Where Will the Wine Industry Be Led
Last Thursday at the Women for Winesense annual “Women in Wine” event, three remarkable women came together on a panel to chat about their views of the wine industry, offer some personal observations and inspire the crowd of 100 or so people at Buena Vista Winery in Sonoma. I was honored to moderate the panel. Since that evening I’ve not been able to get one comment made by one panelist out of my head.
Michaela Rodeno, owner of Villa Ragazzi and former head of both St. Supery and Domain Chandon, was one of the three panelists. She made the following observation:
There is a lack of leadership in the wine industry. Not since Robert Mondavi lead the industry and left us has a new leader emerged.
Robert Mondavi was undoubtedly a leader of the California wine industry. He provoked and prodded California wineries to believe in quality and produce quality and to do what it took for California as a whole to take its place in the world as one of the quality wine leaders. And the industry did just that and did so under his leadership.
I wouldn’t want to speculate on who now, some years after Mr. Mondavi left us, could step up and lead the California wine industry. What’s more interesting is where that leader might direct and take the California wine industry.
All three panelists last Thursday, including Michaela, Claudia Schubert—President of Diageo Chateau and Estates, and Gina Gallo—Winemaker for the Gallo Signature Series, spoke of the critical importance of innovation. Would a leader of the industry call for and lead a new sort of innovative approach to sales or marketing or even winemaking? I don’t think the latter is where this leader would take the industry. Winemaking is largely a matter of science and understanding our natural surroundings and innovation in this realm tends to proceed at a steady pace when capitalism is the driving force, with or without a leader.
This leaves, potentially, sales and marketing innovations. The great innovations over the past 25 years has been direct sales. Direct to consumer sales and provided the basis for an explosion of brands that the three-tier system of distribution could never have handled. The explosion of new wineries and the great wines that have emerged from these wineries was fostered in spite of, not due to, the three-tier system.
Ms. Rodeno cited the Internet as one of the most important changes that occurred and emerged during her forty years in the industry. Is there room in the realm of communications for a notable, wine-centric innovation that one leader or another might foster?
I don’t think this qualifies either. Despite the importance of the internet for reaching new consumers and disseminating information, the wine industry has been notoriously slow in adopting new marketing and communication technology to move the industry forward. There are individuals who are pushing the rock as hard as they can as they try to move the industry forward where the Internet is concerned. But even their heroic efforts seem most often to meet with either resistance or inertia.
Perhaps a new leader might be inspired by notable improvements to logistics technology and redirect the attention of producers on retailers, asking them to give more margin to those who sell their wines to the consumer by selling direct to the retailer. The problem with this scenario is that it would take a rejection of the wholesale tier, punishing it in effect for not driving efficiencies. I find this scenario somewhat unrealistic, despite its appeal.
Perhaps it is altogether unreasonable to even consider how a new leader would inspire the wine industry. The fact is, during Mondavi’s tenure as the undisputed leader of the American/Californian wine industry, there was a certain commonality among the wine producers, the wholesalers, and the retailers. During the 1960’s, 1970’s, 1980’s and into the 1990’s most wineries asked how they could get their wines into the hands of consumers via the wholesaler/retailer route. And there were few huge wineries and many fewer tiny wineries.
Today the industry seems divided into types and sizes and interest groups each contending for a particular slice of the marketplace, while fewer and fewer giant wineries monopolize the wholesalers attention. How does a leader corral such a diverse industry and send them down a single path singing the same tune? I don’t know how, nor what the path might be pave with.
There was a great deal more that came out of the “Women in Wine” event last Thursday that provokes contemplation. It was a seminar in the wisdom of success as epitomized by Michaela, Claudia and Gina. But it is this issue of leadership, the current vacuum and where a new leader might take the industry that sticks with me and confounds me.
You, Tom! You must be Emperor of Wine!! 🙂
The cliff over which I would run the industry would be steeper than anything else anyone else could find. But thanks!!
