For an industry steeped in tradition over hundreds of years, the business of making fine wine has been undergoing a technological renaissance in the vineyard, cellar and C-suite. The big deal the outside business world has been making about “big data” is starting to reach wine marketers, who increasingly are able to dive into the lake of data on who their best consumers are and how to reach them.
What big data analytics means for wine producers and sellers is the ability to leverage the science of pulling together and quickly analyzing information from traditional and online sources to sell more wine directly to consumers and the places they buy it most often.
Two ventures connected to the North Coast are looking to bring the big data savvy of e-commerce powerhouses such as Amazon to the wine business. One is CustomerVineyard, launched by a consortium of industry suppliers, educators and financiers, and another is Wine Concepts & Design from the Lodi winegrowing region.
CustomerVineyard launched at the beginning of this year. It’s a venture by Vinvention’s Wine Marketing Solutions division, Sonoma State University’s School of Business and Economics, the school’s Wine Business Institute and outside investors. At the forefront of getting the venture out the gate were M.J. Dale, head of marketing for Vinventions; Joel Miller, a veteran marketer of consumer products who has taught in Sonoma State’s executive MBA program; and Rob McMillan, founder of Silicon Valley Bank’s Premium Wine Division and a closely followed industry trends watcher.
FISH WHERE THE FISH ARE
Behind Wine Concepts is Nicholas Karavidas, who started it four years ago after building the OZV zinfandel brand as winemaker and general manager for Lodi’s Oak Ridge Winery. Over a decade before that, he was trying to figure out how to better translate paper files with graphics and market research into brands that connect with specific consumer types.
“I wasn’t trained in demography, but I was creative as a brand designer, winemaker and marketer,” Karavidas said.
That led him to big data wrangler Geo Strategies, which over the past two decades has been building what’s now called cloud-based software to help clients transform their sales and customer data into maps that identify where key consumers are clustered.
“It’s about fishing where the fish are, but smart fishers use sonar,” Karavidas said. “If they see a fish jump in the distance, they don’t move their whole commercial fishing operation to where they saw it jumped. You burn fuel, time and energy to realize there are no fish there.”
The amount spent on acquiring the wine consumer data, having them analyzed and creating sales action plans from them worth it? Case studies leading up to the launch of CustomerVineyard suggests the return on the investment could be over 10 times the marketing and sales dollars put into the effort, Dale said.
“That’s because of the focus on finding your untapped potential in your existing customer lists,” Dale said. “These are people who are not already your top club members but have interacted with the brand. Helping to identify those with extraordinary potential really helps wineries get laser-focused in who to interact with then how to turn that into additional relationships and direct wine sales.”
Five companies, a mix of vintners and retailers, participated in the first phase of CustomerVineyard, which wrapped early this year. Another 10 are involved in the second phase, with how long it takes to complete varying with the company. Another 50 wine producers and retailers have requested more information.