Thursday, January 29, 2009

The evolution of my wholesale business

I pulled Virginie de Valandraud 2006 from the open market, even though it represented 70% of sales since 1992. I did keep a few colleagues and friends wholesalers via brokers who sell through specific distribution networks.

I am doing the same with Valandraud 2008: pull it from the open market and setup distribution through a few colleagues wholesalers, some who already have signed sales contracts thanks to inspired brokers (indeed) by this business opportunity.

Bordeaux market place plays a great role when demand is strong, but I am concerned that when times are a bit more challenging, they have a hard time promoting and sell wines.

The open market is a fantastic tool, but in Valandraud’s case, why would a colleague put all his effort in distributing a wine when a competing wholesaler also carries it? For, if in my case I followed the unwritten rules, by selling my wine at a higher price than my colleagues, most haven’t even asked themselves if it was worth investing in my wine. Valandraud, which was sold by 70% of Bordeaux wholesalers for more than 15 years, fell to 50% for 2007 and without being a prophet, I believe it will be less than 30% for the 2008 vintage. Therefore, why stay in this open market distribution system and instead sign formal distribution agreements where each client will be protected in his region?

My company is becoming more and more commercially independent. Speculative turbulences are already being diversified and being spread between 3 sorts of wines: some produced by us, those sold exclusively, and those sold by Bordeaux market place.

1 comment:

Miguel said...

Point! I like this move, and have been waiting for someone to break from the pack and try a new route to market with a top wine. The 2008 vintage will be a very interesting environment for a bigger test of self-directed distribution from Bordeaux, and all its possible impacts.

The question I am wondering: Is this a game of Chess? Or is it Poker? Either way, I like it.

Bravo. See you on Tuesday.