Yes We Can

Rosanne & Johnny Cash“The key to change… is to let go of fear” … Rosanne Cash

Change, Change, Change

Anyone who has lived through the last 3 years, has an awareness that in these transformative times fundamental social change has occurred. You were along for the ride whether you wanted to be or not. Oh, this isn’t the Woodstock Nation’s form of radical social change, or, even the Brown vs The Board ofBrown vs the Board of Education Education emotionally charged social change. In this current period symbols of change were not as visible. No long haired flower children in strange colorful clothes, no angry mobs, no Lester Maddox with his ax handle, and no burning Woodstock posterstreets. The agents of change fit-in as well as ‘The Man in the Grey Flannel Suit’ fit into his era. Most likely you woke up one day and saw that significant cultural change had occurred. Buried in the details of your daily existence, the greed and hubris of those that created the current economic conditions driving this period of change went largely unnoticed until the meltdown. The meltdown which hit as quickly and as surely as those planes hitting the TwinTowers on 9/11. And, as this was happening an evolution of just how it is we communicate concepts, ideas and beliefs rapidly evolved. Into the void stepped a political marketing machine whose brand plan was consideredChris Matthews News Sunday on MBC revolutionary, and was widely disregarded by most professional political pundits. It was an often repeated Sunday broadcast network news analysis that the candidate and his team using these new symbols and social media platforms had no idea what they were doing. And then came the Iowa Caucus. Without regard to your personal set of political beliefs, it seems to be obvious that you as a wine marketer should be studying the observable lessons of the Obama Presidential campaign marketing tactics and the campaign’s use of new media tools with the understanding that how we as wine MarCom managers now communicate and market brand has fundamentally changed.

A Short Case Study in Contemporary Brand Management

Barrack working the crowd on the Campaign TrailIn any brand marketing campaign, the essence and essential truths of the brand must be distilled into a viable message. The message must be replicated and repeated through the use of images, words and symbols. Through the message a visceral connection must be made between the brand and the targeted audience for success to be North Carolina Rally for Barrack Obamaaachieved. In an effort to achieve this success, through effective marketing research, the campaign was able to identify a target audience based on demographics and attitudinal predisposition. A significant portion of this identified audience had a presence on social media. The Obama campaign was an early adopter/implementer of social media platforms. MySpace was dominant in the social media space at the beginning of the campaign, and so an Obama fan page was created, and interested individuals rushed to join the club. As Facebook and then Twitter gained traction, accounts were created to engage voters, and as the Shepard Fairey's Barrack Obama 'Hope' posternumber of fans grew so did the channels for communication and a pool for fund raising was established. Individuals who contributed to the campaign were given an opt-in choice to receive important updates about the campaign and election. YouTube was also a major factor with numerous short videos featuring endorsements, narrative story lines and music like the Will.i. am. ‘Yes We Can’ video featuring the mantra of the ‘Change’ message for the campaign.Will.i.am, Yes We CanThe iconic Obama ‘HOPE’ poster was created by street artist Shepard Fairey, and became instantly recognized as the visual image of the campaign. Third party endorsements, utilizing the ideas of co-branding and borrowed interest, were achieved, with Oprah’s endorsement gaining worldwide press coverage for the Obama campaign. A masterful use of message, image, social media, endorsement and third party advocacy. There was significant push-back against this campaign, but the execution of an integrated brand management plan through the fidelity to the perceived authenticity of message, the engagement and involvement of the many, and a transparency of the process, insured the successful conclusion of stated goals. So, are you to going to mirror this model and move your brand(s) forward towards the adoption by your targeted audience resulting in purchase?

An Even Shorter Conclusion

writing a checkAs I stood in line at the local Safeway this morning the three customers ahead of me all paid by personal check, and I’m thinking ‘people still use checks?’ If you want to live on a cash basis, haven’t ATM cards been around all of our adult lives. This slow adoption of tools made available through technology, even in this technologically sophisticated area of the country, seems to be endemic in the marketing arena of the wine business. I’m not sure if this is ego, uncertainty, or fear of the unknown. But I am sure that those that are frozen by fear will likely not survive in these uncertain economic conditions, or have afrozen in fear chance of thriving in a turnaround. Given the vision allowed by the distance of time and with my apolitical marketing mind-set, I can see the clarity of vision of the Obama presidential campaign, and their effective use of all the current tools available to even wine marketers. Ones that are available for use without the necessity to build a war chest on the scale of a political campaign. Difficult times should light the fires of our creative marketing imaginations. At this time in history, we have to be thinking better, faster and cheaper. One of the key lessons to be learned is that ubiquity doesn’t trump authenticity. The basic idea that I’ve learned sometime in my marketing experience is that while political skills matter there are no magic bullets, or one size fits all solutions for today’s wine marketing challenges. But, identifying, targeting and engaging your consumer audience before, during and after the sale is essential, essential to conceiving and executing your winning wine marketing brand plan.

