The importance of multi-channel marketing (AKA yes, print will be seen by more eyes than email)

This month, we launched the VINsider Wine Club Collector’s Edition, which gives its members access to library vintages of Esprit de Beaucastel and Esprit de Beaucastel Blanc that we’ve aged in our cellars.  As we have held back only a limited quantity of our older wines, we announced an initial limit on numbers for 2009 to 250.  With about 3600 wine club members, I was fairly confident that we’d get to our maximum, and in fact we have.  We’ve reached our 250 and will be cutting off any further registrations at the end of this week.

What has been interesting to me was the relative effectiveness of the different effort we've used to promote this new club.  We have let our club members know four different times about this opportunity. 

  1. July 28th: a mention as a part of our regular end-of-month email for July 
  2. August 9th: a paper letter which we sent out on letterhead
  3. August 17th: a column in our fall newsletter
  4. August 25th: a prominent mention in the end-of-month email for August

I was expecting the greatest response to be from the first email mention, but this was not the case. In the five days after we sent out the email (about the limit, in my opinion, of the impact of a piece of email communication) we netted 27 registrations.  It was the paper letter that had the most impact.  On August 10th, the first day anyone could have received it (realistically, just Southern California) we received 29 registrations.  The next day brought in 49.  In total, in the week after we sent out the letter, we received 147 responses.  The column in the newsletter produced 37 in the next week.  And this last email, which went out not even 36 hours ago, has netted another 44 registrations so far, with more coming in.

I plotted the registrations by day on a graph, with the different marketing events noted:

Collectors Edition Registrations by Day

Our experience launching this program has been for me a salient lesson in multi-channel marketing.  If you send out a regular email (as I think any winery, or really any business with direct customers, should) you should expect that a significant percentage of its recipients are going to ignore or skim the letter.  Of course, some people may just toss a printed letter too, but these days, a physical mailing, if it’s nicely done, is unusual enough that I think it commands more attention.  Of course, a print mailing is more expensive to produce and send out than an email by a factor of something more than 100.  But if what you are promoting is sufficiently valuable, it’s important to remember that it will see a lot more eyes than an email.

As for emails, we saw very different response rates between the initial email that announced the Collector’s Edition program, which saw only a small bump in registrations, and the one that went out yesterday, which produced more response in the first day than the earlier email did in a week.  I think there are three factors at play here.

  1. Position within an email matters.  In the initial email, we soft-played the section promoting the Collector’s Edition.  I didn’t want to steal the thunder of the letter that was coming soon, and so we put the mention toward the end of the email.  We do organize our monthly emails consistently, with -- in essence -- a table of contents at the beginning, so customers can scan the email quickly, but I still think that many people don’t make it past the first or second point in an email.  In the recent email, the announcement about the Collector’s Edition was the first section.
  2. An announcement at the end of a limited time promotion tends to see more response than one at the beginning.  We feature a wine each month, and typically see more orders at the end of this monthly feature than at the beginning, even though we often sell out of the featured wine before the end of the month.  Of course, communicating urgency -- in this case that there were only 25 spots left in the program -- helps.  At the same time, it’s important not to underestimate your customers, and save urgency for when it’s real. 
  3. There is a cumulative effect to repeat marketing by different channels.  Each mention, as long as it feels natural and unforced, raises people’s curiosity and makes it more likely that they will investigate further.  By the end of the month-long program, I’d hope that nearly all our wine club members would have at least heard about and considered briefly our new program.

None of this should be a revelation to marketers.  Still, I spend more of my time working on marketing than I do on any of the many other pieces of my weekly job, and I was taken by surprise at some of our results.  A few general lessons for any winery doing this sort of promotion:

  • Think about print as a complement to email marketing for anything special
  • If you’re going to use email marketing, make sure that your most important items are in the beginning of your email.  Better yet (if you can do it without overwhelming your customers with too much mail) make it the sole focus of an email.
  • Don’t be afraid, if you can do so within your established patterns, to mention an important program in more than one email.  A customer who may be distracted or buried when one mention comes in may have time to read the next one a few weeks later.
  • Expect to receive most of the results of an email within 48 hours.
  • Marketing the same program through multiple channels can have a cumulative effect.

Oh, and as to the immediate item at hand?  We have enough wine allow a slightly larger membership in the Collector’s Edition club, and felt that doing so was fairer than cutting it off arbitrarily less than a day after our “last call” announcement.  So, we’re going to accept any additional registrations through the end of this week.  Anyone who misses that cutoff will be put onto a waiting list for 2010, when we expect to be able to expand the program a little more. If you're interested in this year's shipment, which I think is exceptionally cool, act soon.

Introducing the VINsider Wine Club "Collector's Edition"

Earlier this week, we sent out initial notice to all our VINsider Wine Club members that we are launching a library version of our wine club.  We're calling this the VINsider Wine Club Collector's Edition.

