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Uncertain times mean it’s time to change

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Something is happening out there in the wine industry, and by that I mean everything from wineries to wine stores, wine magazines and restaurants.

You can feel it in the air, like the first tang of chill in advance of the coming of Winter. It’s the taste of change, innovation, experimentation. As people realize — belatedly or not — that the old ways no longer work, they restlessly seek new ways of doing business. Gropingly, for there are no road maps into this dark future, they feel their way forward, grabbing an idea here, an idea there, brainstorming, trying to come up with a 2.0 or a 3.0 plan that will get them through the uncertainty and, just perhaps, land them on top.

I saw evidence of this yesterday at my San Francisco tasting group. Our leader, Gary Cowan, of Fine Wines International, had a little video cam set up on a tripod on the table, a first for him. After suitable jokes about Homeland Security and black-boxing our faces, Gary explained that he’s now putting videos up on his website, to help him sell his wines.

One of us, a restaurant guy, quipped, “To sell wine nowadays, you have to play with gadgets.” To which Gary replied, in all seriousness, “The days when a retailer just ordered wine and waited to sell it are over.”

He might have substituted, for the word “retailer,” “restaurant” or “winery.” No longer is it enough to make and sell wine and then expect the world to beat a path to your door. (Well, unless you’re Lafite in China, that is.) Today, sellers have to reach out to their customers, and they have to do so in ways that may be unfamiliar and even uncomfortable for them. In Gary’s case, that not only meant learning how to use a web cam, it meant mastering iPhoto. In other words, he had to develop a whole new skill set.

Restaurants likewise are learning to be creative and pro-active, especially high-end eateries. The Fifth Floor, a very tony San Francisco restaurant, has started a new consumer program, Sommelier for a Day, in which, for $250, ordinary folks get to hang out all afternoon and evening with their Master Sommelier, Emily Wines, followed by dinner. This a little beyond the ordinary routine of a fancy restaurant, but by all accounts, it’s earned them loads of P.R. and perhaps even helped stabilize the bottom line. In this, Fifth Floor’s out-of-the-box thinking brings to mind Rodney Strong’s “A Really Goode Job” contest of this past summer.

Wineries also are going online, reaching out, innovating. The Napa Valley Vintners has turned into the Cirque du Soleil of winery associations, constantly on tour showing off their wares. They’re Twittering, with 1,410 followers and growing, and Facebooking, with 2,705 fans. Winemakers are lining up to do a star turn on Gary V.’s Wine Library TV the way actors with new movies vie for a spot on Letterman and Conan.

It’s not just here in media-saturated America. Even in staid Bordeaux, the winemaking community needs to resort increasingly to “wine tourism, aerial rides over the vineyards and posh picnics among the vines,” advises the legendary Bernard Magrez, proprietor of Chateau Pape Clement and Chateau La Tour Carnet.

Aerial rides over the vineyards in Bordeaux! Sacre bleu! Is nothing sacred?

K&L Wine Merchants, a Bay Area fixture for 30 years, just announced the launch of a new mobile site to give its customers search access to its catalog. They know they can’t sit back on their keisters and wait for people to come into the store. My own magazine, Wine Enthusiast, has one of the fastest-growing iPhone apps, which gives users access to our database of nearly 75,000 wine reviews, in addition to vintage charts and other wine information.

These are all examples of how new technologies and creative new ways of thinking are the silver lining around the cloud of this recession. It’s basic Darwinian selection: those who adapt to the new order will survive and thrive, while those who don’t are doomed to go the way of the dodo bird.

  1. [Editor translation]: bread and circuses.

  2. Dennis Schaefer says:

    “brings to mind Rodney Strong’s “A Really Goode Job” contest of this past summer.” I think you make a joke here about what an impression that social media contest had on you. The winery involved was Murphy-Goode.

  3. Dennis and everyone: My mistake. I meant to say Murphy-Goode. I’d been thinking about Rod Strong’s Rockaway thing from 2 summers ago. To tell you the truth, that was a pretty big P.R. coup also!

  4. Innovation is the key, especially for small wineries like SUNBOX Eleven Winery. We realize that, along with the “old-school” methods of selling wine, which are still an important part of total sales, new technology and WAY-OUT-of-the-box actions are needed to survive. Social networking only works if you really work it, which we do (top 50 wineries worldwide on Twitter). Basically, the old-school hand-to-hand sale can be translated into a virtual face-to-face sale. Branding is the most important of all the factors, and if you get the name recognition in multiple markets, small wineries can survive & thrive in this tough economy…

  5. Keith Miller says:

    As a retailer for 25 years the time (current co – owner of a 7k Sq Ft store that does very well) of wineries “working” harder in the market (the Internet is that) had to come. They have been relying on Distributors and taking buyers out to lunch and dinner for ages. They have been catering to the wrong people all these years. But one could say many businesses have been doing the same thing and they would be right. Competition is great for business and it is here folks.

    So much opportunity right now in business. Building brands was forgotten over the years.. Its a lost art. We as a company are helping in that area now. We feel the consumer wants to see reputable third parties (like G.V.) give there opinion on products such as wine. Any owner of a business can say they have the best product..Duh!

    And when it comes down to it many businesses do not have the time… I look at the wine business right now and I see a bunch of so called roofers coming in after a storm and saying ” I can help with that”. Many con artists out to make a quick buck in my business (wine business). Simply put a lot of so called “Marketers”.

    It takes industry people that have the experience to build brands. Finding people that have had the face to face with the consumer is very important when hiring to market I feel….We are Wineguystv.com and we very much believe in the social media aspect. But one must have a balance.

