Focus on your customers

Comments

1. zinman Said,

   Are there enough thoughtful customers out there, who are willing to seek out your wine in alternative channels, to make a successful winery?

   The vast majority of wine purchases are made in grocery stores and bottle shops, where the choices are overwhelming and impulse is the key phrase. That is the ugly reality of the wine business.

   It’s easy to sympathize with small wineries as they try to get traction in a very, very competitive marketplace, but it’s hard to see how there is a solution that won’t involve local sales of the product to the people who control the grocery chains and bottle shops.

   Distributors don’t exist only because they spend huge amounts of money to buy legislatures. It’s true they buy access to legislators in exactly the same manner as drug companies, oil companies and defense contractors. An ugly scenario that needs reforming, but one that is almost universally abused in the business community.

   Distributors exist because they perform tasks that big wineries don’t want to do for themselves, and do it at a relatively small cost (key word relatively).

   As long as 85%(WAG) of the wine customers seek out is sold by the top four producers (Gallo, Constellation, Fosters, Wine Group), the system won’t change. In other words, business is working out just fine for the big producers who have most of the money, so they support the 3 tier system.

   Perhaps those customers can be taught to seek out wine that isn’t widely promoted and isn’t available in every Safeway in America. That would truly change be a sea change.

   It sure will be interesting to watch.

   Good Blog. I just added it to my reader.

   Zinman

2. Mike Duffy Said,

   About 50 wineries represent 95% of wine sales in the US. So, the other 3,000+ wineries are fighting over 5% of the market. There are easily over 10,000 new wines (vintages) each year. It’s hard to get anyone’s attention.

   And yet, as Paul Mabray of Inertia Beverages (www.inertiabev.com) will confirm, it’s an uphill battle to get wineries to look at direct sales in a concerted fashion.

   Most wineries have rubber-stamp Web sites, poor e-commerce and merchandising, no regular e-mail marketing program, and don’t blog. I tried and failed with The Winery Web Site Report as a custom publication aimed at helping wineries improve the “visitor effectiveness” of their sites.

   I’m looking forward to seeing your “cool solutions”. Best of luck!

3. Mike Duffy Said,

   PS - you can’t use Bloglines automatic subscription tool on this post (no auto-discovery of your feed).

4. tom merle Said,

   I join others in eagerly awaiting your solutions, cool or hot. Everyone is looking for that special key to open up the market for the micros… Maybe, unlike the hundreds of others who’ve tried, you’ll succeed. But you can’t blame some of us for being skeptical…

5. Greg Said,

   Thank you guys for your interest…. those are some great questions/comments. It feels really good to meet other people that share the same struggle and seek to do something about it.

   Zinman, (Great name by the way), you make some very insightful points. I agree that local sales and retailer incorporation is a very important part of the system. We all obviously picture something similar to 1-800-FLOWERS. However, to make this whole thing work, it is crucial for big distributors to embrace the direct sales channel (DTC and DTT). Currently, it is their number one goal to squash direct sales because they look at it as their competition. A friend in the direct sales space said that he called a contact at a big distributor in the northeast about getting them involved in the direct sales channel, and the guy responded with “don’t talk to me about that, I’ll get fired if they hear me talking about direct sales.” Distributors are trying to fight it, but pure economics and the all-powerful market is pushing sales to the direct channel simply because it cuts costs and eliminates enormous inefficiencies created by bad policies that favor distributors. You see the light when you can show the distributors how to actually benefit off of this system. If we can catch one that will be open-minded about expanding their growth strategy, we would be on to something. I know, I know, much easier said then done, but give us a shot. Also, concerning your initial question of is there enough thoughtful consumers to be interested in these smaller wineries, all I can say is that there is a young, excited, and global generation emerging that is just waiting to try what the world has to offer. It’s our job to create the demand.

   Mike, you’ve nailed the key problems that wineries are facing right now. E-mail marketing is so important to staying in touch with your customers and building a relationship with them. In such a brand saturated market, it is imperative in developing a solid customer base and getting those repeat buys that are needed to build a brand. Furthermore, wineries need online buzz and viral marketing strategies that get their wines good press. Too often you have a quality wine, but word never gets out. Pinot Blogger is a great example of getting your name out. He hasn’t even sold a bottle of wine yet and already has a huge following! Let’s hope the juice is good. Finally, rubber-stamp websites and poor e-commerce is the biggest challenge that these smaller wineries face. The question is, how do you aggregate all of these wineries into an exciting place that allows direct and vibrant interaction with the consumer, especially the young, worldly, sophisticated consumer?

   P.S… I think we fixed the bloglines problem… let me know if you are still having a problem.

   Tom, thanks for the note also. We’ll get that editing function taken care of.

   Cheers guys!

6. Victoria Said,

   A small step, but a vital one, would be to make sure staff in the tasting room is enthusiastic, friendly and knowledgeble. A lot of first contact with a customer will be in the tasting room. Think Napa, Santa Barabra County, Sonoma etc. And scary as it is, there are still tasting room staff out there that are snobbish and looking down at you if you do not come of as a big wine pro or sometimes just because you are “young”. Especially some Napa Wineries still has this problem. And trust me, consumers will not buy wine from a winery with that attitude. Instead of looking down at customer, who might be beginners to wine, teach them and interact with them, make them excited. Make it easy, fun and a learning experience instead of intimidating! Now that is a winery I would always keep in mind, purchase from, return to visit again and recommend to family and friends.
   A small change with a big impact.

7. Paul Said,

   Victoria,

   You are so right about many of the tasting room staffs.

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