The Conversation

Naked City Detectives, Harry Bellaver, Paul Burke, & Horace McMahon“There are eight million stories, in the Naked City. This..has been one of them.”Stirling Silliphant (The Naked City ABC TV series 1958-63)

The Rain

The sound of rain, and just not the sound of rain falling, but the sound of people talking about the rain at the end of what had may just have been the perfect vintage, seemed to divert attention away from the economy, at least for the time being. While the rain, and all the wine country conversations that the rain started, provided a welcome relief from the constant drone that it’s hard out there. It’s really not the time to take your eye off the ball and to forget the market challenges inherent since the onset of the ‘Great Recession.’ For each winery and each winegrower or vineyard owner there’s an unique story. The folks on the flats in mid-Napa Valley likely had a different take on this year’s growingDoug Shafer giving his take on Vintage 2009 season weather than the folks in Calistoga, Carneros, the Vaca or Mayacamas ranges, or in Western Sonoma County, Mendocino, the Willamette Valley, Walla Sun and rain in Oakville, CA looking at the RObert Mondavi Tokalon VineyardWalla or in Santa Barbara. While each unique story suggest a similar outcome, this is a vintage that will unfold over the next several years. Perhaps the critics will pronounce estimates of Vintage of the Century or speculate that the rain has dashed all hopes for a positive result. Perhaps I lack the prescience or the hubris to judge the future of an entire vintage during harvest and crush, but I do have an understanding that a vintage is the sum of the individual experiences of each participant. And, I have an understanding that it’s in the telling of your story that will connect you to your customers.

The Bounce

In this brave new world of permission marketing, and in this time of growing consumer detachment and cynicism driven by the perceived systemic failure of our financial and Henry Paulson,  Bush Treasury Secretary governmental institutions, a review of your traditional marketing message methods has been necessitated, even as the mixed message on the state of the economy is being delivered by traditional mass media. A mention of the names Paulson, Geithner, and AIG tend to initiate a gag reflex in even the most jaded observer. However, today the DowTimoth Geithner, Obama Treasury Secretary Jones Market Index reached a 12 month high and once again climbed above 10,000, in part driven by reports that Goldman Sachs made record profits in Q3. Also noted as a sign that the climb from the bottom is underway are stories in Ad Age Talent Works that Google is Hiring again; and The New York Times reporting that Apple profits are up 47% on Strong Mac Sales. The story on the state of the wine business is even more mixed. Like the citizens of the Naked City, each wine business has its own story, some up by 10%, some flat, and some down 30%. Many wineries are going through an extended period of stress. Vic Motto, Co-Founder, Chaiman and CEO of Global Wine Partners, a St Helena, CA wine industry iBank recognizes the industry wide stress; but, doesn’t see a significant long term dislocation in wine consumer’s buying behavior. Having heard the sea change story before, most recently with the Vic Motto, CEO and Chairman of Global Wine Partnersprediction that Two Buck Chuck would drive consumers permanently away from luxury wines. Didn’t happen. It’s Mr Motto analysis that the American wine consumer is ‘aspirational’ and that wine is and will be viewed as an ‘affordable luxury.’ I’m also in the camp that believes wineries that survive this very tough period will likely, at some point, see a return to the pre-recessionary trends in buying patterns. In an October 15th Associated Press interview, Safeway CEO, Steve Burd sees signs of the turnaround in an uptick in the coffee sales mix and a move back to growth in the premium wines segment.

The Conversation

Technology has provisioned wine industry CMOs with a whole new marketing tool kit. Technology is a tool to be used and appreciated, but not one to be viewed as the long hoped foThe CLUETRAIN Manifestor silver bullet. How we now communicate with our customers has dramatically changed with the development of the web, email, texting, blogs, video, Facebook and Twitter. And in this new paradigm there are three words that have become the mantra of this new technological world in which we all now communicate our stories: transparency, authenticity, credibility. I’d like to add one word, human. This commonsense point was first made in ‘The Cluetrain Manifesto,’ by Rick Levine, Christopher Locke, Doc Searls and David Wineberger, first online in 1999 then in print in 2001, Copyright © by Basic Books. BTW: a 10th Anniversary edition of this must read biz book is now available. While the 10 year timeframe has dated some of the jargon, the core concepts of the treatise remain, especially those listed in the seminal 95 THESES:

  1. Markets are conversations
  2. Markets consist of human beings, not demographic sectors
  3. Conversations among human beings sound human. They are conducted in a human voice.
  4. Whether delivering information, opinions, perspectives, dissenting arguments or humorous asides, the human voice is typically open, natural, uncontrived
  5. People recognize each other as such from the sound of this voice

The first five points in the “Cluetrain’ 95 THESES are a construct that is now an unavoidable communications directive for your consumer facing business. People grow your grapes. People make your wine. People sell your wine, and people buy your wine. Your story, while sharing traits with almost all others in wine’s corner of the CPG market, is unique to your circumstances.

