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Exporting 101

This check-list is provided to help ensure that your initial export experience is successful and rewarding. Not every question needs to be answered before you begin exporting, but each will have to be considered at some point. References and links to help you gather the information you need are given throughout. Once you assign a broker or distributor, they will be able to answer many of these questions.

Do be sure that your commitment to exporting is thought out before you obligate resources.

Commitment

1. We have identified a purpose for exporting that makes sense in the context of our long range strategy. Some reasons cited are:
   • Credential and prestige of participating in global market
   • Increasing total case sales
   • Increasing distribution in order to grow future sales
   • Selling production in excess of U.S. market needs
   • Combining business with enjoying foreign lands
   • The gratification of seeing your wine on a landmark wine list

2. The market(s) to which we have elected to export fit our style, image and price point. We know on what basis we are competitive.
   (Agriculture Trade Offices in U.S. Embassies and Consulates around the world publish market reports by commodity. To research a specific country, go to FAS Online.)

3. We are willing to devote time and resources to being successful.
   U.S. wines represent only 4% of the international market. Selling in an export market means building category as well as brand, i.e. export markets will require more resources and/or take longer to penetrate than U.S. markets.

4. We have determined which sales structure—broker, distributor, direct sales—makes the most sense for us. In general:
   • Use a broker when
     • you want sales, but don’t want to learn the market or control the marketing
     • you want to deal with one person or company to sell to several or many markets
       • This is arguably the easiest way to begin exporting; it buys you the most services; it also gives you the least control over how your wine is distributed in the target market. (For further information see Finding a Broker.)
   • Assign an importer directly when
     • you can devote time to visiting the market
     • you want to control or negotiate the marketing done by your representative
       • Assigning an importer gives you more control than working through a broker; it also requires more of your time and energy. (For further information see Finding an Distributor.)
   • Make direct sales
     • to eliminate levels of profit-taking
     • when brand building is not an issue
       • Direct sales are generally made to large stores or chains or to a single outlet when it is your only outlet in the market

5. We have a person or persons at the winery responsible for exports: packaging, logistics, sales & marketing, accounting.
   Surveys have shown that those companies that succeed over the long haul in exporting have someone at the winery specifically designated to oversee export activity.

Market Research

(Agriculture Trade Offices in U.S. Embassies and Consulates around the world publish market reports by commodity. To research a specific country, go to FAS Online. If you have already assigned a broker or importer, they can be a source of some of this information as well.)

1. We know what U.S. market share is in the target market(s).

2. We understand the import tariffs and mark-up structure and at what retail price point our wines will sell.

3. We know legal structure of the distribution system.

4. We know the practical division of wine sales through various channels and where our wines will be offered.

5. We, or our representative(s), have a marketing plan in place that is specific to the targeted market(s).

Compliance

1. We know the requirements for labels, packaging and shipping documents.

2. We know the regulations on oenological practices and what proof will have to be provided.

3. We know how to report export sales for appropriate federal and state tax treatment at home.

Logistics

1. We have identified one or more freight forwarders that are knowledgeable and reliable.

2. We know how to prepare shipping documents for export.

3. We know how our wine will be handled from the time it leaves the winery until it is sold at wholesale in the designated market, especially at what temperatures it could be shipped or stored and what vessels and warehousing will be used.

4. We know who is responsible for risks and insurance at various points en route.

Payment

1. We have an agreement regarding when and how we will be paid and when and how we will compensate brokers and distributors.

2. If payment is coming from a foreign party, we know the credit risk and how we are insured against non-payment.

3. We have taken into account exchange rates and risks associated with them.

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