Unprepared to Compete

July 5th, 2008 → 10:24 am @ Josh Hermsmeyer


Great new post over at Steve Heimoff’s blog. In it Steve addresses what appears to be a lack of consumer interest in California Syrah. Money quote is below:

There are signs the industry is concerned about a Syrah slump and is gearing up to do something about it. In May, Gallo sponsored a Syrah Symposium in Santa Ynez…

At one of the Symposium seminars, I was struck when several of the panelist-winemakers blamed the wine media for Syrah’s failure to win hearts, minds and wallets. “You guys have to do a better job of educating consumers,” one said.

Before I launch into a rant at the folly of blaming anyone – critics, distributors, consumers, God or the weather – for a lack of consumer interest in a variety, let me just say that Steve Heimoff’s blog has been consistently excellent since it launched just a few short weeks ago. Steve updates often, and with compelling content. Be sure to check him out.

So, back to the blame game. Here’s a question for wine producers: Who’s in charge of making sure your wine sells?

If you answer anyone other than “Me” I think a serious re-examination of your business is in order.

Wine Critics

Wine writers shouldn’t be relied upon to advocate for any one region or variety, even though they sometimes do. We’re fortunate as an industry to have talented individuals who are passionately driven to write about wine. But relying on the wine media as a core part of your business model is simply folly. Wine writers write for their audience, not to further the marketing goals of a winery or wine region.

The same goes for wine scores. There are so many other avenues to pursue right now in wine marketing it is simply lazy to rely solely on the tried and true: points and medals. If and when the scores and accolades come, bully for you.

But even if they don’t, many long lasting luxury wine brands have been built without top scores. They did it with savvy marketing, ridiculously great customer service, and good wine in styles that consumers desire.

Bottom line: If your business model includes “make a 94 point wine and sell out,” you’re short both imagination and good sense.

Distributors

The story is similar with distributors. It can be fantastic to have a distribution partner with connections, leverage and years of relationships with buyers out there moving your wine for you and building your brand.

But what are the chances that you’ll enter the industry tomorrow and fall right into such an arrangement? Yeah, good luck with that. For the vast majority of brands, you can’t rely on distributors to build your brand for you, especially if you are small or have a variety that isn’t in fashion at the moment.

Another reason why distributors are often a bad deal is the following paradox: If your brand is strong enough to attract the interest and support of a distributor (which means there is pull demand from the market) you should be looking at turning that brand strength into direct sales and moving to the self-distribution model.

Furthermore, the last thing the sales reps at the distributors want to do is launch a new brand. Believe me. It reeks of effort, and many reps are distinctly uncurious about little known wines and wine regions. They want to move product, make commissions, get recognized and get promoted. They don’t give a whit about your brand, and why should they?

Oh yeah, and the margins suck too.

Consumers

There is only one group you can rely on to help you sell wine, and unless you have direct contact with them, you’ll never be able to actually influence them.

Delighted customers are the only asset you can reliably lean on to help you market and sell your wine. If consumers aren’t recommending your wine, it means you aren’t delighting them. You aren’t exceeding their expectations at every opportunity.

It’s a very tough proposition, delighting customers and consistently exceeding their expectations so that they’ll talk about and recommend your wine. But it’s a tough business, and it’s glamourous enough that everyone wants to be in it.

It seems to me that being exceptional is the minimum threshold to even consider entering such a capital intensive, high risk industry. Which is why comments like the ones reported by Steve strike me as so utterly misguided.

Are these people just totally unprepared to compete?