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A comment on marketing, after receiving the latest Bordeaux hype from a press release

9 comments

 

You know, I understanding marketing. When a winery or wine region touts itself as the “best ever,” or “greatest vintage,” or simply uses self-reverential language that makes it sound like it’s sitting at the right hand of God, it’s merely putting its best foot forward in a formal situation—as most of us do.

Say you’re at a job interview, or maybe meeting your new boyfriend’s family for the first time. Of course you’re going to be charming and try to impress these people with what a special fellow you are. You might even do a little discrete bragging…nothing too over-the-top, just enough to let them know you’re better than the average bear. After all, as Rabbi Hillel said two thousand years ago, “If I am not for myself, who will be for me?”

But really, there has to be a limit. Bordeaux (echoed by its various supportive critics) has proclaimed vintages of the century so often, we might have to reinvent the concept of “century” in order to accommodate all those special years. Its image, conjuring up marble palaces and royalty, is the nearest thing in winedom to the regality of the British royal house, itself a product of the greatest marketing the world has ever seen. And certainly, the proprietors of Bordeaux chateaux know a thing or two about pulling off the elite act! On the other hand, certain Napa proprietors who try to mimic the glamor, fashion and mansions of Bordeaux–and they’re out there–are plus royaliste que le roi, more royal than the King. Which makes them tres amusant, although they don’t intend to be.

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A word about the commotion over Justin cutting down those oak trees. I have a long admiration for Justin, one of the icons of Westside Paso Robles. I always liked their wines, and when Justin Baldwin himself owned it, I thought he was a great guy who brought a lot of savvy to a region that needed it.

Now, Justin appears to be experiencing a rather serious backlash because of the tree cutting: restaurants are canceling their accounts and longtime customers say they won’t buy the brand anymore. As one of them noted, in the Paso Robles Daily News, Paso Robles itself is Spanish for “Pass of the Oaks.” Cutting down a bunch of old, beautiful oak trees must hit locals doubly-hard in that lovely part of Central California.

I couldn’t say if Justin’s ownership was right or wrong. There may be mitigating circumstances. Unlike many people, I’ve learned not to take fast positions on topics I haven’t studied. But I can say that the owners, The Wonderful Wine Company, showed surprisingly little foresight into how such a thing would be perceived. This is the age of the Internet, of social media; cutting down those trees provided perfect fodder to the nimbyism that often runs throughout wine country, where people understandably like the rural, scenic ambience and don’t want anybody or anything to mess with it. Surely, the Justin brouhaha testifies to the need to have a public relations consciousness within an enterprise—not necessarily a department, but somebody savvy who can anticipate public reaction and warn management of the potential risks. That does not seem to have been the case at Justin. There are lessons to be learned here for all wineries.


Big Pot: The marijuana industry learns from wine

4 comments

 

I am astounded how rapidly the marijuana industry is growing into a bona fide, full-fledged business. In fact, it’s starting to look a lot like the wine industry

My marijuana days—and they were many—happened when pot was illegal. You could get arrested for possession of a joint; I knew lots of people who were. We used to try and guess which would be legalized in the U.S. first, pot or gay marriage. I always figured it would be pot. I was wrong, but not by much.

California began the legalization process of medical marijuana back in 1996, but even today, marijuana is not completely legal, as gay marriage is. However, this November, California voters will probably pass the Control, Regulate and Tax Adult Use of Marijuana Initiative, provided it can get enough signatures to make it onto the ballot, which seems likely. And with billions of dollars at stake, entrepreneurs are lining up to grab their fair share of the profits from an industry that—like wine—offers ordinary people pleasurable respite from their daily toils.

The latest evidence of this is an email I got yesterday. It’s from a high-powered investor relations firm, IRP, with offices in L.A., New York, Miami and Hong Kong. The email (you can read it below) was a press release touting a new company, Kush Bottles, a California company (with whom I have no relationship whatsoever, in case you’re wondering) to help “ease the pain and eliminate the headache of entering this fast-growing, opportunistic market.” Kush “provi[des] cannabis companies across the U.S. with market expertise, proper branding and high-quality packaging that satisfies the stringent requirements of the law.”

