Posts Tagged ‘economics’

 

 

Our most popular post from last year is brought current with the 2012 financial information. The question at hand is: “How much do wineries really make?
 
The answer of course is ……(drum roll please ….) Not enough. Finding the facts is almost as hard as chasing unicorns in this business because the wine business is private. Its a family owned industry with even the largest; Gallo a family owned company. But its really quite amazing from the perspective of what is shared between neighbors in the wine business. There isn’t the sense that your neighbor is a rival or competitor. Its more of a club feel in many ways. If you need something, its quite normal to check in with your neighbor. Need a tractor because yours went kerput? No problemo. Need a little welding and custom fabrication on a pump? I’ll be right over with a welding rig.
 
There is a competitive side that abounds in the business too of course. When it comes to sharing financial information and customer lists, good luck! Ask a winemaker neighbor how its going financially, and you’ll get a mixture of liars dice, false bravado, partial truths and ….. well ….. 

 

Read on …

 

 

Wine is social. Sure, you can drink it solo, but it’s best enjoyed with friends, food and conversation.  Selling wine is social, too. Canny wine marketers know this in their bones. The job isn’t about moving a bottle of wine across a counter. That’s just the transaction. The job is about great service, gonzo enthusiasm and killer personality.

They approach a customer, ask the right questions, listen carefully, suggest wisely. If the customer goes away smiling and the wine is a hit, the customer will come back. And next time, bring friends.

If any industry is tailored for social media, it’s wine. The proof is in the data. According to VinTank, a social media software company for the wine business, 14 million people have mentioned wine online at some point, a number that grows by 450,000 people every month. And they’re talking a lot, having 1.5 million conversations about wine online—every single day.

The bulk of this chatter happens on mainstream social networks like Facebook, Twitter, and Instagram, plus wine-centric apps like CellarTracker and Delectable. People post tasting notes, bottle shots, and ratings from 88 points to Yuck to Wow! They tag their friends, who share it too. Think of social media as the breeding ground for digital word of mouth.

Now, producers, retailers, restaurateurs and buyers have joined the conversation. Getting up to speed in social media means learning a new technology, but that’s not so different from learning a new point-of-sale system (and arguably a little easier). Happily, many wine pros find that success online requires the same kind of sensitivity and savoir-faire their jobs demand in real life.

“Customers are going to talk whether you’re listening or not,” says VinTank’s CEO, Paul Mabray. “You’d answer the phone if they called you. You’d answer an email. It’s fundamental customer service to answer a tweet, or a post on your Wall. And you don’t answer in stupid promotional ways. You just say, ‘Hey, how are you doing?’”

But social media success does require a slight shift in thinking. Traditional marketing was about push. A marketer publishes a notice about a holiday sale, or the arrival of a scarce Bordeaux, hoping customers will come pouring in.

Social media is about pull. Instead of broadcast-and-pray, a marketer goes where the customers are, connects with them, and engages with them on their terms.
Read on …

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For over 3 years, we have worked closely with the Burgundy School of Business both as a company – hiring interns to work with the EWBC, and as a research engine – helping us conduct field studies on various subjects. This year, Aymeric Dehont conducted a host of research for us, which eventually inspired him to create a paper on the fragile relationship between wine and social media. We appreciate Aymeric’s hard work putting together his thoughts and trust you will share your feedback with him. Keep in mind this is from a very European perspective.

How to improve the use of social media in the wine business?

Introduction:

As a Masters student in Wine Business in Dijon, the regional capital of Burgundy, I’ve continuously questioned myself on many issues within the wine and spirits sector. Yet, one of the most debated subjects has been the apparent effectiveness of social media. After attending the EWBC – Digital Wine Communications Conference, I have come to under that the wine & spirits industry, in general, hasn’t succeeded in its use of these new tools. Therefore, I wanted to get a better understanding on how to improve digital communication and what would be the ideal online strategy to follow.

This paper will provide a brief analysis of how social media is currently affecting the wine industry based on articles, marketing analysis and knowledge.

Social media and the impact on marketing

It is true that social media has attracted an inordinate amount of people over the last two decades and currently, almost everyone is using at least one of its platforms. In large part, this is because interaction between each other, and the community, has always been a basic need for humans, referring to the very famous Maslow’s hierarchy of needs pyramid.

As observed in the Nielsen Social Media Report 2012, social media is mainly used when watching TV in order to interact and function as ‘social care’ for customer service. Approximately, 47% of social media users were actively involved in social care. In 2011, more than 80% of the Fortune 500 companies were using some form of social media to connect with consumers.

Companies that are using these tools efficiently are not advertising, but instead creating bonds between themselves and the consumer; thereby establishing loyalty. The customer isn’t considered as an asset anymore, but as a person to interact with and to satisfy. Bear in mind that social media is made to connect remotely between humans, and being “connected” means interacting with each other. Advertizing is not an effective means to create a relationship with people, but rather a means to provide a straightforward message to the consumer without receiving direct feedback. 30% of consumers found advertising on social media annoying and only 25% are willing to pay attention to it, which proves that the use of social media is totally different from regular advertizing campaigns.

Read on …

What is in a bottle?

 

The Journey
Bernie Rooney, owner of Oak Barrel Winecraft in Berkeley, Calif., says you can make a bottle of wine for about $5 or less once you have the equipment. That’s not why people go to the trouble, though. Instead, he says, home winemakers do it to enjoy the journey — from picking the grapes to drinking the wine a year or more later. “If you collect trains, people think you’re strange,” says Paul Taybi, a home winemaker in El Cerrito, Calif. “If you make wine, you get invited to a lot of parties.” In the end, your creation may remind you of Two-Buck Chuck (the bargain producer officially known as Charles Shaw), or a 1998 Chateau Mouton Rothschild –for those who have already drunk a good quantity of wine.
Read on …