WINE TOURISM & DIRECT SALES Panorama & best practices of American wineries

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1 WINE TOURISM & DIRECT SALES Panorama & best practices of American wineries AREV Wine Tourism Commission, Jeanne Peron, Director France Benson Marketing Group 22 April 2013

2 CONTENTS 1. Presentation agency & expertise 2. Panorama of Wine tourism and direct sales in the USA 3. Reference indicators for direct sales 4. The five keys to success 5. Wine tourist travellers 2

3 OUR AGENCY & EXPERTISE 3

4 Who are we? WINE & SPIRITS A marketing agency specializing in the world of Wine & Spirits A team of 12 people 90% of our customers are estates or interprofessions AMERICAN MARKET, FRENCH MARKET Created in 1997 at Napa in California 2005, a bureau opens in NYC 2012, a bureau opens in Paris 4

5 Our expertise The marketing and communication campaigns designed by the agency comprise one or more services depending on issues and objectives: BRAND STRATEGY Building a marketing strategy plan: brand positioning, differentiation, values, objectives and messages PUBLIC RELATIONS Building messages and plans of action that target decisive publics for the company (journalists, bloggers, key influencers) COMMUNITY MANAGEMENT A social marketing strategy and plan, presence and interaction on social media 24/7/365, media plan 2.0 TRADE MARKETING A plan of actions targeting consumers and/or buyers WINE TOURISM MARKETING Customized and package offers developing wine tourism activities (referencing, customer loyalty, media coverage) 5

6 Wine Tourism Marketing Department Package offer 1 WINE LAUNCH PACK 2 WINE ACTION PACK 3 WINE CONNECT PACK PROFESSIONALIZE YOUR WINE DEVELOP YOUR REPUTATION AND STAY 100% CONNECTED TO TOURISM OFFER BOOST YOUR DIRECT SALES YOUR CUSTOMERS We audit your current offer: - we analyse the current offer - we identify your estate's strong points and opportunities - we define your differentiation and positioning - we formulate your new wine tourism offer We recommend communication tools We create an enrolment form for your ing list on your Internet site We build up your annual wine tourism marketing plan We reference your wine tourism offer (Internet sites, specialized guides, etc.) We provide 3 theme-based press releases: drafted, distributed, follow-up We produce 6 newsletters: designed, drafted and distributed to your database We build up your annual digital marketing strategy We organize your Community Management: - a monthly editorial calendar - content drafted for your different accounts - interactions managed with your communities 24/7/365 Advertising 2.0: we design and purchase space on social media Monthly reports 1900 before tax* *Travel expenses not included Monthly reports 990 before tax*/month 1700 before tax*/month Or 11,880 before tax/year Or 20,400 before tax/year *Not including a press watchdog service * S N O I T P O DESIGN INTERNATIONAL LOYALTY OPTION OPTION OPTION - Brochure Your newsletter in foreign languages - Signage - Internet site, etc. A customized loyalty programme for each type of customer 6

7 They trust us USA Campari America Echelon J. Lohr Winery Hahn Winery Knights Bridge Winery McManis Family Vineyards Redtree Wines Robert Mondavi Winery Root: 1 Round Pond Tastevin France Conseil Interprofessionnel des Vins du Languedoc Maison Laurent Miquel Bureau des Vins de Loire Maison Bouchard Père & Fils Union Saint-Emilion Pomerol Fronsac Italy KRIS Wines Spain Gonzalez Byass 7

8 PANORAMA OF WINE TOURISM & DIRECT SALES IN THE UNITED STATES 8

9 Direct sales in the USA What size is the distribution circuit? Total Wine Sales in 2012 in the USA (Domestic and Imported) Volume: 360 million cases (12 bottles) Value: 34.6 billion* USD Direct sales circuit 2012 Volume: 5 million cases (Benson Marketing Group Estimation) Value: 2 billion USD (Benson Marketing Group Estimation) Growth in this circuit An increase of 7.2% in volume and 10.3% in value compared respectively with 2.9% and 5.7% for the traditional* circuit Sources: * Wine Institute. 9

10 Last quarter 2012: direct sales progress whatever the size of the winery Source: Figures for wines shipped to consumers. DTCWS Jason Eckenroth Report from Ship Compliant and Wines & Vines 10

