Insights From Overseas:Three DTC Trends from Europe Auto Draft

By: Susan DeMatei, Founder of WineGlass Marketing

After navigating our client’s business and company growth during the last two roller-coaster years, I was ready for a significant break. Armed with credits from two canceled vacations and many pent-up credit card miles, I cashed in for an extended European visit in July. While there, my husband and I traveled to and stayed in four major wine tasting regions: Alsace, Champagne, Burgundy, and the Rhine/Mosel.

  While there are countless and apparent differences between how France, Germany and the US promote tourism and sell wine directly to customers, there are equal similarities if you look hard enough. On this trip, I found myself in the rare role of a focused tourist. So, I became aware of the marketing cues and delivery vehicles and noted what worked, and what didn’t.

Here’s Some of what I Learned:

1. You can’t judge a baguette by its crust.  If I were to ask you to paint a picture of your ideal customer, who would you envision? Most have that gray-haired, tanned, 65-year-old couple on a sailboat in their mind. What if I told you that the average 25-55 year old was equal to or wealthier than most over 55?

   And it goes beyond gray hair to the overall presentation. The casualness of today’s affluent consumers was apparent on day one in the premium airline lounge. I splurged all our points on an upgrade to Business Class for our 11-hour flight to and from Zurich, complete with the little fold-down bed and access to the private lounge at the airport. I expected to see businessmen in suits and mature couples dressed in Sax Fifth Avenue or European power couples with effortless, crisp, linen summer button-downs and a nanny in tow with the two gorgeous well-behaved children. This was not what I saw. I saw 30-year-olds with backpacks and complete families with grandmothers in a wheelchair and many young children.

  This observation continued at wineries. What struck me the most was the dress code. I know this isn’t the 60’s where you dressed up to go traveling, and we were in a heat wave, but even in Reims, where an average tasting can be 70€ and a bottle in the thousands, the standard was casual, very casual. Like pajama bottoms, gym shorts, flip flops, unbrushed hair, and ripped jeans casual.

  Takeaway:  The days of the winery controlling the “exclusivity” of a visit have passed. Customers now decide where they think they fit in and boldly go there. Visually, the current wealthy consumer is indistinguishable from a person on minimum wage. How would you determine who “belongs” even if you could? It would be best to assume anyone walking through your door is self-selected to be at your winery and a potential buyer. Your control exists with a straightforward website with your story and brand, where you list your offerings and are clear about your pricing. If you execute traffic-driving initiatives, ensure your income and geography target is correct so you don’t get someone looking for a Toyota strolling into a Range Rover dealer.

2. Napoleon’s hat is cool but not what I was looking for.  My husband and I have seen vineyards and done our share of winery tours, but I was not going to miss the chance to tour the ancient and legendary cellars of the one-and-only Moët & Chandon. I have always been a Dom Pérignon fan, and as the parent company, Moët is the only place you can find it as a tourist. I was prepared to spare no expense for a high-end experience at this boutique and called ahead but was dismayed that they only had two options for visitors. I explained I was a Sommelier from Napa and that I was interested in the higher echelon wines I couldn’t easily find in the US, but there was no flexibility with options. Hoping for the best, I purchased the more expensive of the two tour/tastings.

  Épernay is very similar to Napa. Small and hyper-focused on luxury winery tourism and visited by many tourists with various ranges of knowledge and spending power. Moët & Chandon didn’t disappoint with a grand entrance and seating area displaying several historical artifacts, including Napoleon Bonaparte’s hat.

  But that was as interesting as it got. For the next 75 minutes, we were led through an introductory tour of the champenoise method-not, even very much history or specific information about Moët. It was the same script someone from Schramsberg could have used. A woman from Oregon wanted to ask questions, but at each juncture, she apologized and seemed embarrassed that she was interrupting the tour guide’s script with wanting to know more.

  At the completion, we were rewarded with two glasses of vintage champagne (the base level tour offered a single tasting of the current NV Brut as the only deviation). In the garden with our group, I listened to our group chatter as an Australian wine collector boasted about his cellar full of Penfolds Grange to a mother from the Netherlands with her son, who was celebrating his birthday (he had just turned 18). Then we were all ushered through the gift shop before exiting.

  Takeaway:  What a tragic missed opportunity! With some foresight and flexibility, the Grange buyer and ourselves could have easily been delighted with an abbreviated tour and tasting of their high-end offerings. I’m sure we would have purchased 3x as much in half the time. Then the woman with the questions and the mother and son would have been within a smaller group of people who all could have learned about dosage or riddling while feeling more comfortable and heard.

  Never underestimate the power of customized experiences or knowing your audience to maximize sales opportunities.

3. A little Nerd goes a long way.  The tools and technology used were as varied as the regions we visited. Alsace had some of the most professional “Hollywood” style use of video, ingeniously using the barrels and the cellar walls as the video screen for various camera angles. Mercier in Épernay has a full-size laser-guided train that tours their cellars and a video that interacts with its elevator. Dr. Loosen, in Germany, chose low-tech but equally effective blown-up laminated images of the vineyards and soils to accompany and explain their elaborate and complex Riesling tasting.

  We belong to the Domaine Serene Wine Club in Oregon, and their sister winery is Château de la Crée in Santenay, Burgundy. I appreciated they were sufficiently connected worldwide to have my Wine Club information (even though I noticed la Crée wasn’t on WineDirect as Serene is). The customer service was seamless; they knew what wines we’d purchased and our entire history. But with language barriers, I respected that they also asked us to fill out a customer form to confirm they had information in their system correctly, and nothing needed updating.

  A not-so-great but funny example of a technology miss is that thanks to COVID-19, most cafes and some European restaurants have removed menus entirely in favor of QR code stickers on the tables. This reduces waste and time, lowers germs, and is easier to update, so it seems like a great idea all the way around. That is until your phone runs out of juice (which happened), or your sticker is ripped or faded (which happened), and you’re left awkwardly sneaking to another table or flagging down an annoyed waiter to find a menu.

  Takeaway:  We can use technology to enhance or confuse our customers. It can improve creativity, help communicate a message, make the visit memorable, reduce waste and germs, and help your customer and employee experience. Just ensure you know why you’re using it and employ it with intent and purpose.

  Also, always have a low-tech backup for when tech fails or you need to communicate with a neophyte.

C’est La Vie!

  It’s been several years since I’ve been to another wine region to compare “cellar door” marketing and programs and I can say Europe has come a long way toward our new world DTC practices here in the US. I am encouraged that as younger consumers become more educated, affluent, and demanding, the pace of evolution will continue to increase. There will likely be additional channels and tools that we are just beginning to explore in another few years.

  Susan DeMatei is the founder of WineGlass Marketing, a full-service direct marketing firm working within the wine industry in Napa, California. Now in its 10th year, the agency offers domestic and international clients assistance with strategy and execution.  WineGlass Marketing is located in Napa, California at 707-927-3334 or wineglassmarketing.com 

Text Marketing Plan: 3 Easy Steps to Get Started

By: Bryan St. Amant, Founder & CEO of VinterActive

Now that leading wineries have discovered the power of SMS marketing, the race is on to see which brands will profit and at whose expense.

With consumer engagement 32-times better than email marketing, even new wineries can quickly grow a small text messaging list that outperforms thousands of email addresses. For wineries with established DTC lists, the news is even better.

If your winery can convince 3% of your existing list to opt in for text messaging, you’ll succeed in creating an entirely new DTC channel that sells as much wine as the other 97%.

And here’s the best news of all…

Today’s SMS wine marketing solutions are inexpensive, easy to use, and can generate game-changing results in days by following three easy steps.

STEP 1) Plan Your Initial Offer: Once you’ve made the decision to add text messaging to your mix, your next step is to decide what you’ll be using it for so you can create your first text marketing offer inviting your customers to join your brand’s text messaging list.

The latest research shows that consumers are interested in brands that offer exclusive promotions, product news, and customer service delivered via text. And the most successful wineries we’ve worked with use text messaging to deliver all three.

But just because you can do all these things with SMS marketing doesn’t mean you need to do them all at once.

That’s why we recommend most wine merchants start with one of these text marketing offers:

• Concierge Services available via text.
• Wine Club Updates sent via text as needed.
• Order Tracking triggered by new shipments.
• Monthly Winery Updates about new wine & events.
• Weekly Tasting Room Specials.

If you want a proven pilot program and have a wine club, try offering your members the opportunity to receive their club updates via text. They’ll be thrilled, and you’ll have a new text marketing list.

PRO-TIP: For maximum engagement with loyal customers, perform a simple survey asking them what texts they’d like to receive from your brand. You might learn something, and when you offer your fans the chance to sign up for text messaging, they’ll already be on board.

Whatever you decide to offer at first, as long as you focus on real customer needs, you can’t go wrong. You can always start slow and build your text marketing program over time. So don’t stress out. Just getting the ball rolling might be the primary benefit of your first campaign.

For a motivated wine marketer, this first step shouldn’t take more than a day or two.

