“What’s past is prologue” … Antonio, The Tempest, Act 2, Scene 1 – by William Shakespeare
The Doors of Perception
As I rub my eyes, to clear the fog of time, I can’t believe that we’re at the end of the first decade of the 21st Century. Wow! Just wow! It seems like I’m caught on this infinite loop of Einstein’s time-space continuum, no longer trapped by a third- dimensional existence, but wandering aimlessly through the strings of the stream, moving across the universe. Here’s yesterday, there’s tomorrow, but where’s today? Oops! Gone
. Transitory. But it did exist? Right? It did. It does exist – however fleeting? Transitory like the existence of photons, neutrinos and muons created in the Farm’s particle accelerator. The fundamental particles in the standard model being the past, the particle zoo the present and the still undiscovered Higgs boson, the future.
Party Like It’s 1999
As my mind’s eye clears, I start to recall many of the events leading up to the final days of 1999, both in wine and tech. Behind this is the story of Y2K and the largely unnecessary BIOS updates, and all of the smoke being blown into the peak of the dot-com bubble, there was a perfect storm brewing behind the marriage of winery sales and marketing and tech that was launched with the release of the personal desktop computer
by Apple and then IBM in the late 1970‘s early 1980‘s. The introduction and adoption of which led to some intended, but for the most part unintended outcomes. Although within the computer biz there are some of the largest market cap companies in the world, they all started as bootstrappers. HP started in a garage in Palo Alto, Fairchild Semiconductor as part of Stanford lab experiment, Microsoft by two Harvard drop-outs who bought a disk operating system from a Seattle computer shop and then licensed the software to IBM helping to launch the PC . Two more dropouts who met in a computer club developed the Mac, based on concepts and designs originally developed at the Park by Xerox with no intention of ever releasing a consumer usable computer. In 1985 Quantum Computer Services, under the direction of Steve 
Case, launched Q-Link for the Commodore 64. And, by 1988 launched Apple-Link online services, and then PC-Link. In 1991 the name was changed to America Online, merging the two separate services. AOL quickly became the dominant ISP generating significant income through their monthly consumer subscription model. By 1999 Time Warner’s Jerry Levin was in merger talks with AOL, and in January 2000 the historic $164 billion merger was completed. This all took place against the background of rapidly improving and innovative computer technology, and with the development of ISPs and telecommunication tools that allowed web access for increasing numbers of consumers, helping to transform what had been utilized primarily as a research tools of loosely connected, disparate networks, originally known as the ARPANET, into what we now know as the Internet.
During this period, most of the Bay Area development in tech had geographically taken place on the Peninsula, South of San Francisco, along stretches of Hwy. 237, Zanker Road, Page Mill Road, Stevens Creek Blvd., DeAnza Blvd., the Lawrence Expressway and Homestead Road, not far from Stanford, aka-the (brain) Farm. However, in 1999, in an area in San Francisco known as China Basin, a then backwater area of
empty warehouses, and now the site of AT&T Park, the home of the San Francisco Giants, offered cheap rents for start-ups in an area known as South Park. Just up Townsend Street, was Pyra Labs, where Ev Williams and Paul Bausch 
wrote the script for Blogger, and in buildings surrounding the China Basin area was Salon and a host of other web-tech companies in what was then a grim neighborhood. I remember going to a 1999 pre-opening Giants event at the under construction ball park, and noting the names of now long gone (i.e. Pets.com) tech start-ups on the sides of warehouses, and thinking that this would be a thriving community again. And it now is, with the development of biotech research centers, living spaces, retail development and restaurants. Twitter HQ is now located near South Park, and the neighborhood is once again the center of a new slate of start-ups.
