August 25 2009
Ed. Note: I have been profoundly impacted by a simple little treatise in book form called Reset: How This Crisis Can Restore Our Values and Renew America
The premise of Reset is that the U.S. has been in a go-go period since the Reagan years (1982) – a period of time in which everything grew including the disparity between rich and poor, the size of our houses, the quantity of consumer choice, our spending habits, waistlines and more. And, while this cyclical growth has wrought much havoc in the form of present day circumstance, our current economic period offers great hope. Noted Andersen, “it’s the end of the world as we’ve known it, but it’s not the end of the world.”
According to Andersen, citing the Schlesinger Model: “we are now at the start of the fifteenth alternating cycle since the founding of the United States, currently making yet another of our periodic shifts from an unfettered zeal for individual getting and spending to a rediscovery of the common good.”
Andersen suggests that we all possesses a duality of spirit much like the Grasshopper and the Ant in the old fable – we are irrepressibly fast and wild coupled with a practical ingenuity, common sense and an ethos of hard work. And, now, we are shifting from a sustained period of acting like the Grasshopper to a time of needing to be the Ant.
Andersen continues (excerpted): “… the possibility of a radical reshaping of not only economic and financial systems but also the ways that Americans think about their country and themselves … to a great extent, our national future will unfold over this century according to the collective and individual choices we make now.”
“As the recession ends and the sense of crisis fades, we mustn’t lose our freshly, painfully acquired ability to think the unthinkable. We need to keep the downside risks in mind … it’s just as important – and maybe more so – to imagine the unimaginable on the upside.
Andersen’s ultimate message is one of hope and belief in the American spirit.
With that in mind, I asked Scott Becker from Global Wine Partners for his thoughts on this period of time in Napa and what it means for the future—a Kurt Andersen-like analysis of wine, if you will.
Scott was quick to provide compelling insight, while also noting that Napa’s success isn’t the result of one man; perhaps symbolically, but not literally. He cited Andre Tchelistcheff, Mike Grgich, Jack Cakebread, amongst many others as being key to the success of today, and historical precedent for what happens tomorrow. Here are Scott’s full comments.
Napa Valley’s Next Chapter
With the current recession affecting fine wine sales, many industry observers have questioned whether this period of time marks the end of a chapter for Napa Valley. In my opinion, the new chapter began in May of last year, before the financial meltdown last fall. It was something more fundamental than economics that changed Napa Valley. The passing of Robert Mondavi marked the end of an era, but also the beginning of a new chapter full of opportunity.
Mondavi was the face of Napa Valley for decades and projected the young region into wine stardom through the sheer strength of his passion and personality. Mondavi was to wine what J.P. Morgan was to finance or, more recently, what Bill Gates was to computers. He was exactly what the Valley needed at the time—a visionary who inspired a generation.
And, while the Napa Valley wine industry has matured over time, it’s still youthful in comparison to parts of the Old World like Bordeaux or Barolo. And, yet, the Valley isn’t as freshly scrubbed as Mendoza or Mendocino. Without question, as Napa grows into middle-age, what the Valley needs now is different than what it needed during Robert Mondavi’s lifetime. The next chapter for Napa Valley will not be defined by one man. No, the next chapter will be defined by the network of relationships that capture the essence of the Napa Valley. These relationships exist at all levels—producers, distributors, importers, retailers, consumers, media and many others. Between each level we will continue to interact in ways never before possible due to continuing changes in technology and regulatory barriers. This communication will lead to transparency, which will create increasing authenticity allowing additional growth and development between Napa Valley and “me too” brands.
However, more professional talent will be required to manage the network and mine the data, the glue that binds the relationships. Speaking of data, the next chapter will need more of it. Scanner data and depletion reports won’t be enough to readily understand what is happening in the market for fine wine. The shift from a production focus to a market focus will accelerate through this next chapter. We can expect continued consolidation in the distribution channel, which will inspire some to find still more innovative ways to reach the consumer. In short, Napa Valley will need to develop the systems and the talent to support a maturing, complex industry in an increasingly competitive market, while leveraging its strengths in infrastructure and reputation.
This is not to say that Napa Valley will lose the heritage and culture that has made it so great. The challenge is to figure out how to capitalize without compromise. In other words, how to capitalize on the opportunity before us without compromising on what made Napa Valley great in the first place—special terroir and special people. Robert Mondavi, and others like him, laid a solid foundation. The next generation of leaders in Napa Valley must continue what he started but also take it to a new level. And, while Napa Valley will no longer point to one man as the ideological leader, Napa Valley will continue to evolve for the better because we all succeed when everybody is invested as a stakeholder. Just as we have seen the “wisdom of crowds” in other industry segments so too will we see it in Napa. Leading the way will be the tapestry of the Valley working together—the vineyard hand, the cooperage, the winemaker, and the solar panel installer, the wine salesman, the distributor and the social media director who, together, with a unified desire to become better, more sustainable, with a shared goal of excellence, will allow Napa Valley to continue to flourish while letting Mondavi and his legacy live on throughout this next adventurous chapter.
Posted in, Wine: A Business Doing Pleasure. Permalink | Comments (13) |
I have no idea how my last paragraph got inserted between my questions. Must have to do with those technological changes 
Thomas,
Thanks for your questions. I kept my comments brief so only hit the hightlights, which unfortunately meant that I didn’t fully expand on each point. I’m certainly no script writer, but I’ll try to answer your questions. I’d like to hear your perspective on your questions, as well.
