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Summary of the Silicon Valley Bank’s Wine Division Direct-to Consumer Wine Sales videocast, Part 1

By Dr. Kathy Kelley, Professor of Horticultural Marketing and Business Management

Each year, The Silicon Valley Bank’s Wine Division releases a State of the Wine Industry Report. This is followed by a videocast overview in January, and then a videocast focusing on Direct-to-Consumer Wine Sales in May.  For more information about these products and events click on this link: www.svb.com/premium-wine-banking.  On Wednesday, I watched Part 1 of the Silicon Valley Bank “Insights for Successful Consumer Wine Sales” videocast.  If you missed the live videocast, you can watch the recording and/or sign up for Part 2, which will air on May 29, 2019, via this link: http://bit.ly/2EvkV9g.  Both videocasts will be the subject of Cryril Penn’s July 1 Wine Business Monthly article. Until then, I decided to write a blog post to give you an idea of some of the main themes discussed during videocast, as well as examples of how you can utilize the information at your own winery and tasting rooms.  

In-home Experiences/Tasting Opportunities: Personalization and Convenience 

The panel discussed the fact that subscription boxes are popular – in fact, the industry was estimated to be worth at least $10 billion in 2018 (http://bit.ly/30C1WmK). Subscription boxes are offered based on “who” the box is for (e.g., age range, gender, pet owner), interests (e.g., food, wine, fitness, environmentally friendly products), usage (e.g., beauty and clothing, education, cleaning), and are often “mass customized.”  As with one specific wine-based subscription box, new subscribers answer survey questions, after which each package is semi-personalized with products that are most likely to appeal.  

Perhaps you are wondering how you can take advantage of this trend.  Whether you have an existing club/loyalty program or if you have considered doing so, you can implement the “best practices” that make subscription clubs so popular.  A couple of these include:

1)    Incorporate user-generated content (UGC)

UGCs are customer reviews that include photos and/or video, in addition to text, that describes the user’s experience (think Amazon reviews), which companies then repost on their own social media accounts.  

Why is this type of review valuable?  As reported by Michale Ugino, co-founder & CMO of Sellbrite, the following are reasons why you should repost UGC on Instagram, Facebook, Twitter, Snapchat, YouTube, etc. (http://bit.ly/2YN7YiR):

  • a majority of adults in the U.S. use social media,
  • customers trust what other viewers say about the product – even if they are strangers – more than they trust “brand-created content,”
  • video and photos are more engaging compared to text-only posts,
  • with the need for brands to post frequently to remain relevant on social media – such content can help keep your tasting room front and center on followers’ feeds, and
  • aside from the time needed to locate and repost the content – it is free. 

This makes sense – if your customers are “on” Instagram, for example, why not use this outlet to showcase “real people” as they talk about how much they enjoy your wine or the great time they had in your tasting room (http://bit.ly/2YN7YiR).  

While you can use a tool like Google Alerts to receive email notifications when something is posted about your brand online, you will need to develop a hashtag, use it consistently in your posts, encourage others to use the hashtag in what they post, and monitor its use.  You can read about how several bands have used UGC successfully by accessing Ugino’s article: http://bit.ly/2YN7YiR.  

2)    Elements of surprise  

If your current club allows members to select the exact number bottles and varietals of wine they receive in a shipment, you might find that other customers look forward to “surprise” packages that they receive, and that part of the excitement is in the “reveal.” Excitement builds throughout the process – starting from the date when the customer expects the box to arrive, to when the box is delivered to the mailbox/doorstep, and peaks when the customer beaks open the package and inspects each item.  

Even if a particular item does not exactly appeal – most likely the recipient will give it a try and/or pass it on to a friend/family member, which further extends the brand’s reach and potential clientele base.   Perhaps you have seen the commercials for certain subscription boxes that air before the shipment – giving a “sneak peek” as to what the subscriber will receive – and then after all boxes have been shipped – when additional videos provide subscribers with information on how to use the product (even if a detailed card or booklet is included in the box with photos and usage instructions).  

Think about the impact you could have with creating short videos and posting them on social media sites that 1) provide a sneak peek as to what is in the subscription box and 2) a longer video (or series of videos) that provide descriptions of the wine, what to pair them with, how long they can be stored, how to store them, etc. 

While you may feel more comfortable recording and editing a video before it is posted – having a live event will give you the opportunity to ask and answer viewer question.  You may have already produced videos that describe these elements for some of your wines, but if the videos are released in tandem with the delivery – there might be a stronger connection, interest in the content, and viewership.   Just another strategy for developing content to stay relevant and on your followers’ screens.  

What are other ways that you can provide a level of convenience and personalization?  Think about how you can enhance the online shopping experience with delivery and in-store pickup.  Do you and your tasting room staff suggest tie-in products that complete the main purchase, or recommending purchase based on past behaviors?  There is at least one way that winery tasting rooms can offer convenience and potentially increase transaction size. 

Lingering 

The panelists not only had experience in the wine industry but in other “traditional” industries that are also seeing a maturing customer base and searching for ways to appeal to Gen Y (born between 1977 and 1994; http://bit.ly/2W1xWSB) and Gen Z (born between 1995 and 2012) consumers.  

One of the issues that arose during the discussion was how these generations behave differently from more mature consumers in tasting rooms, restaurants, and similar.  Past blog posts have described how important experiences are to these young consumers and that the value received needs to be justified by the price paid.   Price is certainly a consideration for these young consumers who likely have less discretionary income than older generations, and these young wine drinkers may be choosing tasting rooms based on the fee they will pay, but they are also selecting them based on the value of the overall experience.  

Videocast host Rob McMillan, EVP and Founder, Premium Wine Division, Silicon Valley Bank, provided an example as to how his step-daughter selected a tasting room based on the tasting room fee, outdoor lounging area, and activities offered (cornhole game area). This particular group was looking for a tasting experience during which they did not feel rushed and where they could “linger” or hang out and have a good time.  

I have shared the image below of a winery tasting room in Australia that had a driving range guests could use to practice their golf swing while consuming wine, beer, and cider. As I observed the group using the driving range (which was available for a fee), they were relaxed, socialized, and spent more on food and beverages than visitors who were participating in an informal tasting – and the demand on the staffs’ time was very minimal.  

Driving range at Sidewood Estate, South Australia

Lisa H. Kislak, Chief Markering Officer, Crimson Wine Group, discussed the value of “soft seating” and that it is a concept recognized in the restaurant industry – flexibility in space (like many modern hotel lobbies).  Such spaces will allow for lingering and create an atmosphere that encourages this type of behavior.  

The inclination may be to create a large space for visitors to chillax; however, first create a small area and evaluate the response (as with any changes that you make to your wine, selection, etc.) to determine if response is positive, how positive the response was, and then make the decision to increase the offering based on these data. The area you create could be as simple as a few picnic benches and tables or a bit more stylish like the example below.  

Outdoor recreation and seating area at Jacob’s Creek Winery, South Australia

Tastings by Reservation

While many of your tasting room visitors enjoy the freedom to walk in without having to plan too much in advance, others may enjoy the ability to make reservations for a more involved tasting – which may include a number of benefits: 1) time-stressed individuals know they will not have to wait long for staff to pour samples, 2) assurance that staff will be available and able to answer questions, and 3) access to reserved wines.  

I witnessed this several times at several Australian wineries where a dedicated tasting bar area was set aside for this purpose.  A “premium” fee was charged for the tasting and the staff member who oversaw the tasting was one of their seasoned employees who could answer any questions guests asked.  These factors elevated the tasting room experience and even though visitors paid more for a tasting – the value they received was well worth it.  Perhaps, as a result of the heightened level of satisfaction during their experience, they had an increased interest in the wines, willingness to follow the tasting room on social media, and likelihood of writing a positive online review.  

Collect Data from all Customers

I often write about data collection and analysis in my blog posts, as there is great power in knowing what appeals to tasting room visitors.  Though it is fairly easy to collect data, track purchases, and communicate with club/loyalty program members, if you are not learning about who is visiting your trashing room/purchasing online and who are not members of your club – you are missing out.  

So, how might you collect data from visitors who (for one reason or another) have not/chose not to join the loyalty program?  If you offer a tasting that requires a reservation, customers should provide the minimum: name, city/state (to learn from how far visitors travel, if there are “pockets” of households where visitors live and that could be the basis for targeting), email (to send a confirmation email and make it easier for the recipient to signup for an email newsletter), cell phone number (additional way to send the confirmation for the tasting and for him/her to signup to receive texts about upcoming events).  

