Moshé Weizman
Released 3 Sept, 2024
How can we come up with innovative ideas for the wine industry? Start by solving the problems that YOU are faced with.
Today’s article comes from Moshé Weizman, a wine lover who suddenly had to change the way he bought wine during, and post-COVID. Moshe didn’t like the options for bulk-discounts, which he found expensive and limiting. If this was a problem for him, then surely it must be a problem for others, so he started thinking how to solve this. It turns out, according to Moshe, that over 80% of wine buyers globally purchase between 1-5 bottles (i.e. less than 1 case). What Moshe proposes as a solution, could revolutionise the way people buy wine.
What I love the most about what Moshe proposes is that it builds on wine being a social experience, AND offers a way to attract the modern (potential) consumer.
“People love drinking wine together. Why can’t they be led by merchants to buy it together too” - Moshé Weizman
We need a variety of solutions moving forward. Let’s open our eyes and our ears, and start #Rethinking what is possible. These are challenging times, but remember…
“The airplane takes off against the wind, not with it.” - Henry Ford
Every month I post one of my own articles, then one from somebody else in the community. Everyone who believes they have something valuable to share is very welcome to publish an article to this newsletter. Think of this as “TED for the wine industry” – Please send your article to info@hennekamwines.com to be part of this project. Let’s keep this vibrant community growing.
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The (Needed) Rise of Digital Collaborative Buying Solutions
The global wine industry has undergone several changes in recent years, particularly during the COVID-19 pandemic, which disrupted supply chains and consumer behaviors. Although sales temporarily increased in the DtC (Direct to Consumer) sector, once we moved beyond COVID, inefficiencies in traditional wine sales models were highlighted, creating opportunities for more flexible and collaborative approaches to wine selling and buying.
The Impact of the Pandemic on Wine Purchasing
As the pandemic restricted international — and, to some extent, local — travel, wine consumers were forced to rely on custom e-commerce options, which reinforced an existing challenge: the transactional limitations in individual bulk buying or having special discounted quantity-based offers limited to one buyer. This led to higher commitments and fewer options, underscoring the limitations of traditional bulk-buying models. The challenge exposed a crucial gap: most consumers aren’t bulk buyers, meaning that case / quantity offers were simply irrelevant for over 80% of buyers. This highlighted the need for solutions that could offer more flexibility and variety while allowing merchants to sell bulk or limited-edition wine efficiently.
The Potential of Collaborative Buying in Wine: Turnover, Shortcut to Digitalisation, and the Younger Generation Angles
Collaborative buying is a concept that has been explored in various industries to pool consumer purchasing power and access bulk discounts. However, in the wine industry, the traditional collaborative buying model has typically emerged from the end consumer, or B2C, side. Consequently, we have seen — and continue to see — concepts similar to the “Groupon of wine”, with marketplaces gathering large numbers of end users and approaching merchants (wineries, retailers, importers, etc.) for the highest discount possible.
Maintaining and growing end-user numbers is a challenging, often glass-ceilinged approach that requires never-ending promotion, customer acquisition, and data — all equaling time, resources, and budgets — yet it does not fully address consumers’ nor merchants’ needs. These approaches are precisely the marketplaces that Paul Mabray referred to in his comprehensive “Marketplaces Eat Markets article”.
The path NOT taken so far is the B2B, or rather, B2B2C approach, which goes 180 degrees in the opposite direction. This approach enables merchants with a minimum form of digital assets (a threshold number of social media followers, newsletter registrants, a relatively busy tasting room, etc.) to apply collaborative buying functionality in specific circumstances they have already secured but lack the means to convert:
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Gathering of an audience (either physically or digitally)
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An audience with a high intent to buy
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The compelling deals offered to them
Think of winery visitor center visits, festivals, post-workshop sales, pre-import sales, futures, digital sales to club members, etc.
The B2B2C path, when enabled digitally for merchants, could — in real time and on an ad hoc basis — allow them to physically (i.e. at the winery) or digitally (i.e. social media, newsletters, SMS promotions) gather groups of buyers and let them join in on deals for limited editions or case / multiple case deals in a seamless and engaging way. In other words, it allows merchants to take the lead in organizing collaborative purchases, turning existing consumer traffic into higher conversions. This could precisely eliminate the individual and transactional limitations consumers currently face and create, in real time, a communal buy in circumstances, quantities, prices, and offers that the merchants control.
While the above can dramatically influence turnover, it can do even more.
Digital collaborative buying solutions could play a key role in merchants’ digital transformation. Automated, standalone functionalities can reduce merchants’ administrative workload and alleviate the stress of setting up, and maintaining, an e-commerce operation, managing orders, payments, etc. Such solutions should become the e-commerce webshops of the wine industry, replacing standard webshops and the considerable financial commitments of clubs. People love drinking wine together. Why can’t they be led by merchants to buy it together too, even with people they don’t actually know, here and now?
Digital collaborative buying solutions can also gradually offer merchants valuable insights into consumer preferences and buying behaviors, helping them optimize inventory and improve overall business performance. By analyzing which wines and deals are most popular, where, and when, merchants can better tailor their offerings to the market’s needs.
Lastly, as we all know, one of the industry’s pressing challenges is engaging younger consumers, whose preferences differ significantly from those of previous generations. Millennials and Generation Z are looking for engaging, interactive, and community-oriented purchasing experiences. They are also more inclined toward digital and gamified experiences that could help demystify wine, as they might feel intimidated by traditional methods of purchase.
Digital collaborative buying solutions could incorporate gamification elements that would appeal to this younger demographic, featuring a sense of urgency and competition that turns the wine-buying process into a more engaging experience. This approach is crucial for capturing the attention of younger consumers and introducing them to the wine industry in a way that feels accessible and fun.
Expanding Collaborative Buying Across the Supply Chain
While most digital tools focus on direct-to-consumer sales, there is significant potential for the application of digital collaborative buying solutions across the wine supply chain. In the B2B2B model, importers, distributors, and retailers could use collaborative buying tools to facilitate larger transactions and improve the efficiency of the wine distribution process.
For example, importers could pre-sell stock through collaborative buying solutions, reducing the risk of holding unsold inventory. Distributors could also use them to offer bulk deals to retailers, increasing the volume of wine sold at discounted prices. This would help streamline supply chains, reduce costs, and provide value to both sellers and buyers. Think of a retailer or a restaurant not needing to buy a case of Château Pétrus but splitting one with another restaurant across town. Good deal, and the case is still gone for the distributor.
The Future of Collaborative Buying
As the wine industry continues to adapt to a changing consumer landscape, collaborative buying solutions will play an increasingly important role.
The impact of these tools extends beyond immediate benefits like increased turnover and higher conversion rates. They can help create a more resilient and dynamic industry, enabling merchants to adapt to changing consumer behaviors, reduce operational inefficiencies, and create opportunities for sustained growth, whether in B2B or B2C scenarios.
Author Bio…
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Moshe describes himself as a father, husband, only child, wine lover (Certified Sommelier from the Court of Master Sommerliers), licensed mediator, colorblind, allergic to cats, die hard ice hockey fan and long distance runner. A passionate sales and business development person who enjoys venturing into uncharted territory and making the unlikely happen (like revolutionizing the wine industry…).
Moshe leverages 20 years of international sales experience in the different facets of enabling companies with start up activities / launching new products in new regions, or re-establishing activities in regions that have faced difficulties.
The writer is the Co-Founder & CEO of WINEing, Wine & Spirit Education Trust (WSET) L2 and 3 graduate, and Certified Sommelier from the Court of Master Sommeliers.