What strikes me is how high-level all this activity is. Almost overnight, it seems, we’re talking about the stock market (IRP has a lot of NASDAQ clients, and Kush is listed over-the-counter), and a level of complexity to the pot market that requires wannabe players to hire expert advice. The tone of IRP’s press release is extraordinarily similar to the press releases I get everyday from wineries: professional, articulate, and crafted in the public relations jargon language we’ve come to expect from a press release.

The wine industry discovered years ago that if it wants to play in the Big Leagues, it has to do so with bigtime marketing savvy and media relations professionalism. The marijuana industry, now in its infancy, reminds me of Napa Valley wineries in the 1960s and 1970s, when they were owned by visionary but rather naïve people when it comes to business. Wine took decades to go Big Business. Pot took a couple of years, and the way it sells itself is changing overnight. The day of the mom-and-pop pot cultivator is over. Welcome to Big Pot.

Here’s the full text of the IRP email, if you’re interested.

Dear Steve,

My name is redacted and I am contacting you to arrange one of the first interviews with the CEO of Kush Bottles, Inc. (OTCQB: KSHB) – – a rapidly growing Southern California company that is helping entrepreneurs across the U.S. enter the rapidly growing cannabis industry. Nick Kovacevich, the CEO of Kush Bottles is traveling to New York this week and will be available for any live interviews.

Entrepreneurs all over the nation are eager to enter the legal cannabis market, which could approach $9 billion by the end of 2016, according to massive expansion projections in existing medical marijuana markets, which estimate as much as 99% growth.  More states look to implement medical marijuana programs as doctors and researchers continue to uncover the medicinal benefits of cannabis. In addition to the growing medical industry, four states and the District of Columbia have approved recreational/adult-use programs, which further propel the expansion of legal cannabis nationwide.

Unfortunately, cannabis is still one of the most complex industries within the United States. As the laws evolve, new rules are put into place, making it difficult for cannabis businesses to keep up with the challenging regulations that govern legal marijuana. Growers and dispensaries must understand and carefully follow a multitude of laws that govern their business operations. Packaging, branding and labeling represent some of the biggest hurdles that a business must overcome. If any of those elements are mishandled, the business could be fined and/or shut down.

Kush Bottles, a California-based company, publicly-traded under the symbol “KSHB,” on the OTCQB, at approximately $1.35 per share, was founded in 2010 to ease the pain and eliminate the headache of entering this fast-growing, opportunistic market. This forward-thinking startup is a one-stop shop for any business looking to get going in the legal cannabis trade. Using its first-mover advantage, Kush Bottles is providing cannabis companies across the U.S. with market expertise, proper branding and high-quality packaging that satisfies the stringent requirements of the law – all without incurring massive legal fees.  In addition to saving clients thousands of dollars in legal expenses by helping them navigate compliance hurdles, the company also allows their clients to bring in more sales by using proven branding and marketing techniques to help make their products stand out to consumers.

Offering high quality innovative packaging solutions while also providing clients with crucial regulatory insight is the magic formula behind Kush Bottles’ success.  The company has proven its model by continuously growing revenues and posting net profits, which is rarely seen amongst other cannabis-related companies.  Furthermore, as a result of using their regulatory knowledge to help cannabis entrepreneurs achieve compliance, they have built an expansive network of growers, processors, and retailers across the United States.  With over 5000 returning customers to date, Kush Bottles is one of the largest suppliers of packaging and ancillary products for the legal cannabis industry.

We would like to offer you one of the first opportunities to interview Nick Kovacevich, the Company’s Co-Founder and CEO.   Nick has tremendous insight into the challenges that face the legal cannabis industry.  He is always excited to share his vision for helping entrepreneurs overcome these challenges and discuss how Kush Bottles has become the industry-leader in cannabis packaging and branding.