Regular readers of the blog may remember a post from last summer called a library wine club? where I was struggling with how we might go about sharing the wines that we'd been aging in our cellars since the 2003 vintage (a post on which I got lots of good comments from readers).  We've finally come up with a solution that we like, and have taken the plunge.  Here are the details:

  • Collector’s Edition members will continue to receive two shipments of wine per year from us.  The spring shipment will be the same six-bottle selection that all VINsiders receive, but the fall shipment, in which we traditionally include the upcoming vintages of Esprit de Beaucastel and Esprit de Beaucastel Blanc, will be increased to a case by the inclusion of six additional bottles:
    • 2 bottles of a library vintage of Esprit de Beaucastel
    • 1 bottle of a library vintage of Esprit de Beaucastel Blanc
    • 2 additional bottles of the upcoming release of Esprit de Beaucastel 
    • 1 additional bottle of the upcoming release of Esprit de Beaucastel Blanc
  • We will select the library vintages each summer based on the results of a library tasting, whose results we will post on this blog (for an example look at the writeup that followed the library vertical tasting from Francois Perrin's visit in May)
  • We will make available a small quantity of the library wines for re-orders

There were a couple of things that we liked about this solution.  First, it didn't require people to be home to accept another shipment, and didn't require us to make another shipment in either mid-summer (when it's often too hot to ship and lots of people are on vacation) or mid-winter (when lots of people have other major purchases and it's sometimes too cold).  Second, it's not a big additional commitment for members: just six more bottles once a year, and no more than two additional bottles of any single wine.  And we were able to give some nice extra benefits to members consistent with our existing policies.

  • As the resulting fall shipment will consist of twelve bottles, members will receive all the wines at the additional 5% case discount (we sell 1-11 bottles to our club members at 20% off; 12+ bottles at 25% off). 
  • As the shipment will include at least six bottles of Esprit de Beaucastel wines, we will ship it for free.  We made this policy change earlier this spring to encourage the sales of our Esprit de Beaucastel wines. 

I think that the resulting Collector's Edition inaugural shipment is pretty spectacular.  The wines (with their costs) will be:

  • 2 bottles of 2003 Esprit de Beaucastel (library price: $55 each; cost: $41.25 each)
  • 1 bottle of 2005 Esprit de Beaucastel Blanc (library price: $45; cost: $33.75)
  • 4 bottles of 2007 Esprit de Beaucastel (list: $50 each; cost: $37.50 each)
  • 2 bottles of  2008 Esprit de Beaucastel Blanc (list: $40 each; cost: $30each)
  • 1 bottle of 2007 “En Gobelet” (list: $40; cost: $30)
  • 1 bottle of 2008 Picpoul Blanc (list: $27; cost: $20.25)
  • 1 bottle of 2008 Bergeron (list: $27; cost: $20.25)

We're limiting inaugural membership in the Collector's Edition to 250, and will always have to limit membership to avoid overwhelming our library. 

A letter will go out to VINsiders next week explaining the new club in detail.  VINsiders who are interested in becoming members can just fill out and fax back the last page of the letter, let us know either by phone and email, or sign up online.  And new VINsiders, whether they join online or in our tasting room, will have the option of choosing the Collector's Edition when they do.

This program is the result of five years’ preparation, and allows us to provide newer members (as well as older members who have already consumed all their earliest vintages) the opportunity to experience Tablas Creek’s most ageable wines, cellared in ideal conditions.  We hope that our fans will be as excited to receive this increased access to our own library as we are to share it with them.

Wine Clubs vs. Mailing Lists

I've gotten several questions recently on why we choose to use the wine club model while other California wineries choose to sell their wine to their supporters through a mailing list.  As I have been answering these questions, I thought that it might be interesting to delve a little into the strengths and weaknesses of each from the perspective of a winery -- and from a consumer.

The wine club model should be familiar to most fans of Tablas Creek, since it's what we use.  In our VINsider Wine Club we send out six bottles of wine twice a year, typically in March and September.  Wine club shipments are generally sent out at a discount (ours is 20%) off of retail price.  Many wineries offer some basic customization options such as red-only or white-only; some also offer different tiers, such as three bottles, six bottles, or a case at each shipment.  A few offer significant customization options, or even allow their members to choose any collection of wines to make up their shipments.  While wineries may allow members to skip a shipment, in our experience few members choose this option, preferring to cancel their membership and perhaps rejoin later.  And most wineries avoid sending large amounts of any one wine in their club shipments, preferring to use them to expose their members to the breadth of the wines that they make, and focusing on small-production wines that are typically different from those in general release.  Members who are interested can order more of their favorite wines, sometimes at an even-greater discount.

The traditional mailing list model works a little differently.  Members receive allocations each ordering period (one to three times a year).  Newer members receive smaller allocations, or allocations of less in-demand wines.  Members who have been on the list longer receive larger allocations and/or better wines.  Members do not usually have to take their full allocations each time, but anyone who passes entirely, or who takes only a portion of their allocation repeatedly, tends to get either dropped from the list, bumped to a less desirable allocation, or just not progressed to more elite levels.  Very often, the mailing list wines are not otherwise available, and are viable commodities on the resale market, so members are able to take allocations of wines they may not necessarily want for themselves and then resell them to other interested buyers.  Typically, mailing list wines are not discounted per se, but the price for these wines on the resale market is higher than the release price, so non-members have to pay the higher prices on the secondary market.