Tom – great insight here. I worked for Michaela for several years and have great respect for her insight and leadership. Did you know she was the first female CEO in the Napa Valley to come from the “outside” – a non-wine family member? She’s an impressive lady. Anyway, in my humble view, I believe the next great leader in the industry is not going to be a person or company. I think it’s going to be some technological innovation or break through for the industry as whole. As you are well aware, the wine industry has always been painfully behind the curve when it comes to the use of technology. Remember it was not that long ago that the concept of a winery website was a foregin object for most mid-sized and small wineries. Heck, Dry Creek Vineyard didn’t even get a computer onsite until the late 90’s! Will it be virtual tastings? Or a break through in the three tier system? I wish had that crystal ball – instant millions!
Thank you again for moderating our “Women in Wine” panel Thursday. You asked these terrific ladies several thought-provoking questions and illicited many more fascinating answers from them.
I, too, was rather stuck on Michaela’s comment about leadership. As you mention, there’s quite a bit of innovation in many arenas of the industry right now. It’s difficult to say if future leadership will require more specific focus in just one area (i.e. DTC or tech or something else), or if leadership will emerge as simply a bigger voice from the industry overall.
Certainly our 2013 panelists, Michaela, Gina and Claudia, showed us they’ve got plenty of leadership steering their own businesses to new heights today. But it will be sometime before we see anyone remotely like Mr. Mondavi emerge again to the forefront.
Great insights and questions you pose around leadership in the wine space, thanks for sharing. Perhaps the next great leader will focus on educating the masses? As direct to consumer wine sales continue to steadily grow, most US consumers have easier access to a variety of wines. Wine has traditionally be something that wine aficionados or “wine snobs” were good at understanding and sharing with friends. Many people outside of California have been intimidated by all of the fancy jargon used to describe wine and have never really become attached. Maybe wine needs to become more personal and relational? To borrow a recent quote from Joe Waetcher at Wine Direct, “the US is ranked #57 in wine consumption per capita”. There is still a lot of work to do in educating consumers in our country. Internet and social media outlets allow wine education to happen at a pace we have never seen before. Perhaps the next great leader will help remove some of the pretense and stigma around wine and help spread the new good news to all.
While I agree with my good friend Michaela about Robert Mondavi’s vision and leadership, I’ll disagree with her that the industry is lacking leadership.
No disrespect to Robert Mondavi who deserves every accolade thrown his way, he was leading in a different era; one in which he determined to take gigantic risks and with success earned commensurate respect from his industry colleagues. But there were far fewer in number back then. Would anyone single person be able to truly repeat that kind of risk-taking and leadership role in today’s business? I doubt it.
In truth, I think leadership is already happening in the industry and it’s not from a man or woman. It’s the from the PC and the internet and it’s shaping the way we sell, process information, make decisions, collect data, but most important it’s changed the way we communicate and listen. We have our own Moore’s Law being applied now with the pace of change quickening in a logarithmic manner every decade. That’s driving this sleepy cottage industry Mr. Mondavi led out of the wilderness, into a hard-charging one in which many who entered the business with different skill sets, now struggle to keep pace.
The leadership now isn’t from a single person. It’s from the mass of people who are now using new tools to modernize and solidify the future of the business.
I think you and I are thinking along the same lines when it comes to evaluating the context and circumstances that were different when Mondavi stepped up.
However, I’m not ready to cede “leadership” to technological innovation. It’s just not romantic enough for my taste. Also, the idea that technology leads us really strikes me more as a matter of adapting to changing circumstances (and technology).
Technology is a tool to be use in the pursuit of an agenda.
In a leader I want a vision. Technology doesn’t supply that. A leader makes the case. A leader demonstrates a way in or a way out.
That’s not to say that a leader is required. And I’m not sure Michaela was making that case anyway. I think she was making an observation about what’s different about today’s industry versus 10, 20 or 30 years ago.
But, if I were to offer a reason for there needing to be a leader, it would be that we must find a way to expand the market and not just wait for the Millennials to take over. I don’t think that’s enough. They’ll bring change based on their size, economic circumstances and tastes. But a gifted leader will demonstrate how the industry can expand its reach; how we can convince a larger percentage of the population that wine is an alternative.