Sunday, March 15, 2020

Selling Wine in a Pandemic


There are times in life when we have to react to circumstances that are well outside of anything expected. A pandemic? Well, that's a circumstance none of us have any experience with. That new aspect in all our lives is requiring each of us to adapt, then employ behaviors that are out of the norm. For some, this is distracting but for others, this is nothing less than debilitating.


The current news cycle seems like an unending summer rerun now, with a plot being played over and over - except it's hard to avert your eyes from this show because there is an issue of safety involved. And business?

The recommendation from the CDC to avoid crowds and employ social distancing is causing havoc with travel agencies, hotels, airlines, cruise lines, and the hospitality industry. But what about the wine industry?

This is obviously hurting us as well, but let's not go down that path because plenty of people are and will. We don't need to look at a train wreck. We need to talk about as many creative solutions as we can muster. And more important to me is that everyone grasps one overarching philosophy I hold as an absolute truth:
This is NOT a situation that will impact long term wine demand. This is a short term demand shock. Consumers will buy less wine for a short time because there is a reduction in the number of occasions; canceled sporting events, conventions, corporate events and so many other occasions where wine is served.

...But no matter what, wine consumers won't abstain. That's a fact!

How do I know that? Did consumers stop drinking wine during Prohibition when it was illegal? No. They just evolved the way it was manufactured and delivered.

And during the most recent recession, did consumers stop drinking? No. We experienced a short term slowdown in sales, followed by a sales increase a year later.

Wine consumers drink wine in good and stressful times. Your job as a winery is to figure out how you can get your consumers to realize you are open for business, and show them the options they have that will make it easy to get your wine to them - even during a pandemic.

My advice for wineries today is to focus on things you can control. While you can't control diminishing hotel reservations or canceled tasting room visits, you can find a way to meet the customer where they are. Here are some thoughts:
  • People will want wine and with restricted purchase points, try to find same-day delivery options and/or tell customers how long it should take to deliver your product to their door.
  • In the good old days, winery employees made delivery runs to local restaurants. If employees are willing, send them out on nearby delivery runs to consumers.
  • Find ways to help your customers have fun even in this difficult environment. People will search for something else to do to feel normal. Ship them a game for family play with their case of wine. Include a gift card to Uber Eats to have dinner delivered, or give them free passes to a concert on your own property later this summer.
  • You can't get on a plane, so consider virtual tastings using Skype or Zoom. Use your network to get a celebrity, athlete, or musician to participate with you in a larger event. Engage with your at-home customers.
  • Some people will still come to your tasting room as long as it's not against the law, but you have to assure them it's safe. Publicize and prominently post the new actions you are taking to control community spread and make those activities obvious to guests who come. If that means putting everyone in gloves and masks, then do that and have fun with it!
  • If you are in three-tier grocery outlets, early indications are that consumers are buying more from that channel as they eat more often at home. Consider things you can do to have your wine noticed on the shelf and use this news cycle and behavior change to your advantage.
  • Consider changes to your tasting bar that enhance social distancing, but emphasize that you have private tastings where by-appointment consumers can maintain a safe distance.
  • Have a curbside pick up offering. If it can work for grocery stores, it can work for wineries.
  • If you can't sell from a tasting room, consider other places you could sell that are in keeping with current CDC Guidelines. Some that might work include grocery stores, pop up venues, open-air farmers markets, and out-of-area or out of state locations. Don't limit yourself to selling only in wine country.
  • Is it possible to put up a tent and sell cases of wine from the roadside, with fanfare and messaging? I'm thinking roadside fruit stand here - which interestingly is where tasting rooms started way back when.
  • Use your marketing imagination and messaging to get consumers to buy online. It's a less expensive way to sell. And while you're at it, see if you can get new club signups in the process. There are many ideas to consider that may drive new behaviors including coupons, discounting, free tickets to future events, and gift cards that could be used on the next purchase. Figuring out how to direct people to online sales will continue to pay off even after this situation fades from the news.
  • Collaborate to promote your region hotels and restaurants that are aligned with your thinking in promoting "safe visits." Give consumers a reason to get out of their homes without them feeling they are at risk. Or maybe go a step further and cross-promote with a venue entirely out of your region.
  • To the extent your tasting room employees find they have free time, call your club members. While telling them what you are doing at your winery, emphasize with them and be ready to listen to their stories too. They might buy wine, or your outreach might enhance your connection. Either way, both are good things that will pay off with a long-term view.
  • With the recent job and stock market losses, some consumers won't want to spend on your spring release. Consider delaying your shipment. At a minimum however, have a gracious option available for them to skip their allocation and still remain a club member with full benefits.
I believe those wineries who take up this challenge to control what they can, will find success even in the current operating environment. I also believe that at some point when this issue ebbs, we will have local wine consumers with pent-up demand who won't be going to Europe, Asia or getting on a plane for a vacation. 

