“Wine is sold, not bought”
That’s the word from Michael Brill, who started up Crushpad years ago.
He was commenting on my blog post from yesterday, and when I read those words my brain fired on all cylinders because the phrase is not only pithy, it’s true, and made me think. What does it mean, “Wine is sold, not bought?”
Obviously, wine is bought. But selling precedes buying; you can’t buy something that someone’s not selling. And since everyone is selling these days in the wine industry, you clearly have to sell better than everybody else if you want to sell anything at all!
Well, that’s pretty obvious, isn’t it, but the point I want to make is that selling has become harder than ever nowadays, and so it requires smarter ways of doing it. You have to think outside the box. Everybody’s trying to think outside the box, which means that the space “outside the box” is getting crowded–it’s no longer “outside the box” but inside the box. (A little Zen paradox there…) So you have to get even further outside in order to be truly outside the box. That, in turn, means you have to know where the box is: which implies clear perception. Which implies knowledge, because knowledge is power. This is why the smartest people are generally the most successful in selling wine, and I don’t mean just I.Q. smart, I mean creative, visionary, driven, even a little mad.
Speaking of Mr. Brill, he’s launching a new business. It’s called Cruzu, and here’s how he explained it to me. (Any dumb mistakes I made in taking down his remarks are mine, not his.)
“It’s a crowd-funding source for wine, Kickstarter for wine. Independent winemakers and small wineries can create wines backed [financially] by wine enthusiasts. In exchange for backing, the backers get a combination of a good deal on the wine; they follow the winemakers and create a relationship with them. It’s a little Crushpaddy…”.
As with Kickstarter, Michael will list specific projects on the Cruzu website, projects brought to his attention by the winemakers themselves. If a project gets funded, it goes ahead; if not, it doesn’t. Michael asked me not to mention any names at this point, but I can tell you there will be some very good, high-level winemakers involved, some of them familiar from his Crushpad days.
Cruzu sounds interesting and very apropos for our times. With a recovering economy, people may feel like they have the extra cash for fun stuff like this. And the ethos sparked by social media—of interactivity, of connectedness, of wanting to be heard—is perfectly in tune with Michael’s idea of “creating a relationship” between wine drinker and winemaker.
I wish Michael, who’s always been an outside of the box thinker, well.
This is a very old expression from the stock market – “stocks are sold, not bought”, and although it’s got some truth, it really refers to the idea that people don’t necessarily know what they want, but can be easily guided – which isn’t necessarily a bad thing, although much worse for institutional investors than retail wine clients and retail wine stores.If people just “bought” stuff, you wouldn’t need wholesalers visiting clients; clients would just order what they wanted.
That is an interesting observation. While I find Napa’s struggles in certain markets to be borne more of wine style than selling strategy, I do believe that the latter might be more of a factor than I realized.
When was the last time the Napa vintners did a traveling road show? Hell, they used to visit smaller markets like Columbus and Indy in the 90s, but I can’t recall them even deeming Chicago or New York worthy of any real outreach efforts for many years. 2009 in NYC was the last visit that I can recall; whereas Sonoma seems to be making a concerted effort in this regard annually. Meanwhile, younger buyers who may not have been of drinking age when Napa was last popular in NYC or Chicago are inundated with large scale tastings and seminars ranging from the annual Bordeaux grand tasting to Tuscan white wines,the Gambero Rosso Tre Bicchiari tasting, Castilla-La Mancha, Wines of Portugal and the list goes on and on.
Perhaps the Lord and Ladies of Napashire should spend less time bitching about the three-tier system, “gatekeepers” and hipster somms and more time off their asses and doing the hard work of selling their wines. They’ll just need to get over the cognitive dissonance of realizing that their wines don’t sell themselves, everything isn’t somebody else’s fault and that they aren’t so special as to be exempt from the down and dirty marketing and selling that everybody else deems necessary.
I absolutely LOVE the quote!
