Tag Archives: export

How to export wine to the USA market?

During my visit in Prowein,  the director of  the USA Wine West, LLC, Steve Melchiskey gave us a really great lecture about how to export wine to  the USA market.  After collecting all the useful knowledge I got from him,  here I’d like to share with you and give some thoughts  about this.  🙂

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About Mr. Melchiskey 

  • over 30 years experience in the wine industry
  • worked at retail, wholesale operations management, wholesale sales representative, winemaker, vineyard manager, importer
  • purpose: to give an overview and insight into one of the best, and most competitive, wine markets in the world

Facts about the U.S. wine market

leading wine consuming nation – at almost 4 billion liters consumed (360 million 12/750ml cases or 4.2 billion bottles)

  • Most sold varietals: Chardonnay 21%; Cabernet 12%; Merlot 9%; Pinot Grigio 9%
  • Top imports by country: Italy, France, Australia, Chile, Argentina, Spain
  • Top 10 wine sales states by volume: California, Florida, New York, New Jersey, Texas, Illinois, Massachusetts, Washington, Virginia, Ohio
  • Top 10 wine consuming states (by liters per capita): District of Columbia, New Hampshire, Massachusetts, Vermont, Nevada, Connecticut, Delaware, New Jersey, Rhode Island, California, Hawaii
  • Final Fact: The U.S. is a huge and diverse market with strong growth of wine projected.

How to get into the U.S. Market

1. Know your competition
– come to the U.S., buy wine of your region from a store, note the prices, and do a blind tasting of them with your wines. How do they compare?

-Talk to retailers. What do they look for in new wines? What do they need? What kind of new products excite them?

2. Do your research!
– Visit different regions and states.
– Talk to wholesales and brokers in Oklahoma, Mississippi, Alabama, Wyoming and Vermont.
– The U.S wine market is not just San Francisco and New York City.

3. Develop personal relationships
– The wine business in the U.S is built on friendships and relationships. Spend the time and be rewarded.

Three tiers system of wine importing & Distribution

1. Importer tier
2. wholesaler tier
3. retailer tier

Top U.S. import Strategies

Single state importer/wholesaler

  • pros: easy to manage, controlled, focused strategy.
  • cons: limited sales, limited number of states where it is legal, limited states where it is logistically practical.

condensed tier states VS. 3-tier states

Multi-state/regional importer/wholesaler

  • pros: easy to manage, sales level better, logistics better
  • cons: supply continuity issues, difficult to expand to other states.

National importer

  • pros: allows for ex-cellar service to large wholesalers and FOB U.S. Warehouse Stock sales to state wholesalers, national sales and marketing strategy, excellent logistics, supply chain integrity.
  • cons: very difficult to find true national importer, volume requirements.

Most foreign wineries start at the beginning and work their way up through these strategies over time.

Selling wine in the USA= selling wine to 50 different countries

What will a 2 euro bottle of wine cost in the U.S?

Two euro/bottle model
2 euro*1.4 (current exchange rate estimate= $2.80/bottle ex-cellar US$ price)
$33.60/case 12/750ml
(must sell in this format)
Winery to port, customs/duty/tax, transport and unloading at US warehouse $10.00/case (estimated)
$43.60/case
Landed cost for FOB US warehouse sales

Importer Margin = 1.35 mark up =$43.60* 1.35= $54.00/case FOB US warehouse from importer to wholesaler
Wholesaler Margin = add $6 transport and state tax * 1.4 markup pr 28% margin = $84/case retailer
Retailer Margin = 1.5 markup or 33% margin = $10.49/bottle to consumer

What will a 8 euro bottle of wine cost in the U.S?

Eight euro/bottle model
8 euro*1.4 (current exchange rate estimate= $11.20/bottle ex-cellar US$ price)
$134.40/case 12/750ml
(must sell in this format)
Winery to port, customs/duty/tax, transport and unloading at US warehouse $10.00/case (estimated)
$144.40/case
Landed cost for FOB US warehouse sales

Importer Margin = 1.35 mark up =$144.40* 1.35= $186.00/case FOB US warehouse from importer to wholesaler
Wholesaler Margin = add $6 transport and state tax * 1.4 markup pr 28% margin = $268.00/case retailer
Retailer Margin = 1.5 markup or 33% margin = $33.50/bottle to consumer 

Legal and regulatory label compliance

  • FDA Bio-terrorism Registration
  • U.S. compliant labels – Federal certificate of label approval (COLA)
  • Sample waivers from certificate of label approval
  • Extra Organic Certification paperwork/ compliance
  • Franchise Rules

According to COLA 

Europe: “ no pregnant woman” illustration is mandated
USA: No “pregnant woman” allowed! instead, this government warning is required

Government warning: (1)according to the surgeon general, women should not drink alcoholic beverages during pregnancy because of the risk of birth defects. (2) consumption of alcoholic beverages impairs your ability to drive a car or operate machinery, and may cause health problems.

The Franchise Rules
Watch who you sell to, and WHERE they sell…
it could end up costing you forever.

The reality of selling wine in the U.S. 

your sale doesn’t end with selling to an importer

  • Expectation that you will help sell your wine to stores and restaurants
  • your sale is not to the importer, it is to the importer’s customers!
  • depletions are what count!

– be ready to give incentives and manpower to help your importer and wholesalers sell your wine!

No parker= NO LOVE!! 

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Other necessary Marketing & Sales assistance to the U.S trade

  • point of sales material
  • market visits
  • retailer and consumer tastings
  • financial incentives

Begging may be a final strategy…

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