However, there is also the opportunity to ask about preferences (to tailor the tasting to their interests, select the appropriate person to oversee the tasting, etc.), consumption frequency (to suggest club membership type/level that might fit their needs), how they learned about the tasting room (for future promotional efforts), etc.  The reservation form/system should also provide links to Facebook, Instagram, etc. and encourage recipients to follow the tasting room and key staff.  

Tammy Boatright, President of VingDirect, encouraged viewers to evaluate customers based on how frequently they purchase, when the most recent purchase was made, and how much consumers spend on each occasion and annually.  This will allow you to segment customers and identify who purchases your wines online vs in the tasting room, who purchases more frequently, and/or spends more per transaction.  From there you can develop promotions or events that would appeal to groups that exhibit similar interests.  Perhaps, if you find that a certain group of visitors only visit your tasting room or make an online purchase around the holidays, you could develop a targeted promotion to entice them to visit during periods in between.  

An overview of recent wine products

By Dr. Kathy Kelley, Professor of Horticultural Marketing and Business Management 

With the number of websites, trade publications (e.g., Chilled, Spirited, The Tasting Panel), data from sources like Nielsen, and related, it can be daunting trying to keep up with new wine-product launches, evolving categories, and what might be on the horizon.  Some of the more prevent wine products discussed recently have been: spiked sparkling beverages, rosé and Sauvignon Blanc wines, sangria, and sparkling wines. In this blog post, I have provided a bit of the consumer and market research that I gleaned from the many publications and newsletters that I regularly read.  

Spiked sparkling beverages 

In 2012, the first hard seltzer (e.g., alcoholic seltzer water), SpikedSeltzer, was introduced based on Nick Shields’ observation of women at a bar who were ordering several vodka sodas (Schultz, 2018).   Other motivations for developing spiked sparkling water, according to Casey O’Neill, Boston Beer Company, was that they “were looking for a light, refreshing drink to reward ourselves with that wasn’t heavy on the alcohol” (O’Brien Coffey, 2017).  

These products also meet the needs of consumers who seek products low in calories and carbs and are gluten-free with (as you might expect) likely buyers more likely to be younger female drinkers (Wine Business Monthly, 2019a). 

Now, the category, “which didn’t exist two years ago” (Wine Business Monthly, 2019a) experienced sales of nearly $487.8 million, while volumes increased 181% for the 52-week period ending December 28, 2018 (Kendal, 2019), and accounted for about 10% of all flavored malt beverage sales in 2018 (Nielsen, 2018). 

Several wine-based, alternative beverage alcohol products with 5—6% ABV, have been introduced (Barth, 2018) have been spiked with rosé wine:

  • Truly Spiked & Sparkling’s Truly Rosé, with a 5% ABV, 1 g sugar, and 100 calories per serving, 
  • Nauti Seltzer’s Nauti Rosé 
  • Smirnoff raspberry rosé flavored spiked sparkling water beverage (90 calories and 1 carb)

Even SodaStream International Ltd has explored the trend.  In November 2017, a limited-edition Sparkling Gold “fine alcoholic concentrate,” was launched for the holidays.  The concentrate is not used with the SodaStream machine, but rather added to a glass along with chilled sparkling water (https://www.foodandwine.com/news/sodastream-sparkling-gold-riesling).  While only available for purchase through the manufacturer’s German website, the product provided users with a 10% ABV beverage “resembling the taste of fruity Riesling wine.”  

A product that is available in the US is Drinkmate which is produced by iDrink Products.  Using either a Drinkmate Machine or portable Drinkmate Spritzer, which use “Fizz Infuser technology,” consumers can carbonate any beverage.  

iDrink Product’s Drinkmate Spritzer
Permission to use the image granted by iDrink Products.  
Image source:
https://idrinkproducts.com/collections/on-the-go/products/drinkmate-spritzer-special-bundle

The Drinkmate sparkling wine spritzer can be crafted in just a few steps: “Add super-chilled white wine to halfway mark of Drinkmate bottle. Carbonate and add [a] slice of lime to rim glass.” https://idrinkproducts.com/blogs/drinkmate-recipes/drinkmate-sparkling-wine-spritzer

A recipe for a mimosa using white wine and a Drinkmate Machine
Permission to use the image granted by iDrink Products.  
Image source: https://idrinkproducts.com/blogs/drinkmate-recipes  

Empty CO2 cylinders can be returned to the company for credits that will be applied to future purchases.  

Rosé and Sauvignon Blanc

For the four-week period ending December 1, 2018, according to Nielsen-tracked data, off-premise wine sales increased 3.5% (Wine Business Monthly, 2019b).  While Chardonnay remains the most popular white wine varietal (based on off-premise value and volume), rosé table wine and Sauvignon Blanc experienced the greatest percentages of growth.  Off-premise sales of rosé grew 43.4% in dollar value and 43.8% in volume, and Sauvignon Blanc experienced an 8.4% increase in value and a 6.3% increase in volume (Wine Business Monthly, 2019b).

AdWeek recently published an article that described JNSQ, a new wine brand developed by The Wonderful Company (brands include POM Wonderful, Teleflora, Wonderful Pistachios https://www.wonderful.com). JNSQ is an abbreviation for the French phrase “je ne sais quoi” which is “used to describe someone so unique and exceptional that no words exist to sufficiently capture [the] essence” (http://www.wonderful.com/brands/jnsq.html)

JNSQ’s promotional message that describe the brand’s essence
Permission to use the image granted by JNSQ  
Image source: https://www.jnsq.com/pages/about-us

For now, a “Grenache-forward” Rosé Cru (image below) and Sauvignon Blanc, both made with California grapes and packaged in a bottle “inspired by vintage luxury perfume bottles…[with a] resealable glass stopper,” retail for $29.00 on the JNSQ website.  A 10% discount is applied to orders if the purchaser subscribes to either a 30, 60, or 90-day replenishment.  

Permission to use the image granted by JNSQ  
Image source: https://www.jnsq.com/products/rose-cu

According to the article, roséand Sauvignon Blanc were selected as Millennial women’s wine preferences have shifted to these wines. Lynda Resnick, The Wonderful Company co-owner, was quoted as saying these females and “older Gen Z’ers are bringing back an appreciation for quality, craftsmanship and functional beauty.”  

To further demonstrate Sauvignon Blanc’s popularity, in 2018, the Sauvignon Blanc Experience (https://sauvignonblancexperience.com), held in May 2018 in Kelseyville, CA, exceeded its goals for attendance.  The event which coincided with International Sauvignon Blanc Day featured speakers from wine brands and wine-growing regions around the globe and tastings for consumers and the trade (Wine Industry Advisor, 2018).  If you offer this varietal and want to host your own event – the holiday is celebrated the first Friday in May, which will be May 3 in 2019. 

Sangria and Sparkling

Referring again to Nielsen data, as reported in Wine Business Monthly (2019b), sangria sales value and volume increased by 10.4 and 5.5%, respectively, for the four-week period ending December 1, 2018, while sparkling wine grew 7.9% in value and 4.4% in volume.

Last summer, Market Watch Magazine published an article about sangria, sales growth at that time, projected on-premise growth (the CEO of Beso Del Sol Sangria predicts that the “category will grow upwards of 50% over the next few years”), and related trends (Marketwatchmag.com 2018).  Interviews with retailers, restaurants, and other brands touted the drink’s versatility as a year-round beverage (based on the wine and flavors used in the recipe), the cultural importance to Latino and Portuguese customers, and three brands that experienced “double-digit gains” in 2017.  

Of the brands, Lolea (launched in 2014, with a 34.2% growth in 2017) focuses on:

  • providing customers with a “better quality product,” 
  • packaging (e.g., a red, white, pink, black, gold color scheme, resealable bottle) and
  • engaging presence (e.g., social media, allowing and encouraging others to download artwork and images and share them with others).  

With five different offerings, with flavors ranging from “cherry red tone,” to a sparkling white “enhance with elderberry flowers and wild apples” and both a standard-sized and a 187ml bottle (below), the brand also offers a gift bag set, complementary products (e.g., ice bucket), and a party kit that includes eight 187ml bottles of sangria (four red and four white), and coordinating cups, straws, and bottle opener (https://sangrialolea.com/content.php#producto).  

