Wine Marketing

Wine & The Connected Consumer

by Tim Elliott on February 23, 2012

Randall Grahm is one of the true characters of the American wine scene. A self-styled terroirist, intuitive branding genius and all around eccentric, Grahm has taken his Bonny Doon Vineyard on quite a ride over nearly the past 30 years. After setting out in 1983 to make great Pinot Noir in California, Grahm was drawn to Rhône varieties — long before it was cool — and blazed an innovative trail. Years past and the winery continued to grow particularly at the entry level with the ubiquitous Big House brand. But being a terroir driven vintner who presides over blending sessions in industrial wineries can’t be a lot of fun. So in 2006 Grahm sold the Big House brand to The Wine Group and spun off Pacific Rim into it’s own business with outside partners.

Randall Grahm

Photo via Twitter

By his own admission Grahm has downsized his once considerable enterprise by a factor of ten and the business model of a modest winery today is a lot different than when he got started. Today the consumer has more tools to help them choose a wine in the store using smartphones and apps like Hello Vino. Social networks such as Twitter and Facebook can connect friends from Barstow to Barcelona in near real time for instant recommendations. And wine distributors, who used to be the winery’s “feet on the street”, have become nothing more than extensions of the sales force for large volume brands like Gallo, Kendall-Jackson and, somewhat ironically in this context, The Wine Group.

It appears Mr. Grahm is well aware of the current realities in the wine market and his own transformation from selling mostly through distribution to mostly direct to consumer after reading a very revealing post on his blog earlier this week. I have the opportunity in my day job to have frank conversations about the wine business but none of these surface here as they are off the record. Seeing similar issues presented in a long-form post on a winery blog is most refreshing and frankly breathtaking. I’m sure there is a bit of added drama at play here and the Dooniverse is not really on the edge of ruin but if it is that would be most distressing. The wine world with Randall Grahm and Bonny Doon in it is much better than the reverse.

So in the spirit of a friend lending a helping hand I offer the following unsolicited ideas for Mr. Grahm and his team to ponder:

Get social - Dude, you have over 350,000 Twitter followers! No other vintner is even close. Use it occasionally to sell your wine. I’d probably also figure out how to convert some of those followers to Facebook Page likes, too (only 5,000 there now). I know you have a social media strategy and do better than most in the wine business but a bit more wood behind this arrow would pay off handsomely at the very least in positive word of mouth.

Embrace Video - Unlike a lot of winery owners you have a rich story to tell with passion and nuance. Use video to get more of your story onto the social web to get some of those Milleninals exposed to your brand. You are sort of dabbling at this now; commit to a regular schedule.

Open A Bay Area Tasting Room - Hate to say it but Santa Cruz is kind of out of the way for many to get exposed to Bonny Doon wines. I’d take my hospitality closer to the customer and look for a space in San Francisco (SoMa, Dogpatch, Haight, etc.).

Ditch That Flash Website - I mean it’s 2012 and a lot of folks have iPads. All of that cute animation can be done in HTML 5.

Spruce Up The Wines - This is the least important on the list but one that deserves some consideration. I have to admit aside from the occasional bottle of Le Cigare Volant I have not tasted through your lineup in a while but a peek at CellarTracker reveals some improvement can be made. These days a $25 wine better taste like a $35 or $40 wine or people will buy alternatives that over-perform their price point.

Hope this helps, Sir. Let us know how it goes.

 

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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Wine, Video and The Cult of Gary

by Tim Elliott on March 25, 2008

Sometimes posts take several days, or even months, to get published here. Along the way, details are added and subtracted as I think about the story and form an opinion.

This is one of those posts.

I started writing this post on August 2, 2007 after 6 months inside what I began to call, “The Cult of Gary.” Of course, I was a lurker only commenting on the odd episode and not really participating with the discussion Gary Vaynerchuk has led for the past two years at Wine Library TV. And I think I nearly missed the point of why Gary connects with so many people; it’s his humanity.

But the first draft of this post did not mention humanity but focused on the ethics of using a scoring system in his reviews, lack of disclosure on the podcast of being a wine retailer and his unorthodox approach to palate training (I still would like to know what Bob Parker, Jim Laube or Steve Tanzer thought of Gary’s schtick on Conan O’Brien and Ellen). It also bothered me that Gary was so opaque to the wine blogger community who socialize on Twitter and often email each other on various subjects. Each time I hovered over the “Publish” button, something held me back from sharing my insights on the most celebrated wine podcaster in the world. Sometimes it would be to soften the language so it wouldn’t sound like sour grapes, other times it would be something Gary did that provoked more investigation.