WineShopper.com
With the development of virtual retail technology and the introduction of secure payment systems, and in a spate of healthy competition, the online ecommerce channel floodgate had been opened by Amazon.com and others, including many bricks and mortar companies. Margins in the ecommerce channel were lean for books, CDs, videos and electronics – from 9%-14%. Research and a few existing online wine sites revealed net margins of approximately 30%. College educated, affluent urban buyers were already buying a
significant amount of goods online, matching the demographics of targeted wine consumers . On the surface this seemed like a natural line expansion for Amazon and others. Amazon partnering with the Kleiner Perkins Caufield & Byers invested $46 million (Amazon at $30M, and the Sand Hill Road boys $16M) in the online wine ecommerce marketing agent, WineShopper.com. But the task at hand was daunting. WineShopper had developed the Naxon Network, an automated distribution system meant to link and track the inventories of 250 major wine wholesalers. This was revolutionary at the time. The idea of online sales might have been on the radar for the few wineries left in Silicon Valley, but it was geek speak for most of the other wineries’ sales and marketing technology adverse late adopters. Adapting Naxon to this arcane and unconnected data field, obtuse due to the 
complete balkanization of state beverage practices, became a task that CEO Peter Sisson eventually found to be undoable. Wine, unlike books with uniform ISBN numbers without regard to the individual point of distribution, stocked by each distributor in each market had unique proprietary product
coding systems identifying individual wine SKUs. A system that along with the arcane and fragmented State by State beverage laws eventually proved to be the undoing of WineShoper, even with what would later be identified as a talent laden start-up, including a name that in the next 10 years would become synonymous with digital initiatives for wine business ecommerce, Paul Mabray.
Virtual Vineyards, oops Wine.com, oops Wine.com/WineShopper.com, oops Wine.com by eVineyard, oops Wine.com
Peter Granoff and Robert Olsen had been operating the wine ecommerce site Virtual Vineyards for three years when in 1998 they partnered with Lionstone International out of Lake Forest, IL to increase their
reach and points of distribution in the US wine market. A speed bump was hit in March of 1999 when the State of Massachusetts sued both Virtual Vineyards and their shipper FedEx. Although the suit was eventually dismissed, the points presented in the suit have in fact as yet been resolved. In June of 1999 a combination of VC-financing was sourced from New Millennium Partners LP, GE Capital and MediaOne Ventures. Three months later in 
September of 1999, Virtual Vineyards acquired the name wine.com from the by then struggling online retailer. Bill Newlands was brought in as the new CEO as co-founder Robert Olson took a step back from day to day leadership. Co-Founder Peter Granoff continued as the public face of the wine.com. With the rapid evolution of the company, the now named wine.com announces TheWineryShops@wine.com, greatly increasing their selection of imports and mico production wines from California. A influx of $50 million represented at the time the largest capital infusion into any online wine ecommerce platform. A series of quick partnerships were announced, signing agreements with Bloomberg.com and Microsoft eShop. However, expenses greatly outweighed revenues as sales of just $9 million resulted in a 1999 operating loss of $20 million. In these halcyon days of the dot-com bubble, this was a company with a business model, reasonable burn rates and, my god, revenues. All was well. Or so we all thought.
Merger, Merger, Takeover
As the decade turns, wine.com continues to sign on partner affiliations, first with WeddingChannel.com and as the exclusive online wine merchant for PBS cooking programs. And here you thought that the current KQED wine club was a new idea. Wine.com also announced an agreement to be the ecommerce channel for Gallo of Sonoma. In June 2000 wine.com and the Wall Street Journal announce an exclusive strategic alliance with wine.com functioning as the exclusive ecommerce merchant for the WSJ’s first
online wine offerings at wine.wsj.com. By August WineShoper.com recognized the futility of their model and merged with wine.com, operating under the name of the latter. Rounding out FY 2000 wine.com partners with Realbeer.com to offer beer through the wine.com portal. Then in October 2000 acquires the European Wine Exchange (EWX) a German based B2B-B2C ecommerce site. In December wine.com launched possibly the first mobile wine ecommerce site on the AvantGo ISP. However, all was not well. The burn rate approached unsustainable levels, and the by now bridge loan investor, Menlo-Park based Sand Hill Capital pulled the plug and negotiated the sale in April 2001 of the merged entity wine.com/WineShopper.com to eVineyard, which then relaunched wine.com as ‘wine.com by eVineyard.’ (to be continued)
What the Point?
There are, for sure, lessons to be learned. It’s great to be a pioneer in any industry or business segment, that is if you can duck the “slings and arrows of outrageous fortune.” While the rewards may be potentially great, so are the risks. It has been said that timing is life, but that the right timing = success. Some of the ideas introduced more than 10 years ago were perhaps, based on limited infrastructure build and low bandwidth strictures creating a then clogged pipeline which limited wide consumer adoption, then too early too succeed they are now being refined and reintroduced. The wine ecommerce effort, in spite of the ruling coming out of the landmark Granholm v. Heald case, still has an uphill but not sisyphean climb. Byzantine state regulations
and protectionist legislation fueled by short sighted, intransigent three-tier wholesalers continually block significant progress. However, a new field of visionaries (and a few pioneers) dot the wine ecommerce universe these days. There has never been a deeper concentration of experienced talent at the top of the wine ecommerce pyramid. Some of the battles have been won, but talent and experience alone will not win out. Each individual player in our highly independent and fragmented wine industry must at some point pick up their ecommerce tool kits and travel the digital pipeline and ensure their brand(s)’ success through the strategy of channel diversity and chose to ‘make wine work online.’
