Tag Archive - business

Go with the cash flow

December 7, 2009 in wine conversation with 4 Comments

LONDON - JANUARY 5: Chancellor Alastair Darli...
Image by Getty Images via Daylife

… or “How I will do my bit for the economy of this country via the wine aisle”

For the last few years, pretty much since I started blogging, I’ve had something to say about the underhand way that the government uses Duty on wine to line their coffers, usually at the expense of the consumer, but by implication also affecting everyone else in the chain, from retailer to producer.

I have tried to argue that our Duty system, with high taxes on EVERY bottle of wine, no matter how good (or poor), have little impact on whether consumers drink to excess, which is supposed to be one of the reasons to raise the price.

I have tried to argue that lowering taxes would enable producers to invest more in the quality of the product and their communication/marketing, educating consumers to drink better, and drink more responsibly.

To no avail, of course.

Earlier this year, the Treasury admitted in a letter (during a campaign by Le Beast wines, Harpers, Drinks Business and Off Licence News) that:

“…alcohol duty is an important revenue stream for the government”

and

“The alcohol duty increases announced at Budget were not designed to tackle problem drinking but they will play their part in ensuring we can continue to fund the Government’s spending priorities.”

It seems that the anti-alcohol lobby and politicians are allowed to use these as justifications for putting Duty up, but when they get the money, they can then spend it on whatever they wish.

So, I’m changing tack.

Let’s be realistic: If the government needs money to shore up our economy and get people back to work (or keep them in work), then they will be forced to raise taxes. They could*:

  • tax me harder on my income, thus making me have to work longer/harder
  • tax me more on stuff I buy (VAT), thus discouraging me from buying that ‘stuff’ and thus not making money OR,
  • raise money from me while I am enjoying one of life’s real pleasures; drinking wine

To be honest, thinking about it like this (as I did when I went to sleep last night), I would rather be paying them extra dosh while I have fun, not while I work (of course, in my case I’m doing both).

So, Mr Chancellor (or simply Darling as we will now call him), I’m not excusing you. You could still do A LOT more to support wine businesses, producers, retailers, consumers and the health of this country, but as you do not seem to be prepared to do this, I guess I will just have to do my bit for the economy of this country via the wine aisle.

I hope you appreciate it!

And, Darling, when we start to emerge from this fiscal black hole you have helped to get us into, I trust you will do the decent thing and engage in a proper dialogue about what is actually good for the many responsible drinkers in this country.

Now, I’m off to pay some taxes, … by the glass.

* Of course, I suspect they’ll do all 3 of course! Watch out for 20% VAT, higher income tax and increases on Duty as a triple-whammy

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Find Wine with Style

December 3, 2009 in marketing with 3 Comments

findwineAt the recent The Wine Gang Christmas Fair I had the chance to taste lots of wines and meet importers and wineries from around the world. One of the ones that stood out for me was a small online retailer looking to sell wines in a novel way: FindWine.co.uk

Most wines in this country, whether in the supermarkets or independent merchants, are sold mainly by country. They might then be divided by region, price or even style, but the first arrangement is almost ALWAYS by country. Most (surviving) online merchants have therefore taken this format as well, and although you can usually filter by many different criteria, country still dominates the thinking.

The other thing most retailers have in common is that they generally list a larger range of wines that may then be categorised or tagged with tasting or buying information to help consumers decide between them. The thinking is, if you give consumers a broader range of choices, they’ll find something they’ll like … and buy.

The truth is, many consumers are not looking for anything too specific, and in fact are often put off by too much choice. They want a good deal, and a recommendation of a ‘good’ wine, so may well leave without buying anything.

FindWine decided, instead, to create a list with only 54 ‘slots’ that represent 6 different price categories across 9 different ‘styles’, and find just 1 wine that is a good example for each. The prices vary from under £5 to £15+ and the list of categories includes “zippy” whites as well as “soft-isticated” reds, so should appeal to lots of consumers.

I think what these guys are up to is very interesting, especially as their model allows them to buy good quality wines in small parcels so they can keep things fresh and change regularly. All we need now is a bit more interaction and visibility from the faces behind the business to demonstrate their passion for the wines and give us confidence they are choosing interesting wines for these ‘slots’.

