2 Weeks in a French Vineyard

I, like many people, had a rather romantic impression of working in a vineyard: along the meandering slopes and the meticulously planted lines of grapes, a vintner would stroll pass her prized old vines, with a glass in her hand, and later sit down by the porch of her estate for a platter of cheese and prosciutto, followed by a nice fiesta under the afternoon sun...

With that impression in mind, I gladly signed up for a two-week volunteering gig at a French vineyard in Languedoc-Roussillon, a southern French region known for hearty table wines. The vineyard was situated around a 14th century chapel (still in use today), and planted 13 hectares of typical southern French varietals (Syrah, Mourvedre, Grenache, Cinsault, Carignan, etc.). Here's me on day of arrival:

(Careful what you wish for!)

It was late spring / early summer when I arrived, so the grapes were just starting to grow. I had 2 jobs (mostly): to prune the grape vines and cut off excessive grapes (to control yield / concentrate flavor in remaining grapes), and to trellis the weaker grape vines so they don't get destroyed by the storms. Picture below is me cutting off tiny grains of grapes on the vine (sad! but important for making good quality wine). 

(Shoop, shoop)

I thought it was a pretty fun job in the first hour, not as much when the second hour hit, and my whole body started aching in the third hour from the constant bending down and standing up. The scorching sun in southern France didn't help either - it would be 50 degrees in the morning when I started working, but 80s when it got closer to noon. By the time I finish my 8-hour day, I'd be lying exhausted in bed... 

(Already exhausted after half a day) 

It was southern France so the weather was extremely unpredictable, and the storms could sneak up on you before you knew it. One morning it was sunny like the picture above, but the clouds gathered within half an hour, and soon the wind was roaring through the field and the rain pouring from the sky. The owner of the vineyard and I had to stay in the field for another 2 hours in the storm to finish trellising the weaker vines and save them from getting totally destroyed. From that day on, I gained a whole new level of appreciation of the comfort of an office job... 

However, the hard work came with priceless rewards. I got to bottle my first bottle of wine from the cellar and took it home as a present. The owner opened a bottle from 1990, my birth year, and taught me a lot about the history of her family's winemaking heritage. And after a week's work, I got to relax on the weekend and enjoy a bucolic brunch like this one: 

And I made a new friend: 

Remember I said that the 14th century chapel was still in use? I was very lucky to have caught a concert inside the chapel during my stay. The acoustics were amazing. 

All told, it was a rough two weeks from a physical stand point, but time extremely well spent and rewarding. The work on the field taught me how hard it was to grow and make wine, and helped me appreciate wine from a whole new perspective. I was humbled by the dedication and diligence of the winemakers, and moved by their sacrifice and pride. 

(My first bottle of rose!) 

(Not) Sponsored by Vinebox

As much as I hate online advertising,  I'm a sucker for good clickbait. And Internet Big Brother has figured out how much I love wine. Which is why they pushed a wine advertisement to me...and also why I clicked on it:

Vinebox.

By the glass, monthly wine club. Great, unique wines that probably haven't hit Safeway shelves. In pretty vials with educational cards. They had my attention.

While I didn't buy it for myself (already guilty about my bi-yearly wine club shipment...), it got me thinking about the model for selling wine by the glass. When I consider my own wine habits, it makes a lot of sense:

• I like the "discovery" in trying a new wine / from a new place / etc.
• I want to drink a glass with dinner sometimes...but no more
• I hate feeling like I wasted good wine when it spoils

Additionally, buying a bottle can feel like an investment - wine by the glass feels like a treat.

I've seen other versions of wine-by-the-glass in grocery stores (Underwood cans comes to mind) but the format doesn't seem to have proliferated outside of a few select brand / wine clubs. But I wonder, as consumers shift towards more sustainable products (and packaging for that matter), as smaller wineries fight to get in front of consumers, as the food / beverage industry feeds a growing consumer preference for innovation, if we will see more wineries signing up for wine-by-the-glass clubs, or experimenting with packaging. 

Wouldn't it be nice if you could open a wine "flight" with dinner, instead of a bottle? As long as retailers can keep the formatting affordable, I would bet on seeing more from this space in the next few years! 

The Legality of Wine Trade within Latin America

After thinking about the legal obstacles that NVL faced in the United States, I was curious whether NVL might have luck abroad, specifically in Latin America.

In 2012, Euromonitor released a report that showed that the trade in illegal alcohol in six Latin American countries accounted for 25.5% of the region's total market by volume and 14.1% by value. These six countries include Colombia, Ecuador, El Salvador, Honduras, Panama, and Peru. These numbers represent a loss to the legal trade of US $736M.

While consumer awareness of this issue has been improving, the issue has been difficult to combat. On average, retail prices of illegal products are 30.3% lower. In addition, counterfeit products are often priced similarly and sold side-by-side with legal, authentic products making them hard to detect. Governments in these countries have done little to improve industry regulations or even enforce existing laws, despite the millions of annual tax revenues they are losing as a result of the illegal trade.

Given that consumers in the region do seem to have the desire to purchase responsibly and legally, there may be an opportunity for NVL to improve the process and facilitate the ease of legal alcohol purchases. Governments should theoretically welcome NVL with open arms since it will increase their revenues from taxes and reduce illegal activity in their countries with little investment or action on their part.

That said, a drawback would be that the LatAm consumer may end up capturing more of the value than the U.S. consumer. This would depend on how far consumer responsibility and desire for product authenticity could drive consumer behavior. If consumers are willing to pay 30% more for an authentic, legal product, value capture in the value chain may not need to change much. If consumers aren't willing to pay the higher price, then some or many parts of the value chain would need to sacrifice a piece of their value captured in order to drive consumer purchases at lower prices.

