Wednesday, January 27, 2010

Our world is filled by what we don't know about wine consumers

Ever hear a salesperson say "It's not my style, but people love it!". My questions is, how do you know? Does the salesperson get their information from indifferent servers in restaurants? Did they follow the consumers home and ask for candid responses on their doorsteps after Desperate Housewives? Is this the type of wine your mom likes? How do you know?
I'll tell you what you think you know:
  • You think consumers want simple wines that aren't too complex-You are WRONG. Consumers don't make this assessment, ever.
  • You think Consumers want wines that are conceptually easy to understand and pronounce. You are WRONG. Consumers want to understand the wines, yes, but they are more excited when they have learned something solid and can show off their new found understanding. Don't dumb it down, you're lowering the bar.
  • Consumers want oaky sweet wines. WRONG- You have tricked them into thinking this is the way to go. Oaky and sweet mask a multitude of flaws, so marketers and sales tools such as yourself have repeated this mantra and created a self fulfilling prophesy. There is a segment that always have and always will stick with a very specific type of wine, don't let that cloud your perception.
  • Average Consumers don't "get" the world class European wines-WRONG! Just last week, I hosted a Piemonte consumer tasting with a great Barbararesco and a Moscato d'Asti. Conventional wisdom would dictate that the Moscato would be popular, and the Barbaresco would fall on deaf ears. The reality is the Barbaresco was declared The best wine I've ever had! by at least a dozen people. A high acid, earthy, tannic red from Northern Italy is not exactly lowest common denominator wine, yet, it blew the average consumer away.
The bottom line is, you think you know what consumers want, but the reality is, consumers are constantly trying to figure it out for themselves. If you wouldn't drink it, don't try to pump it up. If you are impassioned about a wine, don't be afraid to get other people pumped up about it. This is infectious. Take time to educate,and give your clients the tools to educate. Turning 1 person on to 1 new wine discovery trumps all the cheap Merlot you think you are selling. I can promise you one thing, you will get your ass kicked out there by underestimating your audience.

Monday, January 25, 2010

Toledo Free Press Article-January 24th, 2010-Wines and Dining

This is an article I wrote that appeared in The Toledo Free Press of over the weekend, enjoy!

Wine can be such an integral part of our dining experience, but so often, we rely on a few rules to guide us through the complicated wine selections available. How does a novice or a veteran in a comfort zone of mid-priced cabernets widen their repertoire without sounding like a novice? Believe it or not, the answer is: “ask for help”.

Navigating a wine list? Here are a few handy rules to consider:

· Are you a scotch or a Martini drinker? Too bad, they don’t do anything for food but numb your palate, switch to wine; it will make all the difference. Good beer, that’s another story.

· See names you recognize on the wine list? Skip ‘em. Those are there to make you feel comfortable. If you want great experience, ask for help, and make sure whatever you order, it’s something the wine buyer recommends and something you’ve never heard of before. This is a sure way to elevate the experience. The wine buyer is a professional and you should trust them.

· Want the most bang for your buck? Again, the wine you’ve never heard of is the winner with the smallest markup. This pricing strategy exists to help depletions on all items on a wine list. The wines you know gets the biggest markup and the ones the buyers love the most but are obscure get the smallest. Whenever possible, order wine by the bottle instead of by the glass, this will also make you dollar stretch further as glass pours are marked up higher to accommodate the potential loss of product as it fades away. Bonus, the State of Ohio now allows you to take home opened, unfinished bottles of wine, ask your server for more details.

· Stay away from wines that have a big oak presence, this also deadens your palate, instead look for wines that are higher in acidity; this will help with any protein on your plate.

Ok, but what if you’re hosting a dinner party? What to serve? How do you make your party memorable? As always, expand horizons, here are some knock category suggestions that should be available at your local retailer, and as always ask you friendly neighborhood wine merchant for suggestions within the categories.

· Albarino-Spanish white that has awesome minerality and acidity. The best have a great “orange peel” quality. ($20 retail)

· Torrontes-Increasingly popular white from Argentina, that can range from just off-dry to steely, great inexpensive choice ($11-$14 retail)

· Pinot Gris from Oregon-This is the same grape as Pinot Grigio, but stylistically, couldn’t be more different. If Pinot Grigio tastes like Lemonade, this tastes like Lemon Custard ($20 retail)

· Cotes du Rhone-One of the most diverse and assertive red wine for pairings, Based around Grenache and Syrah, can run the gamut from red to black fruit and from soft to rich. Should be around $15

· Cabernet Franc from Loire Valley-This would be Chinon or Anjou-great spicy red that works well with fish, about ½ the price of an equal quality Pinot Noir. ($15-20 retail)

· Rosso di Montalcino-This is Sangiovese from Tuscany, but unlike Chianti, this is a much more powerful version that suits steak and all sort of rich hearty dishes. This is a steal as it is declassified Brunello di Montalcino, which are some of Italy’s most sought-after and collectible wines. ($20-$25 retail)

