Priscilla Hennekam
Released 23 July, 2024
I’ve been deeply contemplating the actions needed to transform the wine industry’s current situation. It’s clear that no single action, or even a few, will provide the comprehensive solutions we all seek. The most significant obstacle we face isn’t just operational; it’s our mindset. We can no longer afford to invest blindly without a clear strategy for return.
We must move away from the belief that cutting corners with DTC alone will improve margins, or that bombarding potential customers with cold calls and emails is sustainable. Desperately chasing any opportunity to survive in this industry isn’t a viable path forward.
There is a better way to operate, a different mindset to embrace. Don’t you agree?
It’s time for the industry to change, and it’s OUR responsibility to create that change. Let’s embark on a journey of Rethinking and Re-education, challenging our assumptions, exploring innovative approaches, and redefining our strategies. Wine has a proud tradition, and we should not let go of that, but neither should we let it bind us. By embracing a culture of lifelong learning, and adaptation, we can pave the way for sustainable growth and meaningful change in our industry.
Welcome, or welcome back, to “Rethinking the Wine Industry”. This is a newsletter by the wine industry, for the wine industry. In today’s edition I hope to inspire change. After some time off to do my own #Rethinking, I’ve teamed up with Gary Finnan to bring something new for the wine industry. For more information, read on, and click here to register your interest.
Is DTC the Golden Egg for the Wine Industry?
Everywhere I turn, I hear that the best way to sell wines is Direct to Customer (DTC). Even with all the recent innovations, we keep returning to the same strategies. It reminds me of a quote I’ve heard is common among firefighters: “The fire service is 200 years of tradition, unimpeded by progress”.
What is DTC?
DTC involves selling wines directly to consumers, cutting out wholesalers and retailers, which typically results in a higher profit margin for wineries. DTC sales occur through three main channels: online sales through the winery’s website, cellar door sales and experiences, and memberships which often involve spam emails or annoying phone calls.
The Pros & Cons of DTC
The main benefit of DTC is a higher profit margin. Increases in sales volumes are debatable, because while dedicated marketing campaigns might boost short-term sales, they could potentially harm future business. Supporting downstream businesses often yields better results - less margin but more sales.
As Jeffrey Gitomer (a.k.a “King of Sales”) said,
“People hate to be sold to… but they love to buy!”
For me, however, the wine industry is a COMMUNITY, and DTC has a strong internal focus – you boost yourself by cutting out half the industry! With the above in mind, is DTC really the best way to sell wine?
Focusing on DTC means constantly trying to attract people TO YOU. Isn’t it better to have customers naturally DRAWN TO YOU?
If not DTC, then what? Do we need a shift in mindset to make progress?
In a conversation with industry veteran Gary Finnan, he shared, “The biggest problem in business is never visible.” He is right; success in the wine and hospitality industries isn’t just about acquiring more customers - it requires a shift in mindset. The unspoken challenge lies in re-educating ourselves and adapting to new ways of thinking in response to a changing landscape. Gary expanded his thoughts, saying, “Let’s return to basics and stop spoon-feeding what has been branded an ‘Experience’ ".
A customer recently shared a powerful insight with me, we talked about three fears that are interconnected and can significantly impact our personal and professional lives. Overcoming them often involves developing self-awareness, cultivating courage and resilience, seeking support and guidance when needed, and embracing a mindset focused on growth and learning from experiences. Recognizing and addressing these fears can empower us to live more authentically, make more confident decisions, and take meaningful actions towards our goals and aspirations.
The Three Fears:
So, what are the three fears?
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Fear to Notice: This fear stems from our reluctance to confront uncomfortable truths in our lives, whether about ourselves, our relationships, or our circumstances. It prevents us from recognizing problems, growth opportunities, or positive aspects we might overlook.
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Fear to Decide: Making decisions can be daunting due to the uncertainties and consequences involved. Fear of making the wrong choice or facing unknown outcomes often leads to indecision and missed opportunities.
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Fear to Act: Even after deciding on a course of action, many struggle to take the necessary steps forward. Fear of failure, rejection, or the challenges that come with pursuing goals can lead to procrastination and unrealized potential.
People act for their own reasons, not ours.
We also discussed the “Influence to Buy” or the “Why to Buy”.
Building strategies where customers are drawn to us requires a deep understanding of their motivations and fears, rather than solely focusing on our own. It’s not about showcasing how great we are, but about making our customers the heroes. The wine industry often emphasizes producers’ greatness but forgets that people buy for their own reasons.
It’s time to Rethink
Let’s stop thinking it’s fine (and normal) to not have financial health in our wine businesses, believing that one day it will magically change. Who will change it? IT NEEDS TO BE US!
I am tired of living in a world where we prioritize pleasure, prestige, and status over financial stability. Many wine businesses, even those backed by millionaires, struggle financially. I often hear statements like, “This is the most prestigious way to lose money,” or jokes such as, “To make a small fortune in the wine industry you need to start with a large fortune”.
I’m tired of this reality, are you? It seems like that in the wine businesses you pay dearly for moments of pleasure without expecting any financial return. This is business, and business needs to make money!
Together, we can re-educate ourselves and start treating our wine businesses as businesses. It involves a complete mindset shift and we need to do it to transform our industry for a sustainable future. We all need to achieve financial sustainability in our wine businesses.
Join Us – RETHINKING the Wine Industry Mentorship
Collectively, we have faced the first fear. We have noticed there is a global problem with wine sales that we need to solve. Are you ready to face the second and third fears? Are you ready to step outside your comfort zone, embrace challenges, and fully engage in the unknown journey ahead? Then let us help guide you.
It’s time to rethink our approach, re-educate ourselves and learn how to attract customers to us, instead of constantly chasing them. To help do this, I am running a mentorship program, called “Rethinking the Wine Industry”. Instead of focusing on Direct-to-Consumer, we will show you how to transform your wine business with Dedication Towards Customers.
Let’s stop putting band-aids on our wounds without finding a cure. Learn how to solve real problems with the Rethinking the Wine Industry mentorship, and bring customers to you, instead of always seeking them out. Stop sacrificing future sales for the sake of a small boost today.
This mentorship will be delivered by myself and guest contributors in a webinar format allowing real-time interaction with the opportunity to ask questions. Due to the live nature of this event, spaces will be limited. If you are interested, please add your name to the waitlist, and we will contact you with further information once the mentorship is scheduled for release.