I can be reached via email at psugarman@irpartnersinc.com or via phone at 818-280-6801.

Sincerely,

redacted

Vice President, Media Relations

www.irpartnersinc.com


Is classic marketing an anachronism?

16 comments

 

I take Reka Haros’s point that there is “deep confusion around the term ‘marketing,’” specifically that marketing all too often is confused with sales and… marketing tactics confused with marketing strategy.” I’ve been in this business for a long time and even I can’t be sure of the differences; but after all, these are only words we use to describe slippery and overlapping concepts. Let me explain.

Haros, a marketing manager who wrote her op-ed piece in the “Trends” blog of the alternative closure company, Nomacorc, identifies three phases of marketing (similar to my five-phase analysis of West Coast Pinot Noir), stretching from the 1950s (think of T.V. automobile commercials of that era), to Marketing 3.0, our present time, when the Internet has empowered people, leading to all sorts of challenges to marketers.

What kinds of challenges? Marketers, says Haros, now need “to access [consumers’] hearts too,” through such concepts as “emotional marketing,” which itself is based on establishing “trust with consumers through identity, integrity, and authentic image.”

I guess I would argue that “emotional marketing” is nothing new. Look at this advertisement, from the Nov. 7, 1960 issue of TIME:Burington

It shows a mom and her little boy, on their way presumably to or from school. The little boy wears a Mackintosh (raincoat to you non-Brits) made of Burlington’s waterproof fabric. The ad capitalizes on the emotional bond between mom and son, on her sense of security that her boy won’t get wet in the rain, on the boy’s innocent trust, and on the “comfort and safety” Burlington Industries provides to Americans in the everyday pursuit of their lives. That is emotional marketing from nearly sixty years ago, right down to the scrawled drawing in the boy’s hand, of a sun shining on a stick-figured little boy much like himself.

The problem with wine marketing today, says Haros, is that the wine industry has “a confused idea” of what it means. She accurately concludes that, too often, social media is used by wine marketers as a strategy, rather than the mere tactic it actually is. Haros also accurately understands that marketing and sales people speak entirely different languages: marketers propose, but sales people dispose; and sales people—hard-driven road warriors, as opposed to the desk-bound creators in marketing–can be “hard to convince.”

For these reasons, Haros concludes that “wine marketing is still in its first stage of evolution.” It is here, however, that she runs out of solutions: it’s easy to diagnose a problem, hard to fix it. Granted that wine marketers need to develop “a long-term vision,” but this is easier said than done. The chief obstacle to this development, as I see things, is that marketing, as classically understood, may be an anachronism. [Italics mine] Marketing used to be based on the [true] assumption that most consumers were idiots who would fall for craftily-conceived campaigns designed to convince them to buy products and services they might not even really need. Using “emotional” and other [misleading] tools, marketing agents could appeal (often subconsciously) to consumers’ secret fears and desires, manipulating them in desirable directions. To refer back to the 1950s again, this approach worked: Marketers (and advertisers) were dealing with a naïve, credulous population that proved over and over again that it could be manipulated, even without being aware of it.

We have now in America, by contrast, an entirely different population, especially the young. No longer naïve, they are suspicious to a fault. No longer credulous, they believe practically nothing, except if their friends believe it. They particularly disbelieve anything deriving from authority. If it’s a billboard, a pop-up ad on the computer screen, a television commercial, a radio pitch between songs, it’s automatically tuned out.

If marketing indeed is as outmoded as rotary phones, then why do wineries still engage in the practice? Because they know that, if they do nothing, the chances are close to zero that they will continue to exist. This is their dilemma: thrust between the devil and the deep blue sea (or a rock and a hard place), they see, on the one hand, the necessity of spending time and money in a practice with no guaranteeable results and, on the other hand, doing nothing, in which case the result is guaranteeable: catastrophe. Given such a choice, it’s easy to see why wineries continue to engage in marketing.

