Tag Archive - Winery

What 1% increase in spending will sell you more wine?

Ironically, the answer is probably not by increasing the quality of your wine.

A vineyard tractor

Will this sell wine? (by @ryanopaz)

With the one exception, moving from a Parker (or other pointillistic) rating of 89 to 90, there is very little chance that you can find any benefit to a 1% increase in wine quality leading to a measured increase in wine sales. Yet wineries will spend thousands and thousands of dollars/euros every day to try to make it happen. They spend on things such as: a new bladder press that presses the grapes even more gently, a consulting winemaker to come in and tweak the style of their wines, or maybe a whole set of new fermentation tanks just because the current ones are not quite the right shape to attain maximum extraction. I’ve seen all of these implemented by wineries who were struggling to sell more wine. Each time the winery was looking for a way to get more people to buy their wine, but from what I can tell, all that was achieved was a larger bank debt and the same amount of wine being sold.

I’m talking about wineries with established markets and established ways of doing things. A new winery might quite rightly need to upgrade the materials they have as they begin to grow, but even in that case, measuring the quality of the wine in relation to the wine making gadgets’ fixed costs is a VERY difficult thing to do. As we used to say in the kitchen I worked in: “It doesn’t matter how fancy your knife is if you don’t know how to use it.”

The irony is that so many wineries are already full of fancy wine making equipement with shiny wineries and fancy bottles, and yet they have either forgotten to invest in a website, or the website they currently have hasn’t been updated in years. Today the website is not an option.

So what 1% increase in spending might help these wineries to sell more wine, if not by making the wine better?

If poor wine quality is stopping you from selling more wine then you will need to spend a lot more than 1% of your budget to improve the wines. If you’re selling wine already and you want to sell more, a new tractor is not going to make difference to your sales. The problem is, buying a tractor is easy to understand. It’s a physical object that you can touch and you know it’s there. Marketing, websites, and PR are less so. You can’t physically touch them and, like a ghost, that can be scary! “New wine press, no problem, I can see that and touch it and all is good! New online social media campaign? Well, I don’ t think that that will help much, plus I don’t understand it”.

Not understanding how something  works does not mean you don’t need it. 

I don’t understand how the hard drive in my computer remembers what I put in it, but that doesn’t mean I don’t need it. I buy it, and use it, because it is useful. Social media, and a functioning website, are not optional winery tools, they are as essential as your destemming machine.

That is if you want to sell more wine.

I believe that a 1% budget increase spent on your winery’s sales, marketing, or online engagement will make a small difference to your bottom line. Quite often a very large difference. If you have the courage, I dare you to try.

An example: What is your annual operating budget for your winery? 250,000 euros? 500,000? More? Less? Let’s start with the first one, where 1% gives us 2,500 euros. Take that money and go out and hire a professional, not a relative who took a weekend class in web design, but a trained professional, and have them sit down with you and teach you about Twitter, Facebook, or even help build your first blog. For that 2,500 euros, and a bit of shopping around, I bet you could get a new website and some in-house training. Maybe not the fanciest website, but you could trade that in for a Facebook fanpage, some Twitter help and more in house training. Now you’re set. Just remember to ask questions and get involved; this stuff won’t run itself.

Then spend 1% of your time each week engaged with it. That’s just 15 minutes a day.

2,500 euros of social media education and initiatives + 15 minutes a day = more wine sold. Guaranteed. Or rather you won’t sell any less wine. You can only gain.

This won’t happen overnight. I bet you didn’t learn to make the perfect wine your first day in the winery. It probably took some time to learn how to do it. That’s ok. It didn’t stop you from trying though, did it? No, you wanted to make better wine, so you went and did it no matter what. Next thing you know, you got the hang of it and pretty soon it became easier and easier. The same goes for social media.

By getting out there and talking to consumers and promoting yourself online, you will sell more wine. The social part of getting out there won’t be tangible, but your selling wine will be. What have you got to lose? With the crisis here in Europe impacting sales, wineries can’t afford not to try. Make 2012 the year you try something different.

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Losing the plot

?????

It seems so obvious from the outside. Winemakers and wineries in a region should cooperate to promote the region and give consumers a clear idea of what that region offers to encourage them to give their wines a try. Yet in practice, when you delve into any region or country, what you see are arguments, divisions and recriminations.

It is something I saw a glimpse of recently during a trip to the beautiful region of the Langhe in Piemonte (thanks to Berry Bros & Rudd), but I stress that this was only the latest example of something I see everywhere.

The conversation started as “How can we (all) make people more aware of the Nebbiolo grape” … but quickly turned into a discussion about who should or should not be included, how “there’s really nothing else in the world like nebbiolo, and everyone should realise this”, and about the classification of vineyards.

Italy is already famous for its complex regional boundaries and multi-layered wine classifications. So how is it that wineries can possibly rationalise “making things easier/clearer for the consumer” by creating further sub-divisions of wine regions and new DOC’s?

