10 years of Winery Consulting – What I learned

A Wine Marketing & PR Perspective

I was asked recently how I got started in the wine business. My experience is not unlike many small producers who transitioned from other business lives, learned on the job, but had the determination necessary to be successful. I am fortunate and appreciative to have worked with over 50 wineries in some capacity, initially as a DTC marketing consultant and starting in 2012 as winery publicist.

Marking 10 years doing anything is milestone, especially in the wine business given the pace of change we’ve seen. Wineries continue to recreate themselves by embracing marketing best practices and technology innovations. The pace of change has picked up with no end in sight. The one constant we can all bank on are relationships. If you’re a publicist, it’s the relationships you develop over a long period of time with writers, media outlets, winery and travel associations and occasionally with other publicists and marketers. If you’re a winery, relationships that matter most are with your customers, staff, wholesalers, other service providers, and the wine community. Going forward I’m guessing that people will continue to matter most, followed by product and wrapped in good marketing and brand promotion. Here are some general observations related to small production wineries in Oregon, over the past 10 years.

2009 – The way things were

  • DTC marketing – a relatively new channel for small producers with little distribution. Focus on tasting room openings and wine clubs, starting mailing lists, email marketing and social media
  • We’re farmers – most common response to queries about marketing plans
  • Marketing plans and consulting services – those were for real businesses! And, we used to sell out in past years!
  • Paid Content – print advertising is still widely used for winery promotions
  • Wine clubs – not as prevalent – 70% had some form, many needing revision
  • Websites – many wineries upgrade to WordPress and other content self-management systems
  • Social media was a new thing – common responses included – It’s not for us. Do I need to do this?
  • Holiday weekend sales were legendary – reports of $15,000-$20,000 weekends were common
  • Staffing – Few hospitality managers and very few digital marketing managers
  • Brand Building – relied on distributors. Distribution mix to DTC was 80% to 20%
  • Distribution consolidation – started with 2008-2010 recession. Small Wineries phased out of markets. Focus turns to smaller cities and regional markets. Much effort expended on market trips
  • Wine quality – still varies by producer. Collaboration on techniques is improving uneven quality
  • Media Coverage – wineries are occasionally being discovered. Active media outreach is minimal
  • Great recession ceases in 2010-2011. U.S. stock markets reach record high. Confidence, optimism and new investment returns

2012 to 2018 – It’s getting competitive

  • Owned Content – wineries focus on updated websites, blogs, social media, news, photos, videos and designed collateral
  • Regional, AVA and Tourism Associations – emerge as marketing organizations with enhanced budgets from new member dues, grant funding, fundraising
  • Experiential marketing – became a thing around 2015, which leads to hiring of hospitality, tasting room and club managers as the new standard in tasting room staffing. Multiple “experiences” offered
  • Winery specific software – facilitates target marketing and customer relationship management. Development of applications and technology create opportunities for hospitality staff to customize customer experience and interactions. Website analytics allows tracking of activities and results
  • Competition – new vineyard planting and winery brands proliferate due to factors including changing weather, quality and integrity reputation, and significant outside investment
  • Channel Mix – is evolving to 20% Distribution and 80% DTC
  • Wine quality – quality is a “point of entry” for consumer sales, and is widely accepted due to production experience, collaboration & technical advances
  • Media Coverage – wineries recognize the need to stand out in a crowded marketplace, and recognize brand building as their responsibility, although take a passive approach to promoting themselves. Winery associations offer members exposure to media activities, contacts and inquiries.

2019 until?