Producer Preferences
From a producer's standpoint, there are advantages to each model.  A wine club allows you to build loyalty and expose a relatively wide audience to limited-production wines.  However, it is not a great way to move larger quantities of any one wine.  For example, at Tablas Creek, we have about 3500 wine club members.  Sending a bottle to each member requires roughly 300 cases of a wine.  But members may feel that as they are already receiving a case of wine over the course of the year, they may not need to order more.  We also have to create enough different wines each year to fill the slots in the wine club, which can be challenging in vintages with short crops.

A winery can target the offers to their mailing list to reflect the quantities of the different wines they have to sell.  So, if they have a lot of a particular wine (let's call it "Merlot") they can set the allocations of the Merlot higher for that vintage.  With 3500 mailing list members, they might set the allocation of that wine to 2 bottles for the lowest-heirarchy 2000 members, to 4 bottles for the mid-tier 1000 members, and to 6 bottles for the elite 500.  Assuming that their members take their allocations, In the end, they will have moved over 900 cases of Merlot to their members.  Members are going to be encouraged to take the wine, even if they don't particularly want it, because of the implied threat of loss of priority on the list and hopefully because they can always turn it over and at least make their money back on the secondary market.

For a winery, the mailing list model is typically a more lucrative way of selling its wine, since they can sell increasing allocations to their longest-term members.  Some wineries get up to sending 5 or 6 cases, or more, to their elite members.  And because they can tailor their offerings to their production, they can always match up supply and sales.  Plus, they typically sell at full retail price.  Some wineries (Turley is a much-mentioned example) can sell tens of thousands of cases through their mailing lists.  But, mailing lists really only work when demand outstrips supply.  I wonder if there are any wineries out there who began with a wine club model, and as their demand grew, switched to a mailing list model?  I haven't heard of it, but it must be tempting for wineries who've built up sufficient excess demand.

Wholesale Distribution Consequences
A wine club, because it contains mostly small-production wines, is largely noncompetitive with a winery's wholesale distribution efforts.  Still, it's always a juggling act for wineries to make sure that club members are getting best prices on wines, and we are careful that our club member discounts bring the prices of even our more distributed wines down to levels comparable to what the same wine might be sold for by the most aggressive discount retailer.  We have lost club members occasionally when a local discounter cuts their prices below our wine club members' prices.

Mailing list wines are rarely available in the wholesale market, or, if they are, are typically either restricted to restaurants (whose higher markups raise the price comfortably above mailing list prices) or sold at mailing list cost to retailers, who then mark up the wine and resell it.  Of course, if the demand on the secondary market falls so that members with higher allocations can't unload their extra, or the winery decides it needs to move wine into the wholesale channels, a mailing list system can fall apart quickly.  So, many wineries who use mailing lists have their hands tied when demand falls.  Wine clubs chug along in times of economic stress, and ours has continued to grow (albeit more slowly than in past years) throughout the current recession.

A Consumer's Perspective
For a consumer, I can see advantages to each.  A wine club is typically a less extravagant commitment than a mailing list membership.  And you tend to get additional discounts for additional ordering, and a wide range of offerings.  But wine clubs are often less flexible than mailing lists, and many wines may be made in quantities so small that it's unlikely you'll be able to get more even if you want to.

I have increasingly started to hear consumers refer to mailing lists where you're required to buy ever-larger quantities of wine to maintain your priority, or to buy quantities of wines you're not particularly interested in to maintain access to the wines you want, as "hostage" lists.  But most members seem to stay members, at least as long as they can re-sell (or "flip") their unwanted wines.  I understand this frustration, and we've always tried to make sure we're not overloading our VINsiders with too much of any single wine.  Anyone who wants more is welcome to order more, and lots of members do each year.

I'd be interested in feedback from anyone who is a member of both wine clubs and mailing lists.  As a consumer, do you have a preference?  Are there practices you'd like to see the wineries you patronize adopt?

Why bother with single-varietal wines if blends are better?

I got a great question recently from Tablas Creek VINsider Wine Club member and blogger Steven Stumpf, whose blog is one of my must-reads each week.  He asked, in essence (and much more diplomatically than I'm rephrasing it) why we make single varietal wines if we believe that blends are the best expressions of Tablas Creek.  I thought that the question was excellent and my response worth expanding and sharing with everyone on the blog.

Before I start, it's worth noting that 80% of what we make, including our flagship red and white wines, are blends.  And we start our blending process by first selecting the lots for the Esprit de Beaucastel wines, which means that they get the best lots in the cellar.  We are convinced that blending the different Rhone varieties allows us to make the best wines we can each vintage, and also (by diminishing the signature of any one varietal on the finished wines) better allows us to express the terroir of the site, which all the varieties share.

