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March 21, 2007 | Wine Industry Trends | WineDirect Admin

Top 10 Reasons to THINK DIRECT!

I think, generally speaking, people are tough on themselves. In business, most good manager’s let people, with subtle guidance, create their own goals realizing that people that create their own roadmap to their responsibilities and/or success generally do two things:

  1. They’ll own the process for their success
  2. They will be tougher on themselves and create more stretch opportunities than their manager likely would impose.

I bring this up because I had the occasion to attend the WineAmerica spring conference in Washington D.C. this week.

WineAmerica, composed of winery and state association members from around the country, has a mission to encourage the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.

As I listened to the WineAmerica members’ ongoing business and policy challenges over the course of the last couple of days, I’m reminded that sometimes we (as in west coast producers) are hard on ourselves. And, at the very least, even if we are not too hard on ourselves, we should acknowledge that while much is left to be done, others in other parts of the country are fighting fights that are no longer native to California, Oregon, or Washington—things like establishing quality metrics and the like. And, we’re pretty far down the road in understanding and acknowledging that direct sales and the leveraged use of the internet in managing direct sales is a pretty good business practice.

Perhaps, simple to some, but still valid food for thought for most of the wine producing country, I offer up my own David Letterman style Top 10 list for “The Top 10 Business Drivers Creating the Direct Shipping Channel” – pithy items that I presented at a breakfast meeting this week.

  1. Granholm and liberalization of shipping laws radically changes the wine industry in the next 10 years
  2. The ultra premium sale of wine produced by smaller wineries is sharply on the rise
  3. Wineries continue to consolidate as large producers get larger and smaller wineries look for creative growth paths
  4. Retail continues to consolidate as big box retail dominates the wine trade with only top 10 major metros showing growth in independent retail
  5. Distributor consolidation continues as large distributors acquire/merge in order to grow while slowly morphing into logistics companies that happen to carry wine
  6. The Long Tail, as a distribution theory on the sale of niche products, becomes an acknowledged and accepted contemporary economic model
  7. Restaurants using wine as a marketing component are increasing rapidly, but drawing from the same wine availability pool as everybody else
  8. A study by VinExpo anticipates that the U.S. market will become the largest market in the world in consumption and value by 2010
  9. U.S. young adults, according to recent research, are more apt to buy imports necessitating a need to create new sales channels for bottlenecked import brands
  10. Online wine purchases are growing at a 300% year over year clip with dozens of new businesses emerging online to address and capitalize on the growth … growth that wineries can own themselves if they seize the opportunity

And, yes, despite the fact that west coast producers are down the road a bit, much more work is yet to be done. Just like wineries and state associations are fighting the good fight on issues that are immediately critical to them (like, hmm, say, self-distribution in their state) there is still much work for everybody to fully capitalize on the DIRECT agenda.

Here at Inertia Beverage Group you know we are carrying our weight. In this situation, we can never be too tough on ourselves. As always, please let us know how we can help you, as well.

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