Note: Copyright © 2009 Think Wine Marketing® All rights reserved.
Against the background of the Wine Business Monthly lead story Tuesday, November 3rd, announcing ‘
stages, AmazonWine chose 
In light of an apparent wine market uptick, the subsequent gnashing of teeth, and what to me was an overly pessimistic take by journalists and bloggers alike rang as an overreaction to the actual events. The collective ennui displayed by many in the wine industry seemed more reflective of recent difficult financial times, and of hopes unfulfilled. And, many of the comments tended to be colored by the respondents particular points-of-view based on their involvement and specific roles in the wine industry. To get a clear picture of the effects of the AmazonWine decision not to move forward, I reached out to experienced digital wine marketer, 
TWM: What was the genesis of VinTank?
TWM: This history is somewhat mirrored by your VinTank partners/team members.
TWM: I’ve heard traditional marketers say sales is sales, so, is a different skill set required by ecommerce managers?
TWM: What does VinTank see as future trends in the wine industry?
wine (both retailers and marketing agents like 
comparable to other luxury good verticals. We think that time will be soon and there will be more than one winner (probably a few of the companies mentioned above). However, one of the key challenges is winery participation. Only by supporting and feeding an alternative channel can it become healthy and the rewards will benefit the industry. We believe in wine online and we hope wineries start believing too. The internet is the most powerful and ACCESSIBLE tool we have ever seen in our lifetime. We (the wine industry) should be using it better.
‘
‘
Four years ago, 
sales and marketing efforts, while exhibiting some crossover capabilities, are unique to the channel and should be valued as such. As Paul Mabray recently tweeted “Twitter is not a strategy. Facebook is not a strategy. Customer service and communications need to be core to your strategy.” So, while it is laudable that some winecos are now developing social capital and evolving into savvy communicators by incorporating Social Media Management into their core tactics, what may be necessary for long term wine brand success is the establishment and execution by your wineco of a viable online ecommerce sales and marketing program.
“There are eight million stories, in the Naked City. This..has been one of them.” … 
season weather than the folks in 
governmental institutions, a review of your traditional marketing message methods has been necessitated, even as the mixed message on the state of the economy is being delivered by traditional mass media. A mention of the names 
prediction that 
r silver bullet. How we now communicate with our customers has dramatically changed with the development of the web, email, texting, blogs, video, Facebook and Twitter. And in this new paradigm there are three words that have become the mantra of this new technological world in which we all now communicate our stories: transparency, authenticity, credibility. I’d like to add one word, human. This commonsense point was first made in 
It was harvest time in the fall of 
hearing birds chirping madly as the sun broke through the morning fog. But as he looked down the neatly groomed rows of vines, he noticed that there wasn’t a wild flower, a weed or a blade of grass on the bare dirt underneath the vines. As he walked the rows, Mike noticed that there were no bugs on the vines or flying through the air, no dragonflies, no butterflies. Stopping and reflecting he knew what was bothering him, the vineyard was no longer a living space. Mike thought a moment and considered his options. He knew that this wasn’t the way things should be. At that moment in time he vowed to change the way things had been done, to change the conventional wisdom of how things had always been done. This ancient bowl had supported life 
for millions of years, and in just a decade of intensive modern farming that had all changed. But, it wasn’t working any longer, and the Benziger farming practices needed to revert to the old ways, to the ways defined by closed system agriculture. Benziger Vineyards needed significant cultural change to recreate a new living farm. And change they did, after 3 years of concentrated
study, a sustainable, biodynamic vineyard started to take shape. The first step was to establish biodiversity. So island gardens were established within the vineyard space to help support beneficial insects; and between every 10th vine row a bed of host plants and flowers were seeded to support a vineyard population of the good guys. Sheep and cows were introduced as natural lawn mowers, with their waste the base of a closed system compost program, so that no chemical fertilizers would ever be needed or would ever be used. Land that was dead just ten years ago was, in less than a decade, now a classic biodynamic closed system living farm. Earth, nature and man came together in a special place that happens to be in my backyard, just north of the town of Sonoma.
