2023: Just Accepted
Original Research Article

Distribution Velocity in Wine Retailing

Martin Hirche
University of Cologne
Simone Loose
Geisenheim University
Larry Lockshin
Ehrenberg Bass Institute, University of South Australia
Magda Nenycz-Thiel
Ehrenberg Bass Institute, University of South Australia

Published 2023-11-06


  • distribution,
  • velocity,
  • wine,
  • retail,
  • channel,
  • strategy
  • ...More

How to Cite

Hirche, M., Loose, S., Lockshin, L., & Nenycz-Thiel, M. (2023). Distribution Velocity in Wine Retailing. Wine Economics and Policy. Retrieved from https://oaj.fupress.net/index.php/wep/article/view/14190


Little is known about the relationship between distribution and market share in the wine category. Understanding the influences of product and distribution characteristics at the SKU-level and incorporating them into marketing strategy and planning has important managerial and academic implications. Sales of 3,524 wine SKUs across 4,218 stores and 4 states in the US over one year of observation are analysed. We use an established distribution velocity model (Reibstein & Farris 1995) to estimate the relationship between distribution and market share. We then use the market share deviations from the expected values and apply a secondary robust regression to investigate possible relationships between various product- and distribution characteristics and those market share deviations. The results show that the distribution velocity in wine retailing is convex and increasing, in line with previous findings for other consumer-packaged goods in the marketing literature. Beyond distribution breadth, we find that overall parent brand performance (above), unit price (above), packaging type (above), country-of-origin, grape variety, sales consistency (above) and store specialisation (below) are associated with above or below expected market share of wine SKUs.


[1] Statista 2022. Revenue of the wine market worldwide by country in 2021. https://www.statista.com/forecasts/758149/revenue-of-the-wine-market-worldwide-by-country/, 2022 (accessed 09 October 2022).

[2] OIV 2021. Leading wine import markets worldwide in 2021. https://www.statista.com/statistics/328253/global-market-leading-wine-importing-countries-based-on-value/, 2021 (accessed 09 October 2022).

[3] Euromonitor 2017. Statistics Alcoholic Drinks US. January 2017 ed.: Euromonitor International.

[4] Euromonitor 2021. Wine in the US – Country Report. May 2021 ed.: Euromonitor International.

[5] Ataman, M. B., Mela, C. F. & van Heerde, H. J. 2008. Building Brands. Marketing Science, 27(6), 1036-1054. https://doi.org/10.1287/mksc.1080.0358

[6] Farris, P. W., Olver, J. & De Kluyver, C. 1989. The Relationship between Distribution and Market Share. Marketing Science, 8(2), 107-128. https://doi.org/10.1287/mksc.8.2.107

[7] Hirche, M., Farris, P. W., Greenacre, L., Quan, Y. & Wei, S. 2021a. Predicting Under- and Overperforming SKUs within the Distribution–Market Share Relationship. Journal of Retailing, 97(4), 697-714. https://doi.org/10.1016/j.jretai.2021.04.002

[8] Kruger, M. W. & Harper, B. 2006. Market Share and Product Distribution: Re-tested and Extended. (White Paper). INFORMS Marketing Science Conference. Pittsburgh, USA: Information Resources, Inc.

[9] Reibstein, D. & Farris, P. W. 1995. Market Share and Distribution: a Generalization, a Speculation, and some Implications. Marketing Science, 14(3), G190-G202. https://doi.org/10.1287/mksc.14.3.G190

[10] Verbeke, W., Clement, F. & Farris, P. W. 1994. Product availability and market share in an oligopolistic market: the Dutch detergent market. The International Review of Retail, Distribution and Consumer Research, 4(3), 277-296. https://doi.org/10.1080/09593969400000021

[11] Wilbur, K. C. & Farris, P. W. 2014. Distribution and Market Share. Journal of Retailing, 90(2), 154-167. https://doi.org/10.1016/j.jretai.2013.08.003

[12] Ailawadi, K. & Farris, P. W. 2017. Managing Multi- and Omni-Channel Distribution: Metrics and Research Directions. Journal of Retailing, 93(1), 120-135. https://doi.org/10.1016/j.jretai.2016.12.003

[13] Farris, P. W. 2004. Using Steiner s dual-stage model to develop better measures of retail distribution. Antitrust Bulletin, 49(4), 941-954. https://doi.org/10.1177/0003603X0404900406

[14] Hirche, M., Greenacre, L., Nenycz-Thiel, M., Loose, S. & Lockshin, L. 2021b. SKU performance and distribution: A large-scale analysis of the role of product characteristics with store scanner data. Journal of Retailing and Consumer Services, 61, 102533. https://doi.org/10.1016/j.jretconser.2021.102533

