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Field Notes from a Wine Life – Wine Wars Edition

Odds and ends from a life lived through the prism of the wine glass …

Wine Wars

Mike Veseth, author of the respected wine blog, The Wine Economist, and author or co-author of more than a dozen books, is a professor of International political economy at the University of Puget Sound in the state of Washington and he’s released his first wine-centric book, Wine Wars – a clear-eyed and expansive take on globalism and big business in wine. 

It’s a welcome addition to the wine book shelf.

A good portion of my early wine and wine business POV was informed by Lewis Perdue’s very accessible 1999 wine business book, The Wrath of Grapes, still a fine read if you can find it used.  Veseth’s book is a worthy next generation heir to that tradition.

For many writers, the wine business is handled as a dry, academic subject, but in the hands of Veseth (like Perdue before him) it’s interesting and zippy reading (bordering on a fun vacation read) and an incredibly helpful primer for not only the newly wine interested to help them understand the wine wall at their grocery store, but also savvy veterans who have, perhaps, focused their learning in specific regions, not looking at the wine world in totality and from a business perspective.

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I wrote a jacket blurb for Wine Wars, so my opinion is obviously biased—as such this isn’t a formal review per se, but if you’re interested in reading Wine Wars, I have two publisher supplied copies to give away to readers – simply leave a comment and answer this question:  Wine from which emerging wine region is more interesting to you?  Baja California, Mexico, Niagara, Ontario or Eastern Bloc countries like Bulgaria, Hungary, Serbia, Croatia and Romania?

FedEx and the Wine Pick-up

Take the growth of the global wine world, combine with hegemony in U.S. distribution, add in the growth of wine shipping to consumers and stir it up with niche wine ecommerce sites like Winemonger, Canadian Wine Shop, and Israeli Wine Direct and a couple of things become obvious:  1) We’re all likely to source wine from niche sites in the future and 2) We’re all going to deal with the hassle of providing an adult signature on our wine shipments. 

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I use a UPS store for my wine shipments for the convenience of delivery on the first try with packages sent via any shipping company (wine and multiple days on a truck equals a potentially bad outcome) and because store personnel sign for the, “Over 21 signature required” package in my stead.  However, that convenience does have a cost – about $200 a year to have a parcel box, equivalent to a postal service P.O. Box.  It’s worth it to me because I’m not at home during the day to accept and sign for packages and because I choose not to make my employer a part of my wine enthusiasm by having them observe me receiving a steady stream of wine packages on a weekly basis.

Into this fray comes FedEx Office (formerly Kinko’s).  They are now offering a service where consumers can receive packages at a FedEx Office location where it will be signed for and held for your pick-up.

There are some initial limitations to this program – FedEx Office isn’t offering a free service AND a personal mail box like I pay for that accepts packages from anyone.  The free service is limited to shipments that are sent by FedEx – you’re out of luck if a package is coming from UPS or the USPS.  In my experience, the overwhelming majority of wine shipments are made by UPS. 

However, a consumer can use a FedEx location for their shipping address if a package is being shipped from FedEx or a package that is in transit can be re-directed from a residential address to a FedEx Office store location, a convenience that FedEx previously charged for. 

This is a prescient move by FedEx and a service that is likely to incrementally improve with additional consumer benefits in the months and years to come for wine consumers.

For more information on this service, I’ve created a PDF that can be downloaded here.

Don’t Forget your Dreams

I was recently turned on to Kickstarter.com, a crowdsourcing investment site, when a friend of a friend was looking for money to finish a short film.  For a $10 dollar donation I’ll get my name in the credits of the movie.  More than anything, as an entrepreneur at heart, it’s nice to inexpensively help somebody out on a project that is a labor of their love and passion.

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To the extent that Kickstarter.com is interesting to the wine enthusiast, there are a couple of wine-related projects in the midst of seeking funding, one of which is Boxxle from entrepreneur Tripp Middleton from North Carolina. 

