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Think Big, Act Small

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It’s interesting, in the light of this new report on the status of direct-to-consumer wine shipments in the U.S., to project the trend into the future and imagine what the American distribution system might look like in 15 or 20 years.

The report’s most startling discovery is that DTC’s dollar value last year “was greater than the total value of U.S. wine exports.” Almost as noteworthy is the fact that “The direct shipping channel continues to grow at a faster rate than the overall wine market.” DTC is said to be more important to “small and medium sized wineries” than it is to large wine companies that dominate supermarket and big box sales, presumably because the Big Boys have a lock on a distribution system that’s been consolidating in their favor for decades.

Which brings me to the crystal ball part of this tale.

Let’s imagine that it’s 2030 and, all other things being equal (the U.S. still exists, there’s no internal civil unrest to discombobulate markets), consumers are still healthy and buying wine. At the present rate of expansion of DTC, one can easily see the day coming when small and mid-sized wineries sell pretty much everything they produce direct, either through tasting rooms or through some sort of postage.

The result would be a schizoid market: Giant companies (Constellation, The Wine Group, Diageo, etc.), with their scores of individual brands, still dominate the supermarket aisles where most Americans continue to shop. At the same time, more and more consumers are getting their wine direct from the winery.

The situation is roughly analogous to what happened to traditional bookstores with respect to Amazon.com and other online sources of books. The trad bookstores found themselves confronted with a huge challenge: how to stay relevant. It was much easier for busy shoppers to buy something online and wait a few days to get their hands on it, than it was for them to actually get into their cars and drive to a mall or downtown, find parking, wait in line at the register, etc.

As similar-sounding as the situations are, though, there are important differences. Consumers don’t have to go to bookstores, but they do still have to go to the supermarket to buy their groceries, so as long as they’re there, it’s no hassle at all to swing by the wine aisle. This is good news for the big wine companies, who should continue to enjoy robust sales for decades to come.

Still, there are lessons for everyone. The big wine companies are going to have to “act small.” This means creating new brands that seem eco-friendly and appeal to individual niches in the market: young people, urbans, ethnic and racial groupings, housewives, singles, older retirees, liberals, conservatives, hipsters, etc. Although these brands may be mass-produced in the tens, if not hundreds, of thousands of cases, the consumers don’t know that. All they can see is a bottle they can relate to, and that seems to relate to them. To a great extent, the big wine companies are already doing this. They’re going to have to keep doing it, and do it better, if they want long-term dominance.

The small and medium-sized wineries have this lesson: They have to “think big.” They have to put on their businessman’s hat and come up with real marketing plans. After all, direct-to-consumer doesn’t happen all by itself, like Athena springing fully-born from Zeus’s brow. DTC has to be planned, created, executed and followed through; and once you have a loyal customer base, you have to keep it and make sure the competition doesn’t poach it away.

This is where communicating with the customer comes in. If a small winery has a tasting room on, say, Highway 49, in Gold Country, and is selling 90% of their wines “through the screen door,” they’re very lucky. But most wineries aren’t in that position. They may sell 30% in the tasting room, but the rest has to be cultivated, through clubs and the like. This is where social media comes in. Consumers like to feel connected to the producers of goods and services they buy, especially when the product is something as mental as wine. (“Mental”? Yes. There’s nothing emotional about buying a screwdriver. But there is something emotional about buying clothes, a car, wine. Think about it.) I’ve long said that wineries can’t put all their eggs in the social media basket, but they should put at least one or two and, depending how it goes, maybe even three or four.


How do you know if you’re being authentic?

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“Did you stop beating your wife?” is the classic Catch-22 question. If you say “Yes” you admit to having beaten your wife. If you say “No,” you admit you’re still beating her. Either way, you lose.

It must feel the same way when a winery owner is told that he’s not being “authentic” in his marketing strategy. What’s he supposed to say or do to prove that he is?

Yet “authenticity” is supposedly the Holy Grail that Millennials are seeking. We’ve been told this again, and again, and again over the years, particularly with the rise of social media such as Twitter. Here’s the latest version, entitled “Authenticity Key to Wooing Younger Wine Consumers, Price Says.” (It’s in yesterday’s Bloomberg News.)

