Wine Festivals – Marketing Goldmine, Necessary Evil or Simple Drunkfest?

By. Neil Williamson, Grumpy Marketing Guy

Photo Credit: Virginia Wine Festival

Anyone that has been paying attention over the last twenty years has witnessed the growth of the wine festival. The bulk of this post will focus on Virginia wine festivals but I have seen similar patterns in other states as well. As a disclaimer, I have created festivals, worked with festival promoters, been a festival attendee and been an exhibiting winery.

One truth at the outset — All festivals are not created equal.

Back in the Industry’s early days, wine festivals were the hot spot to find the new wine meet the wine makers and hear good music (all of this is still true). In addition these festivals were hugely profitable for the wineries because people would come and buy cases of Virginia wine that were not available at their local stores.

Then three major changes occurred:

Others saw the festivals were successful and fun and more festivals popped up
Virginia wineries started selling in the neighborhood wine shops
A bunch more Virginia wineries (now over 200) came on the scene

Photo Credit: Virginia Wine Festival

Does this mean festivals are no longer a good idea for consumers or wineries — absolutely not but how both consumers and wineries approach festivals should change. In addition smart festival promoters are differentiating their festivals with additional programming, unique locations, and special top-notch entertainment and promotion.

First, consumers should change their methodology at a festival. Rather than heading toward either the first tent or your favorite, I encourage festival goers to “start in the back and work forward”. Seek out those wineries you don’t know before you head back to your well known favorites. Secondarily, eat — trust me you need to eat. After over a decade in the wine business, I can tell you the sun and the wine will catch up with you. Finally and most importantly buy. The wineries have come to the festival to sell you wine. Don’t ask where you can buy it — look at the cases stacked behind the taster — you can buy the wine here!

The wineries need to be more selective about their pours. Knowing you are headed to a festival where a number of wineries will be pouring do you think it is wise to bring all 14 of your wines? An interesting study mentioned in Malcolm Gladwell’s book Blink tested consumers provided four options of jelly to taste versus 12 options of jellies to taste — which portfolio sold more? The one with only 4 choices. Take a good look at your wine inventory and determine which wines you can afford to pour and sell at festival. In addition, after two years of festival going, wineries should take a good hard look at their festival profitability, not all festivals make money but those that cost a bunch should be considered for discontinuation.

Finally, the promoters must recognize two important realities first the people come to the festival for the wine so be really nice to the wineries and make it easy for them. Secondarily, that the days of throwing a wine party in the field and having any crowd come are long gone. You need to have a hook, a solid marketing plan (including social media), as well as hope for good weather.

Festivals are an important part of the Virginia wine business. In addition to being a solid sales/marketing opportunity it also draws the industry together in a unique way. You will never forget who was near you when the Tornado Warning came down from the hill or what wineries made it to the convention room floor despite over a foot of snow.

Above all else, all involved in wine festivals need to have a can do attitude and recognize that whether the event is like a Super Bowl winning team or the voyage of the Titanic, we are all in this together.

The answer to the question in the post headline is “Yes!”

Respectfully Submitted,

GMG

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Making Your Weak Points Stronger

By Neil Williamson, Grumpy Marketing Guy

Every brand identity has a weakness. There are some stronger brands that have the lingo of the day over take them, others find what once was a strength is now perceived as a weakness, and finally some brands find their brand identity has obscured their product.

Language changes

Many years ago a small businessman started a pest control service, Pest Management Services. In the intervening thirty years the initials PMS came to have a totally different meaning. As his business was a low margin business rather than renaming the business, he simply asked his associates to change their verbiage to use the term “Pest Management’ rather than the initials — a quick, free fix.

Located in Seoul Korea, it’s hard to believe that the World Taekwondo Federation is unaware of the urban slang that their acronym (and colorful logo) represent in much of the western world. Either they have too much vested in the logo, or they don’t care. If I were advising WTF I would encourage a two step process change the logo then rework the name.

World changes

For several years, Dunkin Doughnuts were known for their ubiquitous commercials touting time to make the doughnuts. Their story was fresh baked doughnuts made by real people who got out of bed just to bake your doughnuts — until doughnuts became a dietary target and no matter how freshly baked people were trending to Starbucks for coffee and leaving Dunkin in the lurch. Time for a brand revamp. What are people stopping for? Coffee (and a pastry) what is the biggest drawback to Starbucks — the line. Bring on a new brand position that brings in patriotism, hints at health and productivity – America runs on Dunkin’.

