By Barbara Barrielle
After a challenging year of adjusting their businesses to pandemic conditions, some wineries that flipped their sales models and tried new strategies are reporting success. The need to pivot and changing sales channel dynamics have yielded more targeted sales, and many winery employees and managers have learned new skillset they will carry forward as we emerge from the time of Covid-19.
The two-day virtual Wine Industry Sales Symposium illuminated the changes that have happened in the industry over the past year and shared experiences and case studies from wineries that introduced new brands, adopted data to analyze the direction of their tasting room, and optimized their DTC sales.
The symposium set the stage with a macro-overview of how the industry was affected by Covid-19 shutdowns, restaurants closed, retail sales soaring, and eCommerce booming. The pandemic accelerated existing trends toward DTC, eCommerce, and data analysis. New models became popular as regulations relaxed to stimulate business with to-go sales and third-party delivery replacing on-premise sales.
The boom in wine retail sales put small brands with limited distribution at a further disadvantage, but executives from three major wine distributors explained what small wine brands need to do to work with large distributors successfully.
“The small winery needs to hone their own authentic story, a salvo if you will, whether through DTC or social media, before they approach us,” said Breakthru Beverage Group’s Daren Cliff. “They need to have something compelling, identify the markets and start your messaging and brand platform in your home market first. Or a connection tied to the winery’s DNA.”
Cindy Leonard, EVP of Fine Wine for Southern Glazer’s concurred, “It is essential to have an authentic story and think about how this will satisfy the consumer, wholesaler and you, the supplier.”
Taylor Monson of Goose Ridge Winery in East Washington launched not only a new brand but a totally new category for the well-established winery and released a grape-based vodka called Vido. “We had planned to roll out in a traditional fashion through bars and demos, but when that was out of the question, we went back to traditional three-tier and built interest in our retailers and, subsequently, their enthusiasm pushed wholesalers.” Monson used geo-tracking to find influencers around retailers to demo cocktail recipes on social media and mixologists to be ambassadors of the brand.
Jim Silver, Managing Director of Ren Acquisitions, shared how their brand marketing plan was shifted into untraditional channels by the pandemic. Their New Frontier Portfolio was planned to have 100-point Alejandro Bolgheroni Estate as its high-end DTC brand, Napa wines like Justice and Pursuit targeted to on-premise, and Renwood as a retail brand. When on-premise disappeared at the start of Covid, their strategy flipped to include much more direct marketing throughout all of the brands. “Covid changed the entire dynamic. Sales approaches were all flipped upside down. But really, all the tools are available,” said Silver. “Untraditional channels considering the brand assortment, but with everyone at home looking at their computers, two-tier marketing through massive e-retail sites like Last Bottle and Wine Access, worked for us. If you get a regular email from one of these, you are my kind of customer.”
Before the pandemic, few winery tasting rooms operated on a reservation system but now it is the norm. Many tastings at tasting rooms shifted from standing at the bar to a guided tasting seated at a table format. A panel of hospitality experts from California, Washington, and Oregon, related how an elevated experience and data collection have been key in reopening as allowed by each state. Fewer guests but more purchasing has been crucial to keeping doors open.
All panelists agreed the personal contact leads to “higher spend by guest, higher club conversion.” Stephanie Wycoff of Crimson Wine Group said, “Going forward we are looking at a hybrid model where we can still have walk-in tastings, and have that engaged consumer.”
“Goals are important and having an open book with your team motivates them,” says Tom Bassford of Elizabeth Chambers Cellars. “We are transparent, and this leads to those phone calls at the end of days where employees excitedly report great sales.”
Even though traffic has gone down in these tasting rooms, remarkably sales have gone up, engagement with members is up and “We aren’t leaving money on the table,” said Tiffany Stetson of Goose Ridge in Washington.
The tasting room model is not the only DTC strategy that was honed by the pandemic. In some ways the pandemic was a true wake-up call for the industry ushering in a golden age of online marketing and eCommerce says Paul Mabray, CEO of Pix.
“From all the bad that came from Covid like loss of life, job loss, home schooling, stress, anxiety, the reality is that the one great thing it did was wake up the wine industry!” said Mabray. “It isn’t half bad…and it works. For the wine industry, the new normal is change.”
All the Wine Industry Sales Symposium sessions are available to watch for free on demand.