GoodGrape
Home Wine News Articles Shop for Wine Accessories About Links Downloads Contact

Good Grape Wine Company

Left side of the header
Right side of the header

Browse by Tag

good grape daily: pomace & lees free run: field notes from a wine life around the wine blogosphere wine: a business doing pleasure good grape wine reviews new world red wine influences wine white wine wine blog news robert parker wine bloggers notes & dusty bottle items wine sediments wine business wine blogs historical wine book excerpts tasting safari: wines you can buy online cluetrain manifesto revisited winecast: a year in collaboration wine spectator robert mondavi wine blogger wine marketing indy food & wine vin de napkin vinography wine blogging dr. vino appellation watch: midwest regional review new vine logistics alice feiring wine critics american wine blog awards wine reviews cameron hughes wine books luxury wine tom wark natural wine gary vaynerchuk tyler colman steve heimoff oregon pinot noir wall street journal wine best wine blogs wine writers biodynamic wine best wine bloggers a really goode job california wine robert mondavi day robert mondavi winery fermentation blog penner-ash wine research wine ratings fred franzia pinot noir crushpad wine cellartracker dan berger amazon.com southern wine & spirits 100-pt scale grape stories mike steinberger church wine wine & spirits magazine wine tasting notes vintank silver oak trader joe's wine wine and spirits daily matt kramer champagne indiana wine slender wine direct-to-trade murphy-goode winery notre dame football stormhoek inertia beverage group wine technology bordeaux wine enthusiast sparkling wine wine and the economy wine distribution terry theise wine.com allocated wine biodynamics wine news reading between the wines the wine makers tv inniskillin hr 5034 oregon bounty rodney strong oregon cuisinternship wine advertising wine review jim laube wine ethics three dolla koala sonoma pinot noir appellation america gourmet magazine wine market council open that bottle night zinfandel rockaway wine online winery marketing wine trends lynn penner-ash wine advocate sommelier journal good grape augmented reality hugh macleod rockaway vineyards chateau petrus barack obama + wine sanford pinot noir rombauer digital marketing obama inauguration michael ruhlman wine spectator wine reviews karadeci the business of wine iphone wine mobile apps winery promotions whole foods wine first blush juice cult cabernet boston beer company trinchero wine tasting rooms viktor frankl 100 point system vineyard church communion wine mark squires wine and music scheurebe sherry wine tycoon healdsburg terroir wine branding global wine partners wine terroir southern wine and spirits wine lists adam strum tinybottles core wine drinkers janet trefethen bruce reizenman luxury wine marketing wall street journal wine columnists "frankenwine" wine authors nbwa old vine zinfandel cluetrain manifesto down under by crane lake unified symposium jackson-triggs vidal ice wine clif winery name your own price mirror wine company indiana gourmet food allocated cabernet the wine line guinness advertising 2007 stoneleigh pinot noir wine pr wineamerica wine wisdom lewin's equation 1winedude chacha rudolf steiner wine expedition fat tire beer mothervine supplements continuum texas bbq wine pairing prince's hot chicken king estate wine certification the traveling vineyard wine and art jason kroman alloutwine.com wine mou hess collection wine social media expensive wine trends wines and vines kelly fleming cabernet the new yorker ted lemon whyte horse winery iphone wine apps. palate press wine blogging strategies murphy-goode wine trading down dip johnnie walker chateau latour planet bordeaux sherry wine paul clary blog gracianna wine wine cartoons alan goldfarb fusebox wine moms who need wine ted jansen hourglass wine social media topps augmented reality rancho zabaco zinfandel woot wine the new frugality patio wine bryan q. miller argentina wine zephyr adventures barolo santana dvx au revoir to all that formula business ordinance .wine geocaching brigitte armenier rockaway wine red bicyclette man's search for meaning st. helena catholic church new zealand wine sanford chardonnay lettie teague nba liquor advertising noble pig award of excellence ericca robinson andy warhol quotes fermentation anthony dias blue home winemaking consumer shopping research the best pinot noir food & wine magazine a year in wine apple iphone bruliam wine generation y. wine april fool's day wine snooth karen macneil music and wine german riesling secret sherry society cult wines wine video game russian river valley pinot wine appellations reset "old world wine darwinism wine star awards tastingroom.com wine sales hailey trefethen park avenue catering fine wine marketing wine tasting journal wine competitions national beer wholesalers association clos lachance dr. oz yellow tail wine jon fredrikson wine blogging wednesday climber red priceline.com drew bledsoe amazon.com wine california cabernet paso robles wines of chile specialty wine retailers association judd's hill rose wine recession wine wine & spirits daily firestone vineyards wine trivia robert parker's bitch eryn supple the grateful palate heidi barrett john james dufour america eats willamette valley disney wine program value wines brand butlers american wine blogs forty-five north winery wine press release hong kong u.s. wine 2006 hess collection monterey chardonnay adler fels wines & vines kelly fleming interview the pour oregon food and wine dan cederquist parks and recreation wine umami swanson alexis cabernet italian wine merchant dependable wine sutter home videos inexpensive wine jay miller keep walking