The yeast are starting to get buggy moving! Flavours are looking good!
Filthy Good Vino Project Cabernet Ferment Day 2 Part 2 Adding Acid
Home in time for a midnight plunge! Love the Filthy Good Vino Bathtub Winemaking Project! Attention to detail! Even after 5 decades of Gaja, funky Nebbiolo from Barbaresco Subscribe to filthygoodvino.com to follow our vintage diary & exploits! Next post will review the evolution of Gaja’s Barbaresco over 5 decades!
The human nose may be just about be redundant and along with it the need for Winemakers! If Lloyd Alberts design for Sniffer makes it to mass production we’ll all be able to augment smell with sight and integrate the power of Google to make wine!
Serendipity, well Twitter actually, delivered a new friend to my iPad. We share the common passions of Filthy Good Vino and Barolo. A tweet soon followed that included a link that took me to a Documentary on the Langhe. The Langhe is a region of spectacular beauty in Piedmont, Northern Italy. It is home to some of the great Artisans of the culinary world. Think unctuous cheeses, white truffles, in addition to being home to the Founder of Slow Food, Carlo Petrini. These are not producers of product by recipe on mass. They are custodians of land, animal and vine pursuing excellence in their chosen field.
The link took me to footage of one such custodian, Maria Teresa of Bartolo Mascarello, who shared her philosophy on the production of Barolo. Made only from Nebbiolo grapes, Barolo at its best, is without question, one of the worlds most unique and greatest wines. Befitting wine of such calibre it is also one of the most challenging wines to produce. Bartolo Mascarello hold some of the most prized lands of the Langhe. Maria Teresa’s dedication, her sense of obligation, of duty to preserve the essence of these lands is clear.
Archival footage of her late father demonstrated wisdom that can only be earned by the passage of time and was marked by a head covered with silvery grey hair. His clarity of thought and wry humour in pursuit of an authentic expression of his vines was unclouded by new winemaking technologies that have often confused the wines of others choosing to employ them in Barolo. It is interesting that so many of the great winemakers of the world reflect that it is just as critical to understand what not to do, as what to do, as you guide a grape from the vineyard to the bottle.
Although I have yet to taste the wines of Bartolo Mascarello, five peeps who live and breathe for the wines of Barolo, peeps, who combined have visited the Langhe on an enviable number of occasions, had only unanimous praise for the craft of Maria Teresa and the the exceptional expression of her wines. I can’t wait to try them!
Nick Stock, rascal that he his, started a vibrant twitter conversation today. His open question to the Twitterverse:
“Are flash sites and daily deals training consumers to expect cheap wine?”
Having a passion for both Wine and Digital Strategy, there was no way 140 characters were going to be enough. If I had responded via Twitter, the answer would be: “Yes .. and No! It’s only just the beginning for wine online we’ve a lot to learn from todays experiment.“
So, here’s the blog! (Check out the Crystal Ball Gazing at the end). First some background.
What is a Flash Site?
A website that sells a product at a significant discount, as much as 40-60% for a limited period of time, often 48-72hours.
What percentage of the market do online wine sales actually represent?
How many people are being potentially being influenced by a Flash Site Sales?
At a time when retail wine sales are struggling to produce annual growth of more than 3 per cent, the online wine sector has grown by 50 per cent in each of the past two years.1
Market estimates put the size of the online wine sector at $220 million, equivalent to about 5 per cent of the domestic retail wine market and it is expected to top $350m this year.1
I couldn’t find any numbers on the portion of these sales that are from Flash Sites, the volume or average bottle price.
In the end online is still only 7% of total sales. Significant yet not necessarily as huge an impact on behaviour as it could be.
One positive behaviour it is establishing is a comfort with buying wine online in Australia.
What is the Average Price Daily Deals / Flash Sites are selling a bottle of wine for?
In the US 3 sites that account for 63% of Flash Sales. The average price per bottle was $27.61 for the 12-month period, for well over 4,000 offers, with a 40% discount off the winery retail price. Most of the wine was domestic for the US (Napa & Sanoma) and from the 2007 vintage, about 3 vintages behind current.2
Demonstrating that bottle price is actually high in the US, but at a significant discount, all be it winery retail price not street price.
