Mom and pop businesses make up 99.7 percent of employers, according to the U.S. Small Business Association. Yet, despite their large numbers, small businesses face tough competition from corporate giants that use volume and online sales to keep prices low, and can eventually knock out the smaller guys. This is especially true in the alcohol industry, where large wine corporations dominate a shrinking pool of distributors—muscling out our local wineries.
Enter Liberation Distribution, a brand new distribution company located in South San Jose and the brainchild of co-founder and CEO Cheryl Durzy. LibDib, as it’s called for short, levels the playing field between small- to mid-size wineries, breweries and distilleries, and their larger, corporate counterparts.
With 20 years of sales and marketing experience at Clos La Chance Winery, her family’s business, Durzy is keenly aware of the difficulties that smaller wineries have in getting their wine into the hands of distributors. “While managing my family’s brand, I became incredibly frustrated by the lack of options that were available to distribute our wines,” says Durzy.
Since Prohibition, federal regulations have mandated a three-tier distribution for selling alcohol. For the most part, makers (Tier 1) must first sell their wine to a distributor (Tier 2), who turns around and sells the wine to restaurants and retail shops (Tier 3). This system worked well when there were thousands of distributors who represented both small and large wine businesses alike.
But, since the 1990s, as alcohol distributors have decreased in numbers, they have increasingly focused their attention on corporate giants with brand names and deep pockets. Smaller wineries have been left scrambling to compete at getting their products on restaurant menus and retail shelf space.
Looking for a solution that would benefit all makers, no matter their size, Durzy created her new business model which gives any craft beer, wine or spirits maker the freedom to sell their products via a three-tier compliant web platform. “At LibDib, the small guy is just as important as the big guy.”
LibDib, offers a cutting-edge, technology based distribution model. Using an innovative web platform, makers can create an account and upload any product they wish to sell and do all the shipping direct to the restaurants and retailers. “Not only is LibDib half the cost of traditional distribution models, it is an ideal way for makers to showcase their cool new products,” explains Durzy. “We’re also a no-risk plan because there aren’t any time contracts and makers are free to come and go.”
Kim Engelhardt, owner of Lion Ranch Vineyards and Winery in San Martin says, “We’re excited to pursue this opportunity with LibDib because as a smaller producer, the usual distribution model doesn’t make sense for us. We will only occasionally want to move inventory away from our tasting room, and traveling to promote our sales would be an inefficient use of our precious time.”
LibDib also benefits the restaurants and retailers which, in order to gain access to the website, must have an active resale license that has been approved by LibDib’s compliance staff. Without the typical minimum orders that traditional distributors require, they can purchase small quantities of a product without having to maintain a large inventory.
Adam Sanchez, partner of The Milias Restaurant in Gilroy says, “It’s great that there are no minimums and no broken case fees. This will give Milias access to a lot of smaller wineries that are too far for me to drive to in order to pick up their wines.”
Valerie Evans, owner of The Grapevine restaurant, opening in Morgan Hill this summer, is excited, too. “I look forward to featuring some of LibDib’s local wines on our menu,” says Evans. “For a small restaurant like mine, it helps with our outgoing costs not to be subject to a case minimum. The simplicity of the website will save a lot of time for me, too.”
After only three weeks from LibDib’s launch date, Durzy says, “Business has been crazy. We already have 250 products from more than 50 suppliers with new businesses coming aboard every day.”
Perhaps Vic Vanni, owner of Solis Winery in Gilroy, sums it up best, “LibDib sure beats the old distribution model.”