Wine Industry Career Series: Understanding the Three-Tiered System

By?Karen Wetzel , WSET 3, NVWE, AWE

The Three-Tiered System is an integral part of the alcohol beverage industry and is a rich source of wine jobs across the US. Understanding this hierarchy is critical in helping you determine what roles might best fit your needs.??????

But first, a history lesson. The Three-Tiered System was born out of Prohibition in 1933 with three goals:

1. To help states regulate and tax the production and distribution of alcohol.
2. To keep large producers from monopolizing the industry by requiring that production, distribution, and sales all be conducted by different entities.
3. To ensure the safety of consumption and transportation of alcohol products.??

Now, let’s break down the role each player has in the Three-Tiered System and the jobs they generate:

Tier 1 = Producer (aka supplier, manufacturer, winery, importer)??

Producers make the wine and sell it a wine to Distributors.?Nearly every state in the US produces wine in some capacity.

• Operations Jobs: Like any other production company, wine companies need people to buy or grow supplies, make their products, package it, and transport them. These jobs fall under “Operations” and include supply chain personnel, laborers, winemakers, and logistics.??
• Sales Jobs: Producers often have a sales team to manage their distributors' business, ensuring their wine is being inventoried, presented and sold in the market. Producers may also have their own sales team to present wines to large national accounts such as Costco or Marriott.??
• Marketing positions: Marketing, Brand, and Public Relations Managers are needed to build consumer awareness and generate sell-through.???
• Support Roles:?As with most companies, producers need to staff IT, Administration, HR, Legal, Maintenance, and even Travel Coordinators.

Tier 2 = Distributor (aka wholesaler, middleman)??

Distributors buy wine from the Producer and then sell and deliver it to the Retailer (anyone who ultimately sells the product to the consumer).??

They can range in size from a small independently owned distributorship covering a limited geography to large corporations working across multiple states. There are often dozens or more Distributors in each state and every state that allows the wine to be sold to its citizens (yes, even Utah) has a least one Distributor.

• Sales Representatives and Managers:?Multi-level sales teams are essential as this is the primary function of the Distributor.?Sales Reps and Managers work directly with retailers and restaurants to present their products and assist with sell-through.
• Brand Managers:?This role functions as a liaison between the Distributor and Supplier and is especially important in large Distributors that may juggle many Suppliers at once.
• Warehouse & Delivery Staff:?These roles are the backbone of any distributor to ensure accurate, on-time delivery of products sold.
• Support Roles: Like Producers, larger Distributors also need personnel in IT, Admin., HR, Legal, and Maintenance.

Tier 3 = Retailer (aka store, restaurant, theater, commissary, ballpark, etc.)

A Retailer is a business with an alcohol beverage license that buys wine from a Distributor to sell to consumers (the unspoken 4th Tier’).

• Off-Premise accounts:?

1. Retailer (store) where products are consumed somewhere other than the point of purchase.??
2. Buyers work with the Distributor’s sales team to choose wines to carry.??
3. Store Managers and Salesclerks assist customers with selections and ensure the shelves are stocked.??

• On-Premise accounts:

1. Restaurants and other venues such as theaters and stadiums where products are consumed, literally on the premises where purchased.
2. Owners and Managers work with Distributors to select products to carry.??
3. Waitstaff, bar staff, and Sommeliers work directly with each guest to promote and sell wine products.

As you can see, the opportunities are vast within the Three-Tiered System, and the best part is that you don’t need to live near a winery to be a part of this historic scheme. In fact, many of the jobs we discussed do not require any wine knowledge at all, so no matter your background, there is a job waiting for you.??

Be sure and check out the next issue in our Wine Industry Career Series when we’ll break down the role of the Distributor Sales Rep as well as how to find and score the job.??

Karen Wetzel

Karen Wetzel is a highly regarded, experienced Wine & Spirits Industry professional and a well-credentialed Wine & Spirits Educator. With over 30 years in the industry, she has experience in almost every aspect of the distribution and supply chain and her expertise can help you jump-start or advance your career. Starting as a sales rep, Karen has held key positions within the distribution and supplier network including Category Manager, National Accounts Manager, Director of Sales, and Director of Wine Education. She has helped countless others advance their careers through mentorships and best-in-class sales training courses. She has also developed wine & spirits education programs for employees, distributors, and restaurant/retail trade partners with the goal of helping them thrive in our industry. Karen is a WSET Certified Educator, has her WSET Level 3 in Wine & Spirits and WSET Level 2 in Spirits, and holds expert certifications for Napa Valley, Rioja, and American wines from the Napa Valley Wine Academy. Today, Karen teaches at the Napa Valley Wine Academy. She also develops career development content and coaches Wine & Spirits Industry Professionals.