For centuries celebrities and royalty have been used in promotional opportunities to endorse wine and spirits brands.  The drinks industry as a whole is no stranger to spending millions to get celebrities to talk about and publicly consume their brands. But, in today’s world of accountable marketing and measurability, isn’t it risky to splash out when there is no guarantee it will work?  Does it really increase sales or is it just a branding exercise for those that can still afford it?

Even as recently as November 2012, Moët & Chandon announced a five year endorsement deal with tennis star Roger Federer, replacing Scarlett Johansen as the face of the brand.  It is apparently worth $30 million.  Time will tell whether Moët will make their money back and the types of consumers Federer can bring in.

Moët & Chandon is no stranger to endorsements.  In 1866 the company commissioned the entertainer George Leybourne to write and perform songs such as “Champagne Charlie” about the virtues of champagne. Dozens of songs were commissioned by champagne houses at the time including “”Ruinart-Polka” and the “Charles Heidsieck Waltz”. Champagne houses also marketed their wines through music, art, literature and movies at that time succeeded in positioning champagne as a mandatory presence at all celebrations, inaugurations and launches. It’s an approach that is still used today.  It’s maybe why we drink champagne only for celebrations, unlike in French culture where it doesn’t need to be a celebration to crack open a bottle.

Marketing techniques for champagne proved very successful with movies and movie stars in particular.  One of the more famous associations for a champagne brand was for both Dom Pérignon and Bollinger in the James Bond series.  Dom Pérignon was featured in several James Bond films starting in 1963.  By 1973 Bond’s the brand of choice switched to Bollinger.  Bollinger has since been featured in at least 12 of the films.

Celebrities then and now provide fine wines, champagne and spirits brands with a way to position their products as glamorous, aspirational and part of a luxury lifestyle.

Today we see both the wine, spirits, and drinks industry in general hard at work on endorsement deals. The most successful, and accountable recent celebrity endorsement example is Cîroc vodka.  In 2007, Diageo approached hip hop mogul Sean “P Diddy” Combs  to not only endorse their brand, but appointed Diddy “head of marketing” and gave him 50% of profits.  Through advertising and appearances the brand went from 40,000 cases to 2 million cases a year in six years.  According to Advertising Age sales for the vodka grew 552% since the pre-Diddy days.

Diageo’s Tanqueray brand also succeeded with the same strategy when they approached actor and DJ Idris Elba for a music video for the campaign “Tonight we Tanqueray” in 2011.

Reality stars can do it too.  Like her or hate her, Bethenny Frankel’s Skinnygirl brand has taken off. Bethenny was a member of the original Real Wives of New York City TV series.  Bethenny sold the Skinnygirl brand to Beam, Inc. in 2011 and in 2012 they launched Skinnygirl wine. Beam says that sales of Skinnygirl cocktails soared to 486% in 2011, so no doubt is pinning high hopes for the wines.

Sometimes wineries will work with a celebrity for a special wine or particular vintage.  The star may have no ownership in the brand or involvement in the industry. In 2005 the California sparkling wine producer Mumm Napa worked with Carlos Santana to name their vintage wine of the same year Santana DVX.  Fattoria Le Terrazze, a winery in Italy worked with Bob Dylan to do the same thing.  In Bordeaux, Château Bauduc approached British chef Gordon Ramsay in 2009 for an endorsement of their 10^th vintage.

Dozens of celebrities are on the wine bandwagon already promoting their own labels.  Recent additions to the wine world include Drew Barrymore, Angelina Jolie & Brad Pitt, Fergie and David and Victoria Beckham.  All are banking on their celebrity to promote the wines, in the already cluttered and fragmented wine industry.

What happens when celebrities screw up?  There have also been dozens of endorsements that have turned sour.  In 2010 Rap star T.I, was paid to endorse Rémy Martin cognac and axed five months later after being arrested for drug possession.  Even when the star is dropped by the brand the press articles live on.

In the biggest drinks sponsorship of its time, Michael Jackson was dropped by Pepsi in 1993 when he was accused of child molestation and confessed his addiction to painkillers.  Britney Spears was also “phased out” by Pepsi in 2003 when her $9 million deal was dropped after she was spotted numerous times with Coca-cola products, despite being given unlimited Pepsi products.  In other PR disasters, Tiger Woods was dropped by PepsiCo’s Gatorade in 2009, during the media frenzy around his extramarital affairs.

