Are You Part of the Problem?

The wine industry has created a climate where it can't win while craft beer is crushing it!

 


July 5th. We’re halfway through 2013 and what has changed? What have we learned?

Not terribly much most likely. One thing I have learned is that when someone writes that someone else has “Nailed It!” we’re probably wasting time talking about the same old crap.


The validity of the 100 point scale.


The effectiveness of social media.


Or even better: How to measure ROI on social media.

These all come with the territory of course, but I wish that they didn’t. Our business, this crazy business of moving bottles, is of course a joy, and a curse. We operate like no other business on earth. Preying as much on ego as on the joy wine contributes to our lives, throwing around the ever less meaningful 20 point grading scale that poses as 100 points as though the novice can derive useful info from the numbers in abstract, and pretending that we know all of these wines that it is impossible for one person to know.


What can we make of it all? It’s a tough question that I find easy to ask, and yet impossibly difficult to answer. What we should do is perhaps not try to answer, but simply try to make everyone’s life a bit easier by not celebrating what divides us, but rather what unites us. And that is of course wine, a passion for wine, and the desire to educate. An educated consumer is your best customer afterall!


We have these disparate days, you know them #CabernetDay, #GrenacheDay, why is there no #ArintoDay by the way? They are supposed to help market wines, and you should be the beneficiary of some of that marketing largesse, but are you? I would guess not. Not because the idea is bad, but rather because it is poorly executed. It is, as is so much of what transpires in the wine world, designed for the in-crowd. What we all need is more of the out-crowd to become interested in wine. I don’t know how to do that but I would love your suggestions. I would also love to hear from you and your ideas on better coordinating the events we do have at hand to help to drive awareness and of course sales through you stores. How can we work together?

This is where that “Nailed It” nonsense comes in. Entirely too much back patting going on in our industry and not enough hand holding. The craft beer movement is exploding, and displacing some interest in wine I might add. In the end this might be a good thing for all involved since appreciation of craft beer builds all the assets one needs to branch out into wine, but I am left wondering what they are doing right that we’re doing wrong.


Wine remains a product with a snobbish and intimidating aura and we have to change that, or at least make the effort to try and change it. That comes from doing something, and doing it differently than we have been doing. We need to be more collaborative and we need to leverage our relationships outside of the wine industry to get the word out. Wine is fabulous, it need not be expensive, and it certainly doesn’t need to snobby.


I would love to create a network of retailers, Snooth Approved or what have you. Retailers that we can all feel comfortable sending friends and family to. I’d love to hear your thoughts on that idea, and any others you would like to see implemented to help grow all of our businesses. I know you aren’t thrilled about working together and often don’t see the benefit of larger campaigns that might also help your competition, but as I said, it’s time we do things differently!


So are you going to be part of the problem, or part of the solution? Let's solve this together!

 

Mentioned in this article

Comments

  • Hi Gregory,

    How would you create a network of 'Snooth approved' retailers ? What criteria do you have in mind ?

    Jul 05, 2014 at 10:07 AM


  • Snooth User: lax2vie
    37671 4

    Good thoughts, but once again it comes down to one thing:
    This is not about you, it's not about 'us', this is about the consumer, the one enjoying the glass of wine. Sadly she is the one the industry rarely thinks about. It is about the one who rather enjoys a hand crafted local microbrew for $2 than a glass of $7 wine. Not because they don't know enough about it, but because they can't easily enjoy a great glass of wine without having sticker shock and feeling guilt or headache. Yes, it is that simple. Wine education is overrated, and again, industry generated, looking down upon the 'poor' consumer, instead consumers want to simply ENJOY an alcoholic beverage, and wine would be a preferred option, if only…

    The wine industry, especially in the US turned into a luxury goods industry, it is in a different category than beer, hence higher end beers (or microbrews) can be so successful. The road was paved for them…by the wine industry.

    The solution is not a Snooth approved set of stores. There are enough stamps of approval and small selection stores claiming they have great well priced wines. It would just be another industry campaign #SnoothStores and #CabDays, I will still enjoy a microbrew instead. Don't get me wrong, I love wine (tremendously!), and I love working with the industry (my family even owns a vineyard), but there is rarely a more inclusive and incestual community than the wine industry, and it starts to show to the consumer the minute they walk down the wine aisle. When selling wine, one needs to start to think OF the consumer instead of oneself, but do not stop there, start to think LIKE the consumer - it is the only way to create change. The wine consumer is different than the industry thinks of her.