The numbers haven’t been collated for Australia. In Australia Greys Online suggest an average price point of $5 a bottle with sales growing at 25% annually and Crack Wines $10-25 a bottle growing at 20% each month. Anecdotally Vino Mofo’s offer today (31 July 2012) included wine selling for between $10-22, historically more expensive wines have been sold, their growth is hard to quantify particularly with their recent acquisition by Catch of the Day and the huge lift in accessible audience it represents.1 Claimed discounts are high.
Wineries will eventually be able to determine if selling to Daily Deal sites is profitable and sustainable and if the Cocaine hit to Cash Flow was worth it. When supply and demand eventually shifts to be more favourable toward Wineries, Daily Deal sites, particularly deep discounters with no social layer, will see the number wineries willing to supply them dry up. If there’s no wine to sell and no established relationship between business and customer, customers won’t show any loyalty to their “dealer”. Just like Uma Thurman in Pulp Fiction one day everyone will realise they’ve just snorted Heroin, not Cocaine!
Who is buying online?
If the buying patterns of Australian wine drinkers follow the US, Gen X and Baby Boomers with sufficient disposable income, the affluent, who have developed a “Taste for Wine” are the ones buying online.
Gen Y are buying for super-convenience, instant gratification, they’re in the Buy It, Drink It camp, consuming within 17 hours of purchase (85% of all wine consumed). Buying for the night at the nearest most convenient bottle shop.
Logic deems that, if 85% of wine, is actually being consumed within 17 hours of purchase, then that 85% must be purchased from a bricks and mortar store no online retailer is offering what would effectively need to be a 1 hour delivery promise.
Ironically this suggests that although they are the most technologically savvy:
They are the least likely to buy online. Waiting 3-4 days for delivery isn’t convenient and does not fit with their consumption habits.
They are not sufficiently affluent to buy cases, the default purchase quantity online (largely due to the current economic paradigm of transporting wine to the customers home / office).
They are less likely to have developed sufficient interest in wine at a base level and don’t drink it as an daily accompaniment to a meal.
What is the model? Transactional? Gamified? Adding a Social Layer?
Gamification is the introduction of Game Design, Game Technologies into a non-game context to make it more fun and engaging with the aim of influencing the behaviour of participants. In a retail context this might be to encourage opening email, visiting a website more frequently, spending more time on the website, developing relationships with more community members and ultimately buying more product.
The Daily Deal / Auction site represents a low level of gamification, by making a special offer, available for a short time, that you could “miss out on” or providing and opportunity for the customer to “win” a product.
The Social Layer supports an increase in the number of interactions with customers, between customers and the depth of these relationships to build a more engaged community.
Flash Sites are low level gamified at one end of the spectrum, some add a low level social layer with opportunities for customer reviews at the other end. Still pretty basic and not necessarily building great depth of relationship.
Online Wine Sales models are still in their infancy. Incorporation of Gamification and Social Layers have yet to reach their full potential. Models that are taking this to new levels have already been established both internationally and domestically. Things are looking promising … Stay Tuned!
What conditions have lead to the opportunity for heavily discounted daily deals?
The viability of Flash Sites is a simple matter of economic circumstance.
Exchange rates increase the available volume of cheap imports.
Oversupply issues domestically and globally.
Consumer confidence, reduced retail spend. Price vs Volume purchasing considerations.
Distressed Wineries / Overstocked wineries looking to shift stock and improve cashflow.
Hard to fight economic reality … in the short term at least. Whilst these circumstances exist, flash sites will have the stock they need to prosper.
So .. Are Flash Sites Training Consumer to Expect Discounted Wine?
Yes … but, only through somewhere less than 5% of all wine sales (growing fast).
Those being influenced are mostly Gen X and Baby Boomers.
The positives.
A comfort with buying wine online is being established. This can only help future online models and open up opportunities.