In 2020 there will be an unusual number of local consumers wanting to have some fun and they will be staying local. Make your winery one of the places consumers discover, because they are and will be looking!



UPDATE:

The situation continues to change rapidly. Since posting this blog a few hours ago, Governor Gavin Newsom came out with new guidance that calls for all bars, wineries, nightclubs, and brewpubs to close.  

Many wineries are already announcing the closures of their tasting rooms as of Monday the 15th. That will put enhanced emphasis on revenue-generating activities away from the winery. [link]

And in further news:



What's Your Opinion?
  • Yes, we know everything sucks so let's not start there. Do you have any suggestions for others that might help at this unique time?
  • Are you having success with anything?
Please join this site on the top right-hand side of the page, and offer your thoughts below. I respond to everyone.

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22 comments:

  1. Well, the governor just said all tasting rooms have to close. So check that one off your list. As usual, sage advice. Those with good DTC channels will be much better off, of course.

    ReplyDelete
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    1. Alder - Thanks for the post. I hadn't heard that but I haven't looked at the news in 10 minutes, so anything is possible.

      As an industry expert, do you have any other thoughts people can learn from?

      Delete
  2. One person who had technical difficulties posting emailed the following:

    Use Zoom to hold online tastings. Up to 100 participants in the free version. — https://zoom.us/pricing — and up to 1,000 for premium.

    Even in non-pandemic times this could help wine club engagement. Offer special pricing for orders placed during the tele-tasting.

    Establishing a presence in virtual worlds could be an alternative. I used to play around with Second Life 10+ years ago. I looked at it today, but the on-boarding process for new users is actively user-hostile and a total geek kludge (like 10 yrs ago) that will drive normal wine drinkers away...

    But back to Zoom ...Wine country visitors who arrive at your shuttered tasting room could read the instructions on door and have a real-time tasting sitting in their car in your parking lot.

    That teleconference could be led by tasting room staff who could bring samples ... and purchases to the cars ... parking lot would be set so that cars are 6 feet away from each other to comply with self-distancing guidelines and edicts.

    Think of how this learning experience could be rolled into your overall marketing once corona VP becomes just another Mexican beer.

    ReplyDelete
    Replies
    1. If this can be pulled off legally with zoning rules for alcohol consumption, the parking lot idea could be fantastic.

      Think about stirring up nostalgia for the old drive-in movie days? Most people have phones or ipads they could bring to provide the "screens" though obviously wineries with the space and means could perhaps actually set up a projector onto a building side, etc.

      But, again, it would have to depending on if the wine could be consumed in the parking lot or would it be viewed as an extension of a terrace or patio?

      Unfortunately, I can see many officials getting queasy about that thinking that it may promote drinking while driving, etc.

      Delete
  3. Thanks for the inspiration. May I resend part of this to my members (FWC) with credit to you, of course.

    ReplyDelete
    Replies
    1. This blog is wide open for anyone to use and cite. Thanks for checking.

      Delete
  4. I just sent this out as an email blast to all my clients & potential clients. I added an "out-of-the-box idea. Call up your best long terem clients and offer to do a reserve wine tasting in their home for a small intimate group free of charge. Don't sell just enjoy your wines & their company. I can just hear them telling their friends what you did for them!

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    Replies
    1. Good thinking BTBWB. We have to envision possibilities at this stage instead of freezing up and not making decisions. Try things and if they work, expend. If they don't, go to the next idea.