But celebrities are not always paid to endorse brands.  Sometimes it is unplanned and unwelcome by the brand.

Rappers like Notorious B.I.G., Bad Boy and Jay Z have mentioned the champagne brand name Cristal numerous times.  It was Jay Z’s mention of the brand in his music video “Excuse me Miss” that sent the brand name soaring and did not please Cristal owner Louis Roederer.  In 2006, after a comment made by Roederer Managing Director that Jay Z deemed racist, he boycotted the brand and switched to Armand de Brigna, another champagne brand in flashy gold colored bottle which was featured in his “Show me what you got” music video in 2009.  This time the brand was more than pleased and said they completely sold out and could have sold their volume of production several times.  In the case of Cristal, they didn’t need or want the exposure, their brand is scarce enough to find anyway, but it shows what can happen by surprise, opening up knowledge of the brand to a whole new audience, whether intended, desired or not.

The same thing happened for Courvoisier when rapper Busta Rhymes (and featuring P Diddy) released a song called “Pass the Courvoisier”.  The cognac brand saw sales rise 30% in 2002 – which was reportedly the biggest sales boost since Napoleon Bonaparte named it as the official supplier to the Imperial Court of France.  Courvoisier claims it had no agreement with the artist prior to the release of the song, although worked with the rapper afterward.  There is no proof either that Courvoisier was Napoleon’s favorite cognac, as he died before the company launched in 1835.  But this association has proved to be a successful marketing tool.

But what happens when the brand chooses a spokesperson that reportedly doesn’t even drink alcohol? Midori chose brand mogul Kim Kardashian as a spokesperson in 2011.  Kim’s role is to appear in advertisments, give personal appearances and tweet.  Kim has been riddled with endorsement nightmares including Sketchers toning shoes, QuickTrim diet and the TRIA hair removal system.  I can’t help but wonder if Midori’s sales will be helped or hindered by this choice.

So what are brands looking for when they sign on these celebrities?  Here are several reasons:

- Influence consumer purchases: Like it or not, the publicity celebrities attain dominate popular culture, and news travels fast through their sphere of followers on social media.

- Build awareness: They can be great for new brands or those looking for mass exposure.  i.e: Madonna, Michael Jackson, Britney and Beyonce for Pepsi.

- Position the brand: For style and sophistication champagne brands have long used movie stars ie: James Bond for Bollinger, Scarlett Johansen for Moët.

- Attract new consumers: Many spirits and drinks brands find stars that will help them tap into the teen audience, kids drinks, black teens and the Hispanic market.

- Breathe life into a failing brand: Create new excitement and desirability.

- Target a specific fanbase: i.e: Sprite using athletes such as Kobe Bryant.

Brands should carefully consider their demographic and who already consumes their brand, or could be convinced to.  The person has to have credibility and it has to be or at least seem authentic.  Do they actually consume this?  Clearly, Britney in the case of Pepsi and Kim Kardashian, in the case of Midori are not great choices.  In the best case scenario, the person should become part of the company, as P Diddy did in the case of Cîroc.  The most successful endorsements show the celebrity’s involvement going deeper than just appearances.  Celebrity endorsements can be effective if they are well thought through and are viewed as a long term strategic decision.  Given today’s heavy reliance on social media, perhaps the celebrity endorsement isn’t as important as it once was, because according to Ad Age and Nielsen, today’s consumer is more likely to be influenced by someone in their social network than a weak celebrity connection.

Time will tell with new endorsements like the Moët and Federer deal. What do you think?  Are celebrity endorsements still worthwhile?  Or should the drinks industry be more creative with social strategies?

Today’s ATME (Association of Travel Marketing Executives) Annual Marketing Forecast highlighted some new tactics, and indicates a much more positive year for the industry.   Discussions around “the year of mobile”, a term that has been repeated like a broken record for several years, have now phased into  “the year of the three screens” (desktop, mobile and tablet).

Surprisingly, Google even coined a new term: “It’s a Non-line world,” said Managing Director Rob Torres as he described the blurring between online and offline in media and the need for marketers to create cross platform experiences.  “Brand experiences matter,” he said and cited Booking.com’s TV campaign launched last week.  Torres said queries outside of desktop (tablet and mobile) have now increased to 30%.