1. I believe the essence of Napa Valley is world-class wine and world-class people. What goes on outside the bottle is just as important as what goes on inside the bottle. So we need to sell that wine in a world-class way. That is done through the network of relationships, among distributors, retailers, consumers, etc. My point was that Robert Mondavi was seen as the face of the Napa Valley brand for many years. Today, that brand is bigger than any one person or wine. We are now all a part of the brand.
2. We will continue to see changes in state shipping laws that enable producers to connect directly with consumers. We may even one day see a fundamental change to the 3-tier distribution system. In addition to regulatory changes, technology is also re-shaping those relationships. Blogs offer consumers more choice for information and perspective about wine than what was historically offered through traditional media. Consumers can look to facebook or twitter to see what their friends are drinking. If Amazon still opens an online wine marketplace, that would offer yet another way for producers and consumers to interact directly. Direct-to-trade (DTT) is just now starting to emerge. Particularly for smaller brands, DTT allows them to build relationships with sommeliers and retailers. That wasn’t possible before, when small producers could only hope for a depletion report from the distributor that listed where the wine was sold. And these are just the changes that come off the top of my mind. There will inevitably be others that we haven’t even thought of yet. But all these changes will give the producer the opportunity to craft the message and interact directly with consumers and the trade.
3. All the changes mentioned in #2 will create more transparency. It’s not absent today, but it can be improved. We’ve all witnessed the tremendous growth in the number of wine brands over the last several years. That’s true in Napa Valley just as it is elsewhere. It was fine to have so many brands when the wine sold itself. Today, the market is different. It’s more competitive than ever. The economic downturn is part of the reason, but the downturn only exacerbated the problem that distributor consolidation has made it difficult for producers to get presence of mind. The brands that are holding up the best are those with the strongest relationships. My comment about authenticity was simply that it will separate the winners from the losers. Let me give you one example. I first met Jack Cakebread a few years ago while I was in business school. He came to Boston to host a wine tasting with a group of MBA students. He’s been doing that same routine for decades at dozens of business schools around the country. After all these years, Jack takes the time to get on the plane and visit these students himself. What better way to build a brand than establish the relationship with young, aspiring businessmen and businesswomen? He goes further to invite them out to the winery for a weekend called “Cakebread U” where they learn about food and wine. That’s authenticity. And authenticity will separate the Jack Cakebreads from the “me-too” brands.
Thomas, I hope this helps answer your questions. But again, I’d really like to hear your perspective.
Scott,
Thanks for the explanation.
As an old hand at communications, I never was one for accepting the skin when the framework is in the bones.
I wasn’t looking for a back and forth—really looking for the answers to my questions for me to better understand what you meant. But I will say this one thing:
By “authenticity” I thought you may have been referring to what’s on the label and what’s in the bottle; the relationship between the value of a reputation such as Napa Valley with the value of “Produced and Bottled By” or “Vinted By,” et al.
If anything has the power to obscure a reputation, its wine labels that say so much but can also offer dubious forms of transparency.
For my 2 cents, until we engender a wine-savvy consumer, we will be having this marketing conversation over and over. The place to start might be with truth in information on all fronts—and maybe, to lighten things up—better back label writing
I think part of that begins with information provision. When you can empower your buyer to make informed choices, not only regarding your wines, but others, you’ll inevitably be rewarded by them for it. I’ll agree it will become more of the winery’s job to reach across the proverbial aisle and show all the great ways wine can be further enjoyed.
I’d be curious to ask Mr. Becker why he has already left Global Wine Partners after a stint of what, 8 months??
This is an admirable discussion. I appreciate your effort. It perfectly fits my bill.Thanks a ton.
Mr. Becker must have had fantastic English teachers somewhere along the way—not only are his ideas fascinating and inviting, but his manner of expression is also appealing. Good work!
Hi,
I run a small business on the internet. I want to expand my business a little bit, but I’m not sure of the best way to get the money that will help me with that. Would it be better to continue using the small business finance that I currently have, delaying expansion, or would it be smarter to get a small business finance loan from the bank in order to make my operations bigger now?
Studying at GBS is a life changing experience. With emphasis on intellectual discovery and critical thinking, our students are provided an environment for both intellectual discourse and experiencing corporate life. Our faculty are teacher-scholars and constantly engage the learner community to pursue academic and careers goals with the rigour that it deserves.
Studying at GBS is a life changing experience. With emphasis on intellectual discovery and critical thinking.
Managerial or corporate finance is the task of providing the funds for a corporation’s activities. For small business, this is referred to as SME finance (Small and Medium Enterprises). It generally involves balancing risk and profitability, while attempting to maximize an entity’s wealth and the value of its stock.
we will be having this marketing conversation over and over. The place to start might be with truth in information on all fronts—and maybe, to lighten things up—better back label writing
This work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 Unported License
Design by The Blog Studio
Print
I think I understand what Mr. Becker talked about, but I do wish he would have explained himself.
“...the next chapter will be defined by the network of relationships that capture the essence of the Napa Valley. These relationships exist at all levels—producers, distributors, importers, retailers, consumers, media and many others. Between each level we will continue to interact in ways never before possible due to continuing changes in technology and regulatory barriers. This communication will lead to transparency, which will create increasing authenticity allowing additional growth and development between Napa Valley and “me too” brands.”
A few explanations following this paragraph would have been nice.
1. How do these “networks of relationships”
capture the essence of the Napa Valley and what is that essence anyway?
All of this reminds me of the days when I was in the business of creating corporate communications presentations and wrote scripts for meeting presenters, with slides on the screen.
2. How do the relationships interact now, and how will they be different in the future? And what regulatory and technological changes will play a role in these new interactions?
3. Is transparency at present absent from Napa Valley? If so, how? And what is meant by authenticity? Is Napa Valley seen today as non-authentic?