Note: Copyright © 2009 Think Wine Marketing® 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.

Is The Medium the Message?

Marshall McLuhan“Obsolescence never meant the end of anything. It’s just the beginning.”
… Marshall McLuhan

The opening talk by Paul Wagner of Balzac Communications at the recent kickoff meeting at the St. Helena based CIA’s Rudd Center of the reenergized Academy of Wine Communications was filled with promise.Academy of Wine Communications Promise tempered by concern. Concern that the world of winery public relations was changing, and it was changing fast. How we all communicate our messages and to whom is in a state of flux. Our own local major urban newspaper, The San Francisco Chronicle is the canary in the coal mine when it comes to wine coverage. While the articles and reviews are still top flight, the once dedicated wine section no longer makes economic sense in a world where news, reviews and information availability is ubiquitous anywhere where there is an internet connection. Having been around for awhile, I’ve discovered that change is good for the soul. It’s adapt or perish. Old dogs can and must learn new tricks.

aka Bistro, St HelenaToday at lunch in St. Helena, I couldn’t help but notice the number of smart phones, netbooks and laptops that were visible and in use. The discussion of the decay of manners in American society is a topic for another’s blog, but the use of technology is here and it’s how we now talk with each other. Technology enables how we get and filter our daily information. My invitation to lunch was in the form of a text message sent from a client’s Blackberry to my iPhone, and my response was in kind. We both knew several people in the crowded room, so after the check was paid, we took the opportunity to network. Networking in the old school sense by shaking hands and swapping stories. My host became involved in a longer conversation, so I thought I would do some market research. Alaptop keyboard couple from South Africa was teleconferencing with their winery staff on their MacBook Air laptop. The honeymooners from Florida were posting pictures of their lunch on Facebook for their friends and family back home. The young women from the New York distributor, on an educational trip to the Napa Valley, were documenting lunch and the local wine choices on their company blog. The local vineyard owners were texting details of their luncheon deal back to their CFO. The room was abuzz, and the restaurant was mentioned to countless contacts around the States and around the world.

Reading the NewspaperIt is an incontrovertible fact that we are in an age of permission marketing. Consumers choose what message or marketing centric handshake to accept. We have to ask and answer the question as to what now works, and how do we track the metrics of Public Relations success in this new, new world. How can we still control the substance and intent of our brand messages? Do the number of mentions and the old circulations numbers still function as the measure of success? And, if now, what about tomorrow? The rise of social media and the conversations of wine bloggers, wine forums and the active wine community on Facebook and Twitter are in fact being tracked by Cruvee. Batchbook, a small company contact manager CRM has developed a social media interface that allows registered users to read what their clients are saying on social media networks about their brand(s). Salesforce.com, the cloud CRM application has added a module offering clients the abilitytwittering to listen and interface with their customers on Twitter. So, it is now possible to initiate communications initiatives within specific targeted communities and then track and document the specific resultant metrics via Cruvee, or the appropriate hosted CRM. I happen to think this is more accurate and more effective than a review or a story in a classic metropolitan newspaper, where the accepted metrics were, in my opinion, perhaps more nebulous, by tracking insertions and assuming circulation numbers equaled reads. Of course the numbers won’t look as good, but we are now actually narrowcasting to an identified set of wine consumers rather than broadcasting. If we do this in a limited set of markets, then an ROI can be established by tracking the effect on wine sales within the defined geographies over a 30 day followup period.

Rutherford GrillTraditional CPG best marketing practice must carry the day without regard to the communications medium utilized. In a conversation at the Rutherford Grill,after the AWC meeting and reception, with two giants in winery PR, Jim Caudill and Tim McDonald it was agreed that times have changed, but that the basics have remained the same. The story to have value and to create interest must be unique,Jim Caudill replicable, visceral and verifiable. There must be an objective beyond just awareness. It has to be about managing your winery and your brand(s) reputation. Specific objectives for your communications program must be established and objective points of achievement must be tracked. Action without accountability is likely devoid of merit. Key communication points must be defined and repeated as part of your winery message throughout all tiers, all channels and all outlets. Listen to the pros, incorporate their ideas, and you’ll be effective in achieving your planned programs.

