After many years on the periphery of the wine industry (market and and economic analysis), I have many contacts with small to mid-sized wineries from a widely underrepresented US region. Their wine is incredible. They include entry level to premium labels and wines with 100-point scores. Many want very much to be represented in my state and region, but have not found a distributor. I have also spoken with wine bars and shops that have expressed an interest in carrying them. This leads me to think about starting a distributorship. Am I nuts? Any pointers to share? FWIW, I have started successful businesses including my 20-year consulting practice, a value-added orchard, and soon a small vineyard.
It is generally a pretty bad business, gross profit margins are on average 25%-45% which is very thin compared to other CPG categories. Distributor consolidation nationwide has also increased the barrier to entry in terms of actually getting the product into the account, retailers/customers are inherently fickle, and the wine category as a whole is on the downward trend of the cycle.
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If the region youâre talking about is truly âunderrepresentedâ then we can obviously rule out California, Washington and Oregon. That leaves the Southwest (New Mexico, Arizona, Texas, Colorado) and New York (Finger Lakes, Long Island). What am I missing? Iâve had numerous wines from all those places and while there has been the occasional winner, itâs been occasional at best. That raises the question of your objectivity - is your friendship influencing your palate?
Even if youâre right and the wines are terrific, thereâs virtually no awareness or consumer demand, so youâd have a major uphill battle to make this a successful business. (And just as an FYI, I am speaking from experience. I was responsible for selling some damn good wines from one of those out-of-the-way places and it wasnât much fun.)
Michigan. Not that it changes your point.
This is a major west coast region, though I canât say much more. It is simply poorly distributed in this part of the country.
If you already have channels to sell the wines means youâre in a pretty good spot. Thatâs probably the hardest part and gives you a steady foundation to start the business.
Enough of them already now with throughput for you to breakeven?
You would certainly not lack for small wineries to represent. Most of the small wineries I know lack all or most distribution. But then again, selling wine is really hard, even established players struggle to get represented in shops/hospitality. But if youâre not afraid to wear the leather on your shoe, Iâm sure it can be done to success.
Yes. It can be done but as others have noted, itâs tough. Most fail. Very few will break through to the upper tier without existing contacts (buyers, not suppliers) and reasonably solid business acumen. I donât actively pimp out my book here but since it is on point to this subject, you can find a link in my profile if youâre interested.
Thereâs usually a good, market-driven reason for that. There are just too many companies distributing these days to leave entire regions overlooked and underrepresented. This doesnât mean the wines canât be sold, but if they are truly appealing to the end consumer in terms of quality and value, someone would be on them. Or if theyâre not, the bigger companies will let you build the brand and then come in an poach the better suppliers from you. Maybe not every single one but enough to âbreak your kneecapsâ so you stay in perpetual struggle.
This book is great
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Thank you 
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I am just starting your book, Tony, thanks for sharing.
I agree with Tony, per a friend who gave this a go in Missouri, itâs tough sometimes to even get meetings, much less one bottle on a list/shelf.
However, one area I see opportunity in my area is through non-chain establishments (local owners) and wines by the glass. Establishing short, almost pop-up type pairings to menuâs especially if there is not a resident Somm. Do your homework on the menu, have some upside analysis of how a successful wine program will impact their bottom line when you get an opportunity. There are multiple restaurants who would love a more successful wine program. If you do your homework and approach like youâre not just pushing bottle but helping them boost their business (almost consultant-esque) you could establish a foothold. More work, but if you can help them win folks will ride with you from my experience.
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Other factors aside, one must be relentless in this pursuit. It never ends but it is most crucial in the early days. Dogged determination is a competitive advantage.
There isnât just one strategy that works but I agree it is often a little easier to crack an opening into locally owned, independent places. That said, leave no stone unturned. One never knows when an open-minded, considerate buyer will provide an opportunity at a chain, whether local or national. We had one guy who really struggled as a salesman but somehow he got us into a Gordon Ramsay place in Midtown, something I would probably have avoided, and those placements moved with good consistency and were basically on what i refer to as âcruise control.â Even after that salesman was gone, the account just kept reordering those wines without ever sending another sales rep to the account. Another nice thing about chains is they offer âone stop sellingâ where one buyer can have the power to buy for multiple places. But itâs often a tradeoff because much time can be frittered away trying to bust into corporate places.
Re the pop-up type things, OK, take what you can get, but ultimately the money is going to come from repeat orders that run for extended periods. I go into this a little in the book. It usually requires a very good relationship with the buyer to get these so it takes time- usually years- to lock them in. The temporary/pop up things are essential until more solid relationships are formed.
I go into this in the âBe Appropriate or Go Homeâ chapter. Itâs another area where a competitive advantage can be had with some ease. Many reps are too lazy to bother but it shoud really be table stakes.
Careful with the showing the âupside anaylyis.â It can be used to effect but itâs a delicate balance that needs to be applied judiciously. Many have too much ego to listen. If they do, many other factors out of the sellers control can happen but the buyer may ultimately blame your pitch for bad results feeling that they were duped by a sales pitch.
This is it. Itâs about a partnership that works for both parties. Everyone wins 
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Thanks for the commentary and your expertise here T.
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Happy to shed some light if I am able 