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.

Why Your Winery’s Failure to Plan is Planning to Fail

By: Quinton Jay

When it comes to creating a roadmap for your winery’s success, it can feel daunting to generate one that is both flexible and remains in line with your winery’s goals as a business. If it’s too flexible, then it will be difficult to keep your planning strategy aligned to your internal initiatives; if not flexible enough, your plan can break apart the first time you encounter an unexpected hurdle.

  The landscape of wineries, and wine as a business, is far different than that of five or ten years ago. Because virtually every piece of the value chain has changed — from distributors and retailers/restaurateurs to consumers and capital providers — new strategies, partnerships, and resources are necessary to ensure your winery’s continued success.

  Each piece of this chain has a unique impact on your winery’s business and its future as a brand. In order to not only survive but thrive amidst these changes and others affecting the wine industry, it is paramount that each winery formulates and implements a multi-faceted plan of success to help carry its business forward into the future. As founding father Benjamin Franklin once said, “a failure to plan is planning to fail.” However, like most aspects of operating a business, creating and enacting a successful roadmap is far easier said than done.

Image Credit: Harvard Business Review

For the past 20 years, I have managed, consulted for, and invested in dozens of wineries and other businesses in the wine industry. Each one of those businesses, regardless of size, location, or consumer market all share one commonality: the most successful ones were those that possessed the foresight to plan for both the best and worst-case scenarios. In order to help you create a solid plan for your winery or wine business, I want to help offer some key steps to get you started.

Step #1: Gather the Facts

  Whatever your business plan will look like, you need to have a clear picture of what your aspirations and goals are for it. The obvious caveat here is that, to do this successfully, you will need to envision what you want your business to look like in the future. Do you simply want to be your own boss or create an environment that is a fun and enjoyable place to work? Do you want to grow your winery into one boasting 1,000,000 cases with wine sold throughout retail chains, or do you want to grow it into one with 5,000 cases with a focus on direct-to-consumer sales?

  Whatever your specific case may be, the first thing you need to do when forming your business’s plan is to gather the facts. This starts by analyzing your business’s segmentation, targeting, and positioning in the marketplace. Segmentation, or the process of grouping customers within a market according to similar needs, characteristics, or behaviors, will provide four key benefits to your business:

●   Opportunities for building and strengthening long-term relationships with key customers and partners;

●   Improved marketing efficiency and effectiveness;

●   A better understanding of the competitive landscape, and;

●   Faster responses to the changing needs of your customers

  Once you have the facts of these segments gathered, the next set of facts you need to acquire are those acquired through consumer market research. By gathering information and trends on your wine business’s target market — including who they are, their likes and dislikes, and whether those markets are growing, declining, or remaining steady — you can better understand their wine consumption statistics, trends by price points, as well as the various demographic and geographic trends of that market.

  After these facts have been answered and gathered, you will have a far clearer picture of your winery’s competitive niche, be it through a specific product (or set of products) or as a brand. From there, begin researching competitors with similar niche offerings. Who are they? What are their price points and pricing strategies? Is their business growing, declining, or remaining steady? What are their strengths and weaknesses, and how will your business compare to theirs?

  Lastly, you will need to gather facts about your market’s current conditions. For example, take a look at your distribution channels to see which ones are consolidating or undergoing management changes. Another example of this is to find out whether your target consumer market is purchasing more wine at restaurants, retail stores, or online. Along with external conditions such as changes in shipping laws or current economic fluctuations, each of these fact sets will play a heavy role in determining what your winery’s business plan will look like.

Step #2: Analyze, Synthesize, and Develop Strategic Initiatives

  After you have accumulated the different sets of factual data affecting your winery or wine business, the next step in formulating your business plan is to synthesize these facts with the strategic initiatives you develop that will affect your business’s marketing, sales, and finances as an operating brand.

Marketing Plan

  As a brand, your winery can be defined as the relationship between your business and its consumers. It is a promise to the consumer to deliver a particular experience each and every time. This is what makes the key element of successfully marketing your business dependent on understanding your customers, including their likes, dislikes, and expectations.

  By defining and analyzing your target market(s), you will be better poised to integrate your gathered facts into your marketing plan. You will also need a clear understanding of what your business’s goals are as an organization, which is where your consumer market research — as well as your competitive data set — comes back into play.

