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'14 Tour Guide

Reviewed Wineries

In an article last month in the New York Times, reporter Katrina Heron detailed current problems in Napa Valley selling high-end wine. The economic collapse has resulted in slow movement of inventory leading to sure-to-be calamitous circumstances – wineries backed up on vintages, grapes left hanging on the vine, and winemakers considering skipping a vintage or already having done so. An article this week in the San Francisco Chronicle titled ‘Napa Wineries Fall Under Foreclosure Crush’ was even more foreboding, saying 2010 may be a record year for foreclosures.

Now before Washingtonians and folks elsewhere start smirking and thinking it serves Napa wineries right for being so expensive, so exclusive, and so [add your own adjective here], make no mistake. This problem is not Napa’s alone. If you own a winery, chances are these same problems are coming to your doorstep if they are not already there. Many Washington wineries, certainly those with wines around $50 or higher are already feeling the effects and have been for some time. This problem is going to get worse in the coming months. If you are thinking or hoping otherwise, you are sure to be unpleasantly surprised.

There were two sentences in the New York Times article that made a particular impression on me. Both were regarding top Napa producer Grgich Hills. The first mentioned that Grgich had 20,000 cases of unsold wine last year. 20,000 cases. That’s a lot of high-end wine to be sitting on without a lot of ways of moving it now or in the future. The second was a quote from Mike Grgich saying to his staff, “Get me Facebook and Twitter!” While some might find this humorous coming from an 87 year-old man with such a storied history in the wine industry, I found it chilling. The instinct is right but as I read the quote, two words came in to my head. Too late.

***

Due to the boom times of the last decade and the fast pace of recent changes, many wineries in Napa and elsewhere have been slow to understand the changing forces and even slower to respond (let’s not forget too that the wine world does not move quickly). They have been caught off-guard by a perfect storm of a historically bad economy, the rise in social media, and changing demographics. Many have long ignored emerging channels, such as websites, blogs, Facebook, and Twitter. “I don’t have the time,” is the frequent refrain.

I don’t want to trivialize this sentiment because many of the wineries in Washington and elsewhere are very small operations where focusing on one area means not focusing on another. The question I would ask is, can you afford not to? Can you make it through another one year or two years doing the same thing you are doing right now if the economy remains stagnant? What if it gets worse?

If you cannot – or even if you feel you like can – it’s time to consider doing something different. Many already are. I have been struck by the increased interest in social media from Washington wineries in the last several months. I am continually seeing newly launched websites, blogs, and Twitter accounts. While some have fully embraced social media in its many forms, many are now venturing into the waters not because they want to but because they are scared to death of having to make it through another year like the last one. Still, I am surprised by the number of high-end wineries in Washington with hundreds of thousands to millions of dollars of backed up inventory who currently have no social media presence whatsoever. What are they waiting for?

For some of these wineries in Washington, Napa, and elsewhere, it is already too late. They were too slow to respond to rapidly changing forces. And before the economy suddenly changed, they simply didn’t have to respond. I am sure there are wineries out there right now that feel like they still don’t have to. Perhaps they are right. However, wine sales, club memberships, and waiting lists can rapidly evaporate. I recall living in Boston how the local basketball team, the Celtics, had sold out every game for more than a decade and had a years-long waiting list for season tickets. Suddenly the team found themselves offering day-of-game seats for $10 (and let's not even talk about the addition of cheerleaders) because all of those people suddenly went away. I should add the fact that they sucked had something to do with this. My point is that things can change very, very quickly.

My intention with this post is not to bring doom and gloom. Rather, it is to say that if you are running a winery and you have been considering becoming involved in social media, this is your clarion call. Now is the time. Do it. Do it before it is too late for your winery.


Postscript: A former mentor once said to never to bring a problem without offering a solution (thank you Murray). To that end, I will suggest in a future post a variety of ways wineries can engage in social media. Until then…

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27 comments

  1. cityroute16 Says:
  2. Sean,

    Great post that combines wine,the impact of the down economy, and the socialization of the two. I've seen the result of this recession in the Washington wine industry. I was contacted to join 2 of the 3 members only wineries that I consider "uber-wine". If we still were rolling along at a growth rate several years ago, I'd still be outside looking in. I couldn't agree more that any business, wine or other, needs to take tech and run with it. People are only going to get more savvy about it. Communication advances are doubling every 2 years, and expected to continue for the near future. Of course, you'll pay through the nose for it too. Looking forward to your suggestions for the wine industry to stay viable in this economy.