STEP 2) Select an SMS Wine Marketing Platform:
Once you’ve identified the customer services you’ll deliver via text, your next step is to select an SMS wine marketing platform.

Fortunately, many vendors now serve the wine industry and offer a broad range of marketing tools and price points. So do your due diligence by confirming the platform you select has all the tools needed to support your most crucial SMS marketing goals.

Critical tools for DTC wine marketers often include:

Two-Way Text Conversations: Essential for text-based concierge services. If you have a large hospitality team, make sure the system you select supports multiple team members as needed.

Text Marketing Preference Center: Essential for segmenting customers based on individual interests. Preference-based messaging is the best way to maximize consumer satisfaction and minimize unsubscribes.
Integration with Wine Commerce Systems: Essential for automating transactional messages like order confirmation, reservation reminders, and shipping notifications.

Automated Text Marketing Workflows: Essential for quickly responding to customer inquiries and maximizing staff productivity.

Age Compliance Mechanism: Essential for complying with industry regulations. SMS wine marketing systems must have working age gates that filter out contacts younger than 21.

PRO-TIP: Most wine marketers can send and receive texts using toll-free or local numbers. To send more than 3000 messages daily, use a toll-free service since they can deliver thousands of messages in seconds. But if customers also call you on a local number, you should text-enable it, too.

You can’t go wrong if you choose a platform that delivers the tools needed to support your initial goals. Worst case, if your plans change or your SMS platform doesn’t deliver as expected, you’ll still have all your data and opt-in contacts. So you can change your SMS marketing system if needed.
Even with due diligence, this step should take a week or less.

STEP 3) Launch Your First SMS Wine Marketing Campaign: When your new SMS platform is ready to go, it’s time to launch your new text messaging service. The wineries we’ve worked with have enjoyed success launching their SMS programs using a combination of:

• Email invitations to existing contacts.
• Webforms targeting prospects visiting your website from a desktop computer.
• “Click-to-text” buttons targeting prospects visiting your website from a mobile device.
• “Scan-to-text” signs that use QR codes to invite tasting room visitors to join your list.
• Keywords your customers can text to your brand to join your SMS list.
• Printed offers accompanying product shipments.

Just like email marketing, the success of your text marketing program depends on your list size.
So promote your SMS list wherever you engage the most customers.

If you have a large email list, promote your SMS program to email subscribers. If you have a busy tasting room, promote your SMS list there. And if your website or social media pages host hundreds or thousands of visitors each month, they should prominently feature your SMS wine marketing offers.

PRO-TIP: For an in-depth tutorial on the best practices for growing SMS wine marketing lists, check out our recent article, “The 7 Best Ways Wineries Can Grow Their Text Marketing Lists.”

To help you get started, your SMS wine marketing partner should be happy to assist you with all the tools needed to introduce your new text messaging services and grow your opt-in list quickly.

Even if you take the time to set up all possible subscription channels, this step can be accomplished in less than a week, leaving you ready to begin profiting from SMS wine marketing.

After Launch, What’s Next?

If you’ve already launched your SMS wine marketing program, congratulations! You’ve joined an exclusive club of wine merchants who use text messaging to stay in touch with their customers.

Now the fun begins – optimizing your text marketing program to maximize results.

One of the first decisions you’ll need to make is how often you text your subscribers. Since the number one reason consumers unsubscribe to text marketing programs is that they receive too many or too few messages, the frequency of your messages is critical to dial in.

The latest research on text marketing shows that most consumers prefer receiving text messages from their favorite brands every two weeks. But consumer preferences vary widely. So we recommend offering customers a choice of text messaging content so they can hear from you as often as they like.

Your initial campaign could offer winery updates every two weeks. But then, as you build out your text marketing program, you might also offer weekly updates on tasting room specials or perhaps monthly updates featuring recipes that pair well with your wines. With weekly, bi-weekly, and monthly options to choose from, your SMS wine marketing program will appeal to the broadest range of customers.

As you continue to optimize your text messaging program, you’ll need to keep an eye on results. That means regularly reviewing the open, click-thru, and unsubscribe rates generated by your campaigns so you can do more of what works while learning from your less successful efforts.

In our experience, learning from both success and failure is the key to delivering world-class DTC wine marketing results.

The Sooner You Text,
the Sooner You’ll Profit

In a world where 90% of online consumers want text messages from their favorite brands, but only 8% of U.S. wineries text their customers, this mismatch between consumer preference and industry practice spells nothing but opportunity for wineries focused on growth.

Unless you think text messaging is going away soon, you only have one choice to make: whether or not you let your competition profit from text messaging before you.

With consumers hungry for brands that engage them with text messaging and wine marketers reporting results 32-times better than email, now’s the time for savvy wine marketers to embrace text messaging.

We hope the 3-steps we’ve shared with you in this article can help your business quickly profit from SMS wine marketing.

Happy Selling!

About the Author

Founder & CEO of VinterActive, Bryan St. Amant, is a pioneer in developing preference-based direct marketing and its successful application in the wine industry. His award-winning work has been featured in books, magazines, and seminars. VinterActive is located in Windsor, California. For more information please call or visit their website vinteractive.com
707-836-7295

PLEASE LIKE ME: How to Successfully Navigate Customer Reviews

By: Susan DeMatei, Founder of WineGlass Marketing

In the September/October issue of The Grapevine Magazine, I wrote an article entitled “The four reasons you should care about online reviews.” As a quick recap, the four reasons were:

1.   We are at the precipice of a cultural shift from Baby Boomer values (externally showing luxury as validation, including professional and published reviews and scores) to Millennial values (internal and self-validation, including being part of a community that shares your beliefs).

2.   The internet and modern eCommerce train us to look for the most popular brands and rank the highest among people (we assume) are peers.

3.   Google evaluates reviews when delivering search engine responses and ranking.

4.   Your customers care about review sites.

•   92% to 97% of customers look for or read a review before doing business with a company.

•   80% of us trust reviews by strangers just as highly as a reference from our friends.

•   72% of us look for only positive reviews, and 86% will not do business with those with negative reviews. (Clutch.co)

  For many, this advice proves sound and agree that internet reviews are essential. Maybe you’ve even begun identifying where your target audience congregates and shares thoughts online. But knowing something in principle and achieving that goal are two different things. Your next step is to encourage and collect reviews, which is the topic of this follow-up article.

Asking In Person

  The most obvious way to accumulate reviews of your wine and service is to ask a customer when you’re with them at the time of the sale. This is also the most effective way, as the experience is still fresh in the customers’ minds, and you have a captive audience for a couple of minutes. But this is also the most uncomfortable for some. So, before you start squirming in your chair, here are some suggestions for making this awkward interaction more natural.

Build It Into The Banter  

  The most skilled wine educators weave the request naturally into the conversation. The trick is to have several routine lead-in questions where the response will naturally lead to a review suggestion.

  For instance:

•   “Did you enjoy your visit?”

•   “Do you want to take any wines home with you”?

•   “When are you guys heading back home from vacation?”

  The expected responses will comfortably lead to:

•   “Since you enjoyed yourselves, we welcome you to share your feedback so others can enjoy us.”

•“  Thank you for the purchase! We’re glad you liked the wine. We’d be excited if you’d share your feelings about it to encourage others to try it.”

•   “We love having visitors from out of town. Since you’re heading back tomorrow, please consider leaving notes on your experience, so others find us on their vacations.”

  It’s best to have this dialog after the entire experience is done, with the bill and tip paid. You want to clarify that any review is not affecting their service, charges, or product quality. And, when you have this interaction, choose words that don’t seem pushy. “Invite you to leave feedback” sounds better than “Can you give us a review.” Finally, don’t hesitate to say why you want a review. “Hey, thanks a lot, we’re trying to get going again after COVID, and good news travels fast.”

  Remember that even if you feel uncomfortable, most of the people you ask will be flattered that you’re asking them for feedback, not annoyed that you’re fishing for compliments.

Remove All Obstacles For An Immediate Response

  Continuing our roll playing from above, if the customer above says “yes,” you want to be able to actualize that direct call to action. Have the tools ready immediately and seamlessly to review your location right then and there. Luckily, almost all customers walk into our tasting rooms with tiny computers in their pockets, so offering WiFi for their phones is all that is needed. With a QR code on a napkin, coaster, receipt, or table tent, they could be on your profile on Yelp or Google in less than 15 seconds. If you are remote and WiFi is a challenge, see if you can offer an iPad on your network.

  Then thank them. The good news is that when asked, research says ¾ of us will leave a review. So, you’ll be surprised at your success.

Remote Options

  If your natural state is being socially distant, so in-person requests just are not your thing, there are still ways you can request reviews. Online you will find many websites selling window clings or table tents to make the subtle request not-so-subtly. If you want these in your tasting room, get some tear-off pads so that you can provide the information in the bag with their purchase. And don’t forget that when you’re working on your email, phone, and text campaigns, you can also include a request for review. No, you won’t annoy your customers. Asking for feedback is standard practice in many industries.

