Back to Basics

Picaboo Street“When someone tells me there is only one way to do things, it always lights a fire under my butt. My instant reaction is, I’m gonna prove you wrong.” … Picabo Street

Yes, it’s tough out there, maybe tougher than anytime since the immediate post 9/11/2001 period for wine sales. The wine brand market place is saturated, with little or no room for additional undifferentiated brands. The rate of distributor consolidations has increased squeezing out the small winery brand. On-premises national accountNielsens are becoming an even more significant part of current broad market wine sales. There is an increasingly rapid consolidation of the grocery sector, constricting the funnel from winery to shelf placement. And, now the Nielsen Company, in their May 13, 2009 US Wine Consumer Report informs us that even though wine in general is ‘recession-resilient’ the US wine consumer has an economic hangover resulting in restrained spending.

US Wine Market GrowthThe domestic wine market, while featuring new points of price sensitivity and significant channel shifts, is still growing, albeit at a slower but perhaps more rational rate. Is the market growing for your brand? If not, maybe you should revisit some of the basics of marketing best practices. It will also help to have an understanding that the actions that you take today and tomorrow, will help to position your winery to ride upward with the recovery.

project-genomeDevelop a deep understanding of the various to market models available to you as a wine marketer:  the Three Tier System, DTT, and/or DTC. Gain a thorough knowledge of the role of ‘Marketing Agents,’ third party marketers of your wine such as The Wine Spies, Woot Wine, winecliQ, and soon Amazon, Sears and Borders Books, plus a panoply of independent wine clubs.

Hire and retain talent. Find people who share your vision, and have the ability and desire to articulate this to the market. Identify individuals who view innovation as a key strategy. It seems to be an important concept in this phase of the business cycle to have experienced leaders who have previously weathered the inevitable exigencies of  business ups and downs.

Run a flat organization. Create an environment of opportunity. Stress collaboration over hierarchy, and value and reward individuals based on their contributions. And, remember the golden rule of management, to praise in public, and to discipline in private.

Steve JobsRecognize that in recession it’s time as Steve Jobs of Apple once said to, ‘Think Different’. Apple was born in the energy crisis of the late 70’s. The early 1980‘s were a time of great innovation. Glen Ellen and ‘fighting varietals’, Kendall-Jackson’s category leading Vintners Reserve Chardonnay, and Corbett Canyon 1 Ltr varietals from Santa BarbarBadit Tetra Pack Winesa County all debuted in a climate of 22% interest rates and base mortgage rates of 17%. The early 90‘s brought about $2 Buck Chuck, Tetra Packs, Screw Caps, and Cult Cabernets. There has been a continual evolution of the wine market from deserts, to light sweet whites, to the era of jug wine, through the shift to varietals. The current cover of Beverage Industry Magazine features a story about packaging innovation, proclaiming a new ‘French Revolution, Boisset Family Estates pushes the boundaries of wine perception.’

permission marketingPay attention to cultural and market dynamics. In this age of permission marketing, use all of the great social media tools to engage your friends, fans, customers and clients. Get online and in tune with social networking through Twitter and Facebook. Make sure that all of your print trade information is accessible through your web site, such as labels, product information sheets, sell sheets, press releases,file:///Users/johnncorcoran/Desktop/images.jpegacclaim, etc. Put your press kits on USB flash drives. USB drives are green, they can be recycled, the end user decides what’s important to print saving a tree or two, and the reduction in print cost can be significant.

wine tastingsGet on the road and shake hands. No one can tell your story with more authenticity than you can. Do a lunch with market movers each day. If you’re in the market for 2 days, make the first lunch with 10 accounts who don’t buy your wines, the second day can be the thank you lunch for your best in-marketDavid Cole accounts. Get on the phone and talk to your customers. I saw this on Twitter 2 days ago from David Cole of James David Cellars “Surprised a few customers today when I called to thank them for their online orders. Love talking with customers!”