     
  3. Cityroute16,

    Indeed, many have made their way on to exclusive mailing lists in the past year. People are still buying these wines but are buying half as much as they did in years past if not less.

    I attended a Twitter conference here in Seattle at the beginning of the week. I was quite impressed to hear about what some of the big companies, such as Microsoft and Amazon, are doing with Twitter. These companies are on the leading edge and can obviously afford to be. What was clear to me from this conference is that Twitter is here to stay. What was also clear is that the next big splash in the social media pond could happen any time (if it hasn't already). Folks who are holding off getting involved are getting farther and farther behind.

     
  4. Anonymous Says:
  5. Is the sky falling?
    Playing the villain here Sean so bear with me (I only do that with seriously fascinating topics and with individuals who can handle it with grace, and not censorship)...
    Okay, so the economy has squeezed the wine industry like never before. Got that. Luxury wines, in general, are staying on the shelves. Got that, too. An established social media presence moves wines. Uh, where's your research data?
    There is this belief that Twitter is a place to create "vibe", that is, talk and that if Tweeps talk a lot about a certain wine, that creates "vibe" and that "vibe" becomes curiosity that flowers into "demand" which leads buyers to seek out and purchase that wine.
    That "vibe" can subsequently morph into "demand" is what Twitter-philes vehemently advocate to wineries, without any factual proof that it has. As a 1500+ tweet veteran, I can tell you I have not purchased a SINGLE BOTTLE based on fellow wine bloggers' recommendations on Twitter. As for wineries' tweets, that number is less than half a case, so far. ~WAwineman

     
  6. Anonymous Says:
  7. Perhaps for your next post advocating solutions, consider a "Twitter 2.0" for the local wine bloggers...stop tweeting like one has pom-poms and is auditioning for a spot on the jv cheerleader squad. There's a distinct contrast between rah-rah "this wine rocks!" and someone who purchased the wine and left a link to its review. Also, just because someone has x-thousand followers does not mean a damn thing in terms of quality. Wineries, don't fall for that snake oil!
    Wineries are a business that depends on profit, like any other business. Someone has to buy the wine. If Tweeps only hype a wine and don't buy it, that reveals the character of the Tweeper. Words have power, and power can be misused and abused as history so notes. Right?
    ~WAwineman

     
  8. WWM, you ask good questions. I think one of the things that has dissuaded some wineries from entering the realm of Twitter - or has got them in and quickly out - is the idea that it's an easy way to sell more wine. It is not.

    I think most wineries start out with the idea that they can put something up on Facebook/Twitter/Whatever saying "Buy my wine!" and it will magically happen. Of course it won't. What would happen if you tried the same thing in the tasting room? Probably would be a bad idea. In the tasting room winemakers get a chance to talk to people, tell their story, and establish relationships. This is what social media is about as well. Establishing relationships, not about advertising. It allows you to establish relationships with people you wouldn't be able to easy reach otherwise. Does this result in wine sales? I believe indirectly yes and have heard a lot of anecdotal stories from wineries but don't have hard data personally. What I can say is that I believe, much like websites many years ago, that certain forms of social media interaction will be a requirement in the near future.

    However, I'm not saying that social media is a magic bullet. It is not. But it can help wineries in a number of different ways. One thing that it can do is increase brand awareness. Certainly there are a number of wineries I have learned more about or been introduced to on Twitter/Facebook/Blogs. This interaction has also made me learn something about these people and made me more likely to seek out their wines.

    My main point though is that if what you are doing as a winery is not working the way you need it to in today's economy, it's time to try some different things.

    I would be interested to hear the experiences of some of the wineries that have been active in the social media space.

     
  9. Anonymous Says:
  10. Oh, and of course, to wineries...just make damn good wine and sell it at a reasonable price. It worked for most of Betz Family Winery, all of Quilceda Creek, and I would even go so far to include Adams Bench Winery.
    Wine reputation, responsive communications (email, face-2-face), and an always-updated winery website still usurps this social media experiment.
    ~WAwineman

     
  11. WWM, couldn't agree with you more on that last sentence. In my upcoming post, point number one will be "Keep your website up to date." If I see one more website one to two vintages back or with a news section from 2006 that says "Coming soon..."