    The US wine industry created the wrong fictitious target audience persona, one that wants to be educated and be picking the best bottle from a wine list to how off her skills, be a wine club member and collect vintage bottles, where really she, in general, is not that. She enjoys a great microbrew and loves a great glass of wine. She wants to get value and believes in her taste and the person helping her make the decision. She enjoys an affordable fun microbrew and an artisanal cocktail that is made with passion by a bartender. She sees value and skills and pays a fair price for it. She cares less about snooty terms and more about the story behind how the grape made it into her glass, a glass she can enjoy without feeling guilt or headache or a tutorial in hand. This is the big problem with marketing and branding in the wine industry, and it is self-inflicted.

    So to answer your question, I am part of the problem, and excited to see the industry seek a solution by putting them into the shoes of the one enjoying alcoholic beverages, not just wine. Take it down a notch in order to start connecting. Magic will happen, guaranteed.

    Jul 05, 2014 at 2:01 PM


  • Hello lax2vie,

    I cannot speak for the wine drinkers in the States, but luckily here in Europe things are different. Perhaps because Euopeans are more down to earth, less emotional and care more about quality than price (although the financial crisis, caused by the American banks, did move some people to drink cheaper wines. IF winemakers would only care about what the masses want to drink, Coca Cola would be market leader in the wine industry in no time. THANK GOD that winemakers themselves decide how their wine ought to be made and tasted. It's the endless variety that makes wines so 'mystical'. And so what? Wine make people think and learn to develop their senses. And so what if some people are too lazy to learn a little bit more about wine? Please, let them drink a simple beverage as beer is. If they prefer beer over wine, so what? There's a market for both beer and wine. Luckily in Europe the comsumption of beer is declining ... and in favour of wine ! Beer is a mass product, it can be made in endless volumes. Wine on the other hand is an unique product, different every vintage. And with so many different wines and producers per wine, it is only logical that big producers turn to branding and marketing. Isn't it the same in any industry? Those who are interested in wine are eager to drink better wine while growing older, those who drink super market low budget wines are not likely to change their buying habits. And there is nothing wrong with that. To each his/her own!

    Jul 05, 2014 at 3:18 PM


  • Snooth User: thewinecloset
    Hand of Snooth
    1518269 38

    Realising this is a US site but like myself in the UK, Scotland specifically for myself there is nothing really happening, the on and off sale trade in the UK don't seem to be helping themselves, Here at my Hotel in Taynuilt we run "the wine closet" a company selling great wines at a reduced mark up for off sales with 2 monthly tastings of a selection of 12 - 15 wines based on a theme, For instance this month July is showcasing Southern France and 1 producer in Famille Perrin, nice easy drinking summer wines, these are a great success and feeds the restaurant as regulars come in exited to get the wine list after having ben to some tastings. D

    Jul 05, 2014 at 3:50 PM


  • Snooth User: lax2vie
    37671 4

    Thank you Saffredi Wine Import. I wrote my commentary solely about the US-market (where I live and run a successful marketing/branding agency), as I believe Gregory wrote the article with the US in mind. I do not believe Europe (where I am born and raised) has those issues, the pricing is night and day - you can find great affordable wines easily - and microbreweries not a hot new trend that is set to compete for true market share.

    Jul 05, 2014 at 3:55 PM


  • I have been thinking more about this topic- branding & marketing in the wine industry. In my opinion there are (at least) two kinds of branding/marketing strategies that influence the wine industry and the consumption of wine.

    Although they both aim for the same, more market share and more profit, they also target different groups of wine drinkers. When looking at the Champagne industry, it is clear that they aim for wine drinkers with a larger budget. Their sole purpose is to be able to increase their prices by branding and marketing their Champagnes ... and they have succesfully done so. It would be even a fair guess to say that the Champagne producers were the ones that initiated branding and marketing in the wine industry.

    The downside to this is that, while prices are increasing, the quality does not equally improve. Not saying that (for instance) Moet & Chandon is making a bad Champagne, but its price does not reflect the quality. Knowing that it costs 12 EUR ex-cellar, it is painful to see that it is sold in Europe between 30-40 EUR (!)

    The same goes for big cheap brands like Jacob's Creek, the Gallo Family, the Castel Family, etc. They aim for another audience (low budget wine drinkers) and although some of their wines have some appeal, the majority of these wines are totally manipulated in the cellars making it more of the same (bad wines).

