Predictions

Three hundred and sixty four days ago I wrote up a list of predictions for the wine industry. Like many past years, I had great plans for this blog and podcast and was looking foreword to trying some new things. But as it turned out, 2010 was a difficult year and nearly all of my enthusiasm for this new start evaporated and the year passed with few posts and not even a single podcast.

So as we welcome 2011, I am returning to try some of those new things but also return to the essence of what inspired me to start this podcast up some 6 years ago. But before posting a new audio recording I thought it might be good to revisit by past predictions and see how I did. And then never try such foolishness again.

As I recall, I tried to be somewhat less aspirational last time in order to not look too ridiculous a year hence. So how did I do?

Photo by Charyn Pfeuffer

The Return of the Luxury Wine Segment - While its too early to claim a full return for wines over $35 a bottle, 2010 did see some growth in this segment. But “the new normal” will be different than before the market went off the cliff in late 2008 with consumers being more choosy in their purchases. When the final sales figures come in I would be surprised if this prediction didn’t come true, however.

Wineries Integrate Social Media Marketing – This was sort of a gimme going into the year, and we did see some growth in this area in 2010, but it is still early days before social media marketing truly goes mainstream in the wine industry. I’ll still give myself this point as nearly every winery is doing something on the social web today.

Wineries Will Go Mobile – 2010 was the year of the iPad and smartphone but few wineries did much with this platform. I expect 2011 to be the year of the tablet with a lot of iPad clones being introduced next week at CES. Although I think there will be some interesting developments in this space over the next 12-18 months, I will give myself a miss here. Perhaps my vision got the best of me on this one but watch for the combination of mobile, local and social this year.

Wine Bloggers Will Discover Business Models –  To be honest I have not kept that close to this subject so I don’t really know if wine bloggers are making any headway in this area. What I do know is wine bloggers like Joe Roberts at 1WineDude are taking a stab at it. Best of luck, Joe; show us the way. I’ll call this one a miss, even if it might have been premature, too.

A Major Wine Print Publications Will Fold - I’ve been hard on wine print magazines partially because I don’t read any of them anymore. But no major wine publication closed it’s doors in 2010 so this one is a big miss. But I still think there is a big opportunity in creating a new type of wine publication tuned to the digital medium as more people consume news on tablets and smartphones. Since even mainstream magazines haven’t figured this out yet I don’t think any wine magazines will anytime soon either.

So 2 right and 3 wrong; about par for this sort of thing here. But as I mentioned, I do think at least a couple of my misses might prove correct in the coming year. And, no, I will not make any more predictions in the future as I plan to take this blog and podcast in a slightly different direction. Stay tuned.

My Wine Predictions for 2010

by Tim Elliott on January 2, 2010

Despite my fairly checkered past in making predictions for the coming year, I am back with another batch. I think 2010 will be a transformative year for the wine business and for wine blogging. The economy will show improvement by the summer which will reverse the “nuclear winter” we have seen for the sales of high-end wines over the past 18 months. But there will also be some surprises in 2010:

The Return of the Luxury Wine Segment – It’s been a tough year for wines above $35 a bottle. In fact, Mike Grgich recently commented he had never seen a more challenging year in his 50 in Napa Valley. But that will change as the economy gains strength and American consumers vote with their wallets. There will continue to be a trend toward value but those $60-80 Cabs will start to sell again.

Wineries Integrate Social Media Marketing – As I mentioned in my review of 2009 yesterday, social media was one of the big trends last year with wineries tweeting and connecting with customers on Facebook. This will be the norm by the end of 2010 with social marketing fully integrated into the go-to-market plans of wineries of all sizes. No longer will it be, “nice to do,” or something to get an edge on competitors. Social marketing will be a requirement for growth by the end of this year.

Wineries Will Go Mobile – This is the next frontier as mobile, local and social all converge on smartphones such as the iPhone. Apple’s forthcoming tablet will also change the way consumers use the web to learn about wine and also buy it. Early adopter wineries are already working on their mobile strategies; by year-end nearly everyone will be playing catch-up as this space heats up.

Wine Bloggers Will Discover Business Models – We have seen the rise of the “professional” wine blogger in the past couple of years and I expect more of us will discover how to turn our hobbies into cash. No, it will not be a full-time living for most, but it will be a significant enough incentive to create content on a regular basis. Some will cry foul as monetization can lead to conflicts of interest but there will be several bloggers who will figure this out.

A Major Wine Print Publications Will Fold – OK, so this is my outrageous prediction for the year. And I don’t think this casualty will be the Wine Spectator, Wine Enthusiast or newsletters like the Wine Advocate. But the times are changing and I don’t see a great future for print wine magazines particularly after new technologies that fundamentally redefine what a magazine is hit the market early this year (e.g. Apple iSlate or whatever this will be called). I hope to see some true innovation in online wine coverage, too.

