REthink Wine Blog

Last week the San Jose Mercury News reported optimistically on the state of the wine industry in these economically troubled times. With the not so original title “Wine Industry See The Glass Half Full” the Mercury News presents the conventional wisdom that people are continuing to buy wine, though may be looking for more value at lower prices. I have to wonder: is there anybody who turns down a good wine value at any time? (more…)

The recent news that Amazon is looking to get into the wine retailing game broke like a wave a few days ago. What the impact of the multi-billion dollar company coming into the online wine selling market will be can’t be said at this point. And there is also great deal of speculation of exactly how they are going about doing business online with wine.

But this isn’t what was truly interesting about all the press on Amazon’s wine program. Down deep in these stories was an estimate by Barbara Insel of Stonebridge Research on the size of the e-commerce market for wine. Insel, one of the top analysts and business consultants in the wine industry, estimated for the reporter that $2.8 billion of America’s $30 Billion retail wine market comes in the form of direct sales. Although the article didn’t mention this fact, that $2.8 Billion is only winery-direct sales and does not include online wine merchants.

Also interesting was Insel’s estimate that seven percent, or roughly $200,000,000, of that $2.8 billion in direct sales occurs exclusively online. It’s not winery club sales. It’s not tasting room sales. It’s pure online transactions from winery to consumers. We think this is significant because it demonstrates just how large the upside is for savvy wineries looking to increase their sales. There is clearly a lot of room to increase the 7% to something more. It’s likely that this percentage will increase over time in an organic fashion. But for individual wineries that are hovering around that 7% figure with their own sales, they can find a way to increase it substantially through strategic online marketing and prospecting for qualified customers in every venue they offer their wines.

The fastest way, however, to increase your pure online sales is to talk more frequently to the customers in your data base. Consider your email marketing program, for instance. Are you leveraging your communications as best as you should be? Consider a few of Angela Sanchez’s Tips for Increased Email Conversion.

To get an indication of what it would mean to increase your online sales from 7% to 10%, imagine allocating three percent of your volume sales that had been sold to wholesalers, and selling it instead direct to the consumer. Amazon will have some sort of impact on overall online wine sales. But you can impact your own bottom line right now by shooting for an immediate 3% increase in direct sales through strategic e-commerce marketing.

Kiz Dodds posted an article about sustainable farming earlier this month, and we’ve also had other blogs on similar subjects before. As our winery partnerships grow, we continue to meet more and more of wineries going green or greener. Who doesn’t want to save Mother Earth?!

But going green isn’t just limited to the vineyards and the grapes. It can happen anywhere. You can help the cause by driving a hybrid car to work every day. You can reduce our oil dependency by utilizing solar and wind power for your energy consumption. You can even save our planet by using recycled and green products as part of your business. And having said that, here are just a few of the many businesses out there trying to help others get green(er):

Greenerprinter
www.greenerprinter.com
Based in Berkeley, CA, you can have all of your collaterals, business cards, postcards, etc printed on recycled paper using soy and vegetable based ink in their 100% wind-powered plant.

The Green Office
www.thegreenoffice.com
Not only do they sell green office supplies from paper to furniture, they also have Webinards to help guide you go green.

Bay Area Green Business Program
www.greenbiz.ca.gov
Registered green businesses broken down by county and services. You can hire a green construction company, or you can have a green bakery cater your next event.

These are just a few examples. If you put on the thinking cap and do the research, I have no doubt that every part of a winery’s operation can be green. Every little bit helps and everything counts. And don’t forget to recycle!!!

At this year’s Inertia symposium I moderated a session on web site design in which we talked about the wonders of social networking and how it might benefit wineries. Facebook, blogging, twitter: we invoked these words in praise and wonder. But just two weeks ago our own Carole Loomis posted an article, So You Think You Want To Blog starting with the advice, “Think Again”. Two years ago Paul Mabray posted Wineries - to blog or not to blog - NOT whose title is self explanatory. I myself have never before encouraged wineries to blog, advising that blogging is a distraction from more important marketing efforts. So why was I bullish on blogging last week?