The Case Study

Mike BenzigerIt was harvest time in the fall of 1994. Mike Benziger came out of the winery office to check on the grapes to judge when to start picking on the Family’s Estate Vineyard, located in a collapsed caldera on the Sonoma Valley side of the old dormant Sonoma Mountain volcano. Times were good. The vineyard was always busy from the days of the Glen Ellen Winery start-up through the launch of the premium value tiered Benziger Family Winery. Wines that always over delivered. Mike should have been smiling, but instead he looked troubled. He cocked his head as he stood on the edge of the vineyard, puzzled that he heard nothing. Nothing at all. Just up the hill at his home in Jack London State Park, he rememberedBenziger Family Winery Ariel Shot hearing birds chirping madly as the sun broke through the morning fog. But as he looked down the neatly groomed rows of vines, he noticed that there wasn’t a wild flower, a weed or a blade of grass on the bare dirt underneath the vines. As he walked the rows, Mike noticed that there were no bugs on the vines or flying through the air, no dragonflies, no butterflies. Stopping and reflecting he knew what was bothering him, the vineyard was no longer a living space. Mike thought a moment and considered his options. He knew that this wasn’t the way things should be. At that moment in time he vowed to change the way things had been done, to change the conventional wisdom of how things had always been done. This ancient bowl had supported life Benziger Family Winery Bloggers Visitfor millions of years, and in just a decade of intensive modern farming that had all changed. But, it wasn’t working any longer, and the Benziger farming practices needed to revert to the old ways, to the ways defined by closed system agriculture. Benziger Vineyards needed significant cultural change to recreate a new living farm. And change they did, after 3 years of concentratedThe Insectary at Benziger Family Winery study, a sustainable, biodynamic vineyard started to take shape. The first step was to establish biodiversity. So island gardens were established within the vineyard space to help support beneficial insects; and between every 10th vine row a bed of host plants and flowers were seeded to support a vineyard population of the good guys. Sheep and cows were introduced as natural lawn mowers, with their waste the base of a closed system compost program, so that no chemical fertilizers would ever be needed or would ever be used. Land that was dead just ten years ago was, in less than a decade, now a classic biodynamic closed system living farm. Earth, nature and man came together in a special place that happens to be in my backyard, just north of the town of Sonoma.

Mike Benziger & Kathy Benziger Threlkeld talking with the wine bloggersOn Saturday, October 3, 2009 I had the opportunity, along with a group of wine blogger colleagues, to hit the Benziger Biodynamic Trail at the Benziger Family Winery on Jack London Ranch Rd, just up the hill from the village of Glen Ellen. Our tour group had the opportunity to interface with Mike BenzigerKathy Benziger Threkeld, Colby Eirman, Director of Gardens, and Winemaker, Rodrigo Sotto. The passion in the delivery, even from the well practiced folks at Benziger, was  impressive, especially in closeColby Eirman, Director of gardens at Benziger family Winery quarters over 3 hours. This was a one-on-one conversation and the telling of the story, starting with that moment of enlightenment in 1994. There wasn’t any ducking questions in the active exchange of ideas. We weren’t being sold on a story. We were being invited into an experience. This was a conversation between humans. A few points really stuck with me. The first was that ‘the wines weren’tRodrigo Soto, Winemaker at Benziger Family Winery necessarily better, but that they were different.’ That they reflected this place. The second point that hit a nerve with me was that ‘each year the wine was a time stamp of the vintage.’ Not once were scores mentioned as a descriptor of any of the Benziger grown and produced wines that we tasted that day, although the Rodrigo Sotto’s wines have gotten rave reviews and scores in the traditional wine press. My take away from the day with the Benziger Family and team members was one of transparency, authenticity, and credibility. A team that understood that their plan, in a world now dominated by pull marketing, was that by communicating in this human voice missionaries were created, replicating the message and influencing friends.

