I am a small business owner in the wine industry. My consulting firm assists wineries – most in California – market and sell their wine throughout the U.S. The recent bill, HR 5034, threatens both my clients and my own business.

In the last 20 years the number of wine wholesale distributors in the U.S. has declined from roughly 7,000 to around 700 today. This consolidation in the wine wholesale distribution channel has increased the difficulty of small wine producers to reach markets, especially since there are over 250,000 different wines available. There are simply not enough wine wholesale distributors to be able to effectively represent and sell that many products.

That is why direct access to the market, be it to restaurants, retailers, or consumers, is now vital to the U.S. wine industry. HR 5034 blocks this access to market. It serves no other purpose but to protect wine wholesale distributors’ business, without providing for protecting and enhancing wine producers’ business.

The wine wholesale distributors claim that HR 5034 gives Constitutional powers back to the States. But it overturns the Constitutional provisions of unfettered and equal commerce between States. Such a bill that directly contravenes the U.S. Constitution is not a viable solution.

Wine wholesale distributors also claim to safe-guard against underage drinking and promote temperance. But even a cursory understanding of the wine sales channel clearly shows that wine wholesalers have no interaction with the public, and often spend vast amounts of money in the promotion of consuming alcohol. It is the wineries themselves, along with restaurants and retailers, that are the front line against underage drinking, and actively promoting moderate consumption.

Please do not let powerful lobbyists destroy California jobs with the erroneous arguments for HR 5034. The future of all commerce should be well-regulated but open markets – for both wine and other products.

I do hope that you will stand with California small businesses and stop HR 5034 from ever reaching the floor for a vote, much less ever become law. California needs its small businesses in this time of deep recession and financial turmoil.

Sincerely,

Paul Tincknell
President
Tincknell & Tincknell, Inc.
Wine Sales and Marketing Consultants since 1997

PS – This letter was sent to all three of my representatives. It’s time to stop wine wholesale distributors from buying market protection from our government. Please feel free to use any of the above in your own correspondence to your elected representatives. You can find and email them through this site: www.contactingthecongress.org.

A Reply

May 26, 2010

Dear Mr. Tincknell:

Thank you for contacting me regarding the Comprehensive Alcohol Regulatory Effectiveness (CARE) Act of 2010 (H.R. 5034). I appreciate you taking the time to share your concerns with me on this issue.

As you are aware, this bill would significantly harm the California wine community, especially small wineries. H.R. 5034 was proposed by the National Beer Wholesalers of America as an attempt to increase their control over which products are sold by beer, wine and spirits wholesalers. It’s completely wrong-headed, which is why I’m working extremely hard to make sure it goes nowhere.

Before I give you the background on the bill, let me assure you – this bill is widely opposed in Congress, and I’ve been told by Speaker Pelosi that it’s very unlikely to succeed. However, the effects of this bill could be devastating to California wine and the beer wholesaler guys are working overtime for its passage, so I am going to stay vigilant in my opposition. And I hope you will join me in that effort.

What’s in this wrong-headed bill?

Simply put, this bill is an attempt to upend our country’s current alcohol distribution system. For decades, our courts have struck a balance between the 21st Amendment, which allows states to regulate the transportation or importation of alcohol, and other constitutional rights such as the Commerce Clause, which ensures the federal government’s right to protect fair and non-discriminatory commerce across state lines.

H.R. 5034 would make the dormant Commerce Clause inapplicable to any state laws dealing with alcohol unless “unjustified” and “facially discriminatory.” It would shift the burden of proof away from the states to defend laws they pass and make state laws supersede any federal law that is inconsistent with state law’s provisions. Laws like the recently struck-down direct shipment law in Massachusetts would be immune from Constitutional scrutiny.

Bottom line: this legislation allows Congress to pick the winners and losers in the wine business. It means wholesalers could have complete control over which wines consumers can access. And wineries and wine retailers would have no recourse if discriminated against.

What can you do about it?

I’ve heard from many people in our Congressional District who oppose this legislation and I am very grateful for your support. If you have colleagues or friends in any other Congressional Districts – in California or any other state – I encourage you to have them contact their Member of Congress and ask them to not co-sponsor H.R. 5034.

You can read more about this harmful legislation in Wine Spectator: http://www.winespectator.com/webfeature/show/id/42526
And you can also join a Facebook group against H.R. 5034: http://www.facebook.com/STOPHR5034

Again, thank you for sharing your thoughts with me. Please continue to contact me on all issues of importance to you and to our district.

Sincerely,

MIKE THOMPSON
Member of Congress

http://www.mikethompson.house.gov

The size of, and inherent competition in the U.S. wine industry requires a system of distribution that can ship and deliver large volumes of efficiently and cost-effectively. The current supplier > wholesale distributor > on-premise/off-premise distribution path that is the U.S. three-tier sales channel would exist even if all legal barriers to consumer-direct sales were eliminated. For the last 20+ years, wholesaler distributors have fought to keep in effect and reinforce state laws prohibiting or limiting consumer-direct sales in order to protect their local franchises. In many states, the alcohol wholesalers’ lobbies are the largest contributors to state legislature election campaigns and political causes.

The arguments given by the wholesale distributors to limit or prohibit consumer-direct shipments of wine and preserve the three-tier sales channel are that the secondary and tertiary tiers:

• Prevent underage persons from receiving alcoholic beverages;
• Ensure the collection of state taxes on sales;
• Reinforce moderate consumption;
• Provide broader selection;
• Create more competitive pricing.

Studies and experience are beginning to show otherwise; there is a growing body of evidence that shows consumer-direct sales create more sales through the three-tiers. Furthermore, consumer-direct sales via the internet create more competition, which affect selection and pricing positively for the consumer. Each argument made by the wholesale distributors is either not true or can be easily corrected; for instance, collection of state sales taxes is easily accomplished by various forms of compliance services, from firms to online mechanisms such as ShipCompliant.com. All states that allow consumer-direct sales mandate that common carriers require an adult signature to deliver alcohol. Eliminating those issues (and the one about temperance, which should not be in the purview of a commercial business IMO), wholesalers’ arguments about their legally protected role makes a market more competitive is hooey: barriers to market access never make a market more competitive – ever. Barriers to market only protect certain business interests.

Consumer-direct sales can only replace the three-tier sales channel for wineries that have very small production. Indeed, the three-tier sales channel is often inefficient and not cost-effective for smaller wineries or small-production wines. The volume produced cannot support the incurred marketing costs of supporting sales through the three tiers, especially given the consolidation in the wholesale tier over the last two decades.

Wineries that must utilize the three-tier sales channel due to the size of their production supplement, not replace, those sales through the marketing actions to promote consumer-direct sales. Excepting only extremely high-demand wines, consumer-direct sales do not cannibalize sales from the secondary and tertiary tiers; the volume needed to replace three-tier sales is not feasible consumer-direct.