Middleton is seeking to solve a dual dilemma with box wines.  First, box wines aren’t very aesthetically pleasing.  Middleton solves this with a sleek, polished stainless steel house for spigoted bags of wine.  Second, and more importantly, bag-in-a-box wines are gravity fed and the spigots are universally at the bottom of the box requiring the edge of the countertop or a hoist to get the wine in your glass.  Middleton solves this with a patent-pending process that is sufficiently vague enough that I can’t explain it, but allows the wine to dispense to the last drop with the spigot pleasingly raised for correct countertop pouring within the housing of the Boxxle.  While you can donate as little as $5, a donation of $75 or more effectively acts as a pre-order for the Boxxle when it goes into production. 

To watch a video on the Boxxle and the project, check out the Kickstarter site here.


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Vote in the Wine Blog Awards!

So, there’s this thing called the Wine Blog Awards which is sort of a hybrid of the Oscars and the People’s Choice Awards.

The awards combine a juried review along with popular voting and recognize English language wine blogs in a number of categories like, “Best Writing,” “Best Business Blog,” “Best Wine Reviews,” “Best Overall,” and so on.  There are eight categories overall and not all blogs are a fit for every category as there are a few specialty areas like, “Best Single Subject,” “Best Winery Blog,” etc.

Like all awards, because we take our cues from popular culture, most people are “humbled” and diffident when named a finalist and/or a winner, and secretly (or not so secretly) peeved if they’re not acknowledged.  If nothing else, this is a measure of the influence of the awards in the online wine writing community.

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I’ve been a finalist or a winner since the inception of the awards in 2007, and I’d be lying if I didn’t say that I like winning.

However, up until last year, I was winning awards because of my blog design – which, frankly, I conceived, but I paid for with the help of an ace designer.  So, these were hollow victories because it had nothing to do with writing, where I put in actual effort.

Then, last year, I had a breakthrough of sorts and I was a winner in the, “Best Business Blog” category – recognition for writing capably about wine marketing and the wine industry.  Yes!  This was good because the purpose of this site is to write column-style and make the wine business (behind the lifestyle façade) interesting and accessible.

Flash forward a year and I’ve been named a finalist in three categories and they’re not the design category (thank goodness). 

Please vote for whomever you deem worthy in the Wine Blog Awards.  You’ll see that I’m a finalist in the following categories:  “Best Overall,” “Best Business Blog,” “Best Writing.”

Vote here.

As always, thanks for reading Good Grape and helping me, a schooled journalist, but non-professional writer, pursue my interest in wine while scratching my creative itch and hopefully, as George Bernard Shaw, perhaps the most oft-quoted guy that nobody knows what he’s known for, said, “If you have an apple and I have an apple and we exchange these apples then you and I will still each have one apple.  But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.”


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Field Notes from a Wine Life – The Globally Domestic Wine Situation

Odds and ends from a life lived through the prism of the wine glass …

Crossover Hybrids

When wine coolers were introduced in the 80s they broadened the appeal of the good grape at the same time that wine was undergoing a revolution of interest amongst Yuppie Baby Boomers, creating a more egalitarian perception for the nascent west coast wine business that was burdened at the time with inherited, stuffy, legacy east coast Euro-centric leanings.

Flash forward 25 years and wine in California has self-actualized and we’re living in a global wine village, fully in the throes of another sustained interest and growth cycle.  Yet, this time, instead of wine coolers, we’re seeing new and different attempts at broadening the appeal of wine.

I call these new wine beverages, “Hybrid crossovers” – like the half car, half SUV, half gas, half electric cars that are rapidly gaining popularity in the U.S.

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For the purists that can barely stand the thought of the new wine brands hitting the market with residual sugar, I’m firing a friendly observationally-based warning shot across the bow – when ChocoVine (a sort of cream liqueur meets wine sipper), is projected to sell 1M cases this year, now is a good time to buckle up for the changes that are coming.

Besides ChocoVine and its emerging competitors, we’re seeing Pomula Wine Spritz (available exclusively at the trend forward Cost Plus World Market chain of stores), Courvoisier with wine, Ritzling, a carbonated Riesling from New Zealand served with a lime (Like a Corona) and other permutations.

