Observations of a Wine Marketer – Taste Napa Valley

“If all of us acted in unison as I act individually there would be no wars and no poverty. I have made myself personally responsible for the fate of every human being who has come my way.”
….Anais Nin

Thoughts & Observations

The events that started in October 2008 seemed like the start of trip down the wormhole. As the economy spun out of control due to the hubris, fraud and greed of a few in whose hands the future of financial markets rested, our wine industry started to take on water in the ensuing world financial turbulence as outlined by Michael Lewis in The Big Short,” As brands attempted to gain traction, the strategic and tactical marketing sins that were ignored in the halcyon days of the apparent financial boom of the post 9/11 world, were now acting like anchors helping to sink a lot of wine boats. Wineries found that they were facing non-existent or greatly constricted credit-markets. Bulk & case goods values were realistically lowered as the rate of depletions declined, and inventories started to back-up, crowding distributor and winery warehouses. Brand margins were squeezed as significant discounting became the de rigueur marketing tactic to move lazy inventories. In this fabric of the late first decade of the new millenium’s space time continuum, results were at best mixed. The market disequilibrium lacked known values, resulting in a confusing set of solutions; and not ones satisfying the given equation. It seemed that in the singularity of the broad market no one solution existed to pull our industry out of the gravitational force of this financial black hole.

However, conventional wisdom and the popular press tends to focus our view of market trends through the lens of our largest or enterprise winecos, or through those wineries with the most visible profiles. This prismatic look exhibits the logical fallacy of ‘argumentum ad numerum,’ (i.e., the number of followers sways the argument, arguing noise over signal) and on closer view leads us down a path of absurdity. Most USA wineries are family wineries, producing less than 10,000 cases with a significant number producing less than 5,000 cases on an annual basis. We don’t need Stephen Hawking to solve this apparent size dichotomy; but, we just have to observe what it was that allowed some agile family winecos to escape the event horizon and to have thrived in these trying times.

  • market research
  • a passion for wine
  • sharp pricing tactics
  • a laser-like focus on quality
  • significant channel diversity
  • client relationship development
  • a clear route to market strategy
  • key lighthouse account placement
  • indy and mid-chain grocery distribution
  • communicating real points of differentiation
  • incorporating a vibrant DTC & DTT sales plan
  • focus and delivery of superior customer service
  • website development that allows for intuitive eSales activity
  • utilizing regional and/or national restaurant account targeting
  • adopting integrated sales-focused drinks industry CRM technology

There has been an apparent turn-around in the wine market, starting in mid-August of 2009. This has been true especially for wines above $20/bottle. But, there will be bumps and plateaus in the road ahead. In the opinion of Think Wine Marketing the three-tier distribution system presents significant challenges for small family wineries, and the support of HR5034 by three-tier wholesalers is a serious affront to family winery/distributor relationships. So, those lessons adopted and/or observed during the Great Recession should not be shelved as we approach a brighter business climate. Let’s not do this time warp again.

Taste Napa Valley

As always events large and small hosted by the Napa Valley Vintners are events not to missed, and Taste Napa Valley 2010 exceeded all expectations. The air was heavy, almost tropical, and the skies were dark, but spirits were high and smiles were everywhere – on the faces of staff, volunteers, chefs, vintners and guests. The early start and the iconic winery location marked a change in the public face displayed by Napa Valley to guests from the four corners of the wine world. This was a return to the sprit that I remember that was in place back in the early days of the Napa Valley Vintner get-togethers, the ones hosted by Hans Kornell. While the food, wine and celebrity meter was off the hook, this was just a gathering of Napa Valley’s agribusiness business community shared with wine consumers for the benefit of numerable Napa County non-profits. If the positive results of this year’s earlier Napa Valley Vintners’ Annual Mid-Winter Barrel Auction for the Trade, were to replicated at the Auction Napa Valley 2010, a good indicator was the Friday June 4th Barrel/eAuction at the Rubicon Estate. There seemed to be a palpable excitement displayed by the more than 2,000 attendees at the grand courtyard food and wine tasting, and the active bidding for the Barrels by ballot or though the eAuction was robust. Incorporating a mix of technology for the eAuction was timely and displayed a recognition that eCommerce now plays a key role in the wine business and at contemporary wine auctions. But a large part of the auction was the interaction of guests with names or faces previously only seen by most visitors in print, on TV or on the web. Those who live here often forget that not only do we live in one of the most beautiful places in the world, but the people we see in our everyday work lives… the ones who work so hard in our restaurants and wineries are in fact celebrities. And these celebrities of the food and wine world were cranking out good times, good will, great food and great wines.