Michael Brill is one of the smartest people I’ve met in the wine business. His new venture sounds promising and I wish him the best of luck.
Me too!
As a seller for 40 years and a producer for only 20 it is a know paradigm that it is ‘Easier to make it than to sell it’…
Bill Haydon – why are you such a buzz kill, always the same diatribe about Napa! Let it rest.
“When was the last time the Napa vintners did a traveling road show? Hell, they used to visit smaller markets like Columbus and Indy in the 90s, but I can’t recall them even deeming Chicago or New York worthy of any real outreach efforts for many years.”
Down here in La-La-Land, wine merchants and restaurateurs could anticipate a Napa Valley Vintner’s tasting every year or every other year — alternating between a Los Angeles County or Orange County venue.
(The last one I recall a NVV event was about seven years ago, hosted fittingly at the Napa Valley Grille in Westwood . . . on the border of the UCLA campus.)
Periodically I write to the NVV and ask about future trade tastings.
My e-mails elicit no replies. (That’s a self-inflicted wound.)
So we trade persons look to the annual Family Winemakers of California combined trade and consumer tasting [http://www.familywinemakers.org/taste] and the annual “Stars of Napa” sequential trade and consumer tasting [http://www.learnaboutwine.com/Stars-of-Napa-Valley] to keep abreast of emerging trends and new producers.
Now to be fair, La-La-Land wine merchants and restaurateurs have a notoriously poor reputation for not attending trade tastings.
The arrogance / sloth evinced by too many is: “Let these modern day Willy Loman wine sales reps schlep over to my establishment, and call on me with their chill bags.”
(And that’s also a self-inflicted wound.)
So many trade tastings bypass La-La-Land for San Francisco, where the wine merchants and restaurateurs “seem” less jaded about grabbing the car keys (or hopping on BART) and heading out for an event.
Steve, wearing your new hat as a Jackson Family Wines exec occasionally going into the field with sales reps, what’s your colleagues’ “take” on each market — L.A. and S.F. — in attracting trade persons to events?
(And thanks once again to JFW and you for conceiving and organizing and hosting the Santa Maria AVA / terroir tasting at République restaurant recently. You got a nice turn-out of wine retailers and restaurateurs and wine press.)
The Naked model continues to spawn “outside” the box, while still sitting in a (bigger) box, no?
Ron, if I understand you, then I think you’re exactly right. Naked has done a !@#$% fantastic job of building a new type of direct to consumer winery. I am in awe and inspired by what they’re doing. But ultimately they are a winery (your “bigger box”) and they decide which wines will be produced, which ~100 contract winemakers they hire, and recognizes the lion’s share of the value created. The winemaker gets paid as a contractor but ends their relationship with no direct consumer relationships. For winemakers who need cash to pay the bills, it’s a great deal… for those that want to create their own wines and build their own direct business, not so much.
My fanboy obsession with Naked aside, I think there are plenty of opportunities for other models. We’re coming at it from a much lower level – providing a software+logistics platform that allows over 100,000 wineries to connect directly with consumers with their own projects and create their own long-term direct relationships. Soon, a small winery in Savoie or Bierzo (or Napa) can connect and sell directly to US consumers. They don’t need another winery, an importer, a distributor, or a retailer relationship to do that. They ‘own’ the relationship and can create multiple projects: starting with crowdfunding but then club subscriptions, ecommerce, flash sales and so on.
Is this a niche or a massive new direct channel? Dunno.
Chris Solle is not only the smartest guy alive, but one of the top 10 good-looking and maybe top 5 good-smelling.
Michael,
Your quip about Chris reminds me of this dialogue exchange in the Marx Bros. movie titled “Monkey Business”:
Groucho: “If you look at it, it’s a barn. If you smell it, it’s a stable.”
Chico: “Well, let’s just look at it.”
~~ Bob
Michael,
Your plan sounds interesting but most wineries and especially those from Bierzo and Savoie will need at least a local importer/distributor to market and sell there wines.