     
  12. Anonymous Says:
  13. My apologies for so many comments. I'm obnoxious by nature.
    I do heartily agree with you that social media can be a great marketing tool for new wineries (and obscure wineries). For the wineries that follow me and I have not tried their wines, I am much more willing to purchase their wines if I see them in the marketplace.
    Case in point is Castillo de Feliciana. They just showed up on my follower list one day. I had no idea who or what they were, so I followed their link. Nothing too impressive, but, like you, I am a fiercely passionate advocate of Washington State wines, so when I did see a bottle of their 2008 pinot grigio at the store, I bought it then reviewed it. Never heard from them or nothing.
    There are other anecdotes, but I will stop boring you. yeah, enough, i'm past my 140-word glory. ~WAwineman

     
  14. Anonymous Says:
  15. that's 140-characters. whatever...you know what i meant. :P
    ~WAwineman

     
  16. Interesting post, Sean.

    As just a regular wine consumer who happens to be on Twitter, I see it as a huge benefit for wineries to have a social media presence. Here's why.

    Four times in the past month I've found myself in the large wine section at my local grocery store wondering what to buy. "Should I go with an old favorite?" I asked myself. "No," I decided. "I'm going to buy a wine from one of my new Twitter friends." It was the personal connection I made with a few of the wineries I follow which helped me make this buying decision.

    Also, as a result of Twitter and making these connections, I've visited tasting rooms I might not have visited otherwise. This weekend, I hope to visit two other wineries I've never been to--one said he'd give me a 20% discount on any purchase and another said I'd get a free tasting--all because I tweeted something about both these wineries to my followers.

    Does social networking make huge difference in overall sales? I don't know. But in the world of this one wine consumer, it certainly does.

    Laurie

     
  17. Don Says:
  18. Interesting discussion. As a small winery quite involved in the use of Facebook and Twitter I can say that to date we can only attribute a few sales to it. Can't say we get much off our website either so they probably are tied for effectiveness.

    The one thing that Facebook and Twitter involvement has done is allow us to establish relationships with folks that we would otherwise never meet and this is the real benefit in my mind. We are focused on using Facebook and Twitter to establish the "Brand" and get it recognized in lots of places that may not see our name for years but when and if it does arrive there they will be more inclined to give it a chance.

    An example of this occurred last weekend when I was at a Seattle wine shop browsing the shelves when the attendant asked me if I owned a winery and when I replied yes she then asked if my name was Don. It turns out she had seen some Facebook posts with my name and picture so therefore recognized me. I did not try to sell them wine but I am sure that if the distributor comes around they will be much more receptive to carrying some of it from that contact having been made.

    As a winery you should not pass on needless trivia but instead remember that what you post is what your reputation will be built on and from that the sales will result in the future. Producing the best wine you can is not enough when there are so many labels competing for the customers attention - social media is one tool in the box to use in attracting attention to your label.

     
  19. Laurie, thanks for the comment and for giving us your personal experiences. They are interesting examples of how social media can work. Person goes to the grocery store, sees a winery that they have built a relationship with on Twitter and decides to check out the wine instead of something else. Person decides to visit the tasting room because they have seen or interacted with a winery on Twitter. Perhaps the person buys the wine (this is were the good wine, good price comes in). Not uncommon stories I believe, although again, I don't have data to support this belief.

     
  20. Don, thanks for the comment. I think your point about using Social Media to establish relationships and build a brand is exactly what wineries should be doing. This is what these tools allow you to do - reach people that would have been difficult to reach by traditional channels. Establish your identity and brand. Does this result in immediate sales? Most likely not or at most fairly minimal. Does this result in longer term sales? I personally believe it will.

     
  21. Don, your winery is a perfect example. If it hadn't been for Twitter friend @DougHaugen bringing a bottle of your wine to a Tweetup I attended, I wouldn't have tried it. Who knows if I'd have found you otherwise. He told me the story of your label which I found fascinating, not to mention I thought the wine was delicious. I'll definitely be buying it in the future.

    Laurie

     
  22. Leslie Says:
  23. As another small winery involved in social media for almost a year I agree we have not seen big sales increases that we can directly attribute to FB and Twitter...yet. However, we are building a community and a presence and brand awareness and as social media becomes more mainstream there is great potential. When websites first started no one knew whether investing the time and money in those would pay off either. Not an easy decision since nothing comes off the table in terms of what you have to do running a small winery but there are tools such as Tweetdeck that can help and I'm sure Sean has more he'll share about that (totally agree about making sure the website is up to date first and foremost!) Can we be responsive to each and every thing online? No, but making an effort counts.

