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The shift from print to digital is getting stronger

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Two articles in yesterday’s Wall Street Journal, taken together, suggest that the transition from print to digital journalism is gathering steam.

 

The first, “The Vanishing Everyman’s Art Gallery,” actually is a bit of nostalgia for the old days when newsstands were on every street corner of every city in America, and their publishers hired artists to paint pictures for the covers. (The classic example is Norman Rockwell’s relationship with the Saturday Evening Post.) The writer asserts that millions of American thus gained exposure to, and an appreciation of, good (if sentimental) art—thus the “Everyman’s Art Gallery” heading. He laments the passing of those days (and also the passing of LP album covers, replaced by not-so-interesting CD covers).

But his real point is to underline the continuing weakness of print magazines, which are rapidly moving online. There’s nothing particularly new in that—we’ve been talking about the migration from the printed page to digital for years—but what’s different now is that advertising dollars may finally be finding their way to these digital websites.

The challenge in the past for magazines that wanted to move online was that advertisers—who account for the great majority of a magazine’s income, as opposed to paid subscriptions—weren’t willing to spend anywhere near the big bucks they would pay for on a printed page. For example, let’s say a quarter-page ad in a print publication cost $25,000. On a digital version of the magazine, the advertiser would have to be content with a little button or banner, at a cost of, say, $750. That was a big hit for publishers to absorb, and nobody quite knew how to get around that dilemma.

But now, according to that second WSJ article, “At long last, TV money flows to web.” Granted, this movement of money is starting with online movie outlets, not general or specialized magazines. But it’s a start, a crack in the dike that previously kept big money from migrating online. As one ad buyer remarked, “For us, it’s really about shifting to where audiences are.” And, as audiences increasingly glue their eyeballs onto computers and portable devices, advertisers have no choice but to go there.

It’s still unclear, though, if advertising for smaller web sites—like those of wine magazines–will reach the stupendous levels currently flowing to print and television ads and commercials. “How much these [digital] outlets can draw [in ad revenues] in the near term will be determined in part” by future negotiations, the WSJ says. Smaller online digital outlets don’t draw anywhere near the number of views of major TV programs, like the Super Bowl, and so digital ad revenues aren’t going to reach those levels anytime soon.

But “Younger consumers are consuming less TV as a portion of their total media consumption,” pointed out one analyst, meaning that in eventually, the playing field could level out, as big network and cable TV attracts fewer and fewer viewers.

What this means for magazines is that they have to negotiate a delicate transition from reliance on the printed page to crossing the digital doorstep. You can’t go from the former to the latter in one quick move; if you do, you’d be out of business. Instead, publishers must seek to attract new, younger viewers and readers who prefer their mobile devices, while avoiding alienating older viewers who like their magazines the way they’ve always been. Wine magazines are in an especially vulnerable place, because the divisions have never been starker between older, Baby Boomer readers (who made today’s wine magazines famous and successful) and younger, less tradition-bound consumers. Millennials don’t drink their grandfather’s wines, their grandfathers don’t drink their grandkid’s wines, and a publication that wants to appeal to everyone might just fall between two stools.

* * *

Finally, R.I.P. Bob Sessions. Great job at Hanzell.

 

http://www.winespectator.com/webfeature/show/id/49997


Whole Foods: The canary in the coal mine?

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“Whole paycheck,” somebody once dubbed Whole Foods. I’ve understood why ever since they built a Whole Foods around the corner from where I live.

People are willing to pay a premium for the food they buy there, but those days may be numbered. Yesterday’s Wall Street Journal had two articles, one on the cover of the Marketplace section called Slow to Cut Prices, Whole Foods Is Punished,” while the other, shorter piece was headlined “Biting Into Prices at Whole Foods.”

The upshot: on Wednesday, the 380-store chain’s stock price plummeted, “vaporizing more than $3 billion of the company’s market value” due to flat earnings and “a key measure of sales growth [that] hit its weakest pace since early in the U.S. economic recovery more than four years ago.”

The flat growth apparently is because consumers are wising up to the fact that they’re paying far more for organic kale and fair-trade chocolate than they have to. Other grocers are moving in on Whole Foods’ turf, and “this competition is just getting started,” the WSJ predicted.

