Know Your Numbers: Econometric Modeling in Wine Pricing and Inventory Decision Making

Price elasticity calculations can help a winery predict how consumer demand will change for an SKU following a price adjustment. By Nathan Hart A data-driven decision making strategy can optimize […]

Last year saw a rocky start to the import wine business. Thanks to the Boeing vs. European-subsidized Airbus battle, enormous tariffs on European wine were all but imminent. Once defeated (thanks to intense lobbying efforts), restaurants around the country began to shut down and on-premise sales came to a halt. In 2020, importers couldn’t catch a break. Still, as restaurant sales rebound and portfolios are adjusted, those in the wine import business always have challenges as they work two sides of the import coin—suppliers and distributors. Processing billbacks on the distributor side and managing commissions on the supplier side, all while trying to promote and price products with adequate margin in the market, is a feat. In addition, many importers realize lost profits and are forced to provide slow customer service as they just try to reconcile everything from inefficient and error-prone disparate systems, spreadsheets, and deal tracking practices. But it isn’t all

BTG, quantity discounts, closeouts, incentives, and samples are among the top pricing and promotions strategies in the three-tier wine industry. Do you know how well each one works, where, and for what products? Most wineries and suppliers operate on theories and presumptions without the data to back it up, but that doesn’t help you truly turn the right dials. Learn how to trace the impact of all your trade programs accurately. Read: Tracking Success of the Top 5 Wine Sales Promotions.

Three-tier suppliers have a common aim with pricing and trade management: firmly understanding the true profit of your wine. To get there, you'll have to get a complete handle on all things gross-to-net, and this doesn't stop at the individual products. Knowing these figures by wholesale distributor, by regions you sell into, by promotions you offer, and by each salesperson will all help you turn the right dials on pricing to start improving the bottom line. But disconnected spreadsheets, manual reconciliations, and islands of pricing data are holding you back. So how do you get there? Read: Beyond Depletion Allowance: The Top 8 Mistakes Wineries Make With Pricing Management.

Tradeparency is a trade spend management platform with the exclusive ability to deliver complete market coverage across the entire cycle of pricing, claims, analysis, approvals, and planning for three-tier wineries and importers. As a team of wine-focused, technology experts and data artisans, Tradeparency is delighted to join the WIN community this month! Learn more about Tradeparency’s price management, depletion allowance, and distributor promotions solution by visiting www.tradeparency.com.