Observations of a Wine Marketer – Taste Napa Valley

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

Thoughts & Observations

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

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

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

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

Taste Napa Valley

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

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

The Wrap

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

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

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

Technology is not a Four Letter Word

‘If you can’t measure it, then you can’t manage it’ … classic B-School value proposition

The Challenge

Back in 1997 when I first started working and living in San Jose for Mirassou Vineyards as the National Sales Manager, I found myself in Silicon Valley in the middle of a revolution in science and technology based on a platform laid down by a post World War II generation of scientist and engineers. These were frenetic times in the South Bay, and the structure of today’s technological achievements was being built in a series of fits and starts. At the time consumer access to the internet was really only a few years old, and broadband was just a dream in a small lab in Telecom Valley. The Mirassou family had gone down some several dead-ends strategically in the development of their brand. A significant challenge was at hand. I faced a similar challenge years earlier at Walt Disney World when I was assigned the role as the supervisor for all of the food & beverage receiving clerks. Significant waste occurred on a daily basis as a result of over ordering limited shelf life foods. Ordering was based on a minimum/maximum par inventory level. A system that, even in the early days of an open and functioning Magic Kingdom, was already dated. Disney had a top line research department, and we had a monthly calendar of predicted guest counts. Decision on revenue budgets, levels of staffing and even operating hours were based on these forecast which were accurate within .5%. So, I did a 30 day research trial of food, item by item, usage versus actual guest counts. From there a specific relationship between traffic and usage was discovered, and a ratio or factor was assigned to the ordering system and quickly implemented by all food & beverage outlets. Food waste as a percentage of Park food service revenues was reduced from around 2% to .2%. The answer was in the math, and then in getting the system to accept the change. But the challenge at Mirassou was more daunting.

David Mirassou, who had gone to work for Fred Franzia, after College, became a star in Bronco’s chain grocery division. After a few years he returned to the family business, but was relegated to a role selling to and merchandising groceries in Northern California. I shared an office with David, and after implementing some necessary field staff changes, David became the Western Division Manager. At the same time I hired Michael Stedman as our sales analyst. Both David and Michael were very sharp in viewing and conceiving new ways of looking at the sales process. David built a detailed, sophisticated  Access data base, and then gained permission to login to his distributors’ AS400 data files. Importing the data in the form of a .cvs file, he created pivot tables to populate the data, and then used this information to manage his distributors by providing goals and monthly feedback on not only a macro level, but on a micro level, salesperson by salesperson. Michael Stedman built a national key account list for multiple channels, and then implemented a version of this system to target and track performance within this targeted set. A lot of work. The industry took note, and the Gallo Wine Company started tracking our performance. Gallo purchased the Mirassou brand a few years later; and, David is still driving sales leading to the continued dynamic growth for the Mirassou brand. Michael Stedman, after years in New York has returned to California to lead the marketing efforts at Domaine Chandon. Once again the truth was and is in the math.

The Solution

So you can imagine my interest when I read that on Tuesday February 9th, 2010 VinTank and Brixiom Systems announced a new strategic partnership. VinTank is the well known Napa, CA based strategic digital think tank. Brixiom Systems, is an Atlanta, GA based technology company that has developed SaaS (Software as a Service) based customer relationship management (CRM), sales force management (SFM) and warehouse management systems (WMS) designed specifically for the beverage industry. As such Brixiom Systems provides via the cloud, a product that incorporates wine and spirits product and business rules and integrates this unique design with traditional customer management resources. And this actionable CRM product is available anywhere that access to a browser is available – your desktop computer, your laptop, netbook or smartphone.

At the working demo today, Wednesday February 24, 2010 VinTank Founder and Chief Strategy Officer Paul Mabray kicked off the meeting with this on-point statement: “Sales is a science that requires sophisticated management tools, and surprisingly there has been a deep void in trade Customer Relationship Management (CRM) tools for wineries. Only now, with the introduction of Brixiom Systems, is there a product that truly understands the nuances of B2B wine sales management.  We are excited about the leaps and bounds this tool will give the wine industry for better visibility and business intelligence in managing the traditional sales channel.”

Mr Mabray introduced and then turned over the meeting to Andrew Suss, Founder and CEO of Brixiom Holdings. Mr. Suss, a Vanderbilt University Chemical Engineering graduate, started his first company The Charter Group while still a student. TCG provided software solutions and strategic IT consulting services for public and private companies and for educational and governmental agencies. Mr Suss went on to found Brixiom Holdings in the Spring of 2008 with the goal of providing online tools to the drinks industry. Mr Suss launched his presentation stating that “We are truly excited to Introduce Brixiom Systems solutions to the Wine and Spirits Community.  Our products allow for an unprecedented level of information visibility, and enable remote users to access corporate data from wherever they are, via the web and smart phone devices” As the demo progressed, I realized that in this seamless sales automation solution developed by Andy Suss, that rather than shoehorn an existing CRM solution to fit your business model, Brixiom Solutions provides a customizable, scalable, affordable and integrated sales relationship package with transactional, engagement and analytical features with a dedicated beverage industry interface.

