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Wine marketers discuss changes in sales strategies

Issue Date: December 2, 2020
By Dennis Pollock

Five authorities on wine sales took a hard look at their business and the impacts of the pandemic, economics and wildfires during a virtual discussion as part of this year's Agribusiness Management Conference presented by Fresno State University.

Kevin Smith, who manages the business and marketing operations for the Fresno State Winery, moderated the discussion that focused on challenges that have included relying at times on virtual tastings and increased outreach over social media.

Most panelists pointed to an increase in the importance of direct-to-consumer marketing.

Paul Wagner, an instructor with the Napa Valley College Viticulture and Enology Department, emphasized the importance of cultivating personal relationships and foregoing talk of such esoteric matters as soil properties that might influence the wine.

"Don't tell us how you make your wines," said Wagner, who is also president emeritus of Balzac Communications and Marketing. "Tell us why you make your wines. Talk about people, talk about life, talk about dreams. We need to communicate joy, safety, relaxation."

He said small wineries, particularly reliant on on-premises sales, have been most impacted by declines in sales, adding that small vintners can personalize online tastings for customers.

"Stop talking about tanks," Wagner said. "Stop talking about barrels. Stop talking about brix at harvest and talk about the things that touch your emotions: dogs, people, stories. No one has ever walked into a wine shop and said, 'Do you have any wine from calcareous soils?' And yet we feel the need to explain all this stuff to people."

With the down time facing some wineries, Wagner said, "Now is the time to make sure your staff is truly trained."

Bourcard Nesin, a research analyst at Rabobank and expert on the beverage industry, discussed demographics and observed that some people are "aging out of wine consumption." There is also a greater diversity among consumers, he said.

He cited premiumization: "People are drinking less; they're drinking better, and higher-priced brands are growing."

Nesin said some wineries have been slow to embrace e-commerce and to recognize its value. Online shopping has been spurred by aversion to shopping in stores due to concerns about COVID-19. He said 57% of wineries have sold more wine directly to consumers since tasting rooms were shut down.

He said smaller wineries are losing nearly half their revenues, while some of the largest will likely see revenues grow.

"Though revenues are growing, profits are down even for the largest wineries," Nesin said.

Erica Stancliff, winemaker with Trombetta Family Wines and president of the Petaluma Gap Winegrowers Alliance, talked of her mother-daughter owned-and-operated winery's custom crush facility, which has no tasting room but has hosted small events.

"What we had to pivot to and focus on this year was, how do we get in front of people?" Stancliff said.

Among steps she took was using Facebook Live, featuring recipes and wines, plus food pairings with local restaurants and videos of bottling and preparations for harvest. The winery also posted on Instagram, sent targeted emails and did Zoom webinars with its wine club and with wine bloggers.

Because of wildfires, Stancliff said Trombetta made no wines in 2020, but she sought to "keep a positive spin" in talks with reporters and posts on social media, "because we're moving forward and getting through this together."

Steven DeCosta, winemaker with O'Neill Vintners and Distillers in Parlier, one of the largest wineries in California with 14 national brands and 21 exclusive brands, talked of how the winery has pivoted to engage customers through virtual events and to "push deeper in e-commerce."

DeCosta said direct-to-consumer shipments grew 24% in the first nine months of 2020 and value increased by 17%. Off-premises sales increased 21% in value and 16% in volume.

Along with conducting video tastings, the winery posted videos showing the winemaking process, where the fruit is coming from and winery tours. It also provided updates on the growing season and the impact of wildfires.

DeCosta said he expects to continue to use virtual postings.

Sandra Hess, a wine consumer engagement and direct sales specialist, also talked of direct-to-consumer engagement. She emphasized "high-touch hospitality," noting that relationship building was important before the pandemic and will be after.

Hess said her company has helped more than 500 wine brands across the United States with virtual offerings since March, and said high-tech connections can continue "in the intimacy of living rooms, kitchens and offices. Wine brands can leverage partnership and lifestyle marketing to stay better connected year-round."

Communication methods to reach direct wine customers have drastically changed because of COVID-19, she said, pointing to increased use of chat tools, instant messaging and virtual events.

Hess said this is a good time to look at how a winery will balance virtual and in-person experiences in the future, to determine the greatest opportunities that could come as a winery reopens and how the direct-to-consumer team will develop new, private tasting experiences for reopening.

Because the tasting experience could change, she said, it is important that past customers and others be tuned in to what to expect.

"Be as transparent as you can," she said.

Hess said it is also good to thank wine club members and create member-appreciation moments, whether virtually or in person.

(Dennis Pollock is a reporter in Fresno. He may be contacted at agcompollock@yahoo.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




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