Sources:
https://www.thedrinksbusiness.com/2014/05/illicit-alcohol-trade-in-latin-america-worth-2bn/
https://blog.euromonitor.com/2015/10/the-illegal-alcoholic-beverages-market-in-six-latin-american-countries-2014.html

Retreat... Don't Re-Tweet

Prior to class today, I already thought managing social media for alcohol-related products and offerings had its pain-points.

At both Google Express and BloomThat (where I helped manage social media as parts of my roles), we sold wine from our platforms. I remember the social media restrictions being strict, specifically around age-gating.  It was crucial for those brands that we make it clear that we weren't endorsing any sort of under-age perusal of our offerings.  Many brands follow the instructions here for how to lead the appropriate people to alcohol products on our site.

However, class today opened my eyes to see how even more complex the rules can be, specifically when tied-house comes into the picture.

As we were discussing the tweet scenarios -- can I post about a great wine as BevMo if I'm not paid? What about if I as an individual do it? -- I started to wonder about re-tweets.  If they re-tweet, that's probably a problem, we said as a class.

When I was managing BloomThat's Twitter account in particular, whenever a customer would say something positive, we'd quickly re-tweet it and move on (we did it quickly so that we wouldn't fall behind as the tweets came in).  What if, I was wondering, a grocery store accidentally does something as small as a re-tweet... what's the severity of the punishment? That seems so easy to accidentally do.  What are the repercussions?

I did some digging for a real example of when this happened, and stumbled across this article, Tweets cause trouble for Sacramento-area wineries, breweries.  For the eight "culprits," they had the option to either confess or be suspended for 10 days: "ABC sent letters threatening to suspend their licenses for 10 days, or the businesses could admit to the offense and be placed on probation for one year." 

So not "we're shutting you down," but definitely more than just a light reminder. 

In this kind of environment, retreating certainly seems easier than re-tweeting.

Red obsession

Last week's case of Domaines Barons de Rothschild referenced its expansion into the Chinese market. With the rapid economics development in the past decades, China has become one of the biggest importers of wines from the Bordeaux region of France. The red obsession is undeniable!

Among Latour, Mouton-Rothschild, and many other fine Bordeaux wines available in China is Lafite. Lafite is unambiguously the synonym word for luxury Bordeaux wine in China and a pop culture symbol of 'social status' and 'power'. The unparalleled marketing success of Lafite in China is easily proven as HK mobster films and Mainland Chinese TV shows frequently feature a bottle of Lafite in the fine dining scenes (see screenshots).

What makes Lafite truly stand out compared to other Premier Cru? The legendary vintage years (e.g., 1870. year of comet) combined with the low volume makes Lafite 'investment grade' and sought after in secondary market. In addition, my hypothesis is that 'Lafite' is phonetically an easier word for Chinese consumers to pronounce,  in contrast to other long French names. This unique advantage comes in handy for its branding success in the Chinese market.

Marketing as a Key Differentiator

Although I have not worked in the wine industry directly, I led the GSB Luxe Trek this year and worked at AB InBev last summer - through my experience in luxury and alcohol, my hypothesis is that marketing is the way to differentiate as a winery in an overcrowded space.

Over the summer, we were testing consumer appetite for dark beer. We poured the same beer (Guinness) into 4 different glasses and created elaborate brand stories and moodboards for each, spanning from established beer to exotic. We conducted this test with over 30+ subjects in our target demographic and not a single subject realized that each glass contained the same beer. They were so carried away by the brand story that they were incapable of distinguishing variation in taste. For this reason, I believe that consumers derive a sense of identity from the brands they consume based on labels, not based on flavor.

Similarly with Inniskillin or Wente wines, the brand story and history is key to delighting customers, although there are 1000+ competitors in the space. This explains why Christine Wente focused on the history of the winery and her family. This begs the question: how you get consumers' attention?

These are some marketing-based developments that I think are exciting:

• Experiences. Clos19 is LVMH's e-commerce platform for wine experiences - this platform showcases experiences that are giftable associated to wine and spirits
• Women. For beer, at least, off-trade is growing. Women own the share of wallet in the home and as a whole feel alienated by beer companies. Communicating with women effectively is key to growth in wine.
• Health Tracking. More alcohol content, fewer calories.

Grow Big or Grow Home

Last week’s theme seemed to be tradition: between the historic story of the Rothschild family and our discussion of the Wente winery, I began to think about the tension between maintaining tradition and developing an ambition of growth. At one point in her presentation, Christine made a passing comment about preferring to support mid-size family wineries over the big guys. I then raised my hand and asked whether any of the family wineries had ambitions of getting acquired, and she had trouble thinking of any examples.

Do these companies just run as lifestyle brands and ways to employ family members, or do they actually aim to be profitable in an ambitious way?

The Rothschild story obviously represented the latter category, maintaining huge growth globally throughout the decades. I’m curious: what differentiates the brands that aim to grow like Rothschild from the moderate family companies like Wente?

I’m also curious about the intra-industry perception: how do the big guys perceive the small guys, and vice versa?

I’m also curious about consumer perception: in the same way that farm to table food made its way in the 1970’s and microbreweries became popular in the 1980’s, there are now so many smaller wineries across the country. There is so much consumer consciousness about what we eat (think buzzwords like local, sustainable, etc)—are people also thinking this way about the wine they drink?

I’m also curious about why people will buy a bottle for the first time. I hypothesize that major contributing factors include: the label, price, vague guidance from whomever is selling the products, and maybe some previous knowledge or conceptions. Since the vast majority of consumers are unknowledgeable when it comes to what they drink, I’m keen to learn tactics for getting someone to purchase a new brand for the first time. How do folks like the Wente family, who don’t have the deep pockets or advertising budgets of the big distributor brands, reach consumers?