How to Expand Your Winery’s Footprint: Distribution Rules and Market Conditions

Wine consumption in the United States has skyrocketed since the 1990s, and wineries have increased their production and distribution footprints to keep up with the demand. Expanding your footprint can create logistical and regulatory challenges for any business, but this is especially true in a heavily regulated industry like the beverage alcohol space. There are many unique obstacles facing wineries as they branch out and distribute their products in new regions

However, this has not presented an insurmountable barrier to growth – last year’s State of the Wine Industry 2018 report by the Silicon Valley Bank Wine Division showed that the volume of wine consumption in the U.S. has more than doubled since 1993, growing from 370 million gallons to 770 million gallons. Clearly, there is opportunity to be seized for U.S. wineries. But is your winery fully prepared for the rigorous process of licensing, distribution, logistics and compliance with federal, state and local laws?

ShipCompliant can help you navigate the tricky regulatory landscape with our guide for wine producers: 10 Key Steps to Expanding Your Winery’s Footprint.

Understand your own ability to comply with wine distribution laws

Every state – and many local jurisdictions – have their own unique registration processes, compliance obligations and tax rates. Because of this, expanding and distributing your products compliantly can be even more complicated than it may appear on the surface.

Before you debut a new wine product or start targeting a new region, assess your internal resources. The size of your team, the knowledge you have about compliance across multiple areas, and the finances you have allocated to address it are all key components of the evaluation process.

Registering products in new jurisdictions can be expensive and time consuming. If you spend too much time or money putting out a series of fires during registration because you weren’t fully prepared to handle it, you may end up hindering your own growth. It’s important to have a fully fledged plan in place and a complete understanding of requirements in each new area you intend to sell into before you attempt to expand.

Research the market(s) where you intend to distribute wine

Ensuring you are compliant is a big first step when expanding your footprint, but it’s also crucial to have a comprehensive read on the state of the market. Trends may pop up at different times in different areas, in terms of both production and consumption. For example, Oregon wineries tend to produce a lot of Pinot Noirs – for more on that, check out our 2019 Direct-to-Consumer Wine Shipping Report – while Napa County has traditionally been known for its Cabernet Sauvignons. But Rosé has been a huge gainer in the wine market in recent years. It may be more worthwhile for your winery to explore that route, rather than trying to crack into a long-established market like Pinot Noir or Cabernet. You should also think of the ways you can diversify your wines from those that are already selling well in the areas you’re looking to enter.

 

For more tips on growing your winery’s products and reach, download our 10 Key Steps to Expanding Your Winery’s Footprint.

 

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