The comparison with overpriced wine begs to be made. I bet you that the demographics of the Whole Food shopper and the buyer of premium wine are more or less identical. According to this analysis, Whole Foods customers

  • Gravitate to lifestyle brands
  • Form a loyal customer base
  • Are better educated and wealthier
  • Are willing to pay higher prices for higher quality food in a pleasant shopping environment
  • Are largely Baby Boomers – the largest consumer group in America is getting older and they are seeking healthy, preservative- and pesticide-free foods to ensure a long and healthy life

That sounds a lot like premium wine drinkers, doesn’t it?

Are people getting smarter about what they buy—less willing to pay a premium for something that makes them feel good, but doesn’t actually taste better? If so, it’s undoubtedly an after-effect of the Great Recession, which made more of us more frugal than we were in the high-spending pre-Recession days. My own feeling, living in a Bay Area that’s increasingly young and diversified, is that people are less susceptible to marketing and more sensitive to the actual value of the things they buy, whether it’s groceries, clothing or wine. This could be very good news for value wine brands—not necessarily cheap wines, like Two Buck Chuck, but those wineries that offer the high quality of their competitors, yet at a lower price point. We’re already seeing signs that high-priced wines are having a hard time—witness such deep discounters on the Web as WineAccess.

There’s no evidence that consumers aren’t still swayed by famous name wines and glorious appellations, but there’s plenty of evidence that younger consumers, unlike their parents, aren’t quite so willing to shell out big bucks, if they feel there’s a bargain to be had. And thanks to the vigorous competition we see all around us, especially on the Internet, there are bargains galore to be had.


Why do people buy wine?

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There’s a million reasons, of course, but one that’s interested me for years is why they’re willing to pay a premium for some wines and not for others. And in some cases, a huge premium.

The plain and simple fact is that a $1,000 wine isn’t ten times better than a $100 wine or 20 times better than a $50 wine. In fact, you could make a strong argument (which I guess I’m making now) that, once you get above a certain price, there’s less and less difference between wines. That $500 bottle of Napa Valley Cabernet Sauvignon isn’t necessarily better than a $50 Napa Cab.

We have to define what “better” means, though, before we can proceed. By “better” I mean the wine’s hedonistic or organoleptic or purely sensory qualities: the flavors, the way it feels in the mouth, the finish. In a great winemaking region such as Napa Valley, where the overall quality is as high as anywhere on earth, the consumer can rightfully expect a certain standard of excellence once the wine gets to, say, $40. This is why you can make a blind tasting and often a more modestly priced Cab will win.

Which returns us to the question: If the $500 Cab and the $50 Cab are so alike in objective quality, then why would anyone in their right mind buy the former?

Well, you have divined the answer, haven’t you, dear reader? It’s because, when it comes to paying these astronomical prices, there’s nothing objective whatever going on in the buyer’s mind. It’s all subjectivity.

How does this subjectivity work? We get a hint of the mechanism by reading this description of a tasting set up by a crafty Frenchman, Frédéric Brochet, who fooled a bunch of so-called connossieurs. “[He] decanted the same ordinary bordeaux into a bottle with a budget label and one with that of a grand cru. When the connoisseurs tasted the ‘grand cru’ they rhapsodised its excellence while decrying the ‘table’ version as flat.”

If you’re a regular reader of this blog, and of wine news in general, you’ve no doubt heard enough of these kinds of experiments to know that they demonstrate the point I’m trying to make: Your experience of the wine all depends on what you think you’re drinking.

My goal today, though, isn’t to reiterate this point, but to try and rehabilitate the reputations of people who routinely get fooled in these tastings, and to show that they’re not total idiots, and you shouldn’t condemn them as such. Instead, their very failure to perceive reality illustrates one of the best reasons to drink fine wine: because it satisfies, not just the senses, but the intellect.

When I taste Lafite Rothschild, for example, and I know what it is (nobody tastes Lafite blind), I have to admit my soul lights up. I get excited. I pay very careful attention, because this is, after all, Lafite. I know the back-story: First Growth of Bordeaux. Ancient history. One of the greatest red wines in the world. Thomas friggin’ Jefferson loved it. My reaction similarly would be the same as, say, being given the Koh-i-Noor diamond, as opposed to costume jewelry. If you gave me the Koh-i-Noor (you’d have to wrestle it away from Queen Elizabeth first), you just know I’d stare at it and bring it up to the light and look through it and ogle it and go ooh and ahh and remember that moment forever. Now, on my own, I’m sure I couldn’t tell the difference between the Koh-i-Noor and a cubic zirconium from QVC, but that’s precisely the point: in our little thought experiment, I do know the difference. And that makes all the difference.