So that’s all I’ve got this year. Let me know what you think in the comments. I wish everyone a very happy and prosperous 2010 (and that’s, “twenty-ten”).

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Looking Back at 2009

by Tim Elliott on January 1, 2010

Anglo Saxon Crystal Ball
Image by spratmackrel via Flickr

Although some folks don’t care for such prognostication, I posted six predictions 365 days ago for 2009. Before I post a new set for 2010, I thought I would revisit this post and see how close I came to foretelling what might happen last year in the wine world:

The Year of Value – It didn’t take a rocket scientist to predict consumers would look for the best wine values in 2009. The final statistics will not be out for a few days but from what I’ve seen recently, wine sales actually increased in the U.S. and Canada in 2009 but wines above $35 a bottle were flat to slightly down over 2008. The entire market traded down in 2009; it will be interesting to see what happens as the economy improves.

Wineries Really Go Direct - One of the industry trends that I closely track is adoption of social media. As smaller wineries come to grips with the reality that distributors are no longer the best place to sell their wines, they will look to new ways to connect directly with customers. We saw a lot of activity in this area in 2009 with wineries big and small adopted social marketing in a big way. I fully expect to see a lot more activity this year as wineries of all sizes expand their direct-to-consumer sales efforts.

Alternative Packaging – I’ve noticed a large increase in the amount of alternative closures in the past year with a sharp rise in the amount of screwcaps but also quite a few plastic corks being used. But this was really not part of this prediction so I guess I have to call this one a fail. Or perhaps this prediction is just a bit ahead of the curve.

Wine 2.0 Will Produce A Star – Another miss as no one really emerged from the Wine 2.0 pack. But I still think we will see a winner here in the next 12 months as Cork’d gets serious, CellarTracker gets a much needed user interface update and Snooth continues to grow.

Wine Media Goes Digital – I have to say that I’m surprised there wasn’t at least one wine magazine making more than just evolutionary moves online. Both Wine Spectator and Wine Advocate improved their online offerings in the year but no one really did anything very dramatic. A pity as 2010 looks to be the year of the tablet (or at least, the eBook reader). Time was lost and it will show by the end of this year.

Americans Drink Less Wine At Lower Price Points
– As I mentioned on my first prediction, wine sales appear to be up over 2008 but at lower prices. So I’ll count this one as half right.

So 2 1/2 out of 6 or about 42% right. I guess I’m improving over my earlier efforts but still not a very reliable predictor of the future. If I didn’t have 5 really good predictions already written up, I just might just give this up… no, probably not, as it’s still too much fun for me.

Happy New Year!

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My Wine Predictions for 2009

by Tim Elliott on January 1, 2009

Photo by Charyn Pfeuffer

Photo by Charyn Pfeuffer

A couple years ago I made 8 bold predictions for 2007. I decided to sit last year out after only the most obvious of the eight actually came to pass (increasing direct to consumer wine sales). But some progress was made on the list in 2008 with Tyler Colman, a.k.a Dr. Vino truly “going pro” with the publication of not one, but 2 wine books. Not to mention the entire Gary Vaynerchuk story which played out in a big way since I made that prediction. Some of my other predictions also made some progress toward fulfillment so I’m going to add six more for 2009 today.

The Year of Value – This prediction is really not that much of a stretch since the world economic downturn has made it a lot more challenging for wine producers to sell higher priced wines. Anything above $25 a bottle will be a tough sell in this environment with a lot of competition for consumers in the $10-15 price category. Look for some producers to just lower their pricing while others, such as Cameron Hughes, Mark West and Castle Rock, will be perfectly positioned to gain market share. 2009 is the year of extreme value that might also spark more interest in wine auctions as consumers look to maximize their purchasing power.

Wineries Really Go Direct – More wineries are exploiting direct to consumer sales and I expect to see a lot more growth in this area particularly for higher priced brands. The economics of direct sales and shipping will be a major advantage for wineries who can create enough pull with consumers. With wine tourism down due to the recession, I see the winners being those who create this pull online via ecommerce and, increasingly, a social media presence.

Yellow + Blue MalbecAlternative Packaging – As wine lovers become more concerned about the carbon footprint of their favorite beverage, more will look for wine packaged in bag-in-box or TetraPaks. As I’ve blogged here in the past, I hope to see better quality wines in these packages particularly those wines intended for immediate consumption.

Wine 2.0 Will Produce A Star – I’ve written about the intersection of Web 2.0 and wine for some time now but there has not been a breakout success story yet. This year will produce at least one star who will finally validate this space. My money is on Snooth right now but this could change as the year progresses. Stay tuned for a lot more on this subject here soon.

