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Connecting the dots: It all happened yesterday


Synchronicity: Coincidence of events that seem to be meaningfully related.

My mom used to tell me there are no coincidences, just things whose reasons we don’t understand. But sometimes, the reasons are all too clear.

First there’s this headline from yesterday:

Wine & Spirits Wholesalers spend $280K on lobbying

from Yahoo News. Taken into context, that number is “up from the $240,000 the group spent in the year-ago period and the $260,000 it spent in the third quarter of 2009.” So WSWA is upping the amount they spend on lobbying, even in this most difficult period.

Then there’s one, also from yesterday, courtesy of Beverage World:

US Wine Exports Fell 15 Percent in 2009

That’s not good for wineries struggling to get by, and who depended on overseas to stanch the bleeding domestically.

Also yesterday the L.A. Times reported on the collapse of three wineries I’ve known well:

After the fall: The stories of three niche wine makers

This is extraordinarily shocking stuff. Garretson Wines was a pioneer in Paso Robles, Sauvignon Republic was co-founded by former Fetzer star (and Wine Institute head) Paul Dolan, and what can you say about Havens Winery that hasn’t been said? I consistently gave their wines high scores over the years.

Okay, so we know three things (at least):

1. Wholesalers have had the bejeesus scared out of them. When an industry jacks up its lobbying in hard times, it’s because it wants to avoid even harder times.

2. Such wineries as there still are, are finding it harder to sell, not only in America, but overseas, which had been a great hope for many.

3. Wineries are starting to fall like dominoes.

My friend Scott Carpenter, who runs the website The Everyday Wine Guy and contributes to CNN Radio and CBS stations, reports that, according to his sources, “The general guess is 200 [California] wineries will go down this year, mostly smaller guys…The wineries-for-sale list is allegedly way up for Napa and Sonoma.  Now it’s 60 and 51, respectively.” I myself recently wrote that, if things really do head south, we’ll find out this summer, certainly by the end of the third quarter.

What can wineries do to survive this avalanche or tsunami of bad economic times? Part of the answer is marketing. But you’d be amazed at how uninformed some wineries are when it comes to the simplest aspects of how to sell wine. A professional marketing consultant commented on this blog yesterday that “…it is troubling to me that so many [wineries] have no communications plan or comprehensive marketing strategy, yet they want to jump on Twitter or Facebook because it’s the latest thing…It is really shocking to me the number of wineries that make no effort to collect email addresses from tasting room visitors and, further, even those that do seldom use them! I was recently visiting a high end ($50-100/bottle) Sonoma County winery; purchased a couple of bottles, but no one even asked for an email address! Wouldn’t they like to sell me more wine?”

That’s the tip of the iceberg. If I was running a tasting room and somebody walked in and bought a couple bottles of $50-plus wine, I’d certainly ask them, at the very least, to give me their email! Then I’d send them periodic email newsletters, or find out if they want to sign up for my blog, or whatever. But to let them just walk out the door? Insane.

Think it’s just here in California? Nope. From yesterday’s Oregon Business online:

Wine glut possible

“Oregon’s wine industry is raising concerns about oversupply, as the state continues to expand grape production while wine sales drop,” the article says.

Australia, anyone?

  1. I’m staying out of this commodity-economics thread because it gives me a headache. I can’t even balance my checkbook.

  2. Look out, Steve. More on the way.

    Oh, never mind. The only real point to be made here is that the laws of supply and demand do affect the prices of wine in the long run, and wineries can do something about where they fall on the curve by the actions they take. That was your original point, and I agree with it.

  3. The economics of wine might be better understood by reading my blog about the cost of wine.
    Wineries simply cannot pay growers a decent price and stay in business in today’s competitive market. Even small producers that sell direct to the public are having trouble generating foot traffic. Cheap wines are now $2.99, regular wines are $6.99, premium wines are $9.99, and ultra-premium wines are $14.99. If you can’t compete in this price range, you had better hope Steve gives you a 99.

  4. Gail, give your comment 100!

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