Instead, consumer-direct sales have shown a causal link to building sales in the secondary and tertiary tiers through building beneficial relationships with key consumer opinion influencers in local markets.

Consumers that make an effort to have a relationship directly with a winery often are more serious about wine than a typical wine buyer. Likely, such a consumer is an opinion influencer, since their interests often make them a source of information for other consumers less serious or knowledgeable about wine. Opinion influencers – for any consumer good – are the point-of-contact for creating word-of-mouth (viral) marketing. Marketing consumer-direct sales effectively reaches a winery’s key customers that are likely to be influential among their social circle in respects to wine, and create new customers for the winery. Similar to the effect of the latest internet meme (currently chatroullete *eyes rolling*), positive word-of-mouth spreads out from the point-of-contact.

Indeed, studies show that word-of-mouth is the most influential form of marketing channel, and especially among younger demographics. Social networks and online media such as Facebook and Twitter are the new form of socializing, and this connecting socially via technology will only grow. Social media marketing is influencing online word-of-mouth, which amplifies the effect through Twitter followers and Facebook friends that are remotely connected to the word-of-mouth source. Most of these remote connections won’t purchase direct from the winery, but may if they encounter a brand they’ve heard/read positive reviews of from their social connections. This builds sales in the market … through the three-tiers.

Like many entrenched industries the internet has changed the market conditions faster than acceptance by entrenched industry players and, in the case of wine, legislation. However, like those other entrenched industries there is no turning back the clock on the internet’s effect; for the wine industry that will ultimately mean access to consumers by any licensed supplier, be it winery, retailer, importer, or wholesaler. It may take decades but it is inevitable. Those who ride the change embracing it will make the most money in the end. Distributors can either be the Apple iTunes for wine in their market, or the Tower Records watching their sales of CD’s collapse due to the effect of the internet.

Boxed wines come in different sizes and prices. The most well-known boxed wines are available nationally, including Black Box (3-L), Bota Box (3-L), Fish Eye (3-L), Trove (3-L), Boho (3-L), Killer Juice (3-L), Corbett Canyon (3-L), and Target’s Wine Cube (1.5-L and 3-L). They offer the popular varietals such as Pinot Grigio, Chardonnay, Cabernet Sauvignon, Merlot, Syrah/Shiraz, and Zinfandel. Prices range from under $10.00 for a 1.5-L to up to $25.00 for some 3-L boxed wines.

However, there are many smaller wineries finding success in a box. They provide a fascinating and fun way to taste wines from their regions. They often are boxing interesting blends and different wine grapes such as Riesling, Chambourcin, and even Concord. One winery chose to make boxed wines because it was the best packaging for his organic wines.

First stop on the Boxed Wine Trail: Lancaster, Pennsylvania! Tamanend Winery makes a series of boxed wines that have a refreshing sweetness. One with a delicate pink hue, an exotic nose of honeysuckle and roses, and followed by flavors of peaches and strawberries is Tamanend Winery’s Wild Wine Ladyslipper Pink. Tamanend also produces a dry red blend called Cardinalis, and three other 3-L boxed wines, also named after Pennsylvania wildflowers, called Mountain Laurel, Queen, and Honeysuckle. The wines are available for $29.95/3-liter box or for $19.95/1.5-liter box at the Red Rose Tasting Room in the Hager Arcade in Lancaster City, and at the nearby winery by appointment by calling (717) 560-9463.

Terrapin Station in Germantown, Maryland, has a playful line up of eight 1.5-L boxed wines in bright colors sporting a Diamondback Terrapin, a turtle native to Chesapeake Bay. A delightful mix of varietal and hybrid grapes, the winery currently offers 2006 Cecil White, 2007 Semi-Sweet Vidal Blanc, 2007 Dry Vidal Blanc, 2007 Cayuga, 2007 Traminette, a non-vintage Merlot; a 2005 Shiraz, and a non-vintage Syrah.

Self-proclaimed “farmers”, the owners Morris and Janet Zwick donate a portion of the sale of their wines to the Terrapin Institute to help save this endangered reptile. The winery is not yet open to the public but their wines are in good distribution in Maryland, and they attend local wine festivals, special events, and tastings. Their wines and more about them can be found at www.terrapinstationwinery.com.

Located in the beautiful rolling hills of Ohio’s Amish countryside, Breitenbach Wine Cellars, Der Marketplatz, and Café in Dover sell three lightly sweet 1.5-L boxed wines for $20.00 called Frost Fire, First Crush, and Road House Red. The winery also makes a delicious dessert wine that is available only in a box called Three Berry Blend for $22.53. All of the wines can be ordered online at www.breitenbachwine.com or by calling (330) 343-3603. The winery-café-market-B&B is well worth a trip just to see the beautiful, turreted-castle like building, or to attend their famous Breitenbach Dandelion Festival each May.

Fox Valley Wines in Oswego, Illinois, has five colorfully decorated 3-L boxed wines on their website at www.foxvalleywinery.com. Their off-dry Riesling at $25.95 is the best seller, but the Old Glory Red for $27.97, made of sweet Concord Grapes,  and the White and Red Sangrias for $25.95 have loyal customers keep coming back. There is also a soft, dry 2005 Cabernet Sauvignon for $35.95. This winery is located on Route 34, and a second tasting room and the accompanying JJJitters Coffee Studio are located on Route 34 in Sandwich, Illinois. The Faltz family warmly welcomes visitors to the winery, which has a private tasting room, sitting area, two fireplaces, and a large retail store. Tours are offered on weekends.

Western Michigan is known for its famous lake effect, and Fenn Valley Vineyards (www.fennvalley.com) in Fennville, Michigan, benefits from its moderating influences. The winery produces a nice variety of 1.5-L and 3-L boxes that are sold in their tasting rooms and through select retailers in Michigan. Lakeshore Demi-Sec is their most popular wine in a fresh “German style” that is bursting with floral and apple fruit character. The wine is available at either the winery in Fennville or at their satellite tasting room in Saugatuck for $17 for the 1.5L box or $20 for the /3-L box. The Fenn Valley 2008 Semi-Dry Riesling takes its inspiration from the wines of Germany’s northern Rhine River valley with ripe, apple-like fruit impressions that is perfectly suited to seafood and spicy dishes. The winery’s 2008 Pinot Grigio is a classic dry wine with nuances of mango, peach notes, and flavors of ripe pear. Their boxed red wine is Capriccio, a big, soft, dry blend of mostly Chambourcin, with small amounts of Cabernet Franc and Cabernet Sauvignon.