First of all, I blame Gary Vaynerchuk (pictured) of Wine Library TV. He delivered an inspiring talk at our symposium shaming the audience for ignoring blogs and social networking and saying that every winery had an obligation to blog or see their business go the way of the dinosaur. He exhorted wineries to stop whining about being defined by reviewers and the press and start defining themselves by expressing their own brand online through blogs and social networks. Gary’s persuasive talk had a lot to do with my attitude toward blogging all day, and has stayed with me since then.

Also, times have changed since Paul posted his warnings about blogging two years ago. Facebook is a multi-billion dollar business and has become a primary communication platform for many people. Barack Obama is the first serious presidential candidate to be able to turn down public financing largely because of his success raising funds online with the help of political bloggers. Bloggers have caught up to print and broadcast journalists as sources of news, analysis and opinion. Vaynerchuk has become a powerful force in the wine world thanks almost entirely to his online presence in video blogging and social networking. This blog has had some success in connecting Inertia to the larger wine community. The ways in which we connect to information and each other are more and more tied to networking services on the web.

So should wineries hop on the bandwagon? For the first time I now say: yes. But before you all go signing up for blogger accounts I have some words of advice on how to get started.

1. Start reading blogs: You wouldn’t sit down to write a novel without ever cracking a book. Read as many blogs as you can and get a feel for the craft of blogging. There may even be blogs unrelated to wine that you can learn from.
2. Be Promiscuous: Now that you’re regularly reading a bunch of blogs, join the conversation. Leave comments stating your point of view. Don’t explicitly promote yourself or your business - you won’t make friends by getting a reputation as a spammer. Instead use this opportunity to get engaged with the community and start finding your online “voice”.
3. Get Social: There’s a bunch of wine related groups on Facebook, as well as the Open Wine Consortium, which let’s you post blog articles, list your events and engage in community forums. One of the main benefits of blogging is community building and social networks give you the opportunity to do this with much less overhead than a blog you have to maintain yourself.
4. Do some research: One of the best things about the web is that there is so much information out there about the web. Problogger, Blog Herald and Copy Blogger are good places to find information on blogging and to get a sense of the issues that bloggers deal with.

Follow these steps and you’ll be engaging potential customers, creating a brand around your online presence and joining a growing community of wine consumers and producers and you haven’t even got a blog yet. When you’re ready to take it to the next level you’ll have to choose a platform, come up with a site design, get a domain and then put in the hours actually writing content day after day, all while keeping the rest of your business going. Yes, it’s going to require a bigger investment of time than emailing your current customer base or updating your website content every quarter and you’re not going to be able to let go of those old responsibilities either. Perhaps my point of view isn’t that different from that stated by Carole and Paul in their posts on blogging. They have a valid point: given the colossal effort involved, why bother blogging? All I’m saying is: when blogging gives you unprecedented power to connect with a growing audience on your own terms, why not?

Have questions on winery blogging issues? Let me know in the comments and I’ll follow up on this topic in the future.

Ah yes, high oil prices, global warming, chemical waste, non-recycled plastics, pollution, pesticides and herbicides…

Amid current environmental impacts affecting our surroundings, there seems to be a lot of buzz about ‘Going Green - Staying Green’, and how it can benefit Mother Earth. Sustainable farming, renewable energy, alternative fuel sources, recycling, organically produced and eco-friendly products - these are all contributing factors toward solutions for “Saving Mother Earth”.

Therefore, with an increase use of harmful pesticides in our environment, it is not surprising to hear that more people are buying organic. The OTA (Organic Trade Association) reported in an online article that in 2002, 39% of the U.S. population uses organic products.

Well, a number of wineries and vineyards are also cognizant of the environmental impacts and are getting back to basics. They are engaging in biodynamic programs and producing organically grown grapes to fill a niche in a growing market of supply and demand for Organic Wines.

What is Organic Farming??