This subjectivity explains why wines of equal or almost equal quality may vary so widely in price. The pleasure of drinking Lafite consists of far more than merely what the wine tastes like. This is something that’s hard for outsiders to understand, but which is easy for a wine geek. To think that you’re in a limited circle of people privileged to taste something as exclusive and expensive as Lafite boosts your love and appreciation of the wine. This may sound snobbish to some people, but it’s perfectly understandable. It’s occurring in the brain, the seat of thinking and understanding; and pleasuring that part of the cerebral cortex is as important as pleasuring the senses, maybe even more so.

So I’m arguing for some understanding for these poor schlemiels who get caught in these wine tasting entrapments. It could happen to you, it could happen to me, and in fact, it has. What it says about wine isn’t that it cheapens the experience or levels the playing field, but that it elevates wine tasting to a fine art whose appreciation requires knowledge and understanding. As the physicist/mathematician, Freeman Dyson, observed, “Mind and intelligence are woven into the fabric of our universe in a way that altogether surpasses our understanding.” What we think is, for each of us, reality; it’s our collective thinking that elevates Lafite to Grand Cru-ness.


When quality isn’t enough: the “lightbulb of recognition”

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The standard meme for marketing wine is: Ours is better than theirs. In just about every wine advertisement you read, this quality argument is there, whether implicit or explicit. Producers claim that their wine is rounder, smoother, more mellow, more delicious, better balanced, cleaner, more fulfilling, more [fill in the adjective] than the competition. The hope is that consumers will be swayed, for, after all, when you’re spending money on a product, you want the highest quality, right?

As it turns out, the quality factor may not be the best way of promoting wine anymore. From ProWein, the big international wine trade event held last month in Germany, came mixed messages concerning the value of using quality claims to sell wine.

The reporter asked attendees from different countries (Russia, Brazil, South Africa, Italy, China, etc.) what they thought of the pushing-quality approach to selling wine. The answers were remarkably similar: “the excuse that your wine is top quality does not work anymore.” “Quality is not a competitive advantage anymore.” “Far too many wineries appear to rely on wine quality alone.”

Ouch. So if quality isn’t the message to be sending consumers, what is?

Well, let’s begin to answer this by assuming that the 50 people queried were all on the young side; they are described as “students from the Masters programme at the School of Wine & Spirits in Burgundy,” so they’re probably Millennials. The question therefore becomes, What are Millennials looking for in wine marketing?

For starters, they’re not “looking for” anything, if by the action verb “looking for” you mean a pro-active search. Marketing and its hand-maiden, advertising, are by their nature insidious: they come at you from the sidelines, entering your consciousness by osmosis at a time when your guard is down. That’s why marketing works [when it does]: it captures your imagination.

How it does so is complicated. Here are some of the things the students said wineries should be doing to market their products, instead of stressing quality:

 

“start telling a different story.” We know all about “the importance of the story line.” It’s easy, however, for an outsider to say this to a winery, but much harder for the winery to actually do it. What “story” should the winery tell?

“producers need to ensure that their brand’s representative is up to scratch.” This comment, by a South African student, referred to the actual employees who represented the various brands at ProWein. It was echoed by an Italian student who asked for representatives “with an easier and friendlier outlook,” by a Russian who found many representatives “simply boring,” and by a Brit who complained of “too many [representatives] sitting on stools behind their stands using wine bottles as a barrier.” An Italian was positively scathing in his critique of reps, particularly from his own country. “Everyone was thinking just for themselves—creating a sense of fragmentation and confusion.”

Clearly, what these young students were looking for was engagement. They wanted to feel like they were interacting with representatives who were fully human and alive, not a bunch of bored-stiff zombies giving off the vibe that “If it’s March, it must be ProWein.”

We all can relate to this. I was chatting with a friend the other day about how, when I take a cab ride, I like to have a little conversation with my driver. (This is why my friend recommended Lyft and Uber.) But I’ve been on the representative side of the table at wine events and know that it can be hard to always be chipper and put on a good face. You get tired, bored, cranky, especially at multi-day events when you’re expected to be “onstage” all day long and into the night.

This sort of bravura performance requires a certain type of personality—outgoing, extroverted, friendly. This may not have much mattered in decades past. But clearly, the rules have changed. Younger consumers understand that 99% of all the world’s wines are now faultless and drinkable. They also suspect that too much has been made of the famous “cult” wines their fathers and grandfathers worshipped; they feel no need to genuflect at that altar. But they are, after all, consumers; and nowadays consumers want to feel some sort of personal connection to a company whose brands they buy.