  • Branded versus Grower-Producer – the influence of winemaker personalities will diminish as well-funded large wine groups out-spend, out-price, and out-market small brands
  • Consumer visitation – becomes longer and more focused. Extended visits equate to less tasting room traffic, as people stay longer, visit fewer wineries but have higher quality experiences. Conversion rates increase, although less traffic equates to fewer opportunities for club sign-ups and new digital subscribers
  • Wine Club Retention – remains as issue as consumer have much choice and are gaming the system. Loss prevention becomes strategic for DTC management
  • Online Sales – this DTC sales channel has much underrealized potential. More wineries will activate eCommerce programs as an additional revenue source, and to manage customer contacts, interests, transactions and history. The overall customer relationship will be highly managed
  • Staffing – scarcity of trained and qualified staff is an issue, whether within the wine industry or hospitality industry. This calls out the need for sales automation and technology investment
  • Digital Marketing – 2019 and beyond will see the hiring of digital marketing managers as the most important role, in coordinating all marketing functions with a focus and emphasis on e-commerce.
  • Media Coverage – the need to develop “Top of Mind” awareness becomes apparent. Wineries will begin to add communications professionals to staff, at least in a part time role. Active media outreach and brand promotion campaigns will be coordinated with digital marketing staff
  • Channel Mix – some producers give up on distribution and moved to 100% DTC

These are halcyon days for the wine business. Who knows what the next economic cycle will bring? Consumers have disposable income and purchases of $80-$100 bottles are not uncommon. Update and invest in your business now, while the going is exceptionally good.

 

 

Top 5 PR Tips for Small Wineries

Why is Winery PR so difficult?

It’s difficult, because it’s about relationships. And reading. Yes, lots of reading. And research, planning, tracking, analysis and follow-up. The fun stuff, right? And things change. Just when you think you have good contacts, well planned schedules and best known methods, things change – people retire and writers move on, wine columns are canceled, writers get hired to work for savvy wineries that understand the importance of professional writing and content development – and I’m just talking about my job as a winery publicist!

What about the small family-run wineries that face the challenges of growing, producing, wholesaling and DTC marketing their wines, and with limited resources? Incorporate these five focus areas to ensure successful media outreach campaigns, and keep your brand top of consumer’s minds.

  • Planning – create a target media list, content and communications calendars, and a samples calendar. Track your accolades as they come in and use them in your content marketing. Please establish a budget for samples, shipping, shows, market trips, writing, PR consulting, etc.
  • Targeting – identify your brand POD (Points of Difference) and key messages. Align these with writer story interests & palate preferences, and their readership’s interests; Determine writing frequency, outlets, and best contact methods. Categories of writers should include wine, beverage, food & wine, travel & leisure, business and the trades.
  • Sampling – Wine Scores & Wine Competitions are still important. I once heard a writer say “I can’t review their wines if they don’t send them to me”. Same thing for the rating publications, competitions, online reviews, etc. Get your wines out there. The impact of receiving strong ratings is huge and will drive traffic to your online store and tasting room.
  • Pitching – it’s about relationships – following, commenting, sharing and obtaining their editorial calendars. Pivot your story pitch to align with their upcoming stories and interests. Give the writers what they want and need. Make it easy for them to do their jobs. Provide Media Kits, Tech Sheets (not tasting notes) with your samples; Include website and photo gallery links (with attribution) in all your communications.
  • Tracking – Interviews, samples (to publications, writers and competitions), and pitches must be followed up. Writers are too busy and circling back helps them keep you top of mind. Use your website analytics to determine the result of media hits – within close proximity to the article or wine rating being published – did it drive traffic to my tasting room, website, social sites, and email subscriptions. Was there any form of engagement, commenting, sharing that took place. How about sales? How did those new visitors hear about you? Are the results quantifiable?

Wrap up – in summary, its lots of work but must be done because the days of being “discovered” by the media are long gone. We have too much competition for the attention of wine savvy consumers. When you do receive an accolade (feature article, mention, wine review, scores, ratings, and medals of note), are you using that “Earned Media” effectively in your Content Marketing? 3rd party endorsements are hard to come by, so don’t waste that precious resource, and do let the world know that experts like what you are doing and so should they.

