The Nexus Between Golf & the Tasting Room

Posted by Tom Wark on Oct 29, 2007

Professional golf came to Sonoma Wine Country this week. Specifically, it came to Sonoma Valley in the form of the Champions Tour and Charles Schwab Cup at the Sonoma Golf Club. Jim Thorpe won for the second year in a row. So did the wineries.

Based on what I saw of cars on the roads and from talking to a couple tasting room folks and owners, sales were way up at tasting rooms this week.

It was a bit of a perfect storm weekend for tasting rooms and a perfect example of why there may be no better asset at a winery than a well placed tasting room.

A lot of things came together for wine tasting rooms:

1. The Golf Tournament came to town bringing with it a fairly affluent, wine drinking crowd
2. Harvest is still happening, though just finishing up, which also brings folk to town
3. The weather was beautiful, attracting day trippers from around the Bay Area

The benefits of having a tasting room, particularly in a destination like Sonoma Valley, can barely be counted.   Sale are all at full retail. The very existence of the tasting room is a form of ongoing advertising. The tasting room is the best source of wine club memberships—the gift that keeps on giving to wineries. The Wine Club that results from a tasting room and the ongoing visitors allows a winery to make any number of small and unusual bottlings, which often can be very profitable.

The problem of course is getting approval for opening a tasting room anywhere near Highway 12 in Sonoma Valley. The community isn’t exactly in favor of it, believing it brings more traffic to the region. Then there is the concern that one more tasting room in Sonoma mars the beauty of the Valley. Yet, the fact is Sonoma Valley from Kenwood to Sonoma would have to add a tasting room a day just to begin to reach the level of such establishments that exist in Napa. And I’d also dispute that additional tasting rooms, particularly in the incremental pace at which they arrive, do anything to affect traffic.

All that said, I have to tell a story about a long time client and their approach to tasting rooms to give a flavor for the extreme view that tasting rooms are the key element to one path to success in the wine business.

Mayo Family Winery opened in 1990. They geared up to do what others do: Make wine, sell it to
distributors, repeat. After about five or six years of this Jeff Mayo was burnt out trying to manage his distributor force across the country. Most of all he was tired of getting fifty cents on the dollar for his wine, the price that distributors demand. He decided to try the tasting room route and opened in one of his family’s properties in Kenwood what would be the first co-op tasting room in Sonoma Country. He invited five other wineries to pour at the tasting room.

Immediately, Mayo saw 30 percent of it’s wine now sold direct, at 100% of the wine’s retail price. In addition, the wine club memberships began to trickle in. All of this was good news.

Being someone who thought repeating what worked was a good thing, Mayo opened a second coop tasting room in a new Sonoma luxury hotel a couple years later. For this co-op room, Mayo invited in 3 other wineries but also created two new  brands. Again, percentage of sales to distributors dropped, direct to consumer sales increased.

All this convinced Jeff that he needed his own tasting room and winery directly on Highway 12. A piece of land on the corner of Highway 12 and Arnold Drive (the entrance to Glen Ellen) came up for sale and they bought it. It took a while but they got the county approvals to build a 10,000 case winery and tasting room.

This was a very expensive proposition. It meant financing a great deal of it. However, five years after its completion, Mayo is selling 95 percent of nearly 10,000 cases of wine direct. He has a wine club of nearly 2000 people and you can’t drive through Sonoma Valley without seeing "Mayo Family Winery".

But wait, there’s more. Mayo opened another tasting room on Sonoma Plaza. Here folks who visit tend to buy one bottle at a time, tend not to join the wine club as often as at the winery, but it proves an amazing source of marketing for the winery since the Sonoma Plaza is inundated with visitors.

But wait, there’s more. What about a different kind of tasting room experience? Could something different increase further the reputation and bottom line of the brand?

The Reserve Room was born. In the first co-op tasting room Mayo opened a little visitor room where you cold sit, taste seven reserve wines, and taste them next to seven bites of tremendous culinary creations put together by the in-house chef. This worked out. Today that small, seven table tasting room with food results in twice as many wine club memberships per visitor than than the tasting room. Mayo went on to repeat this idea in a Healdsburg location.

Today, Mayo sells wine to one distributor and only because he likes the guy. They are friends. Everything else is direct. About 10,000 cases worth. He has five tasting room sin Sonoma Valley. But here’s the kicker:

With this many tasting rooms Jeff Mayo and his wine maker Michel Berthoud are able to indulge their winemaking inclinations. That is too say, they can make a lot of different kind of wines and at very small production levels because they do not have to worry about trying to sell 200 cases of a strange wine to distributors.

Today, Mayo Family Winery produces upwards of 30 different single vineyard wines annually.

This would be impossible without a tasting room. In fact, it would be very hard to survive selling the same 10,000 cases of wine  to distributors who buy it at 50 cents on the retail dollar.

But there is one other thing. Mayo does not send his wines into reviewers to obtain ratings. He used to when he had to satisfy distributors, but not now that all he has to do is satisfy wine lovers. He did fine when he played the ratings game. But he simply does not have to play now.

The moral is this: if you can afford to build a tasting room on a well traveled wine route, and if you make less than 30,000 cases of wine annually…you must build it!