VinTank Partner, in charge of Business Development & Operations, Clay Wallin, a Vanderbilt MBA who in early 1999 co-founded eSkye Solutions, discussed working on a similar product in the formative days of eSkye, but ran into a wall at the enduser level. Under Clay and Smoke Wallin’s leadership, eSkye developed market dominant eMarket Channel applications and sold to Orion Wine Software In 2008. Mr. Wallin noted that “Brixiom Systems is a unique tool for wineries, importers, and distributors to collaborate like never before. It enhances sales productivity, and the reporting is robust and customizable”

The Message

In October of 2009 Wine Business Monthly published my CRM product review, that focused on specific functional CRM solutions for sales force automation. While these are all superior products with specific applications within the Sales, Marketing and Operations departments of wineries, none have the level of integration that Brixiom Solutions offers to contemporary winecos. The beverage industry reporting functions (compliance, taxation, samples, bill-backs) alone will allow a level of efficiency and savings that will more than justify the modest cost.

I’ve often observed that the recommendation of the adoption of new technological solutions in the consumer facing segments of the beverage industry business is often met with the look of someone who would much rather be someplace else. The investment in new technologies is often avoided by wine companies who view their current non-integrated systems as adequate to their needs. Is that really working for you anymore in this saturated and hyper competitive market? If I was either an enterprise wineco, or a small family winery, I would want to grab the competitive advantage that Brixiom Solutions provides by improving information flow and program execution. Become the supplier of choice to your distributor partners by increasing channel communications and collaboration. Differentiate your wineco from the competition by being seen in your marketplace as technologically advanced. If you do, you will see improved trade and sales efficiencies resulting in reduced cost of sales (COS) reduced points of friction and improved targeted distribution.

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

Haiti – Roshambo – The Winter Fancy Food Show – Wine Tastings

“Man should not consider his material possession his own, but as common to all, so as to share them without hesitation when others are in need.” … St Thomas Aquinas

Haiti

Referencing what is now a well publicized event, Palate Press Publisher David Honig announced the teaming of the online wine magazine with ‘Brother, Can You Spare a Bottle.’ Palate Press is asking the wine world to contribute that special bottle of wine from your cellar for an online wine auction, with 100% of all proceeds being contributed to the American Red Cross Haitian relief effort. The celebrity Hope for Haiti Telethon is over, and the star power of George Clooney and Brad Pitt have exited stage right. And, while the NFL has stepped up with a drive to raise funds for Haiti via cell phone texting, it’s now our industry’s turn to step up, and offer some of the best of our resources, as we often do.

Those of us who make our home on the west coast, know that but for luck, this could be us. We live with occasional shaky ground and the fortunately less frequent significant earthquake event. But unlike Haiti, which is the poorest of nations in the western hemisphere, those of us in the wine business know that sometimes part of our daily decision process is whether to have a Syrah or a Pinot with our roast Rocky Chicken, and not the Haitian’s constant plea of  ‘where can I find food or water today.’ It’s likely that, by the time this post is read, Think Wine Marketing’s donation of a 1.5L of 2004 Radio-Coteau Savoy Anderson Valley Pinot Noir will have been sold (and it has – thanks to Andy Demsky of Shafer Vineyards). So, thanks to those who not only bid at Palate Press on TWM’s lot #13, but on all of those who bid and to those who provided the most interesting selection of wine collectables for this unfortunately necessary outreach. However, there still are many terrific lots in the auction catalog for your consideration, and it’s not too late to submit your own bottle(s) for bid. TWM’s view is that this isn’t a hand-out, but a hand-up to those who are now most in need of assistance.

Roshambo

The Santa Rosa Press Democrat recently ran an article covering the closure of Rashambo Winery and the subsequent withdrawal of Naomi Brilliant from the wine business. It is an interesting read, but to me this is a story of the career redirection of one individual and not a symptom of a wider wine industry systemic financial failure. What follows is a comment by Think Wine Marketing made as part of the conversation at Alder Yarrow’s Vinography thoughtful analysis in his article “Marketing and Branding Do Not a Winery Make.”

TWM: “Thanks for the cogent POV re another wine business closure. I don’t see the Roshambo case to be an example of a canary in the coal mine. A wineco’s economic sustainability in today’s economic and cultural environment, in reality, requires a complex set of marketing and financial skills that go beyond the visuals of buildings, labels, and personalities. And it’s more than communications, pricing and promotions. Basics include, as part of a long skills list, the development of a diverse strategic channel model: Three-Tier distribution, DTC (bricks & mortar visits, winery iStore, wine-club, and ecommerce), and DTT; and, the implementation of a focused market model to answer the questions of who, what, when and where your wine can and should be sold. As a wine biz bootstrapper that means going out to targeted markets and shaking a lot of the right hands, the hands of consumers, buyers and decision makers with the express intent of revenue creation. For a variety of financial and personal reasons, many lifestyle wineries still exist , and yes a few of these will close, with Roshambo being the most recent example. It seems as though Ms Brilliant is now marching to the beat of a different drummer.”

