Observations from an Emerging Wine Market (Colorado)
Last week, I attended the VinCO Conference and Trade Show in Grand Junction, CO. I was able to give two presentations to some of Colorado's most prominent winemakers, winery owners and emerging wineries. There were a lot of questions about selling more wine online - and I thought I'd share some insights.
Overall, Colorado wineries are small compared to the 'Napa' and 'Sonoma' regions of the US, and the majority are family run. There are no corporations that own multiple wineries such as Constellation, Diageo, Crimson, Pernod Ricard, etc. The same people that are getting their hands dirty harvesting grapes are the ones talking to you selling wine in the tasting room. This provides a very authentic experience and you can tell that blood, sweat and tears were shed to create those bottles of wine. This is a great opportunity for smaller markets because you get the chance to really interact with customers in the tasting room. The best way to keep those customers buying is with highly targeted action emails. Thank them for visiting, ask them to rate the wine they bought, or invite them to purchase a suggested wine.
Wineries in Colorado are on the cusp of becoming second-generation businesses. The 'kids' are now taking over from their parents and this is bringing in a wave of new processes. The 'kids' are all looking at technology as a key way to take their businesses to the next level and to sell more wine. Wine clubs are a great way to use technology to maximize your business. While some wineries are looking at starting a wine club, others already have them and are using them as an opportunity to grow. Even though you're from a small market, you don't need to be a pioneer because wineries in larger regions have tested and proven ways to implement successful wine clubs. Colorado wineries have the ability to look at clubs in a fresh way - and can tailor them to their specific needs. You can play with number of shipments per year, user choice clubs and wine club exclusive events.
The 'kids' are great winemakers, and really understand their business. One thing that really stood out is the agreement that shipping incentives are an important way to help them sell more wine. A lot of these small wineries don't currently offer free shipping; but most of them understand the value of shipping discounts and incentives. They are well aware that they need to change their shipping policies. At Vin65, time and time again, shipping discounts outperform price discounts. Shipping discounts are the #1 way to convert online customers and grow your sales. This leads to my next observation - the most asked question was about 46Brix. How does it work, how do they join, or how they could run a similar program to get 3X more sales?
A struggle for Colorado wineries is their location. A lot of wineries don't ship outside of CO and the ones that do have an up-hill battle. Shipping to states like CA, NY, NJ, FL, TX, the 'heavy drinking' states, often take 3, 4 or 5 days. Getting wine shipped to the customer fast is a big challenge. Years ago, getting a order delivered online in 5 days was acceptable; today's consumers aren't willing to wait 3 or more days. Amazon is starting to ship before someone orders with their Anticipatory strategy - which is setting shipping precedents. In the wine industry, forward staging, or storing wine in locations on the west or east coast can cut down on shipping times significantly.
Colorado can make good wine - but consumer perception is a struggle (they had a winery win best Riesling at IEWC in 2004). They are not only competing against known regions, but they are also competing to secure good land for their vineyards against peaches (their #1 agriculture product). It's an battle, but they have been growing year-after-year, benefiting from great complementary tourist activities near the wine region. The best way to drive sales after guests leave the tasting room is to email them and invite them to buy online. Wineries in emerging regions should make collecting email addresses in the tasting room and at events a #1 priority.
Finally, the Colorado area is considered (by who, I'm not sure) to be the "Napa of Bourbon". And it's damn good :) Who says you have to drink wine all the time?