Thanks for the comments and for clarifying some important things about your situation. What’s confusing to me from the outside is that Orbital’s ownership and Stormhoek’s seem to overlap to a large degree (or I may just be confused in general), and the brand ownership issues don’t help either, as you pointed out.

As to your point comparing wine to dog food - I totally agree that shipping wine all the way from South Africa would be silly, especially at your price point. There are fulfillment houses in the US that pick, pack and ship though, so it isn’t impossible. Also when I talk about direct, I’m also talking about tasting room sales, wine club sales, email blasts and every other transaction that takes place at high margins without having to go through a wholesaler (who are evil).

1. I can empathize. Honestly, I have no advice to offer on selling 200K cases because I feel it’s almost a non-viable business model for most wine producers at this point. You need to be either really, really big, or really small. How do you get to be really really big? Lots and lots of money. Which most of us don’t have.

But I think there are ways to work in at least some direct sales without alienating your retail customers. 10% might be a realistic goal, especially if those sales are occurring in the US when your major retail clients are in the UK.

2. Good points, and well taken. My comments on price point weren’t specifically aimed at Stormhoek though. It’s the whole range of wines in that category I feel may not be best suited to social media marketing.

3. Terroir is more than pretty hills, but I agree that it is an invention in some respects. Still, that doesn’t make it any less powerful as a marketing tool. Many consumers believe in terroir, even if it’s defined simply as “this guy is located near this other guy who makes wines that get high scores, so it might be good.” And in the end it’s the perception, not the reality that matters because re-educating consumers is costly.

It may not be fair, but Stormhoek is the poster child for web 2.0 marketing. It’s what allowed you to rise above the din and get noticed. The end of Orbital is notable because it calls into question the efficacy of just such a marketing strategy. It’s about Stormhoek, and its about something bigger than Stormhoek. It about the future of wine marketing.

Thanks again Shane, and all my best to you and everyone at Stormhoek.

But more to the point. On the points you made in your post.
1) Re direct sales - besides my point above regarding online sales, there is also the fact that accessability online can and often does dampen the enthusiasm of potential retailers and to move 200k cases you need more than an online presence. And what do you charge on your site - the same as retail or less but still more than you charge a restaurant or the retailer. It is tricky enough to get the price right for retail.
2) I would contend that the price point is just right to elevate the wine above the masses where price is considerably more important than brand. This price point - in the UK for instance - is a UK Pound above the average mish mash and fits quite well into the low end of the premier range. Our Pinotage showed that in 2006 when we cleaned up against wines 3 to 4 times our price of GBP4.99 / USD9.99.
3) Terroir is an invention in my opinion. To create exlusivity. The New World has none and yet we have managed to produce fantastic wines. Terroir is romantism at its best and makes you think of valleys lined with vines, hills and rocks with horses pulling ploughs to turn in the weeds between the rows of vines etc. etc. Which IMHO is exactly what Stormhoek is. Take a look at Grahams post today and tell me we don’t have a picture perfect farm…

A marketing strategy based on the most cutting edge 2.0 internet BS without a great product to back it is no marketing strategy that I would support. We are not the Milli Vanilli of the wine industry. I expect that you guys knew that otherwise the end of Orbital would have not have raised a single post here.

Shane

As Chris says it’s certainly not the fault of Stormhoek as we were up nearly 40% in growth year on year, but it’s equally not that other brands in the stable were not making money either… the business was split into three sep parts and the problem at the end of the day was cash flow issues for a number of reasons. In an era where the UK has a negative credit situation, the bank just decided that they would rather put the agency into administration rather than sort it out…sad as the situation should never have happened. anyway… Stormhoek i’m sure will carry on… it needs a fresh breath of driving sales support and focus and together with its fantastic marketing support, i’m sure we’ll see it do very well in the near future…Catherine

Just my 2 cents