The above comment and an additional comment made by TWM on Alder’s post reflects TWM’s take on the well documented change of direction for Ms Brilliant and the Roshambo Winery. Success and failure often travel down the same road, but from this perspective, one winery’s hiatus doesn’t a stampede make.

The Winter Fancy Food Show

I attended the NASFT Fancy Food Show this past Monday, January 18th, at the Moscone Center in San Francisco. The production and sale of food is not only part of my life/career experience, but part of my DNA. My varied background includes stints in Disney food & beverage management and as the buyer/operator of Walt Disney World’s grocery ops. Plus, my Grandfather D.M. Sears, a food scientist, worked for the H. J. Heinz Co. in Pittsburgh, and for a leading wholesale grocery concern Reid, Murdock & Company in Chicago, before founding his own branded food production company in Ft Wayne, Indiana, producing ketchup, mustard, sauerkraut, deviled ham, relishes and pickles. The pickle business still survives as Sechler Pickles, thanks to the acquisition by Ralph Sechler of my Grandfather’s St. Joe, Indiana pickling stations. But more than being part of my DNA, I always learn quite a bit from contemporary specialty food marketers re.:

  • trends
  • packaging
  • promotions
  • marketing communications
  • relationship and business development
  • positive examples of small biz bootstaping
  • channel models and channel strategy in a consolidating market

Having only one day to cover the multi-hall location of a show with more than 1,300 exhibitors, these are booths that grabbed my attention:

J&D Foods, the home of Bacon Salt, and Baconaise and now bacon popcorn
Nueske Applewood Smoked Meats…can you say bacon. This Wisconsn based producer is very well known and valued in food service. Also, a great consumer facing brand.
Mia’s Kitchen, a division of Don & Son’s. Not only my hometown friends (I once worked for Mia’s dad), but quality sauces in top drawer packaging.
Jelly Belly, always innovating with product and packaging. Did you know that they offer Jelly Belly wine pairing recipes?
The Craft Brewers Association booth. I’m guessing that you wouldn’t be surprised to hear that this was the busiest booth at the show on Monday. Not only were interesting beers available to taste, but they were being poured but an impressively knowledgeable, somewhat quirky group of passionate brewers.

The takeaway from this event that can be of value to smaller family businesses is that in this greater CPG segment consumer facing brands are experiencing the same consolidating channels and product rich fast product cycles as wine, the following strategic actions matter:

  • Focus
  • Quality
  • Innovation
  • Packaging
  • Sharp pricing
  • Know your product
  • Have an elevator pitch
  • Professional but friendly demeanor
  • Owner involvement in sales and marketing
  • Diversified channel strategy and implementation
  • Have a real, hands-on relationship with your market

Notable Upcoming Wine Tastings

This Thursday, January 28, 2010 The Vines of Mendoza is conducting an online wine tasting with Mendoza winemaker of note, Walter Bressia. Although there are two ways to participate in this tasting, either via a Webinar, or through a real time Twitter tasting, I’m going to participate on Twitter. I’ve been looking forward to this tasting since receiving my wines from Vines of Mendoza, last week, and it looks like atleast 2 of my wine blogging colleagues will be participating,  Frank Gutierrez of Frank Loves Wine and Ward Kadel, aka drXeNo. I’ve actively participated in prior online tasting events, previously on the Taste Live platform, such as

Open that Bottle Night at Back Room Wines

Hospice du Rhone 2009 at Estate Sonoma,

Pinot Noir tasting at Wilson Daniels organized by Lisa Mattson and Agent Red of The Wine Spies

Jordon Mackay’s “Passion for Pinot”  Taste Live Event at The Jug Shop. 

All the Taste Live and Twitter wine tasting events have been a blast, and more than informative, and effective in creating wine centric conversations, while also creating brand buzz. While I’m familiar with Argentinian wines, I’m not familiar with Argentinian wines at these price points. Last year, I picked up my friend and wine biz colleague Scott Becker at the San Jose Airport at the end of a long flight from Argentina, after his plane was diverted from SFO. All he could talk about was the quality of the top end wines now available from Argentina, especially those from the Vines of Mendoza. Now I’ll be able discover for myself. As a family winery, have you considered a wine tweet-up or the Taste Live format to create buzz and awareness for your wines? If not it should be on your brand promotions calendar for 2010.

On Saturday, January 30, it’s ZAP’s 19th annual Zinfandel Festival at San Francisco’s Ft. Mason, that’s on this wine marketer’s calendar. Zinfandel has been on my map since my earliest wine tasting experiences, and this is an event that if you’re a member of the press, trade or a consumer, should be on your bucket list. I’ve been to 10 ZAPs, and circumstances prevented me from attending last year. I’m not missing this year. Yes, I know it’s crowded, and the crowd likes to have a good time, but that’s part of the excitement. And it helps to create a positive buzz, and reinforce the role that Zinfandel plays in the culture of California’s wine industry. Word is that the 2007 Vintage is outstanding. So stay tuned for my take on the ’07 Zins in a future post. I’m also looking forward to saying hi to old and new friends. Also, ZAP is not only wine blogger friendly, but on the cutting edge of recognizing the contribution made to Zin awareness by this group of communicators. So, a special thanks to my colleague, Thea Dwelle, for her contribution in making this happen. If I don’t see you online Thursday afternoon for the Vines of Mendoza Taste Live event, hope to see your IRL at ZAP.