  If you ask for after-the-fact reviews, offer a small token of appreciation, such as a tasting voucher, coupon, or discount. Communicate that you will reward satisfied buyers for the time they invest in providing feedback about their experience. 

  A word of caution: this is a slippery slope. Ideally, you want to earn reviews without offering rewards. Websites like Yelp filter out reviews provided because of incentives, and Google also uses analytics to monitor review traffic.

  Also, educate your employees and team leaders on how to ask for reviews effectively as well as excellent customer experience. Be willing to reward your employees for every posted review that they initiate.

How To Maximize Their Impact

  Now that you have these great reviews use them. The objective is 1) to position positive reviews so that your audience learns from satisfied customers and 2) to encourage additional reviews. First, incorporate them into your website’s design. Consider one of the many review widgets or direct feedback options on your website’s home page. Emails, brochures, or newsletters can include individual reviews. On social media, sprinkle them in posts. Please don’t overdo it, and vary the channel and locations as you never know when a satisfied customer’s comment might be why someone else visits or tries your wine.

Haters Gonna Hate

  So, what about the not-so-great reviews? Finding a negative review about your company, product, or team out there for the world to see can challenge your faith and motivation. You and your team have spent years creating experiences and products to entertain and please customers, so a negative response can feel like a personal attack.

  At these times, try and separate your business practicality from the sting to your ego and remember that there are many reasons why you may get a negative review. You will receive bad reviews from customers visiting with unrealistic expectations who either haven’t researched what is possible at your tasting room or have inaccurate information from a 3rd party. They may be ignorant of the legalities around wine service and sales, new to your wine flavor profile, or just having a bad day.

  It is crucial to set internal expectations that a certain percentage of bad reviews will just transpire as an expression of the core values of our culture. The US is about freedom, and the internet has empowered everyone to have a voice. Some people just like pointing out other people’s flaws because it makes them feel better. The unfortunate reality of running a business is that you simply can’t please everyone. Some of your customers are just negative people, and there’s not much you can do about that.

  The real downside comes with how their negative reviews can harm your business. Only 13% of customers will do business with a company with only 1 or 2 stars, and small businesses with a 1-1.5 rating out of five generate 33% of the revenue than businesses averaging 2+ stars. (Trustpulse)

Embrace The Noise

  But, in most cases, there is value in listening. We can be so close to our own winery experience that we fail to see or acknowledge areas for improvement. A negative review can be an excellent way to prioritize issues and enhancements that bother your customers and hinder your success when looked at without emotion. Pre-internet companies spent months and thousands of dollars on focus groups to secretly watch customers behind glass, hoping to learn what worked or did not resonate for a target audience. How amazing is it that now we have an immediate and actionable free feedback loop?

  Surprisingly, getting negative reviews isn’t always a bad thing. Research tells us that a couple of negative reviews can make a brand seem authentic. Bad reviews give customers a sense of the worst-case scenario, and they want to know what can go wrong to understand how much it will matter to them. The occasional lousy review eliminates any “too good to be true” doubts. When every online review about your brand is a gushingly over-the-top 5-star rating, it can appear fake.

  So, when we see the good, we tend to celebrate it by sharing it with our team. Meanwhile, we ignore, forget, or attack poor feedback. Smart companies make the most out of their online reviews by addressing issues with a response to the customer. And consumer expectations are high:

•    53% of customers expect that reviews will be responded to within 1 hour.

•    57% of customers believe brands should respond to reviews on the weekend.

•    63% of customers say that businesses have never responded to their reviews. (Trustpulse)

How to Respond to a Negative Review

  Here are some guidelines on how to respond to negative reviews.

•    First – take a breath and remember that people are human and flawed, and things happen on both sides. Don’t take it personally and acknowledge that everyone gets negative reviews.

•    Make them feel like they’re getting management’s attention. Respond as the business owner, even if you’re not.

•    Be consistent and timely. Always respond, even if you’re super busy.

•    The goal is to open the lines of communication and let the user know you are listening to them. They aren’t just another metric in your dashboard. Treat them like real human beings. Make your response authentic and personal, as if you were talking with a grumpy friend.

•    If it’s a complicated issue, offer to take the case offline by offering to move the conversation to a private chat.

•    If you are at fault, do what you say you’ll do to fix it. Take immediate action once you’ve told the visitor how you’ll improve their problem.

•    And don’t be shy in asking them to change their rating, or at the very least update their comment that you responded to and tried to make right. And who knows? Maybe that negative review will lead to a killer testimonial that drives even more traffic.

  Online reviews are here to stay and can positively or negatively impact your business. The result depends on how well you hand the reviews themselves.

  Remember, even a negative review can positively affect your revenue! The goal of addressing and improving your online reviews is to harness the power of social proof. By showing that many other customers loved your winery enough to be vocal about it, you’ll be more likely to get even more business in the future.

  Susan DeMatei is the founder of WineGlass Marketing, a full-service direct marketing firm working within the wine industry in Napa, California. Now in its 10th year, the agency offers domestic and international clients assistance with strategy and execution.   

WineGlass Marketing is located in Napa, California at 707-927-3334 or wineglassmarketing.com

The 7 Best Ways Wineries Can Grow Their Text Marketing Lists

By: Bryan St. Amant, Founder & CEO of VinterActive

Silicon Valley Bank’s latest research on wine marketing shows that fewer than 9% of U.S. wineries took advantage of text messaging in 2021. But those who did report phenomenal success with open rates of 98% and click-thru rates of 12% – generating 32-times more customer engagement than email marketing.

So savvy wine marketers are now asking the same question: How can we grow our text marketing lists as quickly as possible?

  The good news is today’s wine consumers – even Baby Boomers – want you to text them. According to PC Magazine, “85% of smartphone users prefer mobile messages to emails or calls.”

  The great news is the seven customer touchpoints outlined in this article offer ample opportunity to grow your SMS wine marketing list quickly, so you can delight your customers and sell more wine.

Email Marketing

  Since 80% of U.S. wineries already use email marketing, the fastest way for most wine merchants to grow a text marketing list is to reach out to existing email subscribers and offer them a new way to stay in touch.

  To convert existing contacts, we recommend introducing text messaging to current customers the same way you’d release a new wine or announce an upcoming wine country event.

  Most wine marketers will enjoy the best success with a series of three email messages:

•   A straightforward announcement of what you’re offering and why.

•   A follow-up email that focuses on what customers miss by not signing up.

•   A final email about how your SMS program addresses their main concerns.

  If you have a thriving wine club, start with them first and consider offering club members an incentive for joining your SMS list. And as you write your email, it’s worth reflecting on what it means to ask anyone to sign-up for text messages.

  Here’s a hint: they’ll be giving you access to the most direct and personal way to reach them. So, successful sign-up campaigns offer unique value to new subscribers in return.

  The latest research shows that SMS subscribers want first dibs on flash sales or promotions. With that in mind, you might offer early access to new releases, special discounts, and tickets to upcoming events.

  Once you hone your pitch, the wineries we work with enjoy the most success by pointing their email subscribers to a web-based opt-in form. Many text marketing platforms now make it easy to create an opt-in form you can add to any website.

Tasting Rooms & Events

  After mining your existing email list, now’s the time to invite your in-person guests to stay in touch with text messaging.

  In tasting rooms or at winery events, QR codes make it easy for consumers to join text marketing lists using their mobile phones. In just a few minutes, you can make it happen by printing tasteful signs that feature a QR code, legal disclaimers, and simple instructions on how and why winery visitors can join your list.

  Instead of pushing your tasting room staff to ask customers for their email address – then deciphering hand-written forms – using QR codes to market your SMS list makes it easier for everyone.  As a bonus, once your customers sign-up for text messaging, many SMS marketing systems can also automate the process of asking for an email address.

Social Media Channels

  DTC wineries report social media is now their most widely used marketing channel.

So enticing online followers to join your text messaging list — using the same offers you promote in your tasting room — is one of the most concrete ways to leverage your investment in social media.

  Digital wine marketers can use unique text marketing keywords like “Text INSTA to 888-592-2832 to join our text club,” QR codes, or web-based sign-up forms to invite your followers to join your SMS list.

  Since it’s so easy to test marketing ideas using social media, the best practice is to experiment with multiple conversion techniques to see what resonates best with your followers.  For the most impact, you might consider creating unique offers explicitly customized for your most vibrant social media communities.

Transactional Messages

  If you sell wine online, accept reservations, or manage a wine club, your commerce system already sends order confirmations, appointment reminders, and shipping notices via email.

  These transactional messages offer another proven way to grow your text marketing lists.  Imagine offering your wine club members the option of receiving a text confirmation when their next shipment is on its way. A keyword like ORDERSTATUS is tailor-made for this application.

  The footer of your online order confirmation page is also a perfect place to promote the option of receiving transactional messages via text. Here’s an example: “PS: Text ORDERSTATUS to 888-592-2832 to receive updates about your wine order via text. No spam, just news you can use.”

