It's a funny thing, this winery business.
Four years ago, when we took leave of our good senses and better judgement, we started down the path of creating what would become Eden Rift Vineyards. An old, incredibly beautiful, heavily tarnished estate in which we invested our dreams, sleepless nights, ambitions, future, and an avalanche of cash.
We were blessed to have a talented winemaker and exciting terroir. A committed team and partners. We were doing everything right, and “killing it”. Moreover, the wines were delicious!
The days where quality and cost control are your universe are like the days of teenage innocence. Our problems seemed huge and exotic. We fell in and out of love with tractor models, electricians, and marketing plans. We felt everything intensely, but in retrospect, it was all small.
When we launched the first Eden Rift wines into the market; the innocent days were behind us, for sure.
Wineries are easy. Vintages in California are predictable. Winemakers are solid practitioners. Well-crafted budgets are easy to stick to.
As a winery owner, the only thing that really matters in the long term is sales. Whether you focus on California, New York, London, or Hong Kong. On trade or off trade. Direct to Consumer. There are a dizzying number of strategic choices open to you. I will offer three immutable facts:
1. American wineries are bad at marketing overseas.
The United States is the biggest consumer wine market in the world, so can absorb most of the wine made by most of the producers in the country, given some creativity with pricing and distribution channels. DTC is an amazing way to build a direct relationship with your consumers, though it is expensive and crowded. National distributors are professional and reliable (if you can worm your way into their heart, book, and consciousness). The downside is that the US is a single market that can expose you to huge concentration risk if your brand, variety, appellation, style, or price fall out of favor; and it can happen fast!
By the way, if you’re relying on scores, publications like The Wine Spectator are completely irrelevant at this point in the global market. Go ahead and use your Spectator scores if you want to broadcast that your concept of relevance hasn’t changed since 2002. They *just* discovered that Pinot Noir is California’s Next Great Grape, for God’s sake. Long-form features, in papers like the San Francisco Chronicle, The World of Fine Wine or The New York Times, are much more effective marketing tools overseas.
2. If you aren’t on a plane, you aren’t going to build sustainable traction.
I don’t think anyone actually knows the true number of wines in the global market, but I think we can assume that it is more than enough to satisfy the world’s drinkers. Moreover, there are few truly flawed wines left in the market to dismiss. The only differentiation left to wineries like ours are personal connections and personal relevance to commercial and individual buyers.
There is a clear correlation between a physical market visit and traction, especially in a brand’s early days. Alas, consistent, repeated visits are required to individual markets, as new brands emerge every day, and it’s a fiercely competitive marketplace. Let your guard down, don’t visit a market, and you may easily lose your place on a hard-won restaurant list or shelf; a single visit is soon lost to a perfumed haze of memory as more and more wineries tread the same boards you do, telling a similar story.
3. Outliers’ results are frequently confused with likely outcomes
In reading the foregoing, the obvious objection is that these rules are not true for Screaming Eagle, for Peter Michael, or whatever your preferred exception happens to be. This sense that somehow each of us is intrinsically special is a real danger to wineries. Survivor bias leads us to remember only the wineries that survive from all wine history to the present day. I love old Gemello Cabernet, but they weren't able to make it out of the early ‘80’s...
Another common error is to assume all wineries have the same business goals you do. Some wineries have inexpensive land (and correspondingly low interest payments), other owners have done the math that owning a winery is a better hobby than owning a yacht, and are happy to lose money indefinitely. If this is not you, it is dangerous to use their strategy as a template for your own winery.
Finally, know what you can, and cannot do. I admire both Danica Patrick and Yao Ming, but as I am not currently an Indy driver, nor can I dunk, their non-drinker consumer recognition strategies are closed to me.
What I do know well is wine from a professional buyer’s perspective and global markets. These are currently where Eden Rift wines are finding their home; largely in the global market, and domestically with on- and off-premise buyers with whom I am often able to build a sense of camaraderie, as I used to be in their shoes. But, ultimately, what I also know is that the most successful winery brands have been able to be nimble over time. They clearly understand that the wine business is counter-intuitive in many ways, and, as such, one must be constantly open to and aware of market changes in order to respond in effective, and ultimately, successful ways.