Exporting to the USA & Wine Spectator scores

The USA is an important target export market for most wineries around the world as it is the fastest expanding wine drinking market. The market is also totally driven by the Wine Spectator scores (http://www.winespectator.com). The Spectator scores play at every level – in the same way as a trophy or gold medal can make a huge difference to a winery’s sales. A 90+ WS score is almost essential if one wants to sell a good volume of wine at a price point higher than $10…  A 90+ wine is an easy sell for the distributor’s rep, because the 90+ WS score tag will attract shoppers and will help the wine sell through.

Because it’s the most influential magazine in the USA, Canada and many other countries, it’s maybe not surprising that the Wine Spectator is often being (wrongly or rightly) criticised.

Earlier this week I read an interesting  blog post by Blake Gray  (http://wblakegray.blogspot.com/2010/09/open-letter-about-wine-spectator.html) – where he elaborated a bit on his Open Letter to Marvin Shanken – the WS ‘s editor. His open letter caused quite a stir in the wine world, with quite some reactions on Gray’s own Blog post (http://wblakegray.blogspot.com/2010/09/open-letter-to-marvin-shanken.html) lots of tweets and more on the the WS forum (http://forums.winespectator.com/eve/forums/a/tpc/f/6826053161/m/717100867)

Whilst I feel I am in no position to voice an opinion one way or another on James Laube’s palette and his way of scoring Californian wines for the Wine Spectator, I do have an opinion on the Spectator’s policy of having just one person conducting the tastings. I feel the magazine is far too influential and too crucial to a winery’s commercial success in the USA for it just being up to 1 person to decide on the wine’s faith…  I also feel that it’s not fair that the person tasting knows exactly what wine he is tasting – I feel it’s very difficult to mark a wine objectively if one knows the wines – i.e. what if the winery is a major advertiser in the WS, or the winemaker or owner is a friend of the taster – by seeing the label, the taster will often already have a preconceived idea of what scores he should allocate to these wines…

In my opinion, it would make much more sense to follow the model most important and influential wine competitions use: a blind tasting by a (multi person) tasting panel. This will allow for an objective weighed score reflecting a joint opinion of the real quality of the wine. Its a known fact that the WS has a significant depth in their editorial staff (ie tasters)  and I feel the wealth of tasting knowledge of the individual tasters can only add value to the ultimate score they will jointly allocate.

Whilst I know some people do follow the WS tasters very closely, it’s also a fact that the vast majority of the distributor’s reps, shop owners and general consumers do not really know who tasted these wines – what style they like and how they generally score – all that matters for them is that the “Wine Spectator” considers this wine to be extraordinary and allocated it a 90+ score. So with this in mind I really do not think they would be aghast by the fact that the wines are now tasted blind by a tasting panel rather than knowingly by 1 taster.

And I feel it would also be easier for the wineries to accept a weighted score – most wineries I have worked with say they stand for quality and I think this should come through better in a weighted score.

The famous Wine Marketing Plan…

The famous Wine Marketing Plan – lots of wineries speak about it, but what should it be, and do you, as a small(ish) winery have one??

Well a wine marketing plan in my eyes is the same as any business marketing plan – ie it is a written document that details the specific actions needed to achieve one or more marketing objectives. The essence of the process is that it moves from the general to the specific – it translates the vision into the mission, mission into specific objectives, and formulates individual action plans for each of these objectives.

To be be effective it’s crucial that the results of the action plans are measurable and reviewed on a regular (generally monthly) basis, as this allows the company to review their objectives and make the necessary changes to the individual action plans to ensure the objectives are met. In other words, marketing planning is an INTERACTIVE process.

Now most small to medium sized wineries I have dealt with have a vision, a mission and some vague objectives. Not that many of them actually have taken the time to create individual action plans to meet their objectives, and still fewer review their objectives on a regular basis and make changes to the action plans. The reason here is that they are so busy trying to run a winery, produce grapes, make wine that they have not a lot of time to focus on a sales and marketing plan, and most are happy as long as some wine is sold every month.

But actually the investment in a wine marketing plan is not really as big an effort as is often thought. What is needed is to define the objectives in a precise way and most wineries already do this for their financial planning. The only thing that they need to add is a little detail.
E.g. in your financial plan it say that you will sell 20,000 cases of wine next year, of which there are 5,000 sold at home and the rest is exported to several markets. You generally already have the breakdown of the export sales – eg 5000 cases to China, 5000 cases to the UK and 5000 cases to the USA.

