beaujolais wine region in France. The Master Class covered the unique characteristics of each of the Beaujolais Crus.

And, of course, the day ended with more activity on the main showroom floor. Even in the last hours of the event, importers and distributors were mingling with the exhibitors, looking for the perfect new product for their portfolio.

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Highlights From USATT 2017

On May 16-17, the United States Trade Tasting (USATT) event brought together producers, importers, distributors and other industry professionals at the Metropolitan Pavilion in New York. Producers learned more about how to enter the competitive U.S. marketplace, while importers and distributors got an early look at some of the innovative brands and products potentially coming to the U.S. market.

The event, which featured more than 2,000 participants and 138 exhibitors from more than 20 countries, focused on helping emerging brands stand out and differentiate themselves within their product category.

Learning to tell your brand story

As many of the speakers at USATT 2017 pointed out over the course of two days, being able to tell a unique and dynamic brand story is especially important when it comes to attracting new importers, distributors, and retailers. If you’re not telling a unique brand story, you’re making it harder for suppliers and wholesalers to sell your product.

Chris Mehringer, President of Park Street, emphasized that brand differentiation had to be at the core of any marketing strategy. One way to do that is by creating “badge value,” in which brand can serve as a badge for people to communicate who they are and what they want to be.

Jonathan Newman,  Chairman, and CEO of Newman Wine talked about the 10 biggest factors that can help brands get picked up by national chains and large retailers. For example, he mentioned the value of creating point-of-sale (POS) materials that help retailers sell wine, as well as the importance of making the label look right. At the end of the day, the attractive packaging really matters.

Stephen Fahy of the Wine Library emphasized that producers always have to be thinking like a marketer. Wine brands, he said, need to take an activist approach to getting noticed within the U.S. marketplace. That means infusing your brand with passion and enthusiasm. And it also means staying one step ahead of what customers want in the marketplace, “Look for new angles, new perspectives, and new opportunities. Always.”

New and innovative products on display

At this year’s USATT 2017, there were different tasting sessions to help participants explore wines from up-and-coming wine regions. For example, on Day 1 Chateau Rongzi held a public tasting of its highly acclaimed wines from the Loess Plateau of China. This marked the first-ever public tasting of its wines in the United States. And on Day 2, show participants had a chance to attend a master class on the wines of the Tejo region of Portugal.

In the Grand Tasting hall, attendees had a chance to see many of the themes and trends emphasized in the speaker presentations in action. Walking around the buzzing showroom floor, participants could see some of the innovative new products coming soon to the U.S. market – such as wines from Portugal and Eastern Europe (Slovenia, Romania, Croatia, Moldova). premium rum and mezcal drinks from Latin America, spirits with new flavor and taste profiles, and wines and spirits with innovative new packaging.  Some of the brand’s people were buzzing about at the event included Vodquila, Get Hot Tequila, Bira, and LIQS cocktail shots.

Getting educated about how to enter the U.S. market

What made this year’s event so distinctive was how carefully the conference content was tailored to the specific needs of the U.S. market. Day 2 of the event, for example, featured a dynamic Q&A hosted by Steven Raye. Members of the audience had a chance to ask one-on-one questions about building a successful brand to members of an expert panel: Martin Sinkoff of Frederick Wildman, Rob Bradshaw of Cape Classics and Michael Yurch of Blue Sky Group.

Participants asked a wide-ranging number of questions, touching on everything from how global warming will impact the wine industry, to how the growing legalization of marijuana could impact the future trajectory of the alcoholic beverage industry.

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Later on Day 2 of the event, there was also an interactive panel with three prominent journalists from the wine and spirits industry: William Tish (Beverage Media), Gregg Glaser (Modern Distillery Age) and David Spencer (iSante). Audience members asked specific questions about how to get press attention, and what types of stories can attract media coverage.