Note: Copyright © 2010 Think Wine Marketing® All rights reserved

Reflections of a Wine Business Blogger

“Sometimes I lie awake at night, and ask, ‘Where have I gone wrong?’ Then a voice says to me, ‘This is going to take more than one night.’”

Charles M. Schultz

The Decision to Write

As my eyes opened on the morning of January 1, 2010, I realized that I had survived what Time Magazine described as ‘The Decade from Hell.’ Oh, a bit beaten-up and feeling a little like one of John Stewart’s Black Pig Meats salumis at the end of the sausage making process. Yes, the economic events of the past 10 years have put most of us through the grinder, but here we are at the other end, having survived to make, market and sell wine another day. A little more than 9 months ago, I started writing the Think Wine Marketing blog. My timing coincided with the bottom of the business cycle. In short order the US stock market had lost more than half it’s value, ending March ’09 with a Dow Jones Market index below 6,500. Housing values, the base of asset wealth for most consumers continued to decline in all but a handful of smaller SMSA’s. Credit to small businesses had been so severely constricted as to be non-existent, especially for wineries with slow moving, devalued inventories. Times were tough for the wine industry. Before this recession, now called ‘The Great Recession,’ the wine industry has always been considered to be recession proof; but, this time at best our industry has proven to be recession resilient. Several cultural and structural changes were accelerated by the difficult economic times that had direct effects on wine sales. As consumers rushed to reduce credit card debit and increase their rate of savings , a significant downward segment shift hit wine pricing almost overnight. The pressures on pricing and the shift from fine dining to a more casual food experience with an emphasis on value, led to a rapid change in channel strategy for many wineries. The rapid movement from an on-premise focus to retail distribution had eviscerated any pricing leverage that formerly not sold at retail wineries had displayed, squeezing profits and/or creating negative margin sales. In light of the current times I decided to write a blog focused on wine marketing. A blog that in part told stories that would be of some help to smaller family wineries in these difficult times. I took a Socratic approach of creating a central narrative and then providing a workbook like ending. As I look back over the last 3 quarters of 2009, and look forward to 2010, I hope that I’ve helped provide some positive mentoring to at least a few family winecos out there in the ether.

The Metric System

While never concerned about gross numbers as the sole metric of success, as an experienced marketer I do track the number of hits and reads that the Think Wine Marketing blog receives. However, my primary concern is/and has been just who is it that reads my blog. It is specifically wine industry marketing centric. My readers for the most part, based on comments and emails are winery principals, GMs, CMOs, PR directors and brand managers. Based on blog originated emails, which have outpaced blog comments by a factor of 10, the TWM blog also has a demonstrable following in finance and in tech. I’ve written 33 blog post in nine months, that have received 149,117 hits of which 56,321 (37.8%) were a result of search engine crawlers, resulting in a net of 92,796 reads, numbers easily exceeded by experienced wine writer/bloggers like Tom Wark, Alder Yarrow and Steve Heimhoff in just a few months – with the following think pieces being the top 10 posts – re. close of business on 1/6/2010.

2009 Top Ten TWM Posts

  1. Nov 17            7,475   — Doctor Pinot’s Thanksgiving
  2. Oct 7               7,434   — Revisiting Marketing 101
  3. Nov 4              7,126   — A Conversation about marketing wine online w/Paul Mabray
  4. Sep 17             6,956  — Marketing by Pulling Corks
  5. Oct 20            6,334  — The Conversation
  6. Sep 24            6,165   — Does your winery have an effective OND plan?
  7. Aug 26           4,534   — Dispatches from Wine Country
  8. Dec 23           4,430   — Y2K10: Part Two: late 90’s tech effect on wine ecommerce
  9. Jul 27             4,259   — Dispatches from the 2009 Wine Bloggers Conference
  10. Sep 9              3,860  — Wine Brand Building Focus

Beyond noting that I have loyal readers, who have provided significant support, input and feed back, the fact that the Think Wine Marketing blog has received recognition from the wine industry and in the wine press is gratifying.

