Over the past decade, a slew of very small importers and distributors have flooded the market, with abbreviated but mighty books focused on a specific wine niche, from terroir-driven Australian producers to indigenous Greek varieties. While this creates access to new and interesting wines from around the world, it also means that more wine than ever is entering the market. Although the competition is fierce among importers and distributors of all sizes, it can be particularly challenging for these “micro” importers and distributors, which tend to lack the manpower and breadth of the big guys.
To endure over the long haul, small, hyperfocused importers and distributors draw strength from carefully honed expertise in their chosen niche and from the resources afforded by teaming up with others. Their techniques to remain viable vary, but there’s a strong argument for staying the course—no matter their small size—despite the challenges of a changing wine market.
Pounding the Pavement
“There’s so much wine out there,” says Gordon Little, a cofounder of Little Peacock Imports, based in New York City, which has specialized in new-wave Australian wines since its founding in 2012. “There are still only so many accounts,” he says, “and everyone is knocking on the same doors.” From larger markets to smaller ones, competition to get and maintain placements is fierce. Having a quality-oriented book is key, but when a plethora of quality wines are out there to choose from, so too is manpower and reach.
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“I think the main challenge for a small company,” says Athena Bochanis, who founded her Hungarian import company, Palinkerie, in New York City in 2014, “is competing with companies that have the resources to put a lot of people on the street, selling new wine and maintaining wine placements.” Like many micro-importers, Bochanis has a one-person sales team. Up to now, it’s just been her, though she does plan to add sales reps to her team in the near future. Larger sales teams, she says, simply have the ability to cover more ground, outdoing the limited reach of smaller companies.
Aris Soultanos, the proprietor and development manager for the Greek natural-wine importer Eklektikon, based in New York City, explains that while he and his business partner, Maria Bakalopoulou, made a conscious decision to self-distribute in New York State, they don’t have the manpower to actively sell in markets outside New York City very often. Eklektikon self-distributes in Illinois as well, but works with distributors in 12 other states and Puerto Rico. With fewer people on the team, it’s also difficult to find time to maintain placements by visiting accounts or doing in-store tastings.
That lack of manpower also means that small-business principals wear many different hats all at once. In addition to managing business operations, selling to accounts, and adding to the portfolio, these small-business owners must find time to maintain social media accounts and plan portfolio tastings—things that a larger importer might have a dedicated marketing or events team to manage. “It’s hard to focus on one thing and really nail it,” Soultanos says. “It’s a little chaotic now, but we’re getting better all the time.”
Managing the Challenges of Specialization
Many of these micro-importers and micro-distributors are not just small in size but small in focus, an approach that both offers advantages and presents challenges. Although it has become trendy to delve into wine regions that were previously unheard of—Hungary, Serbia, Uruguay, the Canary Islands—many U.S. restaurants and retail shops still want well-rounded wine programs with robust selections from France, Italy, and the U.S. Because buyers can save time, as well as the hassle that comes with juggling many different reps (and their purchasing minimums), working with global portfolios may seem more attractive. “For a long time, especially in the beginning,” Soultanos recalls, “there were a lot of closed doors because we were too specialized.”
But for every buyer who refuses to open the door to another small importer, it seems there’s another who prefers working with focused books and artisanal wines. This is where finding—and dominating—a niche offers advantages. “We can’t provide the full-service experience of a big distributor, but we can offer a level of expertise that’s directly related to the specificity of the portfolio,” says Bochanis. “If you’re small, you need to find a way to get noticed, and specializing is a great way to do that.”
Hyperfocused import portfolios are also attractive to distributors around the country, which can boost reach and sales. “We [offer] a lot of value to our distributors,” says Soultanos, “because we have a lot of expertise in a wine region that has a lot of momentum right now.” He notes that Eklektikon works with companies like Amy Atwood Selections in California and Olmstead Wine Company in Massachusetts. “These people can rest assured that we have done all the legwork and that we are sourcing really cool stuff. It’s a no-brainer—it’s a developed portfolio.”