The more obscure the region or varietal the more their needs to be a selling force that gets behind the wines and brings them to the restaurants and shops that are interested which is a small portion of the market.
I like the idea of your crowd funding for under capitalized people who are passionate about what they do in the full time wine making day job so that they can bring their own wines to the market
John Skupny as far as the Bill Haydon Napa rant goes it will go on as long as the well heeled Ritchie Riches who have a fantasy about owning a Napa Valley winery keep on buying fruit, hiring big name wine makers and charging to much for their no name uninteresting Napa Valley fruit bombs!
Cheers,
Joe
Joe,
You can check, Bill has an ax to grind, search him on many blogs around – it is generally off topic and always vitriolic to Napa Valley. As far a your opinion, yes, having lived and worked in the Napa Valley for over thirty years I know first hand what you speak of- and some of it is true. However, by taking a wide brushstroke to dismiss an entire region is, as you have, seems exclusionary and limiting. It ignores thousands of hard working [not all richie riches] people in vineyards and cellars; Winemakers and producers who do it themselves – who have started in the trenches and made wine they want to and that people like to drink. It seems we have come into an era where one movement or region has to put down another one to glorify themselves. I am not a big fan of Bud light but I will fight to my death for your right to drink it!..
Hi Joe.
I know it looks like it, but it’s not always the case that a local (state-level) importer/distributor & retailer is required to get a wine from a foreign producer to a US domestic consumer. I kind of need to leave it at that for now, but assume that there is a fair bit of federate and state-compliant sausage-making re logistics, licenses and regulatory. The important point is that this is all abstracted away from both consumers and winemakers.
The bigger issue you (indirectly) raise is whether winemakers can effectively “sell” themselves to consumers. Because it’s not really so much about retailers and restaurants in this model, but rather a winemaker sharing their world with consumers and consumers buying into that with their dollars. Anecdotally, I think we all know that wine enthusiasts crave these relationships and often turn into repeating annual purchases. What opened my eyes was a SVB study from last year that showed a “typical” Napa Valley winery that had a tasting room was able to generate over 50% of its revenue from the tasting room or tasting room-derived sales (e.g., club). But with no tasting room, the industry number is under 5%. People crave experiences and relationships – can we be a platform that facilitates that online?
On a side note, even though I winge about the channel… I don’t think three tier is an anachronism at all. The longer term idea is to incorporate domestic retail into the environment. So let’s say I back a whole cluster Pinot Noir project in Sta. Rita Hills… 2 days later, I may get an offer from, say, K&L for a mixed 3 pack of SRH Pinot Noir – retail priced at $130 for $99. At that point I’m going to have a very high interest in learning more the conversion rate of something like that should be quite high. Not really doable without retail involvement.
OTOH, the status quo has been remarkably resilient, so it could also all end in tears.
…MIchael
The approaches all share the new emphasis on the collaborative economy and do spill over into each other. It should be said that there are a few of Nakedwines.com winemakers who believe that they are building their own brand through crowdfunding using the Naked infrastructure (e.g., Dahlia Ceja and Bridget Raymond are discussing this tonight at GirlDevWeek tonight in SF)
And no discussion of this sort should occur without mentioning son of CrushPad–The Wine Foundry, which like Nakedwines.com provides all the auxilliary services that a winemaker needs to bring the product to market. Admitedly, most of the wealthy clients leave wine making to the staff, but I know of a few that are very hands on. At one of the recent Bay Area Wine Society monthly judgings, a TWF wine took first place: SoMa 2013 Viognier, and its rare when a white wine comes out on top.
Hi Michael – great work with Cruzu. As an Aussie winemaker I’m hoping Cruzu will make it to Australia!
After a rough and tumble business experience I had the good fortune to get support from Naked Wines(NW), initially making wine with NW in the UK and today with Angels in the US and Australia as well. I also lucked-in to support from local growers with offers of gifts of fruit to let me keep making wine, and suppliers and other winemakers lending us equipment. Really was an extraordinary experience.