But despite all the talk about online, in 2013 travel marketers in the US will still spend $700 million on traditional media, and $300M on digital.  Banner click through rates in US are now at a dismal all time low of 0.1%.

Of course there are still plenty of stale tactics in the industry and things that could be done better – but the man with the most examples and hearty advice was Simon Bradley, VP of Marketing North America at Virgin Atlantic.

Simon says: Marketing advice from Virgin Atlantic:

1. “Any advertising campaign has to have a social impact and has to be baked in PR.”  Bradley also revealed that Virgin has increased its investment to public relations and taken money from advertising to bolster their PR and social.  “PR is far more powerful than advertising.”  He backed this up by staying that their consumers are savvy and that the believability of advertising is consistently declining.  “Virgin is now driving the brand through authentic communications and that are transparent.  People are grazing on snippets of information – it’s more difficult to get them to focus on whole articles.  The great thing about PR is that you can insert the brand and do it in a way that’s compelling and interesting.”

2. “It’s about conversations, not campaigns.  They must be 2-way, multi-faceted and relevant.” 

3. “Loyalty and social are going to be the same thing going forward”.  If you can find ways to increase their loyalty, and create “surprise and delight moments at the gate, in the plan”, they will talk about it.  But what you think people want may not actually be what they want: “Most people prefer seat upgrades than bonus miles.”  Bradley also explained how they reward top flyers through Flying Club Gold Member’s exclusive dinners in top hub cities.  “It’s about building a rapport with your customers.  They will talk about it on social.  Brands should do things that can be highly socialized.”

4. “Surround sound marketing works.” Bradley described Virgin’s Wall Street Journal campaign that went across all WSJ properties.  Compared to using several independent channels, they found by using one media brand the campaign performed far beyond what they normally expected.

5. “Your content is your advertising.” Virgin’s #howtoclubhouse Instagram contest was a huge success, and he attributed to this contest being authentic and compelling.  “We got photos from travelers that were even better than we could have taken ourselves.”

6. “Data is driving all marketing decisions – it’s all about targeting, retargeting, social targeting.”

7. Mobile is an important priority but Virgin takes a holistic approach.  Virgin looks at how people use mobile across their entire journey, even in flight and in-destination and how they can be part of that – it’s not just during the booking process.

8. Tablets are different – They allow for much more experiential brand interaction and allows the experience to come to life.  All marketers at the forecast agreed that the tablet should be treated differently from a marketing perspective than mobile and desktop.

What do you think of this advice?  Do you agree?  Post your comments below!

Cheers,

Mindy

Mistake #1: No mobile strategy   

This is a huge mistake.  We live in a world now where apps can lead your marketing strategy, or even a new business/product launch.  It is now imperative your website is mobile-friendly. Why? Mobile search is predicted to surpass desktop search in 2014.  Wow, that’s next year.   Right now half of all searches are performed on a mobile device.

If you are a service or transaction-based business you should consider mobile leading your entire strategy.  This is especially important for tourism businesses.

According to a Google study in 2012, 61% of respondents said that they’d quickly move onto another site if they didn’t find what they were looking for right away on a mobile site. In addition, 67% of users are more likely to buy from a mobile-friendly site.  So this means if you’re site is not mobile friendly, you will be driving users to your competitors.  If your site is not mobile friendly, then it’s time for a new site.

For businesses considering developing apps, you need to think about how your customers can book, buy and transact on the go.  Apps are essentially tools that make it easier for them to interact with you.  You may find that an app makes sense for a certain a part of your business, as a tool. It should never replicate your website. Think mobile first.

Google Mobile Study, Sept 2012

Mistake #2: Sending too many emails / sending emails that are not targeted

People are suffering from email fatigue to start with.  Think about it, how many emails do you get per day?  The days of sending untargeted emails at a high frequency are gone.  The risk of unsubscribes is higher than ever before and we all know how hard it can be to get qualified subscribers in the first place.

The world of email marketing is now dominated by big data and those companies that will survive need to personalize emails and segment audiences in such a way that they are related to a person’s passions, previous purchases and general likes.

Email passions?  That’s weird.   Well, not really.  For example if you know I am passionate about let’s say wine or travel, you should theme emails or tie the message into these types of themes. Do not send me an email about the Superbowl, or I will unsubscribe. (just for example)  How can you make your content relevant to a person’s passions?  You can bet the open rate is going to increase, as will their brand loyalty.

