Sunday, March 10, 2019

So you think you want to import Italian wine?

While I have, more than once, addressed the challenges of selling one’s Italian wine to America, it seems I haven’t touched enough upon the complexities of importing Italian wine into America. Since I am no longer “ITB” (in the business), I have gotten a barrage of emails from people looking to “get into the business,” from both Italy and America. It’s probably time to go over some things in relation to the realities, in 2019, of pursuing that path.

First let me offer an anecdote. In the fall of 2008, I decided to buy a condo in Dallas, Texas, as a rental property. I was debt free, had some cash to invest in something, and the property I bought was in a very good zip code, one of the wealthiest in my town, and one of the top 50 zip codes in America. I bought a little on the high side, at the time, which was probably not a good omen. But It was still an affordable investment, and within the confines of my comfort zone with regards to the risk, even though Wall Street was melting down.

What I didn’t take into account was that folks who rent might be affected by the downturn and my rental property might be vacant for a time.

Well, my first renter got hit hard and within a year she bailed and moved back home. The place stood empty, and after several months and lowering the rent, I found some college students to lease it to.

They were fine enough, but college students are not stationary. So again, the place stood empty.

I ended up selling the place, and factoring in the initial cost (and improvements and repairs) on the place, not to mention the months it sat empty not collecting rent, I lost some dough. Enough in fact, that if I hadn’t bought the place and just taken the amount of money I eventually lost, I could have bought a fancy sports car (like a Porsche Cayman) driven it into the ground for two years, wrecked it and left it on the side of the road, and I would have been ahead of the game. I wouldn’t have had to take those 2AM wake-up calls about a stopped-up toilet or a kitchen sink that overflowed because the garbage disposal just couldn’t grind up raw Brussels sprouts. But I didn’t. And I learned a valuable lesson:
"Something from the outside can appear to be more glamorous and not as risky as it can be inside reality."

This is merely to say, when folks go to Italy on a vacation, let’s say Puglia, and they spend their vacation in a leisurely manner, eating, drinking, making love, swimming, etcetera, their defenses have been lowered. Then they go to their little trattoria by the seaside and drink that lovely, inexpensive Chardonnay or Negroamaro rosato from the area, and someone says, “We should import this to America, they’d love this!” It sounds simple enough, it sounds innocent enough. My answer to them, now, would be: “Buy the Porsche!”

I’ve gone enough into the logistics on other blog posts, and if interested, please read them. What I will never be able to do will be to convince someone that the investment in importing Italian wine into America, in these times, is time-consuming and highly risky. And if you have “The Dream,” far be it from me to rain on your parade. I will try, anyway.

But the competition will do that much more effectively. And it will be an expensive lesson. But, hey, you made your money, and like me, you can throw it in any direction that you’d like to. But know this: You are a minnow in a sea filled with sharks. They jump higher, their pockets are deeper, they know more about how we got here and they don’t like to lose. This isn’t TBall, hey it isn’t even softball. It’s sliders and spitballs. It’s a fastball heading at 97mph right to your head and you don’t have a helmet on - you are the target. So, know that.

When I was working for a large distributor, who recruited me to look after their Italian wine business, for every case of Italian wine that was imported, we accounted for 1 bottle in every 12-pack case that came into America. And that included everything from the low to the high. The business grew amazingly in the 14 years I looked at the business. This is not a brag. As the business consolidated, what I saw was that fewer and fewer players at the top grew to dominate the Italian wine landscape in America.

You think you have an organic Pinot Grigio that Whole Foods is sitting there, waiting for you to bring to them? Think again. You’ve found a Chianti that Total Wine cannot live without? Don’t bet your life on it. You have found a Sicilian Grillo and Nero d’Avola that Kroger cannot say no to? If they aren’t returning your emails, don’t assume their silence means maybe. The big import companies struggle with these issues all the time. Like I said, you are a minnow in shark-infested waters. Don’t jump in the deep water if you cannot swim faster, deeper and longer. And most likely you cannot. Don’t even go there.

You’ve found a region, let’s say the Marche, where their business in Missouri is severely underrepresented. With all respect to my friends and colleagues in Missouri, have you tried to understand the why of that? I remember going into a restaurant, in Kansas City, owned by a large and famous group, who also make their own wine. What was I thinking trying to sell them a Verdicchio, let alone a Pinot Grigio or Prosecco or Chianti? But what the wine buyer showed me, chilled me even more than the lack of a selling opportunity. “Look at that wall, Alfonso. I have four vintages of our proprietary Pinot Grigio stacking up. I have Sangiovese coming out of my pores. And I have more Prosecco than I will sell in six years, and in six years I will have accumulated six more vintages of the stuff. I’m drowning in wine I have to take, and it isn’t selling fast enough.” And that was Missouri.

Which, while we’re talking national accounts, let’s talk about the on-premise channel. First things first: You don’t sell wine to them – you buy real estate. That’s right, if you want a slot on that list, it ain’t a butterfly. It’s not free. It’s going to come with a slotting fee. And you better have the wine in all 30-40-50 states, at the same price, and you better not run out in Austin on a Friday night. Because you will get a call from an angry restaurant manager threatening to pull your wines off (he can’t, not so easily, but he can phone up to his company and complain, complain, complain until the wine buyer in Tampa, or Newport Beach or Dallas gets sick of hearing about it and “sources” another wine). And your hard work, and all the money you paid to get there is a memory.

Why this screed? Because I know, with Vinitaly (and Prowein) coming up, and with the better weather, people start getting out and about, the new vintages start being released, and all of a sudden there are innocent folks out there who might be tired of their job or who think this could be a good sideline to their paying gig. And I get emails, and have gotten them for 15+ years, thinking they’ve discovered something someone “ITB” just hasn’t gotten around to discovering. But sadly, in most cases, they have. And it has either worked. Or in many cases, it hasn’t. Hey, don’t let me stop you. But don’t expect a lot of people waiting around for you to make a call to their office with your dream. They will crush your dream, as I am doing right here, right now. Except I’m trying to help you before you waste the time and the money. Just go buy the Porsche.

And when you tire of driving it around, give me a call. I’ll make you a deal you can’t refuse.

wine blog +  Italian wine blog + Italy W

1 comment:

Unknown said...

So true sir .#porschecayman

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