I felt the odd one out when I implored the wineries to spend time finding what they have in COMMON that is unique instead of worrying about local matters, but how to explain this view?

Wine and Movies

Winemakers, their wines and their wineries are all great characters. On their own, each one is different, has its own background, personality and role to play in this world. Yet, individually, they are walking biographies, of interest only to the already devoted fans. They lack a context & excitement. They lack a narrative.

To quote an interesting article by Caro Clarke:

“Plot is what happens. Narrative is what the reader sees and hears of what happens – and how he sees and hears it.”

Movies NEED great characters, but they also need a narrative, a story that affects not just what we learn, but HOW we understand what it is all about. There has to be something that brings these characters together, gives them a way to express themselves, makes them interact, highlights their brilliance … and their flaws.

  • Jack Bauer (Kiefer Sutherland) needs Los Angeles, computers, satellites, guns and terrorist threats to make sense as a character, otherwise he might just be a moody, aggressive law-enforcement officer with a sadistic streak and a knack of being in the wrong place at the wrong time
  • King George VI (Colin Firth) needs the pageantry and social norms of British Royalty and threat of war of 1930′s London to make us care about his fight with a speech impediment, otherwise he’d just be an unfortunate toff who wouldn’t make much money as an after-dinner speaker

Ultimately, there has to be something that engages the viewer and consumer and keeps them in their seats. THIS is what the region should be providing. But just like every movie needs its actors to play the parts, it also needs directors, screen writers and camera operators (and many more skilled folks, including Best Grips, whatever they are). A great movie only emerges when all of these people, and their skills, come together.

The same is true for wines. There are great wine makers, great wineries and amazing wines, but they make a much greater impact when they are put into a context that consumers care about and understand. EVERYONE needs to play their part in promoting the region, and the individuals involved need to learn to think of the overall effort as well as their own objectives.

Consumers are looking for ways to understand wine, so let’s give them the stories they need to convince them to bother paying attention, and then spend their hard-earned money on our wines.

In response to this, Vrazon is planning on running workshops for wineries and regional bodies to help them develop this concept for their own situation. Look out for announcements for dates and locations in 2011 and 2012 but we hope to have one up and running in conjunction with the 2011 European Wine Bloggers’ Conference

Let’s hope that in future we can tell more interesting, unique stories that make sense of the great wine characters that do exist out there.

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A toast to wine freedom

In this 50th anniversary year of Amnesty International*, I propose a letter-writing campaign that might liberate wine stories from their digital prisons.

“Yet if these feelings of disgust all over the world could be united into common action, something effective could be done.” Peter Benenson

Please feel free to employ this whenever you come across egregious examples of “digital wine imprisonment” then give a “Toast to Freedom“.

Wine Class @ Diony Castle

[Template Letter - amend and complete as appropriate]

Dear [Winery]

It has come to my attention that the amazing, delicious and unique [wine], a wine celebrated by wine lovers across the world as an outstanding example of the craft and science of winemaking, has, by your actions and inactions, been digitally imprisoned and locked away from the gaze of millions of potential appreciative drinkers.

It was clearly established by international convention that the use of Flash-based web sites is cruel and unusual punishment, tantamount to torture. Wine lovers wishing to enjoy [wine] should not have to wait ages for screens to load, to sit through cringeingly self-congratulatory and irrelevant films, or install plug-ins just to watch bubbles burst on their screen or photographs drift in and out of focus.

Continue Reading…

Can a cheap wine be too good?

I attended a “Spanish Wine on the High Street” tasting recently. The idea was to showcase the best, or most popular, Spanish wines in the ranges of the UK’s top supermarkets and high street wine retailers (or what’s left of them), as selected by their buyers. There were wines of many styles and prices there, including very expensive ones (and lots of Rioja). I have published some of my thoughts from that tasting on my Posterous blog, but I want to explore a separate question here.

What would you expect for 61p?

Supermarket wine shelves UK
Image by casavides via Flickr

We all want a deal. We all love finding a bargain, where the value for money, the “bang for your buck”, is great – especially if we are the ones to discover it and tell our friends and gain ‘kudos’. But sometimes, things might also look, and taste, too good to be true.

One of the wines was from a region already known to make decent, uncomplicated and good value wines. It was not stunning, but it was certainly drinkable, with nice fruit and a clean finish. The surprise was that it was selling for only £2.70 a bottle.**

Normally, if I even tasted a wine that cost this much, I’d expect something virtually undrinkable, simply because it is not possible to make a wine and sell it at this price. So, what does it mean?

