Monday, September 1, 2014

Should You Push Brand PR in a Natural Disaster?

The answer to the title this week is: It depends on how its done because the stakes are raised and a there's also a larger opportunity to end up with scrambled egg on your face.
 
This past week has been pretty hectic for me and all my neighbors who all live near Hess Winery. Early Sunday morning I woke to my fiancée screaming in my ear and the bed jumping like ping pong balls in a bingo parlor. Pitch black since there was no moon, I jumped up but couldn't find shoes or a flashlight. No matter, I had to move alacritously to see if my mom was alive in the back 40. With nothing to illuminate my path, I slid barefooted through all my shattered Riedel stemware - brail style, then maneuvered my way through the maze of furniture which had moved around like Tetris blocks.
 

Saturday, August 23, 2014

Oversupply and a Bubble Forming. Now What?

Somewhere early in the year 2000 my mother-in-law was moving things out of a vacation home in Mariposa CA. I volunteered my help. So together with Anthony; a young and fit assistant from the Starving Students Movers we started lumping furniture. During a coffee break where we enjoyed delicious Starbucks Latte, Anthony started sharing his stock investment strategy. Wait...what? Investment strategy? (Disclaimer: I'm invested in Starbucks at this moment.)
Anthony couldn't have been much more than 21 and it turns out he really was a student - a student taking a videotape course in "How To Retire BeforeYou're Thirty" and was day trading. He explained his trading philosophy: high growth Internet stocks. He had amassed a small fortune already and he did it all with credit cards and margin debt.
I started to wonder if I was missing out and perhaps being too cautious with my own investments. After a little more thought on my drive home, I called my broker and cashed completely out of the market. With the Tech Crash hitting just weeks later, I had discovered a new technical indicator that would define my investing strategy from then on. I called it, "the Starving Students Bubble Indicator (SSBI):
"When a Starving Student gives you stock tips, get the hell out of the market because it’s overbought."

Sunday, August 17, 2014

Do Tasting Rooms Take Away Sales from Distributors?

Procter & Gamble has long been respected for it's integrated product development, integration of acquisitions, and brand marketing. Consider the number of iconic brands they hold like Ivory soap, Pampers diapers, Duracell batteries, Gillette razors, Tampax feminine care products, Crest toothpaste, Tide detergent, and the list goes well beyond that. P&G has more billion dollar brands than any company in the world ... but they don't sell wine. If P&G sold wine people would be running to their mailboxes for free samples and the TTB would not be happy about that.

Sunday, August 10, 2014

Wine Distributors: Legalized Pot vs Prohibition

 
Thirty-seven states have liberalized the 1970 Federal Controlled Substance Act with respect to marijuana use. Thirty-five now allow medical marijuana. Two states; Colorado and Washington have fully legalized recreational and medical marijuana use. Oregon, Alaska, and Washington D.C. are expected to do so in 2014.
 
Two weeks ago I spoke to a large group of high-level sales people and distributors. I enjoy talking to this particular group because I get real-time unfiltered intelligence from very experienced business people. Outside of all the expected discussion of supply, demand, sales tactics, competition, pricing and the like, there was a surprise discussion on the impact of legalized marijuana on wine sales.

Saturday, July 26, 2014

Is it the Right Time to Start a Second Label?

 

Can I have Seconds?

 
It's that time in the cycle again. We are between balanced and long on grape supply in certain varietals and regions and we're facing an unprecedented 'three-peat' of great yields and quality in California after the upcoming harvest. The dearth of balanced supply with inevitably be the dearth of some business models over the next several years.
 
One consequence of these types of atmospherics is that clients start calling to ask me about the availability of financing and want my thoughts on the wisdom of starting a second label. That's an idea on its surface that might seem to be a low-risk proposition - after all, you have been blessed with inexpensive grapes or available bulk - but building a business strategy on a temporary supply issue can make an already bad situation worse in most cases - but not all.
 
There are some instances where starting a second label makes a lot of sense, so please email me if you're a client and want to talk about your specific case. But for the benefit of others in the wine community to spur a little discussion hopefully, here are several real stories of wineries who faced the decision to start a second label in the last 15 years and some examples of success:

Sunday, July 20, 2014

The Easiest Way to Improve Club Profitability

 
While away on vacation the past few weeks, I've had some time to catch up on Dilbert which is a muse for all business revelation. The above comic got me thinking about Tasting Room compensation and specifically how staff are rewarded for new club member signups.

Of course paying for new club members makes sense because you need new members. Asking the next obvious question then .... why do you need new club members? You might think the answer is to increase your direct sales but for many the real answer is, you need new club members just to keep your wine club from shrinking.

Wednesday, June 11, 2014

Anti-Winery Sentiment is Building


 

The Winter of Our Public Discontent

 
 
John Steinbeck
Consistent with the farming traditions of the past, the wine business has long been known for its collegial, collaborative and giving ways. There are always exceptions but people in the wine business historically have worked together for the common good of all.