The grandchildren of the founder of Park Benziger & Company, and the children of the founder of Glen Ellen Winery, Bruno Benziger are well versed in the finer points of wineNow that's biodynamic, at Benziger Family WInery marketing. But, change must be in their DNA. First selling Glen Ellen, then converting a 200,000+ value brand to a slightly more than 110,000 caseMike Benziger pointing out the native raptor population at Benziger Family Winery sustainable, biodynamic super-premium/luxury brand, while changing their farming practice as stewards of the land. In a time of declining circulation numbers and disappearing newspapers, an effort has been made to maintain contacts with the traditional press, in both the wine and consumer lifestyle focused print media arenas. The Benziger marketing team has fully embraced new media, including Twitter, and wine bloggers. Benziger POS is also available as an online deliverable, further enhancing the green story, while insuring the timely delivery of product sheets, neckers, sell sheets and cut case cards on an as needed by market basis. If you go to the Trade/Media section of the Benziger web site, you can download the Chris Benziger narrated video sales presentation which is a masters class in wine brand marketing. And, if you ever find yourself near Glen Ellen, stop-in and take the tour. As a small family wine marketer, you need to identify and mirror the success stories. The Benzigers have successfully differentiated their wine brands in this difficult, brand saturated market. And, by the way, their wines just aren’t different, the Benziger wines exhibit a specific point of view and IMHO are damn good.

The Story

Mike Benziger in the wine caves at Benziger Family WineryThe Benziger family and team recognized that their best path to the market was through their authentic story told in a human voice to groups of consumers, members of the trade, and to traditional and new media writers. A story that has been replicated to the point that in 2008 almost 175 million media impressions were created. Even though the Benzigers produce in their Demeter Certified Winery 1.32 million bottles of wine, the consumer impressions and strong word of mouth campaign along with a vibrant visitor center program help to create demand beyond the produced supply.  Through their objective mastery of pull marketing tactics, tactics based on an authentic and credible story, the Benzigers have been able to not only create an awareness envied by any enterprise wineco, but a model for any family wine business. The question that now begs to be answered: what’s your story and what are your winery’s marketing plans to maximize brand awareness and sales in what continues, even as the turnaround starts, to be a challenging marketplace?

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.

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.

It’s Time for Imagination

“Imagination is more important than knowledge. For knowledge is  limited to all we noimages-1w know and understand, while imagination  embraces the entire world, and all there ever will be to know and  understand.” … Albert Einstein

images-1-1 All the recent economic and financial story headlines and news feeds that we all receive, read and attempt to digest have led to an industry wide case of psychological indigestion. There is often significant cognitive dissonance in what we want to achieve with in-place business models and the levels of brand  performance  necessary for survival in these recessionary times. We can either retreat to our cellars, heads-in-hand, or rethink our models and create new ways to improve brand success. Sitting down with key staff and analyzing sales and distribution numbers used to be a monthly routine, but this process has now become a weekly, if not a daily exercise. We collectively obsess in the analysis of our flash reports and wonder when and if in the near term there will be a turnaround. Well, soon perhaps, but it’s been my life and wine business experience that difficult times call for imaginative solutions – imaginative solutions that will position your winery to survive in the short term and to thrive in this transformative economy.

The Situation

images-2The closure of the fulfillment/compliance firm New Vine Logistics this past weekend was met with a audible gasp heard throughout wine country. Today we can hear the scramble as a significant number of wineries try to recover their wine, meet individual state and federal compliance requirements, and communicate in the midst of chaos with their customers, clients and fans. In the spate of news articles, analytic pieces and blogs on the subject it became apparent that many of the wineries, the ones that relied solely on a DTimages-4C channel model for sales may need to rethink their distribution. A good case study was discussed a few months ago when I hosted a tour of  three west Sonoma County Pinot Noir producers for a group from HBS. At each stop the same question was asked by the group about the breakdown in the winery’s distribution model. All of these still successful wineries had the same answer: 50% DTC, 50% three tier sales focusing primarily on-premise, but with growth in independent retail and mid-chain sustainable grocery. All three wineries understood that a diversity within their models allowed significant flexibility to refocus priorities as market dynamics changed, and market dynamics have changed, and will change again.

Although a few cult wineries are holding even on club sales, most winerieimages-5s have suffered increased resignations, or clubs shipments placed on hiatus resulting in diminished DTC sales performance. The national wine wholesale channel is no longer open to distributing unproven brands or brands that belatedly realize, with the recent pressure on DTC sales, the need for other tactics to sell and distribute wine. The time to create you own revenue enhancement opportunities is now.

