The Slow Adoption of Technology in Wine is Political
A great amount of words have been composed trying to explain why the wine industry has a seeming aversion to implementing new digital technologies. Notables of great talent and energy have worked and are working to cajole the wine trade into embracing the digital tools available for better meeting consumer wine demand as well as matching consumer desires to products.
Yet, the single greatest deterrent to the wine industry becoming a full-fledged adopter of new economy tools isn’t a luddite’s aversion to the expanding digital toolbox. It is the anti-competitive, anti-consumer, and market-disabling state laws that champion barriers to trade.
If these laws that primarily prohibit interstate shipments from wine retailers to consumers survive, what we will witness is the full-fledged demise and surrender of the single most important team of consumer wine educators and wine sellers this country has ever seen: the independent fine wine retailer.
The irony is that the majority of the remaining fine wine retailers support restrictions on interstate shipment of wine because they believe that without them they will simply die under the weight of millions of boxes arriving at the customers’ doors via UPS and FedEx, while in reality, exactly the opposite is true. Without the ability to interact with consumers on a national scale, using a robust suite of marketing and sales tools born of the digital revolution, these independent wine retailers who have been the most ardent champions of the explosion of artisan wineries will succumb to the lure of big box convenience and low-priced case stacks.
Today, while wineries have succeeded in opening upwards of forty some odd states to interstate shipping, retailers may legally ship to only fourteen. No matter how enthusiastic they are about fine wine, the imbibing consumers in places like North Dakota, Wyoming, West Virginia, Nevada, the District of Columbia, and Louisiana are not alone going to lift up the prospects of America’s independent fine wine retailers.
The reason wine retailers have not seen their shipping prospects expand as wineries have is due to four factors: 1) a brutally incoherent interpretation of the Granholm v Heald Supreme Court decision that tells us that the Court — though never saying it — meant to declare that wineries retailing wine are protected against protectionst shipping bans, but retailers retailing wine are not, 2) the willingness of lawmakers to make law based on the highest bidder, 3) the first and second tier’s willingness and/or active participation in seeing independent fine wine retailers go by the wayside, and 4) retailers themselves sticking their heads in the sand believing they will have something to pass on to their children if they only block their own and other’s ability to ship wine interstate.
The current winery direct to consumer shipping channel is worth somewhere in the neighborhood of $3 billion annually. Imagine for a moment if retailer shipping rights had progressed at the same rate as those of wineries; if retailers today could ship wine to forty or more states. Do you really think the retailers’ direct shipping channel would be lingering at $3 billion? Think more along the lines of $6 billion.
Those $6 billion in sales would pay for quite a bit of digital exploration and experimentation. It would pay for lots of technology implementation. It would fund a massive amount of data exploitation. But shipments to North Dakota, West Virginia and Wyoming don’t.
I’ve been working on this issue for a decade now, largely through my association as Executive Director with the National Association of Wine Retailers. That group’s membership is growing, particularly with retailers getting religion as common carriers permanently shut down more states to retailer shipments from out-of-state. And NAWR will continue to grow. Whether the damning up of retailer shipments is broken due to federal lawsuits or legislative momentum, the result will lead to a renaissance in both independent fine wine retailers and developments of new technologies adopted by wine retailers.
But if the political and commercial logjam is not overcome, we can look forward to reading obit after obit of the most important champions of wine education in America.