Inconsistency just doesn’t work in winery PR. In my time in the ether of social media, I have witnessed some egregious breaches Twisted Oak Signof sound public relations communication principles. Making the effort and then bailing seems to be worse than not making the effort at all. To be effective in your social media or traditional media engagement efforts it is important to be interesting, consistent, honest, transparent, and personable. The feedback from those in the know is that the format for conversation has changed, the rules of interface have changed, but the idea of

Jug Shop Pinot Days Promotionbest practices remain.There are many wineries and wine shops that do this job well: Twisted Oak, Hahn, St. Supery, The Jug Shop, Domaine547, Winery Collective, Walla Walla Wine Woman, and of course Bin Ends Wine, founders of Taste Live, to name a few. Hahn and St Supery have established the role of social media management as a key winery functional area. With the advent of the the Really Goode Job promotion, the industry has had the opportunity to identify a number of very talented individuals on Murphy-Goode’s bank. It is my fervent hope that many or most of these individuals, finalist or the overqualified, are offered wine industry PR positions.

In spite of the spate of current conversations and all of our observations of old media hand wringing, traditional print media is not yet dead. Perhaps they’re under the weather with a serious case of where are we now introspection. Each week in my iMac mailbox I receive an update from Wine Opinions listing wine reviews and stories that have been printed in major urban USA newspapers. Wine Opinions has also recently identified key wine bloggers and listed key stories covered in this emerging universe. Anyone in the wine business  who has worked with or talked to a wine distributor sales person in current times understands the functional role of reviews. Good to great reviews raise the awareness of your winery or brand with the first line of gatekeepers, and function as virtual key masters unlocking access to the market. So, don’t throw away or demean this still important point of market information.

Imagine How Others Would Do ItI’ve had the opportunity recently to interface with some real wine industry public relations pros and integrated communication wine marketers: Lisa Adams Walter of Adams Walter Communications; Michael Wangbickler of Balzac Communications; Victoria Bunch, former HP PR executive, and Tia Butts of Benson Marketing Group. The individuals in this group along with the aforementioned Jim Caudill and Tim McDonald will help you identify and craft your brand message and act as pilots to assist in navigating your winery through the now churned waters of wine business communications. Remember that Marshall McLuhan advised us that “it’s not the medium it’s the message.”

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

The Wake-up Call

Niccolo Machiavelli“Whosoever desires constant success must change his conduct with the times.”

… Niccolo Machiavelli

The Cult

My wife’s friend, New York based designer Joe Macal, told her that this summer in the Hamptons the wine selection on the party circuit is no longer the envy of the wine cognoscenti. The cult wines have been locked in the basement wine cellars of the McMansions, and the famous hosts just don’t think ostentatious displays of conspicuous consumption are cool in this economyHamptons Summer Party. Or so opined a vintner friend over Racer 5‘s in Healdsburg last week . I’m guessing there has been a sort of a reverse Veblen good effect going on here. Well, no doubt the tide is out. Wall Street has sneezed, and it’s looking less like a cold and more like the financial flu. The question being asked in the hills and knolls of wine country is ‘are we in a luxury goods recess, or has long-term consumer, even the most affluent consumer, behavior been modified?’ The luxury category segment of the American wine business known as the cult wine market has been on anKinked Demand Curve Model unprecedented run since 1990. While the term is new the concept isn’t. There have always been wines, as long as wines have been produced and sold, that commanded more attention and higher prices. Although we look at absolute pricing as an identifier of value, pricing is relative to the times, and through the inverted kink in the demand/pricing graph made famous by the late Dr Paul Samuelson in ‘Economics,’ and codified by John Forbes Nash in ‘Equlibrium,’ we’ve come to understand that the stratospheric pricing of cult wines infers on the host and guest the psycho-social attributes, as described by Berkeley’s Erving Goffman, of being accepted as members of the club. However, just ask Silas Lapham, membership in the club may not be long term.

The Call

Screaming EagleRinggggg, ringggggg, ringggggg. Sitting bolt up-right in my desk chair, looking past the glare of the iMac screen in the darkened room, I couldn’t believe that at 5 AM my iPhone was vibrating off the edge of my desk. Quickly shaking my head back-and-forth to loose the remnants of the mind numbing long night’s work of pushing ouHarlan Estatet pricing structures for a client’s new label project, I answered my phone without first checking the caller-ID. At the sound of the click the sonorous voice at the other end of the connection jump started the conversation. “Hi, sorry to call you so early, but did you read today’s Wall Street Journal article on the luxury wine market? Well, it struck home. My sales, for the first time in 15 years aren’t so great, and well, I’d like to toss around a few ideas.”

