First and foremost, wine distribution in the US is highly regulated by the Alcohol and Tobacco Tax and Trade Bureau (TTB).  We will cover some of the regulations related to labeling in Module 5:  Service and Selection.  Individual states can also impose additional regulations on top of those mandated by TTB.  Wineries, distributors, agents, stores and even major shipping entities from the United States Postal Service to Federal Express must comply with both federal and state regulations.

That said, the goal of every wine maker is to get their wine from their winery into your hands be it in your own home, or a restaurant or social entity licensed to serve you the wine.  Let’s discuss several ways this can happen:

Winery Tastings and Sales:  Nearly every winery in the US has a tasting room or is part of a cooperative which allow everyday consumers or visitors to taste their wines on location at the winery or a retail outlet and purchase wines to take with them, or have shipped to an authorized location.  Consumers benefit from purchasing the wine direct as they do not have to pay middle man mark ups discussed below.  Wine makers may also travel around the US to promote their wines at retail and social outlets often including sales as part of the event.  For some wineries, this is a great opportunity to brand their wines, gain followership and get loyal consumers to want more and more of their wine.

Wine Clubs:  Wine Clubs provide direct sales from winery to consumer where consumers often have limited control over the wines they receive, but have the benefit of often gaining exclusive access to wines which may never be publically available.  Members of wine clubs often get discounted pricing, invitations to special events and other perks in addition to getting wines others are not able to access.

Distributors:  Distributors are the middle man between wineries and either retail outlets or restaurants and social organizations.  Under distribution agreements, they represent multiple wineries and commit to promoting their wines within the territory they operate often taking inventory in the wines they represent.  Distributors also are responsible as well for complying with the local, state and federal regulations around wine distribution.  As result, they earn a percentage of every wine sold through their channel. 

Retailers:  Retailers include liquor stores, wine shops, grocery stores, big-box retailers and even on-line retailers of wine.  Wines sold via retailers can come direct from wineries or via distributors.  Traditionally, retailers have been physical stores with inventory, but many online retailers now provide the convenience of purchasing wine right from your computer or phone.  As result of increased technology, federal, state and local regulations are built into their algorithms making purchasing online simple and hassle free.  Whether purchased direct or via a distributor, all wines at a retail location (physical or online) will have an additional mark-up or profit margin.

Restaurants and Social Organizations:  Licensed by local authorities, restaurants and social organizations like private clubs, bars and event venues serve a selection of wine to complement their menu or to satisfy the tastes of their patrons or members.  Distributors are often leveraged to help build the wine list at locally owned venues while larger regional or national chains have wine lists selected and managed by headquarters experts to ensure consistency across all their locations.  Consumers should expect to pay a fairly hefty markup for wine.  When you consider this helps cover the cost of inventory, wait staff, stemware and profit, this makes sense and we are all typically willing to pay the price for the experience as well!

Just as any consumer product, the distribution channel for wine can be complex, highly regulated and even frustrating when you cannot purchase the wine you want, the way you want, when you want due to regulations at any stage in the channel.  However, without it, how many of us could keep a stocked wine bar or inventory without the existence of a robust wine distribution channel?