Tefft Cellars bills itself as a “family-owned wine-country experience in the heart of Yakima County.” Located in Outlook, Washington, Tefft has had huge success with their 4-L boxes of a non-vintage Cabernet Sauvignon-Merlot blend and a Chardonnay, both which retail for $24.95 (www.tefftcellars.com). They have a vibrant box wine club, which ships six times a year, and a guest house that is open to the public as a bed-and-breakfast inn. They have recently expanded sales to Idaho and to several retailers along the busy WA I-5 corridor in Washington.

Kennewick Washington is home to organic viticulture and winemaking pioneers Bill and Greg Powers and their two wineries Powers and the all organic Badger Mountain Vineyard. Longtime bag-in-the-box wine fans, they currently offer the Powers 2006 Cabernet Sauvignon 3-L for $22, and the Badger Mountain Vineyard 2007 NSA (No Sulfites Added) Organic Pure Red and Pure White 3-L for $24 and $22 respectively. These full-bodied and flavorful “everyday wines” are nationally distributed in 22 states. Their wines can also be ordered online at www.badgermtnvineyard.com. Organic Pure Red and Pure White are perfect for people with sensitivity to sulfites, and the Power Cabernet Sauvignon will satisfy any situation that calls for a big red wine with aromas and flavors of sweet raspberry, ripe currents, berries, and spices. Discerning Seattle restaurants frequently feature this wine as an eco-friendly wine by-the-glass.

Lodi, California, has always produced powerful wines with rich flavors, and the boxed wines at Le Cask are no exception. The Le Cask 3-L boxed wines sell for $24.99 in many of the best retail outlets in the San Francisco Bay Area. Le Cask’s Old Vine Zinfandel is made from 60-year old vines, and has an impressive display of blackberry, ripe cherry, and plum flavors. Le Cask Chardonnay is the perfect patio sipper, with flavors of ripe apple, pear, and a subtle hint of vanilla from oak aging. Black cherry, currant, and mocha make Le Cask Cabernet Sauvignon the perfect wine for grilled meats. Winemaker Ryan Sequiera is ardent about the benefits of boxed wines, and is willing to put them in blind tastings to compete with some of California’s best.

Sylvester Winery (www.sylvesterwinery.com) in Paso Robles, an up-and-coming wine region in California’s Central Coast, has a fun and unique way to present their five-liters of Chardonnay Cabernet Sauvignon, and Cabernet-Merlot: in a real oak barrel with a stand. These 5-L wooden barrel dispensing units sell in their tasting room for $96, the 3-L barrels for $86, and they can be refilled for $19.99. Sylvester also sells “traditional” 3-L boxed wines of their 2006 Merlot, Cabernet Sauvignon, and Chardonnay for $13.99 each.

In California, Sonoma County’s Red Truck Wines have just rolled out the barrel – literally a new 3-L Mini-Barrel to Sam’s Club nationally, and retails for $29.99. This cute, eco-friendly, and decidedly NOT box wine is made of a hearty blend of Syrah, Petite Sirah, Cabernet Franc, Malbec, and Mourvedre from great wine producing areas through-out California. The non-vintage wine is medium-bodied and complex, with flavors of chocolate, berries, cherries, and licorice abound. This patent-pending barrel design comes complete with rings, staves, and an easy pour spout with tamper-proof protection that requires no tearing. The Red Truck Mini-Barrel will be available nationally in the second half of 2009.

The popular 3-L boxed wine contains the equivalent of four 750-ml bottles of wine, and 1.5-L boxed wines have the equal of two standard 750-ml bottles. In comparing prices between comparable-quality boxed wines and traditional wine bottles, boxed wines typically offer a savings, and that savings is even more dramatic when you factor in the freshness factor.

Wine drinkers that enjoy and occasional glass of wine or two but don’t want the pressure of drinking a whole bottle in one sitting especially appreciate boxed wines’ unique ability to keep wine fresh after opening. Boxed wines today are attractive to anyone entertaining groups on a budget, looking for a green and eco-friendly packaging (76% reduction in greenhouse waste), or that enjoys wine on outdoor excursions like camping, boating, fishing, or backpacking.

(Note: T&T do not consult for or assist any of the companies mentioned above – we just like boxed wine!)

These types of websites spur visitor interaction and involvement, and often create communication between website visitors as well as between companies and customers. Online communities and networks are created – though this has been happening since the internet was created (IRC, The Well, etc.). This online interaction is what companies hope to tap into – if not harness – in promoting their products and services. Accelerating the adoption of these websites is technology that makes it remarkably easy to participate, from blogging software (such as I am using now) to flash-based digi-camcorders that practically upload videos to YouTube by themselves. No command line in a Telnet link required.

Reaching customers and creating a dialog with them is the very essence of marketing. In the past the marketing dialog was mostly one way, from company to consumer, via advertising in print, radio, or TV. The internet and web 2.0 technologies makes it more two-way, yet on a scale on par with print, radio, or TV. Customers can comment on company blogs, follow Twitter tweets, tweet back, and add funny YouTube ads to their Facebook pages. This allows for a much more personal and direct form of bonding, which is powerful and healthy for customers and companies alike.

Much of social networking really entails pushing yourself publicly – creating the Facebook page, setting up a Twitter account and tweeting away, or posting videos – which is what marketing is all about. But it still takes promotion to make people aware of what you are doing, even doing the new stuff online. Just doing it does not equal it being effective. These are new channels of communication, not magical new marketing methods and, like all channels of communication, it is the creative, unique, interesting, and fun messages that will get attention. But even being creative does not equal success, as people first need to know that the messages are there to be read/seen/experienced in order to seek them out. Many think that just by participating in web 2.0 activities customers will flock to their efforts.

Not to say that there are not benefits of doing it via online social networking tools; the internet has proven very powerful in creating interest among people in what is termed “viral marketing” – a fancy term for word-of-mouth or, in this context, word-of-mouse-click marketing. Ideas, subjects, and content can seemingly seize popular attention and get a lot of people interested quickly, and the internet’s network effect can accelerate that interest immensely. Still, like print, radio, and TV, there are a lot of voices out there chattering away at us online, and it takes effort to cut through it all to reach your customers – just like plain ol’ everyday style of marketing.

This is where the trend buzzing in the wine industry is starting look familiar and alarming; new companies are popping up and touting web 2.0 and social network marketing as the next, greatest thing to solve all marketing needs. There is talk of “global wine commerce, the latest technology, and a strong network of relationships” and “build new businesses and disrupt markets”. Wineries are being told to get on the web 2.0 band wagon or they may be left behind, fall into the tar pit, and someday be used to fill a Hummer’s gas tank. A sense of urgency is being pushed, as if you don’t evolve now then you will be in the bull’s eye when the death meteor strikes.