And the truth is, every once in a while, lightning strikes: a marketing tactic actually achieves something. It’s also true, though, that serendipity is probably as effective as marketing; sometimes you just need to be in the right place, at the right time, and then do nothing to screw things up. As for marketing strategy as opposed to tactics, well, it sounds grandiose, but it’s really a unicorn. I’m not big on strategies, which our modern world seems to dismiss.

Can sales succeed without marketing? Probably. If a winery has to choose between the two, obviously sales is vastly more important. You do need a properly educated sales force, one that has at least some grip on the winery’s basic facts and ideas, but this isn’t necessarily hard to do. At some point, though, you have to wonder whether or not classic marketing can be updated to the 21st century, or whether it’s time has come and gone. If there’s a next phase of marketing, I don’t know what it is…and neither do marketers.


Another wine-rating system, this time based on 1,000 points

10 comments

 

Forget about arguing over the differences between 96 and 97 points. Now we can debate the finer distinctions between a score of 875 and 876. Or 943 and 944. Or 563 and 562. Whaaat?? That’s right. There’s a new wine rating kid in town, called Wine Lister, and it uses, not the familiar 100-point system, but a thousand point system.

No, this is not The Onion. How’s it work? Well, according to their website, they gather data from multiple sources “to give a truly holistic assessment of each wine,” and the reason for a 1000-point system is because Wine Lister “can actually differentiate to this level of precision [which protects] the nuance and meticulousness of the exercise.”

Well, yes, I suppose a 1000-point system can be described as more “nuanced” than a 100-point system. But really, people who believe in score inflation now have a powerful new arrow in their quiver with which to criticize numerical ratings. From their press release, Wine Lister seems to be using only three critics at this point: Jancis Robinson, Antonio Galloni and Bettane+Desseauve (a French-based, sort of a Wine-Searcher website).

At first consideration the notion of a 1000-point system sounds dubious. It does present us defenders of the 100-point scale a certain conundrum: after all, if the 100-point system is good, then a 1000-point system has to be better, right? Maybe even ten times better. Of course, this can lead to a logical absurdity: How about a 10,000-point system? A million-point system? You see the problem.

Of more interest to me than how many points the best system ought to have are the larger questions concerning the need for a new rating system, and the entrepreneurial aspects of Wine Lister’s owners to launch one at this time. Consumers already have many, many wine rating and reviewing sources to which to turn, both online and in print. They don’t seem to be demanding yet another one. Why does Wine Lister feel their time has come?

Well, maybe it has. Any startup is a gamble, and in the entrepreneurial world of wine reviewing, which seems to be undergoing tumultuous changes, anyone can be a winner. Antonio Galloni took a huge gamble when he quit Wine Advocate to launch Vinous, which has turned out to be such a huge success. Will Wine Lister be? I don’t know, but it has good credentials. What it has to prove is that it’s more than a simple compilation of Jancis-Antonio- Bettane+Desseauve reviews. They’re also factoring in Wine-Searcher, and there’s even an auction-value component (although most consumers won’t care about that). But beyond being a “hub of information” (from the press release), I think Wine Lister’s limitation is that wine consumers seem to want a personal connection to the recommender they listen to, which an algorithm cannot provide. I could be wrong. I’ll be following them on Twitter @Wine_Lister and we’ll see what happens.

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While I am affiliated with Jackson Family Wines, the postings on this site are my own and do not necessarily represent the postings, strategies or opinions of Jackson Family Wines.


Scores, stores and wineries: a new analysis

7 comments

 

Every day, I get blast email advertisements from wineries or wine stores touting the latest 90-plus point score from Suckling, Parker, Vinous or some other esteemed critic. Here’s an example that came in on Saturday: I’m reproducing everything except the actual winery/wine.