On that note, watch this short interview I recorded at the show with John Critchley, one of the guys behind FindWine:

If you have used them, or tried their wines, do let me know what you think of their model and their wines. Is anyone else doing something similar?

(Update: I apologise to Mike Howes as this is in fact John Critchley, Mike’s partner at FindWine who I identified incorrectly in the video)

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Crush It! A book review

November 10, 2009 in marketing with 19 Comments

Crush It

Crush It

Well, I ‘crushed it‘ in one sitting on the plane on the way to Lisbon for the EWBC.

Gary Vaynerchuck’s Crush It! is a book intended for an audience of entrepreneurs ready to take advantage of the opportunities offered by social media. These opportunities are easier to capitalise on in an age of ready-made blog platforms, template fan pages on facebook and free plug-ins to carry out necessary tasks, so I use the term entrepreneur to mean all those interested in starting their own money-making business, even those with minimal investment or risk.

That’s all of us!

The style of the book is very readable, and very “Gary”. You can hear him dictating the book, pacing back and forth in the room, stopping to make a friendly quip, probably about American Football, then launching back into his well-honed routine as if he had not left off. In fact, it is so much in the “Gary Vay-Ner-Chuck” voice that I had to read it at the speed he speaks, so I got through the book in an hour and a half!

As someone who has been following Gary, on and off, from fairly early on in his Wine Library career, including some of his keynote videos and his business site, much of this book is already familiar @garyvee stuff. It is interesting to have the presentation in one place for reference and in a form I can lend to others (even if video is more entertaining, it is harder to use to research and/or prove a specific point of your own).

The point of this book is not to give his existing followers something new, but to bring his message to those that have not yet committed themselves to social media but who think they want to know more. It is for Gary’s “posse” to give to others to explain their addiction, and for some of us, a useful basic checklist to refer back to.

One thing it is not, for the record, is a wine book, but the messages are still relevant to wine businesses.

If you want a highly readable, passionate and credible book on how to approach building your personal brand in, and through, social media, it is worthwhile reading. However, the world is moving apace and even some of this book is already outdated, so read it quick to get you up to speed on yesterday so you can get on with building your own brand today.

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The case of Majestic’s big small announcement

September 1, 2009 in Consumer marketing with 9 Comments

I just heard via two sources on Twitter (isn’t it great?) that Majestic are about to radically change their business model and potentially make them an even greater player in the world of wine retailing.

Now Majestic’s minimum purchase it to be halved to only 6 bottles

Until now, Majestic required consumers to buy a minimum of 12 bottles at a time. Their “warehouse” model of large stores, plenty parking and knowledgable staff had  made them a favourite of keen wine drinkers.

However, the vast majority of UK wine drinkers do not buy 12 bottles at a time. Most buy 1 bottle for a specific evening, or maybe 2-3 if on a promotion. This made them a ‘specialist’ as opposed to a regular ‘wine shop’ in the minds of most consumers.

The theory has been that by buying in larger quantities, you could take advantage of more volume deals and get a better price overall for your wine. In practice I wonder quite how much better that price was unless you were really picking the promoted lines, but …

Despite targeting a relatively small number of wine drinkers, Majestic has been enormously successful in the last few years, especially if you compare them to their peers; Oddbins, Wine Rack/Threshers and pretty much any other high street wine retail name. It makes a BIG difference to have 1 customer walk into your shop and buy 12 bottles with an average price around £6-£8 and therefore spending £70-£100 instead of them walking out with a single bottle, no matter how expensive.

… spare a thought for the independent wine merchant struggling to survive

Now Majestic’s minimum purchase it to be halved to only 6 bottles. Clever, or crazy?

  • On one side, getting consumers to move up to buying 6 bottles is easier than jumping from 3 to 12.
  • It means that the wine consumer on a budget who already buys at Majestic might feel less guilty about going back to the store to “only” buy 6
  • Many modern flats do not have space for storing 12 bottles at a time (sad to say)
  • Majestic is obviously hoping that their “£2 off per bottle if you buy 2 or more” type discounts will encourage shoppers to buy more than 6 anyway (I always seemed to buy more than 12 I admit)

However, it risks upsetting the delicate balance they have achieved that has made them successful.

12 bottles was not a ‘legal’ requirement, at least not once you could mix & match your own. It was simply the business saying “you will buy 12 bottles or we won’t sell to you”.

