champagne discount generic+trademarks heidi+barrett howell+mountain+cabernet lamborn+vineyards napa propaganda tasting tour wine wine+blog
July 21 2008
I am calling out the elephant in the room—the one behind the curtains that nobody wants to acknowledge exists; the fact that some really dumb money is spent in wine lifestyle magazine advertising.
At some point the consumer wine magazine sales representatives need to take a long, hard look in the mirror and decide when they are going to stop being bankrupt of integrity and start making good advertising and marketing recommendations to their International country trade association clients.
Flip through any wine and/or wine and food magazine – Wine Spectator, Wine Enthusiast, Wine News, Quarterly Review of Wines, Wine & Spirits, Food & Wine, Gourmet, Saveur, etc. and you run a pretty good chance of seeing an advertisement from an international wine trade commission.
You know the drill: Wines of Spain, Wines of Austria, Wines of Greece, and the list goes on and on …
“Try our country’s wines,” is the basic come-in. All of these ads are brand neutral and none of them are worth a damn. Completely anonymous and non-descript.
Sure, sure, the ad reps. for these magazines justify the business with CPMs and demographics, influence, and my favorite, “pass along readership.” However, the fact of the matter is, in this day and age, the advertising for a country and its wine region does absolutely zero, zilch, zip, nada.
If the advertising did matter, if it drove consumer interest, they would have a website that tracked to a source code from the magazine or a special landing page, because that is what marketers do: measure how they spend money for what result, usually a sales result. It seems so simple. Return on Investment.
Yet, these International association ads do none of that. Seemingly, the advertising sales reps. do not encourage the trade associations to track results because they would quickly realize how much result they were getting for $10’s of thousands of dollars in advertising spends.
Sure, the magazine people will say that they do the important work of creating mindshare within important contextual editorial, but let us be honest here: who reads magazines anymore? I do. However, I sometimes feel like I am the only one. Nobody under 30 reads magazines, especially not lifestyle luxury oriented food and drink magazines—the ones with the Range Rover ads. And, duh, I wonder who is buying the majority of imported wine these days? You betcha. It is people under 30.
Can you say disconnect?
Here is how it breaks down. Typically, these country trade associations are funded cooperatively by member wineries, or an agricultural department that receives some sort of support from the country of origin. Usually, they have a man (or woman) on the ground in the states who acts as a Market Manager, or something similar; the representative of the country’s wines in the US for various marketing purposes—many of these folks live in San Francisco doing the important work of coordinating tastings and following marketing practices circa 1992.
It is a color by numbers job and presumably, if you show some activity against the meager budget you were given, talk about the power of Parker and Wine Spectator and how you have placed a $20K ad in said Spectator, show up in the country for whom you are representing twice a year, give a slide deck with insights into the mystical US market place with some pilfered sales data from the Internet talking about the increase in wine consumption, discuss a need for increased budgets couched within the importance of your individual work and impact, then you live to see another year pass on without much of a hiccup.
It is all pretty ridiculous and it drives me crazy. I hate to be a chest thumper about the Internet and online wine communities, etc. because that smacks of homer-ism, and that is not my point. However, my overall point is that very rare is the time that you see a large consumer general branding campaign and they are usually only executed by brands like HP, Coke and companies with equity built up to the point that influence is their currency. Everybody else had better have a value proposition and call to action or its all wasted money.
So, shame on the countries for not demanding more from their US based representatives, shame on the US based representatives for not delivering more creative ways of marketing and double-shame on the magazine ad sales reps. that are doing the equivalent of putting people into homes they should not be buying.
The dumbest money spent in the wine business? Wine trade commission ads for countries. Dumb, dumb, dumb.
Posted in, Wine: A Business Doing Pleasure. Permalink | Comments (5) | Print |
July 12 2008
When purchasing wine at retail it is frequently organized by varetial, flavor intensity, price, country of origin, and by food pairing. Wine is even grouped in an indiscernible way by consumers as in, “I have no clue how to find anything in this store.” However, there is one simple no-brainer way that is infrequently, if ever, used in wine retail merchandising.
What is this genius merchandising technique so mystifyingly simple that it has eluded the grasp of wine retailers for decades?
Duh. Wine is never grouped by winery.
This simple fact confounds me. You can go into a store, scan the shelves, and see wine from an individual winery in seven different spots, but never together.
Consider:
• Research indicates that 97% + of people purchase wine at retail without any preconceived notion of what kind of wine they are going to buy.
• Wineries around the world try to build brands so they can be memorable to a wine consumer to spur affinity and a repeat purchase.
Yet, I have never been in a single wine retail store in the country that features and highlights the winery. Yes, the actual winery with all of the winery’s wines in one spot, telling the story of the winery that the winery has so painstakingly tried to craft.