Are there subsets of your audience that fit into certain passion profiles?  (Let’s forget demographics when you are building an email strategy)  As a startup or small business this is harder to do.  You can only really do it well if you have a substantial database.  Email-dependent companies have one chance to keep sign ups and that is to provide relevant content at the right time.  Collecting data on your customers is even more crucial than ever.

Mistake #3: Relying on Google Adwords and Facebook ads to drive search

When was the last time you clicked on a Google ad or Facebook ad?  For me, the answer is almost never.  I’m almost immune to it, and I don’t think I’m alone.  What is really driving traffic these days?  Let me introduce you to two of your new best friends, Pinterest and Google+.  Social media platforms like these along with rich content like images and video content will continue to be the biggest way to drive traffic and engagement.

You may have heard this before: “Men are from Google +, Women are from Pinterest”. Time Magazine’s article last year led to many articles on this top and piqued the interest of many marketers. Pinterest is perfect for brands in luxury lifestyle businesses such as wine, food, fashion, home – and it skews female.  To reach the male demographic, consider Google+, where two thirds of their users are male.

Pinterest

Mistake #4: I’m posting on Facebook, doesn’t that mean I’m using social media?

No, not really. I am still amazed by companies that still don’t understand how to use social media.  Social media sites are simply a tool to allow you to have a TWO way conversation with your customers/fans, or potential customers.  It’s is not an opportunity to push your sales pitch.  It’s not a numbers game, it’s an engagement game.  Look beyond your own Facebook and Twitter feeds and start thinking about influencers in your industry with large networks you can get to blog, tweet and post on your behalf. Consider what networks you want to be seen in and how you can make that happen, with links back to your own site.

Mistake #5:  I don’t think I need to have a blog / I don’t have time to write a blog

Wow, this amazes me.  Blogging is free.  You are creating original content for Google to pick up, and increase your ability to be found and drive traffic, now and for years to come.  You get incredibly detailed insights of how your readers are interacting with your blog.  You are broadening people’s awareness of what you do, and engaging with them through comments.  This is especially important for sites that do not have static content, like deals sites, or simply to keep customers updated with what is going on in your business.  I cannot think of a business that would not benefit from a blog.

Mistake #6: Not being aware of what is going on in your industry

The biggest tip I can give businesses is to really watch what is going on in your industry and your competitors.  Google Alerts are my #1 tool for this.  Noone has time to read industry blogs all day, but getting these alerts allows you to stay informed and react to changes in the industry, and get ideas of things you can do for your own business.  I am constantly getting ideas and learning from the news I get every day.

What mistakes do you think businesses make?  What marketing tips do you have to share?  Please post them below!

• 52% of American women say they prefer to drink wine compared to 20% of men (Source: Gallup, August 2012)
• 42 million women in the US drink wine (Source: Forbes, February 2012)
• Women accounted for 58.1% of wine buyers in 2011 (Source: Beverage Information Group)

So why don’t we see more marketing towards women?  Some possible reasons:

• Wine marketers have not updated their marketing strategies to speak to women, or do not know how to reach them
• Wine marketers/wineries are trying to reach them in the wrong ways and using old methods
• Wine marketing decisions tend to be made by men, although this is changing

Millennials being the fastest growing segment has been highlighted by industry experts as a major opportunity.  Social media is the key in targeting not only the millennials, but women especially.  Women skew higher on all major social networking sites and are more likely to be making purchasing decisions on wine.  So marketing needs to change.  And so do other things…

According to experts women are less influenced by wine ratings, as they tend to judge the entire product. Label design, the bottle shape and the philosophy of the winery are equally to women as important as the quality of the wine.  But several wine brands have taken note and this year Treasury Wines Estates, launched “Be” – geared to women, specifically “millennials” from 21 to 34 years old.

Chateau Ste. Michelle introduced a Facebook campaign primarily geared to women, coupled with a print campaign.  Historically the brand had advertised only in magazines for wine professionals and for the first time it more focused on women’s information sites such as Parents, Better Homes and Gardens and Every Day with Rachael Ray.

After huge success with her pre-made cocktails brand, Bethenny Frankel sold her brand to Beam Inc.  This year they launched three types of Skinnygirl wine.

