Independent Distributor Network Offers Alternative Route to Market
In an era of rampant consolidation in the beer distribution tier, more and more craft brewers are having a difficult time getting access to the retail market. The wine and spirits industry has a new entry, which could provide a model for the beer industry.
Independent Distributor Network (IDN) is a 18-state network of local, family-owned distributors working together to offer wine and spirits producers an alternative solution to establish a national footprint.
“The top 10 wine and spirits distributors account for roughly 75% of the national market,” says David Stubblefield, President of the IDN Board or Directors. “Distributor consolidation has been a trend for the past 20 years. It has led to more efficiency and economies of scale for those companies, but has also left more niche or craft wine and spirits brands with fewer options for 3-tier sales.”
According to Wines Vines Analytics, there were approximately 3,000 distributors in 1995, but only 1,200 of those remained by 2017. The top two distributors now account for $27 billion in wine sales or more than half of the nearly $50 billion U.S. consumers spend on domestic wines per year. At the same time, the number of domestic wineries has grown three-fold and imports are at more than 475 Million gallons annually (IndexBox estimates).
“Today, U.S. consumers have access to more selection than ever, but many producers find themselves without options for national distribution,” said Joe Cekola, Vice President of the IDN Board or Directors. “They are big enough to need it, but small enough not to have the same advantages as the biggest producers. Therefore, we started IDN as an alternative solution by offering the potential for national coverage, with the high level of service and attention provided by our members.”
There are currently 19 members of the IDN family of distributors, covering 18 states. The company plans to expand to another 10-15 states over the next two years. Each member company is family-owned, often multi-generational, and brings expertise in their local market.
As a network, IDN provides a sales, marketing, and distribution solution for mid-to-large scale wineries and distilleries seeking fair and equitable opportunities to cultivate their businesses, through a combination of brand building, local market expertise, and proven growth strategies.
“For our members, the multi-state alliance creates a viable opportunity to attract existing brands and also to build new brands,” concludes David Browne, Director of The Domestic Wine Portfolio for the IDN. “IDN combines buying power with partner suppliers to create cost savings and increased margin, with the possibility of shared purchasing and logistics. For the restaurant or retail buyer, IDN gives them additional choice in products, working with people they trust who provide unrivaled service, sales, and marketing.”
Any similar solution for Beer ?