What is needed now is to add a more detailed forecast per market, split up per month and per variety sold to the specific market in that month. Eg for the UK, in January 250 cases of Cabernet Sauvignon, 500 cases of Chardonnay and 250 cases of Merlot, In February nothing, in March 250 cases of Merlot, in April, 250 cases of Cabernet and 500 cases of Chardonnay etc etc

Once you have the detailed forecast for the year, you should extend this forecast for the next 4 years, the next 2 years you split up the sales forecasts by market by variety in 3 months periods, and for the last 2 years you give a yearly forecast per variety per market. This will give you your long term sales strategy – it will also bring home exactly how much wine you should expect to go out every month/3 months and allow you to better plan bottling, storage and market visits.

Once you have your monthly forecasts per market per variety, its now important to include checks. A first check should be introduced at time of forecasting and it should compare your forecasted values against the actual sales you had in that market the same time last year – again split up by variety and by month. This will allow you to evaluate your situation and submit your expectations to a reality check and if large sales increases are expected it will enable you to focus on these increases and define tools and resources needed to meet the objectives. Eg you would like to grow in the UK from 200 cases of Cabernet in January last year to 500 cases this year. How will you achieve this – has your UK distributor the means to grow the Cabernet sales in a short period of time? How are you supporting him to achieve this growth (eg larger volume deals, better pricing, in market representation, trophy awarded recently to the Cabernet…)

The second check is to compare the forecasted sales in a month to the actual sales in that same month. E.g. you forecasted 500 cases of Cabernet to go to the UK in January , but instead only 100 went. So you know that your forecast is out by 400 cases – this allows you to come up with a plan to distribute these 400 cases of Cabernet that did not go to the UK in January over other markets and other months. Alternatively, you won the Decanter trophy for your Cabernet in December and in January your sold 1000 cases into the UK rather than 500. What impact will this have on the rest of the markets you had Cabernet allocated to and have you communicated the change in allocation to them?

In short the second check will allow you to realize exactly where you stand in comparison with the forecast and will force you to acknowledge the changes needed to the individual market plans in order to meet the overall objectives.

So adding a little detail to figures most wineries have readily available, has introduced a wealth of knowledge about your exact current situation which now allows you to take control and make the changes which are needed to meet your overall sales targets and to realize your vision!

Wine Distribution

Distribution I feel is THE way to reach a broad audience. Why? Because you want people all over the world to enjoy your wines however little old you cannot be everywhere at the same time, nor do you have the store/restaurant contacts all over the world to make this happen.

However it is a myth that having a distributor in a particular country/state will guarantee your sales there. I haven’t met 1 distributor yet that will drive a winery’s sales all by themselves. The winery principle or Sales and Marketing Manager needs to understand the market, set realistic sales targets and work with the distributor to meet these targets.

The winery relation with the distributor is really the key to success and like with all relationships it’s paramount to chose your distribution partners carefully. There needs to be a common ground, a joined passion for your wine and your story, and a joint understanding of your brand. Its important to see a distributor as an equal partner with similar goals – ie you both want to sell wine and make a living – and  at the same time give your distributor all the tools and help he needs to do a good job.

Communication is key here. Its important to go through your sales and marketing plan together at least 3 to 4 times  a year. Its best to do this in a personal meeting (or a skype video conference call) and discuss depletion reports, actual vs projected sales, marketing effort required to meet projected sales and share successes and PR & Social Media strategies together.

These regular updates allow the winery to keep their finger on the pulse, get valued feedback about specific market trends, adjust marketing spend, sales projections and re-evaluate opportunities and risks attached to the market sales plan. In other words it forces the winery to focus on that market and to take action if need be to make sure key targets in the sales and marketing plan are still being met.

It allows the distributor to share their market knowledge and advise the winery on what events, competitions, market visits are needed to meet the target, and reset expectations if need be. Again here it forces the distributor to focus on your product, to evaluate their sales efforts and acknolewdge their successes and challenges ahead.

getting started

Hi all,

Just got off the phone with a winery owner friend of mine and once again realized that the difficulty for small to medium wineries lies in selling the wine (this includes getting paid for it) and that there really isn’t that much support out there for these guys… Hence my decision to start this blog. Let me introduce myself, I work for 4.5 years as a VP marketing and sales for a small to medium size winery in New Zealand and as you might have guessed from my title my main focus was on selling wine. This included branding, distribution channels – ie retaining existing ones and acquiring partners in new markets – pricing, marketing etc.
Since leaving Nz I have been working in operations for a web start up and really started to appreciate the value of Social Media to get your product to market, I am also pretty clued up on budgeting, suppliers management and running a smooth operation, and would like to share my knowledge as well as my passion for wine with you all. Watch this space for tips on how to market your product and get the recognition and the $$ you are after!
Caroline