The Lesson Plan

dreamstime_6009024.jpg Although it’s tough out there, it’s been tough before. Something we tend to forget this after periods of  meteoric growth.The US wine business is a product saturated, dynamic and evolving industry  meandering  through peaks and valleys on its way to maturity. But a little imagination on how to market, distribute and  sell you wine brand(s) will help in overcoming even significant obstacles on the path uphill. There are so  many distribution options available to wineries in DTT, DTC, or three tier models just use focus and creativity  in building your base channel strategy.

If your brand has limited distribution, then you have a lot of distribution voids. Start locally. No matter what you call your wine images-6country, you want to achieve distribution in local key reference accounts. Tourist come from all over the world to visit, to taste and to eat. If your wine is on a local must visit restaurant wine list or as a wine by the glass feature it creates not only trial but awareness. If you’re a Napa Valley winery, target the wine list at Cole’s, Tra Vigne or Bouchon. I was at Cafe La Haye in Sonoma last year when a distributor friendimages-3 from Texas ordered a bottle of Radio-Coteau. He’s now Eric Sussman’s Texas wholesaler. Years ago, Schmitt-Sohne, an unknown German wine brand without US distribution, established a tasting room at Disney’s Epcot and within 1 year had distributors in 50 states growing today to be one of the most successful of German wine brands in the States.

In order to build sustainable broad market distribution start building a key lighthouse and/or multi-unit on-premise account base. Begin in your immediate local market, then as production grows expand regionally. If you’re lucky enough to produce wine in a state that allows DTT distribution, or you’re working with a firm such as Inertia Beverage, key on what is now called national accounts.

images-7 Although SW&S’s Mel Dick always advises building your brands on premise  today I believe in a more diverse      distribution strategy. The ascension of the local mid-chain grocery provides quality distribution alternatives for fine    wine  sales. If you’re in St. Louis, you want your wine in Dierbergs, or  in Cleveland at Heinen’s, or at Nugget    Markets in Sacramento. And on a regional or national level distribution and features at Whole Foods will result in    significant sales. If you have a new brand that has garnered 90+ reviews from The Wine SpectatorThe Wine Enthusiast or The Wine Advocate and your goal is regional distribution in club stores such as Costco – then it’s achievable.

If you have unsold wine, understand that the burgeoning private label business is boomingimages-31. Rather than spending resources to launch a second label, consider the development of a private label wine for a regional beverage chain, a  mid-chain Grocer or with an emerging sommelier. The aforementioned Heinen’s in Cleveland offers Vin Hunter, a label developed by Wine Director Ed Thompkins.

Consider distribution in control states. For example, if you’re a small winery and decide to sell wine in Pennsylvania you will be in the PLCB speciality store system opening up the special order market to a state closed to most out of state winery DTC efforts, while providing the ability to access the important on-premise markets in Pittsburgh and Philadelphia.

ian-jpg1In order to drive more guests to your winery plan more effective promotions. Ch Ste. Michelle and Robert Mondavi do this through summer concerts. But this tactic is not just for the iconic destination properties. C.Donatiello has a great summer concert series – most of which are free. Newbies get to discover great wines, associate the wines with a memorable time like Gomez’s Ian Ball’s birthday concert and become members of a growing fan base.

Offer freemiums, such as online complimentary or twofer tasting coupons. Offer free ground shipping oimages1r additional discounts based on quantity purchases. Host a  group of local or visiting wine, food or travel bloggers such as the recent Hahn  vine planting forum, the St. Supery annual bloggers forum, or the Twisted Oak pre-WBC bloggers party.  Establish and maintain your Facebook and Twitter accounts. Don’t treat winery social media accounts as hard sales tools, but occasionally offer specials such as the first chance to get limited production wines. Initially limit this to your contacts, but count on this offer going viral.

images-21Focus on improving your customer service. Recognize the importance of your guests. Greet every visitor with a smile. Over deliver on their brief experience. Call your customers and thank them for their phone and internet orders. Let them know about any events, tastings or winemaker dinners in their home market. Solicit ideas and suggestions and then listen. Reward your most loyal customers at least once per year with an in-house members of the tribe event.

Imagine

images-5This list is not meant to be comprehensive. The above ideas are just suggestions meant to engage you the winery chief marketing officer and to encourage your brand building creativity. You have responsibility for your winery’s success. There is no one out there to hold you’re hand. Bury any inclination towards hubris and arrogance, and listen to what the market has to say. Pay attention to other wineries, big and small that are successful, and study just what it is that they do to create sales. Have the right staff with the right skills in place. Invest in resources, even as margins are squeezed. Spend time in your best markets and keep your eyes and ears open. Keep your pants up and your head down. And be prepared to work harder and smarter than ever to achieve the tasks at hand, but do it with a smile on your face, and the attitude that failure is not an option.