“Not a problem, I’ve been up working on a project, but no, haven’t read any papers this morning. Ah, excuse me. Who is this?”

“I’m that small cult winery, ha, that you pitched last year about this time and I told you I didn’t need any help. But I just got off the Araujophone with a management contact at my Boston asset management firm and, well, I need it now.” “I’ve replanted about half of my vineyard, changing the potential final blend, and the grapes are in 4th leaf. I could bottle the young juice in my primary brand, but the overall quality would be diminished. And if there was ever a time to push the quality envelop, it’s now.” “I’m thinking about introducing another label, in a more popular tier, something that could be sold in other environments, other channels. I’ve always been at the luxury end of the market, but I do buy other wines all the time, and think it would be great to get this new wine in more hands.” “So, how do I do this?”

The Plan

Yes, it is possible for a luxury brand to execute a lower priced, more egalitarian brand strategy effectively. A clear focus is needed and a tier specific brand plan is necessary. There are key questions that need to be asked and answered.

  1. Theme – name, appearance, label, packaging
  2. Personality – place, product, pricing, promotion
  3. Tactical Plan – what, when, where, how, how much
  4. Reputation Engineering – the PR initiative
  5. Sales Effort – DTC, DTT, existing distributors?

Forts de LatourA great team is in place, and to dislocate them for a new project just wouldn’t make any sense. They are part of the positive story for your existing brands and lend credence to the new project. You’re current cult and luxury portfolio is based on Napa Valley mountain grown Bordeaux proprietary reds. Protect the image of the existing luxury/cult brands by reducing production by further defining selection and maintaining real rarity. Use the traditional Bordelais classified growth second label model. Think Forts de Latour from Chateau Latour, Pavillion Rouge from Chateau Margaux, or Le Petite Cheval from Chateau Cheval Blanc. Share the story of replanting with new clones and the early quality displayed by the young vines, whilimages-3e refining the cult winemaking process. Increase exposure and the positive press and/or wine blog buzz opportunities by providing value and access to wines which were formerly unavailable in the broad market from your winery. In a market in which Michelin star chef Daniel Boulud has decided to focus more on value with DBGB Kitchen & Bar, the idea of a cult brand providing a more value centric model is not only timely, but most likely necessary given the reality of today’s world financial markets.

The Wrap

drafting plansCreating any new brand in a rapidly consolidating and saturated broad market is not without risk. Manage your risk by utilizing research to target the best potential accounts. Work with key lighthouse accounts, both on and off-premises in limited geographic markets, who will provide support through newsletter, blog and/or web endorsements, while avoiding brand image diminishing discounting. Be sharp in your pricing to not only maximize profit but to achieve planned depletion velocity and consumer pick-up and repurchase. Your value proposition is leveraged on your existing reputation, built through hard work and a fidelity to your singular vision over the last 15-20 years. Don’t engage in any activity that will diminish the new brand or your existing brands. And, really only do this if you are totally committed to success, and not just as a short term liquidity fix.

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

Swimming the Grocery Channel

Larry Bird“Push yourself again and again. Don’t give an inch until the final buzzer sounds.”
… Larry Bird

The Client

I’d been listening for more than a hour, taking notes, watching for signs or cues that my client wanted more than a confirmation that the strategic business model conceived more than 7 years ago was still viable in this new, emerging economy. Sometimes it’s just best to let someone talk and talk. And after all the points are expressed, restated and then exhausted the steam just runs out. As my client turned in his chair, at images-3the large cluttered antique desk, holding the latest account sold report, he looked at me and said one last time, ‘just a little more hard work.’ ‘Yep, that’s what we need, a little more hard work.’ I leaned forward in the faded leather club chair, pinching my eyes closed with my thumb and forefinger and started to feel the onset of a migraine. A migraine that would only go away when my client saw the light. I fought back the urge to answer withDana Carvey as Bush 1 my best Dana Carvey imitation of Bush 1 saying “Not gonna do it.” But, self preservation and 7 years of history got the better of me, and I responded that it was time to rethink the winery’s business model. We needed to flatten out the growth curve of the principal brand, while continuing to focus on the best quality. Some of the juice would have to declassified to be sold in bulk, bottled as a value tier or launched as a new brand. If the new tier or label strategy were to be implemented then pricing tactics would allow the winery to open up new channels for wine by the glass (WBTG), independent retail, or grocery distribution. The word grocery resonated like a scratch on a blackboard. My clients face scrunched-up as if he had just smelled a carton of month old milk. He looked up at me over the top edge of his bifocals and said ‘GROCERY?’