Wine Media Goes Digital -The traditional glossy wine magazines such as Wine Spectator and Wine Enthusiast will be forced to rethink their print business model this year and go more digital. I still think there will be the same amount of wine publications produced but the ones that are left will have figured out how to make money from their online presence and not just by print advertising sales. Of all of these magazines, Wine Spectator is the best positioned to flip the switch, open up their subscription site and become supported by their online advertising inventory. But I don’t expect to see them do this because they will see too much short-term risk in their current, but doomed, business model. 2009 will be a great year for new entrants trying to figure out this territory like Mutineer.

Americans Drink Less Wine At Lower Price Points – This prediction is linked with my first one but I think it’s important to note that the wine market in the U.S. will not grow as it has in the past. Not only will consumers drink less wine they will trade down to lower priced selections. With the U.S. dollar increasing in value, this will make imports more attractive especially from the Old World where vineyard land is a long sunk cost.

So there you have it; six bold predictions for 2009. I’ll revisit these in June and again in December to see what really happened.

Which ones do you think are right, dead wrong or what did I miss?

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My Wine Predictions for 2007

by Tim Elliott on January 3, 2007

Coming out of the technology world, I find it somewhat surprising that there are few in the wine trade who offer predictions of the trends at the beginning of the year. In tech it seems everyone with a column, podcast, blog or email address offers their views; some, like John C. Dvorak, have made their careers at this, but I digress. So I’ve thought long and hard about the eight trends that follow and how foolish I might appear this time next year. But, nothing ventured, nothing gained, etc.

Online Wine Communities Go Mainstream – The number and quality of wine blogs increased in 2006 to nearly 500 and pros like the Wine Spectator started blogging. Late in the year, Web 2.0 wine sites came online to both aggregate blogs but also to build communities to share tasting notes and cellar inventories. A few brave wineries also got into the act with blogs and podcasts but this area is still largely an opportunity for new entrants. I expect online wine communities to explode in 2007 with one or two leaders emerging in the Wine 2.0 space by year-end. Wineries not plugged into this new medium will be kicking themselves for not making their move in the first half of 2007.

The Old World Strikes Back - The over extracted, long hang-time New World reds with 15-16% alcohol will be overshadowed by more restrained and balanced Old World wines particularly from Spain and Italy where New World technology has met Old World terroir. While a few high-wire winemakers like Pax Mahle will continue to release fruit monsters to high scores, many more will fall by the wayside as consumers value food compatibility more than brawn. The wines of New York will also benefit from this trend.

Direct To Consumer Sales Soar – More wineries will sell wine directly to consumers via the internet and wine clubs than ever before this year as the effects of the Supreme Court decision and technology investments pay dividends. I expect Inertia Beverage to enable more wineries than anyone else but there will be more than one technology platform for wineries to adopt. There will also be some new entrants like WineQ who will carve out an online niche with enthusiasts.

There Will Be Another Stormhoek – A wine brand will harness the wine blogosphere and social media to become a breakout success like what Stormhoek has done in 2005 and 2006. They might also narrowly target Millennials in their efforts to become the choice of this new generation of wine consumers becoming the “Pepsi of wine.”

Pinots Come Back To Earth – Both Pinot Grigio and Pinot Noir have been the hottest varietals for the past couple years but I expect them to level out in popularity this year. The new hot wines will be made from Riesling and Tempranillo with Rosé still increasing in popularity from last year. But then again it could be Viognier and Mourvèdre ;-)

South Africa Emerges – The wines of South Africa have been under the radar of many wine lovers, particularly in North America, but new approaches, such as what Stormhoek has pioneered, will catapult South African wines to center stage in 2007. I also expect Chile and Argentina to continue to grow their share of the market.

Flights Replace Wine By The Glass – One of my personal disappointments in dining out is the selection of wine by the glass. Since my wife doesn’t drink and the normal supply of half bottles is lacking in almost every restaurant, I commonly grab a couple glasses of whatever is available. The places I really like are those with an interesting and well chosen selection so I can try a couple new wines with my meal. The places I love are those who offer flights of 3 or 4 wines in smaller pours. I hope more restaurants follow this trend.

At Least One Wine Blogger ‘Goes Pro’ – One could already argue that some wine bloggers have made the move already with Alder Yarrow speaking at the Symposium for Professional Wine Writers this year and Lenn introducing his own wine club, but I think a wine blogger will be hired by the established wine press in 2007. My money is on the Wine Spectator to be the innovator who will bring on this blogger as a “guest” but they will remain blogging there long-term.

OK, so I’ve side-steped the global warming issue since I think gradual climate changes should be measured in several hundred year increments and to bring forward some of the trends from 2006 is kind of a cop-out (although Millennials will increasingly be a factor in the overall market).

I’m sure there are some other crystal balls in the wine blogosphere; comments are open for more… what do you think?