CARL GIAVANTI is Winery Publicist with a DTC Marketing background. He’s going on his 11th year of winery consulting. Carl has been involved in business marketing and public relations for over 25-years; originally in technology, digital marketing and project management, and now as a winery media relations consultant.  Clients are or have been in Napa Valley, Willamette Valley, and the Columbia Gorge.  (www.CarlGiavantiConsulting.com/Media).

USE THIS CONTACT FORM TO REQUEST THE TOP 5 PR TIPS CHECKLIST

Three Biggest Challenges Facing Small Wineries Today?

I think the real story in the Willamette Valley (and other small regions nationally) is that 75% of wineries produce fewer than 5,000 cases annually. It’s micro-production by any measure. They have survived because of so-called “Premiumization” and the recent fascination with their AVAs. What will happen when the next economic downturn occurs, as the distribution consolidation continues, and/or as vineyard and winery acquisitions accelerate (which they are doing now)? Are there business parallels between what is happening in Willamette Valley and other burgeoning industries such as craft beer or high tech? Is large destined to win? How will small craft producers survive and thrive in the long run?

Distribution

Distribution is one of the most challenging business problems small-production wineries face. Consider that just 20 years ago there were roughly 2,500 wineries and 3,000 distributors. The odds of having your wines represented by distributors were very high due to the demand for excellent wines. Distributors worked hard to help build winery brands. That is not the case today. There are more than 9,000 wineries in the U.S., and with the consolidation of the largest distributors, I estimate only 700 distribution companies remain. And for economic reasons, they focus on large family or corporate winery groups, high profit margins and depletions. The small winery simply cannot compete. Ironically, market research and industry studies show that today’s consumers want to try and purchase more from small craft brands (as opposed to the well-established brands that used to be consumers’ preference), but cannot find them available in the marketplace.

Additionally, I was reminded of the purchasing power of retailers that act as wholesalers. I made a trip to Costco recently and discovered cut-rate pricing for Willamette Valley Pinot Noirs on display for Oregon Wine Month. Would you believe $10.99 for Willamette Valley label wines? Concurrently, there are active initiatives to control labeling and varietal percentages to enhance the Willamette Valley brand and presumably our price points. I can’t make sense of this discounted pricing in the long run, despite the recent large yield vintages.

Competition

While there are still many small winery operations starting up these days, there are many others that are better equipped for this hyper-competitive environment. I believe we are living in a wine bubble that is destined to pop for economic, political or other unforeseen reasons. Starting a winery today requires significant funding and marketing wherewithal to stand out in today’s crowded, competitive market. We not only have too many wineries in small regions like Willamette Valley, we’re seeing many more from all over the world that bring serious investment dollars and business savvy to bear. Many smaller wineries aren’t so well prepared.

I am also starting to see high quality and reasonably priced $20-$30 Pinot Noir – which I believe is sustainable for most small wineries – and should act as a good hedge against eventual restrained consumer spending, as well as to supply national wholesale markets.

Brand Building

Why do this? Because top of mind awareness is the only way to ensure consumers will buy wine from you when they are ready. The adage goes something like this – Repetition breeds familiarity; Familiarity breeds trust; and Trust leads to Sales. It’s the justification for advertising and media relations programs.

While getting media coverage is still essential for businesses, it is increasingly challenging due to the proliferation of wineries and dearth of established writers with ongoing columns. In other words, the days of being “discovered” and handed a strong fan base due to media coverage have passed.

Writers are not paid enough to research and discover, nor do they have time to do so. Wine brands that stand out in today’s world tend to get ongoing media coverage for three reasons: (1) They are already popular, often written about, and quick and easy for writers to review; and/or (2) They are easily found in the marketplace due to distribution; and 3) They spend advertising dollars with a media outlet. Many print and online publications rely on a pay-to-play system to survive in a post-Internet world. This leaves many small-production wineries out of the equation, and mostly for financial reasons.

Another aspect of branding is controlling your winery profiles on social media. I like to think of social media as Consumer PR. Have you claimed your profiles on all the relevant sites? I mean not only the obvious ones – Facebook, Twitter, Instagram, but also the travel itinerary, wine country mapping, wine rating and mobile app sites. Monitor, post and engage consistently.

