People fail to realize that the ONLY vibrant spirits market in the World is the one with this horrific and draconian, and outdated three their system. By no means is it perfect, but without the three-tier system, the U.S. would endure the negatives of a product that is not sold with a degree of self-governing, which can seriously hurt society. Look at the U.K. or India, where people go to a pub to get "pissed" drunk, or scores of people die from illicitly made alcohol in some villages in India.
Not only do people fail to see the safety benefits of the three-tier system and the other tenants of the system that people forget are also essential, as few people know that alcohol is banned from engaging in consignment sales, most forms of inducement, and most importantly, no slotting fees that dominate almost all other CPG products. It is truly amazing that a sales rep in spirits in the U.S. is regulated exponentially more than a pharmaceutical rep.....
Nowhere in the world has a spirit industry remotely as dynamic as the U.S. The products that dominate the cultures, back bars, and retailers in France, Italy, Spain, etc., have not changed in generations. NO innovation originates outside of the U.S. Heck, brands like Jager must come to the U.S. to succeed!
COVID caused this industry to forget how to build brands, as you cannot sit behind a computer and think an Instagram post will sell a story, passion, and products meant to make people feel aspirational when buying and consuming. It is not easy, never has been, to build a brand that succeeds. And those failures are, most often, just that, as you know, who almost always fails to innovate, the largest suppliers in this industry. Innovation originates from small suppliers and often from people new to the industry!
Do people think that TIto's was an overnight success? Or did the distributor in Texas not want that brand to succeed? and heck, it didn't take over until the days of the $1000 bottle service were over and a time when flavored vodka was all the rage, not a Texan vodka. Brands like Skrewball, Hpnotiq, Hendricks, and Sailor Jerry, all slugged it out market by market over the years before being an "overnight" success story. And some of those brands lost money for years before becoming some of the most profitable and economic brands in their category.
The three-tier system is flawed, and COVID gutted the number of reps on the street and on lone platforms, threatening the scale of what can be done. However, new brands have followed the same path, either spending all their money on agave or barrels of whiskey at prices that leave nothing left for, well, like any salesperson! You cannot just show up one day, sell some barrels and think your job is done.
It is human nature; if you understand the system, you can succeed, but trying to go to war with it just because you didn't succeed will not end well for anyone. The number of millionaires and even billionaires that this industry has created out of thin air is proof that failure most often is not due to anyone but your own efforts or lack thereof. Grow up and try again. use what you leaned to not make those mistakes again.
The generational growth cycle that Spirits has enjoyed over the last 25 years has made many forget that it can be an unforgiving business, espically in caegories requiring siginficant capital like Whiskey. Categories like Tequila and Bourbon didn't premiumize they transformed, as the most premium brands 15 years ago, are now considered "daily sippers" by consumers! Howver, these things called Global Economic Cycles tend to affect premium products the most, but it is a WIN that many categories in spirits are now considerined luxury and viewed as asspirational by entire generations that they are not going back to mixto tequila or blend whiskey.
If both distributors and suppliers stopped blaming others for the slowdown, the faster we will get things back on track. but thinking that the three teir system is so bad (the last 25 years would say otherwise) is worth kiling off right now, will 100% kill off the most vibrant and dynamic market for spirits, and the things that most belvie will be fixed as a restul will get dramatically worse. Ask the folks in Washginton State how getting rid of the Control State system worked out for them.....30% higher prices, less variety as the chains dominate the market, and now you have to ring a bell to get someone to let you buy a bottle of alchol due to threat. So that would be the future, if you keep up the whinning.
Coolio, you write as though you think if the wholesaler mandage is discarded folks won't still use wholesalers. Make the case that a producer ought not be allowed to sell directly to directly to a retailer. Make the case that a retailer ought not be able to stock inventory that a wholesaler doesn't carry. And please, let's not play the game of "how will they pay taxes". Just make the case that you want to make: that producers and retailers ought not be allowed to do business with one another. Make the case that consumers ought not be allowed to have product shipped directly to them from out-of-state producers or retailers.
Sorry Mr Wark but you are very much wrong in this screed attacking a dynamic and successful industry. The independent tier system is dexterous through changing economic and commercial periods, responsive to changing tastes, an efficient tax collector and accountable when product mishaps inevitably occur.
I am as libertarian as most when it comes to widgets but alcohol is still a potentially dangerous product, with pathologies much more frequently occurring in systems without three tiers safeguards. It is an evolving system, which is dynamic and accountable to the wishes of the citizenry of each state. It produces a cornucopia of products, local and national in origin, across all price points. You don’t see that in many industries, from soup to sodas etc. This is one industry and business model that works for consumers.
Mr. Potomac, no one believes that the mandate that out-of-state producers only sell to wholesalers stops problem drinking or saves lives or harm in any way. All it does is funnel product through and continually shrinking set of wholesalers. And no one believes that interstate direct to consumer shipments from producers and retailers causes "pathologies". I've been watching the DtC channel closely for more than two decades. There's not a singled documented instance of DtC shipments causing any harm or any pathologies. In fact after dozens of lawsuits, opponents of DtC shipments have never once provided any evidence that DtC shipments actually prevent harm. They just harm the marketplace.