And throughout the two-day event, there were speaker presentations on every aspect of bringing a new wine or spirits brand to market. Thomas Barfoed of JF Hillebrand, for example, discussed the logistics of bringing a product to the U.S. market from overseas. Being able to optimize your supply chain can have a dramatic impact on your brand’s bottom line.  And Donna Hartman, an attorney with OlenderFeldman, discussed the important legal points to keep in mind when drafting distribution agreements.

Final takeaways

If anything, the pace of innovation within the wine and spirits industry is accelerating, and that’s placing even more of an emphasis on staying ahead of key trends in the market. It’s no longer just enough to have a quality product. That’s now a necessary, but not sufficient, condition. You also have to have a compelling brand story and a true understanding of where your product might fit within an import portfolio and how it should be priced.

The general consensus of the show’s attendees, based on first-hand conversations with many of the exhibitors, is that this year’s USATT 2017 far exceeded expectations. USATT 2017 showcased a range of dynamic new brands and brought together these brands with importers and distributors to think creatively about how best to bring them to market. Watch this space for follow-ups on success stories from these brands ahead of USATT 2018!

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Highlights from Day 1 of USATT 2017

Representatives from across the wine industry met in New York City on May 16 for the second annual United States Trade Tasting Show

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The second annual United States Trade Tasting (USATT) conference kicked off on May 16 with more than 2,000 attendees and 138 exhibitors from more than 20 countries. As Steven Raye, pointed out in the opening keynote, this year’s event is designed to give emerging wine and spirits brands a smarter way to enter the U.S. market by connecting them with importers and distributors and sharing best practices from across the industry.

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Brandy Rand, Vice President of IWSR (USA), led off the morning session with a review of some of the key trends in the marketplace today. Two of the hottest trends are “Premiumization” and “Category Blur” (the creation of new hybrid drinks as well as consumers who consume alcoholic beverages across categories). U.S. spirits are now an “affordable luxury” and IWSR is seeing tremendous growth in the premium and ultra-premium categories.

In order to stand out in the U.S. marketplace, Rand noted, some brands are adopting alternative packaging (such as wine in cans and boxes) and adopting marketing messaging that emphasizes their “artisanal” and “craft” origins. Among consumers, one new trend is a changing flavor profile that emphasizes “spicy/smoky/savory” rather than just “sweet,” which had been the previous trend. There has also been what IWSR refers to as the “Hispanic phenomenon,” which means greater popularity for categories like tequila, mezcal, and imported Mexican beers.

Some of these trends visitors were able to see directly on the USATT 2017 showroom floor, which opened at 11:00. For example, Vodquila is a new hybrid vodka and tequila drink created for tequila drinkers who want a smoother sipping experience. For many visitors, the highlight of the Grand Tasting in the first floor main hall was the ability to sample wines and spirits from all over the world, including products from up-and-coming wine regions like Lebanon, South Africa and China.

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In the morning session, Chris Mehringer, President of Park Street, talked about the basics of building a long-term, sustainable business model for the U.S. market. As he pointed out, it’s important to have a realistic plan and sufficient resources before meeting up with distributors. Any go-to-market strategy needs to be market-driven, coherent, balanced and flexible. As part of this strategy, brands need to keep in mind how they can differentiate themselves in the marketplace and how they can create economies of scale.

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Josh Wand, Founder of BevForce, explained how importers and distributors can build a strong sales force for the U.S. market. As Wand explained, it’s all about hiring the best team possible. Start off by hiring for passion and expertise and then establish challenging goals for this sales staff. He also outlined two of the keys to employee retention: offering fair market value compensation and building a healthy, positive sales culture. Attracting and retaining talent, he noted, is the key to the long-term success of your business.

In the afternoon session, Donna Hartman, attorney at OlenderFeldman LLP, covered the key points of wine distribution agreements, walking participants through the differences between drafting distribution agreements for franchise and non-franchise states. She also noted some of the important legal points to keep in mind as brands expand in the U.S. marketplace and build relationships with distributors.