wines that rock steve perry aussie wine glut clary ranch pinot noir john tyler wine wine economy mary ewing-mulligan non-profits and wine ebob bodeans mitch schwartz hourglass cabernet wine blogosphere ge smart grid augmented reality trefethen family vineyards california zinfandel wineshopper aspirational marketing clark smith wine book publishing russian river valley ani difranco peru wine trip barbaresco michael steinberger value wine jamie oliver paul blart: mall cop phillip armenier red bicyclette pinot noir next generation apple the psychology of wine the vintners art australian wine vinexpo jay mcinerney the gaslight anthem the pioneer woman james laube sylvester pinot noir goodguide korbel wine blobbers oregon travel tokalon winery not-for-profit jess jackson massale selection wine & spirits magazines kenny shopsin sunbox eleven wine winery sponsorship champagne sales wine criticism cork'd 2008 vina mar reserva sauvignon blanc randy caparoso wine + music midwest wine culture chimney rock elevage cornell enology wine tycoon game stavin kelly fleming national wine & spirits kurt andersen " "new world wine" poseurs macari vineyards sette 7 swanson vineyards generation y and wine 2009 auction napa valley sonoma county wine wipes san francisco wine competition clary ranch tim hanni hunningbird wine beaux freres jon bonne the wine case climber white agency nil charlie weis sugar free wine a very goode job 2007 sean minor four bears pinot noir trefethen three-tier carmenere wine heist purpose-idea rose wine sales vincellar dominic foppoli discoveries pathfinder wine bar bets the winemakers tv australia wine fantesca judgment of paris women in wine oregon pinot gris vegas wine qpr wines jimmy clausen winery hospitality 2007 forty-five north cabernet franc alpine for dummies 2008 honig sauvignon blanc 1% for the planet wine industry news negociant wine business monthly 2008 food & wine winemaker of the year eric asimov travel oregon jordan winery amy poehler wine micro sites umami chris phelps paul mabray wine blogging ethics youtube cheap wine wine bard weds wine dj journey three dollar koala pinot noir reviews chronicle wine ed mccarthy wine to relax erobertparker little zagreb wine magazines howard schultz paul gregutt trefethen oak knoll cabernet sauvignon zinfandel reviews tasting note desciptors natural winemaking wine content klinker brick maria thun bad wine mumm napa slate wine columnist wine pricing wine blog awards 2010 bottle shock movie sketches of spain red bicyclette court eat me kenny shopsin amazon kindle wine politics what is terroir wine purchasing wine nose good wine under 20 the hold steady paste magazine sensory evaluation petite sirah wine points the press-democrat oregon cuisinternship winner blog contests preakness stakes pork tenderloins wine & spirits restaurant poll 2010 e-myth revisited bennett lane winery champagne and business a history of wine words marco capelli music + wine indianapolis patz & hall sonoma coast pinot noir notes on a cellar book wine tycoon video game oak alternatives cabernet bottle shock economy chronicle wines vignoles wine columns mirror wine joe roberts trefethen fallow obama napa valley auction sonoma county wine french wine marketing vino chapeau wine medal winners petaluma pinot wine industry zap wine jr. san francisco chronicle wine ice wine c.g. di arie radiohead doubleback wine chateau thomas wine parker defamation blackstone wine wine snobs wine is the new black expensive wine will hoge wine spies gapingvoid rose summer wine corkd foppoli wines tamari torrontes dirty south wine firestone contest doug frost whuffie factor wine reality show wine label design duane hoff resveratrol woman in wine organic wineries oregon bellagio wine the wine blue book conundrum winery customer service julie and julia texas for dummies wine collection shorttrack ceo vintage of the decade markham mark of distinction sonoma wine company spike your juice celia masyczek jim koch pinot main street winery obama wine digital signage wine retail the fifth taste dominus drvino.com wine direct shipping wine humor altar wine good wine livingston cellars persimmon creek vineyards liberty school cabernet sauvignon german wine oh westside road scott becker randall grahm party of five theme song wine spectator restaurant awards zig ziglar pbs john trefethen elliot essman wine intelligence research steroids in baseball publishing trends wine laws biodynamic wine health research 2007 waters crest "night watch" late harvest wine clif bar wine cheap wines rick mirer indiana miss america lewis perdue guinness beer 2006 brancott pinot noir wine public relations facebook + wine millenials and wine penner ash deb harkness cowboy mouth wine evaluation dark & delicious biod alpana singh dos equis commercials wine and sense of smell tim mondavi rachel alexandra 500 things to eat before it's too late wine & spirits professional culinary institute adobe road the the lost symbol wine stories wine 2.0 schotts micellany hugh johnson alloutwine cooper's hawk winery triple bottom line jim gordon kelly fleming wine mike hengehold traminette wine mobile applications rick mirer wine wine blogging tips constellation wine washington wine john hughes '47 cheval blanc bordeaux reconquest santasti kevin zraly paul clary sweet wines zinfandel producers california wine for dummies best wine blog us wine sales dessert wine di arie rose napa cab. napa cabernet amazon wine thomas pellechia wine spectator top 100 2009 cinderella wine deck wine lindsay ronga batgirl wine top chef hardy wallace firestone wine contest burger wine lonely island where the hell is matt southern gothic wine food revolution french paradox dark side of the rainbow gallo