_____ Winery’s ____ Napa Red Wine 2013 Rated 92JS.

Notice how the “92JS” is printed in the same font type and size as the name of the winery and wine. That assigns them equal importance; the rating and critic are virtually part of the brand. Later in the ad, they have the full “James Suckling Review” followed by a full “Wine Spectator Review” [of 90 points]. This is followed by the winery’s own “Wine Tasting Notes,” which by and large echo Spectator’s and Suckling’s descriptions.

Built along similar lines was a recent email ad for a certain Brunello: The headline was “2011 ____ Brunello di Montalcino DOCG”; immediately beneath is (in slightly smaller point size), “94 Points Vinous / Antonio Galloni.”

We can see that, in these headline and sub-heads, through physical proximity on the page or screen, the ads’ creators have linked the name of the winery and the wine to the name of the famous critic and his point score. One of the central tenets of advertising is to get the most important part of the message across immediately and strongly. (This is why so many T.V. commercials begin with the advertiser’s name—you hear and see it before you can change the channel or click the “mute” button.) In like fashion, most of us will quickly read a headline (even if we don’t want to) before skipping the rest of the ad. The headline thus stays in the brain: “Winery” “Wine Critic” “90-plus point score.” That’s really all the winery or wine store wants you to retain. They don’t expect you to read the entire ad, or to immediately buy the wine based on the headline. They do expect that the “Winery” “Wine Critic” “90-plus point score” information will stay embedded in your brain cells, which will make you more likely to buy the wine the next time you’re looking for something, or at least have a favorable view of it.

This reliance of wineries and wine stores on famous critics’ reviews and scores is as strong as ever. There has been a well-publicized revolt against it by sommeliers and bloggers, but their resistance has all the power of a wet noodle. You might as well thrash against the storm; it does no good. The dominance of the famous wine critic is so ensconced in this country (and throughout large parts of Asia) that it shows no signs of being undermined anytime soon. You can regret it; you can rant against it; you can list all the reasons why it’s unhealthy, but you can’t change the facts.

Wineries are complicit in this phenomenon; they are co-dependents in this 12-Step addiction to critics. Wineries, of course, live and die by the same sword: A bad review is not helpful, but wineries will never publish a bad review. They assume (rightly) that bad reviews will quickly be swept away by the never-ending tsunami of information swamping consumers.

Which brings us back to 90-point scores. They’re everywhere. You can call it score inflation, you can argue that winemaking quality is higher, or that vintages are better, but for whatever reason, 90-plus points is more common than ever. Ninety is the new 87. Wineries love a score of 90, but I’ve heard that sometimes they’re disappointed they didn’t get 93, 94 or higher. Even 95 points has been lessened by its ubiquity.

Hosemaster lampooned this, likening 100-point scores to Oprah Winfrey giving out cars to the studio audience on her T.V. show. (“You get a car! And you get a car! And you get a car! And YOU get a car! Everybody gets a car!”) Why does this sort of thing happen? Enquiring minds want to know. In legalese, one must ask, “Cui bono?”—Who benefits? In Oprah’s case, she’s not paying for the cars herself; they’re provided by the manufacturers, who presumably take a tax writeoff. It’s a win-win-win situation for Oprah, the automakers and the audience.

Cui bono when it comes to high scores? The wineries, of course, and the wine stores that sell their wines (and put together the email blast advertisements). And what of the critics?

Step into the tall weeds with me, reader. A wine critic who gives a wine a high score gets something no money can buy: exposure. His name goes out on all those email blast advertisements (and other forms of marketing). That name is seen by tens of thousands of people, thereby making the famous wine critic more famous than ever. Just as the wine is linked to the critic in the headline, the critic’s name is linked to the 90-plus wine; both are meta-branded. (It’s the same thing as when politicians running for public office vie for the endorsement of famous Hollywood stars, rock stars and sports figures: the halo effect of fame and glamor by association.) There therefore is motive on the part of critics to amplify their point scores.