Wine, though, is very much an analog thing – it is molecules of matter, not bits or bytes. A bottle of wine exists in the physical world, not the virtual (thank goodness). It is meant to be opened and drunk to be experienced, not downloaded and processed. Wine retains its direct connection to the earth in which it starts. Web 2.0 does not change how wine goes from grape to glass. It still passes from hand to hand, therefore those marketing channels must also be utilized and maintained, to build relationships and create interest among those hands.  Strong networks of relationships must happen offline as well as on, and only happen when the brand is interesting and people learn about it. There isn’t a “new” business to be built overnight, as we in the industry are still hamstrung by post-Prohibition regulations, and progress in opening new or alternative distribution channels is incremental and piecemeal. The only way the wine market can be disrupted is if the Supreme Court or Congress abolishes state and local regulation of alcohol sales (same odds as the death meteor striking in our lifetimes). Global wine commerce will never be shipping a case from a winery in California to a consumer in China, but remain exporting pallets to foreign markets for overseas distribution partners to sell. Talk among marketers today like the quotes above is very much in the same vein as what I imagine was said around the board rooms of Webvan and Pets.com. Or in Lehman Brothers about those hot, new securities they traded – similar hot air filling that bubble of buzz to bust.

Web 2.0 provides some valuable tools, and makes marketing for wineries easier because of it, especially for smaller wineries. The basics of marketing still remain the same: creating a robust, interesting brand identity; finding an audience of loyal and potential customers; and building relationships with customers through communicating that brand identity creatively and succinctly. New tools, same foundation. A customer will not buy a bottle of your wine just because you use Twitter, but because of what you say using Twitter.

Remember that effort and cost must be allocated to these new marketing channels. While many web 2.0 tools and services are free, time is not, and getting customers’ attention happens by giving attention to reaching them. Those resources for social network marketing often are in lieu of other marketing efforts, so allocating them must be weighed appropriately; wineries need to identify where and how their loyal and potential customers learn and discuss wine (and similar consumer products) so their marketing reaches them.

For many that is online, but it isn’t everyone, and even those of us who live online log off – like I’m going to do now, and go enjoy a glass of wine.

_______________________

PS – the only bubbles we recommend are the ones to be found in a glass of sparkling wine. Merry Christmas and Happy New Year from Tincknell & Tincknell.

Part of any branding effort is finding a “voice”, a writing style that complements and reinforces the branding. For many, branding just means creating a unique logo – a graphical brandmark, distinctive wordmark, or the combination of the two – and then sticking with a typeface or particular font most of the time. But branding is so much more than that; that is really just the beginning of the branding effort. Creating a distinctive writing style that is consistently used on marketing, sales, and communications efforts can go a long way towards creating a more vibrant and memorable brand.

One would think that, with the internet so much a textual experience despite the boom in online video, writing would be a critical endeavor in marketing. But so much of what is written online for wine really could be written by the same person. Therein lies a point of distinction for those that make an effort (such as the renowned Bonny Doon Vineyard – no one has a more distinctive voice in writing in the wine industry than Randall Grahm), and a very inexpensive way to add a unique attribute to a brand to make it more compelling and interesting.

Hence the title, “Banning Passion.” If there is one single, overused word in marketing, and especially in wine marketing, it is that word, “passion.” Passionate about making wine. Passionate about drinking wine. Passionate about bathing in wine. Ironically, the word comes from the sacrifice and torture that Jesus went through after the Last Supper – not exactly the resounding image one conjures when viewing industrial machinery macerate grapes into pulp, or having snagged the latest Screaming Eagle release to continue a vertical collection destined never to be consumed.

It can’t be stressed enough that to write with correct grammar, and to write creatively will make any marketing more interesting and – at this time at least – a brand more distinctive. That’s something we at T&T are really passionate zealous about / enthusiastic about / have a fervor for!

Anyone who works in the wine industry – from the waiter to winemaker – gets asked that question. Often, the answer entails the usual song and dance of with what, when, who with, how much, etc. But to me, the answer is simple:

Any wine that expresses the hand of the winemaker, the soil of the vineyard, and the soul of the grape.

If you missed the Wall Street Journal’s “Open That Bottle Night” this last Saturday (February 23), then make sure to make an occasion and pop open one of those goodies and enjoy. Life is too short to save the best for last.

A reoccurring question this Clarkesian year of 2001 asked by clients and wine industry acquaintances alike has been:

“Is ecommerce dead?”

The cratering of Wine.com and WineShopper.com, the relatively modest performance of other wine dot-coms to-date, and the collapse of the NASDAQ and business-to-consumer ecommerce ventures throughout 2000 and 2001 certainly give warrant to such a question. However, Tincknell & Tincknell’s answer has staunchly been and is:

“NO!”

Of course our answer can be dismissed as self-serving because part of our business is building web sites and counseling wineries in internet marketing. However, there is one undisputable fact that supports our position that ecommerce is alive and holds potential: online sales are growing (see table).

Yes, that’s right. All throughout 2001 online sales have been growing in both B2C (business-to-consumer) and B2B (business-to-business) segments. Combine that with bullish statements from tech-knowledgeable persons such as Andy Grove’s (Chairman, Intel) comment that the rest of the world is just beginning to be wired with the internet, and Bill Gates’ comment (Chairman, Microsoft) that information technology’s capabilities are in its earliest stages, and you can see that the 2001 dot-com die-off was something other than just ecommerce being a bad business idea.

So why did so many ecommerce dot-coms fail? Well, I am not an economist or a Wall Street wunderkind, but as a marketing consultant I think there are some obvious reasons. Most blatant to me is the marketing angle so many B2C ecommerce businesses took. Their marketing budgets were oriented towards a multi-trillion dollar consumer sales economy (in the US alone) when in reality the online consumer market was (and is) only a few billion dollars. Marketing your online store like it has Wal-Mart’s target audience when really the whole online buying population was only a few million is bound to destroy your profitability quickly. Throughout the latter 90s there just wasn’t that many people on the internet shopping. In comparison to those shopping offline, there still isn’t today in 2001, but it is growing. However, Pets.com, Webvan, Wine.com, WineShopper.com, et al were spending enormous amounts of money marketing as if the internet was equal to our offline multi-trillion dollar economy.

Also, there was the myth that number-of-eyeballs would soon lead to an equal number of sales. Unfortunately, window shopping is a lot easier online than it is offline. Internet buyers often compare prices from several different vendors. Quite frequently that comparison shopping results in the purchase happening offline – something early success measurement metrics didn’t take into account. But the majority of web surfers in the 90s were just surfing. The fixation on dragging the most number of visitors to a web site failed because – just like offline retail – if you aren’t reaching interested, qualified customers you are just spending money entertaining the masses. Or not.