    May be I am an idealist, but in my opinion the only way to make wine drinkers more aware of what they are drinking is by educating them. People have to learn to understand that what has been told to them through marketing campaigns is not always the truth. It is our duty as wine importers / wine sellers to give fair information to the public. Possible success can be measured by your sales.

    Lack of education, in my opinion, is killing the wine industry. People have no idea what better wines taste like. Lack of wine education make people believe that all wines ought to be in the price range of those big cheap brands that are sold in the super markets and budget outlets. How basic it may seem to us, most people do not think about how a wine ends up on the shelves for a certain price. To them all wine producers are the same and they should all be priced the same. But there are so many other factors in play. Quality, availability, transport from the wine region to its end destination, etc. And of course and in some cases unfortunately, there are the (negative) effects of the marketing/branding industry ...

    Every producer, no matter what kind of product they sell, needs a marketing strategy. They all hope that their brand will become at best a household name.
    But in the wine industry, to a certain extend, marketing strategies can have a negative effect on the price of a bottle of wine.

    Wine producers that aim for low budget wine drinkers have caused that most of their wines taste alike. In order to sell cheap, they lower their production costs which results in more of the same manipulated wines. Cultivated yeasts will give the desired result for selling to the crowd: more colour, more fragrance and more flavour. THIS is killing the wine industry. These wines are more or less produced like a pop soda. Differences in vintage can hardly be detected in their wines and it often seems that the brand of a wine is the decisive factor for a consumer to buy or not to buy a certain brand with no regard to its quality.

    Another negative effect is that some producers do not fairly price their products. Due to a succesful branding/marketing strategy they are able to increase the price of their wines without improving its quality. A good example is the Champagne industry. Most of the Champagnes have a very poor price quality ratio and although the most expensive vineyard in Champagne costs up to 10,000.00 EUR per square meter, the majority of the parcels within the appellation cost a whole lot less.

    It is clear that the costs of production and vinification are rather limited even for the most important wines. The same goes for administrative cost, machinery depreciation, marketing/publicity, etc.

    Let's look at Chateau Pétrus, one of the most expensive wines on the planet (only Lafite Rothschild and Romanee Conti charge higher prices on a regular basis) and a bottle that not many people can experience in life. After analysing the various elements of the cost of a bottle of Pétrus and the final cost of a bottle of Pétrus turns around 30 EUR (of which 10 EUR only for the bottle and the etiquette, a special anti-fraud etiquette). 30.000 bottles of Pétrus are produced each year. The 2005 vintage was sold by Pétrus at 450 EUR to the negociants at the Place de Bordeaux and can be found now at 4,500.00 EUR at retailers. The wine represents then an enourmous source of profit for the Moueix family who owns Pétrus, for its combination of moderate production costs, high price and a good number of bottles produced per year.

    Now, let's go back to Champagne and take for example Dom Pérignon, the most famous cuvée of Moet & Chandon. The total cost amounts at 17-22 EUR of which 5-10 EUR is spend on advertising, entirely different from Pétrus, which does not spend on publicity and is merely focussing on the character of rarity and exclusivity. Due in particular of the enormous number of bottles produced (5 millions per year) at non prohibitive final price (the bottle leaves the property at 75 EUR and has a retail cost of 130-180 EUR), Dom Perignon is a golden toy for Moet & Chandon.

    In both cases (but obviously in particular for Chateau Pétrus and for other expensive wines), it is clear that the final retail price has no relation with the cost of the wine, and that we are in presence of a marketing operation that is simply making some wines less accessible and ... much more profitable for a few producers!

    But, we knew all this and this is not the key issue of why I, and so many other wine aficionados, am telling this. What is really important is to start the discussion about the cost of wine production and this will have an impact, in particular for wines which are more accessible and are not managed by a speculative market but with prices decided by the producers.

    So, yes, the wine industry as a whole should reconsider its actions in order to preserve a healthy demand for good wine. In many cases, prices should go down. Is this likely to happen? Not if we leave it to the producers of expensive wines. The consumer has to send out a clear message to the wine industry (as we unvoluntarily did when the recent financial crisis hit us and the prices of first-growth Bordeaux wines dropped as much as 20-30%). After all, supply and demand is still a strong factor. As some wine companies grow larger and larger, their only aim is to increase their profits. It is up to the consumer to decide whether or not they let these producers get away with it!

