On The Other Hand: Wine in 2028
Leave it to Rob McMillan to dig into the big questions: “What Will The Wine Business Look Like in 2028?”
It’s an interesting read. In it, Rob is most concerned with how we (the wine trade) will sell wine. His primary observation is this:
“I think we are coming to the end of the elevated growth in the tasting room and club models we’ve been managing for the past decade.”
In support of this, he provides, among others, these predictions:
– We will have access to digital tools that don’t exist now. We will be able to use big-data to attack our client lists and find the right consumer targets for efficient direct calling.
-We will discover how to change the experience and create them ‘on the road.’
-We will have software programs that will allow us to create personas within our consumer lists, and then craft marketing programs in-house that will feel personalized to the end consumer.
-Tasting rooms will be important still, but the growth in sales will be online and supported by direct marketing.
-Wine clubs will have better information on consumer level depletions, putting an end to the club that ships wine on a schedule.
The most important thing to note about this collection of predictions is that they are all predicated on the idea of wineries having client lists. And that leads us to the question, how will these client lists be created ten years from now? From what will they derive?
I’m almost certain that in 2028 these winery lists will be derived from individuals whose primary acquaintance with a wine goes beyond receiving an email or text or seeing a social media post or watching a video, or even from a recommendation from a friend. They will come from individuals setting foot on the winery’s grounds. What’s significant about this prediction is that it is the same thing that happens today, in 2018.
Rob’s view is that Big Data and new technology is going to result in the ability to reach potential customers that have never encountered a winery, yet are willing to commit to a purchase because the winery has used Big Data and new tech to perfectly identify exactly who is willing to buy wines without any personal connection to the property.
Rob might be right…if we are talking about wines under $30 that are presented as “on sale” or at a great discount or as “a deal”. Let’s hope the bulk of artisan wineries aren’t forced to have their bottlings presented in this manner.
My reasoning is founded on the observation of trends. The primary trend I see that I believe will continue to have a large influence on the wine industry is that folks desire a personal and intimate connection with their chosen lifestyle purchases. And wine that will sell over $30 a bottle in 2018 will remain a lifestyle purchase; a purchase one makes to reward their self-identity, their personal brand, their ego. I can’t see anything currently working its way through the culture that can diminish this trend.
What this leads me to conclude is that a winery that chooses to work mostly outside of restaurant and retail sales absolutely will want to put the bulk of its efforts toward attracting qualified buyers to an experience that connect that buyer to their wine. And that’s the winery or tasting room.
Rob also recognizes that the continued trend toward the consolidation among distributors will have an impact on wine sales in 10 years. He’s right that the 3 or 4 largest wholesalers will more and more focus on fewer and fewer brands that serve larger and larger retail outlets. This is his exclamation point to his observation that wineries will need to do better and more innovative things to sell wine: they must because no one is going to help them in traditional ways.
He’s right about that. In lieu of the fabled anti-trust department of the federal government magically reappearing and taking an interest in wine wholesale consolidation, most wineries will need to plan to go forward looking directly at consumers….Or will they?
Liberation Distribution has shown us a model for getting wine to restaurants and retailers without having to give up control of our brand, produce 50,000+ cases annually, and forego a huge part of winery margins just to get a place on a list or on a retailer’s shelf. Virtual wholesalers like LibDib will only become more efficient and viable as logistics and shipment options become more robust. If we are going to assume that Big Data and new technologies will make it easier for us to connect with consumers, shouldn’t we also assume that Big Data, VR and new technology will combine to make safe, quick delivery of heavy objects like wine far more efficient and affordable? Of course, we should. And it will.
This will allow small, artisan wineries to reach out to retailers and restaurants who too often complain today of being trapped into inventory mediocrity by the big wholesalers, their dwindling services and their inability to offer small production wines.
Note that this last prediction is also predicated on the assumption that many consumers will continue to demand wines with personality; with real people behind them; or, as we like to say, are “authentic”. It’s the same trend that will continue to make tasting rooms the most important sales vehicles wineries will possess in 2028.
Rob is correct that a decade from now marketers and wineries (and retailers) will have access to tools that make marketing and sales a more personal and more reductive practice. Surely we will be able to more easily access tools that allow us to identify consumers more highly motivated to respond positively to specific messaging and marketing. But the key will be, as it is now, to create a bond between customer and seller—if we seek return buyers.
The winery property and tasting room is the most powerful tool producers have ever created to create bonds and relationships with customers. Nothing else even comes remotely close. We’ll see if the Millennials and Generation Z upend this truth and choose to disregard the experience of stepping on to a winery property in Napa, Sonoma, Paso Robles, the Finger Lakes, the Willamette Valley, Walla Walla or Virginia…and leaving their money and email behind. But I doubt it.