I sometimes think that wineries don’t pay enough attention to these rules of the road: When you send someone out to represent you, that person needs to have certain skills of charm and engagement. A winery’s representative, after all, is part of its “story.” If this hasn’t been immediately obvious until now to marketing managers and sales directors, it long has been to those of us on the receiving end of pitches. Just yesterday, Forbes’ food & drink columnist, Cathy Huyghe, in a piece called What Makes a Wine Sell, and What Doesn’t, wrote that “a producer’s story trumps any detail about a wine’s technical profile or even their numerical rating,” arguing that “tablestakes”—the technical details of the wine—“aren’t a point of differentiation” because “Everyone has them.” Huyghe described her interviewing approach to winemakers: after “the preliminaries—the…logistical data—are over with,” she looks for “the lightbulb of recognition…that illuminates what it is that makes that particular wine and that particular producer unique and different…”.

That “lightbulb of recognition” is something wine marketers hope to ignite in the minds of consumers. Wine itself, unidentified and without a human connection, cannot do that; the winery’s frontline representative is the spark that lights the bulb.


How much time did you say Millennials spend on the media? Really? Wow.

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The most stunning finding from Ipsos Media’s new study on social media is that Millennials spend an average of 17.8 hours a day perusing (if that’s the right word) the media.

Assuming they must sleep at some point, that means that nearly all of Millennials’ waking hours are spent looking at or listening to a smartphone, tablet, computer, radio, movie or T.V. screen or even the printed page!

How do they find the time to do anything else?

The actual point of the study was about user-generated content (UGC), a buzzword that, according to Wikipedia, entered mainstream use in 2005. Wikipedia says “The advent of user-generated content marked a shift among media organizations from creating online content to providing facilities for amateurs to publish their own content.” So, for example, anything that lets you put information out there on the Internet (a blog, Twitter, Instagram) is an example of UGC.

It’s clearly cheaper for media organizations to have users create content, rather than for the corporations to have to pay for it. On the downside is the fact that UGC sites cannot charge nearly as much for advertising that sites (usually bricks-and-mortar) charge. This is why we see Facebook and Twitter constantly trying out new ways of sneaking ads into our feeds.

The study’s authors report that 53% of Millennials say UGC influences their buying decisions, compared to 44% who trust traditional media more. Of that 53%, nearly three-quarters (74%) say their most “trustworthy” form of UGC is “conversations with friends/family” (although, to me, a “conversation” with actual people isn’t really an example of user-generated content. Am I missing something?) Anyhow, that compares with only 44% who find “print magazines or newspapers” to be trustworthy.

That will come as welcome news to my friends who are steeped deeply into social media. It means, for instance, that a Millennial who’s looking to buy a bottle of wine will give more credence to a “conversation with family/friends” than a recommendation in a wine magazine.

Well, duh. I’m sure that’s true for most people who buy a bottle of wine. Wine magazines and wine columns in newspapers aren’t for everyone, they’re for people whose interest in wine has risen above a certain base level. These folks may not realize it, but if they’re listening to a wine recco from a magazine or newspaper, they have officially dipped one toe into the Sea of Geekdom. Hey, dive right in, the water’s warm and comforting!

It’s interesting to note from the study that, while we tend to associate Millennials with online social media and not so much with television, they actually watch quite a bit of the boob tube. While 71% of them report daily use of social networking (Facebook, LinkedIn, etc.), nearly as many—60%–watch live TV everyday. And may I be so bold as to suggest that a momentary glimpse of their Facebook feed pales in comparison to watching a 30-minute TV program. That suggests that wine companies might consider advertising on the TV shows that Millennials watch, but (cf. my reference above to advertising), most wineries could never even begin to advertise on Colbert or the Daily Show.

I suppose the challenge for wineries today is the same as it was six years ago when I began blogging: How do you get Millennials (or anyone else) to recommend your wines to their friends and followers? That’s the million-dollar question. No one’s yet figured out the answer. While they’re trying to, I suggest wineries continue to send samples to the top print critics and other tastemakers. The two approaches are not mutually exclusive.


On distributors, and the IPOB-ization of wine

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When I first started writing about wine, professionally, it was for Wine Spectator, but they also wanted me to write for their trade magazine, Market Watch, which I was happy to do, because it was more work for an underpaid freelance writer. I quickly learned to like that back end of the business, the intricacies of sales, marketing, P.R. and all the rest. I found it intellectually stimulating, like a chess game—and I still do.

