Building import and distribution pipes w/ Gabe Barkley, MHW

Breaking into the US market for alcohol has always been hard.  Archaic rules such as the 3-tier system and differing regulations by state make it a complex web of rules and regulations to be in compliance.  The increasing consolidation of the distributor channel has made it even harder for smaller players to enter.  MHW's goal is to make that simpler, giving producers the ability to enter the market and take control of their own destiny.  They provide outsourced importation, distribution, and back-office / compliance services so their clients can grow and execute their sales & marketing plan.  Listen in as Gabe Barkley, CEO of MHW, gives us a rundown of how they do this and how it compares to traditional importation and distribution.  Detailed Show Notes: MHW backgroundLeader in import, distribution, and back-office services for wine, spirits, and beer (beverage alcohol)Founded in 1934Objective: enable rapid growth of new producers and importers for the US and EU marketsPlays mostly in the import and distribution tier of the 3-tier system in the US (3 tiers = producer, distributor, retailer; import being in-between producer and distributor)Has wholesale licenses in 4 markets - NY, NJ, CA, & FLGabe’s backgroundPassion for wine started when he lived in Rome in collegeWorked in wine retail after collegeLeft wine for consulting (Accenture, Deloitte)Helped Kevin Sidders launch Vinconnect (listen to E51 for details)Partnered w/ PE Fund post business school to partner w/ MHW (4 years ago)MHW Core ServicesProvides the “pipes” for selling into the US and EU, does not buy and sell the wines like a traditional importer/distributorMain Services: Certificate of Label Approval (“COLA”) - winery or client’s name on back label “imported by” not MHWRegister brands for sale in each marketTax reportingCompliance requirementsLogistics - pay taxes, customs clearance, duties, warehousingFulfillment of orders to wholesalers or retailers in wholesale marketsInvoice retailers and collect paymentNot a single boxed service, tailor services for each marketClientsTheme: they want to invest in growth in the US & EU marketsThey cover wine, beer, and spirits4 years ago - 40% spirits, 40% wine, 20% beer2021 - 50% spirits, 45% wine, 5% beerServes both domestic and international clientsDomestic - outsource compliance and logistics for Work with more family wineriesEarly days - main clients were new entrants into the market and more spiritsToday - shifted more to wine and larger producers - want to make sure sales & marketing investment are spent how they want it spentExamples: Armand de Brignac (“Ace of Spades”)Carolina Wine BrandsJean-Louis ChaveHypothetical - winery targeting NY market entry - MHW helps bring the product over, the owner comes and open accounts, MHW takes orders and fulfills accountsHypothetical - the winery has an opportunity with a large national retailer to be in 30 states - MHW brings product over and delivers to wholesalers or direct to retailer in some statesTechnology ecosystemInternal ERP to deliver solutions to clientsTransparency is important - client reporting dashboard that updates every 2 hoursOrder placement toolOther communications and self-service toolsBusiness ModelPer case fee with a minimum monthly feeBreakeven happens ~350 cases/month or morePasses on direct costs of being in the market (e.g., warehousing/storage fees)MHW SizeSold through platform 150M cases since mid-1995Helping 10,000s of products come to market150 employees, rapidly hiringGlobal vision - opened EU office in 2018 - no 3-tier system, but complex tax ecosystem they help clients withMarket size - started in a niche, but growing due to increased distributor consolidation (making it hard for wineries to break into the market), cutting out the complexity of the 3-tier system while still controlling your own destiny, providing more cost-effective solutionsCompetitors - some more tech-focused, a self-serve model; some more focused on 1 vertical (e.g., spirits or wine), MHW differentiates with a high touch serviceMHW vs traditional importer / distributor3 ways to enter the marketDo it yourself - build out back-office to support itTraditional importer/distributor - lose control of how wine is sold, but get paid upfront and importer sells the wine, lose transparency into who’s buying the wineMHW - strategic partner to import and fulfill the way the winery wants it to happenE-commerce increase enables clients to have another opportunity to get traction in the US marketUpcoming for MHWDevelop more value-added tech solutionsAcquired BevStrat in 2019 - provides on the ground sales support for clients Get access to library episodes Hosted on Acast. See acast.com/privacy for more information.