I had nothing to do with this campaign but I have to believe it was a tough sell — “you plan to use fitness to sell doughnuts?” . I consider this to be one of the strongest brand pivots in recent memory.

Losing Yourself to Your Brand

One of the fundamental marketing challenges is to develop a memorable brand identity that complements the product without obscuring the product (and the consumer benefits). The most successful brands see their brand come into common place use for the product. Sunkist Oranges are a good example of a brand name that speaks to the product. Now what about the King campaign for Burger King.

This well funded campaign never managed to capture the campy image it wanted. Instead the ceramic headed king started showing up places one would not want their brand associated (strip clubs, etc) and parents complained loudly that the iconic figurine was “creeping out their kids”

One might ask how Ronald McDonald might be perceived in today’s culture rather than the mid sixties era he was launched. In this case, Burger King dethroned the King and most folks thought they waited too long.

If you do a 360 degree review and focus on what you do well, speedy service, great coffee, excellent value build your brand position base on strength of you unique selling position — and don’t be afraid to modify that position as time moves forward.

Respectfully Submitted,

Neil Williamson, Grumpy Marketing Guy

Photo Credits: World Taekwondo Federation, Dunki’n Doughnuts, hubze.com

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What’s Your Story?

By Neil Williamson, Grumpy Marketing Guy

In considering developing, creating or honing your winery’s brand position, I encourage clients to take a long look in the mirror. What makes your wine different than ALL the other wine that is out in the market? Newly minted marketing guys (and gals) like to discuss your USP, Unique Selling Proposition. Back in 2009, An Economist magazine article defined the USP in this way:

A unique selling proposition (USP) is a description of the qualities that are unique to a particular product or service and that differentiate it in a way which will make customers purchase it rather than its rivals.

Rather than using the USP verbiage, I find that a more in New York style question of “What’s Your Story?” generally drives the brand awareness conversation. Everyone has a story to tell and told properly these stories can help to sell your wine. Stories/ideas that have worked include tying to the real or imagined vineyard location (Pine Ridge, Silver Ridge, Pillar Bluff), linking in with celebrity ownership (Coppola Estate, Newman’s Own, Andretti Winery), or elevating a winery/vineyard process (Toasted Head, Barrel Oak, Twisted Vines).

One “encore career” client demonstrated the ability to not only identify his USP but to wrap his brand around it. Jim Turpin of Democracy Vineyards is a self described “recovering lobbyist”. His back story of politics in both the Virginia State Capital and the Nation’s Capital made for the selection of the winery name somewhat a no brainer but he and DV owner Susan Prokop took the concept even further.

Turpin wears bright red white and blue outfits to festivals and other winery owners have taken to calling him Captain America. Each of Democracy’s custom crush wines have names that evoke the concept of Democracy. There portfolio currently includes Velvet Revolution, Declaration, Emancipation, Sufferage, Unum, Parliment and Alabaster.

Another wine brand I use in these discussions is South African Winery Mulderbosch “Faithful Hound” brand. In addition to being a fantastic red blend year after year. I have witness folks break into tears when reading the story printed on the label, that tells the tale of the dog, whose owner moved but returned every evening to sit on the porch and wait for his return, the dog died with his love unrequited. This is a wine with a story.

Another way to look at the nurturing of a brand is understanding how you, or the winery owner, or the grower or the winemaker are the face of the winery. People want to know people. They love getting inside scoop on the upcoming vintages or harvest so they can impress their friends with their understanding of the business. The best person to be your “face” may not be the owner. But a word of caution, if you invest significant brand equity in an employee or partner, recognize this as a strategic decision and think how you will respond when they move on.

Above all else be true to who you are in your brand positioning. If you can’t stand dogs, don’t put a dog on your label. Just like fear, consumers smell phony from a mile away. In addition, if you don’t believe it why should anyone else.

Here’s your homework, sit down with a pad of paper and write down ten things about you that make you unique and think of how you might integrate these into your brand positioning. It may not be a label concept at all. One client was an avid Ford F-150 driver. That’s all he owned his entire life a series of these Ford Trucks. Rather than put that into the label concept we simply added a new title to his signature Winemaker & F-150 Driver.