Sales Plan

  Once you know what your business’s market is and who it consists of, you can then begin constructing a sales plan to forecast future sales, revenues, and prices. This plan will also let you identify gaps in your supply chain such as those in your distribution network, forecast additional human resources necessary to make the sales you’ve forecasted, and evaluate opportunities for direct-to-consumer (D2C) sales, and the costs of goods sold (COGS).

Production/Winemaking Plan

  Though it may seem obvious, one integral part of a winery’s plan that often gets overshadowed is its production sales inventory (PSI) model. The PSI model allows you to forecast production and the tons of grapes needed to produce each case of wine made, as well as highlight vintage overages or shortages in sales and changes in release dates. Your PSI should also include a plan for sourcing grapes or bulk wine, as you will need to forecast the number of needed (and excess) tons of grapes both by vintage and product, and will help your business determine strategies in dealing with needs or excess of product.

  Overall, your production plan’s purpose will act as a precursor to your financial plan, as it will grant you the ability to analyze internal capacity and forecast the following factors:

●    Crush, production, and dry goods expenses;

●    Barrel needs;

●    Bottling costs, and;

●    Capital expenditures

  In order to create the clearest picture of these possible, you will need to gather historical data and information on your business. This historical data will likewise play a key role in forming your business’s financial plan.

Financial Plan

  When gathering and analyzing your business’s historical data, you will want to consider factors such as your historical crush and production expenses which include your COGS. Keep in mind that salaries, benefits, supplies, repairs/maintenance, utilities and rent, as well as depreciation all play a part in calculating your COGS. Along with this, your business’s packaging, bottling, and warehousing costs will also factor into your COGS value.

  Now that you have a clearer picture of your business’s COGS, as well as its sales and marketing plan, you can get started on formulating your financial plan. This will help you summarize your gross revenue, price support, EBITDA (operating profit), and net income, as well as craft stronger balance sheets and cash flow statements to better understand your business’s profitability by its products sold.

  Along with these factors, your financial plan will also need to include an income statement to show your business’s operational performance over time, a breakeven statement to show the volume of revenue from sales to balance the sum of its expenses, and a product profitability statement to compare your revenues COGS, and gross profit per case to ultimately determine which products are generating the most profit for your business.

  Each one of these individual plans is meant to help form concise and easily understood strategic initiatives for your winery or wine business. Together, they act as the foundation for creating and implementing those initiatives, as well as helping to determine which initiatives are meant for short-term or long-term business growth.

Image Credit: Bacchus Consulting Group

Step #3: Aggregate Into the Business Plan

  Still with me here? Great — now that we’ve covered each crucial element to your winery’s plan, the next step is to outline that plan in a way that is easily digestible for you, your core team, your partners, and/or investors. As an example, a general outline for your business plan will appear as follows:

I.      Executive Summary

II.    Business Description

III.   Marketing Plan

IV.   Sales Plan

V.     Winemaking/Vineyard Operations Plan

VI.   Management and Organization

VII.  Finances

VIII. Appendixes

  Incorporating all functional plans of your winery or wine business into one unified document is where the results of each prior phase gets pulled together. This business plan will serve as the guiding document for your business’s entire organization, as it coordinates each sub-plan together to prepare them for execution.

  When aggregating each sub-plan into your unified business plan, remember to collectively review your business’s strategic initiatives and incorporate them into the business plan according to each initiative’s specific function to ensure that your business’s structure — including its capital structure and financing — are geared for long-term growth and success.

Step #4: Develop Tactics and the Operating Plan

  The last key step in forming a solid plan for your winery or wine business is to develop tactics and its operating plan. Though similar to a business plan, your operating plan is less an outline for your business as you envision it in the future and more a roadmap for how you will get it there.

  As a rule of thumb, the tactics you create for your business must include (and clearly answer) the following criteria:

●   What will be done?

●   When will it be done?

●   Who will get it done?

●   How do these tactics define our success and how that success will be measured?

  This is the point in planning where your key performance indicators (KPIs), otherwise known as the metrics used to measure your business’s success internally, become a vital element of your business’s future success or failure. If you haven’t already created KPIs use the SMART method:

●   S: Specific

●   M: Measurable

●   A: Actionable

●   R: Realistic

●   T: Time-bound

  Each metric used to measure your business’s success should contain a logical sequence of tasks, goals, and milestones, and should take into account your possession of the right resources and relationships to carry your organization forward through periods of growth.