11 The average price per bottle continues to rise Source: Figures for wines shipped to consumers. DTCWS Jason Eckenroth Report from Ship Compliant and Wines & Vines 11

12 Direct sales in the USA Why is the direct sales circuit so vibrant? Winery margins are 200% to 300% larger than those of the traditional circuit Hypothesis Retailer Winery direct sale Cost/bottle - winery 1 bottle 5,00 USD 5,00 USD Wholesaler pro tariff 10,00 USD 0 USD Wholesaler margin 30 % 3,00 USD 0 USD Retailer margin 35 % 7,00 USD 0 USD Cost Direct sale 0 USD 4,00 USD Consumer tariff 20,00 USD 20,00 USD Gross winery margin 5,00 USD 11,00 USD 12

13 Direct sales in the USA Why is the direct sales circuit so vibrant? Communication is more difficult in the traditional distribution circuit Producer Wholesaler Retailer/Restaurant Consumer 13

14 What s the origin of this growth? Wine tourism is THE key to direct sales Wine tourism increases sales 8,000 wineries in the United States Consumers taste the wines on-site and have them delivered Wineries can target their consumers precisely Market development open to direct dispatching of wine. In 1997, only 17 states authorized direct dispatching of wine to consumers. Today, 39 states authorize dispatching of wine Wineries have invested in wine tourism marketing Loyalty programmes. Activities and events e.g. assemble your own wine, etc. Better management of customer data Teams better trained to receive customers. 14

15 AVERAGE INDICATORS DIRECT SALES 15

16 Foreword: what is a Wine Club? A loyalty programme Consumers "subscribe" to have wine delivered regularly to their homes. 2 to 4 dispatches a year Each dispatch contains 2 to 6 bottles Enrolment is free. Wines are often offered with a 10% to 20% reduction. Why does it work? An exclusive relationship between the winery and the consumers An important source of revenue Many wineries create cuvées exclusively for the members of their club. The club enables them to increase sales in the other circuits 16

17 Loyalty programmes 4% of visitors join the programme (on average) 2% fall-off/month 23 months subscription on average 85% of enrolments after tasting Over the yellow box: 25 % of wineries having the best enrolment rates Under the yellow box: 25 % of wineries having the lowest enrolment rate Source: presentation DTC Wine Symposium 2012 by Ross Goodwin. Data: 66 Californian wineries of all sizes, data dated September

E-commerce 4,000 one-off visitors per month to the website, on average 2% of visitors

of discount Average duration of visits to website: 2:30 minutes Over the yellow box :

wineries having the lowest enrolment rate Source: presentation DTC Wine Symposium

18 E-commerce 4,000 one-off visitors per month to the website, on average 2% of visitors to the site order online 25% growth year-on-year Average value of order: 200 USD net of discount Average duration of visits to website: 2:30 minutes Over the yellow box : 25 % of wineries having the best enrolment rates Under the yellow box: 25 % of wineries having the lowest enrolment rate Source: presentation DTC Wine Symposium 2012 by Ross Goodwin. Data: 66 Californian wineries of all sizes, data dated September

19 Social networks More than 1,500 "I likes" on Facebook, on average More than 4% growth month-on-month of "I likes" on FB 1,500 subscribers on Twitter on average 4% increase in Twitter subscribers month-onmonth Over the yellow box : 25 % of wineries having the best enrolment rates Under the yellow box25 % of wineries having the lowest enrolment rate Source: presentation DTC Wine Symposium 2012 by Ross Goodwin. Data: 66 Californian wineries of all sizes, data dated September

20 THE FIVE KEYS TO SUCCESS 20

21 The five keys to success The techniques of wineries that succeed 1. Very good data management Simplified consumer enrolment on the ing list All purchase data collected and processed All direct sales included Offers that target customer segments Increasingly sophisticated customer relations management (CRM) tools CRM enables them to launch segmented campaigns by 21

Transaction data analysed customer-by-customer Customer segmentation based on purchasing

22 Case study: segmentation of direct buyers Customer: Joseph Phelps Vineyards, Napa Valley Objectives: To offer top-of-the-range customer service To develop direct sales Strategy Transaction data analysed customer-by-customer Customer segmentation based on purchasing behaviour Segments targeted via offers sent by Results + 1 million USD revenue from direct sales over one year 22