The bullet point: “The key thing to the younger drinkers is being authentic — they have super-sensitive noses about what’s not authentic about your brand,” Price said. (William Price is chairman of Vincraft Group, a winery capital investment company that works with such wineries as Kosta Browne and Gary Farrell.)

Winery owners might well read Price’s words, scratch their heads and think, “What the hell does being authentic mean?” The questions pile up. What practices are authentic and which ones aren’t? How do you know when you’re being authentic and when you’re not? Is there an authento-meter you can buy that measures it? (Try Googling Authento-Meter.) How much does it cost to be authentic? Are there people I can hire who specialize in authenticity? (Try Googling authenticist.) How do I find them? How do I know if they know what they’re talking about? And so on and on. It’s enough to turn your hair gray.

Some hint of a solution to frazzled winery owners is offered by Michael Honig, of Honig Vineyard & Winery, who says Millennials “have been lied to so often and so many times about these fanciful brands. It’s like the Wizard of Oz, what’s behind the curtain? Well, there’s nothing behind the curtain.”

All right, our winery owner now knows, he must never, ever lie to consumers. Fair enough. But then, he never did lie to consumers, not to his knowledge, anyway, not consciously. Oh, he might have put something on the back label about “the finest grapes from the finest coastal vineyards,” but everyone does that, don’t they? And besides, they were good grapes; he paid an arm and a leg for them. But was it a lie? True, he might have paid a lot more for grapes from other vineyards, but it was the Recession, times were tight, his financial manager (who happens to be his wife) said they couldn’t afford $4,000 a ton, and so they had to settle for $2,000 a ton fruit. But it was good fruit, wasn’t it?

Even so, our owner thinks, maybe he should get rid of that phrase. If these Millennials really have super-sensitive X-ray noses that can detect the slightest lie–no, exaggeration–then perhaps he might tone down his back label.

But what was that stuff about “nothing behind the curtain”? I’m here behind the curtain. Me, my wife, my kids, my brother-in-law who does our sales, my nephew who helps out in the winery. Are we “nothing”? Are we the Wizard of Oz, phony fakes pretending to be things we’re not? The winery owner grows indignant. Who is this Honig to accuse me of being nothing? Why, I should call that little so-and-so up right now and–

Then he collects himself and takes a deep breath. Maybe Honig’s right. Sales have been soft lately, at least since 2009. Maybe that’s proof that I really am nothing. If I were something, sales would be better, right? Our winery owner sighs. He pours himself another drink. I really don’t know what being authentic means, he thinks, and the thought makes him sad. He’s gone through four Kubler-Rossian stages in less than 10 minutes and is now parachuting into the final stage, acceptance. He turns to the Google machine one final time, to find a number for Vincraft. Maybe this Price fellow can give me some advice about authenticity, our winery owner thinks. I just hope he’s not too expensive…


Meet the new meme: terroir as marketing

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What I wrote yesterday isn’t to say that all Bordeaux tastes alike. Lewin doesn’t go there and, in fact, goes out of his way to point out distinctions between chateaux (e.g. Haut Brion and La Mission Haut Brion) that must be due to something–although he cautions the reader that “the only difference [between them] is that Haut Brion is planted at 10,000 vines per hectare, while La Mission is planted at 8,000 vines per hectare.” Last time I checked, terroir does not include the way a vintner plants his vines, so what vine density has to do with terroir is a mystery to me.

In California, when you think of all the things that can mitigate or mask terroir (in addition to Lewin’s catalog, there’s clonal/selection, a tendency to use more oak, a general standardization of winemaking techniques, and considerably more career mobility than in Bordeaux), it becomes easier to understand why all coastal Pinots taste more alike than not. What the wine critic’s task then becomes is to look for differences of elegance, finesse, beauty, balance, texture, ageability and so on–qualities that are not merely expressions of local growing conditions, but of human influence, of proper vineyard management and superior winemaking skills. In other words, the writer’s task becomes the telling of stories, not repeating the conventional wisdom of the terroir meme, which is of very little use to consumers.