  Not only do today’s consumers prefer text messaging 2-to-1 over email, transactional messages about orders, shipments, and appointments are among the most popular text messages consumers receive.

Mobile Website

  Website visitors using their phones to browse your site are the perfect fit for text marketing offers. Not only are they on their phones already, but they don’t even need to enter any data to subscribe to your text messaging lists.

  Without any special software, you can generate a QR code that website visitors can scan to join your list in just one click. Some text messaging platforms popular with wine marketers also offer the ability to generate online pop-ups visible only to visitors using their mobile phones.

  Today’s wine marketers can add “click-to-text” buttons or custom mobile pop-ups to any web page. Perfect for building a list of text marketing subscribers, these same tools can engage your customers by enabling two-way text conversations with your hospitality staff.

Desktop Website

  If your winery website offers online visitors the opportunity to join an email list, doesn’t it make even more sense to give them a chance to subscribe to text messaging?

For visitors browsing your website from their desktop computers, web-based sign-up forms are the way to go. Simple text marketing sign-up forms only require a mobile phone number plus consent with the terms of your offer.

  But if you offer consumers a choice of text messaging content — from concierge services to weekly tasting room updates — a Text Messaging Preference Center can give your customers the ability to curate their own unique customer journey.

Product Packaging

  Your wine labels and the shipments you send to wine consumers can also work to grow your list of SMS wine marketing subscribers.

  QR codes printed on your labels can invite consumers to engage your brand at the point of purchase and consumption. For maximum flexibility, use a dedicated landing page that can be re-directed as needed over time.

  Wine shipments to consumers offer the perfect opportunity to market lifestyle content like recipes delivered by text messaging or encourage customers to post their photos and wine reviews via text.

Make Hay While the Sun Shines

  With today’s wine consumers thirsty for brands that engage them with text messaging, summer is the perfect time to get started with SMS wine marketing.

  If you can print a QR code or send an email message inviting your best customers to join your text marketing list, you’ll soon be on your way to success. With the proven power of SMS wine marketing on your side, even a modest list of 300 contacts can generate the same results as another 10,000 email subscribers.

  Summer sales are just the beginning. Once the holiday season arrives, your new text marketing list can drive record sales while delighting your customers with an easy way to order your wines using their favorite way to stay in touch.

  We hope the simple methods outlined in this article can help you achieve your goals. Happy Selling!

ABOUT THE AUTHOR

  Founder & CEO of VinterActive, Bryan St. Amant, is a pioneer in developing preference-based direct marketing and its successful application in the wine industry. His advice has helped hundreds of wineries across the U.S. grow sales and customer satisfaction by leveraging the best practices of DTC wine marketing.

  St. Amant holds an MS from M.I.T. and a BS from U.C. Berkeley. His award-winning work has been featured in books, magazines, and seminars, including CFO Magazine, Inc., CNN Money, eMarketing Magazine, Integrated Direct Marketing, Direct Marketing Association, Wine Marketing Report, and the Wine Industry Network.

VinterActive is located in Windsor, California at 707-836-7295 or vinteractive.com

Spring Cleaning: Why you should care about data hygiene

By Susan DeMatei

What do you think of when you hear “data hygiene”?  Most people either have no idea what the term means or believe it involves tedious hours mired in excel. But like regular car tune-ups, it should translate to increased marketing program performance and sales.

  Why? Because just like that tune-up, our engine, or in this case our database, needs periodic maintenance to clear out the “gunk” and refresh the connections. Even if we’re growing our list and sending out great emails, our work isn’t done — we need to keep our database healthy.

  How do we keep a database healthy?

  If the reason to have a database is to drive sales, then the ultimate indicator of health should be strong sales, right?

  So, what are the predetermining steps for sales?

  Size: The size of your database directly correlates to the level of sales you can expect from that database.

  Size is not a function of data hygiene but instead your lead generation efforts. Whether lead generation efforts are done through a tasting room or event table, accumulating names or advertising on Facebook, a continual flow of new prospects is like oxygen to your database. Databases decay at a rate of about 2% a month – so every year, you can count on losing 25% of your database. Therefore, it is imperative for the health of your database and sales to target a growth rate of at least 2% a month to not slip backward.

  Best database collection practices say to review all signup forms for typos, fake names, or duplicates before uploading. If you routinely see false addresses like “noemail@gmail.com” talk to your tasting room staff to find out why they feel pressured to fabricate data. There is likely some process that needs revision or a technical barrier that requires an address to continue. A conversation can identify various data collection challenges while impressing the importance of a usable database to your company.

  Additionally, attaching a source to your new prospects as they sign up is invaluable not only for hygiene but also for future continually monitor them to judge their quality. Ask yourself how many leads you got from each activity, how many of them ended up buying, and how long it took them to buy. Next year, this will be invaluable information when planning activities and ensuring you move forward with the activities that yield the best quality leads.

  Validity: The individuals in your database need to receive your emails without flags or filtering.

  You can instantly see the validity of your database when you send a mass email by looking at the bounces and invalid addresses.

  Bounces are typically categorized into soft or hard bounces. A soft bounce is temporary and, in most cases, a setting. The most typical one is an “out of the office” message. The email address is valid; they’re just not getting this email delivered now. Most Email Service Providers (ESPs) will attempt to redeliver to an address marked as a soft bounce multiple times, over subsequent campaigns, before flagging it as a severe deliverability problem.

  A hard bounce is a server error and means the address is no longer on that domain. Servers do go down temporarily for reasons like scheduled maintenance, so most ESPs will still try a bounce two or three times before marking it permanently undeliverable.

  There is a third category. Let’s call these “Unmailables”. Unmailables are junk and so obnoxious the ESP doesn’t even try to send them. They are blank or data is in the wrong field (e.g., the phone number in the email space). They can be made-up domains that don’t exist (like noemail@noemail.com). However, sometimes there is an obvious typo you can fix, like yahoo or Gmail is spelled incorrectly. And sometimes, the email address is in the phone number field, so these are worth investigating.

  Trust: Upon seeing the email in their email box, the recipient must believe that the source is trustworthy and contains relevant enough content to open the email.

  You must know how your ESP defines an “open” email. There are differences in how mail apps track this data point. Most notably, Apple’s Privacy updates for iOS 15, that preload data, create a false “open” to make tracking less reliable. (And this isn’t minor. In 2021, Litmus reported Apple devices accounted for approximately 52 percent of all email opens.

  In addition, gain agreement from your management as to whether you are reporting on total or unique opens (because someone can open the same email several times). At WGM, we report on unique opens because they best indicate how many individuals responded, and the same goes for clicks.

  Interest: The content of the email must be compelling enough to provoke further action, like a click to a website.

  Clicks are also not as straightforward as one might think. For instance, some Email Service Providers count unsubscribes as clicks. Here is where coordination with Google Analytics is critical.  You must overlay the bounce rate of your email traffic to the landing page (because a qualified visitor will stay and read and purchase).

  Note: Conversion, or sales, is ultimately the role of the landing page. An email can deliver a target somewhere, but it can’t close the deal.

  A Simple Yet Critical Hygiene Exercise: Pull your entire database with open, click and bounce information from your last email campaign. Dedupe. And, do this based on name, address, and email address. Sort all the bounces and put them on a different sheet. Review these for typos or duplicates and clean up what you can.

  If you are lucky enough to have sales data, divide the group into purchasers and those who have never purchased. Pull out Wine Club members and multiple buyers and consider calling them on the phone for an updated address. You may also want to add an ongoing postcard program where you drop a card in the mail asking customers to update their email. For the others, if they have purchased, leave them be for a record of purchase history. But if they’ve never bought from you and bounced, you should delete them.

  Sort the un-deliverables and do the same as above:

•    Fix issues.

•    Divide into sales and no sales.

•    Reach out to valuable contacts and delete empty records.

  Do the same with unsubscribes as the first two above. The only difference here is you should pull viable email addresses, upload them to Facebook and target them in your next campaign. Just because they didn’t want an email doesn’t mean they never want to hear from you again.

  You should be left with only customer records with sales attached to them that you cannot email. You will want to keep them for a historical sales record, but you don’t want them muddying up your data. For this group, you can tag them as non-viable, so you don’t keep pulling them for each email.

  It’s good to do this clean-up periodically. But how often and how deep you go down the rabbit hole depends on the value of this potential customer and how much time you have on your hands.

  Most experts recommend some type of database clean up quarterly. If you work at a busy tasting room, you may want to perform them monthly. But with all the evidence that “cleanliness is next to responsiveness”, there is a compelling argument for making data hygiene part of your routine marketing schedule.

  Susan DeMatei is the founder of WineGlass Marketing, a full-service direct marketing firm working within the wine industry in Napa, California.  Now in its 10th year, the agency offers domestic and international clients assistance with strategy as well as execution.