23 The five keys to success The techniques of wineries that succeed 2. Offering impeccable customer service Settle all customer issues. e.g.: Wineries that have an impeccable customer service immediately replace or reimburse corked bottles Reactive, using the social networks Answer all customer claims within 24 hours Present on the social networks, the new consumer s weapon Why? A good customer service is often expected but rarely lives up to expectations Customer service develops the brand s reputation and word-of-mouth communication Customer service is a marketing tool 23

Case study: using social networks to promote visits to the winery Customer: Robert Mondavi Winery, Napa Valley

Benson responded at the invitation of RMW The person was an influential blogger and changed her travel plans to

24 Case study: using social networks to promote visits to the winery Customer: Robert Mondavi Winery, Napa Valley Objectives: To improve customer service To promote visits and purchases at the winery Strategy Follow up all references and keywords related to the brand, be present on the social networks Example Tweet: "Heading to Napa Valley". Benson responded at the invitation of RMW The person was an influential blogger and changed her travel plans to visit RMW The ticket: "We felt obligated to because we got a personal response which led me to the following conclusion... They care about their customers and they re convinced I m gonna like their wine and service. And they were right!" 24

25 The five keys to success The techniques of wineries that succeed 3. Creating a veritable experience with the brand Most wineries adopt a point of view that is based on production. Wineries that succeed, adopt the customer s point of view Consistent communication through all tools (Print and web) The best wineries care about customer satisfaction A convincing and memorable experience for the consumer 25

A visit with a multiplicity of experiences Raymond

family Price per bottle: between 25 and 75 USD 1 hectare

workshops The Red Room: a private games room Winner of the

26 A visit with a multiplicity of experiences Raymond Vineyards Napa Valley, California Owned by the Boisset family Price per bottle: between 25 and 75 USD 1 hectare of biodynamic garden: "Theatre of nature" Wine assembly workshops The Red Room: a private games room Winner of the 2012 Wine Enthusiast American Winery of the Year 26

workshops (38 USD p/p), summer film festival Events

27 Food and wine pairing St. Francis Winery & Vineyards Sonoma Valley, California Price per bottle: between 15 and 45 USD Visits and tastings (free) Differentiation: Food and wine pairing workshops (38 USD p/p), summer film festival Events organized via the loyalty programme 7,000 subscribers on Facebook 27

USD Tasting options: latest vintages, older vintages, plot selections Several visiting

28 Different visiting and tasting options St. Supéry Vineyards & Winery Napa Valley, California Price per bottle: between 20 and 65 USD Tasting options: latest vintages, older vintages, plot selections Several visiting options Differentiation: art gallery Events organized via the loyalty programme 6,800 subscribers on Facebook 28

only (65 USD for 3 crus) Positioning: exclusive, luxury,

29 Exclusive and Privileged Quintessa Napa Valley, California 1 bottle: 145 USD (<10,000 cases) Visits, tastings by appointment only (65 USD for 3 crus) Positioning: exclusive, luxury, exceptional Wines offered only to member customers. 29

30 The five keys to success The techniques of wineries that succeed 4. Indicators for processes and results The processes Fix a deadline for responding to customer questions, , etc. Receiving visitors e.g. greet each visitor verbally in less than 15 s. Indicators of results Create a one-page trend chart with monthly indicators Organize weekly and/or monthly meetings to review indicators and establish a 3-4 month plan Compare in order to improve results: monthly result reports compared to yearly objectives 30

31 Example of a simplified trend chart April March % development Facebook Subscribers % They talk about it % Active users % Twitter Subscribers % Lists % Flickr Photos uploaded 1 1 Views YouTube Videos uploaded Total views uploaded % Website No.visits/day (average) % Single visitors % Online sales Total USD USD % Sales of brand A USD USD % Sales of brand B USD USD % 31

32 The five keys to success The techniques of wineries that succeed 5. Consistency & organization Consistency choose a date for sending monthly newsletters and stick to it Brochure/Internet site: consistent with positioning and identity Integrate marketing tools Use the social networks, website, video, etc. Create monthly themes to post content on social networks, newsletters, etc. Create an editorial calendar A simple summary of the winery s activity: vineyard, visitor space, etc. 32

