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Handling a saturated wine market
Friday, June 08, 2007
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Over the years, several winemakers, as they were about to leave on a trip to promote their wines, have remarked to me, “Making wine is easy. Selling it is the hard part.”

That’s logical — they’re trained in oenology, not marketing. But if they have to go out on the road to help sell the wine, they might want to take a look at a new book on the subject — “Wine Marketing & Sales: Success Strategies for a Saturated Market,” by Paul Wagner of Napa’s Balzac Communications and two Sonoma State business professors — Liz Thach and Janeen Olsen.
The book seems geared to the folks who wear multiple hats in a winery. It takes a reader through the basic steps of marketing and continues right on up to taking a winery that’s on the ropes and turning it around by repositioning it, with all the necessary in-between information.

The Ps of marketing
I remember spending a complete class session in my first marketing class on the five Ps of marketing (yes, I know there are supposed to be four, but the authors have quite logically added a fifth). The book covers the concept just as completely in only a few pages.

In fact, they introduce the subject with just a few words: Product — what you sell; Placement — Where you sell it; Price — What it costs; and Promotion — How you support it. The book adds, “The sum of the above four elements creates the consumer’s perception and creates the fifth P: Position — How do you compare?”
The authors make the case for the importance of marketing and sales with a foreword by the Great Marketer himself, Robert Mondavi, who wrote, “Anybody in the wine business … must address all of wine’s aspects in a way that earns credibility and makes a profit, too.”

Recognizing that many wineries have limited budgets, the book offers a section on “Advertising Suggestions for Small Wineries,” and provide tips for getting the biggest bang for your buck.

The book also covers the importance of graphic design in labels and packaging and presents tips on working with designers to maximize the impact of label and promotional graphics.

Handling contributions

Wineries are hit up for contributions of wine for charitable events frequently, and the authors cover how to separate donation requests and then how to make the most of those to which contributions are made.

“Wine Public Relations” is especially helpful, explaining what reporters and editors look for when deciding to write about a winery or an individual — what’s newsworthy and how to approach an editor or writer. The same chapter goes beyond the media, covering how a winery can communicate with consumers.

Small producers often find the financial side of marketing confusing or puzzling: How much should I spend? The authors include a series of actual budgets from producers of 1,000 cases ranging up to 400,000 cases with amounts and percentages covering all marketing and sales expenses.

The book discusses the avenues to sales — the traditional three-tier system, direct sales channels and direct sales to consumers — and explains the pros and cons of each, providing examples of each for wines selling for various prices. Also discussed is how a winery can select and work with a distributor.

The advantages and disadvantages of wine clubs and direct selling are covered, as is setting up a tasting room. If you’re thinking of exporting your wine, or importing wine from another country, the book offers some good advice. Finally, should you take over an existing label that is less than successful, or if your own winery is undergoing problems, a chapter offers strategies for turning around an ailing business.

Even established marketing professionals could probably gain something from this book, but for those who are marketing novices or handle multiple jobs, particularly small vintners, the book is a must-read.

It’s published by the Wine Appreciation Guild, retails for $69.95 and can be found in book stores, wine shops, at www.wineappreciation.com or (800) 231-9463.
4 comment(s)

Debi Ward Kennedy wrote on Jun 8, 2007 7:42 AM:

" This sounds like a well-rounded approach to marketing wine - except for one element of the equation that is, unfortunately, routinely overlooked: Visual Merchandising & Display. How you present your wine in your wine shop or tasting room, and in feature retail displays in other stores, says as much about it and your winery as your label description does. Effective placement, presentation,and cross-merchandising with other products can tell your story as well as a write-up in Wine Spectator. Just like the wine itself, the difference is in the terrior - pride of place - and that extends to your retail sales locations. Tell your own story in everything you present - carry your brand image into the colors, fonts, images, and props used to display your wine. (I've seen some really awful draped shiny fabrics and plastic grapes used in higher-end wineries - this isn't helping to set you apart or above the masses!) My goal as a retail designer is to express the unique identity of a winery and its wines consistently, through elements that reflect the company's brand. So, I'd add 'Presentation' as the sixth 'P' to the list above. (I'm a retail visual consultant in Washington state, and have provided merchandising support for Chateau Ste. Michelle, Columbia, & Hogue Wineries.) "

Kenneth wrote on Jun 8, 2007 5:15 PM:

" Simply stated, successful wineries are always sales driven, not production driven, no matter how large or small they are. If production is increasing faster than sales, the winery must turn off the production spigot and wait for sales to deplete excess supply. And don't forget, it easier to take prices up than it is to bring them down; so, don't take prices up too quickly! In other words, don't get greedy! "

Gene- Seattle Wine Blog wrote on Jun 12, 2007 9:32 AM:

" As the "wine psychologist", I would add a seventh "p", perception. Marketing, merchandising, public relations, and selling generally are all about how the product is perceived by consumers. In this era of hype, spin, and lies, it is important that the brand signify what is actually in the bottle. I would also add that a winery is not only marketing wine, it is also marketing an image of the winery and the winemaker. "

Ron Rawlinson wrote on Jun 19, 2007 4:33 AM:

" This book has it all. Mr. Wagner and his associates have condensed years of experience and knowledge into a concise,humorous and straightforward guide on how to sell wine. Even a 14 year industry vet like me can learn a thing or two. This is a GREAT tool and resource book. Kudos and thanks! "

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