Staying Competitive
If maintaining a niche within the market can be an advantage, is there a way to do so while simultaneously broadening the company’s reach? Teaming up, either formally or informally, may be the way to do it. Little now partners with Skurnik Wines to distribute half of Little Peacock’s portfolio, a partnership that was discussed for several years before Little decided to act. Facing more competition in the market, he saw the partnership as an opportunity to have more reps selling Little Peacock’s portfolio. Though Little continues to sell all the wines in Little Peacock’s portfolio, he notes that some buyers are more willing to order one of his wines when it’s represented by Skurnik because they probably already order wines from multiple regions through the larger company. “When you’re a small book, it’s very hard to ‘own’ a restaurant list,” he says. “Skurnik has everything, so your chances of getting wine on an international list are higher. Unless the program is all Australian, they’re not going to work predominantly with Little Peacock.”
Small importers and distributors can also band together to pool resources and knowledge while remaining independent. While some do this less formally, hosting joint portfolio tastings or sharing account knowledge with companies that don’t overlap stylistically, Soultanos has made one such alliance official. On March 1, Eklektikon launched the Knit alliance in Chicago with three other micro-importers focused on natural wines: Terra Sancta Trading, which specializes in beverage alcohol products from the Middle East; The Maritime Republic, focused on Italian producers; and Nomadic Distribution, focused on wines from France and Morocco. “We discussed the idea of sharing resources and being in a position to jointly afford great representatives in markets where we had no presence,” says Soultanos. “It’s a unique cooperative effort of the small guys that still maintains our books’ identities.” Having launched the effort in Chicago with one sales rep on the ground, Soultanos plans to bring it to New York next, where Eklektikon also currently self-distributes.
Even without partners, there are ways to broaden reach on a budget. Alluvial Wines, based in California, doesn’t maintain a specific geographical focus, representing 70 international producers and 20 domestic ones, but the six-year-old wine broker and distributor is committed to championing artisanal, responsibly farmed wines. To sell its wines throughout California, the company works with nine salespeople all of whom operate as independent contractors—this allows the company to boost manpower without incurring the expenses of human resources services or employee benefits.
When it comes to managing logistics with limited resources, micro-importers can free up some of their time by outsourcing tasks to other companies. “A lot of people,” says Soultanos, “are using distribution service companies like T. Elenteny Imports in New York City, which offers support [with the logistics of customs, inventory management, shipments, and more]. Letting [another company] deal with the logistics allows us to focus on things that really matter to us, like spending time in the market and marketing our products.”
Planning for the Long Term
Ideally, there would be a definitive way to protect a small import or distribution business from having to pull out of a market or close altogether. While a foolproof solution doesn’t exist, some recommended practices can help a small business achieve longevity. Measured growth rather than aggressive expansion is crucial. “Growing big fast is very difficult,” says Little. “I can think of one [now defunct] importer that was doing very well, and then they started expanding like crazy.” Little also recommends keeping a close eye on business operations, particularly cash flow; seven years into running Little Peacock, he says he still personally manages the QuickBooks for all his accounts.
Contracts with suppliers are also essential; otherwise a company might find itself “up a creek without a paddle,” says Charlie Keyser, a founding partner of the distributor Welkin Vines, a New York-based company that specializes in Washington State wines. On founding his company in 2014, he asked several producers to sign a distribution agreement to protect work done in the New York market for the term of the license so that placements couldn’t be scooped up by a bigger distributor. Alluvial Wines also signs exclusive contracts with all of its suppliers.
Because they’re faced with a challenging landscape, it could be argued that small importers and distributors occupy a field that’s too crowded, and one that discourages others from entering the fray. While many agree that the number of small importers and distributors will probably not continue to grow the way it has recently, there’s still good reason to encourage new players to enter the market. “There is always room for more innovative, thoughtful companies that add to the conversation in some way,” says Bochanis. “A great many wineries are still out there looking for importation and distribution.”
Keyser says that big importers and distributors often can’t support small producers, so small companies are necessary to bring the wines of those producers to market in the U.S. Even if hyperfocused micro-sized importer and distributor ventures are riskier, most of these business owners wouldn’t choose to trade their passion for security. “One could say a good strategy is to mitigate risk through diversification of a portfolio,” says Keyser, “but if I went out and created a book of low-priced popular wines, what would I really be doing for the industry?”
Dispatch
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Courtney Schiessl Magrini is the editor-in-chief for SevenFifty Daily and the Beverage Media Group publications. Based in Brooklyn, she has held sommelier positions at some of New York’s top restaurants, including Marta, Dirty French, and Terroir, and her work has appeared in Wine Enthusiast, GuildSomm, Forbes.com, VinePair, EatingWell Magazine, and more. She holds the WSET Diploma in Wines. Follow her on Instagram at @takeittocourt.