The Old World, EU Wine Reform and Battleground USA

In the global village, Americans like to boast that a war has never been fought on our shores; we protect our interests in other people’s backyard. Yet, there is a daily battle being waged on American turf and its combatants are vying for the hearts and minds of domestic wine consumers.  The conflict I’m talking about is marketing and advertising for the attention and –ultimately- the purchasing power of U.S. wine consumers.

Yes, the annual pat on the back we give ourselves about the U.S’ progress toward leading global wine consumption has a collateral effect. Ditto that for our annual cheerleading for wine to be the top beverage alcohol choice against beer. Because of this, other countries want their fair slice of our wine buying pie.

The most aggressive frontal marketing charge is being waged by the member states of the European Union (EU) and it affects almost all of the “Old World” wine-related communications we see in the U.S. today.

From marketing outreach with wine writers and journalists, to trade shows, PR, marketing and advertising (especially advertising), U.S. wine consumers haven’t yet seen the crest of the coming wine marketing wave all fueled by a strategic vision to reclaim what the Europeans feel is rightfully theirs –a global leadership position in prestige and sales of wine.

image

They just might do it too; beating back years of floundering that was based mostly on their hubris and the status quo.

When you watch for it, you’ll begin to see the tell-tale EU flag in virtually all forms of Old World marketing here in the states– on the side of a Reunite truck doing grassroots marketing in a parking lot, in digital ads for Romanian wine, in email newsletters and, most notably, in our wine magazines – any wine magazine will suffice—including Wine & Spirits, Food & Wine, Wine Enthusiast and Wine Spectator.

image

The most current example is the October 31st issue of Wine Spectator which has nearly 50% of its full-page beverage-oriented ads dominated by EU co-funded wine advertising with an additional seven EU-sponsored quarter or 1/3 page ads.

In contrast, the number of U.S. producers advertising in the same issue? Three – Rodney Strong, Louis M. Martini and a two-page spread from Diageo.

Adam Strum, Publisher of Wine Enthusiast magazine foreshadowed this trend of EU marketing dollars in his “Top Stories of 2010” article from December of last year. In his #3 top story, he noted: “The European Union followed up the market reforms it instituted in 2008 with the promised funding: over a four-year period, well over 828 million euros ($1.16 billion) to support the marketing of European wine. We’re already seeing new styles of labels, unique media concepts and new visibility. Italy is, not surprisingly, leading the charge as the number- one exporter from Europe.”

Ironically enough, or maybe not so ironic at all, the current issue of Wine Spectator is their, “Italian Wine and Food” issue and the advertisers, predominantly, are Italian.

Yet, this marketing outreach funded by the EU isn’t limited to Italy, almost all leading wine member states of the EU including Austria, Greece, France, Portugal, Spain, and Romania have used these monies to ramp up their efforts here in the states.

Interestingly, this battle shouldn’t have the element of surprise; it has been in the works dating to 2006.  Yet, when the EU Wine Reform passed in late 2007 and was enacted in August of 2008, it hardly blipped on my wine-loving radar: It was just a collection of headlines in dire need of some context. Now, we can see the ripple effects…I can see the tangible outcome.

image

What follows is a primer on the EU wine reform effort that will continue to present itself to U.S. wine consumers for at least the remainder of this decade (planning is through 2019). At the conclusion, I’ve included an overview on what I think are the possible long-term implications.

EU Wine by the Numbers

The EU is the world’s largest wine producer, consumer exporter, and importer representing 45% of the world’s wine growing areas and 62% of global wine production

Amongst EU member states (EU-27) there are 2.4 million wine producers working 8,895,793 acres (about 3.7 acres per producer) producing 4.5B gallons of wine worth $21B dollars.

The U.S. remains the leading export market for EU wine receiving 24.6% of their volume representing 30.7% of EU wine value.

EU Wine Reform Vocabulary Primer

EU-27:  Phrase for the 27 members of the European Union.  Formally established in 1993, the EU is an economic and political collective of member countries principally in Europe.

CAP:  Stands for Common Agricultural Policy.  Agriculture is the only sector of the European Union (EU) where there is a common cross-countries policy.

CMO for Wine:  Stands for Common Market Organization for Wine.  The CMO regulates and strives to maintain balance of the European wine market under the umbrella of the CAP.

CMO Wine Reform:  Large-scale, EU-wide effort, led by former European Union agriculture commissioner Mariann Fischer Boel.  Interchangeable with, “EU Wine Reform.”

Member States:  A reference to the 27 member countries of the EU.  If a country is a part of the EU they are a, “Member state.”

Market Intervention:  The process through which the CMO for Wine, with a fixed annual budget of $1.7B (US dollars equivalent), paid for the disposal of excess wine.  This disposal of wine accounted for over 60% of their annual budget or approximately $678M.  Prior to reform, 15% of wine production in the EU was disposed of every year.

Third Country Markets:  Generally, a country outside of the EU where export and marketing is conducted.  Examples of leading third country markets include the U.S., Canada, China and Russia.

National Envelopes:  Funding allocation from the CMO for Wine to EU member states for their support programs.  Up to 50% of the support programs funding can be used for promotion in third country markets.  The balance is used for country wine industry infrastructure support and services.  National envelopes are funded from a re-allocation of the monies in the wine reform, principally from market intervention.

Planting rights:  The ability for a wine producer to plant vines. Currently prohibited until 2015 and left to the discretion of EU member states from 2016 – 2018

Grubbing up:  The process through which farmers who aren’t economically viable from a quality or scale perspective are financially incented to remove their vines and farm another commodity.  Grubbing up, in conjunction with limitations on planting rights, is intended to balance the EU wine market.  Thereafter, producers are presumed to be planting new vines based on market viability.

The Impetus for EU Wine Reform

In the years leading up to the 2006 reform announcement, a number of large trends finally converged on the traditionally hidebound EU member states making the act of doing nothing more dangerous than changing with the times.

Over the course of the last 25 years, declining consumption in the South of Europe, coupled with an explosion in production and imports from the US, South Africa, Chile, Australia and New Zealand led to a narrowing of the gap between European exports versus imports leading to declining domestic market share.  This was exacerbated by increasing consumption in the North of Europe where consumers in many non-EU member countries took a liking to New World wines, adding insult to injury.

image

Besides wanting to keep a wine trade balance (if not maintain a leading margin), The EU had fundamental industry issues to deal with.  Notably, 40% of EU wine production was classified as “table” wine and 60% was “quality” wine with regional origin.  But, overall, 15% of that total wine production was being destroyed on an annual basis because it was unsellable, including some “quality” wine.  Because there were so many EU wine producers farming just an average of 3.7 acres, the producers had become reliant on subsidies while continuing to create a product for which there wasn’t a market that required government “market intervention.”  To say the least, the fact that destroying wine represented 60% of the CMO annual budget was a palpable problem.

