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What today’s social media means for tomorrow’s wine industry

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The advent of the Millennials and social media is said to be revolutionizing consumer behavior in wine to such an existential extent that the Old Order is in dire threat of imminent demise.

From this historical vantage point, some people say that the wine world has gone through two major eras and is now entering a third. Wine 1.0, which lasted for a millennium, saw a few European regions dominating that continent; wine was virtually non-existent in the rest of the world. Wine 2.0, which began roughly in the late 19th century and continues today, saw the emergence of the New World, but that, in reality, was actually (and merely) an extension of Wine 1.0, because the New World mostly meant the former colonies of England (Australia, South Africa, New Zealand, America), who carried English traditions to the farthest points of the globe, resulting in the continuation of the domination of Cabernet Sauvignon, Pinot Noir, Chardonnay, Sauvignon Blanc, etc. This continuity of English tradition, with its focus on rank, privilege and status, also guaranteed the public’s ongoing fascination with the Great Growths/Grand Crus of France, as well as their equivalents (decreed by cognoscenti) in the New World (Penfolds Grange, Harlan Estate, for example).

Now, according to the new historians, we see the nascent parameters of Wine 3.0. These are clear and distinct. One is that the world has shrunk so that ideas are now global rather than regional. Another is that technology has made the spread of ideas instantaneous. For the first time in history, an idea does not need a physical mode of transportation to convey it to the farthest reaches of the planet: the mere click of a mouse now does that. A third leg of this analysis is that a new generation (Millennials) is fundamentally different from its forebears, if for no reason other than that they grew up in a reality in which the first two parameters (a shrunken world and instantaneous transmittal of information) were taken for granted. The result, says this new interpretation, is that wine has been liberated from the shackles that bound it for centuries.

This is an attractive analysis for those who argue for a more liberal interpretation of history–such as, for example, the one governing a view of America that sees our country continually spiraling upward and outward in recognizing the human rights of all its inhabitants (notwithstanding that the reality of this view is not always consonant with the theory). Thus, the democratization of human society both anticipated and parallels the democratization in consumer wine preferences. According to this view, wines of any variety, style or flavor now may be permitted to stand beside glorious Bordeaux/Cabernet Sauvignon or Burgundy/Pinot Noir: younger consumers don’t care anymore about those old paradigms, nor do they care about Authority. Tannat, Furmint, Rkatsiteli, Welschriesling, Savtiano–Millennials happily embrace them all, perhaps all the more exuberantly due to the fact that they were formerly under-appreciated by those very Authorities whom they reject as arrogant and irrelevant.

This certainly is a viable, even compelling way of looking at things; the fact that it accords well with our own American experience in democratization adds vigor to it. (White male property owners at first had all the rights. Then came non-property owners, women, 18-year olds, African-Americans, the handicapped, the GLBT community; PETA is hoping animals may be next. If white male property owners were Bordeaux, the GLBT community is Rkatsiteli.) The argument becomes even more enhanced when critics of the old school embrace it, as Jancis Robinson did last week, when, in Washington, D.C. to promote her new book (“The World Atlas of Wine,” co-written with Hugh Johnson), she declared that “This democratization of wine is great.” 

Jancis might have been reciting the talking points of the blogging community when she added, “No longer are wine critics and reasonably well-known wine writers like me sitting on a pedestal, haughtily handing down our judgments.” This is if-you-can’t-beat-‘em-join-‘em-ism at its most resilient, although I do wonder if Jancis really thinks of herself (much less Hugh Johnson, God forbid) as “haughty.” At any rate, you can hardly blame a critic these days for going over to that side of the fence.

But I would like to segue now into history to make my point, which is that (as your financial statements constantly remind you), “past performance is not necessarily indicative of future results.” If the study of history proves anything, it is how utterly useless it is in predicting the future. We in the West like to assume that history proceeds according to some kind of orderly, predictable template, like the unfolding of a computer program, so that a proper understanding of the past can result in a fairly accurate knowledge of the future: not necessarily in detail, but in general outline. This philosophy was most famously summed up in Santayana’s slogan that “Those who cannot remember the past are condemned to repeat it.” We study history in order to more perfectly align with its forward direction.

