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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.


Some wine writers are losing it

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I sometimes feel like some wine writers are losing their minds.

From about the time I started this blog, in May, 2008, there’s been this constant din about how “Print journalism is dying” and “Wine writers are dinosaurs” and “Social media is changing the world as we’ve known it” and so on and so forth.

To which I say: balderdash. Most of this is journalistic blather, the product of reporters who need to be seen as saying something important, even though it’s not true.

Look, human nature doesn’t change just because some fancy new technology comes along. In fact, human nature is pretty resistant to change. People are more or less the same, in their habits and predilections, as they were a thousand years ago, and we’ll remain so–despite Twitter and Google+!

The latest example of “Henny Penny the Sky is Falling” is courtesy of Jon Bonné, the wine writer for the San Francisco Chronicle. His article, Wine Criticism Faces a Shifting Future, has gotten quite a bit of play. After rehashing all the recent news about Parker, the Wine Advocate and Galloni [which actually no longer is news], Jon postulates a “broader set of questions about wine criticism” that sounds as if he’s about to say something pontifical. Among these contentions are rehashes of dreary points that have been repeated so often, by so many bloggers, that they’ve become clichés.

Let me deconstruct a few of Jon’s quotes by explaining that just because a writer says something is new and revolutionary doesn’t make it so.

1.   “the Millennial surge [is] compelled by a wine’s story, not its score.” The implication here, of course, is that the generation that preceded the Millennials, the Baby Boomers, wasn’t interested in stories, just scores. This is transparently incorrect and insulting. Every generation likes “stories” in its newspapers and magazines. My generation, no less than any other, wanted to read about people, personalities, personal histories. I can’t believe Jon is implying that the Milllennials want to read “stories” more than their parents did. If anything, the Millennials are reading less. Their attention span has been miniaturized by social media and twitter to 140-character tweets. Some story! And scores are not going away, not soon, probably not ever. If anything, scores and other graphic indications of quality (stars, puffs, letter grades) are on the increase.

2.   “This generation of new drinkers… want[s] wines that are relevant and forthright.” Again, is Jon implying that the Baby Boomers wanted wines that were irrelevant and–well, what is the opposite of “forthright” anyway? Whatever this statement means (and I don’t think it means much), this generation of wine drinkers wants the same thing its parents wanted: the feeling that the wines [and other beverages] they drink are interesting and cool. Whatever wine seems cool at the moment (Muscat, Bull’s Blood, Malbec, orange wine) is what they’ll drink–until something cooler comes along, and then they’ll drink that. That’s human nature, and it doesn’t change.

3.   The new generation, according to Jon, wants to know all about “a winemaker’s ethical and technical decisions – about farming, about intervention in the cellar,” about issues of “broader cultural commentary.” This sounds like solid reporting, but it’s built on sand. First of all, the Baby Boomers wanted to know everything, and I do mean everything, about every technical aspect of wine, from soil pH and irrigation systems to the type of fermenter and crusher to the source of the oak, its toast level and how long the wine remained in barrel. If anything, Boomers got too obsessed with technical issues, an obsession that thankfully began turning around some time ago. I don’t believe Millennials care about “intervention in the cellar.” Some writers are always telling consumers they should worry about reverse osmosis, or mega Purple, or whatever, but really, aside from some geeks, nobody cares about these things, and rightfully so. Concerning “a winemaker’s ethical decisions,” I assume Jon means being green. Who isn’t green, to some degree or another? Everybody says they are, and since there’s no way to prove it, we have to take them at their word. But when I go to a club or bar at night and the kids are lining up for their drinks, I don’t hear anyone asking about whether the grapes were grown biodynamically. They’re more interested in feeling good and getting laid. This implication that Millennials care more about “farming” than simply enjoying a delicious glass of wine is the kind of reporter’s BS that proves the old adage, just because it’s in a newspaper doesn’t make it true.

Since Jon bases all his premises on the Parker/Advocate thing, he has to return to it, in the form of a paeon of praise for Galloni’s new venture [and I wish Anthony all the luck in the world]. I’m not sure why Antonio Galloni quitting the Wine Advocate should stand as the symbol of The End of Wine Writing As We Know It, or of anything else, except, possibly, the continued weakening of the Parker brand. Along the way, Jon also references Wine Spectator–twice–although for what reason is unclear, except that Jon has always been bizarrely obsessed with the Wine Spectator. Perhaps he feels that an important article about the Future of Wine Criticism has to drop the S-word (Spectator) and P-word (Parker) in order to be taken seriously. Or to maximize search engine optimization. Whatever.