Single serving sized bottles of Lolea No 2 is “made with high quality Macabeo and Chardonnay white wine, fresh orange and lemon juice, and a touch of vanilla”
Image and description source:https://sangrialolea.com/lolea-n1.php

In addition to drinking the sangria “straight up,” a number of cocktail recipes are offered that use the products as ingredients.  Examples include adding a splash of Cointreau and pieces of oranges and lemons to a pitcher of their red sangria (https://sangrialolea.com/lolea-n1.php).   A great strategy to encourage increased purchasing frequency and volume.   

Another company that experienced double-digit growth, Beso Del Sol (launched in 2015, with 39.6% growth in 2017) offers a:

  • white (tasting notes: Airén grapes, lemon, peach, and mango), 
  • rosé (Tempranillo grapes, orange, lemon, peach, mango, and a touch of cinnamon), and
  • red sangria (Tempranillo, lemon, orange, and a touch of cinnamon) (https://www.besodelsolsangria.com/our-story/). 

Other potential products include sparkling sangrias and a “winter sangria infused with winter fruits and spices” (Marketwatchmag.com 2018).  According to their website, their sangrias are gluten-free and vegan certified (https://www.besodelsolsangria.com/our-story/). 

Based on the Wine Market Council’s data – Millennial consumers have been the emphasis behind the growth of sparkling wine as are more likely to consume the beverage “sometime during the year, compared with older age groups” (Daniel, 2018/2019).  Restaurants interview for the article have had success with sparkling wine cocktails (e.g., as an ingredient for “high-end” sangria, and also mixed with elderflower liqueur, gin, and basil).  Rosésparkling and single-serving sized packaging, as you might have guessed, are increasing in popularity.  

Several sources mention consumer interest in sparkling wine from New Wine World regions, including New Zealand, South Africa, the US, and Australia – which is known for its sparkling Shiraz.  While this sparkling is often a component of an Australian Christmas meal (Wine Companion, 2018), it also pairs well with breakfast items, rare beef, roasted duck, Asian flavors (barbecue pork, teriyaki salmon, and peaking duck pancakes), traditional roasted lamb, and “fruit forward deserts.”  

The beverage can be a base for sangria, made with “orange and lemon rinds, cinnamon, brandy, and a dash of soda,” a punch, “just add grapes, berries, mint, and soda…(an option) dash of lime juice for extra bit,” or a desert, “ drop a scoop of vanilla ice cream into a glass” of sparkling shiraz for an “elegant” milkshake-like concoction (Wine Companion, 2018).   

If you do not have sparkling shiraz on hand, you can still make a cocktail using prosécco.  A recipe published in a recent issue of The Tasting Panel (Jackson, 2018), called the Benvenuto Frizzante, is made with prosécco, amaretto-tasting liqueur, and a variety of other and ingredients.  

References

Barth, J. (2018, December 13). How we will drink wine in 2019: Trends according to winemakers and pros. Retrieved from https://www.forbes.com/sites/jillbarth/2018/12/13/how-we-will-drink-wine-in-2019-trends-according-to-winemakers-and-pros/#24b429123a9c

Daniel, L. (2018/209). Shining sparklers. Cheers 29(6):18-21.

Jackson, M. (2018). Eternally Stylish.  The Tasting Panel 76(9):4-6. 

Kendall, J. (2019, January 28). Nielsen: Off-premise beer sales flatten in 2018 as hard seltzer sales near $500 million. Retrieved from https://www.brewbound.com/news/nielsen-off-premise-beer-sales-flatten-in-2018-as-hard-seltzer-sales-near-500-million

Market Watch Magazine. (2018, July 30). Sangria time. Retrieved from http://marketwatchmag.com/sangria-time/

Nielsen. (2018, August 24). No signs of fizzing out: America’s love of sparkling water remains strong through August. Retrieved from https://www.nielsen.com/us/en/insights/news/2018/no-signs-of-fizzing-out-americas-love-of-sparkling-water-remains-strong.html

O’Brien Coffey, J. (2017, August 14). Five reasons to drink spiked sparkling water. Retrieved from https://www.forbes.com/sites/jeanneobriencoffey/2017/08/14/five-reasons-to-drink-spiked-seltzer-now/#26799bbc415e

Roth, B. (2018, June 20). A sparkling success – Why hard seltzer is a $500 million category worth watching. Retrieved from  https://www.goodbeerhunting.com/sightlines/2018/6/18/a-sparkling-success-why-hard-seltzer-is-a-400-million-category-worth-watching),

Schultz, E.J. (2018, April 16). How the brand that started the spiked seltzer craze is trying to keep its edge.  Retrieved from https://adage.com/article/cmo-strategy/brand-started-spiked-seltzer-craze/313119/

Wine Business Monthly. (2019a).  Outlook & Trends. Wine Business Monthly.  26(2): 19-22, 24, 26, 28, 30-31. 

Wine Business Monthly. (2019b).  Retail sales analysis: Off-premise wine sales rise 3.5 percent. Wine Business Monthly. 26(2):172-173. 

Wine Industry Advisor. (2018, May 25). Sauvignon Blanc Experience attracts attention of the wine industry. Retrieved from https://www.wineindustryadvisor.com/2018/05/25/sauvignon-blanc-experience-attention-wine-industry

Food, flavor, and wine consumer trends 2019

By Dr. Kathy Kelley, Professor of Horticultural Marketing and Business Management

While food and beverage trends are released throughout the year, it seems as though a bulk of the industry and consumer trend reports are released during the winter.  In recognition of these reports and the insights and guidance they offer, I have summarized some of the more prevalent food trends and sources that concentrate specifically on the wine industry.  

Food trends: What we will (likely) be eating in 2019  

As we have talked about in past blogs, it is important to have a meaningful conversation with consumers who visit your tasting room or who you communicate with through social media.  Whether it be the starting a conversation, promoting a particular wine, or having a topic for an Instagram post, knowing a bit about current food trends can help you suggest wines that will pair with these important and emerging flavors and cuisines.     

Emerging international fare   

Pertaining to interest in specific international cuisines, adults age 18 to 34 and 35 to 54 years, were much less likely to consume Italian and Chinese foods than consumers age 55 and older.  This is the case whether they are dining at a restaurant, preparing meals at home, and/or when purchasing packaged food from food stores.  The interest in international flavors among consumers age 18 to 44 years is “because they like trying new things” (Failla, 2019).    

So, what is expected to interest consumers in 2019?  Comax Flavors, a “world leader in creating leading edge flavor technology and innovation for the food and beverage industry” uses market research to gain consumer insights to better predict potential demand.  Recently, they identified “A Passage to India,” which “capitalizes on the growing younger demographics’ attraction to multicultural flavors,” and “Steeped in Culture” that includes “high-impact fermented and pickled flavors” as two noteworthy trends for 2019 (Foodingredientsfirst.com, 2018).    

In addition to matching wines to complement individual spices used in Indian recipes (e.g., cardamom, coriander, curry, and garam masala), “Indian-inspired flavors,” like cardamom mocha, maple cumin, and maple curry spice blends may also be important flavors in 2019 (Foodingredientsfirst.com, 2018).  Interest in spice blends appears to appeal to U.S. consumers as the number of consumers who “prefer foods cooked with lots of spices” increased from 41.1% in 2013 to 44.1% in 2018 (Failla, 2019).    

Flavor profiles    

Over the past few years, umami has gained attention within the food industry.  Umami’s “unctuous, savory flavor is presented in high-glutamate foods like tomatoes, meat, and soy” (Mintel, 2018).  Another, koji mold, “a mold spore that typically ferments miso and soy sauce” is used on meats give “a more fermented taste” (Foodbusinessnews.net, N.d.).    

But another lesser-known taste sensation is kokumi.  Mintel’s 2018 US Flavor Trends report identifies kokumi as a food trend on the “fringe,” which is poised, “in the next five years,” to become more popular.  The “taste concept is associated with flavors achieved by slow-cooking, aging, and ripening.”    

Vegan and plant-based diets  

No longer a fad, according to an article published by The Economist, a quarter of U.S. Millennials between ages 25 and 34 claims to be vegetarians or vegans (Parker, 2018).  Consumers may choose to become vegan to lose weight, lower their blood sugar, and try to prevent diseases (Matthews, 2018).    

