Earth day is a time to celebrate gains we have made and create new visions to accelerate environmental progress. Earth Day is a time to unite around new actions. Source: U.S. Government.
HotCosts business model is to reduce inefficiencies of the current 3-tier distribution model by offering wines direct from the producer. With this model, we eliminate the need to consolidate wines and store them in multiple warehouses, transporting the wine multiple times until it finally reaches the retail shop. We minimize greenhouse gases by offering the most efficient distribution model! However, our winery partners are unable to use this distribution model for many states. That’s because individual states may still determine whether or not you may receive wine shipments to your home or place of business.
This distribution system is an outgrowth of the 21st Amendment, which ended Prohibition. To more effectively regulate alcohol sales after the repeal, most states decided to place an independent intermediary, the wholesaler, between producers and retailers. The result is our current distribution model where each state has created a patchwork of liquor laws nationwide. In many cases, we have left it up to the wholesalers and distributors to determine how your wine gets to your state.
Yes, that’s right we are still paying for the effect Prohibition had on our country 75 years ago!
Even more interesting is the fact that many internet retailers are selling wine that they have purchased and moved to a central storage area! I’ll call that the 2 1/2 tier distribution solution. These internet sales site are buying at wholesale prices from the wineries and moving the wine to their own warehouse where they then store the wine until you purchase it from them. Consider the impact of moving the wine twice and storing it in two locations before it is shiped to you.
Before you purchase wine over the internet, make sure you understand the company’s business model. Buy winery direct – reduce greenhouse gases!
