Few things are more frustrating than when you realize you are in a meeting with a distributor who simply wants to get to the next meeting. You know nothing will get accomplished and that the meeting is simply taking place so people can say you had a meeting. Unfortunately, the “meeting to get to the next meeting” syndrome is pervasive in the alcoholic beverage industry’s three tier structure (Winery/Distributor/Retailer). As I have said in many “rants” over the past few years, I am a supporter and a fan of the three tier system. However, the built in dynamic between winery and distributor increases the probability of these types of meetings.
Why? It’s simple, and it’s the root of most “meetings to get to get to the next meeting”……no one is in charge. Let me explain.
As a winery, you are “renting” the sales force of the distributor. You are “partners” with the distributor in the pursuit of building your brand. Hopefully, you have agreement with the distributor on how the brand will built in terms of channel management, growth expectations, gross margin targets and payment terms.
The winery is “married” to the distributor in the sense that most likely they can only have one distributor per market (of course there are exceptions, but I would rather not have your head explode with the complexities of that issue). So, wineries sign up for a monogamous relationship. Distributors DO NOT.
The distributor’s business model depends on having many “partners” or “marriages”. They are polygamists. That sounds funny, but it’s the truth. When you get married to a distributor, you understand they have other spouses just as demanding as you are regarding building their brand. As a winery you work very hard to be the favorite spouse, but sometimes things get off track and you have to have a “meeting”.
I have been to literally hundreds of these meetings across the country over the last seventeen years. Some are productive, but many of them fall into the category of “meeting to get to the next meeting”. You know almost immediately when it’s not going to be a productive meeting. And, it becomes painfully obvious that you can’t tell the distributor what to do, just as you can’t tell your spouse what to do (I don’t recommend telling your spouse what to do, based on 35 years of marriage). At this point you know the distributor is an uninterested spouse, and is just trying to “get to the next meeting”.
Now you have a problem. Should you get divorced? Should you try to patch things up? Can you make yourself more attractive to the distributor? You have to do something, or your brand will die at that distributor. Remember, you have 49 other spouses around the country with relationships that need to be managed. You have to pick and choose where you can put up with a bad “marriage”.
Here’s a real life example I dealt with a year ago, that illustrates how odd this relationship can be:
I had a distributor in Missouri who had sold only 4 cases of my brands through six months (that’s not a misprint). Clearly, a marriage on the rocks. Complicating this was the Missouri state franchise law that would not allow me to terminate the marriage unilaterally. I had to get my spouses release to get out of this “marriage”. Basically after ignoring me for over a year and putting me in a dark closet, I was going to either try to “work it out” or ask for a release. A meeting was called and I went to Missouri. It was clear 5 minutes into the conversation, this was the classic “meeting to get to the next meeting”. After listening to the distributor’s blah, blah, blah about not being brand builders (no shit), and how many brands they were trying to service (too many spouses, too many demands), I asked how many brands did they have. 472 was the answer. I told them I must be the 473’rd brand with my 4 cases sold. Essentially I was the worst spouse in the house. At that point, I asked for a divorce. After some discussion, they agreed, with some reservations. Unbelievably, they said they were hesitant to agree with the divorce because one of the brands would take off. Yes, the old regret that the ugly spouse may hit the gym and become attractive. Of course they didn’t want to do anything to make that happen.
Now I have a new spouse in Missouri, and it’s a much better “marriage”. However, it’s never a lock. Now, I just have to worry about my 49 other marriages!