Michael Brill on Crushpad’s big new deal with Twitter
I talked with Brill, Crushpad’s president and CEO, last Friday.
SH: How did the deal come about?
MB: We have a couple Twitter employees who are customers of ours. They contacted us about making some barrels for employees, as a team building exercise. They also at the same time were trying to hook up with Room to Read, their favorite corporate charity. Over the course of 45 minutes, we all came up with the idea of why don’t we create a wine, sell it, and the profits will go to Room to Read.
What is the significance of this, beyond raising money for charity? I mean, Crushpad getting involved in social media. You’re already calling it “social winemaking.”
Great question. We’re all about getting people involved in the winemaking process and co-creating a product with the customer. So this is an extreme exaggeration of what we normally do. Instead of 5 or 10 people involved in the process, we’ll have hopefully tens of thousands [buying the wine]. And all this is being tweeted as we go along. It’s a way to expose winemaking to many thousands of people who could not ordinarily afford it or be involved in it.
Tell me about the wines. Varieties? Sources? Price? Production?
Pinot Noir and Chardonnay. The grapes are from different vineyards — Santa Lucia Highlands, Santa Rita Hills, Russian River, Sonoma Coast, all the stuff we normally deal with. The price is $20.
I read that only $5 of that will go to Room to Read, with $15 going back to production costs. That seems high.
Well, if you look at our hard materials costs and labor, we’re not making any money on this. And we’re eating shipping costs. We’re probably losing money. People making wine from the same vineyards [charge] $40 or $50.
Why is the brand is called Fledgling?
That was Twitter. Biz Stone [Twitter’s co-founder] came up with that. They like things that are bird-related.
What is case production?
Between 1,000 and 10,000.
Can you be more specific?
No. Twitter is concerned about not wanting to commit to specific dollar amounts to give to Room to Read, so they don’t want to set specific expectations, even though we have internal targets. I think Twitter’s taking a huge risk on this. Some people have been snarky on the blogs [such as] “Twitter should figure out its business model.”
Is this a one-time thing? Will production and variety type increase?
We’ll see how it works. We’ve never made anything on this scale. This is an order of magnitude larger than our Vayniac Cab [which Crushpad made for Gary Vaynerchuk].
Crushpad has a Twitter account with 63,425 followers. Has that resulted in any additional business, or is it mainly a P.R. device?
It’s the latter. Social media and Twitter are fine for brand building, relationship development, getting your name out there, but it’s a horrible mechanism for generating revenue.
Could that change with a killer app?
Well, there are challenges with Twitter in that there‘s no structure. Personally I believe Twitter for business will only be successful when there’s structure built into it, whether by Twitter or a third party. A tweet is just an event. How do I take advantage of it? So my perspective is, Twitter is great for updating people, but not great now for selling.
Has the recession affected Crushpad’s business?
It’s put a crimp in, especially in the first half of this year. Most of our clients are pretty affluent, but the uncertainty about the economy earlier this year pushed people back. But there’s more optimism now. We saw a big jump this harvest.
That brings up another point. You speak of “democratizing” wine, yet doesn’t the Crushpad model actually only apply to wealthy individuals?
It’s a process. Ten years ago, you needed tens of millions to make wine. Then custom crush facilities brought it down to $100,000. We brought it down to $10,000.
I think a lot of the Room to Read piece gets lost [in media coverage]. It’s a great story. Twitter doesn’t get any P.R. value from this; they have nothing but risk associated with this project. It’s about all of us helping Room to Read, which in turn helps kids.