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My guess for the next wine hybrid crossover to get packaged and find a wine audience?  The Kalimotxo—the Spanish name for a half cola, half red wine concoction that is consumed around the world with different monikers.

If the thought of Baker’s Dozen Chardonnay gets your dander up, if the name, “Wine Cooler” is a pejorative in your vocabulary, hang on because you haven’t seen anything yet.

The Longtail: Not so Long?

A recent press release from Wine.com offered an innocuous statement from CEO Rich Bergsund who was quoted as saying, “We look forward to growing further by offering an increasingly compelling blend of selection, service, value and information that’s impossible to get in a store.”

The “selection” part didn’t get my attention – that’s throwaway wording.  More interesting was the, “… Service, value and information that’s impossible to get in a store.”

Three of Bergsund’s four stated criteria have little to do with sourcing small wines and everything to do with using ecommerce to improve upon the in-store wine shopping experience.  This is key because over the last five years the wine business has largely viewed online wine sales through the lens of the “Longtail,” a pop-economic philosophy that says that the Internet can be a boon for niche products like wine because it enables small quantities of niche products (read:  boutique wines that aren’t in distribution) to be sold in a manner that could never be duplicated by inventory at physical retail.

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The Longtail is/was to be a growth haven for small producers. 

However, what I’m gleaning from Wine.com, the #1 online wine retailer for seven years running, and what their annual top selling wines list bears out, is not an attempt (nor the results) of selling small boutique wines àla the Longtail to a thirsty audience who can’t find these small wines at their local shop, it’s selling readily available wines to an audience who may very well be intimidated by the wine aisle at retail or unsatisfied with notoriously poor wine retail merchandising.

This notion is reinforced when viewing Wine.com’s top-selling wines.  Their #1 selling wine of 2010 was the d’Arenberg Stump Jump Shiraz from Australia.  Chateau St. Michelle Chardonnay was at #5.  A Louis Martini Cabernet at #6.  These are all big brands in national distribution and readily available.

And, while I’m not intending to besmirch anybody, I’ve long held the belief that Conundrum and Silver Oak are luxury brands for people that are heavy in the pocketbook, but light on wine knowledge, the exact same consumer who could or would be intimidated in the wine aisle despite their purchasing power.  Sure enough, Conundrum is #16 and Silver Oak is #35 on the Wine.com top 100 sellers list.

And, if you look at Wine.com’s channel-based positioning and top-sellers contrasted against recently released VinQuest direct-to-consumer (DTC) wine sales research (all direct channels, not just online), it’s interesting to note that VinQuest indicates that the second fastest growing category in DTC sales, neck and neck with online wine sales, is event sales – at 37%.  These are in-person sales, consumer direct.

Hmm.

The data suggests that when direct-to-consumer wine sales are spread out across all wineries, DTC is still a micro-channel of business for most, if not all U.S. wineries, no panacea for the small vintner and nearly equaled in ‘10 growth by offline direct sales.

Looking at a separate piece of data, Silicon Valley Bank research indicates that less than 4% of the domestic wine business is using a customer relationship management (CRM) software tool.

The problem now facing small wineries is betting on the right trend using anecdotal information:  Is online consumer wine sales growth going to come from an online ecommerce provider that facilitates an easy shopping experience, at the expense of conventional wisdom that says that online wine sales are small, hard-to-find brands?  Or, does the proverbial rising tide raise all ships?

Life sure isn’t easy for the small winery, but if I were making decisions for a 10,000 case brand I would double-down on a CRM software tool, and start building my one-to-one marketing capabilities, from both a digital and an event perspective because it sure looks like consumers are sowing the seeds of a trend that is independence-oriented, self-service online wine shopping while seeking a personal winery touch at events. 

In the next “Field Notes” edition – FedEx makes it easy for consumers to pick-up their wine, the “Wine Wars” and more …

Wine & Cola photo credit: Jorge Negreros
Longtail photo credit:  Chris Anderson


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Robert Mondavi Day

Today marks what would have been Robert Mondavi’s 98th birthday, a day before Father’s Day, which is symbolic in its own right not only for the paternal leadership Mondavi provided to the wine industry, but also the lessons he imparted upon his children, the heirs to his legacy, faithfully carried on.