Jay Conrad LevinsonBecome as Jay Conrad Levinson counsels a ‘Guerrilla Marketer.’ Drive your DTC business by innovative marketing. Taste and interact with college alum groups. Do luncheon tastings for faculty groups, i.e., the Stanford faculty tasting. Set-up tasting lunches in large brokerage offices. Do tech company events. The following email announcement is a great example of a must do wine tech event hosted by Smoke Wallin, founder of Wine 2.0:

Subject: Announcement from Wine 2.0 – the second, exclusive, Wine 2.0 Reserve @ Google Event

500-600 Google professionals will attend. Very Casual/Relaxed, Outdoor on theJ. Smoke Wallin patio of the Cafe on Campus
. When: June 19th, 2009, 
Times: 4:00 – 6:30. 
Cost: $325 per winery to pour. 

Winery must be signed up on Winetwo.net to register. Wineries must register who will pour for them in advance.

 Limited to first 25 wineries. RSVP to join us or with inquiries to clay@winetwo.com

Invest in research tools, and get to know your market. For wines in broad market distribution, whether in a three tier model or a DTT model, wine market intelligence is key to decisions regarding your channel strategy, pricing tactics, and distribution model. Marketing intelligence isn’t just for the mid and large sized wineries. It may be as important to the 5,000 to 25,000 case producer, where these decisions are key to surviving and thriving in today’s congestion. All classes of CPGs utilize market intelligence, and there are specific products and companies that provide information to the wine industry.

IRI provides transactional web based data reports for wineries in chain beverage, or in US Food and Drug retail markets, utilizing empowering technology to focus on market performance and brand building

TradePulse provides comprehensive sales, distribution and inventory management services, critical information for managing your sales model.

Nielsen Retail Scan Data provides a robust reporting engine on current transactional data from the retail chain marketplace. Provides information on what are you selling and where are you selling. This is important as a tool for checking your strongest and your weakest markets.

WINEDATA Pricing Report is a source of competitive supplier pricing. This is important in helping to determine your brand and/or varietal competitive frame, and for tracking pricing tactics and promotional activity within this frame.

Christian MillerFull Glass Research is an independent firm providing primary wine industry marketing research operated by Christian Miller. This firm helps you choose the right methodology for your budget, by separating the nice to know issues from the important to know issues. A key component to understanding market dynamics necessary to making those important decisions.

MKF Research, founded by Vic Motto, is now headed by Christian Hill, and is a division of Frank Rimerman, Co LLP. MKF Research has done primary market studies on varietal and category pricing, ranking markets by varietal, and tracking pricing segment shift patterns. This is an aid in determining your market distribution model.

Joe MontanaHopefully your goal in the wine business is to build market value. This is your passion. You do this because you must. Really, because it’s nose to the grindstone time. Basically you need to work harder and smarter than your competitors. It is not the time to cut back on core business resource allocations, either human or capital. Use these resources to identify and fill distribution voids. And, remember to pay attention to the basics.

Note: Copyright © 2009 Think Wine Marketing® All rights reserved.

6 thoughts on “Back to Basics

  1. John:

    There is so much information loaded into that one blog that someone responsible for sales and marketing at every winery that isn’t hitting their goals (yea like that I need more than one hand of fingers to count them) should take at least several days to plow through what you have written. If the wine companies are like much of corporate America they’ll ignore what you have written until “that stuff” hits the fan adn then they will scramble to find answers on their own (and its sitting right beneath their collective noses).

    Its been too long that the only requirement to sell wine was to just make the wine good. I wonder how many of those passionate winemakers/owners even have the marketing sophistication to grasp all your words.

    Frankly, it would be a shame for the world to lose many good wines because their owners were ready to make the shift to the exist in a rugged economic evironment!

  2. John,

    THANK YOU THANK YOU THANK YOU!!!! I agree with Mark. You’ve spelled it out for anyone who’s paying attention.

    It appears we’ve been traveling the same wine marketing path for the last couple of decades. I agree with all you say and appreciate you saying it!

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