Brands that do well with this sector are able to create an emotional connection with their customers; they understand their target market’s social media habits and how to tap into it; they are involved in conversations about wine in general, and they understand it is a two-way dialogue.  Do you have comments on how the wine industry is targeting women?  Please post them below.

• Visiting social networking sites is the number one activity on the web and women outnumber men on almost all significant social media networks.  To reach women you need to be engaging with them through social media.
• In today’s social world, demographics are meaningless.  We need to dismantle stereotypes about gender and focus on “taste monitoring”.  Knowing what brands people like, where they go and what they do tells you far more than knowing their age.

Yet, even though Blakely’s speech was from 2010, there are many companies today making predictions and developing strategies based on traditional demographics like age.  Sure, it’s easy to use age, income and geography to put people in buckets – but in today’s social world it’s not how it works.  I’d bet that any agency still relying on traditional demographics is just too lazy or out of touch with how to reach today’s consumer.

Does this mean that words and stereotypes we use like “baby boomers”, “millennials” and “Generation X” are out the door?  According to this, I’d say yes.  We have to get far smarter about reaching consumers and be careful about making assumptions based on age.

For those of you in the travel industry, you know that travel today is a mindset.  Many years ago age would be an easy clue into what kind of traveler someone might be.  Today this couldn’t be further from the truth.  How active someone is, their outlook on life, how they think and which brands they like, can give you a big clue into the type of traveler they are.  It’s the same with wine, sure the younger age group is buying cheaper wines, but then they are also buying the more expensive wines, they are more educated about wine than their parents were at the same age.  We can no longer rely on traditional stereotypes like age to draw assumptions.

For those brands looking to reach the female audience social media should be your number one priority.  In August 2012, the Forbes article: Women are from Pinterest, Men are from Google+ discussed the female skew in social media.  Pinterest takes the top spot by ranking the highest with females, with a staggering 72-97% female skew.  Facebook also reports a female skew (58%) but an even greater divide between time spent with women engaging more, uploading photos, frequent status updates etc.  Twitter is consistent with less of a female skew (52%).

What does this tell us? Understand your audience at a deeper level than just basic demographics.  Stop making assumptions based on traditional demographics and start to look deeper.  Create “taste” profiles of your audience based on what you know they like and respond to, then find ways to engage with them.

Infographic from Forbes, August 2012

Most of you know I’m a huge Garyvee fan and about this time last year I went to one of his book signings.  Getting a pep talk from the wine and social guru did it for me then (see my video and blog post from Mar 2011) and then the other day I found his CNN segment taped last Dec, with the same topic.     Gary uses social media to do what he calls “humanize the business” and “scaling caring” – he seeks out relationships, listens and contributes to conversations.  He says he understands his customers to a level that he knows what their emotional hooks are, beyond their purchases.  Thank you Gary for spelling out how to use social media to everyone once again.

If you need another reminder on how to use social media and why, here is Gary’s clip as seen on Piers Morgan:

This is what I used to tell brands when I was consulting but now that I’m thick in the weeds of building a business it doesn’t come as naturally as there are about a million other things to do.  Gary’s CNN clip came at a good time.  Last week I had another breakthrough.  I called 30 top customers and spent a lot of time listening and asking questions.  What I thought people wanted, why they wanted it and what they really thought were quite different things.  I also learned about two very different customer profiles and how we needed to talk to them differently. Why did it take this long for me to wake up and do this?  I have done calls, surveys and focus groups many times before in other companies, but when you’re busy it is easy to get sidetracked and forget the basics.

Giving customers the chance to tell me about their experience with the brand not only helps them feel more connected to the brand, but it creates a relationship that will ultimately pay off down the line.  It is stuff like this that will get people even more tuned in to what we are doing, encourage them to tell their friends and feel like they can reach out to “a real person” as opposed to a brand.  It says “we care”. Personalization of brands, in my opinion, is absolutely crucial in today’s competitive marketplace – and the insights I learned were so valuable.  Sitting around conference rooms discussing “what people want to see” is a waste of time unless you have actual customer insights to discuss.

So what does social media and calling customers have in common? Actually, the goal is exactly the same – to develop one-on-one relationships with customers and build your brand.  It gives you the chance to learn what people have to say about you, learn about what they like about you, and what they don’t, where they shop, how they see your competitors – and gives you the chance to start talking to them.  The problem is that many brands don’t use social media in the right way and only use it to push out content.