That Was the Year That Was

  1. The March 2009 acquisition of Scrugy by Cruvee in early March 2009 by CEO/Founder, Evan Cover. Scrugy Founder and Chief Technology Officer, James Jory joins Cruvee as V.P. of Technology.
  2. The Think Wine Marketing Blog is launched on March 26, 2009 with the post ‘Viral Marketing Strategies for Wine Businesses.’
  3. The State of the Wine Industry Social Media’, by VinTank, Derek Bromley and Tom Wark published 5/6/2009 and available for download on the VinTank web site. IMHO this is and will be considered the foundation document of the wine industry’s involvement in the social media movement.
  4. American Canyon based wine shipping and fulfillment company New Vine Logistics suspended business operations on May 29th, 2009. The story was broken on Twitter by Larry Chandler, aka LarrytheWineGuy.
  5. The 2009 Wine Bloggers Conference at the Flamingo Resort in Santa Rosa, CA the last week of July, 2009. This was not only a well planned and executed conference, but the opportunity to meet so many wicked, smart citizen bloggers was amazing. Kudos to Joel Vincent and the Open Wine Consortium.
  6. The August 13th appointment of Think Wine Marketing founder John Corcoran (that’s me) to the Board of Advisors at Cruvee.com, a wine business intelligence platform.
  7. On August 25th, Des Moines Iowa environmental attorney Charles Becker publishes ‘Wine and Global Warming: An open letter to the President.’
  8. RJ’s Wine Blog names the TWM blog of the Month for September 2009. If you’re not reading the frequent posts from Avenue A/Razorfish alum, R.J. Hilgers, please click on the link to check this A-List wine blog.
  9. On September 11th The Wine Spectator Senior Editor James Laube reports that cult Pinot Noir producer Kosta Browne sells for a reported $40 million.
  10. On September 28, Williams-Sonoma Founder Chuck Williams speaks on the lessons of customer service at Sonoma’s Maysonnave House.
  11. On September 29th, Wine Business Monthly publishes, as a cover lead, TWM author John Corcoran’s CRM, sales force automation article.
  12. On October 5th, the online wine magazine Palate Press published Paul Mabray’s article ‘New VinTank Research Analyses Wine iPhone Apps‘, winning praise for both wine consumers and the wine/tech segment of the wine industry.
  13. On October 25th Amazon suspends their on again off agin wine sales efforts. The demise of the Amazon.com wine store was laid at the feet of the arcane and balkinized labyrinth of state wine laws. Wine writer, W. Blake Gray wrote in the December 3rd post on his blog the Gray Market Report that Amazon withdrew because of taxation issues, “not just on wine but on everything.”
  14. On October 28th Cruvee & Vinfolio announce a partnership in which user generated reviews incorporated into Cruvee’s social media management platform. On November 24th Cruvee and Cellertracker announce a partnership giving Cruvee clients direct access to over 1.1 million wine reviews. This series of appointments/partnerships along with the subsequent December 3rd launch of The OwnIT movement helped to consolidate wine data and give wineries control over their brand communication. This innovative and free service from Cruvee.com was created to provide a platform “giving you control over how your wine is represented online.”
  15. On December 23rd the TWM blog received recognition from Dale Cruse and the Drinks Are On Me blog as one of the top new food and drink blogs of 2009. Bob Dwyer wrote a very nice review, which is not surprising given the quality of  writing on his blog, the Wellesley Wine Press.
  16. On December 28th Eric LeVine released a sneak peak demo of the new CellarTracker redesign.
  17. The TWM blog landed the #5 spot for the 10/7/09 post ‘Think Wine Marketing: Revisiting Wine Marketing 101’ on the 2009 Most Visited Blog Postings List on Winebusiness.com.

Observable Lessons

Dear Reader, I hope that my blog posts helped you to imagine ways to develop not only a sustainable wine business model but to envision more innovative route to market strategies and branding initiatives for 2010 and beyond. 2009 was a year that presented significant challenges to wine businesses regardless of size or location. It is my experience that out of chaos comes innovation. Observations that I’ve made over time that the Great Recession tended to reconfirm are: Identify your strengths and outsource functional areas in which you don’t do well; Hire and retain talent; Understand, even in an age of social media, that you own and are responsible for your brand(s) reputation; Understand that wine marketing is more than price reductions and promotions; Diversify your channel strategies; Rethink three tier distribution and investigate DTC (as more than tasting room sales) and DTT solutions to include digital distribution; Incorporate the appropriate sales and marketing focused technologies such as CRMs; Convert your wine business from a production centric culture to a sales and marketing focused culture. It’s now time to roll up your sleeves, and to focus efforts on driving your wine businesses to success in the new year, and in the new decade.

Note: Copyright © 2010 Think Wine Marketing® All rights reserved.

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.

Revisiting Wine Marketing 101

Leo Burnett“If you don’t get noticed, you don’t have anything. You just have to be noticed, but the art is in getting noticed naturally, without screaming or without tricks.” … Leo Burnett