The EU Wine Reform Objective in a Nutshell

Align a wine program that increases the competitiveness of the EU’s wine producers, strengthens the reputation of EU wine as the best in the world, recovers legacy markets and wins new markets in the EU and worldwide.

Decrease over-production by eliminating budget expenditure on destroying wine

Re-allocate the money formerly spent on destroying wine on marketing wine to increase growth

Pull up 432K acres of vines by financially incenting vineyard owners

Place a moratorium on new plantings until the end of 2015 and give member states the ability to extend that through 2018

Align towards a systemic quality orientation with origin of place

Simplify labeling allowing for varietal designation

The Net-Net on EU Wine Reform Changes

Mission accomplished, so far.  A lot of credit needs to go to the former Agricultural Commissioner, Mariann Fischer Boel for having the strength of vision and constitution to get the EU reform done in the first place.  The old question of, “How do you eat an elephant?” is apropos.  EU wine reform was a process that took nearly three years from first public notice to enactment in August of 2008.

As of today, grubbing up vineyards is over-subscribed based on the 432K acre goal.  Planting rights, when re-enabled in 2016 or thereafter will allow quality-oriented producers to plant based on market demand, and, well, the third country marketing is happening apace.

Yet, the real question is:  What does this mean for U.S. wine business and consumers? 

The Implications of EU Wine Reform

Clearly, the U.S. and North America with Canada is target #1 for the EU.  We have an active wine culture that is growing unabated and the most disposable income of any country in the world.  China and Russia trail a close second as their middle-class economies and wine interest is also growing. 

image

What will be interesting to watch is what happens AFTER this EU Wine Reform transition period (2008 – 2013).  In this period of time some CMO monies are being diverted to grubbing up.  However, thereafter, until 2019, some 2/3’s of the CMO for Wine budget is going to be allocated to national envelopes, adding to a marketing larder that is already embarrassingly rich. 

The monies will be allocated to member states based on vine-growing area, production and historical spends.  Therefore, expect to continue to see a barrage of marketing messages from EU wine leaders Italy, France and Spain (Spain has the most potential for becoming au courant, in my opinion).  Yet, it’s the other wine producing countries like Portugal, Greece and Hungary that have the most room for explosive growth. 

If, at the end of this decade, Portugal and Greece have significantly expanded positions of U.S. market share, some pockets of the wine cognoscenti might chalk it up to the zeitgeist, but we’ll know that the zeitgeist was nudged in a certain direction.

The EU Wine Reform is also fantastic for domestic wine marketing agencies and wine magazines – they now have self-identified prospects.  It doesn’t get any better than knowing where the money is.  Expect to see healthy balance sheets for years to come.  Online-based wine media, including bloggers, will likewise experience the positive benefits – warm bodies are needed for press trips, brand ambassadors will be fashioned and digital know-how leading to areas of marketing innovation will all have value against hard currency.  The dark side is that our current understanding of wine media ethics will probably also be immutably altered because where there is money, there is corruption.

Finally, perhaps the most damning indicator is the fact that the U.S. is moving into a period of wine supply balance at the same time the EU is finding balance.  If Australia gets their stuff together to get in balance at the same time that consumption is rising, well, there’s only one way out of that situation and its higher wine prices for consumers.  But, I’m getting ahead of myself… 

As I mentioned, there’s a battle being waged on American turf and the EU has to win the battle before they can win the war.  Will they win the war—the war for consumer interest and sales?  Who knows, but one thing is certain:  The end of this wine decade is going to look at lot different than it does today.

Author Note

1) All EU (€) dollar values and hectares have been converted to US dollars and acres, respectively. 

2) A significant amount of research went into this post in order to distill an unwieldy subject into something consumable (no pun intended).  If you have a question about source attribution, please leave a comment and I’ll direct you to the source if not already linked.


share

Will Yellow Tail Find More Green?

Australia, a wine darling in the U.S. for most of the past 20 years, fell prey to Newton’s Law of Motion and the coloring of the bruising from the tumble down, in addition to being black and blue, is also yellow and black.

Aside from grappling with a myriad of structural industry and world currency issues, the Aussies have also had to grapple with the fact that their number two import market, the U.S., has had its wine cognoscenti turn their back on the perceived plumped up juice from Oz, a fact that was contributed to in no small measure, I believe, by the ubiquity of Yellow Tail – the inexpensive, redolently sweet, duotone in taste and packaging wine brand that grew case sales 3180% from 2001 to 2008, as reported by the New York Times.

To mix metaphors, where perception is reality, one bad apple (Or three if you count Yellow Tail category imitators as well as Robert Parker, Jr.’s legacy proclivity for Mollydooker) has spoiled the bunch, at least in the minds of wine influencers.

Tom Steffanci, President of Yellow Tail brand owner W.J. Deutsch & Sons, noted to Shanken News Daily (SND) in April, “…It’s so important that we never compromise on quality…you can’t fool consumers on quality…”  However, wine tastemakers don’t think much of the Yellow Tail quality nor are they often shopping in the $6.99 price category. 

Consequently, the brand that begat a category casts a pallor over an entire country’s wine. As one Australian wine marketing rep recently told me with a deep sigh, “This is the toughest job in the wine business.”  A job, by the way, that includes aggressively trying to market Australian wine as being borne of terroir and regionality, a job, indeed, that evokes salmon swimming upstream into the waiting maw of a hungry bear. 

image

Yellow Tail’s sales have plateaued in the last two years at 8.3 million cases and recent statistics from Australian wine export reporting indicates that total Australian volume to the U.S. dropped 19% in the year ending in June.  This makes sense given that Steffanci indicated to SND that the brand represented around 40% of Australian wine sales in the U.S. 