Alas, reality has the unpleasant tendency to throw curveballs at us, upsetting the best-laid plans of men. (Heisenberg understood this tendency toward the erratic in the realm of the sub-atomic.) I referred earlier to Wine 1.0, which was totally dominated by Europe (“Old Europe,” Donald Rumsfeld contemptuously called it.) So, too, has the long political history of the West been dominated by events in Europe (and, after the year 1000 A.D. or so, the entire planet: when Europe coughed, the World caught cold). We saw this appalling phenomenon with the two World Wars, and then with the advent of the Cold War, which quickly spread to every continent on Earth.

As a result, my generation–the Baby Boomers–was obsessed with Europe. As a history buff, I’ve read about Europe all my life, and can tell you that, before 9/11, there was hardly a serious history book that even mentioned Islam. The Muslim world was seen merely as an adjunct of the great Western powers (subsequently joined by China, hardly a Muslim nation). The study of Western history tended to be about the causes and aftermath of World War II and the Cold War, and how those continuing power politics were shaping the political and economic realities of the world.

Suddenly, 9/11 occurred–and now Europe, with all its past problems and glories, seems almost irrelevant. If you know history at all, you will find that shocking. And yet, it happened: Europe was wiped out of global historical calculations overnight. History threw a curveball at the world, which didn’t see it coming. And the world now is scrambling to catch up.

I say these things simply to point out the uselessness of predictions based on prior assumptions, that how things appear today is necessarily prescriptive of how they will be tomorrow. We do certainly have a spike of interest in this social media phenomenon–an interest pushed by a media eager to report on “trends”. But one cannot extrapolate from this any conclusions concerning how wines will be described, popularized, marketed or sold in the future, much less what kinds of wines the people of the world will demand. A fundamental truth of human experience is: For now, we see through a glass, darkly. Paul’s conclusion from that is that mankind ought to be charitable. Mine is that proprietors of wineries ought to be skeptical.

Could the Internet itself be the curve ball that history has tossed at the world? Yes. But the outcome of that phenomenon is no more predictable than that of the world’s current situation vis-à-vis the rise of militant Islam. Nobody knows where that is going, and to make any predictions whatsoever based on what has happened in the past is futile and possibly dangerous.

My friend Rajeev, whom I mention here from time to time because he is emblematic of so many other small business owners, just enrolled in a social media course in Palo Alto, which he will attend next week. He has been reading and hearing so much about how entrepreneurs like him should be diving into social media that he’s finally decided to tackle something he’d been avoiding for years. He told me of his hopes and expectations: that mastering the intricacies of Foursquare, Twitter, Facebook and LinkedIn will help him make more money. Rajeev even used the metaphor of exploring a new land. I listened sympathetically but with (I must admit) some inward humor, and thought of Bob Dylan’s 115th Dream, in which the singer meets the captain of three ships sailing toward America, as the singer is heading in the opposite direction. “He said his name was Columbus,” the singer sings, “[and] I just said, ‘Good Luck.’”

 

  1. Steve,
    You write like a renaissance man, and it’s a very enjoyable read, but I would have to disagree with you about the significance of the social media trend and partially you historical analysis.

    Granted there was a gap in world paradigm after the fall of the Soviet Union, but the conflict with militant Islam was not a big surprise in 2001. Huntington’s Clash of Civilizations was almost 10 years old by then.

    It remains to be seen whether social media’s influence will be a trend or a fad, and forecasting based on history, available data, and conditions remains the most reliable method.

  2. Steve,
    Probably one, if not the, best article about social media that you have ever written. The good news is we don’t have to look too far back to see how the internet and soon, social media, will impact businesses. You just have to ask Blockbuster, Borders, Tower Records, Circuit City, and so many more: http://www.flickr.com/photos/briansolis/8510396830/sizes/o/in/photostream/. Not to mention the plethora of print publications struggling to adapt to the new digital era. Also, the studies are starting to arrive that social media has a positive impact on revenue (this Havard study is focused on revenue) – http://www.hbs.edu/faculty/Publication%20Files/12-016.pdf

    Me, I’m with your friend Rajeev sailing into the new world vs. being left behind.

  3. My 10-year old daughter turned to me tonight and said… “Dad, I love Netflix.” I said “Why?” She responded… “because I can watch whatever I want whenever I want”. Curve ball? Maybe. But I predict that she’ll never watch TV like I did (and still do). And I’m willing to put money on that.