    Leslie
    @wmchurchwinery

     
  24. Sean Says:
  25. Leslie, thanks for the comment and for sharing the experiences at your winery. I think your comparison to websites is a good one. Social media will become more and more important in the coming months and years. Starting and building a presence now is critical.

    There has been much discussion in the media about millenials - 20M currently of drinking age with an additional 10M a couple of years away. Interestingly, they are very interested in wine for some reason. Social media is how this group interacts and communicates. I heard an interesting story from a friend recently who said "Oh we never send our children (millenials btw) emails anymore. They read email once every week or two. If we want to communicate with them we text or direct message them."

     
  26. Sean Says:
  27. Laurie, wait until you go to Hard Row to Hoe and see the wallpaper!

     
  28. Here's a link to an interesting article that Bookwalter (@JBookwalterWine) sent out on Twitter.

     
  29. Also this from Masquerade Wines (@MasqueradeWines) via Twitter: We use both Twitter and FB, good for communicating events but haven't seen any impact on sales.

     
  30. Anonymous Says:
  31. The Fermentation blog has a post suggesting 50 ways a winery can update its Facebook page:
    http://fermentation.typepad.com/fermentation/2010/02/50-ways-of-updating-facebook-for-wineries.html

     
  32. Anon, thanks for the link.

     
  33. Sean, your post (and reader comments) should be required reading for anyone in the wine business; growers, vintners, retailers and distributors. This industry has survived similarly tumultuous times in the past but somehow, this time around seems different. There is an abnormally high level of fear and distrust surrounding our institutions and our government. Everyone is hesitant to make a move in any direction. This too will pass but in the meantime your question is spot on; Is it too late (for any of us)? Perhaps the generational demographics combined with fast paced technology (Malthus was not right!)will have a positive influence and get things going again. To that end, the recent Twitter conference in Seattle, produced by the Parnassus Group, was well attended by 200+ twenty and thirty somethings. You could, however, count the number of attending winebiz folks on one hand. This, after every winery in the state was invited, is a sorely lacking statistic. We (who are significantly beyond this demographic) were there and yes, much of the content was way over our heads. Nevertheless, we came away knowing that we are going to learn and practice this new thing called short form communication. If the end comes it won't be for lack of trying.
    @WDWINES

     
  34. Sean Says:
  35. Lloyd, thanks for the comment. I agree that many seem hesitant at the moment. I believe the hope is that things will suddenly go back to two years ago. It may someday but I don't believe that day will be any day soon. Glad to see Walter Dacon out there trying some new things.

     
  36. @ancwine Says:
  37. Sean, I enjoyed the post as well as the comments and agree with @WDWIINES . You are spot on (in my humble opinion) about the social media climate in the wine industry. Wine itself and the notion of growing & crafting it evoke images of a simpler life. Time to soak in the moment and create a legacy so when those who have been forced to utilize the most precious of commodities - patience as we wait for years to create one single bottle, are called into the social media storm a "deer in the headlight" comes to mind. I believe that when they (HA HA I'm separating myself) do spring into action I believe it will be swift and graceful. At that point the 9-12 months that have become years in the "instant messaging" world will be quickly forgotten. Just my thoughts though. Only time will tell.

     
  38. Sean,
    You bring up lots of excellent points, both in your post and in subsequent comments. As usual, you are both thoughtful and comprehensive. I give you full props, especially because there are so many people out there who claim to be social media experts and steer wineries wrong. I totally agree with you that the number of followers on Twitter does not translate into ROI. Involvement in Twitter and Facebook can be negated by a website that is not up to date. When I talk to wineries, I suggest they consider social media as an extension of their tasting room - to build relationships, let people get to know them and their wines, and eventually build advocates along with brand awareness. I look forward to your seminar at Taste Washington.

     
  39. @ancwine, thanks for the comment. Good point about the slow movement of the world of wine versus often frenetic pace of social media (certainly Twitter). They can seem worlds apart and therefore very intimidating.

     
  40. Margot, you are spot on about encouraging wineries to see Facebook and Twitter as tasting room extensions and places to build relationships. Thanks for the comment (and the props!). See you at TW.

     

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