Insight & Opinion: Building A Successful Wine Industry for the Future
Bring the Winery Experience TO the Customer
SANTA ROSA, Calif., June 6, 202
Part One in a Series by MJ Dale of CustomerVineyard.
By now it’s clear to most in our industry that the overall wine category is facing challenges. For more than 20 years, we have steadily grown both dollars and volume at wholesale and in Direct to Consumer (DTC) by relying on our traditional product model and existing sales and marketing practices and expanding markets. And why not? The traditional model has worked well, and our products, story and people were interesting and relevant in the marketplace. To continue this success, however, it’s clear we now need to up our game, better understand our customers and adapt our business.
Note: As we talk about customer data and insights in these articles, keep in mind that almost all consumers enjoy their favorite wine brands across channels--- at the winery, at a restaurant, via the club, at the grocery store or at fine wine shops at home or on vacation. Luxury consumers also regularly buy lower priced options –so there is no such thing as a luxury only DTC customer or a wholesale only consumer. Understanding data about direct consumers, therefore, is of great value to understanding more about the entire wine business both DTC and wholesale. With true consumer level insights as our guide, we can map out a strategy to help individual brands and our overall industry.
Let’s start by looking at where DTC customers (the higher spending wine drinkers) are shipping their wine—an important clue as to where they live and work. The chart above (based on Sovos ShipCompliant’s impressive dataset) shows the top 50 percent of wine consumers by shipment spend and then consolidated by city for the recent years 2018-2022. Mapping the millions of shipments this way is eye-opening, there is clearly a lot of opportunity far from where most wineries are located!
Our current winery DTC business model is very reliant on customers visiting the winery, a fair distance from where they actually live. An in-person customer trip to visit one of our country’s amazing wine regions is of course the ideal way to introduce your product, brand and story to both customers and key accounts. But how practical is it to expect people living thousands of miles away to regularly visit our far away wine regions to enjoy tastings, redeem wine club benefits, or attend events? Some of your customers and accounts get to enjoy these winery-based experiences a lot as they live regionally, but MOST do not.
Idea #1: Extend the winery experience – visually—well beyond wine country.
Invest in building digital experiences (not just new tasting rooms) like Augmented Reality to allow prospective customers to tour your winery and vineyards virtually, meet key team members like winemaker, cellar master and family founders online virtually or scheduled live tours. Consider redesigning your events on the road with immersive projection mapping to bring the winery visually to life in 3D—whether the guests are at a venue in Austin or Miami or NY. Think recent museum events where all four walls come to life featuring a certain artist—but instead showcasing your winery through the seasons. What a great way to host key accounts during the day and connect with your top direct customers (and their friends) at night. This can be done simply for smaller brands, on a larger scale for bigger ones or be hosted on the road by regional trade organizations.
Idea #2: Redesign the traditional wine club to ensure customers can enjoy innovative benefits wherever they reside.
A standard benefit of many wine clubs is free tastings for the customer and guests when they visit the winery. Our data shows that a very small percentage of your club members use these benefits A LOT, while most members visit occasionally. Build the model so they can enjoy tastings at the winery or at regional events.
Small wineries can host customers at an event within an event regionally (perhaps when the team is already in market for wholesale events). Larger wineries can create their own special tastings at marquee locations.
Design fun experiences at an interesting venues. There are already too many sit-down wine dinners in the market. Most customers when surveyed prefer shorter, more lively events --pairing appetizers and wine. They also like edutainment storytelling about the brand, meeting the winemaker or improving their own wine knowledge in a fun and engaging way. How about hosting at a trendy arts venue that aligns with your brand image? The key is bringing new experiences to top customers at a time and place they can plan on, not just held back at the winery.
Bottom line: A more dynamic wine club, with more flexible and innovative regional benefits will improve customer sign-ups (in person or online) and ensure those top customers stay connected longer.
Idea #3: Gain new customers that live faraway by honoring your top customers, their friends (& their favorite charity).
Establish regular regional club events for top club members, their friends and to support their favorite charity. High net worth people show up for charity and will spend on wine /wine clubs if it also helps an important cause. Host it at the VIP member’s club, charity board meeting or even at their home (be sure to understand and comply with all rules and regulations for hosting events by geography). These events can raise north of $50k in just one night, more than covering costs, and at the same time building long-lasting customer relationships with both new and existing VIP customers.
The wine industry is an 8,000-year-old tradition. It’s here to stay. Future success for individual wineries and brands, however, depends on better understanding customers and stepping outside the usual way of doing business. Customer Vineyard looks forward to helping our industry as it moves onward and upward!