Chicken Little

Yes indeed, the sky may be falling. The Great Recession, which in the 6 months from September 2008 through March 2009 stripped in excess of $6.6 trillion from USA personal wealth, may be with us for awhile. The access to credit that drove US consumer spending behavior and the economy has largely evaporated. Although consumers have paid down debt at aiDepression Bread Lines coming soon to your neighborhood record pace, banks continue to reduce credit availability, expecting to retract an additional $1.5 trillion by lowering home equity loan access, consumer credit card limits and commercial lines of credit, restricting the ability of the US economy to recover recent spending patterns. Something lost in the swirl of marketing images from luxury Paneri Watchesconsumer brands such as Panerai Watches, Hasselblad, Hermes, Ferrari, Tom Ford, Christian Louboutin, Michael Kors, et alia, is that under the aura of glitz America has been on sale for quite sometime. Just like disco, to many consumers the idea of the luxury brand may be dead, at least for the foreseeable future. Value has coexisted with the concept of brand as long as brand has existed. It’s the yin and yang of the retail continuum. Walmart created explosive growth in the 1990’s with the concept of everyday low prices, and then created significant competition to chain grocers with the introduction of consumables in both Walmart and Sam’s Club stores. Costco has been in the game for awhile, and has become a major factor in wine sales. Target introduced the idea of designer products at value pricing, and now will match Walmart pricing toy for toy this Safeway Cut Case Wine Display w/Sale pricingChristmas. And then there’s Amazon. Amazon is no longer just your bookstore, but now a major online retailer across several categories of consumer goods and electronics. And, as soon as the compliance situation, delayed by the well documented situation at New Vine Logistics, can be sorted Amazon will be a major factor in wine sales. Trader Joe’s introduced the concept of healthful foods at value pricing back in the 1970’s. With the latest US Labor The Economic Elevator's going SouthDepartment statistics pegging the jobless rate at 9.8%, this is a dramatic understatement of the now real number that’s closer to 17% including people no longer actively looking for work and those now underemployed and working non-benefited minimum wage part-time jobs. It’s not surprising to see major retailers and grocers follow a strategy of value pricing. For anyone in this neck of the woods if you’ve been in Safeway recently the major merchandising theme is SAVE, and the yellow sale tags are inescapable. Lucky stores are following their philosophy of everyday low prices. And overriding this is a spirit of the new consumerism. It’s now cool to be frugal and save money.

The New Wine Consumer

San Francisco TrafficAs I worked my way to the Mission Street Garage traffic slowed to a crawl, in part due the rerouting of traffic away from Market Street. I was in the process of doing a NorCal broad market survey of grocery and independent package stores for a privately held family winery client, and it was time to break for lunch. Since my last two stops were in SoMa, I was headed to the food court in the Westfield Center, and to Charles Phan’s ‘Out the Door.’ Even though it was only 12:30 on an early October Friday, the joint was jumping. The food court was packed with shoppers, most holding multiple bags. The noise level sounded, well actually felt, like a low roar, creating a sense of excitement not present in the City’s shopping Out the Door at the Westfield Center, San franciscodistrict for several years. One of my early retail lessons at Disney’s Lake Buena Vista Village, was to look for the bags in shoppers hands as an indicator of a good or bad day, and this looked like a good day. All of this economic activity seemed to be driven by the aggressive mark-downs and clearances in the stores in the Center. Pricing motivated by the need to make room for holiday merchandise, and these pricing strategies seemed to be working. Consumers have been on the sidelines, even during the recent back to school shopping period in August. But sharp advertising and in store media seemed effective at getting shoppers to reopen their wallets. The efficacy of the various campaigns will be reflected in each stores daily flash reports. The tide may be turning, however slowly, as consumer sentiment seems to be Inflection Point Graphdriven by value, with the economic thermostat having obviously been reset. An economy that now seems more driven by consumer needs rather than by wants. And the need for value seems to be paramount as a new inflection point in consumer purchasing behavior has been reached. So, in an age of cash for clunkers, extended unemployment benefits and tight credit what can we do as wine marketers to meet the contemporary challenges of the market. Let’s take a quick revisit to the basics of consumer packaged goods marketing (I’ll try not to be too wonky) by first asking the following questions:

  • Who are the buyers?
  • How much will the buyers pay for my wine?
  • Where and how will the buyers purchase my wine?
  • How do I create buying situations?
  • Is the customer happy after purchasing my wine?

Marketing 101 Revisited

  • Product – the want satisfying offering of your winery (branding, packaging, product features)
  • Price – what you charge for your wines. Price is a measure of value. Price in the marketplace is a rough measure of how your consumers value your wines
  • Promotion – the communication of information between your winery (the seller) and the potential buyer in a defined channel (Place) that tends to influence attitudes and behavior
  • Place – making goods and services available in the right quantities and locations when your customers want them, resulting in the transfer of ownership from producer (your winery) to your customer/client, taking into account strategies and tactics applicable to any middlemen, brokers, marketing agents, wholesalers and retailers

Wine Business Monthly Top #0 US Wine CompaniesToday most wineries are micro marketers. Even wineries in the WBM Top 30 approach the market on a segmented basis. Micro marketing is the ‘performance of activities that seek to accomplish an organization’s (your winery) objectives (selling your wine on a timely basis) by anticipating customer or client needs (marketing research) and directing a flow of need satisfying goods (your wines) from producer (you) to customers/clients’ (via DTC, DTT, broad market).

It is important to understand that we are no longer in a wants period of aspirational or conspicuous consumption, but in period of meeting the specific identifiable needs oAbraham Maslowf your targeted audience. Without entering the maze of Abraham Mazlow’s ‘hierarchy of human needs,’ here are the basic definitions of wants and needs and demands:

  • Wants – desires for specific satisfiers of deeper needs; i.e., the particular choices (including types of products/specific brands) that consumers aspire to buy to satisfy perceived needs.
  • Needs – a state of felt or real depravation of some basic satisfaction (the difference between a consumers actual condition and their desired condition).
  • Demands – wants for specific products that are backed by an ability and willingness to pay for them.