On Saturday, October 3, 2009 I had the opportunity, along with a group of wine blogger colleagues, to hit the 
quarters over 3 hours. This was a one-on-one conversation and the telling of the story, starting with that moment of enlightenment in 1994. There wasn’t any ducking questions in the active exchange of ideas. We weren’t being sold on a story. We were being invited into an experience. This was a conversation between humans. A few points really stuck with me. The first was that ‘the wines weren’t
necessarily better, but that they were different.’ That they reflected this place. The second point that hit a nerve with me was that ‘each year the wine was a time stamp of the vintage.’ Not once were scores mentioned as a descriptor of any of the Benziger grown and produced wines that we tasted that day, although the Rodrigo Sotto’s wines have gotten rave reviews and scores in the traditional wine press. My take away from the day with the Benziger Family and team members was one of transparency, authenticity, and credibility. A team that understood that their plan, in a world now dominated by pull marketing, was that by communicating in this human voice missionaries were created, replicating the message and influencing friends.
marketing. But, change must be in their DNA. First selling Glen Ellen, then converting a 200,000+ value brand to a slightly more than 110,000 case
sustainable, biodynamic super-premium/luxury brand, while changing their farming practice as stewards of the land. In a time of declining circulation numbers and disappearing newspapers, an effort has been made to maintain contacts with the traditional press, in both the wine and consumer lifestyle focused print media arenas. The 
The Benziger family and team recognized that their best path to the market was through their authentic story told in a human voice to groups of consumers, members of the trade, and to traditional and new media writers. A story that has been replicated to the point that in 2008 almost 175 million media impressions were created. Even though the Benzigers produce in their 
“If you don’t get noticed, you don’t have anything. You just have to be noticed, but the art is in getting noticed naturally, without screaming or without tricks.” … 
record pace, banks continue to reduce credit availability, expecting to retract an additional $1.5 trillion by lowering home equity loan access, consumer credit card limits and commercial lines of credit, restricting the ability of the US economy to recover recent spending patterns. Something lost in the swirl of marketing images from luxury 
consumer brands such as 
Christmas. And then there’s 
As I worked my way to the 
district for several years. One of my early retail lessons at 
driven by value, with the economic thermostat having obviously been reset. An economy that now seems more driven by consumer needs rather than by wants. And the need for value seems to be paramount as a new inflection point in consumer purchasing behavior has been reached. So, in an age of 
Today most wineries are micro marketers. Even wineries in the 
f your targeted audience. Without entering the maze of 
So, as wine marketers it is important to understand that we don’t create needs. Needs preexist marketers and their brands. A marketers function is to influence wants. A good marketer takes the initiative in stimulating and facilitating commerce. A key part of this function is understanding the market and your consumer. So, how can one identify the best possible markets, and then influence consumer purchasing behavior? Engage your marketing research resources and ask:
As a marketer, if you plan to sell your wines in a saturated market based only on price, in essence creating a commodity and not a brand, in what has to be by nature a rapid depletion exit strategy, then the idea of routinized response behavior is the way to go, and pricing and display allowances will be your primary marketing tactics. However, if you want to build a brand even in this challenging market, then engage in marketing tactics that create adoptive response behavior within your identified consumer set.
Without a thorough grounding in classic CPG marketing fundamentals and a clear understanding of wine brand marketing concerning human motivations in regards to purchasing behaviors, success in today’s highly competitive and product saturated marketplace is not likely for your winery. This somewhat academic take, a departure from my usual ‘how-to’ articles was written to encourage you, your winery’s marketing officer, to think about your current brand plan. Concerning your brand – what is it that you do and why do you do it? Is it working? What would you do differently? What are you doing to differentiate your wines? It’s not a time for indecision in your consumer facing wine business. Faced with declining sales in his collection line 
“Once again, we come to the Holiday Season, a deeply religious time that each of us observes, in his own way, by going to the mall of his choice.”
t spending patterns have only now begun to make sense. 