Wine.com is an interesting study for the wine industry, because I believe it illustrates the potential of online wine sales and the failure of the 20th century emerchants. Virtual Vineyards, the precursor to Wine.com, was a pioneer in ecommerce – any ecommerce – and it quickly seized the attention and imagination of the wine industry. Their existence as Virtual Vineyards illustrated a successful and profitable ecommerce model that contrasted sharply to their latter Wine.com phase. Virtual Vineyards marketed itself well to those interested in wine, rather than trying to reach either occasional or new wine drinkers. Most importantly - and I cannot stress this enough – it offered added value to online wine consumers in that it sourced wines from the finest wineries and screened them for quality. Peter Granoff’s, one of the founders of Virtual Vineyards, tasting chart and personal guarantee that all wines were tasted by himself (or other qualified persons later on) gave the consumer a reference point for quality that is vital in wine sales. Last, Virtual Vineyards showed that the internet could sell unique, unknown wines in quantity by providing added value and good customer service – without using reviews or scores from the nation’s wine media.

The fact that Virtual Vineyards ultimately raised the ire of the nation’s wine wholesalers suggests that the online wine merchant was a credible threat to offline fine wine sales. Virtual Vineyards had to modify their business model to stave off litigation but, in doing so, I believe they developed an inevitable business model for the wine industry that still lies in the future. Virtual Vineyards in essence became an online wholesale retailer that was better at marketing fine wines efficiently than the offline wholesalers wielding platoons of street sales representatives (see my Ferment opinion “The Roads Ahead: Wine Business in the 21st Century“).

WineShopper.com, on the other hand, did not have a viable business model. Their early goal was to offer online any wine available in the market. They were going to build an online database that listed all wines available from the nation’s wholesalers catalogs. Their goal was to be able to sell to anyone anywhere any wine available. Utilizing the existing three-tier (3-T) wine distribution system with the wholesalers’ collective blessing, a person would be able to order a wine that would be delivered to their doorstep from a local retailer (within the buyer’s state).

Even a cursory knowledge of wine distribution will quickly point out the logistical flaws of this business model. Not all wines available in New York are available in Fargo, North Dakota. The different licensing and distribution laws makes it a compliance nightmare for wineries to sell nationally in all 50 states – only the biggest can afford the time and effort to do so.

From a marketing perspective there was a lot more wrong with the WineShopper.com model than the logistics of its operations. First, where does the company make its margin? If it is asking wineries to sell to distributors, and distributors to sell to retailers, and retailers to ship or deliver the wine to consumers – just as the current 3-T system works now – where does WineShopper.com make its money? None of the current 3-T participants want to take less of a markup; it is already spread out over three or more players. WineShopper.com can’t really add to markup of the bottle price because it is also asking most of the buyers to pay for shipping. Plus, why would someone buy online if it is more expensive than offline – before shipping costs are added in?

Which leads to the other marketing flaw: not all wines need to be sold online. Because of the shipping costs and delay in receiving goods, most people who shop online for wine are looking for wines that are NOT available in their market. It makes no sense to have Kendall-Jackson, Gallo, Beringer, etc., available unless you are offering their top-line, hard-to-find wines. A database of all wines available was overkill; there was (and is) no need of such among online consumers.

By having every wine available what value was WineShopper.com bringing to the consumer? Unlike a wine shop or Virtual Vineyards, there was no quality filter or recommendation process in place for the consumer. The proposed WineShopper.com was the online equivalent of a supermarket with shelftalkers and no sales assistants.

Indeed, WineShopper.com was setting itself up for massive customer dissatisfaction. Online buyers would be looking for the Caymus Special Selection’s or the Screaming Eagle’s of the world and, if found, would probably not be able to buy them. Those kind of small wineries can’t afford the time and effort to be licensed and available in all 50 states, nor do they have the production to merit national distribution. The continuing unavailability of rare, sought-after wines defeated the only selling point WineShopper.com was promoting to the wine industry: universal, legal availability.

Virtual Vineyards’ morphing into Wine.com was in response to the WineShopper.com threat, whereupon it immediately adopted its worst features. Wine.com carried everything and marketed itself like the online market of wine buyers was several billion strong rather than just a couple of million. Internally, number-of-eyeballs rather than visits-converted-to-purchases was the more important statistic. The final straw was the shotgun marriage of the money-losing WineShopper.com entity and the financially bleeding Wine.com. WineShopper.com needed Wine.com – because the former wasn’t even open for business yet – but Wine.com did not need WineShopper.com. They were already selling millions of dollars in wine. They needed the marketing savvy of their founder Peter Granoff and some sound business sense. Alas.

Wine.com’s failure wasn’t because selling wine online doesn’t work. Virtual Vineyards/Wine.com literally sold millions of dollars of fine wine. It failed because it was poorly run at the end of its existence.

It remains to be seen whether eVineyard/Wine.com will remain last-standing of the initial online wine sales gold rush. Their slow-but-steady-growth business model has kept them alive, but like the Wine.com and WineShopper.com of old, they doggedly offer the most common of wines along with the under-promoted, lesser known wines. Just slapping on the old Wine.com tasting profile chart doesn’t give a consumer the sense that anyone is home. It takes a branding campaign that puts real faces or genuine effort into the offered services to truly impress customers.

Ecommerce works when it offers a compelling reason for its existence. People online are looking for services or products that are not easily found around them. In online wine sales that means:

• People like cutting out the intermediaries, e.g., they want to buy directly from a winery.
• Visitors can find more information about what they are interested in online than can be found offline, and/or get information without any embarrassment; no one likes feeling stupid in front of the wine store geek babbling wine stats.
• Offering online buyers a guarantee of quality, e.g., a transparent system for screening quality or providing recommendations.
• Building a community of like-minded individuals, be they consumers, wine experts offering advice, or winemakers discussing their craft and wines.
• The personal touch, e.g., providing real customer service that cares about the customer.
• A web site that is fun and interesting to visit.

Amazon.com works as a good online ecommerce experience due to much of the above. Whether they will be profitable remains to be seen; their aggressive expansion has been their Achilles’ heel. The demise of Wine.com/WineShopper.com is an opportunity for small wine emerchants and wineries to create successful online sales strategies.

In consumer retail sales – which accounts for two-thirds of our multi-trillion dollar economy – there are no changes in how things work. Technology created a new sales and marketing channel – the internet – for the consumer retail sector as well as new business models for the other one-third of our US economy. Information technologies are impacting how businesses operate (think of Dell) but budgets, sales, and marketing still work the same way they always have. The new digital economy works on the same consumer principles as the old economy. People didn’t change – the technology did.

Building a compelling, enticing web site and supporting it with targeted, properly budgeted marketing will result in a successful online ecommerce venture. Just like building a compelling, enticing store or restaurant and marketing it to those likely to be interested in your business will result in success. Duh.