Now, I’m not talking about a grouping of Yellowtail on end-cap, I’m talking about a wine retail shop that consistently and as a matter of business practice merchandises wine varietals from a winery leveraging the winery marketing as a merchandising mechanism for retail purchase decision. You would think that featuring a picture of the winery next to a grouping of the winery’s wines is a no-brainer. Not so.
Talk about a disconnect in the wine industry value-chain.
Yet, a quick scan of my Indiana Beverage Journal, the wholesale blue book of wines in distribution in the state tells me that, yes, most wineries, carried by single distributors, do in fact have multiple wine SKU’s in the state.
A few years back I wrote a business plan for a wine retail concept that played off two fundamental concepts – make wine retail like a winery tasting room. Sample the wine (I was planning to use an Enomatic) and group wines together by winery. There would be fewer overall SKU’s in the store, but the store, overall, would be merchandised in a much chic’er way—like a combination of a Starbucks and an Anthropologie store.
It would be like bringing the winery tasting room experience to retail.
The net result in my mind was to leverage the equity that the winery had built up, use their desire to build their brand at retail and present the winery in the same way that they try to present themselves at their winery. In doing so, an average store might only feature 60 - 80 wineries at a given time with 4-10 wine varietals per winery.
In doing so, the ability to taste through a winery offering on a rotating basis, the ability for a consumer to identify with a winery via merchandising all sharply increase. In my mind, they sharply increase for the better and build repeat business and loyalty.
This technique is a paradigm shift on a couple of levels:
• The retailer has to make purchase decisions based on a winery varietal grouping and not by an individual palate/buyer
• The retail has to make a purchase decision not based on current inventory of a varietal by price point. “Oh, I already have three Sauvignon Blanc’s at $14.99
• The retailer has to be committed to merchandising their store more like a boutique and less like antiseptic retail
A couple of thoughts on the future of wine purchasing at retail:
• The future expansion of Direct-to-Trade sales from winery to retailer, eliminating the distributor, gives a great deal of power to the winery to provide merchandising materials while using resources that were previously used to incent the distributor
• Small retailers need to get out of looking at inventory as an asset and focus on merchandising and inventory turns that are consumer-directed and not discount price or margin driven.
Let it be noted that I don’t have a single shred of evidence that tells me my instincts are correct, yet if I didn’t have the vagaries of a family, I would trademark the heck out of elements of my merchandising plan, and sink my 401(K) into this idea, that’s how cocksure confident I am in the notion.
I read the June Wines & Vines, a wine industry trade magazine that highlighted a new consumer lab at Brock University in Ontario, Canada, the article notes:
“Purchasing wine is often an overwhelming experience for people,” says laboratory research coordinator Erika Neudorf, a graduate of the Masters of Wine Business program at the University of Adelaide, Australia. “If it is understood how consumers buy wine, then it is easier to create a marketing mix to successfully reach a target market.”
Neudorf says the laboratory at Brock is the first in North America to exclusively study the relationship between consumer approval and wine origins and flavors.
For example, Lesschaeve, who specializes in biological sciences, studies how sensory properties in wine influence consumer preference. To conduct more accurate research, the new lab allows her to recreate the type of situations in which consumers would typically buy wine.
“The lab’s design is similar to a movie set,” Lesschaeve says, “in which the environment of a wine boutique, restaurant or tasting bar can be simulated.”
Here’s hoping that they investigate the simplest merchandising technique in the world—selling wine grouped together from the winery.
What are your thoughts on wine retail? Where are the deficiencies so consumers can make a purchase decision?
Posted in, Wine: A Business Doing Pleasure. Permalink | Comments (12) | Print |
July 9 2008
Non-interventionist wine lovers, those that espouse a natural and sustainable winemaking ethos, can set aside their Clark Smith Voo Doo dolls and talismans warding off the bogeyman and purchase a second set for new public enemy #1 – Eric Dahlberg, President of American Winesecrets.
Smith, right or wrong, had come to be the face of the technology movement in wine with his company Vinovation. By applying technological services like reverse osmosis, de-alcoholization and a bunch of other things that are viewed as manipulation of wine, he became something of an un-exiled pariah.
Regarding technology manipulation in wine, most consumers do not understand it (or care) and most winemakers will not go on the record about its use, thus it truly is a secret, even if Smith would fall on his sword with analogies defending the black art of technology usage in winemaking in lengthy tête-à-têtes. See Appellation America for a couple of examples.
Simply, to somebody like Alice Feiring, Clark Smith is as close as you can come to being the wine anti-christ.
Now, according to Wines & Vines, Smith and his partner have sold their patented reverse-osmosis technologies and alcohol reduction services to a company called American Winesecrets. This feels like an important development.