You have to be genuine, interesting and unique. It’s all that easy and it’s all that hard.

Respectfully Submitted,

GMG

photo credits: Andretti Winery, Neon Cactus Wines

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Winery Weddings — I Do or I Don’t

By. Neil Williamson, Grumpy Marketing Guy

Wineries, like any other business, are often looking for ways to diversify their income by maximizing their assets. Vineyards and wineries tend to be romanticized and provide a great backdrop for a wedding where the goal, not unlike wine, is for the relationship to grow better over time.

Photo Credit: First Colony Winery

Constructed properly weddings (and other private events) can add significantly to the bottom line of a winery. A quick review of the central Virginia wine market found banquet room rentals can be between $2,000 and $8,000. This is before you add in any wine minimum. Several wineries do over forty weddings a year, this can generate over $200,000 gross revenue annually. Even just one wedding a week in the three summer months would equal $60,000.

In addition, you are introducing a large number of individuals to your property, selling a large amount of wine (many wineries have a minimum), all during time your tasting room would usually be closed.

Residual sales also benefit as folks marrying at the vineyard tend to return and purchase.

Photo Credit: http://www.weddingbycolor.com

So it is clear there are several reasons wineries consider doing weddings. Why would a winery not want to serve as a nuptials host?

Winery location is too remote
Not enough space vineyard for a tent
Staffing demands
Wear and tear on facility
Security issues
Neighbor concerns
Fear of Bridezilla
Does not fit personality of the owner
Takes away from other guests’ experience

In my years in the wine business, I have often found that the very characteristics that make a great winemaker are not always the same features of an accomplished wedding planner. The most successful “wedding” wineries tend to have dedicated staff willing to work with the Bride [and the family] for a year or more prior to the event and most comfortable holding their hand through the planning, decision making and the actual event.

If you are planning a winery, determine if you believe your personality fits hosting events, if not, can you afford someone on staff with these skills? Then prior to even laying out the vineyard, no less the winery, visit several wineries that do weddings. Read their websites, meet with their approved caterers, understand their challenges and try to build your venue to be both different than theirs but learn from their comments.

Just as with marriage, weddings aren’t for everyone. The best way to minimize risk, is to go in with eyes wide open — that’s pretty sound matrimony advise as well.

Respectfully submitted,

Neil Williamson, Grumpy Marketing Guy

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Wine Distributors – Friend or Foe?

By. Neil Williamson, Grumpy Marketing Guy

There are a least two divergent views regarding distributors in the wine business.

Photo Credit: Palate Press

While the first group can’t stand them and sees them as the enemy, the second group could not accomplish their business objectives without their existence. Which winery is in which group tends to focus on the ownership’s previous business experience, the winery sales objectives as well as the winery’s geographical footprint.

All of this ties back to the end of prohibition and the creation of the “three tier system” of alcohol beverage control.

In 2009, Jeff Seigal wrote a great piece on the three tier system on the Palate Press wine blog. Siegal explained the creation of the system in this way:

The only consistency, really, is the three-tier system, which exists in some form in every state. In the three-tier system, consumers (with some exceptions) must buy wine from retailers (or restaurants), who must buy from wholesale distributors, who buy from the producers. Retailers can’t buy direct from the winery and consumers mostly can’t either. Say what you will about the system, says Blau, but in 1933, when state officials were looking for a way to regulate alcohol after Prohibition, it was the best thing they could find. And, since then, it has done what they wanted it to do—made it easier to collect taxes, to regulate alcohol sales, and to prevent the corruption and abuses that existed between manufacturers and retailers before and during Prohibition.

Considering the importance of the three tier system to their business their defense of it makes perfect sense. In Virginia, a well crafted compromise has emerged. Farm Wineries (a legal distinction in Virginia) are permitted to use a “co-op” distributorship that is virtual in nature. Orders are placed on the distributor web site and the winery delivers the wine, collects the payment and sends the payment to the virtual distributor who cuts a check on a monthly basis. This option is available to wineries under 3,000 cases in the market.

My experience has been that most distributors are not terribly interested in wineries under the 3,000 case level because they are historically unreliable. Don’t take that the wrong way, it just is under that level (and often above that level) vintages run out before the next vintage is ready placing the distributor in a position where they will likely lose a placement for lack of wine.