33 Example of an editorial calendar EDITORIAL CALENDAR Day Facebook Twitter Event Visitor space Video Website/Blog 1 Event reminder1 Same as on Facebook Update 2 Video Same as on Facebook Video of harvest Publish video 1 3 Special offer Same as on Facebook Special offer 1 Special offer 1 4 Bulletin 3 Same as on Facebook 5 Event 1 - photos Tweet where to buy the wine Event 1 Event Event 2 Same as on Facebook Event 2 Event 2 9 Event bulletin 4 Same as on Facebook Event bulletin 4 Event bulletin 4 10 Brand history Same as on Facebook 11 Event 3 Same as on Facebook Event 3 Event 3 Event 3 12 Link to blog post Tweet where to buy the wine Video of event 3 Blog post Event reminder 4 Same as on Facebook 16 Brand history Same as on Facebook 17 Fan profiles Same as on Facebook Fan profiles 18 Event reminder 4 Same as on Facebook 19 Photo of estate Tweet where to buy the wine 20 Live tweet of event 4 Event 4 Event Event bulletin 5 Same as on Facebook 23 New vintage Same as on Facebook New vintage New vintage 24 Link to new article Same as on Facebook 25 Brand history Same as on Facebook 26 Profile of producer Tweet where to buy the wine Producer profile Event bulletin 6 Same as on Facebook 30 Special offer Same as on Facebook Special offer 2 31 Photo of estate Same as on Facebook Event 5 Event 5 33

34 Five keys: Where do you stand? Data collection Does the estate go all-out to get to know visitors? Is it easy to subscribe to the newsletter? Customer service Is it easy to find a contact? Communication supports Do they make people want to discover the winery? "Mystery customer" Ask someone unknown to come and visit the estate with precise questions to ask Contact the estate and report a corked bottle: what is the response? 34

35 WINE TOURIST TRAVELLERS Hypothesis and Recommendations for estates 35

36 Wine tourism Hypothesis Profile A rapidly expanding sector, wine tourist travellers are a high-potential target Visit wine-growing regions on vacation and long weekends Appreciate wine but also cuisine, sport, spas, etc. Often young, eager to travel internationally Familiar with digital media and social networks New discoveries and experiences important for their image Identify and associate their image with brands Less influenced by key influencers in traditional media than parents generation 36

37 Wine tourism Recommendations for communicating with wine tourist travellers Offer a veritable experience of the brand Authenticity: match words with actions What type of winery do you prefer? Offer it. What type of loyalty programme would you like to join? Create it. What type of Facebook messages do you read? Write them. Visitors experience: adopt a different approach Rustic and relaxed, or refined and elegant, both are attractive What are your strengths? Highlight them (Food/wine pairing, tasting from the barrel, visits to the estate) What distinguishes your estate? Highlight it. 37

38 Wine tourism Recommendations for communicating with wine tourist travellers Base your communication on the dialogue, not "sales" Engage a dialogue In the United States, mainly via Facebook and Twitter What do you like about your work? Share it! Make life easy for them No Flash on homepage Websites compatible with smartphones (and simple) No hard sell Just remember, your work is dream work for many of your customers! For customers, the experience of the estate constitutes the commercial message 38

39 Wine tourism The expectations of American wine tourists when they visit an estate Authenticity American tourists don t expect to find the same kind of visitor space as in the USA. They expect to find an estate that is typical of the country they are visiting Experience American tourists look forward to a memorable experience e.g. tasting with the owner or the winemaker Information They want to know where and how they can buy your wine in the USA. 39

40 Conclusions Wine tourism is a high-potential sector for the industry Consumers experience of the estate strengthens the bond between them and the brand, and develops sales through all channels. Strategy, plan of action and organization must be at the heart of the wine tourism offer France contact: Jeanne Peron, Director Paris Benson Marketing Group/France Mobile: +33 (0) United States contact: Jeremy Benson, CEO Benson Marketing Group Mobile: Facebook/BensonMarketing

WHY YOUR WINERY NEEDS A WINE CLUB! Most successful wineries have wine clubs. Don t get left behind - get started today!

WHY YOUR WINERY NEEDS A WINE CLUB! Most successful wineries have wine clubs. Don t get left behind - get started today! WHY YOUR RY NEEDS A CLUB! Most successful wineries have wine clubs. Don t get left behind - get started today! 2 TABLE OF CONTENTS What is a Wine Club?.3 Why Have a Wine Club?....4-6 How to Set up Your