So months past and the post stayed in my drafts folder waiting for more context in order to complete it. I found that context last week with this short video Gary published on his personal blog:

I have come to the conclusion that Gary is one of the most influential people in wine today not because he’s got the best palate — although he’s got mad skills there — but in the way he’s almost single handily changing wine marketing. He’s often quoted saying that the wine business is “broken” and he’s trying to fix it. I agree and applaud his efforts in demystifying wine and making it fun for those outside the wine blogosphere. Watching Robert Scoble’s video from last weekend shows this first hand:

My earlier concerns diminished as I realized that those of us in the wine blogosphere are not Gary’s audience. As the hardest working man in wine podcasting, he’s delivering the goods to tens of thousands who would be bored stiff reading about wine. Yes, I’d like to see some disclosure but this seems like a quibble when looking at the amount of good Gary is doing for wine podcasting and blogging.

So I think everyone interested in wine should watch Wine Library TV at least once a week. Because the kid has heart. And skills.

Is Terroir a “Meaningless Argument”

by Tim Elliott on February 20, 2008

I’m researching a post about Stormhoek and I came across this podcast with Jason Korman I had not yet heard. During this discussion Jason asserts that terroir applies to all wines wherever they are produced making terroir, “…a meaningless argument…” from a marketing standpoint.

Terroir Hierarchy

On one hand, I agree with Jason that terroir is too often the de-facto marketing strategy for too many wineries. On the other, I’ve tasted different blocks of the same vineyard and found each wine quite different. So there’s something to this notion of terroir.

But the real learning from this podcast is that those of us who write about wine are too often obscuring the true enjoyment of the beverage with jargon and a learning curve that most people will not invest the time to learn. Perhaps that’s really at the center of the argument that most wine blogs are boring.

So I’m going to make an effort to change the way I talk about wine here and on my podcast to make the content easier to understand for the non wine geek.

I’m also hoping to tell the real story of what happened at Stormhoek in coming days.

Why Don’t Airlines Have Better Wine?

by Tim Elliott on August 29, 2007

I’ve been on more than my share of flights this summer, both domestic and international, and one thing that bugs me is how poor wine service has become on airlines.

Yea, I know, there is some pretty decent juice poured in business and first class, but I’m talking about the bottles served for $5 in coach. In my recent experience none of the wines on offer are worth the money and I tend to drink ice water on flights as a result.

It would seem to me that this is an interesting marketing opportunity for wine brands of a certain scale or brands known for consistent quality and value. Since bottling for airlines requires a special line out of reach for most small to medium wineries, only larger production brands tend to play here. Some are obviously using this as a way to expose their brand to new customers as about half the time the wines presented to me are from unfamiliar wineries (mostly from the southern hemisphere for some reason).

But what if someone like Cameron Hughes bottled some larger lots or a special blend just for airlines? They could change the wines over time to expose customers to something better than the average fighting varietal now most common. On the back label they could tell their direct marketing story.

I’d definitely fork over $5 for this kind of juice any day.

Quality, Scarcity and Terroir

by Tim Elliott on August 28, 2007

I worked in Napa last week and drove past some of the most well known vineyards loaded with fruit almost ready for harvest. I also drove past vineyards south of the city of Napa that appear to be setup for machine harvesting and are across the road from a lumberyard and tool rental place. This got me thinking about the differences in wines and what separates great wine from just well made, clean wine.

How much of this difference is due to the decisions of winemakers in the cellar and how much is due to the vineyard practices and place they are grown?

Terroir has long been part of the mythology of wine marketing. But is there really a difference between Cabernet grown at Martha’s Vineyard and the vineyards in American Canyon? Would we be able to taste the difference if both vineyards were made into wine by Heidi Barrett?

From my experience I’d say yes, but it would be interesting to see what some of the best winemakers would make from more humbly grown grapes. Alas, I don’t ever think we will see this in reality but it’s interesting to see what folks like August Briggs are doing at Castle Rock and his eponymous winery.

In the end, place matters but how much is open for debate. As with all luxury goods, scarcity and reputation drives wine prices but quality can be another story altogether.