Friday, January 22, 2010

More dollars than sense

The great cliche: Millionaire wants to own an amazing winery. Pours tens of millions of dollars of own personal fortune into winery project with no wine business experience. Wants to charge too much for their wine out of ego. Finds out that even at that price, it still loses money, and wants prices raised. National Sales managers come and go, all getting killed for being the messenger. Why does this keep happening? Why do you rich folk have such egos, and if you're so smart, why are you soooo bad at the wine business? Tired of lighting your cigars with $100 bills? Here are some handy tips if your REALLY think you want to start your own winery:
  1. Check your ego at the door. There are too many egos to be dealt with throughout the entire chain of getting your overpriced wine onto someone's table (see: chef's, buyers, sales managers and snooty consumers).
  2. Find good wine business people and ask smart questions, Like "Can this be profitable?" & "How much will a 5 star hospitality center on prime real estate affect the price of the wine." The chances are, you will lose some money, but hey, it's a tax write-off
  3. Spend your down time working a harvest or 10. You will be very surprised at how much work and skill is actually involved in the production of wine.
  4. Understand what makes great wine great. Writing a big check doesn't automatically mean you'll have great wine, this is not a new concept!
  5. Spend a lot of time learning about how wine gets from your hands to the consumers'. A big score isn't enough, it will take a lot of work by a lot of underpaid, overworked salespeople across the country.
  6. You made your money in some sort of business, probably a ruthless business. This isn't that business. This is a business built on relationships, trust, humility, enthusiasm and sincerity. These qualities are not what comes to mind when I think about how people get REALLY REALLY stinkin' rich like you.
So let's say I can't talk you out of it, and you REALLY want to make wine. Fine, but here's the deal, you're going to do one of a few things:
  1. Let someone else run it for you, trust that person. And understand, you're probably going to lose a lot more money than you expected
  2. Get really dirty. You should probably drop everything and start immersing yourself in everything from the ground up. And all of this needs to be handles with patience and great humility.
  3. Spend your money on building a great cellar and traveling the world, this is the ultimate wine lifestyle. Leave the wine business to the professionals, we'll call you if we need a leveraged buyout, Gordon Gecko.

Tuesday, January 12, 2010

Won't someone think of the restaurants?!?

In my travels, the one tier of wine sales that catches more grief than any other, are the restaurants. They are constantly taken to task for their unfair wine markups and margins. While every layer gets their cut along the way, some restaurants sell their wine for 2, sometimes 3 times what they pay.

It is in my best interest for restaurants to sell wine on as thin a margin as possible: I sell mid-high end wines that can get slaughtered on wine lists at these markups. Yet, I completely defend restaurateurs wine pricing!

This is controversial. Many in this business believe that restaurants are the villains, and are essentially getting rich off of markups, with no real investment in the chain of distribution. Many of these critics have never spent time looking at Restaurant P & L statements. Ironically, everyone knows how often restaurants fail, yet people complain when the restaurant's wine prices are too high.
Let's put a few things in perspective: of the 3 areas for alcohol sales: wine beer and liquor, wine is by far the least profitable. Your $9 margarita may cost $1 to make, including labor. For an upscale dining establishment to make any profit off food sales is a rarity. It is the role of alcohol to make money. The better the restaurant, the more hours are invested in the preparation of the food. Most upscale establishments employ more than a dozen back of the house chefs doing nothing but cutting vegetables, making sauce, butchering meat, ordering product. These are chefs that never touch your plate, just support staff that have already worked 8+ and are home before you even set foot in the door. The average cost for flatware and stems for a table of 4 can easily eclipse $1000, needing to be replaced no less than once a year. Rent, utilities, linens, etc, all could make your Filet Mignon $80 + if you didn't have wine to help offset these ludicrous menu prices.
Your Sommelier's time doesn't come cheap either. In addition to hours each day, tasting, ordering inventorying, staff training and rewriting wine lists, then there is the time on the floor. Without this investment, the wine list wouldn't be what it is. All of the time behind the scenes results in the enhancement of your money and time in the restaurant. We all know how much a knowledgeable wine staff can add to the enjoyment of your evening.
Once in a while, you will come across a great restaurant that charges more modest markups and have deep cellars. How do they do it? 2 ways-Capital and volume. The more capital you have accumulated, the more you can buffer the everyday expenditures that can close many competitors, by keeping prices lower, this may help your volume, and continue the cycle. This is certainly to be applauded, but it is impossible for many restaurateurs to achieve this in a brief amount of time. these establishments are often the argument from the wine elites, but they are actually the exception that proves the rule. While I defend restaurants, here are a few cautionary bits I'll give to them as a word of warning:
  • Do not blindly markup 3x and then get lazy with staff training, stems or most importantly, wine list selections-NO GROCERY STORE WINES
  • Always sacrifice profitability for velocity. The faster you sell your wine, the more $ you make. Remember, you put dollars in the bank, not margins.
  • If you are profitable on your food, reign in your margins, don't get greedy
  • Great wine makes your food better. People will like your food more with the addition of the right wines, it should be your goal to sell every table wine, even though your other bar items may yield higher margins.
And my suggestions for diners sensitive to the best use of the wine buying dollar, here are some tips:
  • Buy wine by the bottle, glass pours are sold at a higher markup to justify the potential loss, you pay not for a glass, but often a glass and a half. Too much wine? ask for half bottle selections
  • ask the Sommelier to recommend something in your price range-They will always pick the best wine for the money, never be afraid to set a $ limit on what you want to spend.
  • Understand that the Sommelier knows more than you do, listen to what they have to say, and don't try to trick them into telling you that you are a smart consumer for drinking Jordan.
  • Enjoy the experience. You have no idea how much your paper towels cost target, and if you did, you wouldn't want to shop there.