There were so many good wines to try, and so little time. I read recently somewhere that Napa Valley winemakers should forget about trying to make Sauvignon Blanc. Well,besides the ludicrous nature of those comments, two memorable Sauvignon Blancs that I had a chance to try were the Araujo Eisle, and Farella-Park . After sharing a Glass of the 2003 J Schram with my friends at Schramsberg, I headed to the caves with about 1,500 new friends for tastes of Blackbird, Cornerstone, COHO, J. Davies, Oberon, Rubicon, Shafer and on and on. My preliminary impression of the 2008 Napa Valley reds based on about 15 separate barrel samples, is that at this point in their evolution they’re displaying density of flavor, saturation of color and impeccable balance. Can’t wait until these wines hit the market.

The Wrap

What follows are some excerpts from Think Wine Marketing’s conversations with winemakers and vintners at Auction Napa Valley: Since the first of the year market conditions have improved significantly and that results have returned to a new normal. Consumers, ones who always had the ability to spend on affordable luxuries are now willing to do so. Encouraging news supporting a strong rebound for Napa Valley wines is that more than a few small family wineries reported being sold-out of their current releases. I was also told that lessons learned in the past 2 years will be incorporated into sales and marketing strategies going forward. I also heard that the stresses encountered in the marketplace brought home that we are all just farmers, growing, making and marketing wine to people on a one-on-one basis. Perhaps my favorite conversation was with a passionate vintner and member of the Auction Napa Valley steering committee. We talked about the journey through the Great Recession to the current recovery – “it was all about the journey, and not about the end-point.”

My take away from Taste Napa Valley and Auction Napa Valley 2010 is that those of us in the wine business should be proud to work with people who realize that involvement in the greater community in which they live and work is a privilege to be exercised. Auction Napa Valley 2010 proceeds are reported to be $8.51 million, a 49% increase over the 2009 results. Kudos to the efforts of the Napa Valley Vintners, Rubicon Estate, Meadowood, the volunteers, vintners, chefs and bidders for such spectacular results.

Copyright © 2010 Think Wine Marketing Blog® All rights reserved.

Dispatches from the 2009 Wine Bloggers Conference

Grateful Dead

“Spent a little time on the mountain,
 Spent a little time on the hill,
 Things went down we don’t understand, 
but I think in time we will”
… “New Speedway Boogie” … Words by Robert Hunter; music by Jerry Garcia

***

Conferences are conferences are conferences, and it seems that the one-on-one conversations are often where the real ideas Hardy & Ashley at WBC09are exchanged. Discussing ideas and feedback on just what it is that we’re doing, what others are doing or have done will tend to make us all more proficient tomorrow. A lot of citizen wine writers are in factthe twitterai at WBC09 technology geeks.  Really smart technology geeks, like Doug Cook of Able Grape, who is now the director of search at Twitter, or founder organizer Joel Vincent, or Paul Mabray of VinTank, or Evan Cover of Cruvee, or Josh Hermsmeyer, or etc, etc. The Wine Bloggers Conference IQ meter has been off the charts. This active exchange of ideas with so many wicked smart people is really charging my batteries. The take-away is that I wish that more wineries would embrace this democratization of wine information. Oh, not just the social media side of this, but the energy and intelligence inherent in this citizen wine writer movement. I’m also shaking my head in disbelief that more wineries weren’t standing in line to talk to the candidates from the A Really Goode Job promotion. I had the chance at the conference to talk with Frank Gutierrez of Frank Loves Wine and one of the VinTank 4 + . With a nod to Malcom Gladwell’s Frank Gutierrez of Frank Loves Wine‘Blink’, I’ve always been good at recognizing talent in meetings or during interviews, and then in securing this talent. I alway wanted to surround myself with people that are smarter than I am. Have you noticed that your education doesn’t end the day that you get your diploma, that life is a process of observing, learning, and incorporating best practices until you’re boots-up. Frank is someone that I followed through the arcane process of ARGJ. Mostly because he reached out to engage me. Last night I had the chance to talk to Frank about his aspirations and his vision. I came away floored. I’m not prone to intemperate decisions, but if I were a winery in this economy, I would have extended an offer to Frank on-the -spot. So, out there in the winery world, I just want to know is this somebody that you want working for you competitors, or do you want your wine business to be the next success story?