This subtext leads to an interesting question, one I’m sure the Australian wine marketing folks would also like the answer to:  Is Yellow Tail a declining brand, victim of the “Derision Decision” – the point in time where something grows to such popularity that it transcends ‘hot with cachet’ to ‘not cool,’ a victim of the cultural zeitgeist? 

Or, is Yellow Tail’s stagnant growth merely a mindshare issue alleviated by some marketing? 

The answer to that question may be an indicator to when the overall category of Australian wine sales might recover, at least from a perception perspective which can lead to a sales recovery in the upper reaches of price tiers, not anchored by their mates in the $6.99 category.

Doubtless, it’s not schadenfreude to suggest the Australian wine marketing folks might not be terribly upset if Yellow Tail shrunk from its ubiquity and, by proxy, it’s mindshare that equates to, “Australian for wine.” 

image

Already, some East Coast liquor and bottle shop sales data (IRI provided by Wine Australia) shows that Australian wine priced $15.99 to $19.99 was up 24% in the fiscal year ending in June.

This rooted in reality but still hypothetical question of whether the Australian category is tethered to the relative misfortune of Yellow Tail in order to makeover perceptions is especially interesting given that 85% of every man, woman and child over the age of 21 is expected to see at least one Yellow Tail marketing message before the end of W.J. Deutsch’s fiscal year in March of 2012.

I guess we’re about to find out…

The New York Times (NYT) recently highlighted Yellow Tail’s new advertising and marketing campaign.  With a shift in positioning from the nebulously adventuresome, on the go-oriented and short-lived, “Open for Anything” to the equally nebulous, but brand reinforcing “The go-to,” Yellow Tail is attempting to incrementalize and grow their flat case sales.

Brands face this conundrum all the time in the brand growth cycle.  Explosive growth doesn’t always remain so and brands enter into an inevitable maturity phase:  Do we push growth along or innovate?  The unspoken question being, “Do we milk this sucker or do we take a left turn and try to reignite growth?”

image

At least for now, Yellow Tail is taking the safe route.  In the words of Renato Reyes, Chief Marketing Officer (CMO) at Deutsch, as quoted in the NYT’s, he said Yellow Tail as, “The go-to” is “trying to own ‘occasionality’” and be, “the spine of (consumer) purchasing behavior.”

A look at their media mix indicates that their digital activity is skewing female with its current focus on the young female movie Bridesmaid on Facebook in addition to late night television with its young male audience and lifestyle channels that hit a broad, culturally literate, age-spanning audience.  Apparently, Yellow Tail is going for reach in trying to hit a mass segment of people that are likely wine-interested, but not wine enthusiastic (see all the creative here).

By trying to be the “spine” of wine purchasing behavior, they’re trying to create brand loyalty, notoriously difficult to achieve in wine, but akin to regular purchasers of any other consumer goods where repeatable familiarity drives business.

As Reyes noted to the NYT’s, if every Yellow Tail consumer makes a purchase, “One more time, that would represent 10 percent growth.”

Incrementalize.

In my opinion, this audience traded up a price level to Malbec and Moscato, but that’s anecdotal and definitely beside the point.

Meanwhile, an industry hangs in the balance… or does it?

Some tastemakers are coming back around to Australia as evidenced by a recent story by Jay McInerney in the Wall Street Journal where he noted in a similarly themed article about Australia’s current wine misfortune, “I’m ready and willing to revisit Australia.”

image

Likewise, the Dean of working wine writers, Dan Berger, recently confronted Australian wine (mis)perceptions head-on using a “young wine blogger” as his foil (likely a Slats Grobnik-like writing device) where he made the case that the best red wines in Australia, “Are balanced and age nicely.”

So, where does this leave Australian wine that doesn’t have a kangaroo?  Is it wearing a bumblebee colored hairshirt, casually waiting for one brands decline in order to catch its next wave of momentum?  Will Yellow Tail find additional green, continuing to leave fine Australian wines in the red?  I suspect the answer is no.  But, regardless of Yellow Tail’s sales, and even if re-emergent, Newton’s Law of Motion also states that when a force is directed at an object it accelerates in proportion to and in the direction of that force. 

Inexpensive plonk and marketing campaigns aside, I suspect that Yellow Tail and Australian wines of character can co-exist and the real force that is starting to accelerate are the U.S. wine influencers and tastemakers, the progenitors of the, “Derision Decision,” who will soon direct their energy on the good in Australia and not their perception of the bad.

That’s a force (and trend) worth watching and one that Newton, also a wine drinker, would approve of.


share

Field Notes from a Wine Life – Digital Marketing Edition

Every year, and sometimes more frequently, I write a post about what’s happening in digital and what’s coming next, looking through the lens of the domestic wine business, based on my work in digital marketing outside of the wine business. This is that post.

Most everybody reading this understands the value of digital marketing (or “engaging” to use an overworked phrase) with platforms like blogging, Twitter and Facebook.  While not all wineries are utilizing these tools, enough in the wine business are.  Despite the growing imperative, we are in the midst of another cycle of advancement.  New platforms are emerging that are likewise centric to community-building and/ or a mobile device, either a smartphone or a tablet computer. 

Life gets more complicated and one man’s use of Twitter is another man’s opportunity to get ahead of “what’s next.”

On Social Media

The “Social Media Expert” of 2009 is now, officially, a dinosaur.  The game isn’t about Twitter or Facebook, it’s about effective use of platforms, a myriad of platforms that happens to include Twitter and Facebook.  As always, be wary of the consultant who borrows your watch in order to tell you what time it is.