Jonathan Newman, Chairman and CEO of Newman Wine, talked about the Top 10 ways for brands to get noticed and picked up by national chains and retailers. Getting positive press in the major industry publications still matters, as does holding regular tastings to build customer awareness. He also mentioned the important things that brands can do to make their products stand out on the shelves of retailers, such as creating the right types of labels and using the right kinds of point-of-sale (POS) materials that help retailers sell their wine.

Stephen Fahy, Sales Director and Senior Buyer at the Wine Library, talked about ways for wine and liquor stores to turn into “lean, mean selling machines.” He boiled it down to a few key points. One important point is data, which he said now “drives the engine.” You absolutely have to have the data to know who are your best customers, in terms of how often they buy, how much they buy, and how willing they are experiment with new categories. Another key is being bold and standing out – you need to be fearless about being passionate, enthusiastic and even flamboyant. You need to be an “activist” – if you stay quiet, you will be forgotten.

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Finally, the day wrapped up with a Master Class on Chinese wines led by Chateau Rongzi. Participants were given a brief history of Chinese wines and an overview of how the wines are made at Chateau Rongzi before sampling a number of different wines – the first public tasting of these wines in the United States market.

Outside of the conference sessions, there was a palpable buzz on the floor throughout the day, and there’s more planned for Day 2 of the event. Things kick off at 9:00 with a special Office Hours session moderated by Steven Raye, featuring a number of prominent importers and distributors.

There are also two afternoon Master Classes planned, featuring the wines of Tejo (Portugal) and Beaujolais (France). In addition, participants will hear from Thomas Barfoed, Managing Director of JF Hillebrand USA; Adam Lambert, Seller of Beer & Spirits; and Richard Halstead, COO of Wine Intelligence.

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And, of course, the Grand Tasting hall will be open again on the first floor, giving everyone a chance to meet and mingle with importers and distributors as well as experiment with wines and spirits from across the world.

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What U.S. Retailers Are Looking for and How to Pitch Them

On a daily basis, a wine and liquor retailer/wholesaler must manage a litany of items. Among those things is a slew of requests from a large number of winemakers who are eager to get their offerings on store shelves. When making a pitch to them, its important for a representative to be focused and respectful of the retailers time. Also vital is the ability to make a brand stand out from the rest in a crowded U.S. market.  

Meet the Retailers Needs

One of the most important themes in any sales pitch? Authenticity.  Retailers will be looking for an authentic story that tells of provenance. Theyll pass this along to the customers to help improve a brands identity. Ben von Doussa, USA Market Entry Manager for Wine Australia, likes to remind winemakers that every year the TTB approves a whopping 180,000 to 200,000 SKUs for wine and spirits in the United States. Because of this, a sales pitch must be incredibly compelling in order to garner any attention.

Wine Australias vision, going forward, is for Australia to be recognized as the worlds pre-eminent wine-producing company.Another key to standing out in the U.S. market is to focus on what makes Australian fine wines special when compared to other countries. Discussion of the diverse, unique regionality and superior terroirs found throughout Australia, as well as the skilled and innovative people behind the wine, helps to set Aussie wines apart from those made by other wine-producing hard hitters. The exciting thing about this? Its exactly what U.S. retailers are currently looking for. They want luxury wine offerings with a story and a sense of provenance behind them. Moving forward with this information in hand, Wine Australia is confident that Aussie wines have the capacity to be recognized as the best in the world.

What do U.S. retailers want from the New Australia? Listening to the needs of retailers is important and when von Doussa contacted them to talk specifics, they expressed excitement about the potential of new offerings to revitalize the Australian wine category. There have been approximately 50 Australian brands competing for an ever-shrinking amount of American shelf space over the past years. Retailers are looking for something new to attract customersattention.  

The story of origin is critically important in these new brands. Wine consumers want to purchase wine with a sense of place. As they open a bottle over dinner with friends, they want to be able to discuss where the grapes were grown, the purity of the water used to grow them and the growing conditions that make that region different from the rest.

