DTC for Wine and Spirits: How to Secure National Distribution without Being Nationally Distributed
San Jose, CA, July 17, 2020–When small-batch wine and spirits producers experience local success, the next step is obvious: expand into new markets. While the “what” is immediately apparent, the “how” can prove difficult. Distribution can be hard to come by– especially when brands are looking to reach a large number of consumers.
For wine and spirits producers, it’s also about the ability to control the brand. How can a supplier reach the largest number of consumers without having to manage multiple distributors? The ideal distribution solutions should not function as a stopgap. The solution needs to be scalable, or time and resources will be wasted as production and placements increase.
Penelope Bourbon found themselves in such a position. After finding success quickly in their local market, they wanted to expand carefully. The perfect combination of club and retail relationships enabled them to secure a path to national distribution without being nationally distributed.
The Penelope Bourbon team initially focused on markets in their native New Jersey and nearby New York. They saw massive success in their first year, winning awards from the likes of SIP, the San Francisco World Spirits Competition, and Wine Enthusiast. As they expanded their sales, they knew they needed an online distribution solution to keep the momentum going. They quickly realized that the best way to expand would be to get on the shelves of national retailers. The fastest path to that coveted shelf space: speciality clubs and large retailers.
“A careful combination of whiskey clubs and retail relationships gave us an incredible path to national distribution without being nationally distributed,” says Penelope Bourbon CEO and Founder Mike Paladini.
How did Penelope manage to do this? They signed up with wholesale alcohol distributor, LibDib, and then worked with the LibDib clubs and chains team to secure careful placements with major online retailers.
“Our partnership with LibDib has allowed us to build amazing relationships with key online players. We have been able to capitalize on these partnerships to grow our small brand into something much larger,” added Paladini.
For Penelope Bourbon, “larger” doesn’t just mean new markets. Through LibDib, Penelope Bourbon has made its way onto some of the largest big box retailers in the market. “We had our Illinois license for some time but the business model of working with traditional distributors just wasn’t working for us in that market,” said Paladini. “LibDib made it really easy to meet the demand and allowed us to quickly gain access to large players. Their model made it a no brainer for us.”
From a consumer purchasing perspective, having access to clubs and online retailers has become the lifeblood of the company. Penelope Bourbon says this has given them economies of scale.
By leveraging LibDib’s clubs and off-premise chain team, Penelope Bourbon was able to establish a presence and a revenue source through online retailers. Penelope’s business with LibDib now makes up a staggering 18% of their annual revenue, and that percentage continues to grow. The company is able to handle larger club orders, which are managed seamlessly by LibDib’s team.“LibDib is a major part of our overall channel sales. Month over month it continues to grow,” says Paladini.
Penelope Bourbon has found that prioritizing these clubs is, as Paladini puts it, “super scalable.” It allows their liquor brand (and brands of their size) to grow their opportunities along with a constantly expanding footprint. It’s a mutual partnership; Penelope Bourbon sees the LibDib team as an extension of their own team. It makes it easier for makers to expand without worrying about new distribution solutions and the costs those entail. “This is a significantly more cost effective route to market for us,” says Paladini. LibDib’s unique business model is a big value add for producers of all sizes looking to build their relationships with buyers.
Paladini strongly believes makers can expand their club business by finding clubs who have the same passions. Social media marketing should tap into consumers all around the country. Develop marketing efforts that are tied to real conversions. “It’s all about brand awareness and consumer pull,” he says. “With LibDib if you’re hungry to get your product to market, you can do it. Their model makes it happen.”
LibDib, LLC, is a licensed wholesale distributor of alcoholic beverages enabled through a proprietary desktop and mobile friendly web platform. LibDib is available to any Maker and using LibDib, Restaurants, Bars & Retailers legally and efficiently purchase wines and spirits. The company was founded in 2016, launched in March 2017, and is based in San Jose, California with 24 employees, LibDib can be found online at LibDib.com as well as on Twitter, Facebook, Instagram, YouTube, and LinkedIn.
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