People fail to realize that the ONLY vibrant spirits market in the World is the one with this horrific and draconian, and outdated three their system. By no means is it perfect, but without the three-tier system, the U.S. would endure the negatives of a product that is not sold with a degree of self-governing, which can seriously hurt society. Look at the U.K. or India, where people go to a pub to get "pissed" drunk, or scores of people die from illicitly made alcohol in some villages in India.
Not only do people fail to see the safety benefits of the three-tier system and the other tenants of the system that people forget are also essential, as few people know that alcohol is banned from engaging in consignment sales, most forms of inducement, and most importantly, no slotting fees that dominate almost all other CPG products. It is truly amazing that a sales rep in spirits in the U.S. is regulated exponentially more than a pharmaceutical rep.....
Nowhere in the world has a spirit industry remotely as dynamic as the U.S. The products that dominate the cultures, back bars, and retailers in France, Italy, Spain, etc., have not changed in generations. NO innovation originates outside of the U.S. Heck, brands like Jager must come to the U.S. to succeed!
COVID caused this industry to forget how to build brands, as you cannot sit behind a computer and think an Instagram post will sell a story, passion, and products meant to make people feel aspirational when buying and consuming. It is not easy, never has been, to build a brand that succeeds. And those failures are, most often, just that, as you know, who almost always fails to innovate, the largest suppliers in this industry. Innovation originates from small suppliers and often from people new to the industry!
Do people think that TIto's was an overnight success? Or did the distributor in Texas not want that brand to succeed? and heck, it didn't take over until the days of the $1000 bottle service were over and a time when flavored vodka was all the rage, not a Texan vodka. Brands like Skrewball, Hpnotiq, Hendricks, and Sailor Jerry, all slugged it out market by market over the years before being an "overnight" success story. And some of those brands lost money for years before becoming some of the most profitable and economic brands in their category.
The three-tier system is flawed, and COVID gutted the number of reps on the street and on lone platforms, threatening the scale of what can be done. However, new brands have followed the same path, either spending all their money on agave or barrels of whiskey at prices that leave nothing left for, well, like any salesperson! You cannot just show up one day, sell some barrels and think your job is done.
It is human nature; if you understand the system, you can succeed, but trying to go to war with it just because you didn't succeed will not end well for anyone. The number of millionaires and even billionaires that this industry has created out of thin air is proof that failure most often is not due to anyone but your own efforts or lack thereof. Grow up and try again. use what you leaned to not make those mistakes again.
The generational growth cycle that Spirits has enjoyed over the last 25 years has made many forget that it can be an unforgiving business, espically in caegories requiring siginficant capital like Whiskey. Categories like Tequila and Bourbon didn't premiumize they transformed, as the most premium brands 15 years ago, are now considered "daily sippers" by consumers! Howver, these things called Global Economic Cycles tend to affect premium products the most, but it is a WIN that many categories in spirits are now considerined luxury and viewed as asspirational by entire generations that they are not going back to mixto tequila or blend whiskey.
If both distributors and suppliers stopped blaming others for the slowdown, the faster we will get things back on track. but thinking that the three teir system is so bad (the last 25 years would say otherwise) is worth kiling off right now, will 100% kill off the most vibrant and dynamic market for spirits, and the things that most belvie will be fixed as a restul will get dramatically worse. Ask the folks in Washginton State how getting rid of the Control State system worked out for them.....30% higher prices, less variety as the chains dominate the market, and now you have to ring a bell to get someone to let you buy a bottle of alchol due to threat. So that would be the future, if you keep up the whinning.
Coolio, you write as though you think if the wholesaler mandage is discarded folks won't still use wholesalers. Make the case that a producer ought not be allowed to sell directly to directly to a retailer. Make the case that a retailer ought not be able to stock inventory that a wholesaler doesn't carry. And please, let's not play the game of "how will they pay taxes". Just make the case that you want to make: that producers and retailers ought not be allowed to do business with one another. Make the case that consumers ought not be allowed to have product shipped directly to them from out-of-state producers or retailers.
Sorry Mr Wark but you are very much wrong in this screed attacking a dynamic and successful industry. The independent tier system is dexterous through changing economic and commercial periods, responsive to changing tastes, an efficient tax collector and accountable when product mishaps inevitably occur.
I am as libertarian as most when it comes to widgets but alcohol is still a potentially dangerous product, with pathologies much more frequently occurring in systems without three tiers safeguards. It is an evolving system, which is dynamic and accountable to the wishes of the citizenry of each state. It produces a cornucopia of products, local and national in origin, across all price points. You don’t see that in many industries, from soup to sodas etc. This is one industry and business model that works for consumers.
Mr. Potomac, no one believes that the mandate that out-of-state producers only sell to wholesalers stops problem drinking or saves lives or harm in any way. All it does is funnel product through and continually shrinking set of wholesalers. And no one believes that interstate direct to consumer shipments from producers and retailers causes "pathologies". I've been watching the DtC channel closely for more than two decades. There's not a singled documented instance of DtC shipments causing any harm or any pathologies. In fact after dozens of lawsuits, opponents of DtC shipments have never once provided any evidence that DtC shipments actually prevent harm. They just harm the marketplace.