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Distribution can be defined as a way of goods from producer to consumer. In wine production industry there exist several distribution channels, through which wine is distributed to the final consumer. Aim of this paper is to identify and compare advantages and disadvantages of particular distribution channels for wine sales related to a small wine-producer.
Distribution of wine to the final consumer is done through dealers represented by retail chains, specialized wine-shops, hotels, and restaurants. In a smaller scale it is done through internet sales, own outlets and wine auctions. According to the research of Focus agency, Marketing & Social Research, done in 2009, customers buy wine mostly in retail chains and decide on sort and quality of wine directly at the moment of purchase. Selection is based except wine quality also on the shape of the bottle, etiquette, and also cork (consumers explicitly prefer cork, and the screw top rather discourages). Certain part of customers - specifically those, who are more acquainted with wine - buy wine in special wine-shops. The research shows a decrease of direct wine-sales.
When using services of independent trade organizations, producers have to control the intensity of commercial activities and knowledge of technical characteristics of products. Small wine producers, though, do not have to use this distribution channel, and can focus only on direct sales. For some small wine producers, specifically those operating in the areas with an extended possibility for wine-tourism, this channel can be more suitable and effective than using retail chains. This way of distribution does not require extensive start-up investments, it is directly dependent on producers own effort, and can be done as a supplementary activity to the main source of income.
Regardless the particular choice of a distribution channel by a small wine producer it is necessary to be judged not only from the viewpoint of its advantages and disadvantages, but also by a detailed analysis of costs of sales.