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Why wine industry needs to take a new approach to ‘sustainability,’ e-commerce

From the way grapes are grown, the way wine is sold, to how it is packaged, experts gathered Tuesday at North Bay Business Journal’s 22nd annual Wine Industry Conference as an in-person event at the Hyatt Vineyard Creek Hotel in Santa Rosa.

The event included a conversation with a leader of the regenerative agriculture movement, and a recap on efforts by wineries to reach more customers via e-commerce and then a panel discussion on the selling of wine, including boxed wines.

Here are some conference highlights:

A farm with better fruit and lower costs

“I say, ‘We inherit the land from our parents, but we borrow it for our children,’” Ridgely Evers, founder of DaVero Farms & Winery in Healdsburg. told attendees as his environmental motivation for his form of farming.

“Since we started biodynamic farming, we’ve had no infestation of anything. The fruit tastes better, and the costs are lower,” he said.

Evers further emphasized the practice as a long-term plan that requires growers to “embrace uncertainty.” He claims most contemporary agricultural methods are not designed for “the benefit of the soil.”

Instead, Evers commends a trust-your-gut, trust nature approach. After all, this type of farming isn’t actually new. Some methods, like composting on the land, are acknowledged as ancient science practiced for many years.

Evers defined his method of farming in north Sonoma County’s ideal temperate climate as a holistic approach of viewing “the farm as a living organism,” where he grows and tends to vineyards for 18 different varietals, fruit, citrus, lavender, produce and olive trees imported from Tuscany in 1990.

A decade later in his small vineyard, he stuck to the Italian theme in planting wine grapes to harvest Sangiovese, a medium-bodied wine billed as an ideal food complement. About the same time, he was introduced to another Italian varietal, Sagrantino, at a New York bar by the chef and olive oil customer.

He’s been hooked ever since.

His goal is harvesting a million cases this year. He attributes much of his success in the bounty and quality of his harvests to biodynamic agriculture.

With all the heated discussions about the environment and modern farming aside, just don’t ask Evers about “sustainable” farming, he stressed. The common term used to describe eco-friendly ways of harvesting our food implies that staying on the same course will suffice.

“There’s no definition of sustainable,” he said.

Instead, Evers uses biodynamics that heals and treats the land with “regenerative” techniques designed to reduce water consumption on his farm by 75% compared to 2018’s measure, which is critical in a region staring down a third year of drought.

More than anything, he recommends regenerative farming methods as an important means of sequestering carbon dioxide in the soil to trap the greenhouse gases that pollute the air.

“I’ve spent a third of my life putting carbon in the ground,” he said. “I think we have a larger purpose in life besides the business we’re in.”

Motivated online wine buyers meet ‘clunky’ websites

The wine business has been a big beneficiary of the surge in e-commerce sales during the pandemic, far more than beer and spirits.

But that’s happened despite vintners’ and retailers’ being terrible at selling wine online, according to conference keynote speaker Bourcard Neslin, a beverage analyst for Rabo AgriFinance.

“Consumers are willing to overcome some really awful shopping experiences,” Neslin said. “They soldier through high shipping costs, unreliable vintage information, clunky and difficult-to-navigate and definitely outdated websites to get them to get what they want.”

Wine shoppers overcome this e-commerce “friction” without giving up on the purchase because they are motivated, Neslin said.

And that has been on display in wine’s dominant share of online beverage alcohol sales, he said. U.S. wine e-commerce jumped to $3 billion last year from $1 billion in 2018. And wine’s share of online sales of adult beverages for off-premises consumption was 10.9% last year, compared with 3.1% for spirits and 1.5% for beer.

A structural change has come to wine e-commerce with the pandemic. Brick-and-mortar retailers greatly expanded their reach into e-commerce for pickup and local delivery, helped by state and local laws that relaxed some ability to do so with adult beverages, even if temporarily, Neslin said.

Grocery sales online during the pandemic doubled, but beverage alcohol sales online tripled in that time.

And in the pandemic with tasting room traffic cut off by public-health orders and reticent travelers, vintners turned to email, videoconferencing and other virtual tools to re-establish contact with customers that visited them to rebuild and strengthen relationships.

That’s partly why traditional wineries have been outperforming purely online wine clubs that rely on social media marketing, he said.

“It just a function of past inaction and the harvesting of lots and lots of low-hanging fruit,” Neslin said.

Coming out of the pandemic; acquisition announced

How do you start a wine brand during the unprecedented upheaval of the pandemic?

That’s what the conference panel of Marla Bedrosian of Russian River Valley winery Domaine de la Rivere; ultrapremium boxed-wine club founder Sarah Puil of Boxt; and Steve Harrison of e-commerce and compliance platform Vinoshipper tackled.

Bedrosian came out with the first release of her under-1,000-cases-a-year brand in fall 2019 and had planned to market her wines at Sonoma County corporate events in spring 2020. But public-health measures put that on hold for two years.

Thankfully, she had pursued her route to market by way of her previous career in the hospitality industry.

“Our strategy was to reach into the corporate world,” Bedrosian said.

In late 2019, she worked with event-planner contacts to set up a videoconference call that involved her talking about the wine, and she sold two cases. That led to more corporate events appearances, and Vinoshipper worked to get wine to the remote workers’ addresses in time to go live on screen.

And that marketing move has extended into the waning COVID world. Last month, Vinoshipper arranged to get wine to over 300 participants in an Orlando in-person conference, while Bedrosian talked about the wine by videoconference from Alexander Valley.

Windsor-based Vinoshipper has morphed from its founding 15 years ago into a platform to help even small wineries easily handle the laws and regulations for shipping directly to consumers and selling wine online across the country, Harrison said.

The company now has over 2,000 winery clients.

With the ability to compete technologically with larger wineries, boutique vintners can do what they do best, Harrison said.

“The big companies just can't compete with the smaller producers … on that intimate experience,” Harrison said.

Boxt started rolling out its boxed wines several months into the pandemic, in October 2020. The 3-liter boxes sell for $89 a la carte or $79 by subscription, and 90% choose the subscription, Puil said. But they like the ability to pick which of the eight flavor profiles of wines available will be in the order.

“Customers expect choice,” she said.

That’s what she found frustrating about many wine clubs that ship by the case.

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