Win-Win-Win: A Better Three-Tier System

People are constantly grumbling about our country’s state-mandated three-tier system for alcohol. And why shouldn’t they? At its most basic level, the three-tier system overly complicates the ability for wine lovers to gain access to new wines and, has the undesirable side effect of senselessly jacking up prices.

Aside from restricting access to new or unusual wines, the information about the wines that are available is often incomplete or not accurate. So, how is a wine lover to choose between a myriad of options? Get up the guts to try something new? Choose to experiment and experience?

In this age of digital access to everything, it continues to surprise me how little, good, information there is about wine at the point of purchase. Of all the flaws attributed to the three-tier system, the lack of good information is the part that really works my last nerve.

Is there anything we can do? Glad you asked…

Three-Tier System Simplified

With the three-tier model, there is state-by-state legislation that determines how wine is purchased and sold (and if you’re unlucky, some states even dictate how and when you drink).

To simplify:

• Producers must sell their goods to wholesale for distribution.
• On- and off- premise establishments must purchase their wine from the wholesale facilities.
• Consumers access wine in restaurants, clubs and retail based on what is available at those establishments.

When a wholesaler makes a decision to add a new wine to their portfolio, there are a number of factors that are considered. With thousands of wines available today it is easy to imagine how small, lesser-known or boutique producers may have a difficult time getting the attention of a large wholesale business.

Bottom line: the wine choices offered to consumers are limited to those lines managed by the wholesaler so innocent wine lovers who crave new experiences lose.

A Broken System

As a wine lover, aside from having wine access limited based on the whim of the wholesaler, it has become clear that there are weak or broken connections between producers, establishments and consumers.

The broken connection becomes most obviously demonstrated at the point of purchase.

With a typical approach, the producer creates a great set of materials that include a professional label image, winemaker’s tasting notes, pairings and sometimes, professional hype. They spend a lot of time developing a meaningful brand personality to help foster consumer loyalty and ultimately “pull”.

But what happens to these thoughtfully crafted materials when the wine leaves the producer? Often they get sucked into the dark hole of the three-tier system, never to emerge again.

Most wholesalers do routine staff training but even with the best intentions, life still happens. Staff training gets bumped for some other urgent activity, there are hundreds of wines to learn and people learn in different ways. Because of this, oftentimes, incorrect information is being passed to on- and off-premise locations.

Layered on top of a sometimes-weak foundation of information being delivered from wholesale, we find that on- and off- premise wine knowledge varies grossly from staff member to staff member. So sales people go rogue with their techniques and flat paper wine lists offer no improvement for the situation. As a result, the producer’s brand story gets watered down and what consumers see and hear about the brand may differ grossly from the brand’s core message.

Goal: Unforgettable Consumer Experiences

The goal, of course, is to create great consumer experiences but we believe that this cannot happen without more collaboration and communication between the layers of the three-tier system. And, P.S., the consumer needs to be at the center of it all!

There exists the possibility (and reality) of a platform that can help unify the layers of the three-tier system in a way that benefits all parties involved.

Imagine a world where:

• Producers can be sure that the personality of the brand is being consistently and accurately reflected…no matter what the channel…ultimately resulting in consumer pull. (WIN)
• Sales strategies can be tailored to regions or establishments based on consumer behavior and all parts of the three-tier system can connect with consumers in a highly targeted way that is customized for them. (WIN)
• Consumers can have the power to choose and a better resulting experience for having been involved in the choice. (WIN)

At CorkGuru we believe that producers deserve to be heard and that consumers should have exciting choices that encourage them to experiment and drink boldly.

What do you believe?