On Google+

Google+ is more likely to be a danger to LinkedIN than it is Facebook.  I would keep an eye on it, but its value is still very much in the definition phase and even hardcore early adopters don’t know what to do with it.  Accordingly, I wouldn’t spend much energy on it until it gets categorized into a definable niche.

On Flash wine sales sites

As these sites mature, the fact that they offer a discounted price is going to become tangential to the fact that they make purchasing wine reasonably simple and easy.  There are too many wines for the average consumer to navigate when, at the end of the day, all they want is a good bottle of wine without a lot of problems in choosing.  Flash sites solve this by curation, which will become more important as the short-term oversupply issues resolve themselves.  They’re not going away anytime soon.

On Tumblr

In April, when Gary Vaynerchuk exhorted the crowd at the Nomacorc Marketing Symposium to pay serious attention to Tumblr, the easy to use blogging platform, I understood the “what” and “why” of his recommendation, but I also mentally counter-balanced what he said with the understanding that he also had an investment in Tumblr.

Sometimes it’s hard to *listen* to the message (“Every person in this room will have a Tumblr account for their winery in 24 months”) when you think you *hear* something self-serving.  Yet, recent statistics bear out his commendation of Tumblr.

According to recent Silicon Valley Insider statistics, Tumblr traffic is growing at astronomical rates—up 218% from July 2010 to July 2011.

The “why” of this requires a bit more context and Tumblr’s growth puts several trends in play:

  Wordpress, now the de facto blog platform, continues to lard itself with capabilities, morphing into a robust content management system and professional publishing platform in the process, becoming less and less the simple, easy-to-use, no-brainer tool that it was a couple of years ago.

  People that are active on Twitter and Facebook may want to write more expansively than what those platforms support, but less than the 400 – 600 words of a “normal” blog post.  In doing so, they want to “curate” other news and other people’s content and comment on it creating a sort of ongoing digital ephemera stream, a sort of digital scrapbook and archive of their life.  Tumblr and its competitor Posterous makes doing this super simple and optimized for mobile usage, as well.

  Tumblr and its ilk skews much younger demographically than Wordpress and Blogger.  It’s hard to imagine thinking of Blogger as your Mom’s blog platform, but it’s true.

  Web sites like Wix and Weebly allow individuals to create a web site/personal brand hub and then social channels/platforms become the metaphorical arms and legs off their personal brand hub – Facebook for friends, LinkedIN for professional pursuits, Twitter for communicating, quick links and watching news headlines, Tumblr for activities and longer thought,  Facebook for personal networking, etc.

My overall point is that wineries shouldn’t sleep on Tumblr – where blogs are morphing into a winery PR channel and Twitter and Facebook are fast becoming marketing channels, Tumblr is likely to morph into a more personal communication channel.

Speaking of Not Sleeping…

Wineries are officially remiss if they don’t pay attention to Pinterest.  You probably haven’t heard of it, but you will.  It skews dramatically young, female and educated and it’s all about curating pictures of stuff that users like online.

In my opinion, Pinterest is a direct result of the community niches that organized around subject areas in Flickr.  The community aspect in Flickr, it should be noted, has long been under-acknowledged by marketing types, which isn’t necessarily a bad thing as matters of personal taste can be explored unfettered… 

Being into wine is a statement of personal taste and Pinterest is all about expressing personal taste through imagery that is, “pinned” to a user’s board. The fact that Pinterest is growing fast and organically will keep it cool and insider-ish for a good long while.  The winery that starts a Pinterest board that resonates with a large female audience will have a marketing leg-up. I’m very bullish on Pinterest.

Online Wine Sales

The three best wine shopping experiences that I’ve seen online in 2011 are Dean & Deluca, Plonk Wine Merchants and Lot 18.  I’ve purchased from Plonk and Lot 18.

Interestingly, none of these “best” online wine shopping experiences, in my opinion, have anything to do with price, or selection – they have everything to do with user experience.  Clean, elegant, easy to use and information rich, each of these sites gives a drop of knowledge alongside an intuitive web browsing experience.  This is what wineries are competing against and we’re not too far away from current winery web sites and their legacy platforms supported by Inertia, eWinery Solutions and others being woefully out of date from a user experience perspective.

Oh, by the way, wine ecommerce is still very, very early in its growth.  That blip on the sales radar won’t be a blip forever… 

#Hashtag Days

The Hallmark holiday of the new millennium.  Let’s have a “Cabernet Day” or “Pinot Grigio Day” or any of the various permutations that have happened over the last two years.  Snooze.  Wake me when it’s over.  Overall, I’m terribly ambivalent about these arbitrary days just as I’m ambivalent about “Sweetest Day.”

It’s great for marketers because I think it does have an impact (however slight), but, they are unimaginatively tactical and not sustainable because participants gain absolutely nothing from participating and, users, if nothing else, are self-motivated.

Generally speaking, these are even more faddish than the QR codes that I mentioned earlier this week.

Gen Y. Focused Wines

Wine brands that are focused on Gen. Y (HobNob, Project Paso, Tamas and others) are missing something that I think is integral to being in your 20s – connecting your wine brand to an emotion.  Encapsulated by JWT research – it’s got to be a, “Fear of Missing Out” (see here and here).

On ROI

ROI or return on investment is important, but not nearly as important as having the simple ability to measure what you’re doing.  The return will present itself if you can measure.  Figure out the measurement and analytics first.

What I believe about Digital Marketing In a Nutshell

Organized customer relationship management (CRM) is everything.  Every Twitter follower and Facebook fan page “like” should be in a CRM program associated to an email address and, ideally, a mailing address.  The information is available. 

