Last Thursday’s Times had two articles, one about how Heineken is aiming ads at young digital consumers, the other about ordinary people who are figuring out ways to make money from their blogs.
Considered together, the articles suggest that social media has entered an important phase that, just a year ago, would not have been possible.
Heineken’s story is interesting. It’s an old, mature brand. When I was an undergrad, Heineken was very hot and sexy. It was imported, upscale, one of the first aspirational beers. If you wanted to impress a date, you bought a Heinie–not Budweiser or Pabst Blue Ribbon.
But Heineken “has lost some of its cachet,” admits a senior Heineken executive. It’s particularly lost traction in the all-important 18-34 year old demographic, which prefers American microbrews. How do you get across to 18-34 year olds, mainly men? You make a series of YouTubes that are commercials disguised as wacky videos: one that’s “about a young man on a wild date” and another “about a young man’s show-stopping arrival at a wild party,” as the Times puts it.
Young men! Wild parties! Dates! Heineken knows what’s driving this consumer market.
Here’s the link to the ad called “The Date.” It’s good, but even better is the video called “The Entrance,” which is so good, it gave me shivers. Who wouldn’t want to be that guy? He’s the coolest dude that ever lived. And with 3,652,601 views so far and counting, Heineken is obviously attracting a lot of eyeballs.
I have no idea if ads like these will help Heineken with Millennials and Xers. But advertising on YouTube is way less expensive than running comparable commercials on T.V., which young people are abandoning anyway, in favor of online.
Meanwhile, the other article, the one about bloggers actually making money (who woulda thunk?), will surely catch the eye of many who read steveheimoff.com. The recipe for success goes something like this, according to the bloggers the Times interviewed. First, pick a topic you’re passionate about and thus won’t get tired of. Then, be prepared to spend years building your blog. As you reach a certain level, start taking ads on a pay-per-click basis. Besides the usual banner ads, you can also have “contextual ads,” which are highlighted words in posts that link to a vendor. “A commission is paid on resulting sales,” says the Times. (Excuse me for a moment, I’m gonna go get me a refreshing can of Coca Cola and make a quick phone call to my broker on my iPhone.)
Other money-making strategies include charging for content, developing book deals and being hired to speak before groups because you’ve become so darned famous from your blog. And there is, of course, YouTube, which spices up any blog. So quickly is the quality of vlogging improving that YouTube itself is teaching vloggers “how to create a viral video, build an audience and bolster a brand,” says this article in yesterday’s Times. Last year, said a YouTube manager, the top channels on the company’s Partners Program (which teams up with vloggers) “generated 100 billion views and attracted millions of dollars in advertising revenue,” with hundreds of partners earning more than $100,000 a year.
Steve will be back tomorrow.
Beringer to Latinos: Buenas dias!
It’s always been a matter of concern to me that wine consumption in America is overwhelmingly by white people. Ethics aside, if wine is only being enjoyed by Caucasians it’s bad business practice. In California, whites are already less than half the population. Why don’t more Blacks, Asians and Latinos drink? Cultural reasons, is why. Black people like to drink, but their alcoholic beverages of choice tend to be cognac and mixed drinks. Asians seem to prefer beer and rice wine, if they drink alcohol at all. Latinos, too, like beer and liquor.
The wine industry has been very bad at reaching out to these communities. Partly it’s because the industry has no coordinated marketing effort. It’s also relatively poor, compared to the beer and spirits industries. And maybe the wine industry didn’t want to seem like it was pandering to specific ethnicities, the way certain brandies do in Black communities with billboards that are frankly sexual in tone.
It’s nice to see that wineries like Beringer at least are finally starting to take Latinos seriously.
Another blast at critics
This time it’s from blogger Craig Camp, who reminds us again that wine “is indeed a social event, it’s what should be for dinner not ‘fodder for criticism.'” Wine and food should be about sharing and socializing, not scoring. “Critics rank wines and taste wines against each other, which is a cruel thing to do to wine of subtlety and grace.”
Well, of course there’s truth in that statement. Reviewing wine does reduce it somewhat to the status of a Miss America beauty pageant. But I don’t see why enjoying wine with friends, on the one hand, and critiquing it are mutually exclusive. A person can fit both comfortably into his life. Besides, millions of people enjoy reading wine reviews. They’re a helpful way to choose which wine to buy. And remember too that it’s not entirely true that “Critics rank wines and taste wines against each other” exclusively. I do do that, but I also write articles and books about wine, so I’m an educator, not just a critic. I think we critics are often easy targets for a kind of anti-elitist bashing that is a form of elitism in itself. Still, I commend Craig for reminding us that “Wine appreciation is about appreciating wine, more accurately about appreciating life.” True dat!
Does anyone care about Bordeaux anymore?
Mike Veseth had an interesting post the other day called “Is Bordeaux still relevent?” He wrote, “Relevant to those of us in the United States, I mean. It used to define fine wine, but now we don’t seem to buy much of it – the momentum’s shifted to Asia. It’s just another ‘brand’ to many Americans, and not one that is especially successful.”
I completely agree. Nobody I know is particularly interested in Bordeaux. Oh, the Napa winemakers are (to the extent they can afford it), and some über collectors are. But few others. Most of the cool restaurants I go to don’t even have Bordeaux on their wine lists anymore, or, if they do, it’s just for a token. Just as well. We Americans were mesmerized by Bordeaux for a few centuries. But time marches on.