Still, each year we make between four and seven single varietal wines.  If we're such committed blenders, why do we bother?  There are four main reasons.

  1. There are often lots of some of the more intense varietals (particularly Syrah and Roussanne) that are so powerfully characteristic of the varietals that we don't feel they integrate well into blends.  Other years, we worry that if we were to blend all the super-intense gallonage of a particular varietal into the blends that varietal would dominate to a degree that we're not comfortable with. In both of these cases, it also seems to us a shame to blend these tremendously characteristic lots away. These are the lots we typically choose to make into single-varietal wines.
  2. The single-varietal wines are great educational tools. They help show the trade and public why we bother with relatively unknown grapes like Mourvedre, Roussanne, or Grenache Blanc. We also think that having top-notch examples of these single-varietal wines helps us educate the public about why they should care about them better than just having them in a blend does. In a blend, it's always possible to say, "well, it's a great blending varietal" with the implication that it's not a great varietal in its own right.  We feel that a part of our marketing the world of Rhone varieties is proselytizing for the varieties we think are worthy of such attention.
  3. There are people out there who are still convinced that the best wines are single varietals.  We can thank Robert Mondavi for this lingering side-effect of his efforts to separate his Napa Valley wines from the field-blended jug wines for which California was known up through the 1960's. We happen not to agree that single varietals are usually better, but having some excellent examples of single varietals is a way for us to increase our potential customer base.  We're confident that if we can get someone to try one of our single varieties, we have a good chance of later getting them to try one of our flagship blends, and eventually to bring them into the world of Tablas Creek.
  4. It allows us to do some cool stuff for our wine club. Most of the single varietal wines we make are produced in small lots: anywhere from 150 to 750 cases.  Many of these wines never make it into distribution.  We think it's a safe assumption that members of our wine club are interested in these unusual varietals, and if we can make for them a Counoise (as we've done in 2002, 2005 and 2006) or a Picpoul Blanc (as we've done in 2003, 2005 and 2008) our club members will get a kick out of getting to try something that rarely if ever exists elsewhere.  This doesn't mean that we don't send our blends to our club members; they get the first look anywhere at our Esprit de Beaucastels each year, they are the only recipients of our Panoplie, and we do occasionally make unusual blends for them (like the En Gobelet wine I wrote about a few months back). But rather than send several bottles of any one wine, we feel that our club members will appreciate getting to try a wider range of ideas and can then buy more of whatever they're most excited about.

It's also worth noting that many of our single varietal wines (like very many others in California) are in fact blends.  For example, our 2006 Syrah is 90% Syrah and 10% Grenache.  Our 2006 Mourvedre is 90% Mourvedre and 10% Syrah.  And our 2006 Grenache is 90% Grenache and 10% Syrah.  Still, the variety listed on the label is typically how it's displayed and marketed, and we we feel we get the benefits of blending on the wine itself while retaining the advantages listed above.

I'm assuming that most of you who read this blog regularly are fans of Tablas Creek.  What do you think of the single varietal wines vis a vis the blends?  Please share.

Paso Robles Wine Festival 2009

Last weekend was the annual Paso Robles Wine Festival.  We joined 92 other Paso Robles wineries to pour in the park on Saturday morning to pour wine for the roughly 4200 attendees.  Of course, it was hot.  You can just about set your calendar in Paso Robles to the fact that the first hot weekend of the year will coincide with Wine Fest, and this year didn't disappoint.  It was a little cooler than last year (around 100 instead of 106) and the heat broke on Sunday afternoon, which proved to be a very welcome and unexpected early respite.  Still, it didn't seem to dampen anyone's spirits.  The Tablas crew (cru?) at the park included eight of us so we would have time to go out and taste ourselves, as well as to get into detailed conversations with anyone who was interested without neglecting other guests:


The Wine Festival as a whole had a very nice vibe to it, and we were busy the whole time.  We poured about 2000 tastes of wine over the four hours, which amounted to nearly seven cases of wine... the same amount we poured in 2008.  Even better, I heard mostly good things about the temperatures at which other wineries were pouring their wines (which was not the case last year).  We were swapping wines in and out of the ice all day, even the reds, which is essential.  The thought of tasting warm red wines on a hot day... ugh.  There were a few instances of the cool kid syndrome where wineries brought much less wine than they would need and poured out in a few hours, but overall, I think that anyone who attended got to taste all the wines they would have wanted to if they took even a little care.

I hope the Paso Robles Wine Alliance was happy with the results; they've done a tremendous job of turning what used to be a giant party into a fairly focused tasting where attendees are overall quite responsible and interested even at the end.

On Sunday, we again used the excuse of having thousands of wine lovers in town to launch the new vintage of our Rosé (in this case the delicious 2008).  We reprised our salmon tasting, and chef Jeffrey Scott did another amazing job of putting together an amazing spread of dishes to pair with Rosé, including cured salmon, fresh cheeses, two salads (heirloom beets and burrata in one, fennel in the other), and strawberries with balsamic vinegar and basil.  The chef at work:


We have for the last several years planned our event for the Sunday morning of Wine Festival weekend, in the hopes of convincing people to begin their day out west of town and work their way back toward civilization.  As we're typically much busier in the afternoon than the morning, this helps ensure that our traffic is steady all day, and it has become an annual event for many of the members of our VINsider Wine Club (for whom the event is free).