  With these final elements outlined, you can now incorporate all of your strategic initiatives and tactics into one final plan: your operating plan. This plan will serve as your business’s roadmap and a working document for each strategic initiative, and must also contain each actionable tactic listed as a supporting factor to those initiatives which will help you achieve your goals.

Concluding Thoughts

  There is no single business or operating plan that universally supports each winery or wine business operating today. In order to create the clearest and strongest plans possible, it is your responsibility as a business founder or owner to understand your business inside and out. Once you do, you will be better positioned to formulate and integrate a plan that serves your unique business and its goals for continued success and future growth.

Software for Wineries: High-Tech Launches Wineries to New Heights in Productivity

By: Cheryl Gray

Wineries worldwide use technology to their advantage when it comes to saving one of their most important assets––time. The right software applications simplify collecting, sorting and maximizing data. The type of software to use often comes down to the winery’s size, its specific needs and finding the best return on investment.

VinNOW

  Wineries with small budgets but big plans can turn to VinNow of Mesa, Arizona. The company was founded in 1999 by software engineer Ted Starr. VinNOW is designed to operate in either a single, stand-alone computer environment or a network of multi-POS operations and multiple locations.

  “VinNOW runs securely on your computer, not in the cloud. This ensures that if you lose your internet, you still have access to all your data and can still make sales. Having the program and your data on your local network also allows for better data security and gives you the peace of mind that you can do your business no matter what,” said Starr. 

“VinNOW is one program, using one database, that stays in your local system’s control. This is the advantage of having been created by winery owners: Knowing the winery environment and challenges.”

  With 40 years of industry experience, Starr and his team have poured their expertise into developing a versatile software program to suit wineries of any size. Starr added that customer support comes from a team knowledgeable in both software engineering and what wineries need to maximize production. 

  “VinNOW is comprised of professionals with many years of experience in both computer technology and the wine industry. Our expert team is intimately familiar with a winery’s needs and has the technical knowledge to offer and support our specialized integrated system for winery management. VinNOW was created by winery owners who are also software developers and have decades of hands-on winery experience. VinNOW offers a personalized and specialized approach that is dedicated to, and in touch with, the business needs of a winery,” Starr told The Grapevine Magazine.

  “VinNOW is dedicated to providing a quality, comprehensive software application specifically engineered to meet the needs of the wine industry. We provide personalized live customer service and support and pride ourselves in remaining a hands-on, efficient company. This means that when you contact us, you will be dealing with someone who understands your needs and can directly and personally handle any question.

  “With VinNOW, you don’t just receive a software package. You enter a relationship with a software company that has been in the wine business for over 22 years and is directly interested in the health and prosperity of wineries. Should you need us, our support team is available seven days a week to assist you with VinNOW. Our VinNOW support team is always eager to answer your questions and assist you with what you want to accomplish.”

  VinNOW, Starr said, is a fully integrated software system that is ideal for managing inventory, customer data, purchase records, tasting room and internet sales. The software program also manages email marketing and wine clubs with automatic credit card processing. For shipping needs, VinNOW generates UPS, FedEx and GLS shipping labels. VinNOW also allows wineries to track those shipments. It integrates with other software programs such as QuickBooks, Vertical Response, Constant Contact, VinoShipper and ShipCompliant. It also can export information to other email systems.   

  Another innovation from VinNow is VinTracker, a bulk wine tracking module. Starr says that VinTracker allows wineries to track products, everything from what wine is in which containers to what work has been performed on-site.

  Starr said that VinNow allows its winery clients to provide customers with targeted messaging rather than generic correspondence, which is vital to keeping and expanding a winery’s client roster. COVID-19 made this function a critically important tool. 

  “One of the challenges wineries have in a COVID-19 environment is keeping in touch with their customers in order to maintain and keep interest in that business relationship. VinNOW excels at data reporting and allowing a winery to target market instead of having to send the same generic message to everyone,” said Starr. “With VinNOW, wineries can create lists for an almost unlimited set of data points. For instance, you have the ability to create a list of people who have purchased above a certain dollar level, a specific varietal, has purchased futures in the past or are just on an interest list or in a specific range of zip codes. 

  “You can then refine your search to target market customers such as those associated or never associated with a wine club, or even inactive wine club members. Any data element that VinNOW captures can be used to create a specific marketing list to meet your needs.”