Whatever the reason, several articles cite a study conducted by GlobalData, which reports that between 2014 and 2017, the number of Americans who indicated they were vegans increase by 600% (Matthews, 2018).  To meet demand, school districts and fast food restaurants are offering vegan options on their menus (Matthews, 2018).    

There is often some confusion as to how vegans differ from vegetarians.  While vegetarians may eat dairy products and eggs, vegans do not eat or use animal products such as leather and fur. But those are not the only plant-based/plant-forward diets that consumers plan their meals around.  The flexitarian trend, for instance, still resonates with today’s consumer.  A flexitarian diet includes mostly plant-based foods but incorporates animable products and meat in moderation (Streit, 2018).    

The importance of plant-central meals goes beyond appealing to consumers based on their food choice philosophy, rather a food tend that has been suggested by several sources will focus on “hearty vegetables” such as cassava, Japanese yams, parsnips, jicama, and white potato (Foodbusinessnews.net, N.d.).    

Not only is there a need for the perfect pairing with plant-based cuisine, but there are a fair number of consumer-focused websites and articles that are educating vegans, vegetarians, etc. about fining agents used in the winemaking process.   An article published by Wine Enthusiast presented the various fining agents and indicated which were vegetarian (e.g., egg whites, casein), vegetarian and vegan (e.g., Poly-vinyl-poly-pyrrolidone, bentonite), and neither vegan nor vegetarian (e.g., chitosan, isinglass) (Krebiehl, 2018).  The author also indicated that some vegans are even investigating whether wine grapes are grown using animal-based fertilizers such as bone meal or fish emulsion.   

U.K. retailer Majestic Wine has added symbols to their website (Majestic.co.uk) to alert customers selecting wine as to which ones are vegan (VE) and vegetarian (V).  Other retailers in certain European countries are also subscribing to this strategy.      

One way or another, whether it is reproducing restaurant meals at home, purchasing prepared food from supermarkets, or subscribing to meal delivery services (Reiter, 2018), consumers are eating at home more – and they need to know what wine to purchase and serve with these flavors.  Take the opportunity to familiarize yourself with prominent trends, listen to your customers, and provide recommendations that will help them have the best culinary experience possible.    

Wine consumer demographics and trends  

U.S. generations   

Before I describe who is drinking wine in 2019 and what has/is expected for this new year, here is a brief primer on U.S. generations, the birth years that define them, and the percentage of U.S. population in each.   

While there are slight differences in the years that mark the beginning/ending for each generation, according to the PEW Research Center (Dimock, 2019), the years that define them are below.   

Pertaining to the percentage of consumers in each generation.  Data published in the first-quarter of 2017 (Nielsen, 2017) described the percentage of consumers in each generation.  

How the generations are impacting the wine industry   

Mintel’s most recent Wine Report (Mintel, 2018) indicates that 55% of U.S. adults, age 22 and older, who participated in the September 2018 survey, drink wine.  This 55% includes a combination of those who drank wine “most often” (25%) and those who drank wine, but not as often as other beverages (30%).  The percentage of wine consumers was slightly lower than the percentage of beer drinkers (57%) but higher than consumers who drink white spirits (42%), dark spirits (35%), and other alcoholic beverages.  

As in the past, a fair amount of attention (and hope) is placed on Millennials becoming high frequency/high volume wine consumers.  According to an article published on BeverageDaily.com, about 28% of adult Millennials indicated that they “drink wine on a daily basis” (Newhart, 2019).  

Each January, the Silicon Valley Bank Wine Division releases its State of the Wine Industry (McMillan, 2019). The report provides data on wine-consumer demographics, purchasing and consumption trends, winery owner confidence statistics, the economy, consumer sentiment, and similar.  The Millennial generation, because of its size and that all members are of legal drinking age, is the basis for much of the analysis of the health of the industry.  

As with the Beveragedaily.com article, one major point presented in the Silicon Valley Bank wine Divis report focuses on the Millennial generation’s wine consumption.  According to the author, while Millennials “hold slightly higher consumption shares in the $8-$11 bottle price points” they “aren’t engaging with wine as hoped.  They lack financial capacity, currently prefer premium spirits and craft beers, and have been slow getting into careers” (McMillan, 2019).   

It would be in the industry’s best interest to heed this information and not ignore other generations who are drinking more wine and spending more per bottle.  For example, during the period of 2015 to 2018, Millennials accounted for 16 to 17% of U.S. winery sales, while sales for the smaller Generation X cohort increased from 32 to 34%.  Winery sales for Boomers held steady at 40% for the four-year period. Boomers also account for a greater percentage of premium wine sales (McMillan, 2019).        

Upcoming blog posts will focus on alcohol product trends, consumer demographics, and strategies to consider for utilizing these data.    

References 

Barth, J. 2018. How we will drink wine in 2019: Trends according to winemakers and pros. December 13, 2018 https://www.forbes.com/sites/jillbarth/2018/12/13/how-we-will-drink-wine-in-2019-trends-according-to-winemakers-and-pros/#24b429123a9c 

Dimock, M. 2019. Defining generations: Where Millennials end and Generation Z begins.   http://www.pewresearch.org/fact-tank/2019/01/17/where-millennials-end-and-generation-z-begins/ 

Failla, J. 2019. International Food Trends US, January 2019.  Mintel. 

FoodBusinessNews.net. N.d. Ten cutting-edge culinary trends in 2019.  https://www.foodbusinessnews.net/media/photos/4009-ten-cutting-edge-culinary-trends-in-2019 

Foodingredientsfirst.com. 2018. Multicultural and pickled tastes among 2019 flavor trends tipped by Comax. https://www.foodingredientsfirst.com/news/multicultural-and-pickled-tastes-among-flavor-trends-tipped-by-comax-for-2019.html 

Krebiehl, A. 2018. Is wine vegetarian, vegan or neither? WineEnthusiast. https://www.winemag.com/2018/05/09/vegetarian-vegan-wine/ 

Matthews, R. 2018. The vegan trend: Why so many people are changing their diets.  https://chicagodefender.com/2018/05/03/the-vegan-trend-why-so-many-people-are-changing-their-diets/ 

McmIllan, R. 2019. State of the wine industry report 2019. Silicon Valley Bank wine Division. https://www.svb.com/globalassets/library/images/content/trends_and_insights/reports/wine_report/svb-2019-wine-report 

Mintel. 2018. 2018 US Flavor Trends. The report, and other resources, can be downloaded by accessing this website: http://www.mintel.com/us-flavor-trends 

Newhart, B. 2019. State of the industry: What’s to come for alcohol for in 2019.  https://www.beveragedaily.com/Article/2019/01/03/State-of-the-industry-What-s-to-come-for-alcohol-in-2019 

Nielsen. 2017. The Nielsen U.S. total audience report: Q1 2017. https://www.nielsen.com/be/en/insights/reports/2017/the-nielsen-total-audience-report-q1-2017.html 

O’Brien Coffey, J. 2017. Five reasons to drink spiked sparkling water. Forbes.com https://www.forbes.com/sites/jeanneobriencoffey/2017/08/14/five-reasons-to-drink-spiked-seltzer-now/#26799bbc415e 

Parker, J. 2018. The year of the vegan. The Economist.  https://worldin2019.economist.com/theyearofthevegan?utm_source=412&utm_medium=COM 

Reiter, A. 2018. Americans are cooking more meals at home, eating out less.  Foodnetwork.com. https://www.foodnetwork.com/fn-dish/news/2018/9/americans-are-cooking-more-meals-at-home–eating-out-less 

Streit, L. 2018. The flexitarian diet: A detailed beginner’s guide. HealthLine.com  https://www.healthline.com/nutrition/flexitarian-diet-guide 

Highlights from my Australian sabbatical leave​

By Kathy Kelley, Professor of Horticultural Marketing and Business Managment 

I just returned from a six-month sabbatical leave in Australia where I visited many wineries and tasting rooms and talked with various industry members.  I have included a map of Australia’s wine regions for your reference.

Screenshot 2018-06-18 12.59.31

I spent a majority of my time in Adelaide which is surrounded by over 200 tasting rooms situated in the Barossa Valley (known for Shiraz), Clare Valley (Riesling), and more than a dozen other wine regions (see map below).

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South Australia has not yet been impacted by phylloxera (http://bit.ly/2J79Xep); however, several growers and winemakers indicated that they do expect the pest to impact their vineyards at some point.  Currently, they post signs asking consumers not to walk through the vineyards and politely ask those who do to kindly leave the production area.  A few indicated that they are considering other measures (such as fencing) to protect vines near their tasting room, some of which were planted in the mid-1800s.