The Grocery Channel

I understand your reticence. You’re concerned with endangering, what Tim McDonald CSW refers to as, your winery’s ‘Reputation Engineering.’ And, based on old models, this concern was once justified, but no longer. Today’s grocery is more than a viable constellation solar winerydistribution alternative for wineries of small and moderate size. The world of grocery distribution seems to the uninitiated to be dominated by the big boys, the 30 largest wineries in the USA market. And it seems to be most appropriate as a channel model only for those wineries producing 100,000 cases or more. Well the grocery market, like the wine market is highly differentiated and segmented. Groceries are classified and merchandized by neighborhood and product selections determined by local demographics. A sharp, regionalized well conceived channel strategy is a must. There is a spot across most price points somewhere within the grocery segment for your wine brand(s). There are convenience store concepts, independents, mid-chainKrogers, large regional multi-unit stores, and then there’s Safeway and Krogers. Within these larger grocery brands several regional sub-brands keyed to the needs of their local markets exist. Consolidation, a current trend in the adult beverage business for producers and distributors, has also found its way into the US Food & Drug business segment. It is not a one-size fits all solution anymore. As I look across the country, I see data that demonstrably reveals pricing segment shifts and channel shifts that favors due consideration of grocery distribution for your brand(s). I believe that it’s time to reset your expectations. It’s time to innovate. It’s time to realize that there are new points of price sensitivity that factor into consumer wine purchase decisions. It certainly is time to recognize the need for real-time category information as a key part of your decision making matrix.

Please note that large areas of the country, including the Inter-Mountain West, several control states such as Pennsylvania, and Whole Foods Wine Sectionlarge US Eastern population centers including Maryland, New Jersey, New York, Connecticut and Massachusetts don’t as yet allow wine sales in grocery stores. For the smaller, niche, highly-differentiated winery single unit independents and mid-chains are the most appropriate targets for selected distribution. In the nine county San Francisco Bay Area, the small and mid-chain grocery market is vibrant. Within 100 miles of most wineries in Napa and Sonoma several points of potential distribution exist. Although not meant to be comprehensive, the following list represents strong premium grocery retail wine locations: Oliver’s, Fiesta/Pacific, Molsberry Market, Sonoma/Glen Ellen Markets, Vallerga’s, Ranch Market, Sunshine Foods, Oakville Market, Dean & Deluca, Molly Stone’Nugget Markets Wine Sections, Paradise Foods, Nugget Markets, Real Foods, Andronico’s, Berkeley Bowl, Monterey Market, Farmstead Cheese, Draeger’s, Lunardi’s, Cosentino’s, Diablo Foods and many more. Whole Foods, and Trader Joe’s are also larger specialty food retailers with strong wine programs, and a significant Bay Area presence. Although, I’ve focused on my back yard, I would also target strong local or regional grocers such as the Carolina’s Harris Teeter, Chicago’s Treasure Island, Seattle’s Metropolitan Market, Portland’s New Season’s Markets, Los Angeles metro area Gelson’s and Bristol Farms, Florida’s Publix Markets, Texas’ Central Markets, Arizona’s AJs, Cleveland’s Heinen’s and St. Louis’ Dierberg’s.

A Very Short Course in Category Management

Category Management GraphCategory Management is “a retailer/distributor/supplier process of managing categories as strategic business units, producing enhanced business results by focusing on delivering consumer value.” …FMI ECR Committee

Selling to groceries can seem daunting to the first timer. The concept of management by objective is key to your grocery presentation. What specifically are your goals? How do you hope to achieve your placements? Do you understand how to leverage your brand equity with that of the retailer’s equity? You don’t have to be Gallo or K-J to have definedTrader Joe's goals and a plan. Your brand’s equity is based on your prior distribution achievement, sales history, reliability, pricing and promotions. Understand that this is a business relationship that requires candor, confidentiality, participation and the ability to give unbiased recommendations in reference to the category, varietal and other winery’s products. Wineries of all sizes have the ability to grow and diversify their depletions by taking the category management approach with retailers seriously. Understand that retailers are seeking multiple points of input to get a holistic view of their marketplace. Use your unique position as a smaller winery and your knowledge of the super and ultra-premium price segments to become a trusted adviser helping the grocery buyer to be better at focusing on the end user. In your presentation be objective, be consumer oriented, keep the message simple and focused, be action specific, and sell a ‘win-win’ program.