It seems Smith is going to continue to consult and make some wine and work on other sideline projects, but largely move on from Vinovation. This is probably good for Smith (though I suspect he enjoys a good verbal joust), but potentially bad for the purchaser, Dahlberg.
The upshot of this is American Winesecrets, a dubious name if there ever was one, uses the tag line of, “Technologies for a Sustainable Wine Future.”
Hmmm … if Clark Smith enjoyed defending Vinovation, at least he did not have to do it a combustible name and positioning like “American Winesecrets, Technologies for a Sustainable Wine Future.”
This ought to be interesting …
Posted in, Wine: A Business Doing Pleasure. Permalink | Comments (0) | Print |
June 15 2008
I generally keep this site a shill free zone, but business is business and my business is blogging for business.
Try and say that 10 times fast! At the least, while you are trying to say that tongue twister, you can alternately take some sips of free Starbucks coffee, but more on that in a second.
I have made no secret that 2 ½ years ago, when I started blogging, I was a hard-working Brand Manager and then a software sales rep. for a large technology distributor in the IBM channel. I was caught up as a (relatively) young guy in a business populated by people, mostly, at least 10 years my senior. I was still looking for an opportunity that would thrust me out of the Dilbert comic strip and into a trajectory that was satisfying, or at least not soul destroying.
Then I started blogging and my career turned upside down, in the best way possible.
Based on my blog, I got hooked up with a technology company that services the wine industry. At the time, the opportunity to join a start up company with solid funding, IN THE WINE INDUSTRY, was manna from heaven.
While that opportunity to build a direct business-to-business wine buying program was exciting, rewarding and fun, ultimately I moved on, leaving the portion of the business that I was involved in better than when I found it, which is about all you can ask of an employee from an employer perspective. Note to self—it is better to be Henry Ford then the cave dweller that invents the wheel, or the anonymous German that invented the engine, for that matter.
Then in March of this year, I transitioned to a leadership role with Compendium Blogware, a Software as a Service (SaaS) company based in Indianapolis, IN.
Off the road and sleeping in my own bed consistently has been nice, even if my drive to work contains absolutely no vineyard scenery and no KNBR 680 am. So, yes, in a relatively short period, I have moved in and out of the wine industry and now I work for a blog software firm.
Never in my wildest dreams could I have imagined this just a few short years ago.
The thing that makes my current employ, Compendium, so unique and valuable is that blogging for business is on a lifecycle similar to the trajectory of email marketing circa 1998. Now, email marketing is ubiquitous. Blogging will be the same way.
However, while Typepad and Wordpress beat each other up for incremental market share trying to figure out the monetization of advertising across all of the citizen journalist sites, nobody is addressing the corporate market—folks that want a solution with light-bodied content management-like capabilities for administrative approval, and an actual way to measure results separate from mindshare and influence.
In traditional blogging, mindshare and influence are critical to success, but in marketing where real dollars are attached to a need for real results, sometimes that “influence” notion is a tough sell.
Compendium solves both of those challenges by including an administrative layer with developing enterprise blog content management capabilities and by also incorporating some secret sauce that aids in search engine optimization for customers. Therefore, it translates that “influence” to actual results.
It is all pretty cool and something I passionately believe in.
That said, our customer acquisition has been strong and steady, but in these Web 2.0 days you want to take the car from 60 mph to 120 mph. Since I lead the client services and support, I am essentially asking you to help make my life busy, very busy.
We want to scale our customer base another 3X this year.
In order to do this, Compendium Blogware and I are offering $50 worth of free Starbucks coffee to anybody that makes a referral to this link.
However, here is the very favorable and positive rub on the referral—that is all it has to be. Who do you know that should be blogging, but is not? Any wineries? Um, I think there probably are a few. So, if you make a referral, you get the $50 Starbucks gift card no questions asked and the referral does not have to become a customer of Compendium, just engage in a conversation to understand how we are different and better than solutions that are optimized for citizen journalists. That is it. It is as close as you can get to a “no-strings-attached, but you get something in return” offer.
We will do the rest and we are confident that once we get an opportunity to talk through the blog landscape and how we approach the business and blogging in general that a client will see the value and the opportunity in becoming our partner.
So, am I blogging for a purpose? You bet I am. I hope are too, please hit the link to help somebody else do the same.
Posted in, Wine: A Business Doing Pleasure. Permalink | Comments (0) | Print |
April 21 2008
A couple of months removed from the day-to-day wine business, I have noticed a few things:
1) My creative juices are firing on all cylinders
2) My wine passion and passion for blogging has renewed after suffering through a little bit of the “cobbler’s son” syndrome
3) I am starting to see the forest for the trees related to the wine business and that is leading to more business and less wine in my writing. Not sure if this is bad or good.