  For the past two consecutive years, Inc. Magazine recognized WineGlass Marketing as the only Napa company listed in the top 250 hyper-growth tier of the “5000 Series California’s Top Companies”. WineGlass Marketing has also been recognized by the community winning the North Bay Bohemian “Best Digital Creative Services” spot for both 2021 and 2022 as well as being honored by her clients in the North Bay Business Journal as Napa’s “Best Company to Do Business With.” In addition, the firm has taken top honors in the 2021 Web Awards for Best Beverage Website and 2021 Internet Advertising Competition for Best Integrated Ad Campaign in the Beverage Category and the 2022 Internet Advertising Competition for Best Wine Website. The agency is also a Webby Honoree in Website and Mobile Sites at the 2022 Webby Awards.

WineGlass Marketing is located in Napa, California at 707-927-3334 or wineglassmarketing.com

SMS Marketing Performance in the U.S. Wine Industry – 2022

After 20 years of researching and reporting on the best practices of email wine marketing, it’s an honor to share VinterActive’s first VinQuest™ Wine Marketing Report on the benchmarks and best practices of SMS marketing in the wine industry. This preliminary analysis draws on five independent wine marketing data sets and confidential interviews with wine marketers using text messaging in 2021.

  Our inaugural report is based on the performance of 88 SMS wine marketing campaigns sent to over 25,000 opt-in consumers in 2021 and 2022. And for comparison, this analysis also incorporates the results of millions of wine marketing emails sent to consumers in 2020 and 2021. 

The results we found were astonishing:

SMS WINE MARKETING BENCHMARKS

  Compared to email benchmarks in the wine industry, SMS marketers averaged 32-times more customer engagement for each text message they sent.

  To put it another way, a list of 300 SMS contacts can outperform a list of 10,000 email addresses.

Compared to email, the text messages sent by wine marketers were 4.3-times more likely to be opened and 7.4-times more likely to be clicked.

  And SMS marketers who kept track of sales conversion reported 100-times more wine sales for each text message they sent.

SMS WINE MARKETING ANALYSIS

  These results compare favorably with industry-wide estimates that report a 20-to-1 advantage for text marketing compared to email. The results reported by wine marketers in this analysis may indicate consumers are more amenable to text messaging from their favorite wine brands.

Or, since the wine industry is new to SMS messaging, initial results could be tempered over time as more wineries adopt text messaging and the wine industry looks more like other retail segments.

But whether text messaging drives 20-times or 30-times more customer engagement than current industry practices, this analysis means that savvy wine businesses would be foolish to ignore this game-changing DTC marketing breakthrough.

BEST PRACTICES OF SMS WINE MARKETING IN 2022

  For the innovators using text messaging in the wine industry, best practices are beginning to emerge for the three pillars of SMS marketing success:

1)  Growing text marketing lists.

2)  Sending text marketing campaigns.

3)  Managing 2-way text conversations with

     consumers.

BEST PRACTICES FOR LIST GROWTH

  To grow their text marketing lists in 2021, the wine marketers we interviewed found success using:

•  Keywords that consumers can text wineries to join their SMS lists.

•  Web-Based Signup Forms that website visitors can complete to join a winery’s text marketing list.

•  Email Marketing that offered existing customers an opportunity to connect via text.

BEST PRACTICES FOR OUTBOUND CAMPAIGNS

  As wineries grew their text marketing lists in 2021, some of the most successful campaigns we measured were:

•   Transactional Texts triggered by customer behavior to send order and shipping confirmation messages.

•   Preference-Based Content Streams that use keywords to deliver weekly or bi-weekly content, like upcoming winery events.

•   Predictive Sales Offers that use purchase history and customer tags to target sales offers personalized for each consumer.

BEST PRACTICES FOR MANAGING 2-WAY TEXT CONVERSATIONS

  In addition to sending outbound marketing messages to many consumers at once, text marketers in the wine industry are also finding immense success in engaging their customers with 2-way text conversations.

  Entire hospitality teams are turning to text messaging to conveniently communicate with customers, answer questions in real-time, delight their visitors with personalized service, and sell more wine as a result.

  In 2021, the best practices we observed for managing 2-way text conversations were:

•   Assigning Trained Staff responsible for each customer conversation.

•   Automated Away Messages that instantly reply to customer requests.

•   Deploying Mobile Apps so winery staff can message their customers wherever they are.

REACHING BABY BOOMERS WITH TEXT MESSAGING

  The wine industry has a Baby Boomer problem, according to some observers.

  The thinking goes that since “older, more affluent consumers drive the U.S. wine market,” today’s vintners are helplessly watching their best customers die off slowly. Perhaps that’s true for some.

But for U.S. wineries currently engaging their customers with text messaging, older consumers – Baby Boomers and Gen X – are driving record DTC sales.

  Why? The latest research on generational marketing (SendGrid, 2021) shows that email, text messaging, and social media are the top-3 business marketing channels for adult consumers of all ages.

While it’s true that older consumers as a group engage in email marketing more often than text messaging, the older your customers are, the more likely they’ll engage your brand using text messaging.

  It might not seem that way when consumers are challenged by technology in the tasting room. But not all Boomers are the same. So, your opportunity lies in reaching older consumers who enjoy text messaging.

  If your goal is to engage older customers and you already use email, SMS marketing is the next best thing you can do. Even better than social media, according to the latest research.

  And remember, you don’t need to convert many customers to SMS marketing to profit.

  Even if you only persuade 3% of your consumers to join your SMS list, you’ll still succeed in creating a new digital sales channel that generates as much revenue as the other 97% combined.

A RARE GIFT FOR SMALLER WINERIES

  Most of the time, the odds are stacked against small wineries.

  But for a brief moment in time, the power of SMS wine marketing is now available to help even the smallest wineries achieve DTC sales results that would make larger wineries jealous.

  With text messaging generating 32-times more customer engagement than email, growing a list of just 300 SMS contacts can outperform a list of 10,000 email addresses – giving small wineries a rare chance to outcompete larger vintners.

Think about it for a minute.

  Do your customers use their phones when they taste your wine? How hard would it be to print a simple QR code inviting wine tasters to join your SMS list?

  And as in-person wine tasting regains momentum, do you think you might be able to build a small text marketing list that doesn’t require any awkward conversations or deciphering poor handwriting?

  Then, congratulations! You’re ready to leapfrog the competition using SMS marketing.

  Across wineries of all sizes, the average email list of 10,000 names generates about the same DTC wine sales as 300 SMS subscribers. And with 1000 SMS subscribers, you’re going to need a bigger warehouse.

  While big businesses expend more and more resources squeezing the last remaining revenue from their old email lists, savvy wine marketers focusing on text marketing now can outperform vastly larger competitors by the end of summer.

And wait until the holiday season arrives…

If you start building your SMS wine marketing list now, you’ll have one of the most effective marketing tools any winery can use to maximize holiday sales.

  According to wine industry expert Lewis Perdue, the DTC sales boost driven by marketing messages delivered to mobile devices is particularly apparent during the holiday season. The research he shared shows “mobile and desktop about evenly divided for e-purchases, but that changes big-time with the upcoming holidays,” when online sales driven through mobile devices dwarfs the sales generated through desktop or tablet computers.

THE FUTURE OF TEXT MARKETING IN THE WINE INDUSTRY

  In the future, as text marketing continues to mature in the wine industry, benchmarks and best practices will surely mature too.

  Forward-thinking wineries are already experimenting with QR codes in tasting rooms to grow their text marketing lists, leveraging social media for SMS content, and creating new ways to serve customers with personalized 2-way text messaging.

  In 2022, innovation in the use of SMS messaging will give wine marketers even more tools to grow their text marketing lists, manage conversational sales, automate personalized text messages, and harness SMS messaging for B2B sales and employee communication.

  Even though wine marketing is one of history’s oldest professions, it’s finally moving at such a rapid pace we can all look forward to what the future holds.

THE BOTTOM LINE ON SMS WINE MARKETING

  SMS wine marketing is much like email marketing 20 years ago, with innovative vintners reporting outrageous results that were hard to believe at first but finally fueled the wine industry’s first wave of digital marketing success.

  In a world where 90% of online consumers want text messages from their favorite brands, but only 9% of U.S. wineries text their customers, this epic mismatch between consumer preference and industry practice spells nothing but opportunity for wineries focused on growth.

And unless you think text messaging is going away soon, the only choice you have to make is whether you let your competition profit from text messaging before you.

  With consumers hungry for brands that engage them with text messaging — and wine marketers hungry for continued success – we hope the benchmarks and best practices we’ve shared in this report can help any winery profit from SMS messaging in 2022.

ABOUT THE AUTHOR

  Founder & CEO of VinterActive, Bryan St. Amant, is a pioneer in developing preference-based direct marketing and its successful application in the wine industry. His advice has helped hundreds of wineries across the U.S. grow sales and customer satisfaction by leveraging the best practices of DTC wine marketing.

  St. Amant holds an MS from M.I.T. and a BS from U.C. Berkeley. His award-winning work has been featured in books, magazines, and seminars, including CFO Magazine, Inc., CNN Money, eMarketing Magazine, Integrated Direct Marketing, Direct Marketing Association, Wine Marketing Report, and the Wine Industry Network.