Staying in tune on a day to day basis is important, but you can’t always be on the phone with customers.  It’s the reason why tools like Twitter, Quora, Facebook etc are so powerful.  Gary is right this is 100% worth dedicating time and resources to.  It really is a matter of priorities – and using these tools to help you in the right way.  Start listening and caring about what your customers say and you will quickly be a step ahead.  Creating one-on-one relationships have always been and will continue to be the #1 way to market your business.

What do you think?  Please post below or find me on Twitter @mindyjoyce

I’ve always been in awe of entrepreneurs, no matter what their line of business is. But in the wine world, it doesn’t get much more impressive than Michael Mondavi. Recently I had the chance to talk to him and learn where he started from, and what gave him the idea to branch out from California and start an importing company.

Today the Mondavi name speaks volumes in the U.S., having become virtually synonymous with American wine. But surprisingly, in 2004, Michael founded his own international wine importing company, Folio Fine Wine Partners. So I had to ask him: Why not just focus on California wine rather than importing? As it turns out, it all started with a trip he took 37 years ago.

“After my younger brother Tim graduated in 1974, Dad decided to take us to Europe. Day after day for two weeks, we traveled from winery to winery – three to five a day. I had been to Europe several times before that trip, but this time was different. This time, we met with the families, the winemakers, walked through the vineyards and tasted the wines.

“That trip was a real turning point. When we got back, Dad asked me about the most important thing I had learned. And I told him, ‘Everyone talks about how great French wines are, but I think the Italian wines are more pleasing and go better with food.’ I’d fallen in love with Italy, and realized that if people knew about these great wines in America, they would love them too.”

Over time he built relationships with wine families in Europe, and had to make a major decision after he was approached by Vittorio Frescobaldi to import his wines. Frescobaldi belongs to one of the oldest wine families in Tuscany, one that has made wine for over 30 generations and 700 years. Michael realized he couldn’t import just one wine – he needed to create a portfolio. But that wouldn’t come easy.

“In 2004, I sat with my son Rob and started with maps of Italy and Spain. I went down the list of people whom he would be proud to represent in the U.S. Then we traveled to each of the family estates two to three times with our winemaker, Tony Coltrin, who has worked with us for more than 35 years. Together we met the people, saw the vineyards, watched how they respected the soil and checked how clean the cellars were. With each family it took about five meetings before we started to talk about importing the wines into the US. And not everyone said yes. But it’s like relationships – you have to date a lot of people to find the right ones.”

Like many entrepreneurs, Michael is absolutely passionate about what he does, and he is driven by a deeper purpose. His passion is ignited by the thrill of discovery. And for him, the reward is the look on a person’s face when he or she really likes the wine. “Our ultimate goal is keeping our customers happy,” he says, “because if they’re happy once, they’ll come back.”

In the U.S., wine tourism is driven by having to sell wine in the winery  and many wineries are dependent on wine tourism for survival.  About half of their direct to consumer sales actually come from the tasting room – hence the importance of driving visitors to wine regions and into tasting rooms.

In terms of understanding how to tap into potential travelers and wine buyers online, the marketing mindset of the wine tourism industry is about where the travel industry was 10 years ago.  The industry is made up of wineries and tourism boards that have been generally slower to adapt and just not as exposed to online tech and where the travel industry as a whole is going.   But they both have big fish who are highly successful and continue to lead the industry (Mondavi, etc). The difference in the wine world is that although wineries are dependent on tasting room sales, a great proportion of them wineries are, what I’d call “marketing in a box” and are not able to see that collaboration will benefit them more than working in isolation.

Michael Mondavi

1. A rising tide raises all boats. When Michael Mondavi speaks, the industry listens.  His message came through loud and clear: “Promote Napa first, winery brands second”.  Obviously this message can be applied to wine from any region, but with over 400 wineries in Napa alone,  the expense involved in producing wine, and the reliance on tasting room sales, means wine tourism is something every winery needs to be taking seriously.

Success in this business is dependent on these small brands seeing themselves as part of a bigger picture.  So what does this big picture look like?  Every year in the U.S. wine tourism generates $3B of tourism expenditure * (hotels, tours, rental cars, etc.).  When you look at it this way, tourism actually generates more revenue for regions than the revenue wineries generate from tasting room sales.  On average people visit 2-3 wineries on a trip* and marketing regions or travel packages and compelling winery experiences can help everyone.  Looking at the effect of wine tourism in Napa alone, wineries had 8.5 million visits in 2007, generated $714 million in expenditures, 10,217 tourism related jobs, and $250M in wages.  Big business indeed.