And so we come to yet another iteration or mutation of the concept of terroir: it now becomes a marketing tool, a word to use on back labels and sales brochures. How many wines have I seen described as coming from superior terroir that actually are purchased on the bulk market and blended into county-wide or even Central Coast and North Coast appellations? I wish we could put the toothpaste back into the tube and limit our use of the word “terroir” to the only place where it could conceivably apply: to small, individual vineyards that have produced particular wines (varietal or blend) over a longish period of time, where those wines have shown a consistent style and profile. (We might for example look at the Allen Vineyard on Westside Road for its Pinot Noirs from Williams Selyem.) But I think it’s no longer valid (if it ever was) to talk about “Santa Rita Hills terroir” or “Russian River Valley terroir” or “Oakville terroir,” except in the most generalized way, and even then to warn our readers (those of us who have readers, anyway) to take these terroir distinctions with a generous pinch of salt.


Whose blogs are relevant?

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READERS: Here’s another blast from the past, originally published late in 2008. I’ll resume regular posting when I come back from New York, this Friday.

* * *

I had coffee yesterday with M., a highly regarded North Coast winemaker (actually, he had tea) who’s been in the business for a long time. What did we talk about? Blogs, of course. I wanted to know how he (and, by extension, his winemaker colleagues) view wine blogs, and did he think they hold value for him in publicizing his brands.

Yes, M. replied, but… There’s always a “but.” M. put it this way: In determining the value of any particular blog, he wanted to know if it was relevant.

Hmm, I wondered. How do you determine if a blog is relevant? So it was a bit of serendipity this morning to surf through my usual morning mush of blogs and stumble across this one from Caveman Wines, which asks the question, “How do we as wine PR professionals determine which wine bloggers are legitimate or not?” To answer that, the blogger, Michael Wangbickler, a P.R., account manager at Balzac Communications, turned to a guy named Kevin Palmer, who runs an outfit called Social Media Answers. According to Caveman, Palmer came up with a list of 5 metrics by which he measures the value of a blog. Quote:

1. Alexa/Compete – Good for painting a general picture of the strength of traffic to their blog.
2. Quantcast – Most won’t have the tag installed necessary to register with Quantcast. Those that do may be a little more serious about their blogging.
3. Age of blogs – There is high turnover on blogs. An older blog may indicate that the blogger is here to stay.
4. Average Number of posts per month – The more frequently a blogger posts, the greater likelihood that their audience will be larger.
5. Other Social Media channels – Does the blogger have a good following on Facebook, Twitter, etc.? It may indicate that their readership is larger than implied by visits to the blog.

By this method, Caveman writes, he can figure out whom to send review bottles to, because “We can’t just send wine samples to every Tom, Dick, and Harry who happens to say they have a blog.”

I can’t quibble with Palmer’s 5 metrics, although I believe there are additional ways to evaluate a successful blog: the blogger’s breadth of knowledge and experience; number of visits; demographics of the blog’s readership; the blogger’s reputation in the industry (although not all of these are readily quantifiable). I agree with Palmer’s conclusion, taken from his website, that wine blogging currently “seems really fractured and disorganized.” Palmer referred to a Twitter discussion that gave him the feeling “that a lot of bloggers weren’t being respected or included by wineries or PR people. They felt slighted, a little angry” at not being sent samples and not getting invited to events. Well, that gets me back to my conversation with M. With 1,000 wine blogs out there, there’s no reason why a winery should reach out to every one of them. As M. said, he’s happy to play ball with a blog, as long as it’s relevant. Turns out, he couldn’t really define what makes a blog relevant; he just had a feeling which ones are and which ones aren’t.

Blog relevance may be difficult to precisely measure, but, to misquote the late Supreme Court Justice Potter Stewart, you know it when you see it.


Social media can be retail AND real

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“2013 will be the year that big brands and advertisers can finally expect to start making money from social media sites,” is the hopeful prediction of a company, Millward Brown, an international advertising and marketing company specializing in “brand equity.