My point, folks, and I’ve been making it for going on five years now, is that the revolution is not at hand. We have new technology, in the form of smart phones, tablets, the Internet and social media, but humankind has always had new technology. Yet people remain the same. Consumers still want and need experts to guide them in purchasing decisions, whether it’s cars, DVDs, restaurants or wine. They still want to buy things that make them feel cool and plugged in. The Millennials are not so different from their parents. Journalists who wish to be serious need to get over their breathless embrace of social media and pseudo-intellectual analyses of how it’s changing the role of wine writing. It hasn’t, isn’t and won’t.


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.


Making social media profitable: Silicon Valley and San Francisco media try to figure it out

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The buzz in media circles for many years has been how traditional print publications, such as newspapers and magazines, can stay alive in this age of the Internet, where content (for the most part) is free.

The challenge of remaining relevant (and profitable) isn’t limited just to print pubs, however. It encompasses old broadcast media, too, including television and radio. Briefly, how can these models stay in business in a mobile era in which nobody wants to pay for anything, and advertisers are having second and third thoughts about investing large quantities of money into vehicles that look increasingly anachronistic?

There are no simple answers. This blog has grappled with the question for years, as have other blogs and social media platforms. Some extreme social media adherents have argued that print and broadcast media are inexorably doomed. Others, including myself, have said, No, that’s not the case, we’re in an evolution whose outcome is uncertain. Nobody really knows. On the many occasions I’ve been asked to make predictions, I’ve resorted to a standard quip: If Rupert Murdoch doesn’t know what’s happening (and he doesn’t), then how am I supposed to?

If you think about it, the times are indeed changing, what with the entire world going social and mobile, but beyond that, we don’t really understand what this means for traditional for-profit media. We know that the instrumentation of accessing media is changing—from paper and plugged-in electronic things to portable, wireless things. What’s so difficult to figure out, though, is how information is going to be researched and reported, if the money that used to pay for it is draining out of a system increasingly reliant on “free.” There used to be standards of journalism that reporters were expected to respect, if they wished to get paid. There used to be obligations to the society at large, to be useful and helpful. Now that everyone in the world can be his own reporter, what happens to those standards? To put it another way, can Twitter substitute—in value, relevance and historicity–for the New York Times or, for that matter, for the hometown newspaper or public radio station?

Smarter minds than mine are grappling with this question, and it’s not surprising that many of them live in my neck of the woods, the Bay Area, where not only Silicon Valley is located but also that bastion of traditional media, San Francisco (whose big newspaper, the San Francisco Chronicle, almost went belly up a few years ago). San Francisco also is home to one of the most successful, wealthiest public radio and television stations, KQED, which just announced that it’s partnering with two other nonprofits to create “a $2.5 million accelerator fund for selected media startups — of the for-profit variety — to tap.” (An accelerator fund invests capital in externally-developed companies in return for capital, whereas an incubator fund brings in an external team to manage an idea developed internally.)

The investors, who call themselves Matter Ventures, are looking for “media startups with multi-disciplinary teams who have early-stage prototypes, such as participatory platforms, mobile applications, B2B media services, and content production engines.” Ring a bell? Think of a website that produces content (say, a blog), that encourages two-way communication between provider and users (such as a blog), and that can go mobile. They seek “entrepreneurs who show high potential to create media ventures that make a meaningful, positive impact on society while pursuing a sustainable, scalable, profitable business model.”

That “profitable business model” thing is the catch. How would that work for, say, something on social media that’s wine related? Wine blogs have proven notoriously incapable of producing anything beyond modest profits, if any. In this, of course, they echo the Internet in general, where many are called but few are chosen. There are very few web platforms that make money. Porn does. Google does. Online stores do. But those aren’t what Matter Ventures is looking for. The CEO, Corey Ford [who was involved with ex-Google  CEO Eric Schmidt’s venture capital fund), is aware that a “profitable business model” on a social media platform is really hard to achieve, but he believes that the brilliant minds can come up with something. “Is there a way that we can leverage that type of [Silicon Valley innovation] model to support innovations in the areas we care about, in the future of media that matters?” he asks. He thinks there is, but he can’t say what it is, anymore than anyone else can, beyond proposing that “a culture of experimentation”, properly loved and cared for by Matter Ventures, can succeed. The new business will have “to impact society in a way that makes its citizens more informed, engaged or empowered.”

