So, it seems my last post created a request that I look at online wine sales, with a specific nod to VinoMofo. The tone of that request was not entirely complimentary to the online dealers, but I do think it bears a quick look.
So the wine sales game was all about cellar doors. And local, knowledgeable retailers. If you were lucky, a smart restaurateur.
And then it became about distribution, and sales teams. And relationship building with venues and stores.
Then the experience side of things blew up again – wine tourism. A great time for the wine game, and a chance to grasp your punter by the heart, and let the wallet follow.
And then… Coles and Woolworths became the dominant players. A game-changer. Collective buying had an entirely new identity. Or rather, two identities. Producers had a route to market on a national scale. Out of that has grown the collective price pressures. Wine exclusivity for one rather than the other. Demands of time, deliveries, and sometimes, shortening margins. But national exposure in the major supermarkets.
Until they became wine warehouses, with an overwhelming interest in ‘own’ brands. How to stand out from the crowd in that pasture sized concrete cavern? Price pressures. Or other agreements… whatever they may be.
And, more recently, the online forum. Cracka. VinoMofo. Winery Lane. Get Wines Direct. Deal-a-day businesses too numerous to mention. The deals are sharp, and the wines are generally pretty smart. Many of these businesses are run by wine lovers, taking advantage of an avenue which requires no bricks nor mortar, and can be often run on a shoe-string.
And we use them. We are all using them. We buy from them as much as we sell to them. We all like a deal, and the world market today loves a deal. There is less brand loyalty (outside of super-premium, global brands), and more snap purchases.
You know what? I wish the industry didn’t need to ‘clear’ wine through any avenue. But occasionally we do. It might be a failed export order, the last pallet of the last vintage, a label change, or just selling through a wine declassified out of the regular labels due to vintage variation (see: Vintage, 2011). It might be revenue raising, as, at times, cash flow can stall for whatever reason. Or the distributor has gone broke. Or for whatever reason there is. And the chains, and the online businesses provide that channel to a growing market.
In an ideal world, perhaps we would like everyone to pay full RRP for everything, all the time. But the world is evolving, and e-commerce is the name of the game. Ignoring that is extremely dangerous. And stupid, truth be told.
In an ideal world, I wish the prices were not quite so low, but they are. And we need not fling mud at the purveyors, because that pricing is at the very least approved by the brand. A conscious decision has been made to sell that wine at that price. Be it through Coles, Dan Murphy’s, Aldi, Costco, Cracka or VinoMofo. Or even Get Wines Direct. Choices are made. And at the moment? At the moment the smart consumer can get some truly fantastic deals. Ethically? Well, some questions have been raised in every area of the market. But the wines are on the market. And somebody chose to use that channel to the market.
If you want to be smart about it, sell the wine as cleanskins. Or create a second label, in order to protect your brand integrity. Or find another channel. Think around the edges, and make your wine the best deal for a buyer without selling your soul into the bargain. Sell as it is, but know the effect this may have on your brand. Be aware, and – if you are smart – be proud about it . Scream it from the rooftops: “This is my wine! It is great, and this, my friends, is the deal of the century!”
Because then, they might come back and find you for a less bargain-oriented wine.
Oh, and tell your distributors if you are going to trade like this. They deserve a heads up.
The market is more bargain-focussed than some of us might like. But each of these channels is a path to the consumer. Take that path at your own risk, but you cannot say that you are unaware of the consequences. You simply need to make a decision, as a consumer, and as a producer – do the rewards outweigh the risks?
Make a choice – who are your friends in this business, and who are your enemies? My friends are the sellers I use, and the consumers buying my wines. My enemies? Well, there may be a list of people with whom I have chosen to not conduct business. For better or for worse. I make no endorsement of any of the players mentioned here. I simply see each as a valid path to market. Make your choice, and be proud of it. This is the world today. It might not be ideal, but it is us who makes the choices. Choose to be smart. Whatever that means for you and your brand.