They say there’s been a big psychological turnaround in how we use social media. “[S]hoppers are now not only open to being targeted through intelligent digital advertising, they expect it.”

Really? I suppose I do “expect” to get pitched 24/7 to buy stuff, by telemarketers on my phone, by ads on Facebook, and everywhere. I also “expect” to occasionally step in doggie doo-doo after some idiot doesn’t clean up after his/her mutt. But that doesn’t mean I like it!

And what does “open to being targeted” mean, anyway? Do we have a choice in the matter of how Facebook figures out what to advertise on our pages? Nobody asked me for permission to search through everything I do on the Internet and then decide what I’m in the mood to buy. I’m not “open” to (in Millward’s words) “new, richer advertising opportunities,” they’re being foisted on me by forces against my will. The word “open” therefore is bunk, although Millward did get it right with that word, “targeted,” as in seeing us Facebook users through the crosshairs on a rifle.

They have a newish term for the marriage of “retail” and “social media” and it’s called, appropriately enough, “retail social media.” Sounds like an oxymoron to me. Check out the colorful graphic on this site that purports to explain how “community hubs – conduits for people with similar interests to gather” – such as Facebook – can now be used as digital billboards. In the graphic, you see symbols for the following conceptual parts: Staff, HR, Marketing, Operations, Merchandising, Products, Events, Stores, Tactics, Analytics, Strategy, and Business Goals, with arrows showing how all these moving parts are interrelated. But nowhere in the graphic will you see the Facebook user—you and me, the human being at the center of the whole thing. That’s because, from a “retail social media” perspective, the human being has ceased to exist. Instead, there’s only a transactional purchaser with a credit card, a demographic, a, yes, customer whose exclusive function is to buy.

Mind you, I’m not against advertising on websites, per se. I understand that the people who work to give us a free Internet have to make a living. Zuckerberg isn’t doing this for charity. We’re free to ignore the ads if we want to, which is exactly what I do. I’m just increasingly concerned that advertising is going to move from something on the fringes of our social media to something dominant.

It’s sad for me, as a lover of social media, to see it getting hijacked in this way. I guess it was inevitable. But I wonder how the heart of social media—the free, communal spirit in which it has thrived up until now—will survive this assault by the forces of marketing, which are so antithetical to authenticity, transparency and sharing—the traditional pillars of the social use of the Internet. I said as much in my remarks a couple of weeks ago at U.C. Davis’s class on P.R. and Social Media for Small Wineries, although some people didn’t want to hear it.

You know how wine geeks talk about the “True” Sonoma Coast, as opposed to the formal AVA? I see social media the same way. There’s “true” social media in which individual, real people express themselves to other real people and engage in dialog. Then there’s “formal” social media, something that looks and behaves like “true” social media, but isn’t. Instead, it’s a Trojan horse designed to trick people. It’s probably asking too much for big corporations to be authentic (although they can pay people to make them appear to be authentic). But authenticity is what small family wineries do best. I hear over and over again from them that they don’t have the time to do social media, or they don’t know what to say. I tell them over and over again: You do have the time. Facebooking or tweeting only takes a few seconds. As for what to say, Say whatever is real at the time you’re saying it. “Hated to get out of bed this morning cuz it was freezing, but needed get out into the vineyard.” That’s real and authentic and interesting.


Considering Chablis

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The Chablisians are hitting the road to market their region and its famous white wine. It is a very ancient winegrowing region; the Romans brought vines and viticulture there sometime early in the Common Era, according to Rosemary George, MW, in her fine book, The Wines of Chablis and the Grand Auxerrois.

That the Chardonnay grape became a virtual monopole in Chablis no doubt is due to Chablis having been incorporated, in 1477, into the duchy of Burgundy. Red wine may be made there, but then, it would not be entitled to any of the official AOCs: Petit Chablis, Chablis, Chablis Premier Cru or Chablis Grand Cru, but only the lowly Vin de Pays status.