I soon began to be invited to the numerous tastings in and around San Francisco. Among these were events specially designed by and for distributors and their clients. These were trade-heavy events. While there could be some pretty good wines served, most of the distributors didn’t seem particularly interested in them. They just wanted to be told how to sell them (and perhaps they also wanted just to drink wine and eat some good food!).

Those early experiences colored my view of distributors. As far as I could tell, they could just as easily have been selling widgits as wine. They didn’t care about the product itself (although they were willing to work hard), they wanted to maximize their sales. It was a rather demoralizing experience for me to realize that wine was being represented, through this important face to buyers, by such indifferent people.

Over the years, though, my attitude has softened. Every once in a while I complained (especially in this blog) about the inequities built into the distribution system, and I generally supported my friend, Tom Wark, in his American Wine Consumer Coalition efforts to bypass or improve the three-tiered system, which I felt unfairly discriminated against smaller wineries. However, every time I did so, someone I respected—usually a winemaker—would write in and tell me that I was failing to understand all the good that distributors do. So I began to double-check my premises, since some of these winemakers who were taking the time to write were highly respected by me.

So I’ve been open to re-evaluating my views on distributors for some time now, although I have to say my emotional sympathies still lie with Tom. Last Friday, I was invited down to participate in a meeting of Jackson Family Wines’ Southern California distributors. I couldn’t help but be struck by how much more educated—and interested—in wine today’s distributors are compared to their remote ancestors of twenty and more years ago. These people, gathered down in Orange County for a semi-quarterly meeting, struck me as young, really smart, eager and perhaps most of all, passionate about wine. Although I made a few comments, mostly the event was presided over by sommeliers and other wine experts, who led the rather largish group through some fairly serious tastings that everyone seemed to enjoy—and they were blind tastings, at that! The contrast between those widget distributors of the 1990s and these guys could not have been starker, or more welcome to behold.

There seems to be a tendency nowadays for the leaders of these guided tastings to provoke the audience to stretch their tasting vocabulary. For instance, when these leaders ask what flavors people are getting and someone says, “Mushrooms,” the leader asks, “What kind of mushroom?” I understand this approach, which gets the audience more intimately involved and stimulates their analytical powers. This isn’t particularly my way, since I tend to be more generalized about flavors, and I feel that structure is anyway more important that individual flavors, “structure” including the way the wine feels in the mouth, which is all-important. But if people want to talk about the differences between shiitake and hen-of-the-woods, that’s fine by me.

How much smarter and more educated everyone in the food chain has become: not just distributors, but bartenders, restaurant staff and, mostly importantly of all, the consumer.

* * *

Finally—last words!—remember some years back when everybody was talking about the “Parkerization” of wine, that term referring to a supposed overripeness, over-oakiness and high alcohol content of wine? Well, whether or not it ever was true, nowadays I perceive another style-driving trend: Let’s call it the IPOB-ization of wine (after the In Pursuit of Balance organization). I will begin with a question: Are we seeing some vintners, particularly those producing Pinot Noir, now deliberately picking their grapes underripe, in order to appeal to that small, but influential, cadre of writers, critics and sommeliers who insist that Pinot Noir must be low in alcohol in order to be balanced? I invite your answers. For myself, I think the answer is “yes.” And, as a certain Mr. Parker recently implied, underripe fruit merely results in underripe wine.

Now, I haven’t really been clear on what “In Pursuit of Balance” means since I went to their last tasting, in San Francisco, and Rajat Parr said (I paraphrase), “Some people think IPOB means we only like wines below 14% but that’s not true.” Well, I suppose, then, that “balance” can be applied to any wine, of any alcoholic strength, so what else is new? I’ve never heard of anyone being in favor of unbalanced wines. Then I was reading, in the new April issue of The Tasting Panel (and what an interesting ‘zine that’s turning out to be) a little article by Randy Caparosa in which he made some salient points, most notably that, at the last World of Pinot Noir (which I attended; I was underwhelmed by Raj’s Domaine de la Côte Pinot Noir), “There is still talk of the ‘high-alcohol problem’ in American Pinot Noirs, but in the vast majority of 200-plus wines tasted [at WOPN], an overweening sense of alcohol or ripeness just wasn’t’ there.”

Indeed. One could, I guess, argue that IPOB has had its intended effect, of driving down alcohol levels. On the other hand I could point out that high alcohol per se hasn’t been a problem in good Pinot Noir for years. Still isn’t.


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