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05.25.2010  
 

Wineries Rate Their Distributors

New website allows vintners to vent about no-pay, slow-pay

 
by Jane Firstenfeld
 
 
wine distributors
 
St. Helena, Calif. -- For decades, wineries’ reputations have thrived or dived at the hand of reviewers -- more so in the digital age, when anyone with Internet access can publish his take on a producer, a varietal or a vintage. And despite the increased reach of direct-to-consumer marketing, most wineries still rely to some degree on tier No. 2 of the three-tier system, distributors.

Now, thanks to a disgruntled Napa Valley vintner, wineries can share their distributor experiences -- positive and negative -- with their peers. Founded this spring by Peter Norris, president of Vino Family Vineyards, a St. Helena-based negociant that sources wines from North Coast vineyards, nopaywinedistributors.com displays some 200 distributor reviews.
wine distributors Peter Norris
 
When Peter Norris found that some distributors for his Vino Family Vineyards brand were not paying, he launched a website where vintners can air their grievances--or recommend distributors they favor.
Norris, who’s also executive creative director for Sacramento-based marketing agency Runyon, Saltzman & Einhorn, told Wines & Vines he was inspired to start the site after two Midwestern distributors of his 1,200-case brand started paying slowly or not at all. One, he said, “screwed us out of $20,000.” Another, which still owes a total of $10,000, is paying in $1,000 increments.

Norris got an e-mail from another vintner. Vino Family was listed as a client of the slow-pay distributor: Would Norris recommend this company? “Make it COD,” he advised his colleague. He realized that “A lot of wineries were getting burned. Distributors will order and not pay.”

Norris decided to launch a review board similar to the popular yelp.com . Wineries can (anonymously, if they wish) review and rate distributors using a “five goblet” system. The site includes an Amazon-like feature where readers can rate the ratings “helpful or not.” Since no proof of identity is required to submit a review, apparently the reviewers are not limited to winery personnel.

Norris moderates the board, but, he emphasized, “I’m not responsible for the reviews,” although he edits out profanity and potentially libelous assertions.

Reviews of a single distributor can differ radically. One, which achieved an average of 0.5 glasses from three raters, was described variously as:

“Disorganized, understaffed, lacking professional sales management and market understanding -- and worst of all, don’t like to pay their bills.” “Scam operation … they do little of what they promise. We’re still waiting for payment on wine sold six months ago.” And, finally, “Good choice … a trusted and dependable provider.”

Readers make their own judgments, but they may be prompted to do a little more homework before signing on.

“The idea is to try to protect the little guys, who have so little leverage,” he said. He funds the non-profit site himself, and there is a link for donations. Eventually, he said, he might include a banner ad or two.

Readers react

Feedback from wineries, Norris said, has been “incredible.” From distributors, not so enthusiastic, although a surprising proportion of the reviews is positive. “A couple times I’ve heard from distributors that the (negative) reviews are ridiculous,” he said. “I tell them, if it’s wrong, ask your satisfied clients to post.” He hopes to foster dialogue that will be useful to both wineries and distributors, who may wish to address negative issues that arise on the forum.

Two anonymous reviewers posted about The Henry Wine Group, Benicia, Calif. On April 16, the first, identified only as a small Sonoma winery client of HWG, complained of high turnover in the company’s ranks as a source of communication problems, especially in the Los Angeles area. A responder who posted the same day claimed to have worked for the distributor, and suggested that low compensation in pricey L.A. was responsible for low staff retention. This poster added, “The portfolio is fantastic, but a distributor is only as good as their long-term relationships in the market.” Average rating: 2.5 glasses.

In the spirit of journalistic fairness and in keeping with Norris’ goal of creating honest dialogue, we forwarded these reviews in their entirety to the Henry Wine Group. Will Henry, vice president of business development, wrote: “Thank you for complimenting our sales staff…. I agree they are hardworking and the most wine educated in the industry. I also agree with you that earnings within our sales force were at one time too low and turnover too high; partially a result of the current recession….” 

Henry’s comments (edited here) said that HWG has taken “decisive action since 2007” to reward its salespeople. “At the beginning of 2010, we revamped our compensation structure entirely….” As a result, he wrote, “Earnings are up and turnover is down…. The Henry Wine Group has been hiring new talent and we have actually increased the size of our sales team by 20% this year.”

Another reviewed distributor who answered our request for comment had earned a four-glass rating from two winery clients (not Vino Family). Suzanne Chambers, president of Chambers & Chambers, started her distribution agency with her father in 1972, and has closely observed the wine industry’s intervening evolution.

She can relate to both sides of the winery/distributor story. “I think it’s a great idea,” she said of the new website. “One of the real challenges that wineries are facing is that there are distributors who are defaulting. Smaller distributors acr oss the country have been hit fairly hard by the economy. As with broad-market accounts, there are some distributors that are not fulfilling their obligations.”

Chambers & Chambers has several bases in California and Hawaii.

She added, “We are able to share our information with other distributors about how (winery) credit is handled. The wineries need that information, too.”

Norris, who maintains distribution in Texas and Ohio, said he and his partner have reduced the price-point for Vino Family wines and are selling off inventory to finance the next vintage. “As negociants,” he said, “We’re trying to determine the next level.” About this new side-project, he concluded, “I hope I’m giving a service to people.” At the very least, he has initiated a dialogue.

Unfortunately, the potentially valuable dialogue was temporarily interrupted shortly after this Headline was posted. Several readers informed Norris and Wines & Vines that the site had been hacked. Norris investigated and reported that the culprit was “a widespread virus that came through godaddy.com hosting and was not just us. We have fixed the problem and should be good to go.”
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LATEST READER COMMENTS
 
 
Posted on 05.28.2010 - 08:41:17 PST
 
I love it. For years, distributors have used (demanded) scores as a crutch to do their job for them. Now, they are the ones being scored. I'm sure the hypocrisy on their end over this website is deafening.
 
Roberto
 
Napa, CA USA
 

 
Posted on 05.31.2010 - 18:34:01 PST
 
I think this can be a great tool for smaller wineries looking to expand, but it can be a very one sided slander attack also. Is he going to also have a site for distributors to rate how fast wineries pay them?
 
@winereview
 
entire state, SC USA
 

 
Posted on 07.01.2010 - 14:44:03 PST
 
About Time! To make this even better, have the retailers rate their distributors, and match them up with Winery ratings. Most in Virginia would be lucky to get a two rating
 
Stan Rose
 
Charlottesville, VA USA
 
 
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