Who knows if this will succeed? It’s risky for the investors and particularly for KQED, whose donors may well ask why their money is going towards such experimental things instead of paying the bills. But if anyone can figure out how to make social media make money, in a way that helps society, it’s the combined brain power of Silicon Valley and San Francisco media.


Talkin’ social media at UC Davis

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For the fourteenth year in a row, my old friend Rusty Eddy is conducting his PR for Small Wineries seminar at the University of California, Davis. And, as he has for many years, he’s asked me to participate.

When I first started, the things I told the students about were mainly how I, as a writer/critic, feel about PR people, what I wish they’d do differently, how they can help a writer in his job, how to pitch a story, what makes for a good or a bad press release, and stuff like that.

But about 4 years ago, things started to change. Social media was in the air, on everyone’s lips. The focus of the seminar changed abruptly, reflecting the greater shift that was occurring in the world. Students no longer wanted to know the ins and outs of preparing a good press kit. Instead, they wanted to know how a winery should use Twitter. This shift eventually persuaded Rusty to change the name of the seminar. It is now called “PR and Social Media for Small Wineries.” [You can still sign up for the Nov. 3o class.]

Despite, or perhaps because of, this shift in tone and content, Rusty still invites me because, as he says, “we want to know what propelled Steve from an unknown blogger a few years ago to one of the most-read online blogs.” On his panel, I’m something of an anomaly. The others are Jo and Jose Diaz, the husband-and-wife team that run Diaz Communications, a  top winery [and other product] marketing and public relations and web development firm, and Paul Mabray, chief strategy officer at VinTank. If you ask me what Vintank is or does, I’ll answer in Rusty’s words:  “We want to know what the heck VinTank is and why we should all be using it.” Paul has been a frequent commenter on my blog; when social media requires a good defense, there’s nobody better than Paul, for he’s super-passionate on the subject.

So the reason I’m an anomaly is because Jo and Jose, on the one hand, and Paul, on the other, both have a dog in the social media race. I don’t. In a sense, the students will benefit more from Jo, Jose and Paul than from me, because I can’t really give them any advice to help guide their future careers, which presumably will be connected with winery PR. All I can do is talk to them from the perspective of a guy they’ll probably be working with.

From Rusty’s assignment email: “We’ll discuss how PR has changed in the wine business over the last 10 years, but I’ll also insist that the basics of good PR practice still remain the same. Delivery methods and strategies have certainly changed, but one still needs to know how to write a good headline (subject line) and paragraph, and more importantly, how to find a brand identity and tell the story behind a brand in a compelling manner.”

Can’t argue with that. The key, of course, is Rusty’s final point: “how to find a brand identity and tell the story.” That’s harder than ever. In California alone, we have more wineries than ever before, hence more stories, and the truth of the matter is that most of these stories are pretty much alike. “Jim and Joan made their money in [high tech, medical devices, banking, real estate development, Hollywood], then were inspired by a vision to start their winery.” Or “Tom and Tina did it the hard way: with very little money, they bought their spread, cleared the land, planted vines and…”. I don’t mean to sound cynical, it’s just a fact.

What I’ll be telling the students is the best way to get a writer to hear you out is to be able to help that writer in fundamental ways. Writers are workers. We have needs, and we can use all the help we can get: setting up tastings, keeping us informed of developments in wine areas, coming up with story ideas, even doing fundamental research, which is time-consuming. If a PR person calls me and says, “I have a winery client who offers a $25 three-course menu in the tasting room, plus a spa treatment for an additional $50,” I’ll say, “Find me four other wineries that do something similar and I can say it’s a trend.” Writers love trends. One thing doesn’t constitute a trend; five do.

Which brings us back to social media. Trend–or here to stay? Obviously social media isn’t going anywhere, and yet in some respects the vast majority of wineries still don’t quite know what to do with it–especially the little family wineries where everybody’s already wearing six hats. If you’re Kendall-Jackson, you have a large and sophisticated staff (in-house and external) to do your social media for you, as well as a budget that can afford to think outside the box and develop new applications. If your winery consists of mom, dad, and a kid or two, running everything from sales and marketing to vineyard management to winemaking, you’re lucky to get six hours of sleep a night, much less master the arcane arts of Twitter, Facebook and a frequently-updated blog.