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

Networking Matters More Than Ever

Oscar Wilde“There is only one thing in life worse than being talked about, and that’s not being talked about.” … Oscar Wilde

In a modern computer centric world our Rolodexes have for the most part been replaced by CRMs. We’re wired and connected through our desktops, laptops,Rolodex netbooks and smart phones. We tend to ping each other rather than talk to each other, through connections on Linkedin, Facebook, FriendFeed and Twitter. How we identify and track our networks has changed, however it is still clear that the power inherent in networking has never been more important than in today’s product saturated wine market.

This week I received an e-mail from a dedicated reader in my blog network who made the following observation on contemporary interpersonal communications: “With all the focus Screaming Eagle Labelon social networking, I’m worried that the signal gets lost in the noise…So much noise that the point of social networking – building relationships – can get lost. Especially if you’re trying to sell high-end wine, you need deep relationships with consumers, not ones created in 140 characters or less. Facebook will never replace face-to-face meetings, lunches, interview, etc. It can augment, but not replace.”

Dear Reader:

The specific idea behind my blog was an attempt to raise the level of discourse concerning the field of contemporary wine biz marketing issues, and the concomitant desire to create a dialog with my readers. Part of this contemporary marketing landscape is the need for the effective application of e-marketing skills as applied to our complex, saturated corner of the CPG category. Of course there are often no real solutions in a single microblog post people talkingexpressed in a 140 characters. But perhaps there are answers and solutions in the resulting conversation. Effective wine marketing is a series of integrated actions leading to planned outcomes, trackable through specific metrics. Social media is a brand awareness tool that works only in concert with effective implementation of channel strategies, field brand execution, promotions, pricing, etc. Murphy-Goode’s current promo would be inauthentic, and ineffective if they didn’t have their brand house and e-house in order, and a fully developed network of guests, customers, clients and fans. Murphy-Goode is effectively reaching out to existing and new customers, creating additional brand touchpoints.

In an attempt to clarify the role of Social Media on improved brand performance, please note an observation from Pahlmeyer Chardonnaymy experience and noted marketing research in that wine consumers have a limited # of brands, or varietals in their preference set(s). Any mentions from good print reviews, to a product placement in a Demi Moore movie, or a write up by Alder Yarrow in the Vinography wine blog will tend to place one’s brand on the tip of the consumer’s tongue, and tend to predispose and shape  consumer  purchase activity, the goal of any cogent marketer. Also, winery sales management need compelling reasons to communicatNoisee to their distributor partners, gatekeepers and consumers. If a certain number of mentions, perceived as noise, predisposes a positive response from the audience, all to the good. The conversational noise of the Social Net can be be filtered into viable wine marketing buzz with the use of the Social Media aggregation and syndication tools from Cruvee.com. So, yes the Social Media digital handshake augments, supports, and sometimes drives commerce as a new part of old school wine industry networking best practices.

My blog is 1 of approximately 4 million existing weblogs that are written in total and 1 of about 250+ wine marketing blogs. My readership is targeted to a specific niche market, the emerging tech sector of wine marketing, i.e., CellarTracker, VinTank, Cruvee, AbleGrape, etc., also including the winery brand management, marketing research, consumer insights, anacademic analysisd strategic planning arenas. To limit my discussions to just deep academic analysis and thought, would perhaps limit readership, and in turn limit an understanding of the Social Media e-tools now available. But, please don’t confuse brevity with lack of thought or insight. Although reports like the foundation VinTank Social Media White Paper, are perhaps more important in moving the awareness needle forward, the bloggersphere performs a key wine business communication function . I’ll concede that many blogs are personal journals, quickly written, or restatements of news feeds, and that some may disappear without reader remorse. But perhaps blogs are like Thomas Paine’s Common Sense pamphlets, Red Meat issues meant to stir the pot, with some postings leading to a positive, meaningful discourse that moves the conversation forward.

Wine NetworkingAlthough I’ve focused my blog on wine business Social Media issues, hopefully I’ve done so with the POV of pragmatic integration. My goal has been to move at least one person to be a better wine marketer.  I don’t have all the answers, just a part in the real world approach to contemporary wine marketing that works. Marketing that works because it includes talking to and more importantly listening to our customers. Yes networking matters more than ever because we’ve now included the end user as a focus of that network. And, while our handshakes are now often digital, they hopefully convey the modern wine marketer’s intent to form meaningful, nurturing adjunct relationships in the new wine marketplace.

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