“U.S. wineries [are] leveraging social media and multiple direct sales channels to rebound from recession — winery managers forecast continued double-digit growth in 2011,” a new study from Vinquest suggests. The VinQuest™ U.S. Consumer Direct Wine Sales Report is produced annually by VinterActive LLC.
Direct to consumer (DTC) long has been the Holy Grail for wineries, particularly smaller ones that find it difficult to get into the distribution chain. DTC holds other allures, as well: the winery makes 100 cents on the dollar (or close to it), instead of having to sell wholesale.
The challenges confronting DTC sales, however, have been well documented. It’s awfully difficult moving quantities of case goods a bottle at a time. It requires infrastructure and expertise that many wineries simply don’t possess. And there’s still the meddlesome issue of non-reciprocity in various U.S. states.
So it’s good news, as VinQuest reports, “that tasting room, wine club, internet, and event sales grew 12% to a record $3.4 billion in 2010 as wineries adopted new marketing strategies to emerge from the grip of recession.”
However, there are caveats. While $3.4 billion sounds like a lot, you have to compare it to the total of U.S. wine sales in retail value. That’s projected to be just north of $40 billion this year, according to Whole World Wines. So total direct sales still amounts to less than 10% of all sales, and while 62% of winery respondents told VinQuest that DTC sales is their fastest growing sales channel, it’s not the immediate game changer they might be hoping for. At least 13 states do not yet allow direct shipping from out-of-state wineries, (in apparent defiance of the U.S. Supreme Court’s May, 2005 decision), and of course there’s now HR 1161, a resurrected form of last year’s HR 5034, a bill currently making the rounds in Congress that could potentially do an end-run around the Supreme Court’s ruling.
My own feeling, in traveling around California and meeting up with lots of small winery owners, is that they’re challenged enough as it is by the day in, day out routine of producing wine, with all that entails, and don’t have the time or energy to put into adequate oversight of tasting rooms, wine clubs, managing online sales and otherwise succeeding at the whole DTC thing. Many proprietors simply don’t know where to start, and there are surprisingly few resources available to them.
So while the VinQuest report is encouraging, I’m viewing it in context. Distribution remains, and is likely to remain, the chokehold on wine sales in America. Until someone figures out how small wineries can get into the system, there are no magic bullets to ease their plight.
California’s 2010 Crush Report is out, and as usual it makes for some fine geek reading.
It was a big crop, the third largest since 1988, although off the pace of the record setting 2007 and 2009 vintages. The average price for all varieties was down 5% from 2009, which surely was the result of the Recession, coupled perhaps with the big crop. Napa as usual had the highest average price per ton ($3,238), with Sonoma/Marin the next highest ($2,011), which just shows that Cabernet Sauvignon is much, much pricier, at the highest level, than Pinot Noir. Interestingly, the average price for purchased Cabernet statewide was $1,078, a mere one third the price of Napa Cabernet. That accords with my experience: your average bottle price of Napa Cab is about three times that of a Cabernet from anywhere else (say, $25 versus $75).
I looked at the cost of Cabernet per ton from District 8, which is all of San Luis Obispo and Santa Barbara counties. I wish they would divide this ungainly region into smaller pieces. The Grape Crush Report references specific transactions, and it would be nice to know who down there paid $5,000 a ton for Cabernet, rather than the District 8 average of only $966. I bet it was one of those fancy new Happy Canyon Cabs. I suppose it could have been something from Paso Robles, but my instinct tells me Happy Canyon. By contrast, the most expensive Cabernet from Napa (District 4) was listed at $31,241 (base price per ton). Holy Cow. I wonder where those grapes were grown. Screaming Eagle? Harlan? We’ll never know. (If there’s anyone out there who knows, or thinks they know, come sit here beside me and let’s talk. I promise not to tell!)
There are other little weirdnesses in the Crush report. Despite prices being down across the board, a few red varieties registered notable upticks: Aglianico, Aleatico, Alvarehao (the official spelling), Counoise, Early Burgundy (what?!?), Grand Noir, Sagrantino, Tinta Madeira. I wouldn’t read too much into this, but it might suggest a burgeoning interest among certain niche players for more exotic wines. Beclan, an old French variety that used to pop up in California field blends, also was listed in the Crush Report for the first time. And what a debut: 1,000 acres, almost as much as Malbec! I’d love to know who’s doing what with all that Beclan. But its base price is very cheap: only $281 a ton.
We talk a lot about alcohol levels in Cabernet. Guess which District had the highest brix at crush? If you guessed a Central Valley District, you’re right. It was District 15, San Bernardino County, at 25.9. The next three highest brix levels were from Solano, Sacramento and San Joqauin counties and the Sierra Foothills. No surprises there. Napa, at 24.5, was just about the same as District 8 (San Luis Obispo and Santa Barbara again), at 24.3.
In whites, average prices also fell across the board, with the following notable exceptions: Arneis, Grenache Blanc, Malvasia Bianca, Moscato, Muscat of Alexandria, Palomino, Picpoul Blanc (listed for the first time, at an amazing $2,200 a ton), St. Emilion (up hugely in price; also known as Ugni Blanc and Trebbiano) and Verdelho. Explanation? What I said above, about niche players.
The biggest mystery is why in 2009 the average price for Scheurebe was $1,400 a ton and then in 2010 it is listed at 0.00. Was no Scheurebe purchased last year? Why? Is someone looking into this? Did it have anything to do with the Rapture not occurring? Inquiring minds want to know.