<p>Having helped grow Duckhorn from $5M to $500M in revenue and the sales team from 1 to &gt;100 people, Pete Przbylinksi, former Chief Sales Officer of <a href="https://www.duckhornportfolio.com/" rel="noopener noreferrer" target="_blank">The Duckhorn Portfolio</a> for nearly 30 years, has a deep understanding of managing US wholesale markets.&nbsp; In this two-part episode, Pete dives into every aspect of managing a wholesale sales team, including incentive structures and collaborating with distributors.</p><br><p>Detailed Show Notes:&nbsp;</p><p>Duckhorn went from 50k cases / ~$5M in revenue / 14-15 employees (1995) to ~$500M revenue (2024)</p><p>The Duckhorn Portfolio</p><ul><li>Duck themed: Duckhorn Vineyards (1978), Decoy (2nd label originally), Paraduxx (1994), Goldeneye, Migration, Canvasback</li><li>Acquisitions: Calera (2017), Kosta Browne (2018), Sonoma Cutrer (2024)</li></ul><p>Keys to Duckhorn’s success</p><ul><li>Brand equity - focused on Merlot, which was hot in 1980s-1990s and catapulted winery</li><li>Key assets - #1 people, #2 brand equity</li><li>The French Paradox (1991) created big demand for red wine</li><li>Table stakes are good scores, showing up in the market, hosting guests</li></ul><p>Sales team grew from 1 person to &gt;100 (~85 in the field)</p><ul><li>No perfect way to calculate ROI for sales people</li><li>1st method: too many cases &amp; distributors to manage, needed more people</li><li>2nd method: quantified expected incremental sales from more people (data was full of holes)</li><li>Final method: managed to target of 8-10% sales opex / revenue, because a KPI for SLT and Board</li></ul><p>Sales team roles</p><ul><li>Regional Managers, over a series of states (50-60% of time working w/ distributors, the rest out in the market or internal analysis and reporting)</li><li>District Managers, geographically concentrated, go into accounts you want to be in</li><li>National Accounts, on and off-premise; a challenge to determine which accounts are national vs regional, ended up doing it case by case and assigning accounts</li></ul><p>Distributor consolidation led to wineries needed to do the work they cannot do</p><ul><li>E.g. - identifying underrepresented accounts and coming up with action plan by region</li></ul><p>Identifying top salespeople</p><ul><li>Look at overall contribution margin for the region</li><li>Share of business in market (using IRI, distributor reports, account base)</li><li>Gross Profit%, identifies amount of trade spend used</li><li>How responsive they are, their handle on the market, their decision making</li><li>#1 method: do they bring new ideas to the table</li></ul><p>Incentivizing salespeople</p><ul><li>Bonuses must be meaningful (25-35% is meaningful), higher for higher levels</li><li>Look at contribution margin relative to budget</li><li>Used a curve (&lt;90% budget - no bonus, above budget - scale increased, which helps end of year motivation)</li><li>District Managers may have market specific goals (e.g. - increasing depletions, PODs for particular products) that are short term (3-6 months)</li><li>Overall, incentives are difficult to manage, data can lag; make it objective</li><li>Recognition is helpful, e.g. - unexpected gifts like a signed 3L from the CEO</li></ul><p>Distributor collaboration best practices</p><ul><li>Show them a plan and explain why it makes sense (e.g. - buyers are lined up) and get mutual agreement</li><li>Keep it simple, the info needs to be passed on to others</li><li>Identify what you’re prepared to do in the marketplace (e.g. - market visits, funding BTG programs, incentives, etc…)</li><li>Do monthly check-ins and more formal quarterly reviews to see progress against plan and to adjust tactics and strategies</li></ul><p>Optimal size of sales territories</p><ul><li>Depends on # of distributors in region (e.g. - TN had 8 distributors = 8 days/mo of meetings)</li><li>Try to align with target sales opex / revenue ratios (~8-12%)</li></ul><hr><p style='color:grey; font-size:0.75em;'> Hosted on Acast. See <a style='color:grey;' target='_blank' rel='noopener noreferrer' href='https://acast.com/privacy'>acast.com/privacy</a> for more information.</p>