Banking & Finance: Bank study sees more – and more creative – online wine marketing
By Jenna V. Loceff, Business Journal Staff Reporter
Economy increases role of direct sales; buying on Facebook?
Rob McMillan, founder of the wine division at Silicon Valley Bank, believes in this economic climate wineries are going to have to focus more on technology to sell wine, and consumers will have to be more proactive in finding what they want.
“We have been on a march to direct sale for more than a decade,” he said.
Rob McMillan
According to Mr. McMillan, the current economy may be the push that gets more wineries online.
“Think of it this way: distributors in this phase stop ordering while they work down their stocks,” Mr. McMillan said. “Once at their optimal level [for the distributor], they start ordering again to match depletions.”
The result, Mr. McMillan said, is “the producer experiences more depressed sales than what is actually sold at this point in the correction.”
This is pushing direct-to-consumer sales to the forefront. And consumer buying patterns are suddenly key.
“The larger distributors are likely not going to deal with the smaller wineries. The consumer will have to know to go online, through Facebook and places like that,” he said.
He said a lot of wineries’ idea of an online presence is e-mail blasts. But now they will have to rethink things and ask how they can use technology to sell their wine.
He said while it will be an adjustment period, ultimately they will have more control.
“We believe that we would see positive sales at the producer level in 2010.”
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Sonoma Valley Bancorp (Bulletin Board: SBNK), the parent of Sonoma Valley Bank, said it expects to significantly expand its third-quarter and nine-month reported losses following a regulatory review of bank filings.
Federal regulators, after reviewing filings for the quarter, advised the bank’s board of directors to expand loan and lease loss provisions because the value of underlying collateral had declined with the economy.
Sean Cutting
Sean Cutting, bank president and chief executive officer, said the problem largely comes from “a small number of relationships.”
“As is the case with many other community banks, we are facing the challenges of the current economic environment, particularly its impact on the commercial real estate sector,” he said.
“We do not believe that these actions will require any material adjustments beyond the third quarter of 2009, and we look forward to resolving these issues so that we can resume our growth and continue to serve the needs of our customers and community,” he said.
At the request of the Federal Deposit Insurance Corp., the bank also is working on preparing a capital-restoration plan and complying with certain restrictions on asset growth, acquisitions, dividends, management fees and any other capital distributions.
The bank is expanding its loan and lease loss provisions for its third quarter, which ended Sept. 30, to about $24.5 million from $2.6 million. The provision for the first nine months of 2009 would be increased to $29.3 million from $7.4 million.
The resulting quarterly net loss will rise to $19.0 million from $495,000, or $8.27 per common share rather than the previously reported 22 cents a share.
Adjusted total assets would be $335.6 million, rather than $354.2 million.
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Submit items for this column to Jenna V. Loceff at jloceff@busjrnl.com, 707-521-4259 or fax 707-521-5292.
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