4) I am back to the roots of this blog and relying on intuition rather than artful insight based on anecdotal evidence
What this all means is I wrote my post yesterday about calling for a merger between Wine 2.0 and the Open Wine Consortium very much in the Malcolm Gladwell “Blink” mode, without a whole lot of analytical thought. It just seems right and the right thing to do at the right time. This type of “by the seat of the pants” writing leads to some breakthroughs and it leads to some holes in logic, as well.
To that end, I somewhat purposefully did not put a whole lot of detail about how I might do a merger because I wanted to get the point across about relativism and absolutism and, well, there is only so much room for minutia before skimming gives way to snoozing.
That said, I can do follow-up posts and based on a couple of comments I received, I am going to comment in-line:
Paul Mabray, CEO of Inertia Beverage Group wrote:
Candidly Jeff, I think these two organizations are so very different they should NOT integrate. As a supporter of both here is the clear distinction I see:
Wine 2.0 is an event.
OWC is a network.
P
My suggestion is to create one organization that can create a business model around a network of people and events. Simply, this is what thousands of non-profits do on a daily basis—they have a mission, they act as thought-leaders, they serve constituents and many marshal an army of volunteers.
Most blogging and social media companies have developed their revenue streams around content creation and live events, so this much is not so much a foreign concept.
And, frankly, social networking is great, but business still is done in person. So, the difference between a network and an event is negliable.
What a combined Wine 2.0/OWC organization can do is become a national Wine Institute-like organizational body/think tank that executes thought-leadership and acts as the pivot at the crossroads of wine and technology.
While it can be argued that Wine 2.0 is expanding their focus to consumers that is only after the first three or four events were geared as wine technology networking events. The event I attended in November of ’06 was purely a business card exchange with all of the attendee’s being folks in and around the business. The owner of Wine 2.0 undoubtedly is trying to monetize the effort and the way to do so is to try to pull consumers in. I don’t begrudge him that, but I think harkening back to his near-term roots, in conjunction with a merger of equals with the OWC can help better chart a unified course that can then map to how to engage the public.
As I noted in my post, the key here is to consider this effort as a part of relativism and keep the best interests of the industry in mind and set aside, for now, the notion of good old capitalism.
Longer term, I am all for capitalism. In fact, being a non-for profit does not mean you cannot make money, and handsome money, it just means you have to spend what you make serving your mission.
As a sidebar note, I am not a fan of the phrase Wine 2.0 because it will seem as antiquated as “Alta Vista” or “Webcrawler” in a couple of years.
Joel Vincent, founder of the Open Wine Consortium said:
I am on my PDA so this will be brief until I get to my desk. 1) OWC is nearly 800 right now. OWC invites partnership and collaboration with any entity that furthers technology in the wine world.
Lastly, having an Electrical Eng background, I have always likened OWC to the IEEE for technology - education, driving projects to conclusion like standards, and educational events with a purpose. Again, for techies, your proposal would be like merging IEEE with the Consumer Electronics Show. Could there be tighter collaboration? Potentially. And we are exploring that with Wine2.0 and other wine related trade and consumer organizations. So thats where my head is at. I’m glad to discuss further when I get back to my desk.
Thoughts?
btw - There is already a European Wine Blogger Conf and it and the NA version are vastly different from Wine2.0 both in content and in purpose. The link to that conference is on the front page of OWC.
In this regard, I have to politely disagree on the IEEE and CSE. Apples and oranges. What I am saying is that Wine 2.0 is barely out of the gate, so let’s not give them too much credit and it started a scant time ago (less than two years) as a networking hub for wine technology companies.
I would encourage Joel and Cornelius to review non profit business models and determine how a fit can be created that will create ONE organization that serves the convergence of wine, technology and social media for the betterment of all parties in the value-chain. Yes, that will include consumers, but only after we figure out what the hell we are doing first. And, really, before it hits consumers it needs to hit the wine industry who remain, largely, in the dark on technology and the value of the web. A rising ride raises all ships and getting everybody on the wine side reconnoitered is a good thing.
The key here is to lead with strategic intent and in doing so you have to have the end in mind and work backwards to present day.
I have the first $100 bucks for 2009 dues. Can I make that out to “Open Wine Consortium” or some other entity name that is mutually agreed upon by the founders of two organizations that NEED to come together?
Posted in, Wine: A Business Doing Pleasure. Permalink | Comments (0) | Print |
Enter your email address for a monthly summary of posts, additional news and information available only to email subscribers. Your email is never rented, nor sold to anybody else!
This work is licensed under a Creative Commons Attribution-NoDerivs 2.5 License.
Design by The Blog Studio