The failures of the past two years have little to do with the viability of selling online. Tincknell & Tincknell join the other tech luminaries in remaining bullish about ecommerce and the internet. If you examine both the pluses and minuses over the last two years with clear thinking the inevitability of ecommerce becomes apparent. Technology is marching on, becoming easier and more ubiquitous, and is increasing personal and business productivity. Its impact on our society and commerce in general has yet to be truly felt.

Get on board and join the future.

As clocks tick down to close the Gregorian calendar’s second millennium since the birth of Christ (debate on the true end aside), the wine industry has undergone profound changes in the last forty years, with the last ten the most dramatic. Prior to the nineties, the changes all had to do with the actual making of the wine. While the scourge of phylloxera has forced wineries to continue to evaluate and improve their products, the real action of the nineties has been the changing business culture of the wine industry. In a nutshell, the industry has gone corporate and global. Publicly owned wineries prior to the nineties consisted of one: the Chalone Wine Group. Now, everyone anticipates the next IPO-of-the-month. Big businesses are buying wineries, and big wineries are buying smaller wineries and vineyards in one of the most astounding land rushes in California since ’49. Plus, big business executives from outside of the wine industry are being hired in by wineries trying to increase their effectiveness in the New Economy. This is changing the internal cultures of wineries towards a more “Wall Street” mentality, and away from the artistic, “gentleman’s business” attitude.

There has also been a seismic change in perceptions about marketing, sales and distribution. The wine industry is still hobbled by post-Prohibition, three-tier distribution and regulations, but wine producers are finally embracing alternate and new methods of selling wine: the internet and direct marketing. In what historians will probably view with some head shaking, this has caused a combative schism between producers and the distribution network of the wine industry. Wineries want to use all methods possible to reach out to customers, and wholesalers are either unable and/or unwilling to accept the rules of the New Economy and the march of technological progress. It will be a long, costly and very messy battle until the issue is resolved, and is likely to blind the industry as a whole from another, very real, potential threat: the product liability litigation storms that are destroying the tobacco and firearm industries (remember: the wine industry is part of the “A” in “ATF,” the unholy trinity of modern evils according to our society). Alcohol beverage producers are deluding themselves if they think the positive scientific studies on the health benefits of moderate wine consumption will hold off the persistent temperance movement in America, and sway lawyers from not getting rich off of the potential court settlements.

The fractionalization of industry organizations adds to the threat of the potential product liability litigation storm. Besides reducing the wine industry’s political and legislative clout on the direct-to-consumer shipping issue, the lack of unification between the industry organizations effectively means that no one is proactively leading the industry on a number of equally important issues, including industry wide advertising, winning friends in high, political places, etc. The large wineries and vintners are mostly looking after taking care of their own business (Robert Mondavi the shining exception). If the large wineries can’t start looking at the bigger picture, and realizing that what may be good for the little guys may benefit them as well, the industry will remain a balkanized confederacy. Furthermore, the smaller wineries have to accommodate the large wineries in some of their efforts. For example, the furor over fruit-flavored wines is just plain silly, as these wines help introduce new consumers to wine-based beverages, yet small, ultra-premium wineries are in an uproar over how they are labeled. The ultra-premium wineries are giving grief to those fruit-flavored wine producers by forcing more labeling regulations, which just means more governmental interference, oversight and scrutiny. Bottom line, though, is no one who enjoys drinking these fruit-flavored wines is going to mistake a $45.00 bottle of chardonnay as being similar. But that consumer may, one day, enjoy that $45.00 bottle – if they don’t get stigmatized by the small wineries and the press for the wines they enjoy now.

Wineries are also realizing that what’s in a name is more important nowadays than what is in the bottle. Branding, brand positioning, brand identity and brand marketing are the vital strategies in winning consumers’ mind share – hence the successful existence of Tincknell & Tincknell and the kind of work we do for our clients. Ten years ago no one talked about a brand’s identity, only a wine’s taste and style, and whether it got a good score. Today, in our meetings with wineries, how to more effectively communicate their brand’s uniqueness is discussed rather than whether the wine is being sent out to the press. The clout of wine ratings will continue to diminish as the qualitative differences between wines become increasingly more negligible, due to the general state of wine quality continuing to improve. People like to develop emotional attachments to products they purchase, especially when the feature benefits between competing products are de facto identical, and score numbers and ratings don’t fulfill that need for the masses. (What would you say is the most successful brand name in the wine industry? T&T’s choice: Gallo. And they rarely had the good scores after their name prior to the nineties. Runner up: Robert Mondavi.)

So what does the 21^st Century hold in store for the wine industry? Prognosticating is both fun and foolish; right up my alley. I think that there are two roads ahead, and the wine industry is at the fork now. The convolutions of other industries cast light on the tea leaf pattern at the bottom of the wine industry’s cup.

Down the right fork in the road, the corporatization of the wine industry will continue; the big companies will get bigger, swallowing successful small businesses. The independent mid-size winery, say 35,000 to 100,000 cases produced annually, will be fair game for the big wineries bent on increasing profits through acquisitions. Such ongoing consolidation will keep prime vineyard land prices high, keep ultra-premium wine prices high, and lower prices for premium and super-premium wines. Those big companies will use their brands’ identities as the primary marketing tool. They will need to invest in the distribution of their own products to lower costs further and increase margins. And they will need less restrictions and regulations in marketing and selling their wines to compete effectively. Pressure will be put on state and federal legislatures to change laws and regulations for easier access to domestic markets.

Down the left fork in the road lies the little guy. As big wineries get bigger, the niche for very small, artisan winemakers crafting distinctive, uniquely styled and esoteric wines grows too. Micro-wineries of a few hundred or couple thousand cases will satisfy that ongoing need in our society for the arts, originality, personality, creativity, spirituality. But these fun little micro-wineries ultimately won’t be as plentiful in California as they will be in the other 49 states. The big wineries will own the best vineyards in California, and they will make stunning wines from them. But there is no systematic protection of vineyard ownership by heritage here in the US like there has been in France. It will be increasingly more difficult to own a small Napa Valley cabernet sauvignon vineyard and not sell the fruit to a bigger winery or sell out for mega-bucks. Where to make wine is a big challenge for such a vineyard owner, as the days of small to mid-size wineries owning rows of gleaming stainless steel tanks and shiny, new crushing and pressing equipment are numbered. The costs of having that investment 12 months a year only to use it for two months is not reasonable in the economies of mid-size and small wineries. Big custom-crush cooperatives do not give artisan winemakers the kind of control or allow for the experimentation in craft that is needed for making great wines.