But motive alone does not prove a case nor make anyone guilty. We cannot impute venality to this current rash of high scores; we can merely take note of it. Notice also that the high scores are coming from older critics. Palates do, in fact, change over the years. Perhaps there’s something about a mature palate that is easier to please than a beginner’s palate. Perhaps older critics aren’t as angry, fussy or nit-picky about wine as younger ones; or as ambitious. They’re more apt to look for sheer pleasure and less apt to look for the slightest perceived imperfection. With age comes mellowness; mellowness is more likely to smile upon the world than to criticize it.

Anyhow, it is passing strange to see how intertwined the worlds of wineries, wine stores and wine critics have become. Like triple stars caught in each others’ orbits, they gyre and gimble in the wabe, in a weird but strangely fascinating pas de trois that, for the moment at least, shows no signs of abating.


What a beer company can teach wineries about videos

7 comments

 

I buy a lot of wine direct from wineries. The best and fastest way to do this is through their website. Those shopping carts and “Place Order” buttons make life a lot easier. But I do have a gripe. If your shipping address is different from your billing address, why do you have to enter your birth date for both? If someone can explain that to me, I’ll give you free lifetime subscription to steveheimoff.com.

Some wineries apparently haven’t caught up to the 21st century, though. They list their wines on their websites—but still make you call the tasting room to order the old-fashioned way, through a person. I just did this the other day and it took about 15 minutes for a single bottle. The person kept asking me to spell my name, to give my phone number again, etc. etc., and then I kept hearing her talk to herself, saying stuff like “Hmm, this isn’t working right, just give me a second.” And this wasn’t some mom-and-pop winery in the boondocks but a major winery owned by an international corporation. What’s up with that? So Nineties.

Then there are the wineries that don’t let you order their wines at all unless you’re a club member. Their websites are the digital equivalent of a doormat that says “Go Away, and Don’t Bother Us, Ever Again!” You can’t even sign up to be a club member, you have to email them and hope someone will get back to you. I suppose this is done to make their wines appear exclusive—but it’s very snobby.

Winery websites should be places people want to go to and hang out for a little while. They shouldn’t make you feel anything negative. Along those lines, the drinksbusiness reported yesterday that Miller Lite beer apparently is “lost…again,” a reference to their “distributors [being] agitated” because the brand is “sick.” So Miller Lite’s parent company, MillerCoors, is looking for a “new breakthrough ad campaign.”

Well, that’s very strange, because on the same day (yesterday) I got a report from the latest Nielsen data (sorry, no link) that MillerCoors volume overall is down in the last 12 weeks, year over year; but Miller Lite volume grew by +1.5% y/y in the period.” !!! That would indicate that Miller Lite is not sick and may be carrying the company’s other SKUs! Anyway, I went to Miller Lite’s website to see if there’s anything sick about it, and I have to say, their videos are great. I watched all 15 of them and loved the ones that take place in the grocery store. (The Troy Aikman video is classic.) I realize that making videos costs money and not all wineries can afford it; but Miller Lite’s are SO much more creative and entertaining than the typical winery video that has a winemaker or owner giving some boring spiel about terroir and passion. (The Miller ones that show the closeups of golden brew and the brewmaster, Dr. Ryder, are not as interesting.)

Wineries tend to be overly timid in their approach to videos. So many of them are cut from the same mold: boring, predictable, with string quartets trying to get a classy feel. I think some winery owners are conservative and live in a bubble where they think because they’re making videos they think are classy, everybody else will be fascinated by them. Sorry, that’s not how it works. The Miller Lite videos should be object lessons for how to capture the consumer’s attention. And just because they’re funny doesn’t mean that a “serious” brand can’t use humor and human interest. I love that the people in the Miller Lite videos are “real.” Of course, they’re actors, but they look and sound real, and the store looks like the sort of place I’d buy something from—not Premier Cru!

And that’s what we want to see on the Internet, isn’t it? Real people, like us, not talking heads who sound like they’re reading from a teleprompter.


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