I saw a phenomenon this year that I wasn't expecting, and would love some feedback.  While we did sell wine in the morning, we sold only about 40% of our daily sales to 60% of our traffic in the first two hours of the day (which coincided with the salmon event).  And I spoke to several VINsiders who said that they'd come out for the salmon but weren't even going to go and taste, as it was too early in the day for them.  Later that weekend, I read an article in the New York Times magazine where Suze Orman is quoted saying (I'm paraphrazing here) that she never gives things away for free because people just don't value what they don't pay for.  This was truly a phenomenal event, with amazing food and wine, and available to anyone for the price of a tasting fee (which also got the purchaser a full wine tasting and a tasting glass).  Are we doing something wrong if some people come out and partake but don't buy (or even taste)?  Maybe this is overkill?  I'm not sure, but we'll reevaluate before next year.

I'll leave you with two more photos that give you a feel for the family side of the event, and of Tablas Creek.  First, a quiet moment near the end of Saturday's tasting in the park, where Neil is relaxing next to my older son Eli, who just turned four and was taking everything in with very wide eyes:


And finally, one family shot on Sunday, where both kids (Eli and his little brother Sebastian, age 20 months) came out and mingled with the guests at Tablas Creek, many of whom have known them since they were born:


I have the complete photo album, with more photos both from the park and from the salmon and Rose tasting, posted on Tablas Creek's Facebook page:

Congratulations to... my wife Meghan?

So, we just completed the third annual VINsider NCAA tournament bracket.  And once again, our fans showed that their skill in choosing winners extends beyond just wine.  The median entry in the ESPN VINsider group that I set up was in the 60th percentile.  I encourage the Tablas Creek staff to join in the brackets each year, and a handful of us did.  My wife Meghan, who you have to thank for our newsletter, labels and brochures, entered as well, picking UNC to win it all (she's always been an ACC partisan).  Her bracket picked three of the final four and seven of the elite eight and landed her in the 98.5th percentile and at the top of the VINsider pool.

I always knew I had good taste!

My own bracket was fairly embarrassing; I did very well picking upsets in the first round and was in the 99th percentile after two rounds and 97th after three... but things fell apart quickly after that, and my final four of Memphis, Louisville, Oklahoma and Pitt didn't exactly happen. 

Thank you to everyone who played.  It's always a fun diversion for us here!

Creating a new wine: En Gobelet

Our model at Tablas Creek is pretty consistent from year to year.  We make our Esprit de Beaucastel (red and white) and Cotes de Tablas (red and white).  We make our Rosé.  We make somewhere between six and nine single varietal wines depending on what's compelling when we're doing our blending.  Some years we make a dessert wine or three.

Okay, maybe that doesn't sound very simple.  But practically speaking, it doesn't change much from year to year, or at least hasn't changed much since we introduced a relatively extensive lineup of single varietals in the 2002 vintage.  The specifics of which varietals to produce have been more or less dictated by the production levels of the vintage and what we taste when we're putting together our core blends.

One thing that we have not done is subdivide our vineyard and do vineyard block designates.  It's not that we don't believe that this might make for interesting wines; we would love to celebrate any block-level differences we learn about.  We do expect eventually to make a block-designate wine from the dry-farmed, head-pruned, west-facing eleven-acre block on the south side of Tablas Creek.  But we have not yet seen a distinctive character from a specific block that we can track from year to year.  Ask us again in a decade.

Head-pruned-mourvedre One experiment that has shown some promise has been our decision to plant small head-pruned blocks of vines in several of the flatter, lower-lying areas such as the Mourvedre block between the winery and Adelaida Road (visible at right).  We created several other head-pruned blocks in vineyard that we reclaimed from rootstock when we outsourced our nursery operation to NovaVine in 2004.  That effort accelerated when we planted Scruffy Hill (the vineyard block on the other side of Tablas Creek I mention above) in the winters of '05-'06 and '06-'07.  At this point, we have about eighteen acres of head-pruned vines, scattered here and there around the vineyard.

Head-pruning is appealing both for its simplicity and because it is traditional.  The Chateauneuf du Pape regulations which specify the rules for the appellation controllée dictate that all grape varieties except Syrah be head-pruned (taillé en gobelet; literally translated as "pruned in goblet form").  And in Paso Robles, too, the old vineyards are all head-pruned, largely Zinfandel but also Petite Sirah, Carignan and other California "heritage" varieties.  It's much less expensive to plant a vineyard this way, as you plant with less density and no posts, wires, irrigation lines, etc.  And the yields are controlled naturally, as dry-farmed, head-pruned vines rarely produce more than 2 or 3 tons per acre.  This natural yield control is why head-pruning is legislated in Chateauneuf du Pape. 