Wine Consumers at Benziger WinerySo, as wine marketers it is important to understand that we don’t create needs. Needs preexist marketers and their brands. A marketers function is to influence wants. A good marketer takes the initiative in stimulating and facilitating commerce. A key part of this function is understanding the market and your consumer. So, how can one identify the best possible markets, and then influence consumer purchasing behavior? Engage your marketing research resources and ask:

  • Who are the people with identified wants?
  • Where are these people?
  • What’s their purchasing power?
  • What’s their buying behavior?

Having asked and answered the above questions, what degree of market exposure do you want, or more importantly can support with your production, allocations and resources, human and capital?

  • Intensive (ubiquitous distribution for large production, enterprise wine companies)
  • Selective (by channel for mid-sized winecos, or for products within an enterprise wineco where price dictates targeted distribution)
  • Exclusive (small- family winecos with limited channel distribution, or luxury brands model)

Having now identified your market and your desired level of targeted distribution, what sort of consumer behavior response do you want to engender – routinized response behavior or adoptive response behavior?

Routinized Response Behavior – the regular selection of a particular way of satisfying a need. This is typical of low involvement purchases, generics or purchases motivated by price or perception of price.

Adoptive Response Behavior – the demand for a specific product that meets, on a regular basis, the hierarchy of needs of a buyer, and the continued ability to purchase your wine(s). This is typical of high involvement purchases, usually of products (wines) within a consumer’s brand set.

Sale tags on all the winesAs a marketer, if you plan to sell your wines in a saturated market based only on price, in essence creating a commodity and not a brand, in what has to be by nature a rapid depletion exit strategy, then the idea of routinized response behavior is the way to go, and pricing and display allowances will be your primary marketing tactics. However, if you want to build a brand even in this challenging market, then engage in marketing tactics that create adoptive response behavior within your identified consumer set.

Wine Consumer Adoption Process

Awareness – comes to know your wine(s) through your brand awareness plan that may include category specific magazine reviews, scores, story placement, newspapers, blogs, forums, and social media.

Interest – the ease of finding information on your web site, forums, blogs and traditional wine press. Events like Twitter Taste Live, open that Bottle Night or Tweet-ups.

Evaluations – providing information and access to your wine. In addition to the traditional wine press new points of information such as Cellar Tracker, AbleGrape, and approximately 800 wine bloggers are a resource that you need to identify and utilize.

Trial – the chance to try before committing. Wine by the Glass, in-store sampling, winery tasting rooms, winemaker dinners.

Decision – to adopt or reject. A whole set of modifiers come into play, such as varietal, pricing, packaging, where and when available to purchase.

Confirmation – the reinforcement that the decision is good. This can be in the form of availability or rarity, appealing to cultural values (sustainable or biodynamic wines), based on acclaim, reviews or a wine blog, or on the affirmation from friends or family.

The Game

Twins beat Tigers in one game playoff 2009Without a thorough grounding in classic CPG marketing fundamentals and a clear understanding of wine brand marketing concerning human motivations in regards to purchasing behaviors, success in today’s highly competitive and product saturated marketplace is not likely for your winery. This somewhat academic take, a departure from my usual ‘how-to’ articles was written to encourage you, your winery’s marketing officer, to think about your current brand plan. Concerning your brand – what is it that you do and why do you do it? Is it working? What would you do differently? What are you doing to differentiate your wines? It’s not a time for indecision in your consumer facing wine business. Faced with declining sales in his collection line Michael Kors quickly introduced a consumer approachable ready to wear line and is thriving in a brutal retail market. Yes, times are tough, and consumer behavior has been reset, but commerce moves on. It is important to be in the game, so sharpen your pencils and fire up your synapses. Preparation and planning = performance.

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

Does your winery have an effective OND plan?

Dave Barry“Once again, we come to the Holiday Season, a deeply religious time that each of us observes, in his own way, by going to the mall of his choice.”
Dave Barry

The End of Innocence

Now that, according to Chairman Bernanke, we’re at the end of the recessionary crisis, don’t you feel like you’ve been a passenger on Ozzy Osbourne’s ‘Crazy Train,’ and at the end of the ride Axl Rose is welcoming you to the jungle. Well, if one’s to believe all the press, it has been a jungle out there. Consumer behavior has been difficult to predict, as trends in recenJulia Childt spending patterns have only now begun to make sense. Consumer credit card debt has been significantly reduced, and there’s been a concomitant raise in the rate of savings from less than 1% of income to more than 5% resulting in a noticeable drop in consumer spending. An example of the nationwide impact on dining-out is demonstrated in today’s Zagat Survey PR release ‘SF Bay Area 2009 Zagat Guide San FranciscoDiners Adjust Habits in Response to Slow Economy.’ Wine sales and wine values as a result have been flat in the latest rolling 52 weeks report. Questions still remain as to the nature of any long term shifts in behavior, and if or when there will be a return to what was viewed as normal. Some of the analysis, even by those who’s insights we’ve come to value, of the situation have been somewhat myopic. Several of the changes in wine sales and marketing that we are now experiencing are fundamental structural shifts that were both exacerbated and accelerated by the recent hard times. There has been for some time a move from traditional white table cloth dinning to a more casual dinning environment, even with the increased sophistication of American cuisine . Guest check averages grew faster than the rate of inflation as business diners supported restaurants in urban MSAs. On-premises experiences have evolved and will continue to do so. Business expense accounts have been reigned-in as T&E budgets are rationalized to revenues. While its Jacques PepinAlice Watersseems surprising that entertaining at home has increased, Faith Popcorn was talking about nesting for aging boomers a decade ago The effect that Chuck Williams, Julia Child, Jacques Pépin, Alice Waters, et alia had on the American domestic cook has now made home dining chic. The shift in sales channels for premium and artisan wines from on-sale to off-sale, while well documented, has been a shift that’s been occurring for some time. A change that in part has been driven by frequently changing (desktop publishing) and more focused wine lists, and a vibrant off sale market driven by groceries, chains, club stores and innovative independents.