Artisan winemakers crafting wines under their own labels will be forced to find promised vineyard lands elsewhere. Increasing quality and a new trend towards regionalism in consumer purchases will make them successful. They will need to establish small wine cooperatives that share the investment in equipment costs among a small group. Wildly successful wines will be sought out globally, thanks to the internet, while modestly successful wines will not need to expand distribution beyond a local, geographic region. These artisan winemakers will keep the esoteric varietals alive, creating new, unique and intensely personal wines that display true regional and stylistic traits. And ultimately, the wildly successful artisan brands will be bought out by the big companies trying to continuously expand their profits by expanding their brand portfolios.

One of the most interesting effects the above will have will be on the wholesalers’ future. Disintermediation by the internet and the explosion of efficient, fast common carriers is inevitable, yet wholesalers are largely denying it. The need for distribution won’t go away – indeed it will become more necessary – but the need for wholesalers to sell wine is disappearing. As the size of wine producers grow, the control of marketing wines will be handled internally, and on a national scale, just like the large brewers and spirit producers. On the other side, the internet allows small wineries to communicate and market directly to their customers (trade and consumers) inexpensively. For them, regional distribution isn’t that big of a challenge, as small delivery companies can suffice, and the international common carriers are there to service the rest of the world if necessary. Big wineries will want to own their own distribution networks. Smart, big wholesalers will have to abandon the sales side of their business and strategically align themselves or merge with those producers to focus on their core business: efficient, fast distribution of goods. The not-so-sharp wholesalers will get flattened by the big guys and the march of technology. Witness the new distribution models being developed by Wine.com and Wineshopper.com. Their wholesale partners are not responsible for selling the wine, just delivering it. Ultimately, those new delivery service wholesalers will not want to own the product any longer, and so incurring potential liability, but just transport it. The writing is already spray-painted across the wall … .

If the above unfolds as I have foretold, then the end result is that there will be more good wine more accessible to more people than ever before. I don’t think that is a bad future at all. But the 21^st Century will bring about more change – of that one can be certain. Some will be good, some will be bad, much will be disruptive, and all will be exciting.

Be ready.

Much to my surprise and dismay the May 1998 issue of the Wine Enthusiast had both an ad, which I saw first, and a news piece on Inglenook’s new closure for their recent redesign of their low-end table wine category (e.g., the current “jug” niche). Inglenook was rightfully making hoopla about using what is called a “T” cork: a cork with a cap that allowed one to pull it out without the need for a corkscrew in the fashion of sherry or spirits cork closures. To explain my reaction, surprise that someone had finally done it, and dismay that it wasn’t one of my associates, to whom I’ve been preaching about this for the last two years, to institute this type of closure.

First, I must acknowledge natural cork’s importance to the wine industry. Without natural cork, the broad distribution of wine would not have taken place in mankind’s history, possibly relegating it to a niche beverage in the areas where wine grape vines were naturally grown. And if you are a fan of Hugh Johnson’s writing (as I am) you might contend that civilization would have suffered a serious lack of progress without a wine trade throughout the ages, as he postulates in Vintage: The Story of Wine. So it is to be understood that there is a deep rooted institution to use natural cork for closing wine bottles. With all due respect and gratitude for the centuries of closing fine wines, natural cork stoppers are the last aspect of wine packaging design that has not undergone serious scrutiny and drastic change.

So why would I recommend a winery to abandon a good, time-tested way of closing wine bottles? There are two reasons, and the most controversial one is the problem of cork-damaged wine.

While cork manufacturers are making great strides in quality control and product quality, there is still the fact that natural cork may damage somewhere between 3% to 5% of all wine on the market. Cork manufacturers such as Sugherificio Ganau S.p.A. have spent many research dollars into understanding why and how a cork taints wine. Their research pays off by reducing such problems to an estimated 0.01% of cork-damaged wines with their corks made by their proprietary TF 99.9% Process. It is possible that the cork industry may eliminate cork problems entirely. (I should point out that the cork industry is not solely to blame for cork damage in wine; the way natural corks are handled within a winery is just as crucial to the cork’s quality and integrity as it’s manufacturing process.) But until it is eliminated, cork-damaged wine above a certain percentage is really unacceptable in a modern industry. One bottle in a hundred may be the acceptable damage rate for most wine drinkers. But other beverage manufacturers would not accept the wine industry’s current 3% rate of damaged goods leaving the winery floor. Historical tradition is not a good excuse for corked wine to the connoisseur who opens a $50.00 bottle of wine, or the casual shopper who doesn’t like the $5.00 bottle they got for tonight’s dinner. It is easy to imagine customers’ reactions if Anheuser-Busch or Coca-Cola had a 3% spoilage problem!

But to put aside the controversial subject of cork damage in the industry, there is another, and I feel more pressing, issue in the design of the normal cork stopper. The Inglenook cork mentioned above used a plastic top on top of natural cork, so I offer that natural cork is not a problem in and of itself. The design flaw in a normal cork — natural or plastic — is the simple fact that one has to use a corkscrew or cork puller to open the bottle of wine.

One of the wine industry’s biggest challenges (outside of the anti-consumer trend of prohibiting direct shipments of wine to consumers) is to encourage more responsible adults to enjoy wine. Wine consumption has remained flat over the last decade, and there is justifiable concern that new adults, twenty-one plus to the current thirty-somethings, are not being exposed to wine in a casual fashion. Without new wine drinkers the industry could be facing a serious economic decline in the future.

The wine industry has been in a conundrum over the problem for almost fifteen years. When wine sales fell in the mid-80s due to the rise of the health movement, MADD, SADD, drunk driving legislation, the 90s recession, high rates of currency exchange and phylloxera, wineries were struggling for their lives (and many of them lost). Time to consider wooing new wine drinkers gave way to just thinking about carving out more of the existing market share. Now that times are good, the industry has been again challenged by the aforementioned assault on free-trade to consumers between states, as well as depleted stocks due to replanting and low harvests. It is hard to think about getting new wine drinkers when one is fighting to be able to sell to the one’s they already have — and then not having enough to sell to them!

There has been an effort to woo new drinkers, and soon an advertising campaign on behalf of the wine industry will be under way to do just that. But I believe it is time for the wine industry to reinvent itself, and one of the places to begin is with how wine bottles are closed.

No other food or beverage product made for casual consumption requires the consumer to use a tool to access it. If the new campaign, “Wine. What are you saving it for?” is to be asked seriously, one of the answers may be, “To find a corkscrew, that’s why!” The normal cork is the most unfriendly and intimidating of product closures. One of the many nightmares the average waitperson faces during table service is opening a wine bottle. Wine service is an elaborate ritual of opening the bottle: does one place the bottle on the table to open it or attempt it in mid air (and possibly spill wine)? Present the cork to the host or place it on the table? What if the cork crumbles? What about gracefully getting small pieces of cork out of the wine after it crumbles? If our front line of wine sales persons, e.g., wait staff, are, in majority, uncomfortable with opening our products how can that encourage sales? Even in the most wine-friendly of restaurants, the solution of a trained sommelier can be intimidating to the consumer.