Content is most important after that.  Brands are publishers.  Ideally, both CRM and content marketing is underpinned by a strategy of some duration that plans content for various platforms. Plan your work and work your plan.

Note:  PR is one aspect of content marketing and strategy, but it’s not the entire strategy. 

One-off tactics that don’t fit within an overall strategy (i.e. QR codes) are a waste of time, effort and money.  Likewise, a mobile strategy need not be complicated so long as the platforms used within your strategy are mobile optimized. 

Also note, paralysis by analysis is a peril.  There’s so much out there and so much that you *can* know that over-thinking is as dangerous as doing nothing. 

If all else fails, listen to Miles from Risky Business.


share

Don’t Believe the Hype:  QR Codes are the Pet Rocks of 2011

Cyril Penn does a fantastic job as head editorial honcho for one of the wine industry’s two principal trade magazines – Wine Business Monthly (the other is Wine & Vines led by Jim Gordon).  WBM’s editorial filter is an influential arbiter of prioritization in the industry and a bulwark against noise and distraction.

Given that, I was surprised when the August issue of Wine Business Monthly arrived with a large QR code on the cover.  In the realm of digital marketing, precious little is more representative of “noise” and “distraction” then QR codes – a fad more perishable than a gallon of milk with a shelf life to match.

While the article (written by Paul Franson who writes for both trade magazines) is exceedingly informed and balanced, the reality is, in my opinion, QR codes act as an inexpensive panacea for the innovative disruption that is being wrought in the consumer technology market with smart phones and tablet computers and are not an effective marketing tactic for the wine business.

image

As a 15-year professional in technology marketing (Jeez, has it been 15 years?), I’ve had the chance to watch and participate in every chapter of Internet marketing dating to 1996.  And, despite my better judgment, I’m currently involved in two QR campaigns—one with a major mobile phone carrier engaged in niche audience marketing and another with a leading spirits brand.  Because of this, I have a front row seat to execution, usage and value with an eye on the future.

When QRs burst onto the technology and wine industry scene last summer, they represented two aspects of potential value:

  Something tangible and understandable in the realm of the digital hot topic of the day – mobile marketing

  Something reasonably inexpensive, less complex and widely usable on the heels of phone apps which were white hot in 2009, but reasonably expensive, complex and impractical for most wineries.

Despite the momentum in mindshare from wine industry marketers, the numbers don’t bear out a need to implement usage of QR codes in marketing activities.

Consider: According to recent ComScore (Digital research and measurement firm) research, a mere 14 million mobile users scanned a QR code in June of this year.  When considering that there are 78.5 million smart phone users in the U.S., less than one in five owners have used a QR code – and this is the leading edge of technology adopting consumers! 

The numbers get a lot worse when you compare usage against the total number of cell phone users in the U.S. –303 million.  Not exactly resounding validation based on adoption and usage against the potential population.

image

Perhaps more damning is the fact that in technology marketing, momentum is everything.  We want to do the things that our peers are doing.  In this case, they’re largely ignoring QR codes.

Now, I can already hear the cries of defense –“QRs are still early in their lifecycle,” or “Our campaign is successful…” so, let me ask a couple of questions:

  Can you explain how to use QR codes in under 60 seconds?

  When was the last time you used a QR code in the store?

If you can answer the first two queries with a straight face, then…

  When was the last time you used a QR in the store and the content provided by the brand was worthwhile?

If you can answer the first three queries with a straight face, then…

When was the last time you used a QR and the content provided incented your purchase decision?

That’s what I thought. The principal challenge with QRs is that marketers are creating them for an audience and for consumers that they think exist based on a cresting wave, but for whom the numbers don’t back it up.  It’s the worst kind of vacuum-oriented marketing when people create something for people to use that they themselves don’t use.

And, secondarily, the consumer value provided by the marketer’s content is often bad, really bad.  So, even if consumers do scan the code, the value is often dubious at best.

However, even more challenging to QR adoption and usage is the hungry maw of technology advancement that isn’t going to stop apace for QRs. 

The next wave of mobile technology is right around the corner.

While the Wine Business Monthly article cites “label photo recognition” as a possible advancement – the process of taking a picture of the label that will return relevant information, this is likely to join a couple of other technologies and one that is poised to be dominant:  Near Field Communication (NFC).

Near field communication is a technology protocol that will allow for wireless payments via your mobile phone.  Your phone is linked to your bank account and when processing a transaction at a store, you wave your phone at the reader at checkout and presto change-o it’s a transaction without swiping our ATM card.

The same capability will soon exist with NFC tags that can be placed on products, and instead of trying to read a QR code, you’ll be able to wave your phone at a tag and a video (or a brand-oriented piece of content) will automatically load.

NFC removes the important bit of challenge that exists with QR codes – humans.  You have to understand what a code is, you have to get and keep an app. to read the code and then you have to use it.  If all that works, then hopefully the content that’s served the consumer isn’t a letdown.

Eliminating as many steps as possible and keeping it stupid simple with a high degree of value is the key to user behavior. 

In sum, I’m a big supporter of the convergence of wine and technology.  Technology will re-define the domestic wine world, both consumer facing and in the industry value-chain, but along the way there will continue to be a number of technology marketing tools that are more hype than reality and parsing the difference between the two sure isn’t easy.  Unfortunately, QR codes happen to have a grip on the wine business and they’re definitely hype.

Later this week I’ll cover several other fleeting bits of technology marketing fluffiness including the wine industry’s equivalent to Hallmark holidays.

