Wine's Blacker Sheep
Selling through distribution has actually gotten harder.
Not that you need me to tell you this. With breweries creating cider, hard seltzer, kombucha and anything else to stay relevant, the noise that pelts buyers daily has to be at a fever pitch.
How does any sales person remain relevant to a buyer? Only by persistent annoyance. The sales people that are in front of a buyer, physically, will get the most opportunity. A buyer can’t ignore questions in the moment of a conversation the way they could ignore a text message. They have to look at the sales sheet referenced in the presentation they’re receiving, however brief, unlike their ability to delete an email without reading it. This has been true for many years, but the challenge of communication will continue to increase in difficulty so long as the average age of decision makers continues to remain flat and technology advances at its ever increasing pace.
It is the nature of the business that an alcohol buyer’s job is a stepping stone to bigger and better things. There are few lifers and those few lifers tend not to live very long. At best, you can expect to get three to four years out of a solid buyer relationship.
So how are you supposed to survive when the buyer, account and market in question is not the immediate area surrounding your facility? For many of us, the answer is to do the best we can and focus on branding. The branding that tends to work best falls into two categories.
This is a system built for volume. The majority of brokers, distributors, retailers, bars, and restaurants are designed for the sale and/or consumption of mass quantities. Think of it like a diner concept; offering a wide variety of quickly deliverable menu options at prices that will appeal to the most consumers. The quality will be variable and sometimes even questionable, but few complain because of the price. Diners (and the wait staff) are most profitable when they can turn their tables quickly and get repeat business from locals that know what they’re getting before they walk in the door or travelers that have an understanding of a basic quality for diner food.
To compete in this arena, you will have to be able to provide constantly available products with consistent flavor. You will have to invest in marketing the brand up front on a market-by-market basis, with grassroots efforts to create (meaningless) “personal” connections. The best of these efforts can have lasting effects - like the house that has the yellow plastic Schweppes Adirondack chair in their front yard. (Warning: Not all lasting effects will be positive.)
Going low is all about branding yourself off the bottom tier and generating as much volume for the best price you can fetch for that brand. There are important niches you can capture too. Are you always on tap for $5-6/pint? Are you always on shelf for $12/6-pack or $10/bottle? Are you always on a bar or restaurant bottle list for a set price? There are ways to get to these points and get in the door at enough accounts to make the volume worthwhile, but it will cost money. Some of these ways are even legal. Imagine that!
If you’re not going to aggressively target volume, you have to make it up in profit per unit sold. This is an amazingly fine line to walk and the challenge starts when you open your doors for business. It comes down to one difficult question: what value do I place on the time and effort to grow these trees and to create beverages from it’s fruits?
I can tell you right now, the number you’re thinking of is too low. This is the challenge. This is the fine line.
One of the many things I like about the cider industry is that there are a lot of honest, hard-working people here. The industry moral compass generally tends to align with mine, and that’s something I’m naturally drawn to. This moral compass tends to hold you, the producer, back when setting pricing in part because you don’t want to feel like you’re gouging your customers.
Because the number is being considered in these terms, you think of it as how much you would want to pay. This is why it’s perfectly natural to think that the literal fruits of your labor aren’t worth more than $22/bottle. This is why $15 is a fair price. You’re convinced customers won’t or shouldn’t pay beyond that for quality orchard/heritage/artisanal/fine cider.
I’m here to tell you that not only will they, but they absolutely should.
Single vineyard wines from popular California brands sell for a minimum of $28/bottle and most are over $35. Smaller wineries are over $50. So why are single orchard ciders $15?! Yes, wine has the advantage of caché and reputation. Fine. That doesn’t mean cider pricing shouldn’t be less than half of wine.
When you evaluate pricing, it can’t be viewed in a vacuum. You have to look at it contextually within the scope of not just what your neighbor is charging, but what the best wineries are charging for their premium bottles. American-made Pét-Nat wines, the black sheep of the wine world, are fetching a minimum of $25 a bottle at retail. No matter how you produce your cider, it should be worth at least this much. If Pét-Nat is the black sheep, would it be fair to consider cider an even blacker sheep?
Before you go off the rails, cider is its own entity. It must stand on its own two feet and be viewed independently of wine. However, since 95% of Americans still think cider is one-note sweet fizzy stuff in a 12oz bottle or pint glass, there must be some comparative, relative stepping stone for the masses to grasp in their beverage evolution. And yet, even as the blacker sheep of wine, the value proposition for cider must take a large step forward.
That’s not gouging your customers. That’s putting a fair value on the time and effort it takes to not only grow apples that can really only be used to make cider as well as the crafting and packaging of said cider.
My only request is that you drop me a line before you raise your prices so I can buy a case.