The Cube, McLaren Vale

The d’Arenberg Cube is a multi-story, Rubik’s Cube-like building (Rubik’s Cubes that look like the building are can be purchased for $10 AUS/$7.40 US).  The building includes a restaurant, a 360-degree video room where visitors can watch an artistic representation of the brand’s various wine labels, and a space for fee-based wine blending sessions.  While the Osborn family has had a presence in the Australian wine industry since 1912, the Cube opened in 2017.

Screenshot 2018-07-28 14.48.30

There is also a sensory room where visitors can squeeze a handpump and smell what they might expect in a glass of wine and an art gallery.  Visitors can download an app that provides additional information about each room and display.

Screenshot 2018-07-28 14.49.01

The tasting room is on the top floor where visitors can taste the wines (included in the $10 AUS/$7.40 US entrance fee) while looking out over the valley.  Visitors can choose from over 70 wines, including The Cenosilicaphobic (which means a fear of an empty glass) Cat (https://www.darenberg.com.au/the-experience/cellar-door/).  Apparently, there was a cat on site that had a bit of a problem with alcohol.

Screenshot 2018-07-28 14.49.54

Sidewood Estate, Adelaide Hills

Sidewood Estate is a winery and cidery located in the Adelaide Hills (https://sidewood.com.au).  The tasting room has an intimate space for couples and small groups to taste their wines while large groups are served in another space a short distance away.  Having two separate spaces provides a nice quiet area for couples/small groups who want to interact with staff and another where large groups don’t have to worry about being loud.

In addition, all guest can buy golf balls and practice their swing.  If they succeed in hitting a ball onto the small green located in the middle of the pond or get a hole-in-one – they can win a prize.  Not only does the driving range give nonwine drinkers something to do while they wait for their wine drinking friends, it also keeps visitors on site longer which then encourages them to purchase additional food and drinks.

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Hahndorf Hill Winery, Adelaide Hills

Hahndorf Hill Winery focuses on cool-climate varieties (due to the cool temperatures at night) and Austrian varieties, especially Gruner Veltliner.  Several years ago, they began propagating cuttings they imported from Austria, evaluated them, and now share the cuttings with other vineyards in the region.  They make four different styles of Gruner Veltliner wines: a classic style, a fruit-driven style, a “more opulent style,” and a late harvest style (https://www.hahndorfhillwinery.com.au/Gruner-Veltliner). The winery has a Gruner-focused blog called “The GRU Files” (https://www.thegrufiles.com.au) and one of the owners, Larry Jacobs, is called Australia’s “Grandfather of Gruner” (https://www.thegrufiles.com.au).

Screenshot 2018-07-28 12.49.44

Terrior, several wine regions

While the staff did not overly focus on terroir, several tasting rooms did display soil samples, profiles, and maps where their vineyards are located.  Below are some examples of the various ways they displayed these items.

Yalumba Family Vignerons c. 1984. A map of their vineyards and corresponding soil samples are displayed at the tasting bar.  Yalumba, located in Barossa Valley, “is one of only four wineries around the world to have its own cooperage” (https://www.yalumba.com)

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Chateau Tanunda is “home to some of the earliest plantings of vines in Barossa Valley” with some planted in the 1840s (https://www.yalumba.com).  Staff refer to soil samples and explain how production in Alluvial Clay Loam soil can differ from production in Deep Sand.

Pooley Wines, established in 1985 and located in Tasmania, is the state’s first certified environmentally sustainable vineyard (for more information about the program: http://bit.ly/2NResYy).  A fairly unique display shows the soil profiles for two vineyards: a) Sandy Loams over Sandstone in which they grow Syrah, Cabernet Sauvignon, Merlot, Reisling, Chardonnay, and Pinot Noir and b) Dolerite, black crackling clays, limestone over sandstone, in which they grow Chardonnay, Pinot Noir, Pinot Grigio, and Riesling (http://www.pooleywines.com.au/the-vineyards).

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Bleasdale, Langhorn Creek

In addition to seeing several vineyards that were planted in the mid to late-18oos, it was also incredible to see the various artifacts that wineries had kept from this period.  Bleasdale was established by Frank Potts in 1850 (https://www.bleasdale.com.au). Mr. Potts came to South Australia in 1836 and established the first winery in Langhorne Creek in the late 1850s.  As you can see in the images below, he was a skilled craftsman and built machinery that he then used to make wooden plugs for wine corks and vats, and also made his own vats and lever presses.

Screenshot 2018-07-28 20.08.46.png

The image below shows a red gum lever press that was built by Frank Potts’ sons in 1892.   It is the second press that was built on the property, the first one was built by Mr. Potts in the 1860s and had just one basket.  The design is based on basket presses Mr. Potts saw in Portugal.

Screenshot 2018-07-29 12.38.58

According to a sign at the winery: “Both presses were build of red gum, with the density of the wood meaning the levers would not need to be pushed down to provide mechanical advantage.”   The sign also stated that “the two presses stood side-by-side for around 20 years until the first press was deconstructed circa 1910-1915.”

Now, a little of what I saw in the marketplace.

A cider & wine concoction

While it has been on the market for a bit in Australia and New Zealand, Jacob’s Creek (Australia’s largest wine brand) released an alcoholic beverage that is a combination of white grape and apple juice called Pip & Seed.  Flavor profiles include: fruity (“exploding with the flavour of fresh, sweet apples and pears”), crisp (“bright floral aroma and fresh, crunchy apples on the palate), and sweet (“sweet taste sensation bursts with apple and pear aromas while sweeter, juicier apples party on the palate”) (http://www.jacobscreek.com/au/pip-and-seed).  At the time of this posting, the price for one 500mL bottle was $3.88 US.

Screenshot 2018-06-18 13.01.52

Is your wine at the correct temperature to drink?

Taylors Wines, a third generation wine business located in Clare Valley, South Australia, has taken the guesswork out of knowing when a wine is at the optimum temperature for drinking.  I found this bottle of Taylors Estate 2015 Cabernet Sauvignon ($14.42 US dollars) in a wine shop – and though it was mixed in with several other brands, the bottle neck tag attracted my attention.

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The neck tag instructs the purchaser to compare a glass of the red wine at room temperature and at the optimum temperature, per the temperature sensor on the label on the back of the bottle.

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Below, I’ve included an image of the temperature sensor printed on the back label.  According to their winemaker, this wine’s optimal drinking temperature is between 16 and 18C (60.8 to 64.4F), which correlates to the “raspberry” color section on the scale.  In the top-right portion of the image, you can see that the current temperature indicator is “lilac” which is in the range considered “too warm.”

Screenshot 2018-06-18 13.02.11

These are just a few of the winery tasting rooms and products that I saw in Australia.  There are many other wineries in these regions and others that provide visitors with an amazing experience and fabulous wine.  I will share more observations in future blog posts.

Customer Service Checkup

By Dr. Kathy Kelley 

We have touched on a few customer-service related issues and strategies in past blogs: responding to online comments and criticism (http://bit.ly/2wYNSZm), why customers would like to contact a customer service department using text rather than call the company (http://bit.ly/2wYPxhR), and the importance of “good customer service” (http://bit.ly/2wYQuqn), but today’s post focuses on providing good customer service, ways to learn about customer service issues, and strategies for appeasing dissatisfied customers.

Employer and employee expectations

How can employees provide exceptional customer service if they don’t know what is expected of them?  Because you are hiring an adult – you would think that they know how to treat people properly and always be a good brand ambassador.  While most employees will remember to smile and greet customers when they arrive and ask which bottles they would like to purchase after their tasting – you may need to remind/teach them how to interact with customers between the guest’s arrival/departure.  Or, you may need to educate staff on how to focus on visitors when the tasting room is packed, customers are two to three people deep at the bar, and staff members are just trying to remember what to pour next and who liked which wine.

To make sure that all staff members handle situations the same, it is suggested that businesses create a customer service strategy.  After you develop a strategy, print hard copies, require all employees to read and retain the document and have them sign a statement (that is kept on file) indicating that they understand what is expected of them (just like you would for your employee handbook).