People accepted that, in part because 12 bottles was a psychologically significant number (as the number of bottles in a standard case measure). How will consumers react to this being changed? Happy that it is now “only” 6? Or will they wonder why they have to buy 6 at all, and why they can’t just buy 3, or 1?

Also, I’m certain there were those who bought extra bottles to fill their 12 bottle quota. What happens to those purchases?

It is a bold move that will hopefully attract some of those customers who like wine and knew of Majestic but for whom 12 bottles and the thought of £75-a-visit were a substantial barrier.

Let’s also hope it encourages more consumers to make wine drinking a more planned activity.  A little research can make the appreciation of the wine so much greater.

Finally, spare a thought for the independent wine merchant struggling to survive in your town, village or high street. This potentially makes their life even harder, but maybe you could learn about new wines with Majestic’s offers and education, then go exploring the wines of smaller wineries and regions with the help of your local merchant?

Good luck in your wine adventures!

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Open minds for troubled times

February 20, 2009 in wine culture with 4 Comments

Chair
Come on in for an interview!
Image by tommy forbes via Flickr

I’ve reported, commented and complained before on this blog about how the UK government treats consumers and business when it comes to alcohol.

My position has usually been one of incredulity, cynicism and anger at the decisions being taken by politicians, in particular when it comes to taxation of alcohol.

I’d like to extend an offer to a politician or civil servant to explain to me, in person, what this country’s government is doing, and why.

I was prompted to write this post by the announcement that a UK parliamentary committee was to be set up to examine:

… alcohol-related health problems and the consequences of these for the NHS, plus the role of the alcohol industry, police and government departments in addressing alcohol-related harm. [as well as] … examine “whether the drinking culture in England should change, and, if so, how”. (from just-drinks)

Just my sort of question!

Governments and politicians like to be SEEN to be doing something, no matter how ineffective in practice. In general, I do believe that politicians are scared of talking sense about alcohol (or many matters of real personal choice for that matter) and governments are quite happy to continue to be able raise lots of money from a ‘sin tax‘.

The problem is that the government has become dependent on the money raised from Duty on alcohol. They couch their revenue generation as a “strategy” to combat alcohol abuse whilst damaging businesses that could help to change people’s attitudes to alcohol and still, in my opinion, not doing nearly enough to address the underlying causes of that abusive behaviour.

I think many in the wine business in particular would probably agree.

HOWEVER, I will also admit that my experience is limited. I work with great wines, wines made by people who care about their product and which is sold mainly to those who appreciate them. I don’t have much day to day experience of the front line of a binge-drinking culture that I admit does exist in places in this country.

So I’d like to extend an offer to a politician or civil servant to explain to me, in person, what this country’s government is doing, and why. I don’t want a press release, I want a discussion. I’m prepared to post the results on here, either as a new post or in the comments. I would even consider filming a meeting and putting it on the blog for others to view.

Is that you? Or maybe, you know someone who could come along to chat? Let them know!

I am not a campaigner with an agenda as such. I’m not promising those who agree with me to be the best prepared, most vocal champion of the alcohol business (there are people like the WSTA for that). I am not a politician, nor expert debater. However, the government needs to convince me, and people like me, if we are to support their current approach, and if they can’t, then listen to us about finding another way forward.

I’ll even give you an idea of the questions:

  1. What evidence is there that high duty rates stop young people from drinking too much?
  2. What meaningful dialogue can you point to that shows you admit that alcohol consumption is a perfectly acceptable part of our society & culture in moderation? Have  you ever done anything other than preach?
  3. By focusing on the price/cost mechanic, are you not damaging small, independent importers/retailers who might engender a respect/appreciation for alcohol, and instead driven people to the multiple grocers, with their massive purchasing power to offset that duty cost, where no such education takes place?
  4. Is the excess consumption of alcohol not more closely related to opportunity IN GENERAL, rather than opportunity to buy alcohol? Would fewer kids get blind drunk if you inspired them with alternatives for their time & effort, rather than chastising them?
  5. What about the law-abiding middle classes of moderate consumers who are being criticised for their alcohol consumption? Where is the data to back your 21 units safe limit campaign?

These are just some of the questions off the top of my head. If you have any others you’d like to ask, let me know.

So, then, who’s willing to try and convince me? There’s a chair waiting!

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