      Delete
  5. Replies
    1. Thanks for the kudos! I believe this industry can find a path when we work together. We always have when faced with problems so now is the time to come together and evolve.

      Delete
  6. Great message, Rob! We'll be sharing....

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    1. Thanks George. We have to ideate and find solutions. That's a process. Start with a crazy idea and adjust it with input. But I know demand for wine is still there. What's broken is the consumers ability to get it in the manner in which they did yesterday. We can solve for that.

      Delete
  7. Rob, excellent piece as usual. I'm experiencing the pain of this pandemic all too well at our little winery. Distributors have frozen buying, because many of their customers have stopped buying, and our tasting room has been essentially shut down by the virus, even before the government recommended that action. Of course attention turns to virtual sales, but there is only so much online band width for consumers whose inboxes are crammed with covid19 updates and business updates. Like sitting down with a good book, instead of watching whatever sporting event was on three weeks ago, I believe now is a good time to ask our customers how they are doing and to send them images of our workplace to connect them with this beautiful place in Northern California. Take a pause and hit the brand button in order to take full advantage of that pent up demand when this outbreak is over. Thanks for all of the helpful suggestions.

    ReplyDelete
    Replies
    1. Elton - thanks for the painful honesty. This is a dip in the American economy that has the potential to put a lot of small businesses under. Everyone is hoping this is like the flu and will moderate when the weather warms. I think we may actually see a second news cycle that includes real information instead of fear of the unknown, and that might allow for some improved conditions. But if either happen, the pent up demand will be discovered by those wineries who remain relevant and engaged with their customers.

      Delete
  8. Thanks for sharing some excellent ideas, Rob, and for your broader perspective -- this is a very serious, and fluid, situation. But it too shall pass. For us at Benson, it has been one of the busier 72 hours helping clients communicate to consumers and press! Jeremy Benson

    ReplyDelete
    Replies
    1. Jeremy
      Thanks for posting. It's a very busy and scary time. The thing that is certain is that it will end. Nobody knows exactly when but I'm sticking with the estimate the CDC gave major league baseball, which is to start their season May 10th.

      In the interim, we have to fight through the temptation to only focus on the crisis. It's important to deal with crisis management, but we also have to spend more time looking through to normalized business in scenario planning.

      Delete
  9. Thanks for this post and lets keep the creativity flowing. I am an owner of a boutique winery in Israel -- and we just made a decision to offer free home delivery for even a bottle. Yes, we are losing money, but we are losing money anyway. All restaurants and hotels are closed here, and our main markets in the USA have entered lockdown as well (all restaurants in NY are closed). So we need to act where we have some control.
    Re tasting room -- by law we are meant to be closed, but we can sell wine from the winery....just can't have people gathering in the winery. But the chance people will come to us right now is quite slim -- more and more folks are under recommended isolation. So we need to go to them.

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    1. Jacob - all true. This is a unique time, but it exposes the over-reliance we've allowed with tasting room sales. In some ways, this will end up having a blessing in some ways, in that winery owners have to find other ways to sell wine now. When this crisis ends, some of those discoveries will become permanent.

      Delete
  10. My company offers virtual tasting rooms so that your wine can still be showcased to online visitors. We make a 3D model of your tasting room and then shoot some interviews where you talk about your wine, and present much like you would to a visitor. We can then link it all into your e-commerce platform or to an order form. Here’s one we did recently! https://my.matterport.com/show/?m=nhFDuXtmbTz&brand=0

    ReplyDelete
    Replies
    1. EFR - I normally take down posts that are advertisements, but I'll leave this one up for the present.

      Delete
  11. I admit that selling wine & liquor via internet or phone and delivering curbside is the ideal scenario. In Upstate NY stores are still way too busy as some are just not that sophisticated to get the curbside routine in effect.

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    1. Gregg - Many are frozen with fear, or frozen because they are rule-bound. While wine is heavily regulated, today is the time to bend some rules as most of the rules out there were made for normal business times. We have to accept that selling wine today means finding ways to notify customers in their homes of your wine, and delivering it as quickly as possible. How we do that is up to us all.

      Delete

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