According to an article posted on The Thriving Small Business website (http://bit.ly/2wXIqRW), a customer service strategy consists of:

  • Developing a customer service vision that employees fully understand
  • Asking customers (using surveys, comment cards, focus group sessions, or one-on-one conversations) if the level of customer service provided meets or (hopefully) exceeds expectations
  • Setting customer service goals (e.g., within how many seconds a visitor should be welcomed after they enter the tasting room)
  • Providing training and reviewing customer service skills during employee meetings or after an issue is brought to your attention
  • Holding staff accountable and rewarding excellent customer service (e.g., ask customers to indicate who provided exceptional customer service during their visit)

Further explanations and examples for each of these are below.

Developing a customer service vision that employees fully understand

If you have ever taken your Apple devices to an Apple store for service, or you are just browsing the store, you may be quite impressed with how they learn about customer needs.  According to a video produced by Carmine Gallo, President of Gallo Communication Group (http://bit.ly/2wYYNCD), Apple is most likely implementing the following five steps:

  • Approaching customers and giving them a sincere welcome
  • Asking questions to understand a customer’s needs
  • Presenting a solution that the customer can take home that day
  • Listening for and resolving issues or concerns
  • Thanking them for visiting and inviting them back

Asking customers if the level of customer service provided meets or exceeds expectations

You can approach this activity in a few different ways:

  • Hand a comment card to visitors and ask them to fill it out before they leave the tasting room
  • Post questions on your website and on your Facebook business page
  • Conduct an online survey using the free versions of com and SurveyGizmo.com (with limited functions) or purchase the full version on a monthly or annual basis
  • Use Google Forms (within Google Docs) to create a document that looks like a survey, which can be embedded into an email and sent to tasting room visitors/case club members. Recipients can respond to the questions and click the “submit” button when finished. You will then have access to a spreadsheet where responses are organized by survey participant

 

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Examples of questions that you can include in your customer service survey. 

 

If you learn about an issue where the custom was wronged:

  • Tell the customer what we can do (realistically) and correct the problem
  • Thank them for bringing the problem to your attention
  • Follow-up to make sure that they are satisfied with the outcome

Setting customer service goals

A goal could be that you will provide each and every visitor with an enjoyable customer.  In a Wall Street Journal article written by Dorothy Gaiter and John Brecher (“Tips for Tasting Rooms,” http://on.wsj.com/2wY1ggr) the authors listed a few of their tasting room “pet peeves” and behaviors that tasting room staff should focus on:

  • While tasting room staff do not need to be wine and viticulture experts they do need to be able to provide tasting room visitors with at least a “basic understanding of the wines”
  • Have a list of questions that will help staff suggest wines for visitors to try based on preferences. You might also want to have a list of wines that appeal to beer drinkers based on the style of beer they like
  • Be a “people person” and engage visitors in a conversation so that they don’t feel like just a sale
  • Have a little “something special” that you can offer wine enthusiasts, but be discreet if others are tasting too. You don’t want to pour samples for one couple and leave the bottle on the countertop and not offer it to others
  • Give all visitors your attention, even when there is a VIP at the tasting bar. Specifically, “If you are going to lavish wine and attention only on [VIPs]…take them to another room and flatter them instead of just pretending that we’re not there” (http://on.wsj.com/2wY1ggr)
  • Indicate which wines are only available at the winery, which supermarkets/retail outlets sell your wine, and if your wine is available for sale online

This quote may strike a chord: “Many impressive wineries offer very poor service with staff that ‘pour and ignore.’ They don’t act interested in the customer, and they expect all the energy to come from the customer’s side of the counter…To “pour and ignore” is like being the last person in a relay race and deliberately dropping the baton. It is the worst possible public relations we could provide next to outright rudeness. (http://on.wsj.com/2wY1ggr)”

Providing training and reviewing customer service skills

It is suggested that training tasting room staff “has the potential to reduce turnover and build staff loyalty… [and that] a winery may be able to obtain a competitive edge at the cellar door and improve the bottom line of its retail sales by incorporating strategic cellar-door training and development programs” for both existing and new employees (http://bit.ly/2x0okGw).

Several free resources are available online ranging from training manual templates (http://bit.ly/2ycFJB4) to video modules (http://bit.ly/2ydhqTr) to interactive “games” (http://bit.ly/2yc1D7d).

Holding staff accountable and rewarding excellent customer service

When you are out shopping and see customers interact with employees, discreetly observe their conversation and ask yourself:

  • Does the customer service representative look/sound like they are interested in helping the customer and that solving the customer’s problems is his/her number one priority?
  • Based on the customer’s issue, would your response be similar or different from what the customer service rep is doing/saying?
  • If you were the customer, would you be satisfied with the response/outcome?

Remember the saying “praise in public and criticize in private.”  Employees will feel a sense of pride and accomplishment when they are recognized for providing great customer service.  When you do provide praise:

  • Included details about the situation (e.g., while assisting a customer with buying wine for a gift…)
  • How the employee provided “excellent customer service”
  • The outcome/what happened as a result of the employee assisting the customer (http://bit.ly/2x0MjFK)

Empower your employees by giving them the ability to make decisions (http://bit.ly/2ybYDI0).  According to the article, “Think about employee empowerment, not as something a manager bestows on employees, but rather as a philosophy and a strategy to help people develop talents, skills, and decision-making competency.”

Where to look for customer service complaints online

Most likely you are aware of the following review sites and (hopefully) claimed your business page, where appropriate.

  • Yelp
  • TripAdvisor
  • Foursquare
  • Google local guides
  • Yahoo! Local

If you have not searched these sites for customer comments, it is critical that you know what customers are saying about your winery/tasting room.

Another site to consider, though you will not necessarily see customer reviews and complaints, is Glassdoor.com.  This is a website where employees complain/provide reviews about companies they (supposedly) work(ed) for.  While you may not learn about customer issues you may get an idea of how employees feel about your business and how they perceive manager/owner leadership and expectations.

For example, an employee, who worked in the tasting room at “X” in Kenwood, California, wrote that working at the tasting room was a “seasonally fun place to work,” but he/she also indicated that management focused “solely [on] sales” and that “a little more focus on simply learning the wines and delivering better client experiences” was needed (glassdoor.com).   Perhaps this employee never talked to the manager or owner because he/she didn’t feel comfortable doing so, maybe they have brought up issues in the past and felt the input was ignored, or maybe they just like to complain.  Regardless, now the comments are on the website for all to see.

If responding to online comments and criticism seem intimidating, look online for examples of how businesses have responded to customer reviews and comments (both positive and negative). Follow companies like Zappos.com, Apple, Trader Joe’s, JetBlue, Starbucks, and others you feel provide good customer service to see examples as to how you can appease customers who feel that they have been wronged.

Until next time.

 

 

 

 

 

 

 

 

 

 

 

Telling your story: Letting consumers know why your brand is unique

By Dr. Kathy Kelley and Dr. Bonnie Canziani*

Every winery has a story to tell about its history and about its wines. A winery’s story often comprises the main advertising message that consumers receive. Critical visitor expectations are being formed as your potential customers read marketing materials about your winery or listen to your staff in the tasting room embellish on “the story,” using it as a performance script during visitor encounters. Indeed, your tasting room hosts are often the main onsite story tellers and serve a vital role as direct ambassadors of the brand and the company—sharing important information with all visitors to the winery.

In this post, we discuss why wineries should have a well-crafted story, examples of national brands that have been recognized as having compelling stories, and steps you can take to develop your story.

Why is a story important?

Researchers have investigated consumer response to storytelling to learn if businesses do benefit from such efforts.  The Origin/Hill Holliday research group conducted studies with 3,000 U.S. consumers, age 23 to 65 years, and investigated their response to winemaker stories. Two groups were shown product pages for four different bottles of California Chardonnay.  Group one was shown the pages with standard tasting notes, while group two was shown three of these product pages and a fourth page with the winemakers’ story instead of the tasting notes.  Based on responses, the researchers found that the second group “was 5% likelier to choose the bottle with the winemakers’ story – and willing to pay 6% more for it” (http://bit.ly/2umZCCE).

Brands that have successfully crafted their story

While both of the following examples are outside the wine industry, each is a successful business with owners who realize that their stories resonate with their clientele and that their narratives support important business strategies.

Being authentic and personable

Dannijo, a jewelry company created by two sisters, was built on the owners’ belief that a story needs to be “compelling to consumers, [such that] they want to build your products into their lives” (http://bit.ly/2tipnzG).  The sisters often model the jewelry in the ads and their social media posts include images of them outside the office and with their families, which helps make them relatable to their target customers.