As we've had a chance to get some of these blocks into production, we're noticing they seem to share  an elegance and a complexity which is different from what we see in the rest of the vineyard.  Perhaps it's the areas where they are planted (generally lower-lying, deeper-soil areas).  Perhaps it's the age of the vines and a comparative lack of brute power.  But, whatever the reason, we believe that these lots show our terroir in a unique and powerful way.

We got the idea of putting several of these lots into one wine for our VINsider wine club last summer, as we remarked again and again on the character that they shared.  We chose to base the wine on Mourvedre and Grenache (which comprise most of our head-pruned blocks) but also added a splash of head-pruned Tannat which gives the resulting wine a little more smokiness and a little firmer finish.  We are calling it En Gobelet, after the French term for head-pruning.  We expect it to act like many Mourvedre-based wines, drinking well when young, then tightening up after 3-4 years in bottle before reopening for another 10 years or more as a mature wine.  A bottle of the wine will go out in the fall 2009 shipment.  The label for the wine is below.


Succeeding in a poor economy: it's all about the fundamentals

I get questions every day from people asking how our sales are holding up overall and what we're doing to help survive the current struggling economy.  Most people look surprised, and then relieved, to hear we're doing pretty well, all things considered.  Our wholesale sales were down 11% last year because of a decline in the fourth quarter, but our tasting room sales were up 15% for the year and down just 3% in the fourth quarter.  Our traffic was up 5% for the year.  Our sales to our wine club were up 21% for the year, and we ended the year with about 3400 VINsider wine club members: more than 500 more than we had at the beginning of the year.

So far this year, we're holding steady in the tasting room.  Our January sales were up 4.5%, and our traffic up 9.5%.  We signed up 16% more new VINsiders this January than last.  A part of this improvement can be attributed to the day of the week on which New Year's fell (it was a Thursday this year, creating a four-day holiday weekend to begin the year) but we're seeing consistently good traffic out in our tasting room and our average sale per customer and the percentage of our customers who we're converting into wine club members are both at our averages from the past few years. 

So, given all this, I thought it might be helpful if I tried to enumerate what I think that essentials are for a winery who wants to be successful in this economic climate.  I've tried to give some context for my suggestions, as not all of these will apply to everyone's situation.  Most of it is not rocket science.  It's about focusing on the fundamentals and doing them well.