Dimensional Insight

  Helping wineries keep in touch with their customers is also a focus of Dimensional Insight, in business since 1989. Headquartered in Burlington, Massachusetts, Dimensional Insight is an analytics and data management firm specializing in integrating data from different sources and displaying the information wineries need in whatever way they need to see it. The company’s trademark Diver Gateway product allows access to data on any device. Its applications are specific to the wine industry for both wineries and distributors. Nancy Berkowitz serves as Industry Vice President.

  “Users of our software have the flexibility to do self-service reporting and analytics while ‘diving to the lowest detail’ from dynamic dashboards and scorecards. As a result, they are able to get unprecedented insight into the state of their business, and can make better, more informed decisions that help drive increased sales, bottom lines and customer satisfaction,” said Berkowitz.

  With COVID-19 mandates changing the wine industry, not to mention overall industry-driven shifts, wineries have to focus and pivot quickly. Berkowitz told The Grapevine Magazine that Dimensional Insight can help them do just that for data management and analysis.

  “In this economic climate, where there are fundamental shifts in how people are buying products and what they’re buying, it’s most important for wineries to look at not only the bottom line but also any associated numbers. What is changing? Are these short-term changes or long-term changes? To best assess this, wineries need to look at their outlier data to see what the causes for these changes are and determine how to handle them,” Berkowitz said.

  “It can be hard to pinpoint some of this data when you have huge data sets that pull together many diverse sources. That’s why we have an assisted analytics tool that uses AI to proactively look for these outliers or different data points and helps bring these issues forward for analysts. Wineries should make sure they look at not only sales and pricing data but also all data affecting the changes––operations, marketing, finance, economics and more. Then they can focus on short-term and long-term bottom-line goals based on what they discover.”

  Dimensional Insights also offers its winery and distributor clients other unique options and partnerships to expand their businesses.  

  “We also collect daily invoice level data from distributors for wineries through our BeverageLink division. Dimensional Insight has partnerships with the NielsenIQ as part of the Nielsen Connected Partners program and the National Alcohol Beverage Control Association for data relating to sales, pricing and more.” 

  Berkowitz said that Dimensional Insight looks to the future of winery software to increase its use of artificial intelligence and cloud services because of the large amount of data to be handled. 

  “Artificial intelligence is a focus for software and technology. This must be taken for what it is and must truly be understood by the wineries. Not just the results, but why those are the results of the AI software. Otherwise, the results can’t be trusted. Wineries are moving to the cloud for better service and lower costs. We offer the Dimensional Insight cloud for this purpose. All in all, we see technology continuing to move toward better data integration so wineries can capitalize on the data available such as eCommerce and more.” 

Innovint

  Napa Valley’s InnoVint, founded by Ashley Leonard in 2013, combines the expertise of winemakers and Silicon Valley software engineers with a focus on providing winery clients with mobile, flexible and intuitive winery management software designed to save time and streamline the production process. InnoVint is 100% cloud-based, which means that wineries can access the software wherever they are on any device. The company touts ease of use, saying that small wineries can use the applications in less than an hour. InnoVint offers training and an online support center.

  Experts agree that winery software will continue to be a critical tool for successfully expanding a winery business by keeping a connection with the most crucial element of that success—customers.

Is Your Wine Club Keeping Up With Modern Subscription Models?

By: Gaynor Strachan Chun

If COVID taught us nothing, it is that re-occurring sales are key to survival, and that customers are surprisingly resilient and creative with changes in channel or delivery methods. The post-COVID conversations around alcohol distribution include the so-called “fourth tier” of instantaneous delivery (Instacart), and online options like buy online now and pick up in store later (BOPUIS).

  At the same time as these channels evolve, the elasticity of the traditional Wine Club is stretched as well. It is now estimated that the average person is a member of two re-occurring subscriptions and 35% belong to three or more. 

  Why are we moving so swiftly into a subscription economy? For wine, it’s a perfect storm of three factors.

1. Our culture of consumerism is changing. The mindless and haphazard consumerism of old is giving way to thoughtful and curated purchases where the brand and its products add value to our lives. This significant change in consumer thinking and behavior has fueled, among other things, the rocketing growth of subscription models. Subscriptions meet the needs of concerns such as waste reduction and finding quality time with family. And, wine clubs need to catch up to remain relevant, resonant and competitive.