In their stores, the sisters have installed a selfie booth for customers to take and share images of themselves having fun in the store (http://bit.ly/2tipnzG), and they host speakers who present “unexpected and yet brand-related subjects (e.g., fitness and health, philanthropy and sisterhood)” that are important to the owners and that can interest their primary customers (http://bit.ly/2tMN46Q).

These activities, their core products, and a café all encourage consumers to visit often and to extend the amount of time they spend at the retail outlet on each occasion.

Focusing on customers’ interests

Adidas, like several other brands, sells running shoes.  While their loyal customers will buy their shoes again and again, others are drawn to the business based on how they “feel” about the brand, how the brand helps professional and novice athletes succeed in the sports they love.

Adidas is also credited with being a “listening brand.”  Instead of talking purely about their shoes, the company learns what customers care about and then uses these concerns and passions as a basis for developing the “brand[’s] message through social conversations” (http://bit.ly/2tNdi9h).  Examples of Instagram posts based on follower interests include World Oceans Day, #RunForTheOceans (http://bit.ly/2tN4wbg); Earth Day; sustainable athletic clothing (http://bit.ly/2tMLS3c); and encouraging consumers to perform to the best of their abilities – both on and off the court.

So, what should you include in your story?

A brand’s story is more than words on a page designed to be a pitch for your winery.  Rather, your brand’s story includes “facts, feelings and interpretation” and is a way to differentiate yourself from competitors (http://bit.ly/2tNGkWf).  A successful story will help a business build a following, which in turn encourages these consumers to care about the brand and, hopefully, leads to customer loyalty.  Following are some tips for making your winery story genuine and engaging for your visitors.

  1. Storytelling is based on “interpretation”

Interpretation is a skill that connects your audience with information in ways that create emotional ties between the speaker and the listener. Basically, you take important facts about the wine (e.g., type of grapes or fruit used and production processes) and the winery (e.g., family history or facility information) and share these facts with your visitors in an informative and entertaining manner. A story is not just a dry recitation of facts and figures. Stories attract consumers looking for higher levels of personal recognition and warmth from service staff at your winery.

  1. Storytelling is part of your marketing strategy

Your goals need to be clear when forming and telling the winery story. Typical goals include connecting your guests emotionally to the brand, influencing guests to try something new (e.g., join the wine club or attend a future wine event), and motivating your visitors to buy your wine and share their experiences with others via positive word of mouth. One sign that your guests are engaged is if they ask for more details about the wines, the winery, or the winemaker/owners. A good story will lead to conversation and customer action.

  1. Your stories must seem genuine to your listeners

Storytelling in the winery setting needs to incorporate truthful information about your ingredients, your production techniques, and your business background. Stories create personal ties between the winery and its visitors and people want to be able to trust that the information you are providing is accurate and relevant. The more believable stories will be shared with others via word of mouth after the visit.

Example: Honor Brewing Company & Winery

It seems only natural for a winery to support a cause either with raising funds during an event to donating a portion of the proceeds/price per bottle to a charity.  Sometimes, though, the connection between the cause and the wine brand is not as clear as it could be and why the cause was selected (e.g., to help fund medical research for a disease that an employee has suffered from, to support local community efforts).  Honor Brewing Company, Inc. and Honor Winery owners either served in the military or who had close family members who did.  From the name to the labels (e.g., pictures of dog tags, combat boots) to their mission (“…supporting and celebrating those that have served or are serving…), the brand’s is exclusively “dedicated to the men and women who proudly serve our country” (http://bit.ly/2tO1J1K).

The owners also raise money and donate funds to charities that assist injured veterans and families of those who have fallen – and they are transparent in their efforts.  In 2014/2015 they raised over $200,000 for these charities.  They also encourage social media followers to post about family members in the military and partner with many veteran organizations.

  1. Stories are built on essential raw material

Winery stories need to cover the basics so that every visitor has a good understanding of the wines being served and sold, the fruit that goes into the wines, and other interesting details that make the winery business unique. Proof of quality is often incorporated into the winery story by emphasizing the various awards that your wines have won. The story can move from the past to the present as well as indicate new wines and strategies that are forthcoming in the future. It can also help the visitor identify the role of the winery in the greater community or wine industry in the state.

Example: Gimblett Gravels

When you think of the Gimblett Gravels Wine Growing District, terroir might be one of the words that come to mind.  This patch of land, 800 hectares, once “regarded as the poorest, least productive land in Hawke’s Bay…and no hope of growing a decent crop of anything” (http://bit.ly/2tNlKoN) can lay claim to producing grapes used to make award winning wines: domestically, 600 gold medals and 210 trophies and 105 gold medals and 35 trophies awarded in international competitions (http://bit.ly/2tNqGKD).

Screenshot 2017-07-17 14.45.00

Strict guidelines determine whether a wine can be marketed with the Gimblett Gravels designation.  These measures protect the brand’s image and ensure that growers and winemakers make no compromises and that only high-quality wine that reflects the terroir is bottled with the name and logo of the Gimblett Gravels Winegrowers Association.

  1. Most winery stories are also family stories

The concept of ‘family’ appears either overtly or as a subtext within many winery stories on their websites and during the exchanges between visitors and tasting room hosts. The idea of ‘family’ is represented in multiple ways:

  • remarks about preserving the family farm, land, or agricultural business heritage through the development of vineyards and winemaking operations (the ‘family-business’ message),
  • sharing a history of family generations in the wine-making business (the ‘family-tradition’ message), or
  • an advertising appeal aimed at generating closeness to the visitor based on the inclusive treatment of guests (the ‘join-the-family’ message).

Example: Wente Vineyards

Wente Vineyards in Livermore Valley, CA was founded in 1883 and is recognized as the oldest continuously-operated, family-owned winery in the U.S.  Their story begins with C.H. Wente immigrating to the U.S., learning about winemaking, purchasing land in California, and then…Prohibition was implemented (http://bit.ly/2tNtOpI).

Screenshot 2017-07-17 14.44.48

The family and the business survived hard economic times and war and contributed to the advancement of the California wine industry.  And, if this wasn’t impressive enough, the winery can boast that each winemaker has been a Wente including the current winemaker who is a member of the 5th generation (http://bit.ly/2tNtOpI).  What a story they can tell!

The various family messages can overlap in a single winery story. Family images are also positively associated with consumer perceptions of winery trustworthiness.

 

 

In closing

The art of storytelling can be especially useful to wineries that are trying to develop a visible brand presence and uniqueness in the marketplace. Ultimately, winery hosts need to know how to craft and present a winery story that moves their customers to positive actions, e.g., buying wine and sharing winery experiences with others.

 

*Dr. Canziani is a faculty member at the University of North Carolina Greensboro, Bryan School of Business and Economics, specializing in the management of customer service relationships and business profitability in various sectors including hospitality, tourism, and transportation. Since 2001, she has been involved in marketing and business research focused on the NC wine and grape industry, with more recent emphasis on wine tourism.

 

Taking a Good Look at Wine Labels

By Dr. Kathy Kelley

If a customer has never tasted the wine inside the bottle before “the label design and execution, as well as the verbiage,” can make or break a sale (http://bit.ly/2sxnxPF).  It is even suggested that at the point of purchase it only takes about 1.5 seconds for a wine label “to make an impact” on the consumer’s decision to purchase the bottle (http://bit.ly/2sx2i0c).

You may have wine labels that are well recognized and that your customers may respond, but it is also valuable to be aware of what some research suggests could attract consumer attention and what some brands are doing to encourage wine drinkers to “engage” with their bottle and (hopefully) share their experience with others.

Label illustrations, color, and design layout

While the “attractiveness” of a label is subjective, research has been conducted to identify label characteristics that appeal to consumers based on brand image (e.g., fun and whimsical) purchase intent (e.g., consumed at a restaurant, to give as a gift), and similar.

Screenshot 2017-06-16 11.18.18

Two University of California, Berkeley, researchers conducted a study during which participants evaluated wine labels to measure California Cabernet Sauvignon purchase intent based on six label colors, five illustrations, and three design layouts (Boudreaux and Palmer, 2007).  The researchers developed and tested 90 fictitious labels with the same brand name, origin, vintage, and alcohol content.  Though the images are black and white and only a subset of the 90 labels is presented you can get a sense of what the labels looked like by accessing the paper here: http://bit.ly/2swFQUg.