  • Make sure that the customer experience when someone is coming to visit you is a good one.  I think that this point, for small- to medium-sized wineries, is as important as all the others combined.  I am amazed by how many people we get in our tasting room who tell us stories of disinterested servers, overcrowded tasting bars, or salespeople whose only interest is a club sign-up.  A hugely successful tasting room may convert 5%-7% of its customers into club members.  That means that the vast majority of the people coming through your tasting room are not going to sign up on the spot.  Focus on giving everyone a memorable experience, and the wine (and wine club) will sell itself.  This does not mean that wineries should approach sales as though the idea is somehow dirty: sell through education and enthusiasm, and make sure that the customers know the options in front of them.  Every person who leaves your tasting room happy is a source of repeat business and referrals.  An enormous piece of being able to ensure a good customer experience and the sales that result is having sufficient staff on hand to handle your busiest times.  This necessarily means that in slower times you'll be overstaffed, but if you calculate the value over time to your business of a single club sign-up or a single dissatisfied customer who would otherwise have bought a case of wine and told their friends, the cost of labor seems pretty minor.
  • Build and use your lists.  At Tablas Creek, we saw 22,000 people come through our tasting room last year.  Adding just a small percentage to your email lists (let alone your wine club lists) can give you a powerful tool to communicate special offers, share information about events, and generally build an ongoing connection to your base.  Once you have added these people to your lists, it's important to contact them regularly.  An email every few months, with perhaps a print newsletter a couple of times a year, is generally seen as welcome rather than intrusive.  And, for your core customers (read: wine club members) a little extra outreach in times of economic difficulty may well prove rewarding.  We've found that while our wholesale sales have suffered, the responses to our wine club emails are providing a consistent, growing return even over the past four months in this struggling economy.  One final word: there are wineries who fear to contact their club members out of worries that this will remind them that they want to cancel.  I think that this approach is self-defeating in the long run.  You may squeeze an extra shipment out of a few people, but the numbers of dissatisfied members of your base who you create, and the churn of returned or refused shipments, challenged credit card charges, and lost opportunities for between-shipment sales seem to me to far outweigh the gains.
  • Cultivate partnerships.  You are not the only one in your area with an interest in bringing people into town and giving them a good experience.  Reach out to local hotels and bed&breakfasts and create co-marketing opportunities and specials that will give them a reason to be emailing their customers about you.  Work with local restaurants to put together dinners that both you and they will market.  This expands your base, supports your partners in your community, and ensures you stay visible.
  • Stay visible.  This is not the time to cut your marketing budgets and hope to save your way through the economic downturn.  Sure, be selective about what expenses you choose (was that half-page ad in the glossy wine magazine really worth the $10,000 it cost?) but don't disappear.  When overall business is contracting or staying stagnant, you can be assured that your competitors are out there pounding the pavement.  Keep going to festivals.  Keep working in the market with your wholesalers.  Keep supporting the local organizations that are promoting your area and keep supporting the advocacy groups that focus the wines you make.  This will help ensure that you maintain your share of whatever business is out there, and will position you for fast growth when the economy does turn around.
  • Do your part to ensure that you get editorial coverage.  Writers in lifestyle and wine publications are struggling, too.  Newspapers and magazines are both being hit hard by a decline in ad revenues, and many are letting writers go or converting paid positions to contract labor.  This means that everyone in the media is being asked to do more work for less or the same money.  Help them out.  Come up with creative ideas that will make good stories (and relate somehow to your business).  Then pitch the writers who you know on these ideas.  Don't expect every idea, or even most ideas, to pan out, but you'll be surprised what does.  And not contributing ideas is a great way to ensure that they don't get used.  Plus, be sure that you're covering the basics.  Are you sending samples of all your new releases to the 20 or 30 key writers around the country a few times each year?  Figure that the total cost of doing so is somewhere around $2500 plus a few cases of wine.  Calculate what a full-page advertisement is in any of the key wine or lifestyle publications.  Do the math. 
  • Work with new media.  I wrote a little less than a month ago about Facebook and social networking for wineries.  In the month since I wrote that article, Tablas Creek's Facebook page has gained 130 new fans.  Extrapolate this power across months and years, and you will see how potentially valuable these inroads into social networks can be.  And Facebook isn't the only outlet.  A blog is a great way to personalize your business, communicate your core ideas and principals, and drive traffic to your Web site.  Getting involved in online bulletin boards can develop enthusiasm in an important base.  And new wine 2.0 sites like Snooth are just starting to show their power.  If you aren't particularly technologically inclined and are worried about your ability to execute in these new media options, find an intern to do it, or just ask a member of your staff who is recently-graduated from college.  You'd be surprised how easy and inexpensive it is to create a broad online presence.
  • Be more hands-on in managing your relationships with your wholesalers.  We're finding that a major problem in our wholesale efforts is overcoming the nervousness of our gatekeepers.  Clearly wine consumers have not stopped buying Tablas Creek; the people with whom we have direct relationships prove that.  But for a wine to sell in the wholesale market, the distributor manager has to believe in the product enough to maintain a healthy inventory, the distributor rep has to believe he or she can sell the wine enough to pull a sample and show it to his or her accounts, and the buyers at the accounts have to have enough confidence to buy the wine in a crowded marketplace full of people offering them hitherto-unimaginable deals.  That's a lot of people whose confidence you have to win or keep before the consumer even gets the opportunity to buy your wine.  You can overcome many of these hurdles by staying actively involved with your wholesalers.  Make sure you're receiving inventory reports every month, and accounts-sold reports quarterly.  A distributor can't sell wine they don't have in inventory, and won't sell a wine whose inventory is down to a few cases.  Know who you'd like to see the wine sold to, and make suggestions to the distributor.  Offer to support your wines by offering their sales reps (who usually have a limited sample budget) some samples at your expense. These ideas are good even in a strong economy (the wholesale market is a very crowded one, and distributor mergers have guaranteed that most distributors have many more wines in their books than they can realistically focus on) but become essential when times are tough.  And, be sure you're out in the market, working with your distributors.  It's important for you to hear what their customers are saying, and for the distributors to see that you care enough to support their efforts.
  • Focus on giving people value.  Value is an essential concept.  It does not mean that things need to be cheap.  But, it does mean that you need to think about what will remind or convince a potential customer that what you're offering is worth what they will spend.  Offer a special on a specific wine each month.  Or offer free or discounted shipping.  Be generous with events that will bring people out to the winery where a purchase is more likely to happen.  One example: we included a $15 discount coupon in the end-of-year gift that we sent to all our wine club members at the end of last year.  Just a few days later, we started getting orders from people who had received that coupon.  Would we have received those sales had we not sent out the coupon?  Probably a few.  But most, in my opinion, were spurred by people deciding that this little nudge was enough to tip their value scale into the black. 

These are just a few ideas, and nothing here should be earth-shattering for business owners or managers.  But for us they have meant the difference between lamenting the poor economy and being able to continue to grow even as the fundamentals of the economy have deteriorated.  I hope that this has proven helpful, and would love to hear from other business or winery owners out there who have also come up with creative ways of protecting themselves from the economic downturn.

Thoughts on our Annual Futures Tasting and En Primeur Offering

Futures_tasting_winesEach December, we offer our VINsider Wine Club members the chance to taste the upcoming release of our two top red wines, before bottling, and reserve these wines at a futures-only 30% discount off of expected release price.  We began this program back in 2003 (offering futures on the 2002s that were in barrel at the time) and have continued each year since.

Offering wines en primeur is is a time-honored French tradition most often associated with first-growth Bordeaux estates.  In outstanding vintages, valued customers are offered the opportunity to secure a limited quantity of sought-after wines at a special price in advance of bottling and subsequent general release.  As the demand for Tablas Creek's wines grow, this is a way for our best customers to ensure that they receive the wines that they want.

