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Figure out who your customer is, build a relationship with them, give them what they want, and embrace new automated technology. To grow and maintain your share of the market in today’s wine world, that’s the advice from industry experts.

“Give the customer what they want, that’s been the driving force since day one,” said Roger Trinchero, vice chairman and CEO of Trinchero Family Estates, speaking at the Business Journal’s 10th annual Impact Napa Conference Aug. 30 at the Meritage Resort and Spa in Napa.

That credo has served the company well. From humble beginnings in St. Helena, it now sells 20 million cases of wine per year.

In 1973, Trinchero customers developed a taste for its white zinfandel.

It was created almost by accident from saved leftovers from the white juice—only the skins produce red juice—which came from a red zinfindel batch.

“We never throw anything away,” Trinchero said.

That year, the company sold 223 cases.

By 1990, white zinfandel sales reached 3 million cases.

“It was a runaway train, really, basically driven by word of mouth. We were bottling it (practically) as it got on the truck. We called it freeway aging,” Trinchero said.

The company is currently the fourth largest wine business in the country, with 1,500 employees, and markets and sells more than 45 different brands that include Sutter Home, Menage a Trois, Napa Cellars, and Joel Gott.

“Whatever your taste is we have something for you,” Trinchero said.

As large as the company may be, however, Trinchero said the wine business is not conducive to corporate ownership.

“In my opinion, you’re not making good decisions about the future based on quarterly reports,” he said.

Direct to Consumers

Giving the customer what they want is also the best philosophy for direct to consumer sales, a panel of industry experts agreed at the conference.

“Building on what Roger said, you need to give people what they want, when they want it, and on their terms,” said Judd Wallenbrock, president and CEO of C. Mondavi and Family.

This past year, wine shipments rose 18.5 percent, to $2.3 billion, and 61 percent of all wine sales, said Pat Roney, president and founding partner, Vintage Wine Estates, emphasizing how much direct to consumer sales have grown.

Many wineries depend on building a relationship with their customers, rather than selling wine off the store shelves where space is highly competitive. Wine club membership, growing and maintaining it, are key to building those direct to consumer sales. To do so, wine lovers are also looking for access and face-to-face time with winery owners. A brand needs a good story. At Charles Krug Winery, Wallenbrock said members want access to someone with a Mondavi name.

“The single most driving factor is talking up relationships,” Roney said.

Consumers also respond to over the top customer service. Unlike other industries, telephone sales work in the wine industry.

“Our customers love to hear from us,” Wallenbrock said, who was joined on the panel by Paul Leary, president of Blackbird Vineyards.

Future technology will be able to integrate such a database with a shipper such as Fed Ex to allow for follow-up with the customer and create a customized e-commerce experience.

Automation

Data collection and interpretation in the vineyard itself is becoming more automated, creating a ‘connected vineyard.’ Information fed into the Cloud by sensors, GPS equipment and drones can lead to a smarter way to irrigate, and prediction analysis.

“Monitoring with sensors changes the way you do things,” said Roger Boulton, professor, Department of Chemical Engineering at University of California, Davis.

New automated planting and harvesting machines are also revolutionizing the industry, which is having more trouble finding workers and paying them higher wages.

Fellow automation panelist Aaron Fishleder reported the industry has seen wages rise 7 percent a year since 2012. With technology, savings in the vineyards come not only from having to have fewer people, according to Fishleder, but in amount of work which can be done. He said a eight-person crew can harvest 1.5 tons per hour compared to a machine harvester requiring two persons and picking 5 tons in one hour. Or in planting vines, a machine can plant 11 acres of new vines in two weeks with six people. Using only human labor, 22 people working for 30 days will plant 18 acres.

Treasury Wine Estates, a global company with more than 80 brands, harvests 85 percent of its crops by automation, said Rachel Ashley, vice president of grape resources for the company.

Aside from harvesting, the machine also pre-prunes, de-stems, and sprays, allowing for use 10 months out of the year.

Treasury also uses an automated barrel washer, which saves water and 800 hours of labor per year, Ashley said.

After purchasing an automated harvester, which can cost $300,000, and an automated planter, Vinescape, a vineyard management company in St. Helena, is looking at electric and self-driving tractors.

Whether to invest in automation to save costs, improve sustainability or to improve safety, wineries need to be willing to invest more in technology as they mature.

“You have to keep trying new things,” said Fishleder.

Cynthia Sweeney covers health care, hospitality, residential real estate, education, employment and business insurance. Reach her at Cynthia.Sweeney@busjrnl.com or call 707-521-4259.