Wine Brand Building Focus

T. Boone Pickens“The older I get, the more I see a straight path where I want to go. If you’re going to hunt elephants, don’t get off the trail for a rabbit.” … T. Boone Pickens

The Conversation

A significant portion of my current business life is involved in managing the art of conversation. I’m often talking with someone that a casual reader of the Wine Spectator or the Wine Enthusiast might consider a star in the world of wine. I don’t see this as interactions with celebrities du vin, but tend to view them as talks with friends, colleagues and/or possible business associates. These conversations often take the form of a verbal dance with the initiating party trying to elicit at no cost a magic bullet that will help their business, and I’m trying to extract what I call the ‘essential truths.’ One of my clients referred to this process as ‘dancing with the stars.’ The stars in this case are the workable ideas and probable solutions Inside the Actors Studiothat are sometimes extracted in this dance process. It is likely that if these conversations were to be viewed by an uninterested thirJohn dos Pasosd party, they would possibly be seen as some sort of Dos Passosian stream of consciousness dialog exercise at the Actors Studio. But, in fact, these oral exchanges of ideas are neither arcane nor obtuse but a defined process that has long been codified in the halls of serious business. Go back to those late night college ‘bull sessions,’ but add two decades of experience and an identifiable targeted outcome, and you’ll get the idea.

I’m not the contact at the top of most wineries CRM vendor contact lists. I’m the person that’s often called a little late to the party. Procter & Gambol Iconic CPG CompanyCalled to the party after the steam has gone out of the celebration, and the party is headed south. I’m not the expert, I’m listed after the expert. By the way, a wine business contact had a great comment in regards to ‘experts:’ “If someone tells you that they’re an expert, run the other way.” I’m the person who has gone througSummers Estate Wines Discount Couponh several business cycles. The ups, downs and the exigencies inherent in our complex and brand saturated corner of the greater CPG universe. My current conversations seem to reflect these difficult times. Often it’s about a decline in general revenues or net contribution, that’s most often attributable to increased discounting and or promotional expenditures necessitated by a soft market or aggressive competition. But becoming more common are conversations relating to a specific line item. And this is usually about a line item that was previously in balance with market demand, but production was dramatically increased on an aspirational or preferential whim. In the recent, but now past, halcyon days of conspicuous consumption, this ersatz strategy often worked, but those days are now a vague memory. This all too common wine business story never conformed to Consumer Packaged Goods marketing best practices, and has resulted to a lake of unconsumed wines. What? You hadn’t noticed. Well, vintages are starting to back-up, and your winery’s SIP (sales, inventory, Bernie Madoffproduction) report is starting to read like the fiction of Bernie Madoff’s trade confirmations. And, well like it or not, this is the lake in which we all now all find ourselves. There are obvious steps that can be taken, such as the movement of unbottled wine to bulk sales, consideration of significantly reduced FOB sales to developinPaul Mabray of VinTankg markets such as China, a reduction in the amount of wine produced in the near term, lowering domestic FOB prices and increasing promotional spend, diversifying distribution channels or calling Paul Mabray at VinTank for help in focusing on effective DTC initiatives. But, the real challenge in this broad marketplace, one not only figuratively but literally flooded with wine choices, is how to create and maintain a viable wine brand given the realities of today’s economy or the new outlook for a reshaped business world. Sound business decisions are based on good market intelligence and not on whim. The attributes of passion and vision can be the fuel to start a business, but a sound, flexible business plan is the basis for ongoing viability.

A Brief Wine Marketing Focus Case Study

Vintner Jess jackson on the cover of the Wine SpectatorMost large wineries have highly diversified product portfolios, but a few of the largest built a foundation over time by focusing on a specific niche or even a single varietal. In 1982 San Francisco based land use attorney and part time Lake County grape grower Jess Jackson found that his long time Chardonnay buyer Fetzer Vineyards had no need for his grapes. The US economy had been in decline since the 1979 energy crisis, and a significanBarney Fetzert drop in real estate values driven by a banking crisis in the saving & loan sector hit home in this time frame. Interest rates topped out at 22% driving down the value of the dollar and making imports cheeper than ever. On top of that the 1982 California wine grape crop came in at record levels, creating an instant oversupply. Jess had no home for his grapes. Lake County based winemaker Jed Steele was contracted to make 2,000 cases of Chardonnay, but there were problems and the fermentation was stuck at .5% RS. Jess liked the wine and decided to sell it. The Jed SteeleChardonnay market was small at the time. Most consumers had little experience with California Chardonnay, but Jess felt that he could sell the 2,000 cases and recoup his cost. He came up with the name Chateau du Lac, but found little interest with his presell efforts, Wine Marketer Dennis Canning was brought on board and decided to use the last names of Jess and his then wife, ergo Kendall-Jackson. In a stroke of marketing kismet the modifier ‘Vintner’s Reserve’, was added to the label. Dennis & Jess took the now labeled Kendall-Jackson Chardonnay to the market, store by store, restaurant by restaurant and quickly sold the 2,000 cases. JesJess Jacksons was now in the wine business selling Chardonnay. By 1987 the winery was selling 57,000 cases of Chardonnay  and Kendall Jackson was named the Wine & Spirits magazine Winery of the Year. By 1992 Kendall Jackson now one of Americas largest Kendal-Jackson Chardonnayand most successful wine companies, sold more than one million cases of Chardonnay. The focus from the beginning was Chardonnay, and it remains the core of the current K-J driving acquisitions, growth, capital improvements line and brand expansions that were made possible by this laser-like focus on Chardonnay. This is a story that was preceded in time by Trinchero Family Estates basing it’s success on White Zinfandel, and Ridge, Ravenswood and Rosenblum’s focus on Zinfandel. Silver Oak set the mark with a focus on Cabernet Sauvignon, Dehlinger with Pinot Noir, Zaca Mesa with Syrah, ad infinitum. Focus works.

Order out of Chaos

“I don’t know the key to success, but the key to failure is trying to please everybody.” … Bill Cosby

FocusBased on a significant number of wine business conversations over the last three months, permit me to suggest some topics for you to consider for your next management meeting. Some very difficult decisions likely have to be made by you and your team, now. These are decisions that will perhaps determine the long term viability of you wine business. It’s not the time to waffle. If you have to take a financial hit, take it now, and then stop the bleeding. First, a plan to move excess inventory should be developed and enacted. The wine business is now primarily a push market. The pull market that may have previously driven your brand no longer exists. General discount strategies employed by major regional and national retailers have put a semi-permanent kink in the idea of wine pricing elasticity, and removed the wine consumer’s sense of urgency in purchasing your brand now that every wine is on discount. Rethink your entire strategy. Rethink your varietal line-up. Understand the uniqueness of each channel. And don’t harbor the expectation that the broad market will absorb product from your softening DTC sales. And, look at what you do best. If you make really good Pinot Noir do you really need to make that Syrah? Build your brand strategy around a point of focus. Spend time in maximizing your brand reputation and sales around this varietal, and if you have the drive maybe, just maybe, you can be a financially successful wine business.

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.