Expert: Eric Hofer - 6/14/2011

Question
QUESTION: Hi,
I am a winemaker in France and I plan to export to the United States.I do not know to this day, where do my first steps to better understand the U.S. market.

What advice would you give me?

Thank you.

ANSWER: There are some forums for wine and liquor distribution in the US that you should consider.  LinkedIn is a good place to start and it doesn't require you making a trip.  You can build up links with beverage brand developers, distributors, create the contacts in advance of a trip to the US.  There are many agents looking for product; find one with a good reputation and let him/her do most of your leg work.

Identify other products from your region already enjoying export to the US and see if there's an opportunity to cooperate; or from another region where you have a good personal contact who'd be willing to share contacts, experience, and most importantly, show you contract terms.

The US market is willing to sample new product, though you will need some marketing.  Here, getting a local sales org that knows its territory and how to launch will help to get through the doors or the local retailers.

Also, as the US is a continent -  don't aim for national distribution initially.  Focus on 1 or 2 regions and use that to gain experience & reputation before rolling out.

---------- FOLLOW-UP ----------

QUESTION: Hi,
Thank you very much for your answer and advice.
I've been told that French wines were very expensive in the US. Is it true ? How can I verify this assertion ?
Are there trade barriers or a boycott of french products ?

Thanks in advance for your answer !

Answer
This requires a subjective answer.  What is expensive; especially for a non-essential product where people will pay what they are willing to pay?  This would be difficult even in a value-for-money proposition.  But wines are more a question of one's own palate and self-image.  On this aspect, I don't know how you "verify".

So what else can you consider?  Relative GDP and purchasing-power parity.  Here, it's tough due to all the variables.  But there are some obvious items that might help: exchange rates and market share.  The EUR is very expensive currently against the USD; this makes all imported products expensive.  Americans didn't get pay rises simply because the USD dropped; the French didn't lower prices because the EUR soared.  Net-net, product prices went up.

On the other hand, the French wine exports to the US are respectable.  Though the industry as a whole - from what I know, has dropped.  In particular France has lost some ground domestically as the younger generation have moved onto other drinks.

You might join http://www.winebusiness.com/ to start being abreast with what is happening in the US.  Also, look at LinkedIn.

To your last part of your question, I see, though its a few years old, the wine tariff is 0.06 USD/litre.  As to boycotting, some in the US are anti-French, but it's a minority - and by their  display of political myopia I expect would extend to what they decide to imbibe too.  I'd just ignore that ignorance.  Sadly you're 25 years too early to leverage the 150th anniversary of the Statue of Liberty (I'm sure then, Americans will remember their debt to France).