Polly Hammond is the founder and managing director of 5 Forests, a New Zealand-based company that helps wine businesses grow. From research and strategy, to growth-driven design and communication, to capturing and delivering value, they help wine businesses reach their goals with less stress.
We spoke to Polly about how to adapt the wine industry to an increasingly digital world.
Areni: Polly, at 5 Forests what’s the first thing you do when you help a client develop a digital strategy?
Polly: When we work with wineries to formulate digital marketing strategy, we start with a framework of Goals, Capabilities, and Constraints. For most companies, the “Goal” is broadly either to sell more wine or build brand awareness. “Capabilities” refer to the internal know-how of the organization. Is there someone or a team internally who is properly trained in marketing research and strategy? Oftentimes, wineries are small, family-run operations and lack this training, so they focus on short-term goals and tactics rather than a long-term vision. Finally, “Constraints” refers to the things that get in the way, such as leadership buy in (this is the biggest one), lack of incentives and, of course, financial constraints.
Areni: That all makes a lot of sense. We hear from wineries all the time that they know how important it is to take steps to improve their digital strategy, but don’t know where to start.
Polly: Exactly. This goes back to the focus on capabilities. When the wine industry hears “digital,” people usually think “tactics”. They think “oh, we’re on social” or “we have an ecommerce site,” or even “we’ve paid for influencers,” but more often than not this is not part of a long-term, sustainable strategy. Just because the technology is changing doesn’t mean that a proper marketing strategy isn’t necessary anymore; it absolutely is to build a long-term sustainable business.
Unfortunately, as we already said, many wine marketers are not trained or encouraged to undertake proper marketing research. At many wineries, there are too few people doing too many things, and often none of those people have any formal marketing training at all. What’s more, this is usually accompanied by a lack of digital know-how. We understand – it can often feel like technology is changing so fast that it’s hard to keep up. And, so when a winery spends on digital initiatives like a flashy new website or social media advertising without a true understanding of how it works, it’s not surprising that they will lament it didn’t work and was a waste of money. It’s not their fault and it’s not that it can’t work, it’s that they didn’t have the right knowledge to use these tools effectively. Unfortunately, an unprofitable digital spend leaves the team feeling like digital is a waste of time, money, and effort – and they are less likely to invest in digital in the future.
Areni: Exactly. What about constraints? You said that leadership buy-in is the biggest one. Can you elaborate a bit more?
Polly: Yes, of course. Unfortunately, this is often a generational thing and is true across industries, not just wine. The people holding the purse strings are not themselves digital adopters; they came up through an era when wine sales relied exclusively on a traditional distribution model, and they may not be looking at any kind of long-term strategy.
On top of that, particularly in the US, there is often a lack of incentives. If you have a pricing model that is founded on the three-tier system, it’s hard to justify (and the margins probably don’t support) investment in digital marketing. For instance, we’ve talked to numerous wineries, distributors, and importers who cannot figure out who should be responsible for that spend. That’s tough when we are now faced with new wine businesses who are entering the market with models that allow them to focus entirely on digital marketing.
Finally, there’s the biggest practical constraint: money. When you haven’t the research, the know-how, the buy-in, or the margins, it’s hard to front up with the dollars to invest in a proper digital marketing campaign.
Areni: With all that being said, what do you think are practical things we can do to bring wine into the digital world?
Polly: Obviously, we’ve been thinking about this a lot at 5 Forests and we’ve come up with a few answers. First of all, we need to stop circling the wagons and firing inward every time a winery or wine business tries something new and different. Give them high-fives! Talk to them and ask why they did it and learn from them.
Let’s also be realistic: look at the hard data about consumer behavior, FMCG brands, and our place in the world. We need to attend conferences like MUST and participate in organizations like Areni, so that we get a bigger, broader picture of the future of our industry.
The risk takers and innovators need to talk about what they’ve done, what’s worked, what’s failed. We need agencies like us to have permission to write case studies with real numbers. We need brands who have adopted digital to be standing in the marketing workshops, leader to leader, telling their stories.
We need brand marketers to do the research, write the plan, and make the case to help your leadership understand why digital strategy is a must-do.
We need leaders to hire well and trust your team.
But mostly, we need wine businesses to start with a plan. Because strategy is cheaper than failure.
Learn more about 5 Forests and their work, connect with Polly on their website.