What keeps the wine industry up at night?
As you might have guessed, the impact of COVID-19 tops the list for two-thirds of U.S. wineries. A survey conducted by Ekos, a business management software for wineries, dove into these concerns and how the use of technology can help wineries respond to these challenges.
“With COVID, you can’t rely on traditional sales channels because people can’t come to the tasting room and get a glass of wine from you,” says Ekos CEO Josh McKinney. “That means everyone has to get creative. Making the shift to technology can propel a winery to the next level, especially when dealing with so many challenges, from adapting to more frequent fires to attracting new types of consumers in an oversaturated market. And with one-third of wineries predicting that digital/online sales will be the top trend over the next five years, technology becomes more important than ever.”
The wine industry is behind other alcohol producers in adopting technology, and the survey revealed that wineries recognize it. When asked to give themselves a grade from F to A+, wineries with less than 1,000 cases rated themselves as a C. As winery size increases, the rating they give themselves goes up – but just a little. The overall average was a B minus, with 41% giving themselves a B and 34% a C.
Ekos found that, although 27% of wineries expect sales to decrease in the next 12 months, those already using inventory management software had more confidence in their ability to grow sales. Josh quantified that increased confidence, “We found that wineries using inventory technology were 23% more likely to expect sales growth in the next 12 months. That’s because they could estimate sales in channels other than their tasting room model and see exactly how to hit their sales goals.”
In addition to using inventory management software, wineries also rely on technology across their business, especially to drive Direct-to-Consumer (DTC) sales with ecommerce and wine clubs. The smaller the winery, the heavier the reliance was on DTC sales. With tasting room sales down due to COVID, digital solutions are rising in popularity. SVB data from March to May 2020 showed that phone and ecommerce orders rose from 3% to 26% of total sales and wine club orders from 23% to 35%.
Christina Kyriazi, VP of Marketing at Ekos, who designed the survey and spoke to many of the wineries, learned that, “Successful wineries have a plan for embracing technology that involves tying the different parts of their business together. The overarching theme I heard from winery owners was that they want their inventory and production linked to sales and accounting, so they have a connected system with real-time access to key metrics to help them run their business.”
Ekos built its software to do just that, and the team firmly believes that new consumer buying behaviors developed during COVID will continue long after the crisis passes. As a result, it is more important than ever to start building efficiencies into your business by adopting technology. The more data you have in a single place, the better your decisions will be, the more confidence you will have in your choices, and the better you’ll be set up for success.
To learn more, download the white paper, State of the Wine Industry: Trends in Technology Adoption and watch Josh’s present the findings on a webinar with WIN.