    Jul 06, 2014 at 6:05 AM


  • Dear Gregory,
    if you separate your world of potential wine customers into wine-experts and none-experts and look at the buying-power of these two groups, then I guess the experts will not even make one percent of the total buying-power. But most of our communication is aimed at the expert-group.
    The non-experts often have no idea, what they like in a wine. They just like it. And there is nothing bad with this attitude. When these non-experts go and buy a bottle of wine, then they are facing a big problem. As they have no idea, what they like in a wine, one strategy of minimising their risk is to buy a cheap bottle. If it does not match their taste, at least they did not waste much money. One other strategy for them is to buy "scores". But these scores aim at the expert wine drinker.
    This problem sounds a bit similar to the book industry before the arrival of Amazon. And then came Amazon and made all these witty feuleton-pages, which aimed at the regular educated reader useless by using simple correlation. Customers, who like what you like also like... In Europe (or at least in Germany) Amazon already sells wines based on their collaborative filtering algorithms. And as soon as they have enough data and reviews, their recommendations will be better than your local wine-merchant. Which might again change a complete industry. The question is not if this is good or bad. The question should be, what we can do to avoid the same fate as the book industry.
    On a project website (winerecommender.com) I had initially tried to collect reviews and votes from non experts about the wines they enjoyed or hated without much success. Non-experts are afraid of commenting on wine. They often feel they do not have enough knowledge to judge about a wine. I even do not get simple star-ratings for the same reason.
    I guess, we have to find ways to restore the self-confidence of non-experts to trust their individual tastes and preferences without being snooped on. Once we have this, we can find taste-twins among our customers and based on these collaborative filtering twins we can come up with perfect wine recommendations then , which will make the non experts to wine lovers.

    Christian Petersen

    Jul 06, 2014 at 8:03 AM


  • Hi Christian,

    I totally agree. Non-experts should try to restore their self-confidence and learn to trust their own senses. It would mean nothing to me when someone random recommends a certain wine ... unless he or she describes the wine in question in universal and understandable, easy to relate to terms.

    Now, here in lies the problem ... most people have no idea what to look for in a wine other than 'I like it' or I don't like it'. Every year when we start our wine courses for consumers I am stunned how little they understand their own senses. Ask a few people to taste, let's say, a fruity Malvasia from northern Italy (by standard a dry wine) and most likely their description will vary from sweet to dry. Detecting 'sweet' fruity flavours in a wine does not mean the wine is sweet (the sweetness of a wine is determined by the grams of rest sugar per liter wine). Another example is an extra dry Prosecco ... it's a dry wine, but many will call it sweet.

    So, realising this, I have little to no confidence in the recommendations of the wine drinking crowd. Instead, much as you have also stated, expert reviewers do describe wines in such a way that I can easily relate to what they are writing. Deciding whether or not I will import a certain wine does not depend on the scores a wine receives. It all matters what I think of the wine: its balance, its lenght, its intensity and its complexity. Scores may help to promote sales, as there enough people that only rely on high scores.

    More importantly is to really know whose score it is you are looking at and how did the reviewer score and describe other wines that you like. A professional reviewer / wine critic is more reliable than a random person on the internet saying: 'I love this wine!'

    The professional expert usually has a set of criteria that he or she uses to merit a wine. In order to do so, he or she will again and again apply the same set of criteria. Having tasted wines reviewed by the same professional expert (and not all of them are really professional) one will discover a red line in their reviews. The result is that even when you haven't tasted a certain wine yourself, you will find the professional's review useful in making a buying decision (as long as you are familiar with the critic's tasting history).
    Equally imported is to know how a wine ends up with a certain score. Mind you, a 90+ score by e.g. the Wine Enthusiast does not automatically mean that other professional reviewers - like the International Wine Cellar (Tanzer and Reynolds), The Wine Advocate and Wine Spectator - also gave a 90+ score. You will often find that the scores differ from reviewer to reviewer. Especially then it is important to read the description of a wine and to find out what a certain score means to the reviewer who rated the wine. I often hear people say: 'I always buy 90+ wines, it is a safe bet'. This is foolish, because normally a score reflects only on the quality of the wine, not whether or not the professional reviewer likes to drink the wine himself (!)

    So, as an importer, I find it impossible to search all the time for new, good wines. Professional reviews from experts are therefore a great help to me to discover new wines. But be assured, most importers will make the final buying decision based on their own senses. The scores and descriptions are merely a great tool to help us in the right direction.

    Jul 06, 2014 at 10:24 AM


  • Snooth User: Dan Veraldi
    1490154 25

    Christian Petersen makes--from my past experience as a tasting room manager and a winemaker in Virginia--a great point above: "Non-experts are afraid of commenting on wine. They often feel they do not have enough knowledge to judge about a wine. I even do not get simple star-ratings for the same reason." I also agree with lax2vie's penultimate paragraph that I would like to expand upon.

