Creativity and Consolidation in Wine

It’s hard to walk away from an event like the Wine Industry Technology Symposium and not be impressed by the commitment to creativity that seems to be firmly in place within the wine industry. While creativity has long existed on the producer side and still does, I’m thinking more about those who are convinced that a creative application of Internet technology will change the way wine is sold, marketed and embraced.

Trying to argue with those who believe and act on this view is futile for a number of reasons, not the least of which is that they are correct. But…what kept going through my mind as I drove home from yesterday’s WITS is how many of the various applications of technology on display yesterday will actually be in place and used in a year or two.

Innovation—and that’s what we are talking about—does not always lead to riches, fame and success. In fact, innovators often end up as sign posts to a new way of doing things, rather than the folks who actually capitalize on the new ways of doing things and the ones who deliver practical application of new ideas.

I’m particularly thinking of the social networking innovations that seem to be championed by new companies and new evangelists at every turn. You can’t deny that the Snooths, WineLogs, BottleNotes, and VinoRatis of the world are on to something that is potentially quite powerful. The aggregation of drinkers and drinkers’ thoughts represent a new and potentially status-quo-upsetting way of providing wine advice and recommendations.

But I’m also positive that all of these companies can’t survive the slim differences that separate their models for harnessing consumer content. In  fact, I’m sure that there must be consolidation among them so that what emerges will be only a couple or three that can deliver a large, enthusiastic, active, engaged contingent of citizen-critics who, together, help decide what’s worth drinking.

How this consolidation among the "Wine 2.0" companies will take place I do not know, accept to say that money, equity and cojones will define the folks that consolidate them into one useful and active service.

On the other hand, the application of Internet technology that I’m sure will proliferate are those services that make money for wineries by helping them sell more wine. Whoever makes it easy for wineries to immediately move boxes of wine will be showered with attention and success. Ironically, those folks who have the upper hand in this are the progressive retailers who possess both on-line and brick and mortar outlets who buy lots of wine from wineries and move it through an efficient and far reaching Internet presence.

The other winners? Firms that make it easy for wineries to commit to the Direct Sales channel, companies that push buyers to winery websites, and firms that help get the wine easily and efficiently into the hands of consumers—logistics companies.

WITS, combined with the Wine 2.0 event earlier this year, have served to move interest in technology’s impact on the wine trade to forefront. People are thinking about how to embrace the various services. Which should they invest in? Which should they pursue? How these questions are answered, particularly by wineries, is going to determine who the winners are and how consolidation occurs.

Posted In: Wine Business


One Response

  1. Mark Storer - July 22, 2007

    Great post as usual, Tom. In my recent work for Wine Country This Week–and by my own understanding, one of the things that is really revolutionizing wine sales and tasting is the Enomatic system. This is the one where you go into a tasting room (like San Luis Obispo’s TASTE) and pay a fee up front in exchange for a small “credit card.” You then go around to each of the machines that holds and dispenses one ounce pours (about $1.85 per taste) from a bottle of your choosing. No salesperson, no opinions you don’t need. My friend Nick Fisher at the Ventura Wine Co. is installing it in his stores here in Ventura and in Carpenteria. It will alter the way wine is sold–primarily by giving more power to the consumer to “taste what he wants…”

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