Additional background reading on QR codes and Near Field Communications:

Top 14 Things Marketers Need to Know About QR Codes

NFC Marketing and promotions round-up


share

The Domestic Wine World in a Nutshell

Constellation Brands, the 2nd largest wine company in the U.S. behind E&J Gallo, has turned a nice trick.  Since May, their PR activities and the ensuing media coverage (across a diversity of topics) largely encapsulate the trends in the domestic wine world if not the larger American business environment. 

I pay attention to Constellation Brands.  I read the annual report, dry though it may be, and while I find that Constellation tends to get painted with the, “Corporate wine” brush that suggests a blend of big business and wine is necessarily bad, I haven’t found that to be the case with Constellation, at least anecdotally.  In fact, most former employees of Constellation that I’ve talked with offer respect for the organization while citing a host of more individual reasons for why they moved on.

No business is perfect, but Constellation hardly seems to be the bogeyman that the Agrarian Utopianists would have you believe.  Though, one quote from their 10-K seems to summarize the largely unspoken tension that exists between wine big business, the land and the globalization that tugs at both of them.

image

“We are primarily a branding consumer products company and we rely on consumers’ demand for our products.  Consumer preferences may shift due to a variety of factors, including changes in demographic or social trends, public health policies, and changes in leisure, dining and beverage consumption patterns.  Our continued success will require us to anticipate and respond effectively to shifts in consumer behavior and drinking tastes.”

Opinion with the most strident wine conservatives holds that a winery should be a rock in the stream, rooted in terroir, not yielding to the fashion of the day and certainly not functioning as a branded, “consumer products company” answering to the vagaries of fickle, “consumer preferences.”

Yet, pursuant to the essential truth or not, that’s where the domestic wine world is today.  Let’s take a look at Constellation headlines dating to May of this year to see the domestic wine world trends in a nutshell:

Targeting Millenial Wine Drinkers Online / May 12, 2011      
Key reference(s) in the article:  Sensory analytics to understand consumer preferences.  Brand building akin to Procter & Gamble and Coca-Cola.  Expansion of its Project Genome research that studies wine drinkers’ buying habits.

Under the Microscope:  Constellation Brands’ push into digital marketing / May 13, 2011      
Key reference(s) in the article:  “Social media has caught executives’ interest, given that most wine is discovered by consumer(s) via personal recommendation.”  “Since implementing the psychographic targeting, the company has seen an increase of click through rates of 150%, increased fans of 75%.”

Constellation Takes Long-View Approach / May 15, 2011                    
Key reference point(s) in article: “Much of the work Constellation did in reshaping the company came during the recession. For a time, sales took a hit and losses were evident.  But the company continued to pay down debt and build cash flow. ‘We could have pulled back and stopped investing in the business.  That would have been dangerous.  But we didn’t overreact,’ said CEO Rob Sands.’”

Europe:  Constellation plots greater push into Eastern Europe / May 18, 2011      
Key reference(s) in article:  While Constellation divested itself of the majority of this business earlier this year, they did maintain a minority stake in the organization renamed Accolade Wines on July 1st.  “Speaking on Eastern Europe more generally, (Constellation’s General Manager for Europe, James Lousada) said that Constellation is prepared to play a long game in the likes of Poland, Ukraine, Czech and Russia.  ‘If we start now then in five years we will have a significant business in those countries.’”

Constellation Plans Major Innovation Push In 2011, With Launch of 20 New Wines / May 18, 2011            
Key reference(s) in article: “Constellation Wines U.S. President Jay Wright said today that the company is planning a blitz of 20 new wine products this fiscal year (ending next February), targeting fast-growing segments like sweet red blends, Prosecco, Moscato and Malbec. Among the new rollouts will be a sweet red blend in the $8 to $11 range, Primal Roots, and a new offering in the rising unoaked wine segment, Simply Naked (around $10 a bottle). Both will launch June 1st. A new premium Spanish brand, Rioja Vega, is also poised for rollout.”

What Does China Need?  More Table Wine / May 20, 2011
Key reference(s) in article: “Chief Executive Rob Sands of the New York-based beverage company said he will formally announce a top executive for its Asian business.  Sands says he sees a sweet spot in the Chinese market in imported table wines … that market has grown 20% a year in the five-year period leading to 2010, according to a report by Rabobank.”              

Constellation Unveils Winery Expansion / June 8, 2011      
Key reference(s) in article: “’This expansion is a cornerstone for the future of our business,’ (COO Jay) Wright said.”

Constellation Brands to Cut Jobs to Save Money / June 30, 2011      
Key reference(s) in article: Despite higher than expected earnings in its first quarter of fiscal year 2012, Constellation plans, “…to cut about 100 jobs, or 2.3 percent of its workforce, as part of a business realignment meant to save money … the company expects the moves to save it more than $10 million …”

Constellation Sales Slide in First Quarter / June 30, 2011      
Key reference(s) in article: “Constellation has rolled out around 50% of the 20 new wine products it has slated for this year, with Rex Goliath Moscato, Ruffino Prosecco, Arbor Mist Pomegranate Berry Pinot Noir and the Simply Naked unoaked line already making their debuts.”

Summary

By looking at the wine business through the prism of Constellation’s news, I see a number of trends that are palpably present for the entirety of the domestic wine business:  Globalization, digital, Millenials, investing in growth, layoffs, new “hot” segments or varetials like Prosecco, Moscato, unoaked chardonnay, sweet wines.

While these trends are on a more granular level than the seismic macro shifts that Mike Veseth describes in his new book, Wine Wars, the point continues to be reinforced for me that we’re at the tail end of a Golden Age of wine, the agrarian ideal is quickly becoming a slippery slope necessitating changing with the times and 20 years from now the first decade of the millennium will be viewed as the halcyon days of old. 


share

Page 1 of 27 pages  1 2 3 >  Last »


Archives


View More Archives