Why Sell Wine Based on Aroma and Taste?

Selling commodities is difficult because people buy on emotion, or instinct if you will. Want and desire are powerful emotions that can stimulate the release of endorphins. It's why some people are shop-a-holics. It feels good to buy. But it's not that easy to get emotionally worked up about borax, chlorine, and salt. As an economic good, a commodity has no real differentiation, so small price differences in competing products can make huge differences in total sales.

Think about how you won't buy gasoline at one gas station because it's four cents cheaper around the corner. That's a commodity. Ever buy a piece of art that way? Of course not because art's value is in the eye of the beholder, is easily differentiated, and consequently will have wide price ranges. When art is sold, it's sold on the artist's reputation or the emotion the piece evokes for someone. Marketers work overtime to take commodity-like goods and then pretend they aren't commodities by creating and building an emotional appeal around the brand.

Successful Tasting Room Metrics

 

In our second live video broadcast of the year, we focused on the Tasting Room, Wine Clubs and Direct Sales with a panel of industry experts. The entire broadcast was supported by an extensive survey, with over 500 respondents taking part from across the US. The complete results from the survey were returned to the participants. This broadcast included participants from several countries, but primarily North America. Hopefully you were able to tune into the session live from the Silicon Valley Bank studios and participated in the discussion. If you weren't able, above is the YouTube link to the broadcast.

Please log in and comment for the community at the end of the transcript with any of your perspectives and suggestions for the next live broadcast.

Is Your Tasting Room Successful?



It's your fault!

The other day I  stopped in at Wal-Mart to get some things. While checking out, a very large woman in very tight clothes came up from just outside the store and angrily told my cashier she lost her debit card after she paid. While I looked around the floor for the card the cashier said, "Yes, I remember you putting it back in an envelope" to which the woman replied, "Its not in there. I put it in the envelope but you rushed me to get out of line. You rushed me. I want to see your manager!"  ..... Are you kidding me? I had to work at holding my tongue.

How Much Do Wineries Really Make?

Our most popular post from last year is brought current with the 2012 financial information. The question at hand is: "How much do wineries really make?

 

The answer of course is ......(drum roll please ....) Not enough. Finding the facts is almost as hard as chasing unicorns in this business because the wine business is private. Its a family owned industry with even the largest; Gallo a family owned company. But its really quite amazing from the perspective of what is shared between neighbors in the wine business. There isn't the sense that your neighbor is a rival or competitor. Its more of a club feel in many ways. If you need something, its quite normal to check in with your neighbor. Need a tractor because yours went kerput? No problemo. Need a little welding and custom fabrication on a pump? I'll be right over with a welding rig.

 

There is a competitive side that abounds in the business too of course. When it comes to sharing financial information and customer lists, good luck! Ask a winemaker neighbor how its going financially, and you'll get a mixture of liars dice, false bravado, partial truths and ..... well ..... the following video is the best explanation of how that game is played.......

 

The Dance of Grape Pricing

 



ABC. It's Easy As 1-2-3

 

The vines flowering this time of year remind me of seventh grade. Maybe its the Aqua-Net hairspray smell the flowers produce but that's when we had our first crack at dancing after school which made institutionally official, our life-long quest to read the minds of the opposite sex. Filing into the sour milk scented cafeteria one sweltering afternoon, the boys took up their station on one wall while the girls occupied the opposite wall. The girls giggled and pointed at us prepubescent pimply-faced males while we in turn stared blankly back across the barren dance floor. "ABC. It's easy as 1-2-3" from The Jackson 5 cranked at volume eleven in the background, so we started to move to the music right where we stood thus signaling in our Cro-Magnon genetic way that we could dance. Well, we could if we wanted to. We just didn't want to. The girls of course had been practicing their dance moves since 3rd grade in front of their full-length closet mirrors. Us boys? We were playing baseball, football, kick-the-can, capture the flag, and tiddlywinks, oblivious to girls - unless you count the observation of cooties.
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If you want to skip my meandering memories from 12 year olds first dance experience, you can skip down To The Point Now.
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Are Immigrants taking American Jobs?

Immigration is a hot topic bracketed by views from the right and left that aren't predictable based on party affiliation.... maybe because the Hispanic vote has taken on such a high priority for the 2014 elections? From the Ag perspective, getting a sufficient supply of legal farm help has continued to be an increasingly difficult task forcing many farmers to use whatever help they can find. While the Wine Business is not as dire given the higher wage paid, you're foolish to think the current debate wont have any real impact here given the breadth of the discussion.

Some of the questions raised: Is it really fair to give a free pass to people who have ignored the laws of the State and are here illegally? Should you deport families whose children are born in the US and are citizens? Is it fair to taxpayers to be forced to educate illegal immigrants when our education system is in such a poor state? Is it fair to have Americans pay for illegal immigrant's medical expenses when they go to an emergency room? Are they taking jobs from Americans? You might think the jobs are low wage, but what about the high-paid jobs that are being filled by immigrants under the H1-B Visa program? Wouldn't Americans want those jobs? Under the Bill, estimates are that we will be granting up to 1.1 million illegal farm workers some measure of a legal status. Does that make sense?

Bovine Excrement & Global Warming

 

I will get to the topic at hand but first, a moment of silence .......... <that's enough> because last Friday Jonathan Winters passed away. In his honor, I've pinned a video of he and Dean Martin to the blog to remember his greatness, and give a little chuckle to all those who spent the weekend bleary-eyed doing taxes. For you Millennials who don't recognize the other guy in the video, that is Dean Martin who was of course the founder of Men's Warehouse.

Jonathan Winters was a brilliant comedian of a thousand voices. Only 27 actually took up residence inside his head at any one time according to staffers at Bellevue. No matter which personality was home, the man was truly a gift to humanity. He could ad lib on almost any subject. I wish he were here to help explain in his own special way what exactly happened to the 16th Amendment. That's the one that makes us all go crazy to meet the filing deadline. I'm sure he'd have quite a bit to say about that. For you Boomers who weren't born yet, the 16th Amendment is the one that says in it's entirety:

"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

That's it. That's the whole Amendment. I'd love to hear Jonathan explain how we moved from those 30 words to the present 6,000 pages and 500 million words. It's so complex we spend $6BN annually processing our returns. Ninety percent of the populace today have to use a tax professional or tax software to process their returns.

And now to the point of the blog, it would have really been great if Jonathan Winters could explain Climate Change. Like the tax code, understanding Climate Change requires us to listen to others who know more than us. We have to try and decipher the meaning of the technical writings so we can plan and avoid any negative forecast impact. But like all things, wisdom begins with understanding. The problem is understanding gets really difficult for us when we start listening to unqualified on-line writers who give us their interpretations of technical reports, whether its the tax code or Climate Change.