  4. Paul: Yes. But that does not predict what wines she will drink (if any) when she comes of age.

  5. Steve, I didn’t think you were talking about future wine selections but about social media (as your title and much of the blog suggested). That being said, you are correct that we can’t predict what the future of wine choices will be across decades. However the avalanche of social mentions can accurately predict what wines are trending and which ones are in decline. 2 million conversations a day don’t lie.

  6. Paul: Two million conversations a day sound to me like babble. What is to break through and make sense? Authority. Where does authority come from? That is the question.

  7. As in every proper democracy, the authority comes from the people.

  8. Demonstrably untrue. American authority stemmed from FDR, Lincoln, Reagan, Clinton. We elected leaders and then trusted them to lead us.

  9. great post steve, very thought provoking.

    as a millenial, our conversations have already gone beyond “social media” to the idea of “augmented reality”. things like cell phones lead to google glasses lead to computer chips being inserted into your brain. the question is not if it matters, the question is how far it will go. One thing cell phones and the internet have shown is that once the train starts rolling, everyone eventually climbs on board

  10. Steve,
    The people elected those leaders and people will elect which wine they like.

  11. PS – they’ll also elect which critics they follow as opposed to the ones that have been appointed. Welcome to the new world.

  12. So believers in the new social paradigm …. lemme get this right … the codgy old world of Robert Parker telling you what to buy and dictating trends will now move toward this mass democratization where internet enabled, free thinkers will, as beacons of enlightenment, forge new directions for themselves?

    If only there was an analogy. Oh, I have one. Let’s use fashion. So, those editors of vogue etc, who used to dictate runway fashion, look at all the people who think for themselves and … Oh wait. They just buy what Kim Kardashian posts on Instagram.

    Ladies & Gentleman, meet my friend: progress!!!!!

    The medium may change, human behavior will not, people (in general, ie the masses) aren’t self assured, and don’t like standing out, they will always look to others as arbiters of taste, and buy like them. These few people, whether old or new school, will always hold sway.

    Sorry!

  13. JamesG: Love it! Good insights, good writing. Thanks.

  14. gabe: I hope I’m not around when computer chips get implanted in human brains.

  15. Zzzzzzzzzzzzzzzzzzzzzzzzzzz

  16. Yup, JamesG nailed it.

  17. I agree that “Social Media” will fade. It will become completely integrated into much more user-friendly interfaces that make communicating in this new fashion like second nature. Any smart company will be taking advantage of the ability to raise their hand and insert themselves appropriately in front of the best targeted customers.

    Regarding wine, we’ve seen who the masses really follow: celebrities. Paul Giamatti – who admits to knowing little about wine – probably sold more Pinot that Parker. Rapper Nelly got the Moscato craze going. If I had a wine in big distribution, I’d put my money into a good script with the right pop star.

    What I’m waiting for is some sort of aggregator for higher-end wines that can take my own reviews and try to align them with your reviews and others to see what experienced taster has many of my preferences. That aggregator would then help me identify wines to purchase where the chance of not wasting my money would be reduced. I think sites like cellartracker and delectable are most likely to get there some day soon.

    I do appreciate your honest views in this, your personal Web site. I’ve been a follower for many years, though, as you’d expect, I don’t always agree.

  18. Social media is not revolutionizing wine. Access and experiences are. The Internet allows ideas and experiences to be shared, access to and information about a greater variety of products. Saying “social media” is already sounding to me like “cyber-” anything. Old already.

  19. Steve, maybe the internet is history’s way of enforcing “term limits” on leaders once they’ve outlived their usefulness. Perhaps people begin exercising their authority to “re-elect” someone else once they feel like their “policies” don’t speak to them. Demographics change, today’s wine buyers don’t necessarily relate to that “olde timey” stuff perhaps?

  20. terroirista says:

    Dear Steve,
    “Write what you know.”
    You don’t know social media.

  21. The big question is around the relative influence of individual domain experts vs. collective influence of a community. Clearly Steve believes in the internet and social media and the potential for transforming industries; it’s just that he doesn’t believe in the collective influence that we see in so many other industries. I think he’s right.