“The world doesn’t need another winery.  Give yourself a reason to be.” – Michael Mondavi

2. Differentiation is key.  “Wineries need to find ways to differentiate themselves” – Mondavi couldn’t have spelled it out more clearly.  It’s true, finding a point of difference, something unique about the brand and presenting it as part of the visitor experience is the way to differentiate.   Wineries that understand this have successfully created dedicated spaces for wine and taken time to really understand the visitor experience and how it speaks to their brands: “Super Cave” rooms, the additional of food, the addition of art, music, all to create a more specialized visitor experiences.  More data discussed by Mondavi:

• Napa is 4% of the CA wine industry (by volume)
• 80% of 400 wineries in Napa are under 10,000 cases
• 95% of wineries in Napa are family owned
• $42B to economy nationally
• Ripple effects are way beyond individual vineyards and wineries

3. “Winery tourism is brand building”.  People who visit wineries are brand ambassadors. People buy because of a personal connection, an experience or memory of a place they’ve been.  There was a lot of discussion about measuring the ROI of  wine tourism and the effect of the tasting room environment on the amount sold.  Even though wineries differ on the level of sophistication in their measurement, everyone seemed to understand that winery tourism needs to be part of their wine marketing strategies.

4. The potential for direct to consumer wine sales is huge.  It’s easy to forget that that wine sold direct to the consumer is only 3% of US sales.  This breaks down into 2%  sold in tasting rooms, and 1% of all US wine is shipped/sold direct.   This presents a huge opportunity for change.  In the National Economic Study from 2007, national winery D to C sales was estimated at $1.75B out of $23.8B total sales of US wine.  And, even more staggering, 88.5% US adults have never bought wine directly from the winery (online or in a tasting room). Even though a very tiny amount of people have ever been to a tasting room, the ones that do visit have a huge effect.

5. Popular regions for wine production do not necessarily mirror wine tourism.  There are 27.3 million visits to wineries across 50 states.  I was really surprised to learn that New York’s Finger Lakes gets as much as 5 million visits a year, compared to the Napa Valley, with about 8.5 million.  We also heard about the significant wine tourism focus from states such as MO, NC, OR, WA, and B.C. in Canada.

6. The demo doesn’t get much better:  A heads up for luxury marketers.  The winery visitor is about the highest quality consumer demographic you can have:  $75-100K+ HHI, empty nesters, 45+, well educated, managerial/professional, entrepreneurs, children <18 not at home, with men being termed as “trophy drinkers”.  They tend reside in wealthy suburban, ex-urban areas and also retirement resorts (ie Bend, OR, Sun Valley, Jackson Hole) & college towns (highly educated).   Top interests of winery visitors include skiing, frequent fliers, tennis, charities, foreign travelers, cultural events.

“Selling wine is about communicating the place it comes from.” Paul Wagner, BALZAC

7. The importance of creating memorable experiences.  Paul Wagner’s lively presentation hit home, and speaks to exactly what I’m working on at Lot18.  Memorable experiences are ultimately what will build brands that will last forever.  Creating opportunities to build relationships and create experiences for customers are they keys to ensuring future sales and loyalty.

8. Tapping into major events.  Napa Valley was announced as the “official wine region” of the 2013 America’s Cup – just  one example of the many bigger events that wineries can tap into.  The America’s Cup alone is expected to drive 5 million visitors into San Francisco.  Understanding how to be part of larger initiatives is better than struggling along to gain share of voice.

9.  You want people to sign up for your wine club so why don’t you tell them about it?  A staggering 75% of wineries are not presenting the wine club opportunity to tasting room visitors.  I am constantly talking to wineries who have building their wine clubs as a top priority so this came as a big of a surprise.

10. Non-wine is important in “wine country experiences”.   For travel packages and itineraries a well balanced experience is more appealing to travelers.  Interests that have come through in research studies include skiing, tennis, adventure, charities, educational, and cultural events.

