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Conference Sessions Highlight Challenges / Opportunities for 2014

By Elizabeth Hans McCrone

Over 3,000 people flocked to the Sonoma County Fairgrounds on Thursday to attend the second annual North Coast Wine Industry Expo. The event, that was packed with industry professionals from throughout California, Oregon, Washington and beyond featured 300 exhibitors and four different conference sessions focusing on viticulture, finance, cellar technologies and sales.

Elizabeth “E” Slater, owner of In Short Direct Marketing and Co-founder of the Wine Industry Network, was the Expo’s 2013 Session Director and facilitator of the event’s conference panelists.

Branding Your Vineyard

Nick Frey, Past President of the Sonoma County Winegrape Commission, moderated the session on viticulture, called “Branding Your Vineyard.” Speakers included Michael Brughelli, Sales Manager for the Thornhill Companies; Brian Clements, Senior Partner and Vice President of Turrentine Brokerage; and Steven Sangiacomo, Partner in Sangiacomo Family Vineyards.

Clements defined a successful vineyard brand as one where “the customer sees that you do what you say you’re going to do.” He told attendees that the goal of branding is having a “consistent vineyard buyer” and advised his listeners to study long term and short term market trends, have a realistic view of their target markets and to spend time understanding bulk wine sales for clues to consumer buying patterns.

ncwie-quote1Brughelli, whose Thornhill Companies include Bien Nacido, Solomon Hills and French Camp Vineyards on California’s Central Coast, noted that “marketing gives you that ultimate leverage.” He said his company is able to be selective about its business partners, stating that “we don’t work with players who don’t have the desire to become vineyard designates.”

Sangiacomo, whose family has been farming in northern California since 1927, is proud of the fact that his company now has long-term contracts with 30 different wineries, many that were brokered on “handshake deals” and lasting for more than 20 years. He emphasized the importance of personal connection and relationship building, speaking about effective practices that included wooing wine writers by inviting them home for dinner.

“There’s no better way to get a wine writer committed to your brand than to throw some good Italian food at them,” Sangiacomo laughed.

North Coast 2014 Financial Forecast

The session on the “North Coast 2014 Financial Forecast” featured Ben Stone, Executive Director of the Sonoma County Economic Development Board; Rick Boland, Senior Business Consultant with Moss Adams, LLP; Joe Ciatti, Principal with Zeppponi & Company and Rob McMillan, Executive Vice President Silicon Valley Bank’s Wine Division.

Stone spoke positively about the economic recovery fueling growth in the labor market, consumer spending and the tourism industry. He noted that wine has “rebounded revenue since 2010,” fueling revenue growth at a rate of 4.6 percent per year over the past five years. He said that average rate is projected to rise even more, to 5.2 percent through 2017.

McMillan raised concerns that “employment has flat-lined” despite wide-spread reporting of positive unemployment numbers that are approaching 6 percent for Sonoma County, well below the state and national averages.

He noted that the growth in wine consumption is primarily due to baby boomers, who are retiring at the rate of about 10,000 per day. McMillan advised attendees to focus on generation X consumers, who will have the disposable income to continue the luxury wine consumption trend into the future.

Boland focused his comments on the results of Moss Adams LLP’s recent benchmarking survey, which will be released in early 2014. The survey includes data from 166 different growers, vintners and other winery professionals through California, Oregon and Washington. He said in general, the report uncovered five different areas of focus for 2014. They include consumer purchasing patterns, tank and processing facilities, an increasing market share for wine blends, vineyard replanting options and changes in tax laws.

Ciatti spoke about the history of winery mergers and acquisitions throughout the Sonoma and Napa areas, beginning with Viansa Winery in 1990 and ending with Rack & Riddle in Hopland, which was recently sold to Duckhorn. Ciatti predicted that such activity will continue into the foreseeable future and will affect the way the industry evolves.

Trending Technology in the Cellar

The afternoon session on production entitled “Trending Technology in the Cellar” was presented by Clark Smith, Consultant and Winemaker for Two Jakes of Diamonds; Penny Gadd-Coster, Executive Winemaker with Rack & Riddle; Charlie Tsegeletos, Director of Winemaking at Cline Cellars and Matt Hughes, Winemaker with Six Stigma Ranch.

Smith began by discussing “the relationship between winemakers and wine lovers, which I think is in big trouble.” He identified the communication problems causing a “bad marriage” and urged winemakers to find ways to be more transparent about the processes of winemaking so that wine critics and consumers aren’t alienated or mystified by the use of technology. He ended the session with the axioms that “all wine is highly manipulated and no wine is manipulated as much as beer.”

Gadd-Coster took listeners through the three main software systems her winery is using to streamline operations including VinX2, TankNet and Foss Wine Scan. She advocated strongly for the use of web-based systems to allow greater access and transparency for both winery personnel and customers.

Tsegeletos walked his audience through the Excel spreadsheet that his winery uses to consistently and accurately track wine processing, cumulative sales and accurate forecasts across four different vintages.

Hughes spoke about the three mantras of technology in the cellar; use, avoid and do. He advised listeners to: use anything but traditional software, avoid being tied to outdated technology and remember to be flexible. Avoid the misappropriation of current technology, and do as little as possible; that is, let the technology “do the work for you.” He also spoke strongly in favor of wine management systems that are web-based, utilizing cloud technology for access and transparency.

Driving Traffic to the Tasting Room

The final session of the day on sales called “Driving Traffic to the Tasting Room” featured Beth Costa, Executive Director of Wine Road of Northern Sonoma County; Colby Smith Executive Director of the Concierge Alliance of Napa and Sonoma (CANVAS); Amber Moshin, Co-Proprietor of Moshin Vineyards and Chris Parker, Hospitality Manager for St. Supery Estate Vineyards & Winery.

ncwie-quote2Costa spoke passionately about best practices in the tasting room and the need to speak highly of neighboring wineries to create positive and lasting hospitality experiences for guests.

Smith talked about the importance of building relationship with the concierge community through networking, educational opportunities, “vetting the guest” and following up industry referrals with consistent communication and thank you’s.

Moshin outlined several marketing methods her winery uses to grow tasting room traffic, including holding an annual open house, tracking responses from guests, attending offsite tasting events, participating in by-the-glass programs at local restaurants, social media and continuing education for staff. She also recommended using positive reviews from guests in company marketing materials.

Parker ended the session by discussing how St. Supery revamped their marketing strategy by choosing to downsize tasting room traffic and focus on how to better communicate their brand to a more targeted audience. The experiences at the winery now include an educational tour, a wine and cheese seminar and a Bordeaux wine experience for the “wine geeks.”

George Christie, President of the Wine Industry Network, noted the 2013 Expo event nearly doubled in size from the previous year because of the enthusiasm exhibited by the participants.

“Last year we set out to establish a world-class wine industry event right here on the North Coast and thanks to all of you, we’re well on our way,” Christie said. “Thank you for being here and for all of your support.”

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