    It doesn't take much to feel knowledgable about beer and voice an opinion about it. From personal experience and conversations with up-and-coming brewmasters, the upshot in microbrews comes out of the established trend in home beer brewing. I have been to many cities that have stores dedicated to the autodidact and experimenting hobbyist. (Admittedly, plenty of the stores have corners dedicated to home winemaking kits.) But home brewing made the hunting out of interesting brewing methods and ingredients exciting and affordable. You could be a beer snob, and it would only add to your hipster clout! Not so with wine.

    People were looking for interesting and fresh beers that tasted good. The more "local" the better. A beer drinker could bring an undiscovered beer to a party, and since most consumers find beer accessible, a small community could enjoy the beer in their own way and become repeat consumers...maybe even take friends to the brewery for an event, tour, or just a night out. In my experience, wine--even locally produced wine--cannot replicate this in scale. The perception of price vs. buzz and prejudices against the popular images of wine consumers (looking at you SIDEWAYS) must have been the distinguishing factor.

    With the home-brewing trend churning out novice experts, niche breweries popped up and became successful by slicing out niches from InBev and other major producers. This was a market inevitability coming out of the beer oligarchies. But fortunately for the wine biz, the microbrew market is now flooded, the breweries are being bought up, and they will become subject to many of the issues that plague the US wine industry (lack of brand loyalty, competition for shelving, struggling to keep up with demand, cost of scaling up, etc.).

    It seems that the industry as a whole needs to be demystifying wine rather than educating through regimented courses. I always encouraged newbies to find wine they like, drink it how they prefer it, and find out what they liked about the wine. After that they could start to experiment by learning a little here and there about regions, varieties, and production methods. Home winemaking is not going to catch on like the home brewing trend. I just can't see it happening. Yes, social media can help with demystification, as well as packaging (labels, screw tops, etc.), but wine retailers need to start opening up the doors and being less stuffy. Somewhere between the meat market of evening tastings and paid courses, there is a way to bring consumers into the fold as opinionated and avid wine drinkers.

    Wine has always been a "social" media, we just forgot about it. Make it fun for the consumer to branch out, take risks, and then learn. That's how I got here. Didn't you?

    Jul 06, 2014 at 12:06 PM


  • wine tastings in a wine shop ... that would be the day here in Europe ... in EU countries it is allowed to sell closed bottles of alcohol, but one is not allowed (legally) to sell open bottles or let alone give a tasting in their shop.

    Jul 06, 2014 at 12:16 PM


  • Snooth User: duncan 906
    Hand of Snooth
    425274 1,718

    The Sampler wine shop in London's Kensington [ http://www.thesampler.co.uk ] does do tastings in the shop

    Jul 06, 2014 at 12:51 PM


  • okay ... I know it is forbidden in the Netherlands. I believed it is a EU law, but then again, the UK is not that crazy about the EU :))) and neither are we ;)

    Jul 06, 2014 at 4:02 PM


  • Snooth User: djlevin
    478367 156

    IMO, you are looking at this wrong. Take a step back and think about the consumer and why they drink a beverage period. The answer to popularizing wine is to evaluate why other beverage categories are growing. Hard cider consumption has been growing like crazy in the U.S. and taking white wine market share. Most of the people I know select their beverage of choice based on the time of year and the activity. Summer is a hard cider and beer time of year... because frankly, white wine does not meet the need for clearing the palate and refreshing your thirst. In Europe, white wine is more a food pairing device - white wines and light reds are fantastic paired with food - not generally a demand creator in the U.S. Let's just look at the quintessential Summer activity - BBQ. Would be a great pairing for a Zin let's say... but it is so damn hot! Why would I want to heat it up more with a red wine? You just need to look at each category this way. I prefer a bold IPA to a light red any Summer day and I drink wine often! Red Wine by definition is for cooler times of the year. In the end, this issue still comes back to the food pairing angle. In Italy, I once got in to a lively discussion about the best breakfast wine! That discussion ain't gonna happen in the U.S. and is the major reason why wine consumption per capita in Europe is so much higher.

    Jul 07, 2014 at 10:39 AM


  • Snooth User: duncan 906
    Hand of Snooth
    425274 1,718

    We are definitely less than enthusiastic about the EU! Most of us would vote to leave so we can control our own immigration

    Jul 07, 2014 at 2:17 PM


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