Strategies

My feeling is that a balanced approach of direct-to-consumer marketing (direct sales in tasting room/club members and eCommerce), ongoing brand building (using media coverage in your marketing), and specialized targeted distribution options (online brokers, targeted states) are required to ensure success. Unless you have been established for a long period of time (5 years or more), a reasonable goal is 20-30% wholesale and 70% direct sales.

Small do-it-all-yourself wineries are finally hiring marketing staff – DTC or Hospitality Managers – either from within the wine business or outside – experienced hospitality professionals (hotel and restaurant staff come to mind) are excellent hires. They understand the importance of the customer service experience and can quickly acquire sufficient wine knowledge. And they have direct experience with seated tastings, proven to generate higher sales per visitor. Give them a mobile POS and cut them loose.

Consider creating a staff position to manage your wine club, and choreograph the sales path with your staff. Why? Loyalty programs might be the saving grace for small producers. Revenue is recurring and mostly predictable. Members refer friends when treated well and their business is appreciated. Get a handle on this important aspect of your direct sales program while wine clubs are still viable.

Doing outreach and getting media exposure will continue to build awareness of your brand and unique market position to support these goals. Using third-party expert opinions (feature articles, wine reviews and scores) in your content marketing will help you to stay top of mind with your customers.

CARL GIAVANTI is a Winery Publicist with a DTC Marketing background, going on his 10th year of winery consulting. Carl has been involved in business marketing and public relations for over 25 years – originally in technology, digital marketing and project management, and now as a winery media relations consultant. Clients are or have been in Napa Valley, Willamette Valley, and the Columbia Gorge. (www.CarlGiavantiConsulting.com/Media).

2017 Oregon Chardonnay Celebration Review

Guest article by Neal D. Hulkower

The North, South, East and West of Oregon Chardonnay

The Seminar

The seminar which launched the 2017 Oregon Chardonnay Celebration at The Allison in

Newberg on 25 February took us on a tour. Ray Isle, executive wine editor of Food & Wine,

served as moderator and guide as we went “Roadtripping through Oregon Chardonnay Country.”

“People overlook how incredibly complex the wines can be,” Isle asserted. He quoted

winemaker Anna Matzinger who observed that a “high amount of intellectual capital is being

applied to Chardonnay in Oregon.” Five distinct examples from around the state substantiated

her claim.

Bob Morus of Phelps Creek Vineyards near Hood River represented the East. His 2014

“Lynette” Chardonnay had a pretty floral and fruity aroma and was sleek on the palate with nice

acidity and salinity.

Luisa Ponzi of Ponzi Vineyards in the northern part of the Willamette Valley advised that you

“want to catch [Chardonnay] right before it tastes great.” Her 2014 Aurora Chardonnay had a

toasty, fruity and nutty nose and a rich, balanced flavor.

Maggie Harrison of Antica Terra gets her Chardonnay from Shea Vineyard in the Western side

of the Willamette Valley. She admitted that she doesn’t “know how to pick before it tastes

good.” Instead she picks part when the acid is good then lets the clusters sit to let the flavors

develop. The 2014 Aurata Chardonnay offered complex aromas of oak and fruit in an elegant

dance. Similarly, the beautiful palate was rich and evolving, with a long, layered finish.

Heading a bit south, we heard from Ken Pahlow of Walter Scott. The 2015 X Novo Chardonnay

is from a young vineyard in the Eola-Amity Hills planted to fifteen clones. The nose was

dominated by toast and nuts but with air, spice and fruit emerged. The balance and acidity were

nice but there was little fruit on the palate. It was clear that more time is needed.

The tour ended in Southern Oregon. Bryan Wilson of DANCIN Vineyards discussed his 2015

“Melange” Chardonnay from grapes grown at an average of 1800 feet elevation. Initially muted,

the wine sat zaftig on the palate with some juicy fruit and richness but little acidity. Again, this

will benefit from additional aging.