Wikipedia’s Definition: Organic farming is a form of agriculture that relies on crop rotation, green manure, compost, biological pest control, and mechanical cultivation to maintain soil productivity and control pests, excluding or strictly limiting the use of synthetic fertilizers and synthetic pesticides, plant growth regulators, livestock feed additives, and genetically modified organisms.

What is Organic Wine??

USDA of a National Organic Program: An organic wine is now defined as “a wine made from organically grown grapes and without any added sulfites”.

If you’re interested in tasting or purchasing Organic Wines, listed below are some of our clients who produce such wines:

BARRA (Mendocino) http://www.barraofmendocino.com/barra/index.jsp
BONTERRA VINEYARDS (Ukiah) http://www.bonterra.com/home.html
FETZER VINEYARDS (Hopland) http://www.fetzer.com/fetzer/home.aspx
GIRASOLE VINEYARDS (Redwood Valley) http://www.girasolevineyards.com/girasole/index.jsp
JERIKO ESTATE (Hopland) http://www.jeriko.us/jeriko/page/story.jsp
MEDLOCK AMES (Healdsburg) http://www.medlockames.com/medlock/index.jsp

In addition, why not treat your self to a “Green Wine Country Tour”, check out the following companies - they both use vehicles powered by biodiesel fuel:

Incredible Adventures -
http://www.incadventures.com/trips/wine-tours/san-francisco-wine-tours.php
Sustainable Vine Wine Tours -
http://www.sustainablevine.com/tours.asp

I believe we should all do our part and contribute where we can to help protect our environment. I believe we can all make a difference. Maybe that’s why I drive a hybrid, I recycle, I buy organic - and I’m conscious about what we put into our oceans and our dirt.

Go Green - Stay Green and play your part!

I have been watching and planning for what we will do for .mobi - when do we create a tool that replicates all our winery partner sites with a mobi extension? I am still not sure the answer to that question but I am thinking about it. I am also an avid Iphone user (though I hate the email delivery and can’t wait for the next version). I like to the tools that are useful on this platform in mobi format or more. Fortunately we have a new partner that extends us to the mobi side of the fence. Culination has a great model of matching food and wine and more importantly, putting it on a mobile platform to view and search easily. Kudos to Rick for leading this charge and we are pleased to be his partner.

On another note, I will be doing a theme for a few weeks and taking questions from twitter (http://twitter.com/pmabray) or from the OWC post and then taking them to the team to answer every Wednesday. Please send questions about selling or marketing wine or major industry challenges (in regards to direct) and we will put our thinking caps on and try to bring a good answer. The questions that I will try to answer before next Wednesday mostly came from Twitter:

http://twitter.com/kathleenlisson asks:
Could wineries partner/contract with a personal chef to develop recipes, answer questions on a forum on the wineries website?

Is giving customers ideas / new reasons to drink wine a part of their sales strategy?

If wineries have a mailing list, can they encourage direct sales by providing an e-recipe book of 5 - 6 wine and food pairings?

http://twitter.com/israeliwine asks:

maybe some formulas for determining your best shipping discount strategy (maybe it varies by state even)

http://twitter.com/ColeDavid asks:

How do you better sell DTT? What are the best practices?

http://twitter.com/domaine547 asks:

Do wineries get value from sponsoring celebrity events and if so do you know any who’d be interested in sponsoring wine at an LA/Celeb event on july 4?

Stay tuned next week (or hopefully sooner) for the answers and more questions. Now off to get the team to do some brainstorming.

Inertia’s 5th Annual Direct Symposium will take place on July 11th, from 9-3:30pm at COPIA in Napa. This year, we’ve expanded our agenda to include interactive sessions on topics chosen by attendees. Last month, we released a survey on what we were hearing from our clients and industry partners as the ‘hottest’ topics in the direct industry. Topics included:

• Website Design
• Website Merchandising
• Selling Direct to Trade 
• Direct Shipping Compliance
• Allocation Program Management 
• Wine Club Management
• Wine Blogging
• Online Social Networks

We asked attendees to ‘vote’ on their topics of choice for breakout sessions at our July Symposium. The results were tallied, and we have our winners… 

