In the beverage alcohol distribution channel, “Small Is the New Big” is about industry veterans who are shedding their corporate selves and jumping into the world of the independent broker. This emergence of the small broker is being driven by a real market need, that of matching smaller artisan spirits, wines, and beers with retailers on-premise, where brands are built and where proprietors and managers prefer to offer their customers unique, locally-crafted and less well-known products.
The opportunity with this business model for the on-premise operator is to make available products that may have no marketing budgets and certainly spotty representation from their gigantic wholesalers. With no disrespect meant, the reality of the gigantic wholesaler is that they are tasked with driving cases. Their portfolios are so enormous that the small brands conceived on a cocktail napkin and started in a garage, are pushed aside and left without a voice. With the help of independent brokers, on-premise operators can pursue the quest to distinguish themselves from the bar down the street, and their bartenders, who practice the art of mixology, can create truly signature cocktails with these unheard of spirits, wines, and beers.
There are many well-made and interesting beverage alcohol products available nationally, just waiting for their chance to shine in cocktails and on menus. The wholesaler benefits because the under-represented brands within their distributor houses are actually getting attention and moving from warehouse to market. As for the new independent brokers, they benefit because they are arriving on the scene at a time when consumers, especially the coveted millennial generation 21-35 year-olds, are craving experience and “authenticity.”
For any doubters, consider the über target, 21-35 year-old consumers. Their mantra is that the journey is more important than the end game. Commoditization has bred contempt. Witness the growing market for artisan products such as breads, cheeses, aromatic bitters, small-batch distilled spirits, and farm-to-fork produce, along with the use of organics as described in “From Our Garden to Our Bar” (in the Mix Winter 2011 issue). And so we have a win, win, win, win, and win: consumer, operator, wholesaler, broker, and product!
While interviewing a few of these independent brokers, I discovered they shared the simple dream of reconnecting with their passion for the industry by representing those products that they believe in, which are products that are right for the customer and not pushed upon the retailer because of a sales quota.
Dominic Peri, who has made the transition from major wholesaler to his own independent brokerage business called Grape To Grain, said he had reached a time in his career when he “wanted to represent the independent producer, the small guy who has his name on the label, who is passionate about crafting product that is superior…a craft product that will sell itself and only needs me to offer an introduction.”
Carlo Barone, of One Bar USA, says he made the decision to form an independent broker company while sitting at a bar in Manhattan and noticing that he did not recognize one product on the back bar. He believed that “somebody was sending me a signal.” By then, a few of his accounts had mentioned there was a need for
unique products that they could call their own, which they knew existed and yet had a difficult time finding because the wholesalers were too busy selling in their high priority and well-known brands.
A real need? One Bar USA is only two years old and has attracted over 300 brands of spirits, wines, and beers. As Carlo said, “On-premise is not a case business; it is relationship driven.” The brands he represents do not have the strength of a Bacardi or Patrón, and a placement on a menu for a national chain restaurant can be life-changing. “It puts people to work,” he explains, “when these small brands suddenly have to ramp up production to meet operator demands. And yes, sometimes the product outgrows the business vision, and does become a key product within the distributor book.”
Both Dominic and Carlo talked about the products they represent and the need for “a story.” They agree that the products they handle can only find their niche with a good product story that is both extrinsic and intrinsic, covering the origin, ingredients, and recipe that culminates in the liquid. “The product story must be authentic,” these trailblazer independent brokers say. The dictionary defines authenticity as something that has truthfulness of origins and attributions, is worthy of belief, and conforms to fact.
Carlos and Dominic share the combined vision that their role is to introduce “what’s next” to the operator and the consumer who crave uniqueness, individuality, authenticity … their “own” experience. And although they compete in a world of giants, there is no free ride.
Serendipity – “Small Is the Next Big!” Thanks to Brian Yost, who artfully coined that phrase during our conversation at the recent Hospitality Business Exchange Conference. Read all about this example of the “Small is Big” movement in the Winter 2011 issue of in the Mix.
In answer to the question, is this good news for the small guy, I have to shout a resounding YES!
For additional information on Grape To Grain email Dominic at
email@example.com and One Bar USA, Carlo Barone at Carlo@onebarusa.com.