Sources:

• Barbara Insel – Stonebridge Research Group
• National Economic Impact of Wine study 2005-7
• Nielsen Study 2007 – Winery Tourism National Survey
• Paul Wagner from BALZAC
• TripAdvisor
• Michael Mondavi
• Ship Compliant

The US Travel Association estimates that 27 million* Americans travel each year for the purposes of culinary or wine-related tourism.  This is a big number, and it’s certainly big enough for many wineries to realize the opportunity and decide whether some fine-tuning is needed in their marketing strategies.

With the inaugural Wine Tourism Conference (#WineTourismConf) underway in Napa this week, the leaders of this ever-growing and substantial niche of the travel industry, and still underrated subset of the wine industry, are coming together for the first time.

At Lot18 we’ve just completed two successful hospitality marketing webinars where we had almost 40 wineries participate.  Since then, I’ve had so many people reach out to me, from winery owners to tasting room staff for additional sessions.  Wine tourism has never been in the limelight more than it is right now.

If you’re not involved in the wine business, you probably think the wineries are doing okay with this.  The truth is that most wineries in America are not big names that have big marketing budgets.  There are thousands of wineries with fabulous wines and/or winery experiences but they don’t have promotional budgets. Some of them focus their marketing activity solely on their wines, and by default this attracts some visitors, but many of them are looking at new ways of approach this – and they should. The most successful wineries see hospitality marketing this as a long-term approach to building their brands, which includes selling wine and getting people to visit.

Most of the wineries I talk to are small family-run businesses who are not looking to be tourism destinations. They just want the right people. One of the biggest reasons that wine tourism in this country hasn’t developed to its full potential is because there is a gap in knowledge.  When it comes to visiting wine country, many travelers don’t know what they don’t know and go to the wineries they have heard of, or whatever is near the hotel.  And, there are a lot of wineries that don’t know or haven’t thought about marketing strategies to reach today’s traveler.

I was really thrilled that so many wineries attended the our webinars and I’ve had a lot of requests since, so I thought I’d post some of what we covered here.  This is the first of five posts geared to wineries.  Most of this can be applied to other tourism businesses, and marketing in general.

Who do you want walking through your tasting room door?

Now, if you’re not in the wine business, here are the basics:  Wineries want to: 1. Reach a large audience of actual wine buyers, 2. Introduce wine buyers to their brands, 3. Get people into the tasting room, 4. Turn them into lifetime customers.

There is a big difference between the connection a consumer feels about your product when they see it on the shelves, versus coming to the place it was made – and meeting the people who make it. In the case of many wineries that have a long-term vision for their businesses, appealing to an audience of travelers is critical to building a long-lasting, high value brand.

Tips:

• Many travelers are “Destination Collectors”: Luxury travelers particularly may have either already visited the region, or may be considering visiting, but need a compelling reason. What will it take to get them to return to your region, then your winery?  Developing an experience that is unmatched and highlights what is unique and special about your winery (and wine brand) will get this on their radar.
• Travel marketers will tell you that travel decisions tend to be heavily influenced by women (usually about 70%) and the destinations they visit are heavily influenced by family and friends (81%).  Think about it, how often have you heard about a friend’s great trip then planned your own trip to that place?
• Put yourself in the shoes of someone planning a trip to wine country:  Where would you start? What are the touch-points online and offline, and in-destination?  What are their expectations of a tasting room visit?  You really need to walk through this process and then evaluate how your winery does in each of these consumer touch points.

Stay tuned for more tips & updates from the Wine Tourism Conference. Please post your feedback below.

* US Travel Association 2007 Survey

I often visit winery tasting rooms and I always love to see wineries, or any location for that matter, remind guests or customers to tell their friends. People do need to be reminded to check in sometimes, and they will check in or post information about your business. Nielsen reports that 70% of people turn to friends and family for advice when making purchasing decisions. It doesn’t have to cost a lot of money to be part of this conversation. Simple things like store front signs and stickers can really help remind people to tell their friends – all of this helps keep your brand top of mind and helps you attract new customers.

I was thrilled to see this at Kunde Family Estate in Sonoma when I visited, and again at Bodegas Torre de Ona in Rioja, Spain.  All over the world brands are embracing social media to help tell their story.  Wine is social and so is travel, and food, dining…basically any kind of location can incorporate simple marketing tactics like this to build word of mouth.  I encourage everyone to think about the consumer touch points of their business and how they can make it easy for their customers to tell their story.