To the untrained consumer, to be in a position of entertaining and serving wine, the above concerns for wait staff balloon to Godzilla-like proportions for them. The need for a corkscrew was one of the key factors in preventing wine sales to Generation X, as discovered by a Wine Institute Public Relations survey a few years back. Not having one handy, not knowing how to use it, and the inability to easily and cleanly re-close a bottle to save the unused portions were all cited as key reasons why young persons were not drinking wine more frequently. And all could be easily solved.

With a screw cap.

Why, as an industry, do we struggle so against the new and/or casual wine drinker? We challenge, denigrate and dismiss the most popular versions of our industry’s products: Boon’s Farm, sangria, Chablis jug wine, Chardonnay, wine coolers, White Zinfandel, Merlot (in historical order). And, for the most part, we close them with the most unfriendly and intimidating choice of bottle closures. (Note that three of the aforementioned popular wine products were closed with a screw cap! Could be that made them more popular … .)

I have not been able to find any hard research supporting the need for natural cork as a closure to accentuate the wine inside. My understanding is that a good cork is a cork that does not allow air through in any increment, so the argument that the wine matures better with natural cork seems unfounded to me. (Why would Bordeaux chateaux offer to recork older vintages in collectors’ cellars if they weren’t trying to prevent air reaching the wine?) Until side-by-side trials of cork-finished versus plastic versus screw cap closed wines conclusively demonstrate some innate attribute of the normal design, natural cork benefiting the aging process of fine wines, I don’t think the wine industry can justify the continuing use of them. And certainly not even then for the 90+% of wines that are taken home and enjoyed within days of their purchase.

I applaud the Inglenook T-cork. I applaud other wineries that have experimented or persisted with alternate bottle closures. There have been some die-hard pioneers out there trying to change popular thinking. But I am still waiting for the debut of the metal screw cap on an ultra-premium bottle of wine. Only then will I think we will see the debate over wine packaging really take off from the cosmetic changes of today to usability changes in the future.

The wine industry is in the midst of good times. Due to the good times the wine industry has again begun to ask a very important question:

“How can we get more people to drink wine?”

This is a very different question than the more frequently asked, “How can we get people to drink wine more often?” or “How can I get more people who drink wine to drink mine?” Good times bring self-evaluation, and the wine industry has finally focused on the first question above.

The answer, most pundits respond, is by advertising. Other industry models are held up as examples to emulate: the milk industry (“Got milk?”), the beef industry (“It’s what for dinner tonight.”), the pork industry (“The other white meat.”) and even the egg industry (“25% less cholesterol!”). Advertising has been notably successful for them, so the wine industry should get aboard. Especially with TV advertising.

While some individual wineries, usually the larger ones, have taken the lead and advertised beyond industry and consumer wine magazines, most wineries are either too timid to do any or are too economically limited to be able to advertise in a meaningful way. Print, radio and especially TV advertising is very expensive. It is difficult to analyze the success of advertising as well without substantial marketing resources, making ad expenditures that much more risky for most wineries.

The wine industry has rallied to start an industry campaign based on the slogan, “Wine. What are you saving it for?” Like the milk industry advertising campaign, it will be with a humorous bent and be on TV as well as in print. Having not seen the campaign I cannot comment on it in particular. The wine industry should advertise, but I don’t think advertising goes far enough to address some very real reasons why people don’t drink wine. To reach out and really touch someone with a wine glass, a revolution needs to take place within the industry at the fundamental level of the product.

Research indicates that 90% plus of the wine bought today will be consumed within the next twenty-four hours. As an industry, we encourage the responsible adult to enjoy wine with food in moderation every day. But, as an industry, we don’t package wine to be enjoyed immediately. Despite jug-size bottles with screw caps, bag-in-a-boxes, small (325 ml) bottles in six-packs with screw caps and wine coolers, the overall thrust in the wine industry is to market and sell the 750 ml glass bottle.

Two issues with this are size and glass. The Wine Institute conducted a survey among “Generation X” alcohol consumers a few years back, and one of their issues preventing new young buyers from enjoying wine was the 750 ml size. For their life style, the beer bottle was a perfect fit.

In the late 80s, the wine industry flirted with a new bottle size, the 500 ml. It bombed. The 325 ml bottle has been around for ages but many think it is too small, not allowing two people to enjoy two good-size glasses each. The 500 ml bottle was the industry solution. A quick look at how people consume beverages would have immediately shown the error of that thinking.

There are many reasons why wine coolers were so successful: slightly sweet (Americans like sweet), had a screw cap, great advertising and came in 12 oz sizes. A lot of wineries wrote off the wine cooler success to the sweet taste and great advertising. But beer is not sweet. It does have great advertising, but America’s favorite alcoholic beverage in majority comes in 12 oz servings with screw caps or pull tabs, and are marketed in six-packs. Coke comes in 12 oz servings. 7-Up. Snapple. Why not chardonnay? Merlot? White zinfandel?

Back to the Gen Xers; they spoke of the difficulty of having to buy a bottle and use a glass at a party, or finish a whole bottle in a restaurant (many states do not allow a consumer to take the unfinished portion with them). And because it was a bigger bottle than 12 oz, they generally complained that it cost more than beer. It wasn’t a good value. A six-pack is 72 oz, and most cost under ten dollars. A wine bottle is about 23 oz. The 12 oz / six-pack packaging would promote off-premise sales to younger, newer consumers.

I don’t think that wineries need worry about restaurant sales with alternate formats. If good wine was sold by-the-glass from a bag-in-a-box (i.e., wine on tap), wine sales would go up. Plenty of patrons buy bottled beer in restaurants, so I think 12 oz bottles of chardonnay would also sell well. Plus, all wait staff would know how to open and serve it!

Another issue, maybe less important, is the use of glass as a container. For the 90% plus wine that is being drunk right now why not use plastic? Especially if it is in a 750 ml bottle or bigger. I wouldn’t want to age my Opus One in plastic for the next ten years necessarily but, then again, some grades and types of plastic are harder and more durable than glass. What anguish when that aged red slips from the hand and cracks open on the floor … . Maybe glass is not that necessary. Plastic would bring costs down and be lighter to ship and carry. Most plastic is recyclable. Other than the aesthetics of glass (which, I admit, I love), plastic may be a better solution. Plus, think of the packaging experimentation one can do with molds to create textures and colors!

More than advertising, I think the wine industry needs to take a hard look at how people buy and enjoy their favorite beverages without traditions and history interfering. The way wine is packaged and sold may inhibit its purchase no matter how much advertising is thrown at a consumer. By giving up traditions, the wine industry can play on a more even playing field against the other beverage industries for the consumers’ dollars.

The revolution has yet to begin. More daring ideas on the way … .