    So much opportunity right now in business. Be creative and be very consistent… and one more word…Persistent ! Ok one more thing, thank that retailer and restaurant a couple times a year for supporting your winery because I have news for you … the distributor never does it for you. “Thank You” goes a long way when a store is writing 3 million dollars a year in checks to Distributors (ultimately to the winery). Never a “Thank You”…maybe a bit bitter but I keep smiling :)

    So come on business owners.. Its time to saddle up and get to work.

    Cheers!

    Keith Miller
    Bryan Criswell
    Wineguystv.com
    The Winery Group

  6. Idle chatter on twitter and a few video tastings here and there will not lead to a significant increase in web traffic or D2C sales. What needs to happen is a better understanding of one’s brand, how they are different from competition, distill their brand to a few key words, then increase overall internet footprint and optimize website (via SEO/SEM) for those words. Strategic planning will win the war. Too many wineries – and businesses in general – don’t get this basic premise. Click the link above to read the whitepaper I wrote on this topic..

  7. True. Idle chatter and video will make no difference whatsoever. It is actively contributing and participating in the online community where one starts to make a difference.

    There are new skills that need to be learned, fortunately, they are all really simple. Making the time is the hardest thing, but when times are tough, you work longer, harder, and if they are really tough, you may have a lot of downtime when no one is in the shop, restaurant, tasting room, etc…

  8. Though not a prefectly accurate statement I believe the more things change the more they stay the same. In difficult times the practice of sound fundamentals provides the best possible results. I am certainly not against experimentation in efforts to more successfully reach the consumer but basic blocking and tackling should be the primary focus. In short, get your feet on the street and influence the influencers (damn another cliche).

  9. Steve, it is a great piece and true. Fascinating comments reflect the constant battle in the industry between complacency and the market. Simple fact: the only wines selling this year are those where the proprietors are out on the road (and on the web) pushing product, driving traffic and building identity for their wines. The folks denying that are going to find themselves sitting on a lot of inventory. i still tend to think the new media stuff, however cool, is overhyped but it does build awareness and in a world of hundreds of thousands of SKUs, awareness is critical. This era may not last forever but we also are not going back to 2007. This is not about questioning the fundamentals of marketing but how they are executed.

  10. Steve, it was Murphy Goode not Rodney Strong that ran the Really Goode Job contest this summer. Shows you what a good(e) impact that made on you!
    Also it is iMovie not iPhoto that processes video via a Mac.

    The sad new about MG Really Goode Job is the whole thing got so much press and attention but now it seems to have fallen off the map. I see an occasional blip from Hardy the winner but he seems more focused on being a goofball, yucking it up with visitors to the tasting room and his personal Dirty South blog than promoting wine sales for MG or education people on MG wines. They would have been better off hiring 4 people to offer varying commentary (or playing liars dice together) versus the opinions of one individual. If you do not like Hardy (and many do not) then you tuned out. You can laser target yourself right out of the market.

    To go back to solid marketing statements “where’s the beef”? Cute videos will not a solid product make. The 3 P’s (price, packaging and performance) may be old but still hold true. Overpriced and under-delivered has been the moniker of the last few years which is now biting into profits. The BIG Hwy 29 palaces have not guaranteed top value (bang for buck).

    One more thing: Calling the NVV a circus act of Vegas proportions, I see as far from the truth. It is leading the discussions to NOT allow extra activities at wineries (weddings) and preserving Napa as an AG area first and foremost.

  11. Jimmy, thanks for the corrections. Somebody else previously pointed out my muddled confusion of Rodney Strong and Murphy-Goode. And all I meant by the Cirque du Soleil remark was that NVV is very wisely hitting the road. I admire them for that.

  12. Steven,

    I come to your defense, knowing that you know the Murphy-Goode campaign very well, having been there during the process. (We all have brain glitches from time to time).

    I liked your article very much. Last weekend a similar theme repeated itself to me. I was contemplating wine marketing: the old and conservative ways vs. the morass of new ways. By new ways, I mean to include not just the technological (the long-range implications of which are still unknown), but also just unconventional ideas. New technology is one thing; new ideas another–still, neither is quickly embraced.

    So a song played in my head and I realized that what was old is new again. Bob Dylan:

    “Come mothers and fathers
    Throughout the land
    And don’t criticize
    What you can’t understand
    Your sons and your daughters
    Are beyond your command
    Your old road is
    Rapidly agin’.
    Please get out of the new one
    If you can’t lend your hand
    For the times they are a-changin’.”

    Interesting times ahead.

    Mark

  13. Mark, I can hear Dylan’s voice in my head. Love it.

  14. Just a point of correction, the traditional marketing mix is known for Four P’s: Product, Price, Place, and Promotion. Packaging and Performance are concepts which fall under the “Product” category.

  15. Gee, Keith, thanks for the wonderful Wineguystv.com self promotion.

    (I believe the gist was that only your firm knows how to market via blogs w. online video, and that everyone else is a fake. Information none of us can do without, to be sure.)

    To everyone else, thanks for the thoughtful, informative comments on wine marketing. Nice piece, Steve.

  16. No one mentioned better customer service? Perhaps an allusion from Larry when he mentioned practicing sound fundamentals. Treat your customers like a king and they will never leave you. They may buy less, but they will stay. One evangelical customer has an immense lifetime value.

    Another given for the tasting room is that you can’t invent visitors out of thin air. Given that your audience may be a set size, do better at making them bust down your door…this is where the fundamentally sound practices may not be enough. I am not giving away any secrets here, but why is my tasting room up versus last year?

    Finally, there is much credibility in selling and brand building with new gadgets and their broadcast abilities. We have a dollar figure on the value of a single email address. The rest is simple, keep getting customers to opt-in and that dollar figure comes back in sales. Even better, sales that did not require footprints in the tasting room.

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