***

CIA at Greystone, St Helena, CANapa Valley gets it. They’ve gotten it for quite awhile. The Napa Valley Vintners Association knows how to throw a party, and, at the same time, how to effectively communicate their message. Kudos to Terry Hall, Joel Coleman-Nakai, Kat Corcoran, et al. And special thanks to Paula Kornell. I first met her years ago during mBarry Schuler & Marc Lhormer discussing WBC09y tenure at Disney when visiting the Hans Kornell Winery to meet her Dad, Hans Kornell, one of my all time favorite Napa Valley vintners. Having met Paula as a small child, I’ve followed her career from the early days, through her ascension to the top of the Napa Valley wine industry. I know her dad is somewhere, smiling from ear to ear, a glass of sparkling wine in his hand thinking ‘I did a good job.’ Well, Hans, yes, you did a very good job indeed. What a start to the day. Talk about firepower, from the kick-off talk by Ms Kornell to the engaging and effective Charles Henning, ExecutiveEd Thralls, Rick Bakas, Paul MabrayDirector of the CIA (the original CIA) at Greystone, to how to be a better wine blogger/writer from the source that knows, Jim Gordon, Editor of Wines & Wines. But, please allow me a moment to go WOW!!! Barry Schuler, internet pioneer, owner of Meteor Vineyards and VC icon, and one of the great intellects of our time gave a speech that would likely fill the Moscone Center Herta Peju hosting bloggers at Peju Winery WBC09convention hall auditorium at Macworld . And this was just the start of the day. Back to the shuttles, and off to the real business of wine writing, meeting with the winemakers. It was my luck to have a chance to go to Peju Province Winery and to sit with the co-founder, the lovely Mrs Herta Peju herself. Then off to Spring Mountain Vineyard for what would turn out to be the Napa Valley Cabernet tasting of my lifetime.

***

Spring Mt. HouseI’ve been around wine a long time. I’ve attended so many tastings, and thought that I had seen it all. Don’t get me wrong, I am as passionate as ever about wine and the wine business, but how much more new is there? Well, I soon found out, sitting at rounds in the living room of Tuburcio Parrott’s old Victorian, and tasting wines from the mid-90’s and the current or future releases from a list of storied Napa Valley vintners: Jac Cole of SprinThe tasting Panel at Sring Mt, for the Napa Valley cabernet Sauvignon bloggers tasting at WBC09g Mountain, Ted Edwards of Freemark Abbey, Jeffery Stambor of Beaulieu Vineyards, and Paula Kornell of Oakville Ranch Vineyards. Not only did I come away impressed by the overall quality, but by the openness, the frankness and the transparency of the conversation. Yes, times and communications have changed, and they’ve changed for the better. Also, isn’t it about time that we now refer to Sauvignon Blanc, Cabernet Sauvignon and associated varietals as Napa Valley varietals and drop the anachronistic use of the term Bordeaux varietals? Just saying….

***

The grand napa Valley tasting at Quintessa for WBC09Recovering from a day of wine tasting in Napa, after a grand tasting at Quintessa that went by in a flash,IMG_0762 and a great dinner with old friends at Franciscan Vineyards hosted by Jay Turnipseed, Aaron Potts, Efrain Barragan, and Cathy Corison, it was back to the Flamingo trenches, and a morning of shared education. Thanks to Tim Lemke, who gave a tutorial on how to monetize blogs, and to Doug Cook, Director of Search at Twitter, who conducted a discussion on just how search actually works. And then of course back to the busses and off to the Russian River Chris Donatiello conducting a bloggers wine tasting at the WBC09and Dry Creek Valleys for more on-site interaction with our sources. I was lucky enough to be invited to C.Donatiello on Westside Road. Chris, Web, Robert and Vanessa get it. Because they get it they’ll be one of the thrivers as the economy rebounds. Oh, and the C.Donatiello Chardonnays and Pinots are fab. Next time you’re in the Healdsburg area, head over and treat yourself to one of our area’s top winery hospitality experiences. And, don’t miss the summer Sunday concerts. Can’t think of a better way to send a day in wine country.

***

Tim Lemke at WBC09There is some significant wattage of talented, professional and intellectual firepower residing in the citizen wine blogger community. Most of the resources in this community are just an email, a text message or a phone call away. As a group we’re always looking for ideas, so don’t be afraid to pitch us. Oh, I have the scoop that I promised in my last post: Evan Cover CEO at Cruvee is pairing with Josh Hermsmeyer in development of the winery interface for helpawineryout.com, facilitating the targeting and interaction between wineries and citizenDoug Cook, Twitter Director of Search at WBC09 wine reviewers. More to come as this story fleshes-out. Also, note that there is new media, creative talent out there looking for work. And, not just because they’re looking for work, but because they’re passionate about your (our) business, the wine business. Be counterintuitive and hire the best talent in these tough times to maximize your rise out of the morass, as the economy bounces forward and upward. Adopt and incorporate the appropriate technologies for your wine businesses. Recognize that the game has changed, and we’re all in this with shared responsibility for (re)inventing the future. The bus of wine biz marcom is leaving the station and picking-up speed. Get on-board as soon as you can, or risk being left out of the conversation. Identify and mirror those companies that get it, such as: Hahn, St. Supery, Murphy-Goode, C.Donatiello, Judd’s Hill, Gunlach Bundschu, the NVVA, or Wilson Daniels. Observe, study and then incorporate their best practices into your winery’s marketing/communications operations. Sink or swim, we’re in this together. We do this thing because we must. We are a community driven by passion and talent, and fueled by a burning intellectual curiosity. We are not so different from you. Oh, we may be the early adopters, but the door on the bus is still open. So, come on-board. It’s going to be a fun ride.

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