In the wine biz, uncertainty is a given. Any work dependent on the land is, by its nature, unpredictable. Industry veterans become accustomed to the constant change, even thrive on it. Yet how do we maintain our resiliency when it’s not only seasons changing, but the wider world too? And can that resiliency actually strengthen a wine brand?
Industry leaders considered these and other questions at The Exchange, which convened in Napa on March 31st around the theme “Building a Model Wine.” In recent years, more wine brands have flooded the market. Product quality has risen, along with consumer expectations. Simultaneously, new obstacles in labor, markets, and public affairs have cropped up. Along the way, a wine brand’s success has become contingent on not just the quality of wine, but on its messaging, too.
It might seem basic, but is actually far more complicated. Arriving at the heart of a company’s authentic message is rarely a straightforward path. It’s a difficult journey that requires honesty, courage, and an adventurous spirit. While rigorous planners and Type-A personalities might prefer a clear roadmap, veering off-course is often the only way to progress.
Ask the Hard Questions
Whether a wine brand has existed for two months or 20 years, it inevitably arrives at a fork in the road, a place of reexamination. Here, it’s useful to stop and ask: Where are we? Are we headed in the right direction?
While an affirming yes, of course! might be a convenient answer, blind optimism leads seekers down a dark path. “Don’t ignore the challenges,” warned Rob McMillan, executive vice president and founder of the wine division at Silicon Valley Bank. “Too often we ignore painful things.”
Currently, according to McMillan, some of the “painful things” or challenges facing the wine industry include:
- Large stock market correction in a thin GDP growth era
- Frugal Millennials replacing Boomers 1:1 as consumers
- Imports gaining in popularity with new consumers
- Continuing consolidation of distribution
- Increased cost of labor & domestic premium grapes
Any domestic winery in business in 2017 is likely touched by at least one, if not all, of these issues. In light of these factors, how might your company and brand consider re-strategizing? (Hint: honesty will get you everywhere.)
Go All In
Malcolm Thompson, chief innovation officer of Vinventions, reiterated McMillan’s call for honest self-assessment and took the idea further, calling for full commitment to change. A company begins on sure footing, he explained, but the terrain always shifts: “Every innovation reaches a plateau in effectiveness.” When that happens, it’s best to acknowledge the problem—then promptly get to work on a solution.
Thompson told the story behind Nomacorc’s Select Series of wine closures, launched in 2010. The company had been established for over 15 years when it recognized the need for an improved product—and from there, it launched Select Bio: 100% recyclable, plant-based, with zero carbon footprint and enhanced design. Creating the Select Bio Series, which eventually laid the groundwork for the company’s new Green Line, required a complete overhaul of production, including new material sourcing. The logistics wouldn’t be easy, but the effort would surely be worthwhile: ultimately, the Select Series, and specifically Select Bio, would distinguish Nomacorc within the market and improve the company product line.
Getting buy-in from management became key. “When you see yourself at a pivot point or plateau, having commitment from the top of the house … is important.”
Find Your Purpose
According to Terry Creaturo, adult beverage coordinator of Kroger, innovation serves at least three potential purposes:
- Solves a problem
- Offers a benefit
- Just for fun
Rarely would a company expend resources to innovate “just for fun.” For most of us, that leaves the first two. Honing in on purpose, said Creaturo, requires knowing the audience, asking: Who is the customer? Purpose, then, begins with people.
In grocery stores like Kroger, demographics are revealing:
- 65% of grocery store wine shoppers are women.
- 50% do not have wine on their shopping list when they enter the store.
- Most grocery store wine shoppers are not brand loyal.
- The first decision a wine shopper makes is “red” or “white.”
These details matter. Any wine brand that understands its customers and tailors its purpose accordingly will have optimal success getting their product to market.
Think Outside the Box (er, Bottle)
“Darwinian evolution is faster than wine trade evolution.”
The words were central to a presentation by Kevin Shaw, founder and executive vice president of the beverage industry design group Stranger & Stranger. Many of Shaw’s clients are spirits producers—which, he insisted, embrace design innovation far more readily than wine clients. What are you so afraid of? he seemed to be asking.
Specifically, he challenged attendees to consider why we might be so attached to the same bottle formats we have traditionally used. The possibilities are endless:
- New shapes
- Alternative containers (pouches, boxes, cans, Flexform)
- New label textures, design elements (i.e., mesh cages or encapsulated bottles)
- “Fun size” bottles and singles servings
Shaw drove home the idea that branding is indeed an adventure and encouraged attendees to embrace new ideas—we arrive in a better place when we take risks.
Know Your Value
At the end of the day, what is your brand’s value? The answer might be unclear, said Bill Silver, dean of the School of Business & Economics at Sonoma State University. A product’s value in the mind of its creator can be quite different in the mind of its consumer. It’s vital for a company to recognize the disparity and plan accordingly.
Silver referenced a Harvard Business Review article “The Elements of Value” (September 2016), which offers a visual aid in the form of a value pyramid. On the bottom, or functional tier, are items like “informs” or “reduces cost.” In the middle, an emotional tier features softer concepts like “wellness.” At the very top, on the social tier, is a single word: “Self-transcendence.” Companies are wise to parse differences in value, and center branding accordingly.
In the end, said Silver, “Value is about exchange. It’s an opportunity for us to share value with one another, simply by being present.”
Make it Last
“Sustainability” is more than a buzzword: It is a concerted effort by growers, wineries, and vendors to produce wine that preserves, rather than depletes, the environment. Karissa Kruse, president of Sonoma County Winegrowers, spearheaded a massive, comprehensive sustainability program across Sonoma County. Kruse spoke about her work at The Exchange.
While many think of sustainability as relevant primarily to the natural environment, Sonoma County Winegrowers takes it further, including “social sustainability” in their planning. If the people involved can’t thrive, argued Kruse, then neither can the product. She names the three principles of wine sustainability:
- Planet: Water and soil management
- People: Consideration for employees, including affordable housing, childcare, education, healthcare, and workforce development
- Profit: Economic health
Contradictory as it might seem for ecological and social ideals to be presented alongside financial ones, that contradiction is largely imaginary. As Kruse demonstrated, many consumers will pay extra (between $5 and $7) for wine that is sustainably produced.
The most thorough and complete wine branding efforts, then, will consider more than the product and its consumers—but will also consider the community and environment.