Reflections from the Wine Industry Conference
The North Bay Business Journal’s 2015 Wine Industry Conference was held April 24th. Several WineDirect team members were in attendance, along with many others in the standing room only crowd. While several topics were touched upon, the prevailing theme that was repeated throughout the discussions was that above all else, the wine business is a relationship business.
The keynote speaker was Michael Mondavi. His presentation was quite interesting, as he reviewed the history of wine from the 1850s to the present day. He spoke of the challenges the wine business has faced over the years and how these challenges were turned into opportunities. Opportunities are created under distress”, he noted.
The challenge that we are all familiar with, Prohibition, was discussed of course. But Mr. Mondavi’s description of wine distribution in the 1930s and 1940s is not as well known. Wine was distributed in tank cars from producers to regional bottling facilities across the United States. The wine was bottled at these facilities and labeled, not with the producer’s brand but with a local brand label. With the onset of WWII and introduction of price controls, wine changed from a commodity business to a consumer product but the wine was still bottled in jugs. It would take many years for the transition from jug bottles to the prevailing smaller bottles to take place.
He closed his remarks by speaking about his grandfather, Cesare Mondavi. When Michael was a boy, Cesare told him that his most important job was to leave the soil in a better condition for the next generation. He has done that in all of his years as wine producer. With good soil, quality wine is the result.
“Build a relationship with people, so they feel the dirt”, is as true today as it was in the beginning.
The first panel discussion was “How to get noticed in a crowded market”. The panelists were Dan Grunbeck, EVP - Young’s Market, Bill Leigon, President of Jamieson Ranch Vineyards and Joy Sterling, CEO of Iron Horse Vineyards.
Joy Sterling explained that Iron Horse is sold through all channels to create pull across the marketplace. They deploy heavy social media strategy to create and build relationships with customers and visitors at every chance possible. “What is the ROI of social media?” she was asked during the Q&A session. Joy responded “I don’t know how to measure it, but I know that I need to do it”.
Bill Leigon told the crowd about his community outreach with Jamieson’s small herd of miniature horses. The horses are an attraction at the winery and are also brought into the community as an outreach to people with autism. While the horses are an important part of the winery, Bill is committed to the personal nature of the business. Jamieson’s Light Horse wine brand, for example, has a three pronged approach: 1) food and wine, 2) music and art and 3) therapy outreach with the horses. Each piece provides an important element to the connection with the winery.
Dan Grunbeck spoke of how Young’s works with wineries in distribution getting wine through the bottle necks in the distribution channel. Specifically addressing the question of how to get noticed, “80% of success is showing up” he noted.
The panel’s overall message was that building relationships in your unique way will go a long way to your winery standing out from the crowd. Joy paraphrased a quote from Maya Angelou that sums it up nicely. “People rarely remember what you say, but they will always remember how you made them feel.”
The second panel discussion was “Routes to Market”. The members of the panel were Michael Osborn, Founder of Wine.com, Benoit Vialle, COO of Nakedwines.com, Joe Waechter, CEO of WineDirect and Jim Weinrott, Founder of WineAccess.com.
Each of the three direct-to-consumer businesses deploys a different model to sell wine DTC; while WineDirect provides DTC services to wineries and retailers that sell wine online.
At Wine.com, Michael Osborn explained that it operates seven warehouses across the country, selling 17 thousand wines (with the assortment still growing). Of these wines 55% are imported. They created the idea of an online sommelier, trying the concept in a call center setting and via email. Neither approach was successful, but the third attempt, live sommelier chat has resonated with consumers generating 100k chats.
Joe Waechter spoke about the focus of WineDirect which is to help wineries sell more wine online. There are over 1,000 wineries online through the Vin65 platform, generating 540 million dollars in sales last year. 35 percent of these orders were received over mobile devices he noted. Joe also commented on the increase in shipping volume WineDirect has seen the first three months of this year. Shipments have surpassed the volume of last year’s holiday shipping season and there is no sign of letting up. The challenge for the wine industry is to reach the online sales volume of other hard goods.
Jim Weinrott described WineAccess.com as a curated marketplace. In his experience, “most consumers don’t know what they want, so you need to tell them what to buy”. He described Jeff Bezos’s experience of Amazon and the thousands of books offered online. They offered a dizzyingly wide array of books. What was missing? Mr. Smith, the owner of the small book store that went out of business. Amazon needed someone who knew about books.
Benoit Vialle pointed out that most people are not experts in wine. So Nakedwines.com takes the consumer on a journey of discovery, learning about wine and the winemakers in the process. Naked’s angel network funds the small wine maker who might not otherwise have a way into the marketplace.
In the end, each participant agreed that you have to offer great wine, provide a unique wine experience, all the while, engaging the consumer in a two-way conversation. “Customers are your guests when they drink your wine at their table”, said Bill Leigon during the discussion. We couldn’t agree more.