A very simple analysis is to quantify your opportunity  by comparing the Consumer Development Index and your Business Fine Wine SalesDevelopment Index, What may sound like geek speak to you, is actually a simple concept. CDI is a specific market accounting of the % of sales for an item based on type and price. To access this information you need to refer to data from IRI, Nielsen, Trade Pulse, or other previously discussed wine consumer insights firms. BDI is your actual % of sales within a defined geography. Select markets where CDI>BDI. Calculate the gap as CDI-BDI = a positive opportunity. Then utilizing the formula (Volume/BDI)*Gap = opportunity volume, develop a plan. This is allows you to ask and discover the answers to the 3 basic questions of distribution:

  1. Where are we?
  2. Where should we be?
  3. How do we achieve desired targeted distribution objective

Swim to Win

imagesSelling wine to groceries tends to be a more technical and specialized arena than other available wine sales channels, but not necessarily more complex. Sales is sales. My Dad used to always say ‘sales is a contact sport.’ And in any contact sport you want the best tools in order to just not survive but to succeed. You’ll need to incorporate your market, brand and wine knowledge, salesmanship, business skills and your entrepreneurial mind set. Yes, it’s tough out there, always has been, always will be. But, you’re in the game to win. And if you close your mind to any available channel before a thorough strategic market analysis, win you won’t. As you swim in the grocery channel, utilize technology to access the best market and category information tools to target, prepare, present , close and win.

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

It’s Time for Plan B

images-4“The most successful people are those who are good at Plan B.” … James Yorke

I’ll be more than happy to grant you a plenary indulgence if your first response to reading the daily news headlines is to head to your winery’s case goods storage facility to start drinking this years unsold suprplus. USA Today Money section headline reads ‘Anxietimages-3y surges as stocks relapse.’. The Wall Street Journal reads ‘Markets Fall on Growth Fears,’… ‘Drop Amid Worries Over Global Contraction.’ James C. Cooper in his Business Week column advises us that that ‘Consumers Won’t Drive A Recovery.’ Given the dynamics of today’s financial markets the world of commerce as we have known it appears, at a minimum, chaotic. The situation is completely out of our control, or so it seems. As our core wine consumers concentrate on increasing their rate of savings and focus on paying down debt, we face the daily reality of our wine business balance sheets. Upon the completion of the monthly review of our financial dashboards the question most often asked is, ‘which way out of the abyss?’ Well, I’m guessing that Plan A isn’t working as well as it once was, so let’s start talking about Plan B.

head in sandNo Plan B is not sticking your head in the sand, or drinking all of your unsold product by the holidays. Plan B is increasing your promotional spend in very specific ways to create improved brand awareness and to increase the velocity and lift of brand take-away. Promos can take many forms that can be shaped to your winery’s specific business and channel models. It is important to note the obvious. In the domestic USA there are 50 states, with each state determining alcoholic beverage custom, law and practice within its borders. Before embarking on any of the following suggestions make sure that you interface with your compliance specialist and with your Sonoma Market Wine Displaybeverage industry attorney concerning any proposed promotional activity. Promotions in the beverage business can be experiential, interactive, viral or mobile, while focusing on your tasting room, retail distribution or restaurant activity. The idea is to create a reason or a set of compelling reasons that with create a positive interaction between your brand and your targeted customer. Good promotions not only engender sales, but are also structured to provide trackable metrics. All good promotions are established with specific goals and objectives in mind. And all effective promotions are keyed to a calendar with a beginning and end date.

Thanksgiving w/WineAn awareness of the calendar is also important in maximizing promotional opportunities around key selling dates — Thanksgiving, Christmas, New Years, St Valentine’s Day, Easter/Passover, Memorial Day, Mother’s Day, Father’s Day, Fourth of July and Labor Day. Promotions can focus on seasonal releases such as Beaujolais Nouveau on November 15th, the May release of Rose, the late spring release of your aromatic whites, or the fall release of your Syrah. Promotions can be keyed around major sporting events through sponsorships or seasonal promotions such as the MLB All Star Game or the annual NCAA/NFL season kick-off.

While general marketing trends follow our traditional Julian Calendar please note that the promotions calendar for all 50 states should not the sameimages. While consumers are drinking lots of wine in the Hamptons right now, the same can’t be said for most of Florida or Arizona where consumption peaks during the winter months. You may want to create a national promotions calendar, but you would be wise to regionalize your calendar based on seasonal differences and on your unique product mix.