    If I ask 1,000 people about a restaurant or a flat screen TV or a car, I think a good consensus view emerges – that’s why I like Yelp. If I ask 100 random people about fashion [good example JamesG], music or a wine, I could care less what they think. And the horrible thing about wine is that I can’t simply play a sample or look at an image. I’ve got to go buy the damn thing.

    Will today’s top 20 professional critics become tomorrow’s 1,000 semi-pros? Probably, but that doesn’t necessarily reduce the role of professional critics and it certainly does not imply that the wisdom of the masses will be harnessed to redefine how we buy wine. It does mean that there are more *individual* domain experts with a specific POV that can relate better to a segment of wine buyers than a broad-based professional critic. Ain’t nothing wrong with that.

    Stop conflating online and social media and blindly stating that everything is different as show by X in industry Y. It’s fear-mongering without critical thought about how people buy wine and how wine is sold. Like most, I think the wine industry is broken, but critics aren’t the cause… they just haven’t been used the right way yet.

  22. Michael, you get it! Well, you always have. I wonder why the social medianistas take everything so seriously. Just the slightest critique of its relevance for wineries makes them feel like they’ve been personally attacked. And then they attack back in ad hominem ways. Weird…

  23. Susan, the internet. social media and mobile devices are revolutionizing everything. If that wasn’t true you wouldn’t use them as cornerstones of your business. We can call them cyber, e-whatever, i-whatever, xyz 2.0, xyz 3.0 but the reality is that they are major catalysts to change and the new digital native (quickly becoming all of us) now interacts effectively and frequently through these new mediums.

  24. Steve,
    With the way cell-phones are permanently attached to people in our culture, brain chips probably wouldn’t be that big of a change.

  25. Steve, Paul, et al….

    Late to the party. Thanks to my good friend Jake for pointing me in the direction of this thread.

    One thing I would like to point out and ask for comments on. Looking at statistics provided by the Wine Institute, during the period 1998 to 2002 total wine consumption increased in the United States by 17.5%. From 2003 to 2007 it increased by 16.1%. From 2008 to 2012 it increased by 14.7%. The rate of growth of wine consumption in the United States is actually slowing.

    Is this in any way attributable to the democratization of wine criticism or the rise of social media or any of the other topics discussed here? I don’t know enough to say that….but I’d guess that nobody else here knows enough to say that either or to dispute it.

    I would only say that I don’t see that as a positive trend, particularly when we have a larger group of Americans of drinking age now than in recent memory.

    Adam Lee
    Siduri Wines

  26. Adam, my feeling is that statistics can be misleading. I wouldn’t automatically conclude that the rate of growth is slowing. Figures for all 3 years are in the same general range. Even if the rate is slowing, I don’t think social media has anything to do with it.

  27. Steve,

    As I said, I have no reason to say that social media is slowing sales and I definitely didn’t say that. But right now I don’t see any rise in the rate of wine consumption in the United States during the rise of social media. I agree that statistics can be misleading, which is why I think needs to be looked at.

    There was an interesting Dartmouth University study some time back about the decline in movie going and it attempted to tie it into the end of Siskel and Ebert. I think each individual market is unique, but there are some parallels between the end of specialized critics and the rise of democratization of voices in both the movie business and the wine business (of course there are many other factors to consider, like home viewership, etc).

    Adam Lee
    Siduri Wines

  28. Steve – my two cents – it’s all about relatioships. It always has been. Yes, online relationship too. People want to feel connected. They want to feel good. Wine makes people feel good. None of this is rocket science. When you get right down to it, wine is the great unifer.

  29. Someone once said that history doesn’t repeat itself, but it rhymes. The music industry isn’t directly analogous to the wine industry because so far, nobody has figured out how to send a bottle of wine electronically. That said, if you are in ANY business that sells to consumers you’d be an utter fool to shrug off the communications revolution and how it has changed the ways that people make purchases. When it comes to wine, the one thing that the average consumer has trouble with is figuring out what they should buy. Pretty label? Random wine store guy? Recommendation from an expert you don’t know? Indecisiveness is the key road block. Help the consumer make a decision with confidence. Create a platform that generates taste profiles for wine consumers based on their past wine preferences and generates recommendations – with discounts – based on this information, and you will increase sales. Enable these consumers to share their recommendations with their friends and you will further increase sales. No need to over-think it.

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