Isle summarized the tour by highlighting the focus, tension and acidity common among the

Chardonnays featured. While elegant is a term that can be fraught since it might mean thin and

lacking power to some, these wines offered both elegance and power.

The Grand Tasting

We adjourned to the Grand Tasting. For two and a half hours, 46 wineries, including the five

featured at the seminar, poured their Chardonnays from either the 2014 or 2015 vintage.

Appetizers including mushroom popovers, deviled eggs, and smoked steelhead trout prepared by

Jory lent savor to balance the acidity and complement the richness of the wines.

In addition to the five served at the seminar, I sampled 28 bottlings. In general and not

surprisingly, the 2014s were less acidic and more fruity. In contrast, the 2015s were better

balanced, immature but showed great promise for age-ability. From the older vintage, the

standouts were the mouth filling offering from Brittan Vineyards; the lemony but lingering

Crowley Wines “Four Winds;” Chehalem’s complex Ian’s Reserve; the sleek Grochau Cellars’

Bunker Hill Vineyard; and the Matzinger Davies and the Evenstad Reserve from Domaine

Serene were two that were particularly food friendly,. Promising Chardonnays from the younger

vintage included the attractive Knudsen, the yummy Fairsing, the bright Big Table Farm, and the

juicy Willamette Valley Vineyards Bernau Block.

Reflections

It seems that Chardonnay never actually fell completely out of favor despite the now faded

“Anything But…” movement. It remains among the most planted grape varieties in the world,

second among whites to the Spain’s Airén. Naturally, as with Pinot Noir, Oregon winegrowers

have looked East to Burgundy rather than South to California in search of models of Chardonnay

greatness. What we now are seeing is beginnings of the payoff of the “intellectual capital” that is

being expended up and down the state. While there will never be a single style of Chardonnay in

Oregon, just as there isn’t in the Côte-d’Or, it is more distinguished and distinguishable from

what comes from California. No buttered popcorn or oak splinters here. Instead, balance and

acidity are king. This structure suggests greater age-ability, most recently for the vintage 2015

bottlings. The good news is that more producers around the state are embracing the grape, even

grafting over the less profitable Pinot Gris to it. If things keep up as they have been, Oregon

Chardonnay will be ready for a Cole Porter style tribute:

I love the smell of you, the lure of you

The fruit of you, the pure of you

The nose, the legs, the mouth of you

The east, west, north and the south of you

I’d love to gain complete control of you

And handle even the heart and soul of you

So love, at least, a small percent of me, do

For I love all of you

_____________

Neal Hulkower is a mathematician and an oenophile living in McMinnville, Oregon. His wine

writing has appeared in a wide range of academic and popular publications including the Journal

of Wine Research, the Journal of Wine Economics, Oregon Wine Press, Practical Winery &

Vineyard, Wine Press Northwest, and The World of Fine Wine. Occasionally, he can be found

pouring quintessential Pinot noir at the top of the Dundee Hills.

Do Small Wineries really need KPIs?

Continuous Improvement – preparing for the competitive storm

By Carl Giavanti and Aron Brajtman

If I had mentioned KPI’s eight years ago when I started doing marketing consulting, I would have been escorted out of the room, maybe even the AVA. That is not the case anymore.

Measuring your sales performance is critical, as much as we’d like to not believe it. Remember the “field of dream” days, when you could just make great wine and it would sell itself?  Until the great recession (2008-2009) timeframe you may have had this experience. We have fond memories of inventory depletions, really big Memorial Day and Labor Day weekends, and festivals and events where you sold a lot of wine. I remember many wineries saying they didn’t bother getting emails from consumers, nor doing a lot of marketing or tracking sales performance. KPIs? What?