Case Study

The Crisis:

Winery A, a <10,000 case single brand burgundian varietal facility, had experienced reduced week day traffic in the tasting room, IMG_0452and week-end spend was flat compared to last year. A significant amount of bleed was being experienced from the mailing list. The marketing plan had always been to focus broad market three-tier distribution specifically on-premise, and to not focus on retail, avoiding discounting and direct competition with, what was until this year, a vibrant DTC program. Well, restaurant sales were contracting and retail, while receptive, only placed just in time orders. Winery A’s distributors were also minimizing orders and stretching out the payment cycle on purchases, crimping cash flow in a tight, tight credit market. Ouch! What to do?

Plan B:

In order to create focus and to drive traffic in the tasting room the understanding that most traffic was now local was key to creating the following promotional activities. A technology person was hired and tasked with new web-site development and new media strategies. Online coupons were developed offering twofer tastings. The tasting bar glassware was upgraded to Stolzle lead freeBurgGrand crystal. Instead of the standard sequential individual glass tasting, flights of 3 wines were created, i.e., 3 Chardonnays, 3 Pinot Noirs, or 3 SVD wines. Retail wine pricing was revisited and prices were rationalized to current BBQeconomic realities. With the clarification that California wineries could now offer for on-site consumption full bottle or wine-by-the-glass sales, the outdoor areas were refurbished and replanted, picnic tables were added and activities such as live music, BBQ’s and association events were added to the Calendar. An outreach to mailing list clients was initiated first by email, and then by phone. A members only room was created and made available for for active mailing list customers. Several mailing list first only small production single vineyard wines were produced and marketed to the members. Principals and winemakers were now present and active at all primary members events.

To launch the new image, prior to the start of season, a regional party was thrown for hospitality staffs at other wineries, IMG_0543restaurants and hotels. A one day employee discount offer was put into place, and the In-Out Burger Wagon was brought in to serve the large crowd. The new media manager had a station for Facebook Fan Page sign-ups, tied into a ‘guess-that-varietal’ contest, with the winner(s) broadcast on the Fan Page the next day. Great good will was created, leading to a significant uptick in referrals from the attending hospitality folks. Next the new media manager organized individual tastings with traditional media Facebook Fan Sign-Upfrom local and regional newspapers, radio, television and the major wine magazines for a winemaker tour and tasting of the new releases. This resulted in several stories and reviews. Next came the tweetup. All visiting and local active Twitter contacts were invited to the winery for a tasting and BBQ. Library, and yet to be released wines were poured alongside current or soon to be released wines. A good time was had by all, and considerable buzz was created, not just on the event day, but the relationships developed kept the conversations flowing. The new media manager also identified key influential bloggers in targeted markets, and distributed samples for a subsequent online winemaker led tweetup.

For the broad market a new channel strategy was put into place. A regionalized marketing/promotion calendar was developed. The sample budget was increased, and a program for new accounts and/or new markets was put into place. The release of Winery A’s Brown Bag Wine Tastingbest Pinot Noir was treated as a notable event. Tastings were organized and the prize Pinot was placed in a brown paper bag as was a well known and highly rated and much more expensive Burgundian Pinot Noir from the same vintage. The targeted on-premises account gatekeepers were tasted on both wines in a random order, and then asked to choose. A win win situation that resulted in new placements in conjunction with new on-premise post-off or 3 case tier restaurant pricing replacing the former no discount practice. This tasting was replicated with the in-market distributor partner’s key account sales teams. In the evening, accounts with an active wine bar crowd imageswere sampled by the market manager interfacing with wine friendly patrons, and a wine amuse bouche was offered to receptive dinners. Retail pricing was revisited and post off or volumetric discounts were offered. In markets where groceries sales were allowed, distribution was extended with appropriate pricing creating sales and display activity even at Winery A’s higher price points. Winemaker and principal travel was coordinated to do either in-store tastings or bottle signings on key Friday and Saturday sales periods. And in the evening they were scheduled to conduct  local tweetups,  interacting with key wine bloggers and Twitter contacts.

In dealing with their distributor partners, Winery A allocated human resources, and promotional dollars to drive sales. In order to accelerate the payment cycle, they used a traditional CPG invoicing strategy. While seeming to lengthen the payment cycle, by writing the terms to reflect a discount of 5%/10 days, 2%/30,  & net 60, accounts receivable returned to a normalized payment schedule.

Conclusion:

Woodcut BWinery A had a viable Plan B to attack not retreat from the market in times of consumer retraction. They created new promotions, programs and strategies reflecting new technologies, and allocated spend to position their winery for not only the current economic times, but for sustainable success. The implementation of Plan B which incorporated old school  promotional practices aligned with new technologies applied with old fashioned elbow grease have positioned Winery A for maximization of results. So, is your head still in the sand? Are you sitting on your barrels, mired in reams of financial reports, or are you working on Plan B?