Luxury Brands Up Their Marketing Game

By: Susan DeMatei, Founder of WineGlass Marketing

Coco Chanel once said, “The best things in life are free. The second best are very expensive.” The mistress of iconic fashion couldn’t have stated it more succinctly. Luxury today, as it was in Coco’s time, is not essential but continues to be highly desirable and prestigious because of the quality, price, and prestige it confers on its consumers.

  However, when it comes to marketing, luxury brands are like any other brand. They market themselves to those who can afford to buy them and those who aspire to own something, anything, created by them. Like all brands, they battle for share of mind and wallet.

93% of Consumer Engagement with Luxury Brands Occurs on Instagram (Source: Digimind)

  COVID accelerated a trend already in the making – the economy saw a massive shift to eCommerce, and marketing shifted accordingly to digital platforms. Not surprisingly, luxury fashion, jewelry, cars, and retail brands were the first to commit to social media. They immediately recognized that absent the ability to go to a store, the stories and images shared in the new virtual market will make up the building blocks of a brand’s image and equity. And these touchpoints, albeit digital, make for real and tangible engagement, interest, loyalty, and connections with their audience online, particularly on Instagram.

The Face of Affluence Is Changing

  Affluent consumers are no longer just Baby Boomers and Generation X. Wealth is now multi-generational as large numbers of Millennials and Gen Z are prosperous and buy luxury goods. By 2025, Millennials and Gen Z will make up 50% of the total luxury market. Their spending habits will define and redefine what luxury goods and experiences will be in demand.

What We Do Know Is:

•   Quality, prestige, brand reputation, plus a brand’s social values will drive luxury purchase decisions.

•   They will look to social media, influencers, and reviews for confirmation of their brand choice.

•   They will expect to be able to find the luxury brand they choose online and on Instagram.

  As with any consumer audience, identifying demographics is only the first step. In their recent book “Luxury Wine Marketing: The Art and Science of Luxury Wine Branding,” Peter Yeung’s and Dr. Liz Thach’s research identifies four categories of luxury wine buyers: The aspirational buyer, the luxury buyer, the wine collector, and the wine geek. Each persona has its price points, brand loyalty, and trusted referral sources. A wine collector will listen to critics and other wine collectors, while celebrities and influencers might influence an aspirational buyer. Understanding your target and the segment(s) your wine resonates with is the key to success in this evolving landscape.

New School Marketing Tools for Old School Brands

  A recent Social Media Industry Report on Luxury Brands by NetBase Quid digests and synthesizes the kind of social interactions driving authentic engagement and brand passion and how luxury brands are capitalizing (or not) on these experiences to drive consumers to do business with them. The report is a deep dive into the detail of several luxury brand’s social presences. While not everything in the report applies to wine, what is apparent from the research is that digital advertising, social media engagement, search engine optimization, and influencer marketing are now a staple for what could be called “old school luxury brands” like Hermes, Chanel, Burberry, LV, Ferrari, Jaguar, Gucci, Chopard, Cartier, Neiman Marcus, and Harry Winston.

  So the next time you think that you’re too “unobtainable” to be on social media, luxury wines should take heed. The marketing tool kit has forever expanded to include digital channels, not by luxury brands themselves, but by today’s affluent consumers. The consumer desire to have access to everything right now and the desire to buy into luxury brands are successfully forcing luxury marketers to straddle the fine line of relevance and exclusivity.

  Susan DeMatei is the founder of WineGlass Marketing, a full-service direct marketing firm working within the wine industry in Napa, California.  For more information please visit…www.wineglassmarketing.com   

Welcome to VJB Cellars:  Old World Tradition — New World Innovation

By: Nan McCreary

For Italian wine lovers, the dream vacation would undoubtedly include a trip to Italy, a land of charming little villages and 21 different wine regions. But when international travel is out of reach, the next best thing is a visit to VJB Cellars in Kenwood, California, where you can experience a taste of Italy in the heart of beautiful Sonoma Valley.

  “The vision of the founder, first-generation, Henry Belmonte, was to create a piazza like those in Italy,” said Lindsay McGorry, Vice President. “They wanted guests to feel like they had stepped into Italy when they walked through the gate to our property.”

  Indeed, the VJB Cellars exemplifies the best of an Italian piazza, a “town square” where people can dine, drink and enjoy each other’s company. The property features a Tuscan-style villa with a tasting room and a barrel room, a deli and marketplace that offers imported Italian goods and a chocolate-gelato shop specializing in hand-crafted artisan chocolates and a dozen flavors of locally-made gelato.

  The “little town within a little town” also has an outdoor kitchen that serves pizza, traditional sausage sandwiches and barbecued chicken and ribs. “We make many of our products in-house,” McGorry told The Grapevine Magazine. “For example, for our Margherita pizza, we make our own dough, sauce and mozzarella, and we grow our own basil. You can’t get any fresher than that.” 

  With stylish tables and chairs, guests can enjoy lunch with a bottle of wine in the outdoor open space or select from several tasting options led by the knowledgeable wine team. “It’s a lot of moving parts,” McGorry said. “You feel like you’ve actually come to Italy.

  The history of this delightful gem can be traced back to Bonito, Italy, where Henry’s parents, Vittorio and Maria Belmonte, have their roots. Vittorio first picked grapes from the family vineyard when he was eight years old. There he developed an appreciation of the local wine varietals and their characteristics. Maria Belmonte learned to cook authentic southern Italian recipes from her mother and grandmother as a young girl. When Vittorio and Maria settled in Kenwood in 1976, they opened a family restaurant that featured her native Italian dishes. After receiving accolades from industry critics and the local community, the family opened a larger restaurant, Caffe Portofino, in downtown Santa Rosa. There, Maria worked tirelessly as executive chef, and Vittorio—with their two sons, Henry and Victor—ran the front of the house. Again, the restaurant earned rave reviews.

  Henry and Victor, who grew up in the restaurant and continued to have a presence through high school and college, realized that they should be making their own wine to serve with their critically-acclaimed food. The brothers had their first harvest of Cabernet Sauvignon grapes in 1999, but before they could bottle that wine, tragedy struck: Victor died unexpectedly of a heart attack. To keep his memory alive—and his passion for wine—the family decided to plant a vineyard on their 12-acre property and open a tasting room. Henry created a label, VJB, named for Victor Joseph Belmonte, and the family began a new journey in the Sonoma Valley.

  The Belmonte’s sold Caffe Portofino in 2002 and, in 2003, opened a 900-square-foot tasting room with five wines and an espresso bar. The wines were Cabernet Sauvignon and Chardonnay because they were popular in California, and Italian varietals Barbera, Sangiovese and their flagship wine, a Cabernet Sauvignon-Sangiovese blend made in honor of Victor’s two favorite wines. They called the blend Dante, a name Victor had chosen for his yet-to-be first-born son. Today, nearly 20 years later, VJB Cellars still produces Dante.

  What started in a tiny tasting room quickly evolved into a dream for something more for the Belmonte family. “Sonoma County is a food mecca,” McGorry said, “so they decided to bring back Maria’s delicious cuisine. They wanted a place where people could gather and enjoy life’s milestones—not necessarily in the restaurant industry.” 

  In 2010 they broke ground on their current tasting room and marketplace and planted two acres of Montepulciano and Aglianico. In the summer of 2012, VJB Cellars celebrated its grand opening, introducing the public to a “taste of Italy” with authentic Italian foods, a growing list of Italian wines and true Italian hospitality. Their “little town within a little town” quickly became a go-to destination in the Sonoma Valley.

  In 2014 the Belmontes purchased nearby Wellington Cellars from father and son John and Peter Wellington, who had been operating the vineyard for over 20 years. “This was a fantastic transition from father to son to father to son,” McGorry said. “The Wellingtons knew the vineyard would be in good hands as a family operation.”

  The sale came with a full production facility and tasting room, plus 21 acres of vineyards planted with a focus on French varieties, including Marsanne, Roussanne, Malbec, Merlot, Cabernet Franc, Viognier and Bordeaux blends, as well as old-vine Zinfandel dating back to 1882. “The Old-Vine Zinfandels also include one dating to 1912 and another to 1924,” McGorry said. “These are a big draw for a lot of guests, who really enjoy sampling vineyards that are so old.”

  When the Belmonte’s purchased Wellington Cellars—minus the inventory—they rebranded the wines, changed the style and limited production to small-lot, hand-crafted wines produced almost exclusively from the 24-acre estate. They now make wines for both labels at the winery: Annual production for VJB Cellars is 10,000 cases, and for Wellington Cellars, it’s 3000 cases. Wines are sold exclusively direct-to-consumer and from the wine clubs.

  In 2020, the family acquired Kenwood Farms and Gardens, located across the street, which added 14 more acres to their vineyard holdings. The property includes a cottage, a barn with a bar and picturesque grounds with views of Sonoma County’s rolling vineyards. The space will enable the Belmonte family to host large events like weddings, retirement parties and corporate retreats.