Diners Adjust Habits in Response to Slow Economy.’ Wine sales and wine values as a result have been flat in the latest rolling 52 weeks report. Questions still remain as to the nature of any long term shifts in behavior, and if or when there will be a return to what was viewed as normal. Some of the analysis, even by those who’s insights we’ve come to value, of the situation have been somewhat myopic. Several of the changes in wine sales and marketing that we are now experiencing are fundamental structural shifts that were both exacerbated and accelerated by the recent hard times. There has been for some time a move from traditional white table cloth dinning to a more casual dinning environment, even with the increased sophistication of American cuisine . Guest check averages grew faster than the rate of inflation as business diners supported restaurants in urban MSAs. On-premises experiences have evolved and will continue to do so. Business expense accounts have been reigned-in as T&E budgets are rationalized to revenues. While its 
seems surprising that entertaining at home has increased, 
It’s the last week in September marking the 1/3 point of the ’09 Crush. Now that some if not most of the Pinot and many of the white varietals are in-house, the seasonal harvest temperatures are starting to climb towards triple digits bringing smiles to the faces of vintners and growers throughout wine country. Most every year it’s a time of optimism, especially after what’s this year been referred to as an optimal growing season. Everybody at the winery seems busy in the pursuit of a zen-like perfection. Crews hovering over sorting tables tha
t are now commonplace as all hands are on deck insuring that only optimal fruit makes it into the wine that you’ll be drinking in one to two years. Even if the hours are long and days-off are rare, it’s a vibrant time with midnight picking schedules, large farmer’s breakfasts, and plenty of beer at the end of the day. The economic panic of the last year, and the resulting decline in sales have been temporarily forgotten as all the physical and emotional energy is willingly put into the winemaking process . The intense process that is winemaking, as evidenced by the game faces displayed by winemakers, from 
A late start to the upcoming holiday selling season has been forecasted by a number of beverage industry analysts. That may be the case, and we’ll all know soon enough. But hopefully, as the chief marketing officer your winery programing and promotions calendar is in place and ready to go on Thursday, October 1st. A reasoned look at the situation would seem to dictate that now is the time to get off your wallet and put on your seasonal game face. Differing sales channels will require unique tools structured to the idiosynchrocies of each. It will take innovative pricing structures to maximize your sales effort in Q4 of 2009. 
e bouches of a 1 oz pour of your listed or featured wine. As 
display activity. Discounting will be aggressive this OND, but you don’t have to compete with the big boys, be innovative in your tiered pricing, display allowances and use of coupons, including co-branding, non wine merchandise discounting, 
I’ve been researching a series of articles written about the apparent market softness in the wine industry, and it seems that most of the noise is centered around the volumetric end of the business. As a small or mid-sized winery looking at flat as up, you can be much more innovative in your distribution strategy, and much more agile in the execution of your holiday marketing tactics. OND is your Crush time, so this selling season you should heed 
“No-one gets an iron-clad guarantee of success. Certainly, factors like opportunity, luck and timing are important. But the backbone of success is usually found in old-fashioned, basic concepts like hard work, determination, good planning and perseverance.”
had little or no idea that the system was and is badly broken. I took no solace in this moment of discovery. It nice to know where we’ve been, well ‘past is prologue,’ however an awareness that the financial panic that started one year ago with the demise of 
Although it’s been anecdotally reported that there’s been a seismic segment shift away from wines on wine list selling for more than $100, sales above this apparent point of price sensitivity have indeed slowed but have not ceased. The quote that ‘stories of my death have been greatly exaggerated’ could have emanated from that bottle of 
. The restaurant business is a dynamic business with a significant rate of failure, but also meaningful rewards to the successful. It is a business that requires significant resources, both human and capital. The food service segment includes many different models including theme parks, hotels, institutional, educational, catering, stadium, white table cloth, family, casual, bistro, wine bar, sports bar,gastropubs, ethnic cuisine – Greek, Italian, Mexican, Thai, New American, Californian, Pacific Rim, entree 
specific as in Burger Bars, Fish and/or Steak House, et al. Restaurants may be part of a multi-unit enterprise or chain group, or may be single unit independents. It seems based on activity at retail, a visual survey of grocery/supermarket shelves and Club Stores that there’s been a rush to off-premise as the on premise market becomes more difficult and saturated. Many winecos based their distribution models on either a straight 
As more of your competitors rethink their single track broad market strategy, and as a result move resources away from food service, be aware that opportunity awaits your wine brand(s). To take advantage of the various opportunities, specific targets must be identified, qualified and developed. The wine business is still a handshake business, and nowhere is this truer than in the on-premise channel. And nowhere in the wine universe is the business being professionalized more than in the restaurant arena. And this is good thing. But, it means that you also have to raise your game by identifying, targeting qualifying, presenting and
closing. The days of the cold call are over. For example a past market sales day with 
While nothing beats the hands-on market knowledge gained from spending significant time on the streets, pulling corks and sampling gatekeepers at the best lighthouse restaurant accounts, significant low cost resources exist for identifying targeted restaurants within your winery’s areas of distribution. 