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

Satori in Sonoma

Studs Terkel“We are more and more into communications and less and less into communication” … Studs Terkel

My father instilled in me an innate curiosity about life and people. He taught me that having the right question may be more important than having all the answers. And most importantly he taught me to listen. I’ve always been interested in how people arrived at their career choices. Was it an accidental journey or a planned path that you’re now walking down. Since my life’s work has been in the wine business, I’m for the most part interested in people who have traveled a similar road. My Socratic style was inspired by Studs Terkel and his examination of the average American working stiff. When someone asks, ‘will there be anything else, sir’, I often respond question in question, “what’s the meaning of life?” This always stops the questioner in his/her tracks. A moment of reflection is sometimes given to a substantive response, but for the most part it often devolves into an embarrassed laugh, or worse into some platitude or other. Whenever I have the opportunity to talk with someone during a wine interaction I like to ask about their first memorable wine experience. What’s that? Well, since you’ve asked, I’m more than willing to share my story.

My father, Howard Corcoran was a character, and in the Irish oral tradition told great stories. He graduated as the Valedictorian from Central Catholic High School in Wheeling, West Virginia and then from West Virginia University with a degree in Law. He never sat for the bar, but instead followed his widowed Aunt Margie to Florida, where she was the business manager for the architect Addison Mizner. His aunt had been married to Arthur McConnaughy the founder of Island Creek Coal Company, the genesis company of what is now ConocoPhillips. My great Uncle was killed defending his mine during a strike, and Aunt Margie was Jerome KernleftBreakers Hotel Palm Beach with a then significant income. So off to Palm Beach with Dad to be near her sister Virginia, who’s husband operated the men’s haberdashery at the Breakers Hotel. Dad quickly landed a job for $1/day as a clerk in a brokerage office, and lived on a yacht owned by American composer Jerome Kern, with his roommate Johnny Love. At night Dad and Johnny headed a jazz combo that played during the high season at all the big parties. This was in the middle of prohibition, but the swells weren’t about to do with out their champagne or booze. My Dad and Johnny had a sideline business of also supplying the party favors. The yacht was used to sail over to Bimini to pick-up a load of Cordon Rouge Champagne, Seagrams whiskey, and Kennedy Scotch. And then the boys sold their haul to the social 400 who inhabited Palm Beach for the winter.

My Mom and Dad got married after the end of Prohibition just as the New Deal was helping to drag the economy out of the SCAN0009depression. I came along as the last of five kids towards the end of the famed boomer generation. I grew up listening to these by then romanticized stories, and knew that in some way, some how wine would be part of my life. My parents often had dinner parties, and Sunday meals were always formal sit downs at the long claw and ball foot table in the big dinning room. Wine was often part of these occasions, and we were always allowed to taste the wines and encouraged to share our impressions. Knowing my Dad’s story, I often asked my father’s friends and business associates about the first time that they thought of wine and went wow.

I still ask this question. I ask it of store owners, and clerks. I ask sommeliers, and chefs. I ask university professors, distributor owners and winery entrepreneurs. And everyone has an answer. That moment of enlightenment seems, while always different, to be a memory worth sharing. Although I grew up enjoying wine with my family in the appropriate social situations, my moment of zen came on theCh Pavie Label
Empress Lilly Riverboatbalcony of my Disney office in Florida tasting samples while creating the wine list for the Empress Lilly Riverboat restaurant complex at Lake Buena Vista Village. It was the mid 70’s and I was tasting the 1970 Ch. Pavie, and all of the sudden I got it. This, my moment of sudden enlightenment, was soon followed by a trip to Sonoma County, California. At the end of a long week I was sitting in my rental car on a cloudy, rainy winter day in the parking lot of the Dry Creek General Store sipping on a bottle of Dry Creek Vineyards Zinfandel. The sun finally came out from behind the dense clouds and a focused beam of light hit my car. At that moment, I knew that this was my home… satori in Sonoma.

Andre TchelistcheffThat my story, but what’s yours? I’ve been so fortunate due to the circumstances of my life and career to have asked this question of governors, congressmen,senators and CEO’s. I especially enjoyed asking this question of some of the icons in the wine industry, including Joe Heitz, Hans Kornell, Mike Girgich, Andre Tchelistcheff, Robert Mondavi, Henri Jayer, Jacques SeyssesJim Barrett, Warren Winarski and Jess Jackson. Their stories were all unique, but what great stories they were to hear. One of the best lessons that any successful wine salesperson can learn is to ask the right question and then listen to the answer. So, do your remember the moment when you first drank a wine and thought, wow? I‘m listening.

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