I think this is why some people say I “hate” social media, or am at best a social media denier: because I point out the challenges. But I also think that’s why Rusty continues to invite me. Truth, or should I say reality, is complicated, and when you’re a college student, you need to know the truth in all of its multi-facted aspects.


Selling wine by telling stories

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Continued thanks to all who’ve filled out my reader survey, which you can click here to access. More than 250 of you already have participated. This feedback will help me determine the future of steveheimoff.com. If you haven’t done the survey, please take a few moments and do. Thanks. Now, onto today’s post.

* * *

Storytelling.

It’s one of the most venerable of marketing and advertising schemes. Give the consumer an interesting character he can relate to in an advertisement, and half of the sales job is done.

That’s why David Ogilvy invented Commander Whitehead to sell Schweppes Tonic Water in the 1950s

and why, 60 years later, Dos Equis invented The Most Interesting Man in the World to sell their beer.

Put a face on a product, make the face fascinating, give the reader/viewer a little back story, and voila, you’ve brought that consumer a step closer toward purchasing your product.

Storytelling is well known in the wine world, especially among public relations and media experts. They’re always looking for a way to make their clients compelling. People like me, who are gatekeepers to the media, are the particular targets of PR types. They know that all winemakers and winery owners are fundamentally the same, so they have to figure out a way to make their client different. It’s not unusual for a pitch to be crafted this way:

“Steve, I know you know a lot of husband-and-wife teams who made their money in another industry, then moved to Napa Valley to live the dream of owning a winery. But Bill and Tammy [made-up names] really are different! He’s not just another rich guy, he loves puppies! And Tammy is an artist in her own right, having exhibited her crocheted images of moths in the St. Helena Library!”

What the PR folks, bless their souls, are trying to do is tell a story, or, more accurately, sell a story, in the hopes someone will buy it.

Now, we’re being told, in the pages of Direct Marketing Magazine, that 2012 is “the year of brand storytelling.” Go ahead, read the article. It’s short and actually very acute in its perception, and the writer–Scott Donaton–is balanced. He’s not one of these people arguing that social media is the alpha and omega of everything. He gets to the heart of the issue with two really interesting statements:

1. “content can’t be relegated to a side role. It must be integrated into everything [businesses] do,” including traditional advertising but also tweets, YouTubes and other “consumer experiences.”

2. However, “The more broadly content is defined the more danger there is that the word will be washed of all its meaning. If everything is content, how can you have a content strategy?”

In these two statements lies most of the back-and-forth that’s occurred on this blog over the years concerning the value and role of social media for wineries. Many of my colleague bloggers have tended to the position in #1: Wineries have to become more socially engaged by telling their stories and engaging consumers, or else they risk being irrelevant. My position has veered more towards #2. If everybody is Facebooking, tweeting, instagramming, etc., all the time, then it all tends to cancel everything out. Donaton, the writer, calls this conundrum “questions that need to be addressed,” which is fair enough. It means we have to continue to have the conversation, even if it sometimes leads nowhere. In the meantime, Donaton writes, “brand storytelling is an effective weapon [that can] establish rituals, showcase product benefits and generate excitement.”

Problem is, if everyone has a story (and everyone does), then distinguishing your particular story becomes less and less possible, to the vanishing point. You really have to start splitting hairs. If Bill loves puppies, then his competitor, Don, has to love crippled puppies rescued from disasters. If Tammy’s crochets are in the St. Helena Library, then Bill’s wife, Tina, has to have an installation piece in the Louvre. (Actually, that would be a pretty good story!)

There have been some good recent examples of storytelling. The Envolve guys leapfrogged on Ben Flajnik’s star turn on “The Bachelor” to tell their story. They got tons of publicity, all of it free, but it remains to be seen if that has legs. As Donaton suggests in his column, the consumer’s attention span gets shorter all the time. Andy Warhol’s 15 minutes of fame has turned into 15 seconds on a tweet.

Storytelling has its place, but whenever you hear someone talking it up, look for their agenda. Little wineries such as Failla or Saxum have great stories, but journalists didn’t get around to writing about them until they [the wineries] proved themselves by establishing quality. People tend to forget that quality must precede the story. You can tell a story about a mediocre winery and the winery will still be mediocre. Conversely, every story about a great winery is a great story.


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