2. We’re curious. The primary consumers for subscriptions are young urbanites, 25-44 years old. What they have in common is a sense of discovery. They want to try new things and like being presented with options. Most subscriptions offer monthly mystery boxes, surprises, or trial sizes, giving customers a new product to try. This brings an additional level of excitement to the unboxing experience and gets consumers to expand their product knowledge and preferences.

3. We don’t value “saving” like our parents did.Our parents wanted the lowest price so they could show off the best quality brand they could afford. The new consumer is interested in saving time. The financial incentive is there, but you can’t just give a small discount to this group and expect to call it a day on your benefits alone.

  Only a few years ago, the model was simple. You joined a club to gain exclusive access to products and VIP perks. These membership clubs were found in categories such as luxury apparel, food and wine.

  However, with the onslaught of COVID, the dramatic increase in E-commerce, digitally native brands, and the growing influence of the Millennial mind-set and their expectations as consumers, the world of “clubs” has evolved. The consumer has moved on. Have you?

3 Subscription Models Have Emerged

  A McKinsey Report lays out the current state of subscription models very clearly. What jumps out is that the traditional model of Subscribe for Access has been usurped by the newer models of Subscribe for Replenishment and Subscribe for Curation. And, while Subscribe for Replenishment accounts for a healthy one third of subscriptions, it is not a relevant category for wine clubs given its focus on essential household, wellness and grooming products. Which leaves the wine industry needing to evolve the traditional wine club model, beyond offering a choice here or there, to compete within Subscribe for Curation.

  What does this mean? Successful Subscribe for Curation offerings have the following imperatives as the foundation of the subscription offered:

•   Move from a focus on transactions to long-term relationships.

•   Shift from acquisition focus to retention.

•   Shift from selling products to selling experiences

•   High levels of personalization, flexibility and surprises.

•   A highly anticipated unboxing experience.

•   Impeccable customer service.

  In other words, focusing on delivering a great experience that puts the consumer in charge of what they order and keeps them coming back for more by including gifts, exclusive content, and other surprises.

Attracting New Subscribers and Keeping Them

  Wineries traditionally relied on converting their tasting room visitors to club members. However, attracting members who will never visit your tasting room is an increasingly important consideration in any conversation around future revenue growth. We all know a subscription model is good for business – it delivers increased and predictable revenue, contributes to savings in customer acquisition spending, increases loyalty and lifetime value, and can reduce operational costs due to predictable demand. Therefore, understanding the triggers that cause a potential subscriber to sign-up and those that cause them to cancel is a critical component when evolving your current club model to a subscribe for curation model.

  The initiation triggers point to consumers’ desire to discover new things and especially, new things someone else recommends. A strong social media presence and refer a friend incentives are key to this discovery process. Cancellation triggers hinge on the experience – either the overall experience or the perceived value for money vis-à-vis the experience. Given the need to elongate subscription lifetime values, every step of the experience offered needs to be executed at the highest level. Consumers not only expect it, but they also know what a great experience feels like. After all, the average consumer now has somewhere between 3 and 10 subscriptions (excluding media and entertainment.

Less is More

  There is a reason most companies only offer 3 levels of subscription. Our brains think in threes. More choices are not better. They can cause confusion, delay the decision, or result in the potential member walking away.

  Rather than thinking about the subscription levels from your product line-up perspective, structure the levels from the consumer’s perspective – I want you to curate this for me, I want the option to add from a defined list, I want to make all the choices for myself. This will help reduce the number of levels and increase conversion.

Looking Ahead

“The measure of intelligence is the ability to change”

-Albert Einstein

  There’s never been a greater time than now to be open to evolving our business models.  Changes in demographics and consumer trends have been coming for years and wineries who aren’t willing to look at adapting their Wine Club programs leave themselves open to becoming less relevant with consumers as the attitudes and behaviors continue to evolve.   Gaynor Strachan Chun is the Director of Strategy at WineGlass Marketing, a full-service direct marketing firm working within the wine industry in Napa, California.www.wineglassmarketing.com.

Holiday Email Best Practices

By: Susan DeMatei, President of WineGlass Marketing

If you’re like most, you have a holiday calendar crammed full of events, sales, shipments, and recipes ready to communicate to your mailing list. Email marketing is a staple among wineries trying to communicate to wine clubs, provide holiday offers and reach new customers. Follow some of these tips below to make sure your holiday sales are bright.

There are three major influences on the success of an email campaign. From most important to least, they are List, Offer, and Creative.