I also have found as wineries reach the 3,000 case level, it becomes increasingly difficult to self distribute. In Virginia, as in many states, you can not peddle wine; you must order wine and deliver in another visit after orders have been placed into the system. Even if your winery is limiting the distribution to a 100 mile radius around the winery, that still a a great deal of ground to cover especially when one account in the southwest territory needs 6 bottles and one account in the northwest corner has an order for a case.

Now, that you know I believe distributors are winery friends, I have to fix a myth in the industry. There are some that believe “Now that I have a distributor, I don’t have to work outside accounts, that’s why I’m paying the distributor”. That’s a recipe for low sales for the winery. In order to achieve their scale, the distributor represents a number of different labels. The job now increases in complexity, not only do you have to get the account excited about your brand, you have to get your distribution sales team fired up as well.

All in all, self distribution works to a certain level but working with distributors is a net positive step that can help a winery grow exponentially.

Respectfully,

Neil Williamson, Grumpy Marketing Guy

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How Does Push Marketing Impact The Virginia Wine Business?

By. Neil Williamson, The Grumpy Marketing Guy

One of the many distinctions in marketing is push versus pull marketing. Push marketing focuses on getting the product “pushed” out your cellar door. Pull marketing focuses on getting consumers to “pull” your product off the shelf.

Distributor promotions (see below) are an example of push marketing while coupons are a good example of pull marketing.

The Marketing Made Simple website has a great post on this marketing concept including the diagram below:

So where does Virginia wine fit into this picture?

Well, there is a need for this chart to include the three tier system where many wineries are represented by wholesale distributors this adds another layer for between the manufacturer and the retailer. This presents the opportunity to push to the wholesaler as well as the retailer.

As an overarching marketing theme, Virginia wine must continue to develop brand identity to differentiate itself as a brand rather than “Wine” as a commodity.

Long before George Foreman started selling countertop grills he unsuccessfully attempted to market his own branded milk (then and now a commodity). His pull strategy was to look into the then new TV viewing audience and tell potential consumers, fist raised, to go to their grocer and demand that they carry George Foreman milk.

Virginia is headed in the right direction when it focuses its significant marketing and advertising budget on the wine press in the US and especially in Virginia. While getting wine placed in the Whole Foods Markets in Kensington, London is a solid news story – I would like to see more Virginia wine in the Whole Foods Markets in Virginia as well!

In most cases once a winery reaches a certain production level, it makes economic sense to work with a distributor. Some wineries are amazed that they are still required to work sales once they have a distributor – this is a fatal flaw. Distributor relationships are like all relationships they require work, a push marketing campaign.

Wineries are wise to remember that a distributor is only as good as the wines in its “book”. Some distributor books are more like the phone book for the number of wines they represent, this is not a critique merely a statement of fact.

How do you make your wine stand out . #1 have great wine #2 is “push” marketing. Don’t bother with #2 if you have not accomplished #1.

A few years back, First Colony Winery, was looking to excite their distributor sales team and therefore increase their sales. But the fall campaign concept needed a hook. As the client label featured a large silver star near the top, we built a promotion around the Redskins Cowboys football game. The top sales representative received two tickets to the game, a hotel room and a voucher for a dinner at one of the restaurants carrying their wines. The competition was fierce and in the end sales were significantly increased year over year.

It is important to remember that a pull marketing campaign, or even an awareness campaign can be used as leverage for a push marketing campaign. If a winery is planning a brand building marketing campaign, they would be wise to inform its distributors and its retail partners to better position advance sales. Only if the product is on the shelf can a pull marketing strategy work.

Respectfully submitted,

Neil Williamson, The Grumpy Marketing Guy

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Here’s Grumpy!

Today, with very little fanfare, The Trellis Group launched a new wewsite http://www.grumpymarketingguy.com.

As a marketing agency, we have been very selective about the clients we represent. All of our business is from referrals. While it may seem odd, even though the agency turns 10 years old this year, we have not found the need for a website to promote ourselves.

As we move into our second decade of service, http://www.grumpymarketingguy.com will serve as a showcase of some of our work (both good and bad) and hopefully a window into the world of marketing especially wine marketing.

Check back often for updates!

GMG

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