Tough Challenges in the Wine Industry
Through my lengthy, rewarding, and challenging wine career, I’ve not only seen some of the hardest trials of my life, I’ve been tasked with them, too.
When I sat down to write a recent article for The Buyer, I began considering these challenges, reliving all of them in their own way, causing me to reflect and realize that this industry, dog-eat-dog as it is, is rewarding beyond compare.
Enough of the sentimentality, though. Let’s get down to the good stuff, the nitty-gritty, the wine talk that I know you’re here for. I wrote down some of the toughest, most trying, most frustrating, and most difficult wine challenges — in no particular order, of course — that I’ve had the absolute pleasure to experience in the last decade.
Check them out and enjoy the emotional ride with me:
- Selling wine directly to a consumer outside of the 14 Reciprocal States. You know how it was solved? Through a tough combination of lobbying, lengthy court battles, and complicated shipping models (I’m looking at you, three-tier clearing). #solved
- Direct to Trade (DTT). Now that was a challenge. It failed with WineDirect, but I’m hoping for a new chance at success with LibDib. #pending
- Selling wine without actually selling it. Marketing wine without actually marketing it. And doing both conflicting activities primarily using digital. #solved-ish — that’s a story for another time.
- Compliance. This was a huge issue. I consider this one solved, but with a need to be solved again. When direct shipping started to open up, it became a serious madhouse of nuanced regulations. Couple that with the ever-changing reporting regulations from every state and you’ve got yourself a nightmare. Shipcompliant managed to become the monopoly in this category and did a relatively good job streamlining compliance checks and reporting, but honestly? The changes slowed down and Shipcompliant has become nothing more than just an excessively expensive toll-booth. What do we need? A sustainable alternative. Why? To keep them honest, innovative, and reliable. #solved but needing a second solution
- Finding a comprehensive technology solution to streamline DTC sales (think E-com, wine club, tasting room point of sale, etc.). This one is semi-solved. Lots of players in this game have had their moment in the sun before dissolving away, but this remains a crowded category for technology vendors in the wine industry. A comprehensive solution is still in flux, of course, but if I had to put my money on someone, I’d bet on Andrew Kamphuis and Commerce7.com. You can quote me on that. #pending
- Selling a wine to a consumer that’s never heard of your brand that has a rating between 89–95 and averages about $75 per bottle. TBD (ask Angelica Mabray in 6 months). #unclear
- Creating a single database of every single wine and brand out there. Okay, I’ll level with you — this one failed. Who could forget yourwineyourway.com? (Newsflash, everyone can.) That being said, a few companies are stepping into this spotlight, such as Outshinery and GWDB.io. #pending
- Building a game layer on top of wine apps so that wineries can have a single, comprehensive place to market all of them. All right, this one failed, too. Vinpass was a fair attempt at doing this, but implementation varied by the app developer, making it confusing. It did help to form a new understanding of which apps the wine industry consumers actually use, though (Hint: It was not the top food-pairing wine app). #failed
- Developing marketplace layers for wineries to sell huge amounts of wine via marketing agents. Another failure, I’m afraid. Unfortunately, this is a continuous siren’s song that calls entrepreneurs to their ultimate demise. Not even the Almighty Amazon could succeed in this category, but I do still have hope. The lead horse in this category is currently Vivino, and you know what? May the force be with them. Most who've traveled this route have #failed but still #pending.
Like you wanted to be done reading about the challenges of the wine industry.
Check out more of these current wine marketing challenges that continue to face the wine industry:
- Customer acquisition outside of tasting room traffic continues to be a struggle. The tasting room model is beyond broken and will only continue to degenerate over time. Relying on this process will prove to be disastrous.
- Notable brand engagement at the retail point of purchase. Want to know my gut feeling? Treasury, with their AR via 19Crimes, is the closest to making this a reality.
- As online shipping opens up to the retail tier, how are wineries going to differentiate their offerings and services from wine retailers? That’s a tough one to solve.
- Softening the curve of wine interest. What do I mean? We need to blur the lines between people who buy wine for the point of drinking, wine curious folks, and oenophiles. There are huge, drastic cliffs among these folks, and because of it, we don’t thoroughly understand what inspires people to take the journey from wine-agnostic to passionately-oenophile.
- An e-commerce wine company that moves the needle significantly into revenues of over $150 million.
- An honest-to-god anti-counterfeit solution.
- Oeno-tourism tools! No, I don’t mean the lame reservation tools that are currently offered, but real, meaningful ways to help customers who are traveling to wine regions to create their best trip. Perhaps Tock will make this a reality?
- Speaking of tools, we need an advertising tool that allows for legal internet advertising.
- We need a better, more accurate understanding of who the wine consumer is. We need to know their psychographics, their behaviors, their interests — we need to know everything about them.
- We’re sorely missing a lobbying to remedy all of the ridiculous, antiquated house laws and all of the antiqued regulations that do not consider digital marketing or modern technology.
- Better direct-to-customer packing solutions to better protect against heat and cold, but more environmentally friendly, of course.
- Market access in the light of increased distribution. Simply put, we need more access, whether that’s through DTT, small wholesalers, or new models entirely.
- We need improved customer relationship management. We ask a lot from our vendors, right? That combination of hospitality plus retail (plus subscription) requires a particular type of customer relationship management. The problem? This market is too small to support the R&D to build a product that supports its needs.
I‘m sure I missed so many more and if you have and addition to the list of Herculean obstacles for the wine-tech industry, please make sure you comment on the article.