My host yesterday, at a small luncheon at Boulevard, was the charming, young, voluble Jean-Francois Bordet, winemaker at Domaine Séguinot-Bordet (which his family has farmed for many centuries) and also president of the Chablis Wine Board. We tasted through 5 wines: Jean-Francois’s own Domaine Séguinot-Bordet 2010 Vielles Vignes (12.8% ABV, $16), La Chablisienne 2009 Premier Cru Côte de Léchet (13%, about $23), Domaine William Fevre 2009 Premier Cru Vaulorent (12.5%, $53), Domaine Christian Moreau 2008 Grand Cru Valmur (13%, $65) and Domaine Drouhin Vaudon 2008 Grand Cru Les Clos ($74; I did not get the alcohol). Each wine was immaculately paired with superb food, mainly sea food (crab, scallops, lobster), although Boulevard’s chef, Nancy Oaks, decided to make a steak tartare and oyster appetizer for Jean-Francois’s Vielles Vignes, and what a great match that was.

Several things were apparent: Chablis is great wine by any standard. It is reasonably priced, especially at the Grand Cru level; only a handful of domaines dare exceed $100. The wines are just what the anti-high alcohol lynch mob demands. And they are sublimely versatile with food. Of course, if you’re at a restaurant like Boulevard, you eat something classic with Chablis, such as the Maine lobster with risotto and mushrooms, which Chef Oaks paired with the two Grand Crus. But, as Jean-Francois observed, at home he will happily drink Chablis with anything including, he smiled, scrambled eggs for breakfast.

The wines themselves all possess the Chablisian traits of utter dryness, acidity and minerality. From Chablis through Premier Cru and Grand Cru one discovers, of course, increasing power and depth. In some respects, Jean-Francois’s unoaked Vielles Vignes stood out for me, so clean and vibrant and uplifting, and, at $16, an amazing deal. It was my first sip of wine of the day, so that may have accounted for much of its appeal, but I left some in the glass and, even two hours later after that splendid lunch, it retained and even increased its charms.

As if bracketing the five wines, my other favorite was the Les Clos Grand Cru. I called it “huge”, with “fantastic power,” “the biggest of the tasting,” but this is perhaps misleading, because those terms could be used for a California Chardonnay from, say, Williams Selyem, but no two Chardonnays could be more different. The Les Clos was huge in comparison with the preceding four wines, yet it also was sleek, elegant and streamlined, despite a year in oak (none of which, by the way, was new). The flavors vaguely suggested Asian pear and quince, with the wood bringing a spicy tone of butterscotch, but to over-dwell on any specific flavor is a mistake, because the wine comes across as a single entity, which is, after all, the essence of balance.

On the other hand, the third wine, the 2009 Premier Cru Vaulorent, was for me the least of all the wines. Jean-Francois explained that 2009 had been a very hot year in Chablis, and the wine right off the bat seemed heavy, lacking the vibrance of its colleagues. There also was something overtly mushroomy going on, which led me to believe it’s not going anywhere. We did have a discussion of the role of personal preference with these older wines, however, and it may be that my long experience with California fruitiness has prejudiced me against certain older white wines. Chacun a son gout, as usual.

Chablis was one of my go-to wines in the 1980s and I will always have a fondness for it, even if I don’t drink as much nowadays as I’d like. Nor do most Americans, it seems, and, as the U.S. is a very important market for domaines like Séguinot-Bordet, Jean-Francois and the Chablisians are criss-crossing the country, trying to persuade people to remember Chablis. My advice to them was to aim at the under-35 crowd, who seem so open to new drinking experiences, and communicate a very simple message: Chablis has been one of the most famous wines in the world for many centuries. There’s a reason why; no wine gets and remains famous for so long without possessing outstanding, unique qualities. They–these new wine drinkers–owe it to themselves to understand what makes Chablis so great. This is a pure, uncomplicated message, and it is made easier to digest by the fact that Chablis is Chardonnay, a variety everyone has heard of, not some grape type unknown to them.

There are hazards. Some people may have decided that Chardonnay is not for them. They will need to be convinced, and possibly, some of them cannot be. Their loss. Another hazard, which the Chablisians are intensely aware of, is the confusion in America over the use of the word “Chablis” on wines made largely from the Central Valley. This, as an issue, can be finessed, through a successful advertising campaign.


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