Let’s Get it Started

August 18th Start of Crush at Schramsberg It’s the last week in September marking the 1/3 point of the ’09 Crush. Now that some if not most of the Pinot and many of the white varietals are in-house, the seasonal harvest temperatures are starting to climb towards triple digits bringing smiles to the faces of vintners and growers throughout wine country. Most every year it’s a time of optimism, especially after what’s this year been referred to as an optimal growing season. Everybody at the winery seems busy in the pursuit of a zen-like perfection. Crews hovering over sorting tables thaRobert Conard at the C Donatieloo Winery sorting Pinot Noirt are now commonplace as all hands are on deck insuring that only optimal fruit makes it into the wine that you’ll be drinking in one to two years. Even if the hours are long and days-off are rare, it’s a vibrant time with midnight picking schedules, large farmer’s breakfasts, and plenty of beer at the end of the day. The economic panic of the last year, and the resulting decline in sales have been temporarily forgotten as all the physical and emotional energy is willingly put into the winemaking process . The intense process that is winemaking, as evidenced by the game faces displayed by winemakers, from Santa Barbara to Yakima and all the way to the North Fork of Long island, from the middle of August to the middle of December each year continues unabated until every lot is barreled down. The enthusiasm created by the annual wine grape harvest and the esprit de corps generated has often served as the launching vehicle for the important last quarter sales period. A period known within the beverage distribution industry as OND for the months of October, November and December.

Pump it Up

Judith Owen & Harry ShearerA late start to the upcoming holiday selling season has been forecasted by a number of beverage industry analysts. That may be the case, and we’ll all know soon enough. But hopefully, as the chief marketing officer your winery programing and promotions calendar is in place and ready to go on Thursday, October 1st. A reasoned look at the situation would seem to dictate that now is the time to get off your wallet and put on your seasonal game face. Differing sales channels will require unique tools structured to the idiosynchrocies of each. It will take innovative pricing structures to maximize your sales effort in Q4 of 2009. Christian Miller of Full Glass Research has shared that a recent survey of on-premises wine sales by the Wine Opinions Panel, revealed points of price sensitivity for list above $60/bottle, and $16/glass. So, depending on your resources it’s time to create programing for targeted restaurants accounts with this fact in mind. In addition to doing line-up tastings each working day at targeted restaurants, stick around for the early diners and offer an amusChuck Williams at the Maysonnave House in Sonoma, CAe bouches of a 1 oz pour of your listed or featured wine. As Chuck Willams said at the Maysonnave House this past week in Sonoma, ‘make the customer your friend.’ Also, spread your efforts across differing channels, hotels, catering, urban hot spots, large independents, ethnic cusine, entree specific and targeted lighthouse accounts. For off-sale, your POP materials, flow shelf talkers and back card should be pre-packed within the case. Provide high resolution, grabbable images on your winery web site for sell sheets, review talkers, labels bottle shots and tasting notes, etc. This will help to maximize ad placements and possible Sonoma Market Wine Displaydisplay activity. Discounting will be aggressive this OND, but you don’t have to compete with the big boys, be innovative in your tiered pricing, display allowances and use of coupons, including co-branding, non wine merchandise discounting, MIRs and occasional IRCs. Remember a basic rule in merchandising, hangers on 4-6 bottles, not on all 12 in a case. Oh, and Saturdays are great for in store tastings and/or bottle signings. If you’re relying on your tasting room and your wine club as your only DTC options, please consider the many other options available, such as third party wine clubs. This is a specific area in which sub-channel diversity will be the norm, but that’s not the case as yet. Assume the role this OND as a bleeding edge DTC leader.

Winter Song

Happy HolidaysI’ve been researching a series of articles written about the apparent market softness in the wine industry, and it seems that most of the noise is centered around the volumetric end of the business. As a small or mid-sized winery looking at flat as up, you can be much more innovative in your distribution strategy, and much more agile in the execution of your holiday marketing tactics. OND is your Crush time, so this selling season you should heed Warren Zevon’s words ‘I’ll Sleep When I’m Dead.’ The big boys aren’t sleeping at this time of year. Wineries in your competitive frame likely aren’t sleeping either. Go out there and shake a lot of hands, the hands of old and new friends. You can rest in January, at least for a few days.

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