Now we all know those days are long gone and wineries must run themselves like well oiled marketing machines to ensure their survival. I like to say that 50% of total staff time (including your own) needs to be spent on marketing – wholesale, retail, trade and DTC – whatever your channel mix.

Peter Drucker, business management guru once stated “If you can’t measure it, you can’t improve it”, which brings us to the point of this article – Key Performance Indicators.

Don’t think these business measurements apply to your winery? Unless you are a cult winery that is fully allocated with a substantial wait list, bear with me and continue reading.

KPIs are a way for wineries to define success and measure performance, and make progress toward your business goals. For most small producers, DTC goals are selling more wine, improving sales efficiency, acquiring and retaining customers, and retaining staff and improving morale.

This article is primarily concerned with improving DTC sales performance, because the pool of high-end high-frequency consumers is limited and there are many more wineries marketing to them than ever. Additionally, we know that consumers can be fickle. They support your brand and bring their friends around when the value they get from interacting with the winery exceeds the price they are asked to pay. This is a topical issue as we are seeing early signs that the “premiumization” trend is weakening, with the introduction of new marks and second labels at lower price points.

When I query winery owners and managers about tracking and using metrics, I find that most can give me basic sales data such as total revenue by month or compared to last year, percent of tasting room versus wine club sales, DTC compared to other channels, and statistical data such as number of club members, size of email list, number of social followers, etc. However, not everyone successfully tracks total number of tasting room visitors (new, repeat, paid, comp, club), referral sources (how they heard about you), and staff performance and labor metrics.

Once you are capturing all of this data you’re ready to turn it into actionable management information that will drive business results. If you are not great with spreadsheets, or current system does not provide performance tracking functionality, find one that does.

Here are some basic winery DTC sales measurements (KPIs) to implement:

  • Sales per employee: The higher the number in the tasting room indicates whether the staff focuses on supplying the customer with value and whether staff captures a portion of that value for the winery.
  • Conversion ratios: What percentage of visitors to the tasting room actually buy? What percentage join the wine club? What percentage leave their email for further communication?
  • Average order value (AOV): Average sale per tasting room visitor? Is the trend going up?
  • Average annual wine club sales per member? What is the average add-on percentage?
  • What is the Wine Club attrition rate annually?
  • What is average tenure? What measures are taken to retain loyal customers?

Tie your winery’s goals to these measurements and clearly communicate the importance to staff:

  • Post individual, team and winery goals
  • Review and make adjustments monthly
  • Share success, and highlight team members
  • Establish a bonus program to reward staff

Continuous Improvement is the mantra for small production wineries and the key to survival in this ultra competitive environment. Start now – Create goals, track data, establish KPIs, then measure, improve and Repeat!

I track wine industry benchmarks for these KPIs. Feel free to contact me if you’d like that data.

Finally, thanks to Aron Brajtman for initiating this article, providing the KPIs from an accountant point of view and reminding me that even wineries need to be run as businesses. If you found the KPIs helpful, the next step is to understand KFIs (Key Financial Indicators) such as Liquidity, Earnings Growth, Profitability, Activity, Efficiency and Leverage. If you’d like a copy of the winery Financial Metrics white paper by Aron, please email me request at cgiavanti@mindspring.com.

CARL GIAVANTI is Winery Publicist with a DTC Marketing background. He’s completing his 8th year of winery consulting. Carl has been involved in business marketing and public relations for over 25-years; originally in technology, digital marketing and project management, and now as a winery media relations consultant.  Clients are or have been in Napa Valley, Willamette Valley, and the Columbia Gorge.  (www.CarlGiavantiConsulting.com/Media).

ARON BRAJTMAN is a CPA and the owner of a CPA firm that deals uniquely in supplementing the operational skills and talents of entrepreneurs with accounting and finance strategy. Aron has over 30 years of experience providing accounting and business solutions to small and mid-sized businesses and nonprofit institutions. He is located in a fast growing wine region in Canada known as Prince Edward County where he provides services to local wineries and other businesses. http://www.abrajtman.com/