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Howard W. Hewitt

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Howard W. Hewitt

Tag Archives: wine marketing

Tips for smaller wineries to compete

24 Thursday May 2018

Posted by Howard in Newspaper Column 2018, Oregon

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Carl Giavanti, Willamette Valley, wine marketing

For the past two Grape Sense columns, the focus has been on a handful of small production Oregon wineries. This column wraps up the in-depth look at how they face marketing challenges against the big operations moving into the Willamette Valley. There are also some brief comments about their wine and how to buy their products.

grape-sense-logoCarl Giavanti is a winery publicist working in the valley with these ‘little guys’ assisting them in carving out a niche.

“I think the real story in Willamette Valley (and other small regions nationally) is that 85 percent of the wineries produce less than 5,000 cases,” Giavanti has written. “It’s micro production by any measure. They have only survived because of so called “Premiumization” and the recent fascination with the region. What will happen when the next economic downturn occurs, and as the distribution consolidation continues, or as vineyard and winery acquisitions accelerate (which is happening at a rapid pace right now)? Are there business parallels between what is happening in Willamette Valley and any other burgeoning American industry? Is large always destined to win? Is there a “Manifest Destiny” for these small craft producers?”

Carl_Headshot2Giavanti is a guy good at answering his own questions. There is no questioning its tough for these winemakers to clear their shelves at the end of each season. But smart marketing positioning and taking advantage of earned media seem to be the most direct route for the smaller winery’s success.

“It’s no secret there are generally lots of wineries in most wine regions,” Giavanti points out. “There are over 9,000 wineries in the U.S, and due to consolidation by the largest distributors, I estimate only 700 distribution companies, and they focus on large family or corporate winery groups, high profit margins and primarily order taking. The small production winery simply cannot compete.”

Boiling down Giavanti’s recommendations can be oversimplified to having a good story to tell and knowing your product niche. He tells the winery owners to: 1) build your own unique brand, have a strong authentic winery voice that clearly states how you are different, unique and what you promise to consumers 2) do media outreach, either direct or with a media relations consultant. Get your name, your stories and your wines out there! And 3) sell your wine direct to consumer. You’ll have the highest margins (even after marketing costs), enjoy the greatest loyalty and have the most fun!”

That’s pretty good advice for any small business.

The Wines

One of the remarkable things about the Willamette Valley is the overall quality of the wine and the five producers included in this story are no exception. Those making Chardonnay are learning quickly and producing Burgundian style – soft and rich – white wines. Ghost Hill makes a fabulous white Pinot Noir at an incredible low price.

Pinot Noir is the calling card for Alloro Vineyard, Lenne’ Estate, Ghost Hill, Vidon Vineyard and Youngberg Hill. The wines are slightly different in style which is one of the most interesting things about Oregon Pinot for real wine enthusiasts. All have varying levels of critical acclaim. Space does not allow for individual reviews but ordering six bottles of wine from any of the wineries will be well worth your Pinot investment. The wines average around $40-$50 a bottle. With price creep really taking hold in Oregon, these wines are a value buy. Contact the wineries directly through their easy-to-find website to place an order. And yes, they can ship to Indiana. For more specific recommendations, contact me at hewitthoward@gmail.com

And anytime you visit a wine region, remember the little guys!

For More

Go to the Grape Sense website at howardhewitt.net and look for a post with the headline “More from Boutique Oregon Wineries.” There are tips on aging Pinot, and background and philosophy on winemaking.

 

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Small guys face distribution squeeze

26 Thursday Apr 2018

Posted by Howard in Newspaper Column 2018, Oregon, Uncategorized

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Alloro Vineyards, Don Hagge, Ghost Hill Cellars, Lenne Estate Winery, Mike Bayliss, Pinot Noir, Steve Lutz, Tom Fitzpatrick, Vidon, Wayne Bailey, Willamette Valley, wine marketing, Youngberg Hill

When big companies invade boutique wine country with much bigger marketing budgets and resources, the little guy can feel squeezed out. Or, creative marketing and a changed paradigm could lead to more success.

grape-sense-logoOregon’s Willamette Valley has seen explosive growth in recent years in small and large wineries. But big investment from major players has an impact on the smaller wineries distribution and maybe even production.

In recent years Kendall-Jackson has purchased Willamette Valley vineyards: Penner-Ash, Willakenzie, Gran Moraine and Zena Crown. French icon Louis Jardot has bought in along with Chateau St. Michelle from Washington and Foley Wines from California. There are quite a few others.

As the quality of Oregon Pinot Noir continues to gain critical and consumer accolades, more small wineries are disappearing, and others are strategizing to find and hold market share. The bigger brands eat up the shelf space and dominate distributor’s selling efforts.

“We primarily sell out of our tasting room though we do distribute a small amount of wine in Colorado, Maryland and Illinois,” said Steve Lutz, owner of Lenne Estate near Yamhill, OR. Lenne produces about 1,600 cases of wine annually. “It is becoming increasingly difficult to find any distribution for small producers and not a very effective way to sell anymore.”

img_0209

Don Hagge

Some winery owners have simply given up or cut back on efforts to lure a distributor.

“I’m resigned to finding and working with a couple of distributors in niche markets to sell about half of my wine,” said Don Hagge, Vidon Vineyards. Vidon also produces around 2,000 cases annually. “We’re rolling out a new online system (called VinAlliance) this year that might help us and a few other small wineries.”

Hagge hopes the new alliance will allow consumers to buy wines almost like a wine club but from several different wineries on a regular basis.zpat

These small wineries depend on direct to consumer (DTC) sales for their success. “We had distributors in more than 20 states but last year scaled back to six,” Alloro Winemaker and General Manager Tom Fitzpatrick said. “It’s not difficult finding a distributor but it is difficult finding a distributor who can generate adequate sales. But they have their own businesses to profitably run just like us. Building brand awareness and recognition for a small unrecognized producer, in a crowded space, is expensive. Most distributors don’t seem to be able to do this.”

Alloro is the biggest of this group of winemakers at a modest 2,550 cases.

Experience, Fitzpatrick said, has told him that direct to consumer sales will probably always be 80 percent of his business.

Family Portrait

Wayne Bailey

Everyone has a website, and some are exploring the partnering options like Vidon. The challenge is to get a brand in front of the consumer. “Most of our wine is sold through our tasting room, wine club, and events,” said Youngberg Hill winemaker Wayne Bailey.  “Online sales are a big opportunity, but the current challenge is figuring out how to best reach potential customers or let them know you even exist. Even though you can ship to consumers in most states now, it is a very expensive and time-consuming process to gain and maintain the ability to ship into each individual state; making it almost impossible for small wineries to justify.”

The smallest of this winery group is Ghost Hill Cellars which produces less than 400 cases. Marketing is complex for such a small operation. “We have distributors who work with small producers but still even that is difficult,” said Ghost Hill owner Mike Bayliss. “We do online sales and a seasonal tasting room (April to November). Although we sell a good amount of our annual production we’re moving toward selling more grapes and making less wine.”

The upside of the investment by the wine world’s bigger players is additional attention. We’ll look closer at that benefit and at these winery’s wines in future columns.

Note: The next Grape Sense column keeps the focus on wine marketing and these small wineries.

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