[15] Mueller, S., Osidacz, P., Francis, I. L. & Lockshin, L. 2010. Combining discrete choice and informed sensory testing in a two-stage process: Can it predict wine market share? Food Quality and Preference, 21(7), 741-754. https://doi.org/10.1016/j.foodqual.2010.06.008

[16] Joshi, R. & Yadav, R. 2018. Exploring the Mediating Effect of Parent Brand Reputation on Brand Equity. Paradigm, 22(2), 125-142. https://journals.sagepub.com/doi/abs/10.1177/0971890718787903

[17] Kahn, B. E. 1998. Dynamic relationships with customers: High-variety strategies. Journal of the Academy of Marketing Science, 26(1), 45-53. https://doi.org/10.1177/0092070398261005

[18] Balestrini, P. & Gamble, P. 2006. Country-of-origin effects on Chinese wine consumers. British Food Journal, 108(5), 396-412. https://doi.org/10.1108/00070700610661367

[19] Hirche, M. & Bruwer, J. 2014. Buying a Product for an Anticipated Consumption Situation - Observation of High and Low Involved Wine Buyers in a Retail Store. International Journal of Wine Business Research, 26(4), 295-318. https://doi.org/10.1108/IJWBR-01-2014-0007

[20] Jarvis, W., Rungie, C. & Lockshin, L. 2007. Revealed preference analysis of red wine attributes using polarisation. International Journal of Wine Business Research, 19(2), 127-138. https://doi.org/10.1108/17511060710758687

[21] Wiedmann, K.-P., Hennigs, N., Henrik Behrens, S. & Klarmann, C. 2014. Tasting green: an experimental design for investigating consumer perception of organic wine. British Food Journal, 116(2), 197-211. https://doi.org/10.1108/BFJ-04-2012-0090

[22] Steenkamp, J.-B. E. M. & Geyskens, I. 2014. Manufacturer and Retailer Strategies to Impact Store Brand Share: Global Integration, Local Adaptation, and Worldwide Learning. Marketing Science, 33(1), 6-26. https://doi.org/10.1287/mksc.2013.0801

[23] Cleeren, K., Verboven, F., Dekimpe, M. G. & Gielens, K. 2010. Intra- and Interformat Competition Among Discounters and Supermarkets. Marketing Science, 29(3), 456-473. https://doi.org/10.1287/mksc.1090.0529

[24] Shah, D., Kumar, V. & Yl, Z. 2015. Diagnosing Brand Performance: Accounting for the Dynamic Impact of Product Availability with Aggregate Data. Journal of Marketing Research, 52(2), 147-165. https://doi.org/10.1509/jmr.13.0530

[25] Corsten, D. & Gruen, T. 2003. Desperataly seeking shelf availability: An examination of the extent, the causes, and the efforts to address retail out-of-stocks. International Journal of Retail & Distribution Management, 31(12), 605-617. https://doi.org/10.1108/09590550310507731

[26] Chernev, A. & Hamilton, R. 2009. Assortment Size and Option Attractiveness in Consumer Choice Among Retailers. Journal of Marketing Research, 46(3), 410-420. https://doi.org/10.1509/jmkr.46.3.410

[27] Oppewal, H. & Koelemeijer, K. 2005. More choice is better: Effects of assortment size and composition on assortment evaluation. International Journal of Research in Marketing, 22(1), 45-60. https://doi.org/10.1016/j.ijresmar.2004.03.002

[28] Tan, L. P. & Cadeaux, J. 2011. Brand and stock-keeping-unit (SKU) assortments, assortment changes and category sales. The International Review of Retail, Distribution and Consumer Research, 21(2), 161-185. https://doi.org/10.1080/09593969.2011.562682

[29] Rousseeuw, P. J. & Leroy, A. M. 2005. Robust Regression and Outlier Detection, New York, John Wiley & Sons, Inc.

[30] Friberg, R. & Sanctuary, M. 2017. The effect of retail distribution on sales of alcoholic beverages. Marketing Science, 36(4), 626-641. https://doi.org/10.1287/mksc.2017.1038

[31] Verhoef, P. C., Kannan, P. K. & Inman, J. J. 2015. From Multi-Channel Retailing to Omni-Channel Retailing: Introduction to the Special Issue on Multi-Channel Retailing. Journal of Retailing, 91(2), 174-181. https://doi.org/10.1016/j.jretai.2015.02.005