• Selling Direct to Trade: Access. Control. Sales. 
• Direct Shipping Compliance: A Dynamic Marketplace. Your Options.
• Wine Blogging: Brand Building, Customer Loyalty and Sales
• Online Social Networks: Consumer- to-Consumer, Peer-to-Peer Engagement
• Website Design: Designing for Best User Experience & Greatest Sales
• Website Merchandising:  Sell More Online 

Our Symposium agenda will allow attendees to participate in two breakout sessions of their choice: One in the morning, one in the early afternoon. During each of these sessions, panelists will lead an interactive discussion with the audience around a designated topic. Based on several workshops which we led earlier in the year, we know our clients are eager to engage and look forward to some good interaction.

Because of limited space in each of our breakout sessions, we request that attendees reserve their spot in the session of their choice as soon as possible. Signups will be taken the day of the Symposium, at check in, but to ensure you get a seat in the topic of your choice, send your request through today (along with your RSVP if you haven’t already!) to rsvp@inertiabev.com.

See you in July!

During uncertain economic times, management discipline becomes increasingly important. Following are a number of leadership Do’s and Don’ts quoted from Deborah Steinthal and Ellen Hunt of Scion Advisors that I think others may benefit from.

DO….

• Drive with your eyes up: Use scenario planning to narrow the gap between your plan and the realities of execution in today’s environment.
• Look for opportunity: You may be able to attract A-players who might not be available in a booming economy.
• Demand top performance: Instill more financial discipline, set specific measurable goals and hold your team more accountable.
• ID critical decisions that can result in biggest win or biggest pain. Leverage your trusted sounding board to drive a more thorough, robust problem-solving process.
• Ramp up branding: Focus spending on where you get the most returns.
• Increase visibility in your top markets. Offer top customers a relevant experience.
• Prune your portfolio: Jettison unprofitable wines and lines of business.

DON’T…

• “… be arbitrary in your decision making.” - Tom Klein, Rodney Strong
• “… postpone critical investments essential to long term goals.” – Bruce Cakebread, Cakebread Cellars
  
• “… take your key customers and supporters for granted.” - Larry Maguire, Far Niente
• “… cut back on anything that lessens your customer experience.” – Jean Arnold, Hanzell Vineyards

I was encouraged by how many of these exercises we are currently undergoing at Inertia: emphasizing planning, goal-setting and measurements; creating leapfrog opportunities; focused decision-making; attending to how we are seen in the market; and concentrating on delivering what our clients need.

As you evaluate whether you have these “do’s” and “don’ts” in action, there are a number of ways we (or the advisors at Scion) can help – annual planning, setting key metrics, serving as a sounding board for your direct sales and marketing efforts, and strategizing for how to effectively target your best customers.

And as we plan the next releases of our products, there is a significant way that you can help us. Please continue to let us know how we can enhance the REthink Engine and REthinkCompliance.com to help you with your management goals.

Yesterday Inertia hosted another successful seminar at Copia. The topic of the day was ”How to Build and manage a Successful Allocation Program“. The attendance, content, and reception by the audience, exceeded our expectations.

Over 30 wineries were represented in the audience, nearly all were not current clients of ours. This is the first open workshop which we have hosted specifically for non-clients. We regularly host workshops and webinars for our client base, but have recently begun to open the doors to the broader wine industry.  We plan top hold more of these open workshops on a regular basis (topics may include Web Site Sales Strategies, Wine Club Program Management, Selling Direct to Trade and Compliance Management, among others). Stay tuned.

The seminar started with Dan Chapin from Inertia reviewing the “3 Principles of a Successful Release Model“. Dan reviewed the need for any winery considering an allocation program to focus on Exclusivity, Creating a Perception of Scarcity and Conditioning of Purchase Behavior. For more information, or to receive a copy of his presentation, email us at sales@inertiabev.com.

Susan Moore from Aptalent, then spoke on “The Care and Feeding of your Mailing List“. Susan discussed ways to reach key consumers, how to grow your customer list, and how to maintain your engagement with those new customers to help build loyalty and longevity in their engagement with your winery. For more information, email susan@aptalent.com.