  Today, VJB Cellars produces 19 different wines, all Italian varietals except for Cabernet Sauvignon and Chardonnay. “There’s a lot of Chardonnay, Cabernet, Pino Noir and Sauvignon Blanc up and down the valley, so we wanted to offer something different,” McGorry told The Grapevine Magazine. “Our wine list includes Aglianico, Negroamaro, Montepulciano Dolcetto and more, which gives guests an opportunity to come and learn something new.”

  Vittorio Belmonte serves as proprietor and supervises the vineyard management and winemaking teams. Maria is executive chef and director of the market, La Cucina and the Red Rooster Pizza Kitchen. She also hosts cooking classes. Henry, the “Big Parmesan,” oversees all aspects of the winery, ensuring that visitors have an opportunity to experience the Italian heritage and traditions of the Belmonte family.

  VJB Cellars refers to its wines as “Italian varieties with a California flair,” according to McGorry. “We make traditional Italian wines with the flavor profile you would find in Italy, yet with the fruit element that is typical of California.”

  From the beginning, the Belmontes have approached winemaking as a combination of old-world tradition and new-world innovation. “Vittorio grew up immersed in wine with his father and his uncle in the basement of their home,” McGorry said. “He learned the traditional flavors, and he wanted to keep those traditions alive. Yet he was not afraid to put his own spin on the wines.” 

  For example, McGorry explained that the flagship Dante wine is a traditional Super Tuscan Blend, with Cabernet Sauvignon and Sangiovese, but with the proportions reversed. While a Super Tuscan may usually be 85% Sangiovese and 15% Cabernet Sauvignon, the Dante is 85% Cabernet and 15% Sangiovese, making the wine unique to VJB Cellars.

  As the Belmonte’s look to the future, their only plans for growth are renovating the tasting room at Wellington Cellars and producing more wine there. While producing high-quality wines, the ultimate goal is to offer exceptional hospitality.

  “We’re in a land of a thousand wineries in Napa and Sonoma. There are other family-owned wineries, and there are others that produce Italian wines. But at both wineries, we make hospitality our top priority. We try to give people an unparalleled experience so that when they go home, they think about their visit and join the wine club because they want to be reminded of that experience. They come back again and again and bring friends because of how they were treated. In sharing their heritage, the Belmontes want people to come as visitors and leave as family.”

Wine Competitions: Are They for You?

By: Nan McCreary

Every year, hundreds of wine competitions are staged throughout the world. As the wine industry becomes more crowded, winning a medal—especially a gold or a Double Gold—can attract consumers and build brand recognition. But the option may not be for everyone. It’s up to the winery to decide whether entering these events should be part of your marketing strategy.

  Wine competitions run the gamut from enormous international shows to small local events that only feature wines from a specific region or appellation. Typically, wineries submit entries to various classes. The wines are judged by a diverse group of wine experts, who sit in panels of three to five people to taste and consider each wine. Judging is all blind, with the panel only knowing grape variety and class. Wines are evaluated on their own merits—color, clarity, aroma, taste, finish and overall quality—rather than as part of a ranking and, based on voting by the judges, are awarded a gold, silver or bronze medal, or perhaps no medal.

  The Decanter World Wine Awards, the world’s largest and most influential wine competition, defines a gold medal as “an outstanding and memorable wine within its category,” a silver as “a high-quality wine of excitement and personality within its category,” and a bronze as “a well-made and satisfying wine within its category.” Many competitions offer a Double Gold medal, where all members of the panel unanimously award the wine a gold rating. In most competitions, wines advance through a series of rounds: the initial medal round, semi-finals, and the super panel or “sweepstakes” round, where the overall winners are selected.

  Beyond these basics, each wine show varies in size, entry requirements and benefits. Here are three wine competitions that offer a broad range of what to expect when considering entering your wines.

The Decanter World Wine Awards

The Decanter World Wine Awards, founded in 2004, is the world’s biggest and most prestigious wine show. Organized by Decanter—the world’s leading wine media brand—the London-based competition is recognized by wine lovers globally for its world-class judging panels and a rigorous judging process. In the 2021 event held in June, entries set an all-time record of 18,094 wines from 56 countries. Wines were judged over the course of two weeks by more than 160 wine experts, including 44 Masters of Wine and 11 Master Sommeliers, evaluated in flights by country, region, color, grape, vintage and price point. Categorizing wines by price ensures wines are judged against their peers.

  As in all wine competitions, judging is blind, with the panel knowing nothing about the producers. Entry fees are $230 per entry plus a $21 surcharge per order, plus shipping fees. Wineries must provide four samples of each entry. According to DWWA, winning a medal is a “trusted mark of approval for buyers globally and has been proven to increase wine sales, secure distribution in new markets and improve brand awareness.”

Medal winners may purchase DWWA bottle stickers and receive promotion from Decanter through its global digital network, wine tastings, presence at major wine trade shows and exposure to leading retailers throughout the world. For more information, visit www.decanter.com

The San Francisco International Wine Competition

  The San Francisco International Wine Competition is America’s largest international wine competition. Founded in 1980, the three-day event is one of the oldest international competitions in the world. In 2019, there were 4,500 entries judged by 60 experienced and internationally recognized wine experts. Winners are awarded a gold, silver or bronze medal or a Double Gold. The cost per entry is $110, along with the submission of three 750 ml bottles of each entry. Winners receive a marketing toolkit that offers tips for building brand recognition, boosting customer acquisition and retention, and generating publicity and trade attention. Winners also have access to pre-printed bottle stickers; medallion artwork to use in print, internet and social media promotions; discounted point-of-sale promotional materials; and participation in tasting events that provide exposure to target markets. For more information, visit www.sfwinecomp.com

Houston Livestock Show and Rodeo: Rodeo Uncorked! International Wine Competition

  Now in its nineteenth year, Rodeo Uncorked! highlights wine production in agriculture. The event sets itself apart for two reasons: Judging is based on a double-blind procedure, and it is audited onsite by PricewaterhouseCoopers, ensuring the highest integrity. This year’s competition featured 2,862 entries from 17 countries, including 480 wineries from Texas and several hundred entries from this year’s featured region, Washington State.

  Judges for the three-day event include local, national and international representatives from the supplier, wholesale, retail and restaurant branches of the wine trade, as well as members of the press and a select group of knowledgeable local consumers. Winners of the top 13 awards receive custom, hand-tooled leather trophy saddles. Class and Reserve Class Champions are awarded custom belt buckles. All winners have access to high-resolution formats for point of sale materials, including digital medals for online and print marketing and printed bottle stickers.

  The cost to enter the competition is $60 per bottle for early bird entry, along with five bottles of wine per entry. After the show, winners of the top award have an opportunity to participate in three wine-related fundraising events for the Houston Livestock Show and Rodeo. They include Rodeo Uncorked! Roundup & Best Bites Competition, where 400-500 award-winning wines are served with gourmet foods from top Houston restaurants to over 5,000 attendees; the Champion Wine Auction & Dinner, rated by Wine Spectator Magazine as one of the top five wine auctions in the country; and Rodeo Uncorked! Champion Wine Garden, which offers winning wines for sale during the annual Rodeo in March. Every year, these events generate approximately $6 million charitable dollars to support Rodeo’s mission. For more information on the competition, visit www.rodeohouston.com/wine

What competitions should you enter?

  If brand building is key to your marketing strategy, look at each competition and consider the exposure you will receive as a participant or winner in the event. Also, look at the reliability of judging as a benchmark against your peers, access to digital marketing materials to promote your brand, options for participation in consumer events and cost of entries and bottles versus benefits offered by your entry.

  “The purpose of wine competitions is to advance the brand,” said Paul V. Bonarrigo, co-founder of Messina Hof Wine Cellars, Inc. in Bryan, Texas, and winner of thousands of medals in local, national and international competitions. “Many established wineries that sell out each year do not enter competitions.”

  While some wine competitions may promote an increase in wine sales for winners, that may not be true for all events. “Years ago, wine competitions were tied to retail promotion,” Bonarrigo told The Grapevine Magazine. “When Messina Hof Angel late harvest riesling won a gold medal at the Dallas Morning News, the next week we sold 700 cases to retail in Dallas. Due to the sheer number of competitions, there is very little impact on retail sales today.”

  Bonarrigo, who has entered six competitions per year for the past five years, claims his success comes from building brand recognition. “Today, medals help to reinforce your fan base and can help promote new varieties and new wines. The People’s Choice Competition in Grapevine is an outstanding consumer participation competition. We have consistently won best of class in 75 to 100% of our entries. It has helped us secure a very loyal fan base in Dallas/Ft. Worth and especially in Grapevine.”

  Bonarrigo said he enters some shows simply because he supports and believes in the cause. “A great example,” he said, “is the Houston Livestock Show and Rodeo. Merrill (Bonariggo’s wife and co-founder) and I helped launch the competition.