On a recent visit to Indianapolis, at an Italian restaurant that belies its location, tucked between a Junior Achievement and a Wal-Mart in a part of town in need of gentrification, I had lunch with Bob’s son Tim and his sister and partner in Continuum Estate, Marcia Mondavi Borger.

We would dine that day in early April at Capri Ristorante—the progeny of an Indianapolis institution, Amalfi, both opened by Arturo Dirosa who strives to bring the ‘Old Country’ to Indianapolis.  Amalfi was Robert Mondavi’s favorite Indianapolis restaurant.  He was simpatico with Arturo’s authentic Italian way.

It’s perhaps appropriate that even when they’re not trying, the younger Mondavi’s honor legacy and relationships.

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I expected to join a large group of people, maybe a dozen I figured, some distributor hanger-on’ers, a retailer or two and a couple of writerly types.  Color me surprised (and a little bit nervous) when I found out I was their only guest.

I’m not much of a star-gazer.  Michael Jordan, Frank Sinatra, Lou Holtz and, well, the Mondavi’s are the only people, aside from my own parents, that I put on a pedestal worthy of exemplary admiration. 

As Tim held court with Marcia acting as the conversational re-direct when Tim strayed too far afield, as he’s wont to do, we had a delightful lunch that typified why Robert Mondavi, and by extension his family, are my wine touchstone.

Utterly free of any pretense, affable, focused on wine that exhibits where it’s grown, reaching for the pinnacle in quality, a part of the table, family-focused, and exhibiting a sensibility that is concerned with helping your neighbor and doing the right thing, there’s a lot to like about the Mondavi tradition as its carried on by Tim, Marcia and their brother, Michael, a fact that I’ll explore in greater depth in a future column.

While carrying on the family legacy is important, as they’re all involved in new projects, never far from thought though, I imagine, is the sheer impact that their father had on the industry they inherited.  By donating over 40 boxes of the elder Mondavi’s papers to UC Davis this week, in a small way, they ensure that Robert Mondavi’s thoughts and ideas, as captured in his ephemera, is accessible in the widest manner possible for the wine industry’s future.  I’ve appended a couple of examples below – some personal notes on business and a speech to the Wine Institute circa 1981.

To Robert Mondavi, let us raise a glass of wine in honor of him on this day, what is quickly becoming a national wine holiday.

Salute!

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Is it “Game on” in the Wine World?

Lord help the wine traditionalists if it is true: Technology entrepreneur Seth Preibatsch suggests that the next decade of digital innovation will be about the, “Game Layer.”

The “Game Layer,” is a dynamic that was introduced to the wine world last week when, within a day of each other, VinTank, a Napa-based digital consultancy, and Snooth Media each announced their own spin on the new, new thing in digital – game-like elements as a part of the wine + online experience; a sort of Farmville meets educational “Atta boy.”

If the announcements didn’t register with you mentally, you’re in good company:  Neither press release (here and here) passed the “30 Second Rule”—the law of the PR jungle that says if it’s not understandable in 30 seconds it can’t be that important.  Yet, it’s hardly the fault of VinTank or Snooth—it’s just that people are still getting their heads around QR codes and aren’t ready for a potential game-changer (no pun intended) on the order of the, “Game Layer.” However, these developments bear watching even if we’re a good 18 months out from broader awareness.

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To date, your experience with online games is probably stratified into three categories:

Xbox, PlayStation or Nintendo

A glancing familiarity with World of Warcraft (and the pale, sunken-eyed souls who play it)

The annoyance of Farmville or Mafia Wars on Facebook (Initiated by the kid you never talked to in high school who inexplicably friended you up and now spams your email inbox with Farmville crap)

What’s emerging beyond that (and social networking), driven by the growth of digital marketing and smart phones in the mobile space, is the incorporation of elements of gaming into our daily interactions and information consumption.