We have gone through several iterations of how we've set up the futures tasting.  Initially, we did it on a Saturday afternoon in our barrel room, which worked fine in 2003 the (when our tasting room just wasn't that busy).  The next year, we happened to have a big crowd in our tasting room, and the challenge of getting a hundred people through the tasting room and into the barrel room (and back) proved to be too much for us.  We felt that we'd lost control, with non-club members wandering into what was supposed to be our most exclusive event, and VINsiders strolling back and forth between tasting room and barrel room getting who-knows-how-many tastes.

So, in 2005, we moved the event to the evening and held it in both our barrel room and tasting room.  This worked fine the first year (at around 115 guests) but started to break down the following year.  By 2007, 200 guests had reserved, and the event felt more like a nice holiday cocktail party than it did like a focused exploration of young, powerful wines.  Attendees would spend their first ten minutes in our barrel room tasting the futures wines, and the next forty-five in our tasting room tasting their favorites.  it proved to be impossible to keep focus where it needed to be: on the futures wines.   Our average futures sale of attending customers had dropped for two years in a row, and we decided to rethink our format.

Futures_tasting_placesetting We decided that the best way to focus on the wines was to get people off of their feet, and to present the wines in a more leisurely, intimate setting, with restrained food designed to showcase the wines and soften their youthful exuberance.  So, we moved the event to the afternoon and created three different sessions with a maximum seated capacity of 50 people at each.  A placesetting is at right.

Neil (our winemaker, for the uninitiated) and I began by talking through the specifics that created the powerful, low-yield 2007 vintage, and we then moved to tasting the 2007 Esprit de Beaucastel and 2007 Panoplie.  Finally, we served Chef Jeff Scott's creation to feature the wines: a braised lamb over polenta with root vegetables dish (click here for the recipe) that was the perfect foil.  A panoramic photo, below, gives you a sense of the setting in our cellar:

The results were terrific.  The wines showed magnificently, confirming our impressions that the 2007 reds are likely the best we've ever seen.  The sales reflected this; nearly every attendee ordered futures, and the average sale per person was nearly triple what it had been last year.  The feedback we received from the members who came was that it was a wonderfully relaxed, focused exploration of the wines, and Neil and I both appreciated the chance to share impressions and answer questions with these intimate groups.  At $25 for the seminar, the tasting of these wines, and the lunch, it was a steal.  Plus the ticket price was refunded on any futures purchase, so the event ended up being free to nearly everyone.

We had worried that we would find it difficult filling a 75-minute seminar with discussion about only two wines, but instead found that each session ran nearly 100 minutes and could have lasted longer if we hadn't had to reset for the next group.

Now, we just need to find out why more people didn't come.  From 200 reservations in 2007, we dropped down to just under 100 this year, and only the first (11:00am) session sold out.  We'll just have to work on communicating just how nice the event was to everyone before 2009's edition!

Any VINsiders who are reading this should note that Wednesday, December 10th is our deadline for futures orders for the 2007 reds.  An PDF (faxable) order form is available; click here to view details and prices.

Pig Roast!

Each August, we hold a pig roast here at the winery.  We got the idea originally five years ago because our neighbor was having problems with feral pigs and offered to get us one for an event, and have continued the event with farm-raised pigs (in the absence of conveniently available wild ones) each year since.  Our winemaker Neil Collins dug a pit in an old rootstock field near the creek and rigged up a rotisserie from an old tractor motor.  The rotisserie:


Neil built the fire at 4:30am on Saturday, and the pig was on the rotisserie by 6am.  It spends the next twelve hours cooking, and is then taken out of the pit, off the spit and carved up.  Chef Tom Fundaro (of Villa Creek Restaurant) did the honors:


It's always fun for me to bring the kids and see what they think of all this.  Last year, Eli (our older son, now 3) discovered that he could figure out which grapes were ripe by what color they were.  This year, he was much more fascinated by the pig itself, while Sebastian (our younger son who is almost one) discovered the grapes:

Pigroast_sebastian Pigroast_eli_watching

We held the event in our nursery, in our shadehouses that are underutilized due to our partnership with NovaVine (they graft and harden off our grapevine material in Santa Rosa, so we don't have much use for shadehouses here).  It turned out to be a beautiful event space.  We welcomed around 120 people, mostly our VINsider Wine Club members, many of whom have come to every pig roast since 2004.  A couple of views of the event space, first during late afternoon with the sun low, and then after sunset with the lanterns and the twinkle lights out:


The food was served family-style, on platters, and to accompany the pig, Tom prepared gazpacho, summer white beans, grilled summer squash and potatoes, and a peach crumble for dessert.  All the vegetables were sourced from Paso Robles, and the dinner was delicious.  It's always one of my favorite events that we do.  If you didn't have a chance to make it this year, we hope we'll see you in 2009.  You can keep up with what's coming up on our upcoming events page.