  “We have won seven saddles—six for Best Texas Winery and one for Top Overall Winery. The Rodeo does a great job promoting the winners with a Grand Tasting and a Wine Auction. Messina Hof holds the record for the highest price paid for a Texas wine at the auction. Our Tawny Port fetched $105,000.”

Sponsorship

For the sponsors of wine competitions, the goal is to market their event to wineries. Jennifer Lindsay, director of the Rodeo Houston Wine Show, said, “We work with local distributors through our winery relations committee to reach out to their suppliers and encourage them to enter. We also offer incentives, such as exposure through the Roundup & Best Bites Competition, the Champion Wine Auction & Dinner and the Champion Wine Garden, ‘the biggest bar in Texas.’”

  Rodeo Uncorked! awards also generate interest in the event. “Our top awards are very unique,” Lindsay told The Grapevine Magazine. “When people see the saddles and buckles in tasting rooms around the world, the word gets around and helps grow our competition internationally.”

  In the world of wine competitions, there is something for everyone. Besides national, international, regional and local shows, wineries can enter competitions that feature women winemakers or specific typologies or varieties. There’s even a competition that judges wines alongside other wines in their particular terroir—the Grand Harvest Awards in California. New classes are continually added: canned and flavored wines, saké and even CBT-infused wines are making their way into wine shows. Whatever your interest, there may be a competition for you.

Preparing for the Exit: Why Winery Owners Need to Develop a Harvest Strategy

By: Edward Webb, Partner, BPM & Kemp Moyer, Partner, BPM

Successfully running a business means overcoming numerous challenges. Owners need to scale the business, find competent employees, deal with regulatory issues like taxes and licenses, and create processes and systems — all while developing a robust customer base and go-to market strategy. For agribusinesses, owners have all these challenges plus whatever Mother Nature decides to throw at them. For California’s wine industry, this includes increasingly unpredictable variables such as drought, flooding, landslide, excessive heat, cold snaps, pests, and the growing risk of wildfires and damage from smoke taint.

  Despite these challenges, several successful business models predominate in California’s wine sector. There are fully integrated vintners that grow their own grapes, ferment them into wine, bottle them, and sell and market the finished product. Some winemakers do not own vineyards and, instead, purchase grapes from various growers before bottling and going to market. Finally, there are virtual wineries that buy completed wine and sell it under a brand name. Each models bring its own unique challenges and opportunities.

  While a few large producers dominate the state’s wine sector, most businesses are family-owned and operated. This can lead to a new and significant challenge: What happens when the owner wants to retire and either hand over or sell the business? When you include a force like a once-in-a-century pandemic, you can understand why many baby boomers — about 10,000 of whom turn 65 every single day — might be looking at an exit strategy right now. But, as you might imagine, exits can be more complicated than just a simple sale when a family is involved.

Planning is Essential

  First and foremost, an owner should start planning a “harvest strategy” well before they are ready to pull the trigger. To paraphrase Benjamin Franklin, failing to prepare is preparing to fail. A harvest strategy is a much more detailed plan than a “kitchen table” document.  It goes into great detail on the owner’s goals when they will exit the businesses. It tells the financial and operating story that the next owners need to know. It does not hurt that after more than a decade of quantitative easing, historically low-interest rates and a multi-trillion dollar government spending plan, there is plenty of cash in the system fueling record M&A activity.

  There are various factors that need to be considered in a well-constructed harvest strategy, and it is essential that these succession plans are communicated to all stakeholders, both in the family and with the company’s vital employees or managers. Talking things through will illuminate potential pitfalls, such as the owner’s children not wanting to continue with the business or being unprepared to take on potentially substantial operational challenges. Key employees might want to purchase the operation or refuse to continue working with a new owner. Understanding these dynamics will help when it is time to put the plan in motion and limit any unpleasant surprises. Planning ahead may also allow time to employ tax mitigation strategies.

  The harvest strategy provides detailed instructions on how the business is managed, including all the different procedures and systems used in the business. This document becomes increasingly vital as owners age because of life’s unpredictable nature. An owner could become incapacitated or worse, and the company might not survive without their critical knowledge. Owners should revisit the harvest strategy frequently for updates. Plans made today could be vastly different in five or ten years.

Understanding Value

  Regardless of what an owner chooses — either handing over the business to their children or selling it to someone else — any transaction requires the company to have a fair market valuation. Federal and state tax authorities will demand it, so selling the business to family for a dollar will not work. This valuation will look at all aspects of the company to determine its worth, including its financial performance, assets, inventory, real estate holdings and even the brand’s value. Qualified appraisers are the professionals that will undertake this task and will use different techniques and methods for the equity and/or underlying assets. Sellers should note that having a valuation supported by a third party can help minimize pitfalls during deals, like overvaluing an asset, which can cause potential buyers to walk away or not engage in negotiations.

  Appraisers can use a few different methods to calculate the value of the company’s real estate holdings. However, putting a price on a business is more nuanced than selling a single-family home. A typical technique would be to look at comparable sales of similar properties in that area and base the valuation on the transaction price. This method would take things like the size of the property into account, but not necessarily the cash flow potential of operations, including the production of grapevines.

  The value of the land and the grapevines depend on several factors, ranging from the variety of the plant, age of the vineyard, plant density, production per acre, and the presence of pests like vine mealybugs (VMB) and Virginia Creeper Leafhoppers or diseases like Grapevine Leaf Roll. Other improvements to the land will affect its price, including trellis systems, irrigation and frost protection systems. An appraiser might estimate the fair market value for this asset by calculating how much revenue the land generates based on projected demand, grape price trends, and the yield the land produces. A discounted cash-flow analysis could also be used to factor in variables like projected cash flows, industry cycles and general economic trends. Of course, an appraiser could use a combination of all these methods to determine the asset’s value.

Brand Awareness

  One asset that could be harder to put a value on is the company’s brand. It is an intangible that could be worth more than all of the physical property and inventory of the company. There are three methods to determine a brand’s value, and they are sometimes used together.

•    The first is to calculate the replacement cost of the brand. Basically, this involves formulating how much time and money it would take to re-create the brand from scratch, which are divided into three subsections:

      Brand Identity: Covers all items used to create and develop the brand’s identity, including the name, designing the logo, novel bottle designs, trademark and legal fees, websites and choosing a color palette.

      Brand Awareness: The cost of advertising, promotion and publicity campaigns for the brand to achieve its current level of market awareness.

      Market Position: This is the cost of retaining the business’s current clientele and includes advertising, discounting with distributors, and building relationships with retailers.

•    The second is comparable pricing. This method requires researching the sale of similar brands and using that as the foundation for a valuation. This can be a challenge if there are little or no sales of similar assets.

•    The third and final method is an income-based approach, also known as an “in-use” approach. This involves calculating the future earnings that can be directly tied to the brand to determine its value. The formula looks at everything from income to cash flow to cost savings generated from the brand.

Sell High

  If a winery owner’s family is not interested in maintaining the business, selling is the other option. The sale could be to an industry peer, a current employee, a high-net-worth individual or even a private equity fund. However, certain factors go into the sale and the final price beyond the valuation process discussed earlier.

  Any potential buyer is looking for the ability to generate future cash flow. Operating a winery takes leadership with specialized education and experience. This knowledge includes how to grow and harvest grapes, the manufacturing process, as well as storage of the wine. If the sale is to anyone but an industry peer or employee, this can hobble a deal or result in a lower sales price. As mentioned earlier, having a detailed manual on how to operate the business can help reduce transition issues that may impact price, but locking down an expert to assist with a sale can be essential to getting the maximum return in a sale.

Distressed Resolutions

  All the information above is based on the orderly sale or transfer of the business at a fair market value. That means there is a willing seller and a willing buyer. However, the price could be much lower in a scenario where the owner is forced to sell or liquidate, either through bankruptcy, the sudden death of key people, or litigation. In these situations, engaging an experienced restructuring professional is essential.  Navigating a distressed situation is difficult, doubly so when the business is yours.

  There are multiple variables for owners to consider and plan for as they create their harvest strategy. Being prepared for this transition will help them avoid costly mistakes or address issues early enough in the process to make them non-factors. This planning is essential to maximizing the value of their business. Owners contemplating making this transition would be wise to start the process and create their harvest strategy today.

Edward Webb has over 35 years of experience in consulting and financial management, including specific experience in business restructuring and leadership advisory services. Edward has a Doctorate in Business Administration and currently leads the Corporate Finance Consulting group at BPM, one of the 50 largest public accounting and advisory firms in the country, where he sits on the firm’s Management Committee.

With more than 15 years of experience in complex financial advisory, and a primary focus on valuation services, Kemp Moyer has led hundreds of business and asset valuations in his career with substantial industry experience in technology, life science, professional services, food and beverage, digital assets, manufacturing, and consumer business, among others. A partner in BPM’s Advisory practice and head of the firm’s Valuation team, Kemp’s valuation experience includes M&A and IPO preparation and support, fairness and solvency opinions, and litigation support and dispute resolution, among other high impact analyses.