Monday, January 11, 2010

Wine for novice video-John Cleese

If you haven't caught this yet, this is a great beginners video about wine. Cleese is great,and it's chock full of Santa Barbara, notice the Brendan Fraser cameo. Great to see the guys at Foxen as well as one of my favorite personalities, Kirby Anderson from Gainey.

Saturday, January 9, 2010

Today is the first day of your life...

January is always a time of renewal. This year, is different. In speaking with wineries, distributors and retailers, I'm struck by how everyone has sort of let out a collective sigh of relief. Everybody is looking forward to 2010 to being a great year for rebounded growth. They feel like they survived a crazy roller coaster ride, and they acknowledge that the worst is over. So when determining your goals for 2010, what is your bar? Beat 2009? 2008? Where do you set the bar now that everything has completely changed? I believe the answer is, you don't. To some degree, some forecasting will need be done, simply to justify day to day expenses. There is no way to accurately place goals on your sales team and then have those numbers hold credibility when the only thing that will happen is you'll end up being off with every rep in every market. When placing goals on sales reps, wouldn't it be interesting to just unleash everyone? Give everyone a renewed clean slate with the sky as the limit.With everyone now with renewed enthusiasm, you can't let a spreadsheet get in the way of positive momentum.

Thursday, January 7, 2010

New Domino's-Now less crappy!

I saw the Domino's "apology" commercial tonight, and it really left a bad taste in my mouth. They essentially admit to the fact their pizza was bad, and has been bad for oh, about.. ever! So, I am insulted that they tried to sell it to me my entire life, and now all of a sudden, they're sorry it sucked. And the worst part is, they couldn't tell, they needed "real people" who all of a sudden told them "it's ketchup and cardboard" and now they listen? To boot, now these same people have reformulated their formerly crappy pizza (but was apparently good enough for them until the masses opened their eyes), and now we're supposed to say"oh, OK, now that you're really trying, I'll buy it again." How about this for honesty: They should have said, "we knew our pizza wasn't any good, but we made it cheap, got it to you fast, and you bought a ton and made us rich. When you started buying everyone's pizza instead of ours, we panicked and decided to be honest, sort of..." Does that sound more accurate?

Which bring me to wine. If you make crap or sell crap, how is anyone ever going to trust to do anything but lie to them ever again? On the sales side, you're only as good as the wine in your bag, if this is your career, you can't afford to mortgage your reputation on plonk you don't believe in. See how stupid these guys sound?
The Colbert ReportMon - Thurs 11:30pm / 10:30c
Alpha Dog of the Week - Domino's Pizza
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Monday, January 4, 2010

I am a geek.

Without delving too far into the subtle differences between a geek and a nerd, I will say, that they should not be confused. A geek, while often used derogatorily, is really a term that means that someone is really into something. A nerd on the other hand, is someone, while quite possibly a geek simultaneously, is a nerd as a result of that person's general disregard or otherwise obliviousness of social norms.
There are computer geeks (natch), car geeks, History channel geeks, baseball geeks, woodworking geeks. Anyone that is into something beyond just a hobby or a passing interest, is a geek. The world needs geeks, it breeds enthusiasm, if you are lucky enough to be a geek about your profession, then you are even further blessed.
So with that bit of house cleaning taken care of, I am a geek. Specifically, a wine geek. Many of you may say that a wine snob and a wine geek are the same thing, again, this is inaccurate. A snob is someone that judges other people based on their wine choices. While I have been known to do this, I have evolved, and I hope you have too.
A wine geek should have general excitement for many aspects of wine. Some tend to geek out more on the collectible side, some on the production side (this tends to get me pretty excited). So if you are a wine geek (or a snob learning to be a geek), and you are in this business, consider yourself very lucky, every day. For those of you in this business that are not geeks (And I say this rhetorically, because only wine geeks and family read this), you are missing a great opportunity to actually love something you do, and I am offended by your sheer existence. OK, maybe I'm still a little bit of a snob...