It’s a common saying in business that, for a variety of reasons, you either grow or die. In fine wine, the subject of growth is a particularly complex one.

In December, Areni Global hosted an Insight Series webinar on this topic. You can find the analysis and recording here. Experts had so much to share about why to scale up that we decided to run a second session. On January 30th, we called panelists back to discuss how to scale up. Some of our findings, and a recording of the session, are below.

Panelists

• Joao Gomes Da Silva, Chief Commercial Officer, Sogrape, Portugal
• Vianney Gravereaux, Sales and Marketing Director, Ornellaia & Masseto, Italy
• Dan Petroski, Winemaker, Massican, USA

So how do you supercharge growth? And what are the key challenges? Here are our top five takeaways. To access the full conversation, watch the video or listen to the podcast below.

1. Start with a spreadsheet

The maths is easy. “The easiest part is that spreadsheet. The easiest part is asking the question about how much things cost”, said Petroski, who has updated the same spreadsheet every five years since Massican’s inception. He uses California’s Grape Crush report, plugs in prices of grapes at the 90th and 95th percentile of quality, and this helps to inform him if he is on track.

It is also useful for calculating the impact of scale on the cost of dry goods: “It’s pretty straightforward when you’re dealing with a glass broker or a label broker for a decade or more. So every year I ask them where the price break is, at what level of volume do I need to get this from being 26 cents per label to 20 cents per label? And that way you can build that into your model, into a repository, a data inventory worksheet that you can pull from”, he says.

2. Know that the hardest part is selling wine

Sales, on the other hand, is more tricky. “The hardest part is selling wine. That has been, and always will be the hardest part”, says Petroski. And – particularly in the US market, with its three-tier system – its important to recognise that the end consumers are not your only customer.

“Everyone can have a great vision for a product and put a delicious wine under cork, but making sure they get in front of the right people, the right audience of people [is more challenging]. And that person is not always the consumer. That person is the in-between middleman, the distributor, the importer, the sommelier, the beverage director, the sales representative at a local retail shop”, he says.

So it’s important to have a strategy for communicating your product throughout the whole supply chain.

3. Tourism can give you a boost

Tourism can help consumers to form a connection to your country, region and product. Gomes da Silva said that Portgual’s burgeoning tourism has helped to give a boost to Sogrape’s premium brands. Just as they were introducing products to the market, Portugal entered the spotlight.

“We had access to an international audience of consumers which would otherwise have thought that Portugal was an exotic place somewhere lost in an unknown continent. Not any longer, I’m glad to say. And therefore we have been able to ride that wave, not just domestically with this tourism boom, but also in international markets where the door was narrowly opened.”

This has prompted the company to invest in tourism initiatives. “The importance people visiting us – professionals or final consumers – is of such relevance that we need to invest a lot in capacity to welcome people”, he added.

4. Boots on the ground are key

Market insight is crucial, and the best way to achieve that is through having people on the ground: Members of your team who can interact with and understand local markets. As Gravereaux put it, people “…who know what’s happening in the markets, who know what the somms are saying, who know who’s moving where, who knows who, where is the cool latest place to drink great white wine in Hong Kong, etc.”

This means that when decisions are made about distribution, it’s with the input of all of these people. “The more fingers you have in the plug, the better info you have and the hopefully better decisions you can make simply for it”, he says, adding, “It’s not just me and my crystal ball…”

5. Know the limits of your control

There are elements of brand growth and reputation that you can control. And there are things that you can’t, notably in terms of product image and how your product is used in the public space. “So let’s focus on what we can control”, says Gravereaux.

He adds, “The big, big, big difference between top end wine and luxury products is that we do not control the point of sale. I’m not including the California, which must be a bit different with mailing lists and celler doors, but overall we do not control the point of sale. We do not control the last contact between the product and the consumer. So we have to accept this as a fact of life, but we have to be even better on the upstream part because we know that we won’t be there for the last mile.”

Which takes us back to our previous points: Work with the supply chain, listen to the market, maximise opportunities (like tourism) – and never forget the benefits of the humble spreadsheet.

Watch the Recording

Listen to the Podcast

Read the Analysis

This webinar is part of a series of exploration on the notion of growth in the context of fine wine. The full analysis of this exploration Can Fine Wine be Scaled? is available to Areni members and partners. Log in to your account or join us today to gain access to the full article.

---

To keep in touch with our research, analysis and events, subscribe to our newsletter.