To understand this, it’s helpful to understand some of the terminology:

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Game Layer: An opaque term that Preibatsch, the precocious 22-year old founder of a tech company called SCVNGR, uses to define the next wave of innovation this decade, a philosophy that he thinks is far more revolutionary (and he is far more apt to profit from) than the previous decade that was marked by the, “Social Layer” i.e. social networking.  The “Game Layer” suggests that all of our interactions (what we do and why we do it) can be influenced by game mechanics.

Game Mechanics / Game Dynamics:  The universal law(s) that is inherent in gameplay – from Old Maid to Monopoly to online.  This story lists 47 game dynamics that SCVNGR follows in its client efforts.

Game Theory (from Answers.com): A mathematical method of decision-making in which a competitive situation is analyzed to determine the optimal course of action for an interested party, often used in political, economic, and military planning. 

Both the VinTank program (called VinPass) and the Snooth program (called Wine Rack) are similar in nature and use a “Game Layer” on top of digital wine activity incorporating “Game Mechanics”—offering badges and other digital ephemera-based incentives for performing activities like writing tasting notes or demonstrating knowledge.

As an aside, now is a good time to note that the clichéd saying about Generation Y parental coddling and, “Everybody gets a trophy” is no longer the province of youth soccer leagues.  Ahem.

VinPass’ program is chiefly sponsored by the Wines of France and is multi-platform.  This means that users at various wine social networking sites like Winelog.net and wine mobile applications like Drync can “unlock” digital badges based on drinking and writing tasting notes related to French wines like Beaujolais, Champagne and wines from regions like the Loire Valley.  Additional, real world incentives can be achieved, as well – discounts on purchases of event tickets and such.

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Wine Rack by Snooth appears to be a more fully realized program upon launch and offers digital “trophies” to users who read, take quizzes, taste and rate wines at Snooth.com.  Their program launches with title sponsorship from Terlato Wines International.  Similar to VinPass, users (in an undefined way) can earn tangible rewards like access to tastings and offers from retailers.

Overall, I have mixed feelings about these so-called, “Game mechanics” embedded into otherwise normal digital wine activities. 

Wine and digital engagement, in all of its variations, can act as a great democratizing counter-balance against the historical empiricism of the wine elite. However, progress wrought over the last five to six years has a great opportunity to step backwards if game-like elements take hold.  A game, inherently, is a zero-sum proposition:  there are winner and there are losers.  Wine has seen enough of that, no?  I wait with bated breath to hear the first braggart that has accumulated 30 digital trophies who then takes to his high horse …

In addition, there’s a seedy underbelly with these “Game mechanics” that isn’t quite simpatico with privacy issues.  When Snooth co-founder and CTO Mark Angelillo says the Wine Rack idea was borne out of the notion of, “Give(ing) users a better idea of how they were learning and growing with wine, how they were getting interested in the product and how they were progressing through playing with wine data” my first thought wasn’t, “This is a user benefit” it was, “This is a marketing benefit”—as in: Wouldn’t wine marketers love to buy this sort of information.

Another sore point is that the education a user obtains from reading and going through quizzes on these sites doesn’t have any tangible value.  Wouldn’t an inordinate amount of time spent earning a badge be so much more useful if it mapped to a baseline knowledge marker on an actual wine certification?  Why, yes, it would.

Despite these initial misgivings, it’s hard to slow down the digital zeitgeist and all indications point to the “Game Layer” and “Game Mechanics” becoming a much more significant and present part of our lives and digital engagement.

If you’re the sort that views life like a competitive chess match, you’re in luck.  If you’re an accidental tourist in life who avoids conflict and competition while seeking respite in the calming waters of the wine world, well, maybe there will be a “Trophy” for that in the Game of Wine.  

Additional Information
Ed. Note:  Preibatsch has the platform to get in front of the so-called “Game Layer” revolution, but McGonigal has the cred.

- TED speech by Seth Preibatsch
- TED speech by Jane McGonigal, Ph.D and author of, “Reality Is Broken: Why Games Make Us Better and How They Can Change the World”
- Games People Play: Game Theory in Life, Business, and Beyond by The Great Courses


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