The next speaker was Jennie Haug from Revana Family Vineyards.  Jenny is an enthusiastic and engaging speaker. She brought a great case study of how Revana switched from a simple mailing list model, to an allocation model this past spring; they ran their very first allocation release this April.  Jenny told of the learnings Revana
gained from managing their first release, and provided the audience with some of the implications she’s now bringing to their next planned release. For more information, email jennie@revanawine.com.

After Jenny, Barry Waite and Steve Gant from Vintrust led an engaging discussion on the importance of the packaging and presentation of any fine wine at the final stage in their path to the consumer. Most specifically, they addressed the different packaging options for shipping wine direct to the consumer, and how those packaging options are a part of the entire brand building process for any winery. The discussion generated several questions, and initiated good conversation.

The final speaker was Harry Parsley, owner of Silver Stag winery.  Harry has deep experience in the wine industry, starting with being the wine buyer for Lucky Stores, then President of Buena Vista, and now owning his own winery.  Harry gave great information to the group on how to manage your trade relations. He engaged the audience with his entertaining and informal discussion style - bringing years of experience in both buying and selling wines to the audience.

We look forward to bringing more of these seminars to the industry - and hope to see you there in the future!

Love him or hate him but there is no denying the power of Gary Vaynerchuck. He has exploded into the wine world with his powerful voice, his unique methods of reviewing wine, and his love for life. Disclaimer - I consider Gary a friend and am a huge fan. I like his disruptive approach to wine, his goal to democrotize and empower consumers, and his zest for life. If you want a great history of Gary, read this article. If you want to know him, meet him at any of his events or follow his twitter http://twitter.com/garyvee where you will get a mix of vicious promotion and statements that let you know Gary is a great guy, for example - “Wine + Board Games + Friends = BEST NIGHT EVER!”, or ” So excited to be alive! and to be alive in this amazing time when at 2 am I have all of u to hang with, THANK YOU everything/everybody!”, or ” thnx everyone for yappin on AIM, hope everyone has a house full of LOVE today and u are spending time with friends and FAM! See u guys soon!”

Sometimes I don’t agree with the way he describes wine and I am sure that wineries feel the same. I mean really, it must be hard to have someone publicly comment on the product you have crafted with TLC. But good or bad, as long as he mentions it, sales increase. I’ve heard MANY stories where he loves a wine, sells through it, and when the consumers want more, he points to the wineries. Moreover, there is a Anti-Gary group that just buys everything he pans. Amazing.

He is a huge advocate of winery and retailer Direct to Consumer as well as Direct to Trade efforts (yes, Gary is one of the major retailers who loves the concept of buying DTT). Needless to say, he is a HUGE winery advocate.

He is the newest and without question, the most prominent wine personality in the US today. His internet reach, his ability to garner mainstream media attention (Conan O’Brien cameos that are great to watch), and his usage of Web 2.0 has him as the most watched and listened to wine critic in the world. You may argue that point but I would contend that the numbers don’t lie. You can watch his show daily at http://tv.winelibrary.com/ or at http://www.hulu.com/the-thunder-show. He also has released his first book 101 wines - which is a hilarious, accurate, and wonderful new approach to how he analyzes wine. I won’t steal his thunder (pun intended) by sharing the content of the book, but if you are in the wine industry it is a fun read. I know he is already at work writing the next version and I hope one of your wines gets mentioned. I also hope you try to put it in your tasting room or sell it. I think that promoting that type of fun in wine is good for the industry and will continue to capture the attention of our largest growing wine population - the Millennials.

Hats off to Gary, he really is one of the people helping to change the wine industry for the better.

As a post script - Gary will be at our Annual Symposium speaking about innovation. If you have not seen him, please try to come. It is open to all of our winery partners and as a non-Inertia winery partner you can rsvp to try to get in since we have limited seats. For everyone that comes we’ll be giving away a copy of his book for you to enjoy as we do.