I should say I know NOTHING about the deal that got this wine listed in this retailer, but let’s face some basic facts:

In the UK, on a retail price of £2.70 there is £0.40 of VAT and £1.69 of Duty (which is fixed for ALL wine bottles, of any price). That leaves £0.61

That 61p has to cover the cost of:

  • the glass bottle
  • printing the label
  • cork
  • capsule
  • cardboard cases
  • shipping (from the producer to the UK)
  • distribution (within the UK to all the shops)
  • PLUS the retailer’s margin (the supermarket has to make some money!)**

oh, wait …

  • growing the grapes
  • picking the grapes
  • crushing the grapes
  • fermenting the juice and storing it for a period of time
  • all the processes of ‘filtering’ and ‘preparing’ the wine
  • bottling, corking and labelling the wine
  • getting through a great deal of administration and bureaucracy
  • staff to do all this stuff
  • … and maybe leave some money for the winery?

Does that sound likely?

Wineries do their utmost to make a good wine in such a volume that they can make economies of scale and sell it at a reasonable price, but this is extreme. So what are the implications?

These deals are driven by a certain level of desperation. No winery can make money on it, but there are circumstances where “moving” a wine even if it is for almost nothing, is cheaper than the alternative. If your tanks are full of a good wine you have not been able to sell from last year, and you NEED those tanks for this year’s wine, and you can’t simply pour it down the drain … what can you do?

Retailers will gladly take it off your hand if they can make money from it. They’ll sell it cheap and get folks flocking to their shops.

The knock on problem is that we consumers say “Hurrah!” as the value for money is apparently very high, and we love spending so little.

We are then entitled to think, “well, if that wine tastes THAT good for £2.70 then why should I pay £4, £5 or £6, or even £10+?” But it isn’t economic. Wineries and regions will not survive selling wine at that price level.

All the good work by wine lovers to explain the agricultural, artisanal, low-margin, high unique value proposition of wines is lost in a storm of price discounting.

Selling decent wine at throw-away prices changes the expectations about wine as a whole, and particularly the country that it is associated with. It associates it with “cheap” wine, a moniker that is VERY hard to get rid of later (just ask Bulgaria, Portugal, and even Chile).

Too often they become, and remain the “best wines for not a lot of money” instead of the “best value for money” which they aim for.

I totally understand why wineries can end up in this situation in the short term, and that supermarkets are also commercially driven, but it does wine no good. If this becomes the norm (as, arguably, it has), good wineries that have to sell at properly commercial prices will not find space for their wines and are forced to compromise as well, or go out of business.

At the end of the day, cheap wine is usually terrible, undrinkable, nothing more than slightly flavoured, acidic alcohol. You get what you pay for … generally.

But if you buy that wine, and it actually tastes good, then what incentive do you have for spending more? After all, if we keep spending at this level, more wineries will be desperate enough to sell wine at these prices. Until they all close.

How can we change this situation, if retailers don’t care? Whose responsibility is it? Well, the government is poised to create a “law” to stop selling “below cost” … but how do you define that, and where does the money go? A topic for another day.

I think that good wine CAN be too cheap.

Do you agree? Do those who cannot afford more expensive wine ‘deserve’ good wine at cheaper prices despite what it does to the industry – is it just a case of survival-of-the-fittest?

By the way, for a variety of reasons, I am not mentioning the wine, producer or retailer that occasioned this thought. It is a general point I am making.

** I discovered that the £2.70 was a promotional price during a 25% off promotion. However, as this simply removed one aspect (the retailer’s margin), the general point remains although it would have to be taken into account

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Lulu Does England

As you would imagine, being a wine lover and living in the UK is great because we have access to great wines from all over the world. The UK is still one of the biggest, and most cosmopolitan, importers of wine in the world.

This situation arose, in part, because we didn’t have the climate to make the range and volumes of wines we wanted to drink. We simply HAD to go abroad to find it.

However, wine has actually been made in Britain for centuries, mainly thanks to the Romans I believe. What is more relevant, however, is that England today is becoming a great centre for the production of unusual whites (like Bacchus wines) and Champagne-like sparkling wines. Who nows what further warming of the climate will allow in future!

I don’t say Champagne-like lightly, because English vineyards are actually similar in many key ways to those of Champagne, they also grow the same main grapes (Chardonnay & Pinot Noir) and make the wines in the same ‘traditional’ way.

In fact many, including Nyetimber, regularly come above many famous French counterparts in blind tastings (as they just did again)

Now Stephen Skelton MW, a leading expert, consultant and educator on anything to do with English wines, has published his latest book on English Wines and Vineyards: UK Vineyards Guide 2010

What is doubly interesting is that it is only available via Lulu.com a self-publishing and on-demand printing site. It means copies are printed only for those interested in buying the book, so none are wasted just to be eventually pulped. It also cuts out certain intermediaries, allowing the author to have a bigger stake in the books success.

I like this business model a lot and hope it is successful because it provides opportunities for other specialist or creative writers to get their writing published. This is not an easy time to try and get a publisher to take on a book about wine.

Two or more very good reasons to check it out, I hope you agree.

The UK Vineyards Guide 2010
(ISBN 978-0-9514703-4-3)
Price £22.95 + postage and packing.
Available ONLY from: http://www.lulu.com (Ref: 7848482) or http://www.englishwine.com

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