Their results revealed that the illustration presented on the label had the strongest effect on “market success factors and on brand personality” and in general the images that received the highest purchase intent scores were: 1) grape motifs and 2) images of a chateaux or vineyards.  However, if the brand’s goal is to develop a label to convey “upper class and value,” results suggested that a coat-of-arms illustration would be the best option.

The researchers reported that of the colors they tested, burgundy, red-orange, and neutrals “were seen as successful, desirable, and expensive.”

Millennial preferences

While the UC Berkeley study did not segment the data based on generation to learn what Millennials might prefer compared to older generations, such data has been published.

A 2015 Gallo Consumer Wine Trends Survey revealed that the label is important to Millennials, and wine drinkers in this generation are “4X more likely than Baby Boomers to often select a bottle of wine based on its label” (http://gallowinetrends.com/home/).  While the younger generation is “more likely to look for” labels with personality and originality, Baby Boomers look for information on labels that describe the region of origin and taste descriptors.

Elliot and Barth (2012) focused on understanding Canadian Millennials’ preferences for wine label design and personality. Participants, mostly 19 to 22-year-old undergraduates, were asked to list the most significant factor that influenced their wine purchasing decision.  Of the factors listed, 86% of the total mentions referred to an extrinsic [the package] factor (e.g., name of the wine, design layout, bottle) with 33.8% of all the mentions related to the “label,” followed by other “package elements,” color(s) (10% of the mentions), design (9.8%), the bottle (9.3%), and the image (9.1%).

Only 14% of the mentions pertained to intrinsic [the product] factors with the top three mentions being: the producer (6.1% of all mentions), type of wine (3.4%), and alcoholic degree (2.2%).  The researchers indicated that though the emphasis, at this point in their drinking career, is on extrinsic factors – it may be possible that “opinions and preferences” may shift to intrinsic factors as they age and their experience with drinking wine increases.

Participants were then asked to assign ratings to indicate how influential (1= not at all influential to 5 = extremely influential) six packaging characteristics were on their bottle selection.  The top three influential characteristics (rated between 3.83 to 4.00) were: label image or picture, design layout, and color.  Name of the wine, description of the wine, and shape of the bottle were less influential.  The authors point out that price was not tested, but if it was it probably would have “had a significant influence.”

Trying to learn what label factors appeal to certain generations is not restricted to just New World wine brands. Some wineries Bordeaux are designing labels that (hopefully) appeal to younger wine drinkers.

According to an article published in February 2017 (http://bit.ly/2sxYH10), the author interviewed two Bordeaux label designers about their approach to designing “non-traditional” labels.  One designer is quoted as saying, “The new generation of Bordeaux winemakers…[are] trying to break out from overwhelming history” by using “‘avant-garde’ design approaches.”  Another designer and the winemaker at Château Chasserat created a non-traditional wine called Père N 1775 (which includes the French word for father and the year the winery was created).  The associated logo has more of an Aztec feel/look than that of château or vineyard you would expect to see on a traditional bottle of Bordeaux.

Cultural influences

It is important to note that generation is not the only demographic that could impact response to wine labels, or any extrinsic or intrinsic characteristic.  Culture has been studied by a few researchers to learn how it may affect response to a wine brand, promotional approach, label/bottle characteristics, etc.

Lockshin and Cohen (2009) investigated what influenced consumers from 11 countries when purchasing wine.  Though examples of wine labels were not presented, participants were asked to indicate the relative importance of “an attractive front label,” in addition to 12 other factors (e.g., the origin of the wine, grape variety, promotional display in-store).

Participants were segmented into three groups based on their responses to survey questions.  While the smallest of the three groups, 16% of survey participants, one of the segments was based on making wine purchasing decisions based on displays, attractive front labels, and back labels.  A quarter of respondents from the UK were in this group, with slightly fewer Austrians (22.5%), Germans (20.9%), participants from the USA (16.4%), and Brazilians (15.4%) belonging.  Ten percent or fewer of participants from Australia, France, Israel, Italy, and New Zealand, and Taiwan were assigned to this group as larger percentages of these consumers made choices based on recommendations/previous experience or based on variety, origin, brand name, and awards.

“Cool” and interactive wine labels  

Last year, Pace Magazine published a list of seven wine bottles with labels that drinkers could play with, including one that revealed a “secret message” when a little bit of wine is poured on it and another that had a pull tab that served as a wishbone (http://bit.ly/2sx46qe).  Add to this the other online sources that create their own annual lists: Tasting Table (http://bit.ly/2tuwllM), Forbes (http://bit.ly/2tuzkuB), BuzzFeed (http://bzfd.it/2tuy3U2), and many others.

While the graphics, layout, and colors used on the label certainly attract purchasers, there are several brands that have added a Quick Response code (QR code; http://bit.ly/2std07Q) to their label.  The code, when scanned with a smartphone QR code reader, directs the consumer to a website with other pertinent information about the winery, the particular wine in the bottle, videos, social media sites, or anything that the winery decides.

One such brand is Brancott Estate in Marlborough, New Zealand.  The company developed the “Brancott Estate World’s Most Curious Bottle” app (http://bit.ly/2st5sC3) in 2012 so that wine drinkers could “interact” with bottles of their Sauvignon Blanc.  I have included some screenshots that I took while I was using the app, below.

Screenshot 2017-06-14 13.41.02

While I did have a bottle of the wine that I could use for this demonstration, if you do not have one you can use a picture of the bottle/QR code (from one of their magazine advertisements, for example) and certain app activities are available on app even if do not have a bottle/photo.

A Spanish wine brand, Bodegas Vihucas (Toledo, Spain) has created a blend of Tempranillo, Merlot, and Graciano called 8 TICKETS (http://www.8tickets.es/el-vino/; retail price of 9.60 euros).  The label is a metro map that when removed from the bottle (held in place with two stickers), after which it becomes a “game board.” includes directions on how to play the game, and has a space for the drinker(s) to color, draw, and decorate with stickers.

While I don’t have a picture of the bottle/label/game board, as the wine is only available a few Spanish markets (http://8tickets.es/localiza-tu-tienda/), they do have a Facebook Page with reviews (https://www.facebook.com/8tickets/) and Instagram account with images of the bottles and groups of drinkers having fun with the label/game board (https://www.instagram.com/8tickets/).  I did contact the brand and was informed that 8 TICKETS will be available in the U.S. “soon.”

As you might expect, the 8 TICKETS concept and label was developed to appeal to the Millennial wine drinker.  Specifically, the aim of the 2016/2017 A’Design Award & Competition Packaging Design Category winner was to “bring wine to [Millennials] through a memorable and participative experience…show young people all the situations in which wine can be a regular consumption product rather than being reduced to [only being drunk on] special occasions” (http://bit.ly/2sYyvKL).

If you would like to learn about wine and alcoholic beverage product and packaging trends as soon as items launch, visit Trendhunter.com.  You can learn about the new Coors Light can that changes colors when exposed to UV light rays (currently available in the Canadian market, http://bit.ly/2sYxwdM), Croatian wine that is aged in the Adriatic Sea in glass and clay vessels for 2 years at a depth of 20 meters (http://bit.ly/2sYveeu), and drinkable glitter flakes with a “subtle raspberry flavor” that can be added to a glass of prosecco for an even more sparkling wine (http://bit.ly/2sYhv7r).

What is presented in this blog post is just a small portion of the studies and examples of wine labels/bottle characteristics that appeal to consumers.  At Penn State, we have conducted several studies that investigated consumer response to a number of different wine bottle components.  Among the data that we have published in this blog, one study, in particular, focused on what information and features a winery should consider including on the back label (http://bit.ly/2sxTre7).  As with other marketing information we post, it is crucial to understand who your customer is and ask them to respond to your label ideas before making any significant changes or investments.

References

Boudreaux, C.A., & Palmer, S.E. (2007). A charming little cabernet. International Journal of Wine Business Research, 19(3), 170-186. doi:http://dx.doi.org.ezaccess.libraries.psu.edu/10.1108/17511060710817212

Elliot, S., & Barth, J.E. (2012). Wine label design and personality preferences of millennials. The Journal of Product and Brand Management, 21(3), 183-191. doi:http://dx.doi.org.ezaccess.libraries.psu.edu/10.1108/10610421211228801

Lockshin, L. & Cohen, E. (2009). Using product and retail choice attributes for cross-national segmentation. European Journal of Marketing, 45(7/8), 1236-1252.