You are right that NW is good for winemakers that need cash to pay the bills. NW was trying to send us $70,000 to buy oak and fruit in the run-up to 2012 vintage, before we had a bank account in our tiny new wine business! I’d like to think that without that initial funding from NW I’d still be making wine, but am sure we would be doing it hard and not able to make the best wines that funding and access to market from NW allows. Today we employ half a dozen people. Excluding my wife and I, mostly talented young winemakers (Matt Froude has his wine science degree, Laura studied winemaking in Italy, Stacy is studying winemaking and is flying trapeze artist in spare time, and Jasper is with us for vintage from South Africa). From NW has popped the opportunity for me to give the next generation of winemakers experience and education. Also from the NW opportunity we get to give growers and good fruit the best opportunity to shine. Wine shows are a lottery, but in the last 6 months major trophies include for Best Victorian Cabernet and Best 2013 Shiraz at Concours des Vins de Victoria, and am off to Sydney on Thursday with instructions to have enough space in the return luggage for a piece of crystal from the Royal Sydney Wine Show.
But I really want to comment on your thinking that with NW:
“The winemaker gets paid as a contractor but ends their relationship with no direct consumer relationships.”
Across the NW website we talk with thousands of consumers/NW Angels. Angels visit us at the winery, and we meet Angels at shows and tastings. I feel a strong and ongoing debt to this community that gave us support. And I think some of the Angels get pleasure from that sense that they gave someone a boost and it’s been a win. One of the things NW does well is create an environment where relationships can develop between consumers and producers. I guess it will be a different experience for each winemaker, but for me it is much more than the dollars.
Again it won’t be for everyone, but crowdfunding for winemaking, whether through Cruzu, Pozible, Naked Wines and others has benefits of easy communication between the maker and the market; there is economic efficiency – wine is made for a known market so less waste and there no bank interest to pay. And for me just as importantly, there is less gatekeeper activity telling what we should make. Ultimately consumers will taste, rate and comment on the wine. Fantastic to have such easy and accurate feedback from the people I enjoy making wine for.
Cheers, Sam
A Wine & Vines article worth reading:
“Wine Consumers Thirsty for Other Beverages;
Sobering data from Wine Market Council paints wine drinkers as fickle.”
Link: http://www.winesandvines.com/template.cfm?section=news&content=145997
From W. Blake Gray’s wine blog:
“Dear Wineries: Big Wine & Spirits Distributors Hate You”
Link: http://blog.wblakegray.com/2015/03/dear-wineries-big-wine-spirits.html
Some wine is “more sold” than others?
Recall this observation from Wine Spectator:
“. . . While small wineries can succeed by selling most of their inventory direct to consumers and large producers have muscle with wholesalers, those in the middle — annual production of 5,000 to 15,000 cases, for example — can’t get much attention from distributors unless the brand is hot.”
Great comments Sam… your experience with Naked is consistent with what I’ve heard from most winemakers. And obviously I make no secret of my huge respect for Naked.
Yeah, maybe “no direct consumer relationships” is a bit heavy-handed, but I still think it’s directionally correct. Let’s say that your or Naked pulled the plug on the relationship tomorrow. What % of people who bought your wine can you continue to sell into? Maybe the few percent that visited you at the winery, but that’s it. Those are Naked’s customers and of course Naked wants them to buy your replacement’s wines, not yours.
Having said that, there’s way, way, way more good than bad in the model: curation, value, building a tribe and managing the fulfillment inefficiencies of the direct model.
Congrats on your success!
UPDATE?
I heard from a New York wine industry professional that purportedly the SWS sales rep was “canned” over this incident:
“Dear Wineries: Big Wine & Spirits Distributors Hate You”
Link: http://blog.wblakegray.com/2015/03/dear-wineries-big-wine-spirits.html