List: Take some time each year in September and October to perform some basic data hygiene. An intern or consultant can help you here with a well-organized couple-week project.

• Clean up duplicates and merge duplicate records from the tasting room, wine club, website, MailChimp, or other (sales_email_marketing) databases. When doing so, carefully identify the correct master record and fold all the visit history, source, and transactional data under that master customer record.

• Append data with addresses, emails, and phone numbers.  There are several resources to do this simply through excel for pennies a record.

• Remove bounces and anyone who has opted out of any communications over the course of the year.

• Add in any stray lists – like that tasting you did at the event in Vegas in July or the Winemaker’s alma matter list that wants to hear about his wines. And make sure you notate a source on all lists so you can refer back to see what programs procured good, qualified leads.

• Once you have a clean list, then take some time and segment and the time your communications thoughtfully – don’t just send every offer and update to everyone. Perhaps the October Wine Club should not get the Thanksgiving sales to email so close to their Club Shipment email alerts, but instead a printed insert in their club shipment.  If you have the transactional data, you’ll want to target email-marketing messages based on behaviors such as past purchases, tasting note downloads, visits to the winery, links clicked, or other captured actions.

Offer: Only after you’re happy with your lists should you focus on the offer.  Based on your steps above, now consider what sales message will incite the best response to your segmented list?

• What did they respond to in the past? Did you have any past learnings to guide you on what resonated, or failed, previously? If not, perhaps your database is big enough to split and test. For instance, if you suspect that shipping offers will be popular this season, should you give a % off shipping, shipping included, or shipping for $1? And at what volume: 6 bottles? A case? These are things you can test with an email and then do a follow-up email to the entire database of the winner

• What are your goals? What wines do you need to move, and what costs or discounts are appropriate for your other channels? Make sure the wine you just sent to the Wine Club at 20% off isn’t in a holiday sale email a week earlier for 25% off. (A calendar is beneficial this time of year to keep the tasting room, website team, social media, and emails all in synch.)

• Use tracking tools and analytics to determine which emails and corresponding landing pages are the most successful in generating sales.

• Know (or set) Click-Through and Open Rate goals. According to the 2020 WGM Wine Industry Email Benchmark Study (which you can download on our website), email Open Rates for wineries average 24.66%, and Click-Through Rates for wineries average 5.08%.

Creative: The design of your email is essential. There are two reasons email design should follow specific layout rules. First, as of August 2021, mobile phones account for 41.6% of email opens (Litmus). Second, most email service providers, such as Outlook and Gmail, now block images by default. If your graphics contain text including important information, such as the offer or wine details, make sure you repeat the information in the text.

•  Email marketing is just another branding opportunity. Place your logo in the upper left-hand corner or centered as a header of the email.

•  Include navigation like on your website. You don’t have to have every page from your site, but the significant sections help customers engage with you online and create familiarity with your website.

•  Make sure your email is no more than 500-650 pixels wide. Any more than that means your reader will be scrolling horizontally.

•  Keep text to less than 250 words and have frequent links to deeper levels of content or more information on your website.

•  Keep it clutter-free. The less clutter you have in your email, the better. Don’t use more than two typefaces.

•  Keep your main message and call to action (CTA) at the top of the email. It’s ok to scroll in an email and have it laid out vertically but keep your primary message upfront.

•  Create an engaging, concise subject line. A relevant offer that creates a sense of urgency will be your best bet. Your subject line needs to have an incentive for your audience to open the email.

•  While your site may have a lot going on, your email message should be singular in focus. Make sure the message and the requested action are clear. Instead of splitting up readers’ attention, focus on driving home a single-minded message.

•  The landing pages that prospects reach after clicking through are just as important as the initial email. Your landing page should match the email in terms of headline, copy, and content. Use similar colors, fonts, and overall design to keep your customer on the right track and avoid confusion.

•  Make sure your CTA from the email has a connection to the CTA on your landing page. Again, keep the call to action above the fold and relevant to your marketing message.

  Having an effective email marketing campaign is about being intelligent and concise. Focus on the list first, differentiate yourself with targeted segmentation, and then deliver a tested sales message with clean creativity, and your Q4 emails are destined to be a blast!

Susan DeMatei is the President and Nathan Chambers is an Account Director at WineGlass Marketing, a full-service direct marketing firm working within the wine industry in Napa, California