In conversation with Thomas Petito, we chat about how smaller importers and distributors are facing a tough time, and the re-emergence of entry level wines.
“For smaller importers and distributors, it’s going to be a very long time before things start to go back to normal” said Thomas Petito, Owner & CEO of PWS Wines, in an interview with Bevroute.
In the midst of the current pandemic, the alcohol beverage industry has undoubtedly taken a big hit. While wineries, distilleries, breweries, bottle shops, and restaurants have taken the delivery and pick-up route, importers and distributors are also finding ways to clear their stock and are pairing up with restaurants and retailers. A major sector that seems to suffer are the smaller importers and distributors, especially those whose portfolios are based around premium, or yet, more expensive wines, such as small batch wines.
We spoke to Thomas Petito about how the current situation is affecting smaller importers and distributors, and what’s there to look forward to.
Things are changing…
With the situation arising, Petito told us that right now, most retailers and restaurants are looking for entry level wines. A $10 bottle of wine is what retailers and restaurants are looking for, because that’s what consumers are buying right now. For importers and distributors like Petito, those who sell more expensive wines, the hit taken has been a large one.
“For me, my business hasn’t sold a bottle of wine in two months. Covid-19 has crippled me, and businesses like mine are going to be slow. The only good news is that my wines are of great quality, so they’re not going to go bad, they’re going to get better” said Petito.
For smaller importers and distributors, it has become a tough task to clear up stock, or to even sell a minimum number of wines, beers, or spirits. Price plays a huge part in this, however, another main reason why things are changing is because people are looking for simplicity, and are looking for what they know. For example, if you’re selling a $70 Roussin de Morgex, and someone else is selling at $7 Merlot, then people are bound to go towards the Merlot during this time. Consumers aren’t experimenting, in fact, they’re sticking to what they know and what they like – and that’s exactly what retailers and restaurants are doing as well.
“People are drinking what they know, and right now, entry level wines are making a huge comeback. A $10 bottle of let’s say a Malbec is doing great on retail shelves right now. It’s not their fault, it’s what people want, and we can’t really do anything about it” added Petito.
Focusing on the demand of consumers, a main reason this is also happening is because of the income levels. Income levels of people have seemingly dropped over the past few months, however, this hasn’t stopped them from drinking. All this has done is changed their ways of drinking, and changed what they are drinking. Instead of consumers picking up an expensive rare bottle to pair with a cheese board, they’re going for the budgeted value bottles that they can stock up and keep drinking.
What is happening in the US is that people are going for quantity over quality. “A sociological issue within American consumers is that they consume quantity, and the entry level wines are what they want right now” Petito explained when we asked how the American wine market is looking right now.
The question that most smaller sized importers and distributors have in their minds is “What’s next?”. Expensive wines such as premium and small batch wines aren’t selling, the market is tight, so how is the income going to come in? In the end, it’s all business, and to sustain a business, the income needs to keep coming
The Turning Point
With entry level wines taking over the demand sector as of now, what smaller importers and distributors need to do is penetrate into that sector. Keeping this in mind, Petito has done the same with his company. He said “I’ve been buying large amounts of Pinot Grigio and Prosecco and going back to the entry level. That’s what people want, and that’s what I need to give them”
Now the question comes in, as a small importer/distributor, how to penetrate into a market we’ve never been in? The answer here is simple – contacts and relationships. In the alcohol-beverage industry, relationships matter a lot, and that’s one of the main reasons Thomas Petito has been able to get through this time.
“For me, I have a lot of contacts, and over the years I’ve built a lot of relationships in the industry, so right now for me it has been easier than it has been for others. What I’m doing is talking to different people and asking them what they’re selling, and this way I can find my way and offer them the wines they want” said Thomas.
Right now, for smaller importers and distributors that are selling premium wines, it’s all boiling down to who they know and who can help them. So sourcing has definitely changed in various ways. Instead of finding the niche wines and grapes, importers and distributors need to go towards wines that people know about, the simpler wines with lower price tags. The focus should be on creating a source of income, while working towards the passion of wine, and the only way to sustain during this time is by wiggling through the market and going towards the demand.
With the situation in hand, we can only hope for things to get better, but as we hope, we need to work towards the market and find our spot back into the industry – and driving a force into entry level wines is what’s going to help with that.
Check out more from Thomas Petito here