Authenticity is also a significant factor to consider. When entry-level brands flooded into the U.S. wine market, it resulted in damage to the overall image of the Australian wine industry among American consumers. Retailers decided that most Australian brands werent able to deliver the kind of quality-to-price ratio that they needed. Margins matter, and representatives must demonstrate that offerings from the Australian category are capable of delivering the margins seen by other segments such as California or Europe. Its no longer acceptable for fine Australian wines to be perceived as an entry-level product.

In forming a sales pitch, there should be three areas of focus. Lead with all the specifics that make a wine unique. Media ratings from third-party sources like Wine Spectator are highly valued in the U.S. market. In addition to this, provenance, authenticity and a wines extraordinary value through luxury price points will help build a story that retailers want to hear. U.S. retailers are very motivated by driving margin, especially with the online competition that exists in the wine market. To top off the triad of sales pitch organization, offering regional exclusives is an excellent strategy to help build a relationship with various retailers.

Know the Customer

As wine representatives pitch various retailers, their presentation should vary according to the needs of each individual business. These needs are defined by the shopping behaviors of the customer base of that retailer. For instance, warehouse club Costco is perhaps the holy grail of accounts for wine brands. This is because they move a high volume of product, selling it to customers who arent concerned with price point and make wine purchases based on reviews and ratings. This differentiates Costco from other clubs such as BJs and Sams. They cater to a customer base that is primarily motivated by price point and is looking for cost-effective wine options.

Apart from Costco, stores with specialty wine programs should be another area of intense focus for winemakers and their representatives. Places like Earth Fare and Wegmans cater to wine-centric customers who love having a good story behind their wine. Customers who frequent specialty wine shops spend lots of time researching online ratings and are drawn to great quality wine with attractive packaging.

Grocery chains can prove to be a tough nut to crack for luxury wine brands, but ignoring them is a grave error. Brands that can break into a grocery store such as Kroger or Publix at a luxury price point will enjoy the ability to move a large amount of product. Grocery stores want quality wine and are happy to provide a selection for their customers who are looking for a higher price point. However, the current selection of Aussie wines being presented at most grocery stores is being sold as entry-level, low-cost offerings. Grocery stores run in contrast with the drug store wine market in the U.S., where customers are primarily motivated by a wines price point and packaging and are typically shopping for the lowest-priced products. These are not the best choice to focus on for sales.

Independent wine retailers such as Sherry-Lehman and Binnys in Chicago provide a market where price point is not an issue for the clientele. These kinds of retailers sell to a customer that is focused on ratings, as well as a wines story. Before making a choice, these customers need to know where their wine is from, how it was made and what makes it different from the brand sitting directly next to it on the shelf.  

As years go by, more and more of the wine market is playing out on the internet. Sites such as Wine.com and WTSO cater to customers who do intensive research before making a wine purchase. Ratings play heavily with these customers, and they are interested to know the story behind any brand they consider buying. Price point is not a leading priority for online wine customers.

Wine and liquor chains with multiple locations such as ABC or Apple Jack function similarly to specialty grocery stores. They market wine by placing a spotlight on ratings and the story. Attractive packaging also works to garner the attention of customers in these stores. Small mom and pop stores cater to customers who are primarily focused on ratings and packaging. Although the price point isnt a big concern, mom and pop stores can prove to be challenging due to low-volume sales. A supplier will need to cover extensive ground to reach substantial numbers with independent retail stores.

Success in the U.S. wine market truly comes down to research and preparation. Price points are best determined by looking at the competition. Winemakers and their representatives must have a unique, compelling story preparedone that makes the retailer and the customer feel a connection with a given brand. Representatives must arrive at each store with an understanding of what aspects of wine purchasing are important to that specific customer base. Keeping these things in mind will greatly increase a brands chances of edging out the international competition in the teeming and ever-changing U.S. market.    

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