Wineries scramble for digital marketing tools in pandemic
Hardy Wallace, vintner of Napa’s Dirty and Rowdy brand, still holds 900 cases from the 1,200-case March release of wines destined for specialty shops and restaurant by-the-glass programs. It’s a run that is usually sold out by Memorial Day in the typical year.
But 2020 is anything but typical.
Restaurants, hotels and tasting rooms, major sales channels for fine wines, closed in March and are only starting to reopen to certain degrees in California and various states.
Dirty and Rowdy scaled back from producing 6,000 cases a year to 4,000 after a glut in wines started curbing demand in 2017. For the coming harvest, production is set at just 2,500 cases.
“We don’t really need to make wine for a market when we don’t know when it is going to come back,” Wallace said. “I hope it comes back quickly, but with fruit and bottling costs, we may be sitting on two or three years of inventory.”
He launched virtual tastings over video conferencing last year but found that something was significantly lost in the customer experience. He planned to relaunch video tastings in 2021 with live musical acts and other entertainment, but the pandemic forced him to launch that March 14, just before Gov. Gavin Newsom ordered tasting rooms to close.
In the first month, 95 existing customers had bought extra wine to send to friends and family to enjoy at the virtual events, and 900 new direct-sales customers have been added in the past four months.
“The great thing with social media is it’s a free powerful tool, but if don’t know what to do with it it’s like when you just got a Ferrari and think you can win Grand Prix races if drive like you do in a Ford Fiesta,” Wallace said.
At Napa Valley-based Duckhorn Portfolio, high-end steakhouses have been where the Duckhorn Vineyards brand has been built, so the closure of indoor dining in March — and secondary closure again in recent weeks — has been significant, according to Belinda Weber, director of digital and consumer marketing.
Like other vintners, the company has been helping their key restaurateurs with virtual winemaker dinners to keep them in touch with loyal patrons. And Duckhorn Portfolio, which also includes the brands Paraduxx, Decoy, Canvasback and Goldeneye, has been conducting video tastings with its own customers, with tasting room managers conducting about 40 in the past two months. It’s even worked with the Kosta Browne pinot noir brand, which is normally highly allocated: Staff have conducted interviews with “Top Chef” personalities about the wines.
Virtual tastings are continuing, even with outdoor tasting open at Duckhorn Vineyards and Paraduxx in Napa Valley and at Canvasback in Walla Walla, Washington, Weber said.
“Per-person spend is up, and conversion rates are also up from average,” she said. “People who are coming are excited to be out. We’re seeing across our various channels that people are drinking wine and indulging in any self-care they can and restocking their cellars.”
Also up for the Duckhorn brands are online sales and marketing. Volume through e-tailers such as Drizzly and Instacart has doubled, to the point that the company has developed landing pages for visitors for these platforms, which were not a big focus of attention before the pandemic, Weber said. Through the Duckhorn websites and major e-tailer Wine.com sales also are up.
“The average online order (value) went down because in the past there were not a lot of online sales of Decoy, because it was available in the market,” Weber said. “But now they are ordering it from us first.”
Paul Mabray, a founder of Napa-based winery sales analytics software developer Emetry, said the coronavirus crisis has woken up the wine industry to the importance digital marketing and sales.
But success depends on resources put into the effort.
“Most the industry is experiencing some pretty bad whiplash,” Mabray said. “Even four months later, I’ve seen that we didn't have a lot of muscle memory, so we’re having to learn very quickly.”
That involves how to effectively use email marketing and fix the shopping experience on the winery website. And with the rush to reopen tasting rooms in June, some significant brands in the North Coast still present website visitors with challenges.
Here are three tips he’s offering vintners who want to join their colleagues in allowing digital to “snowball for success”:
- Make digital a “pillar of excellence” for the company, from ownership and top management down to the sales team.
- Invest in the website and other digital marketing and sales tools, then hire personnel to specifically manage them.
- Once the website is properly set up, try to shop for and buy wine on it via smartphones, tablets and slow data connections.
Wineries that have been surviving through the coronavirus shut-down of restaurants, hotels and tasting rooms for months are those that had robust e-commerce efforts beforehand or that scrambled to put them in place, according to Joe Waechter, CEO of Napa-based WineDirect, which provides winery management and sales software plus fulfills website and club orders via several high-tech warehouses.