Eventually supply of Cocaine / Cheap Wine will dry up and flash sites will struggle.
Being witness to these events will hopefully prompt wineries and retailers to think hard about how they can evolve their online presence to develop sustainable models through thoughtful design incorporating both game and social layers.
Future Trends – Crystal Ball Gazing
Time for a little crystal ball gazing! My predictions for the future.
Flash and Daily Deal Sites focused on a model of heavy discounting will struggle as supply eventually dries up and as wineries recognise the potential consequence for brand / lack of profitability in using these channels to sell.
Online models will continue to grow and evolve:
Designing for experience will trump base level transactional + low level gamified / low level social models.
Those with the strongest Game and Social layers will be the most successful with the most engaged communities.
Those who do design effective models will not have to rely on discounting.
Great service, time and effort spent developing meaningful relationships between the business and its customers, and, between members / customers of the community will be critical.
Game features that establish vested interests in maintaining a relationship, time invested in building a profile, competing in “The Game” will build a foundation for paying a “fair” price for wine.
Models creating financial efficiency, moving away from the three tiered supply chain, will offer reduced, yet profitable pricing whether perceived or real for the customer. A little cryptic, but, entirely possible.
The online share of the wine market will continue to grow, purchasing on mobile and tablet technology will increase.
Smart Clicks and Mortar Retailers will integrate digital touch points in their physical outlets. They will use their physical presence to create opportunity for a physical touch point for digital customers.
Smart Digital Retailers will establish physical and hybrid touch points for their community.
Wineries and Clicks and Mortar Retailers in general will remain laggards in the adoption of Digital Strategy to build communities around their business and only touch the surface of the potential that exists. Getting a Facebook Page because everyone else has one is not the answer.
A few innovators will realise that they do not have to rely only on the old three tiered model. That they can build a model to grow direct sales, with a strong Game and Social Layer. They will prosper.
These wineries / retailers will take ownership and spend the time and effort on developing meaningful relationships with a vibrant community who:
Care about what they do.
Who they are.
Value the experience, product and exceptional service being offered.
Will pay well for it.
Generation Y will start to come into their own in the next 5 to 10 years as their level of affluence increases and buy both more wine and a higher percentage of that wine online as the opportunity to look beyond instant gratification is realised through wealth.
I can keep my Deep, Dark Secret No Longer. I’ve Witnessed and Particpated in the Murder of TOO much Filthy Good Vino!
THE INSANITY HAS GOT TO STOP!
Yep, I regularly open more than one bottle of sensational wine at a time. Let’s face it who’s happy with less than 3 glasses of different Filth AKA Wine in front of them. End result left overs! By the next day, when my mouth’s as dry as a Cocky’s Cage and I’m looking for something to pour on my Weaties, the vino that was an absolute PLEASURE FESTA the night before is just a shadow of its former self. No longer the vibrant, beautiful, creature that had passed my lips only hours earlier, but, sad, tired, withered up and DEAD! Murdered by evil oxygen.
After a few too many bottles of Filthy Good Vino going to waste, I had a revelation. I was responsible for the MURDER of the ones I loved. Some of you might say I’m a bit soft and just need to add a spoonful of concrete to the mix, keep on training … pass me that waiter’s friend please… harden up and finish the bottle(s) on the night.
In my defence I offer the following:
Those of you that have shared a glass, plate and table with me will know, I’m half Chinese, scored the Asian vino-genes, and, with them a genetic inability to quickly process the bi-products of metabolising alcohol. Just watch as I go bright red at the sound of a cork popping!
Some times, on school nights, the Mrs and I just feel like a glass each and not a whole bottle.
I have a solution! It’s not some crazy wine preserving system with a vacuum or pressurised Argon to “remove” or “replace” the air in the bottle. Best thing is, it’s free and you’ve probably got all the kit you need floating around your home. Check out the video above. After you’ve watched it, if you feel like donating to “Kaani 2012” to help me drink more Filthy Good Vino and stop the insanity, get in touch or drop around with a tube of Filth.
