I think you’re very much correct with the general point you’re trying to make here, but the brevity of your post limits your ability to argue it as fervently as you might.  I think you could easily spend a series of blog posts here, or if you want to go all Seth Godin, I think this would make a great topic for a small book. 

But I’ll take the bait — I *do* have to take issue with your statement “There are no real advantages to consumers buying wine direct from the winery”.  You seem to argue aggressively that it makes sense for wineries to “sell” wine direct to consumers (and their other constituents), so I guess it depends on how you define “buy direct from the winery.”  If you mean that wineries don’t need to own and run their own transaction processing systems or their own pick/pack/ship operations, I can certainly get on board with that.  Is that what you’re trying to say, only much more provocatively? 

Thanks Sid, I think I could write quite a few books about the subject.  Hopefully (fingers crossed) we’ll get to finalizing our annual report even though it is a year late.  It has just been a project that evolves as fast as we finish it.

In regards to buying direct from a winery I maintain my perspective, currently there are no meaningful benefits to a consumer buying direct from a winery.  That being said, I believe wineries should do continue to sell direct and make a core part of their business.  They just have to re-think the strategies and tactics to bring meaningful benefits to the consumer.  Since they often risk channel conflict I contend that service is where they should focus.

The winery benefits most from selling directly to the consumer by keeping the money that the wholesaler would have made…this prevents that slice of profit from benefitting the end-customers local economy. I am in agreement with your article & ideas above…it makes perfect sense to me.

Let me append that statement.  The only real benefit to buying direct from a winery is “access” to wines that are not in distribution.

Jones,
Unfortunately I can’t totally agree that the winery making more money doesn’t benefit the end consumer or local economy.  Most wineries reinvest this modicum of additional profit in making better wine, more visits to the local area, better marketing (which results in better sell through for local retailers and restaurants, marketing investments in local wholesalers or retailers, market support dollars, more staff for better customer support and more.  Both of these benefit the local economy and the end consumer.  My point is there is no direct tangible benefit for a consumer buying direct from a winery except acquiring wines they can’t find in market and that wineries need to understand the barriers for consumers to buy direct and create better benefits.

Well stated!

Beyond defining the customer, social media illuminates the
onus of listening, reaching out, and connecting to the social customer
regardless of the channel through which they might purchase.  Your business must acquire its’ footprint in
the social mindshare of the potential consumer.  When someone actively voices, in their social community, their
desire for a product that you provide, you need to be on top of the situation
very quickly and respond appropriately.

Once you are aware of the potential customer’s social
community, you need to maintain your footprint in the discussions in that
community, and contribute value when your knowledge either answers their
questions, satisfies their needs or solve their problems.  The big win lies in the amplification and
depth that you earn as the customer who has never had eye contact with you
becomes your evangelist.

To do less is to accomplish much less, which is no
longer acceptable as a reputation standard.  

Amen. I will be directing people to this article. Does that mean I’m your customer? My answer is yes. I’m an influencer and a writer who uses your data as 3rd party validation for my work in the industry.  True you don’t get any direct monetary benefit from me but if you count the value of the advertising I am doing for Vintank, you could “passively” get new customers. 
I’d like to see DTC wine marketers reflect on their message and how to best get it out there. At present, a winery sent me a couple bottles to review and all I can think about is a different wine they only have at the winery. I plan on mentioning that wine in the article but I have to call them to get the info. I would love it if DTC marketers at least followed up with me via email so I can easily say, yes, I received the wine AND  provide me with this additional info. It feels like some of them just send the wine out and never work the relationship. 

Someday maybe I’ll write a list of specific steps every DTC marketer should consider when cultivating online writers to see a measurable increase in name recognition and sales across all channels. 

A bunch of “virtual” customers to be sure………..

Paul,

I have to disagree about the advantage of the direct sale at the winery but only in my region, New England, where I have experience. I have no idea how this might work elsewhere, but based on experience I can see where you are going. 

I have talked with quite a few winery owners in my region and they absolutely need to the direct sales to be able to grow their business. Many of them don’t have any distribution, and only some are in the state system which puts them in state stores, grocery stores and a few other retail locations. Few restaurants and bars carry their products. That is both because of they effort they may or may not put in, but also that local wine is just not known. The return from direct sales is poured back into operations. Those that do say they can’t grow their business nearly as well selling through wholesale. 

We are dealing with lots of hyper-small wineries that also capture the customer this way. They don’t yet have the budget for technology solutions that would allow them to have a relationship with the customer when the sale isn’t doesn’t through an event, farm market or in the tasting room at the winery. This may change over time, but it isn’t a myth around here. Many of these business intend to be small so direct sales is their primary and potentially only way consumers will try their wine. I visited one operation in Maine this past fall that is family run and they sell 100% of their wine from the tasting room and usually sell out of most varieties before they close up for winter.

Jason

Alana,

Thanks for being a great VinTank customer.

Jason,

I agree with you that those are key advantages for a winery selling direct.  However, those are not advantages for consumers trying to buy wine direct with the exception of better health for the winery that I mentioned below.  Aside from access to wines not in distribution, provenance, and a direct relationship with the winery, there are very few current advantages for consumers to buy direct from a winery.  That being said, there are so many things we as wineries can do to fix that.

While I didn’t clearly state this in my comment I do believe the advantage to the consumer in buying direct is the relationship and experience with the winery and its people. Many consumers are used to buying most consumable products anonymously, (both ways, producer and consumer have no link) but I think more an more people want to know more. This is what I perceive to be one of the core ideas in the local movement with food and by extension beverages as well. 

My proxy here is something like selling wine in unlabeled bottles or bottles with just grape and vintage on the label, and in high volume settings. Will people buy it or do they want to “know” more about the origin of the wine? If they want to know more wouldn’t they see a benefit from the direct sale since that means they are nearest to the source?

This is 100% a discussion and I am exploring the ideas because I can’t really say that I know enough in the broader wine world to draw a clear line.

Thoughts?

Jason

I agree that the relationship is one of the current three advantages but you can also get a relationship advantage from buying from your local retailer if they are a fine wine shop or from a trusted etailer.  I don’t think the concept of “relationship” trumps price, shipping, selection and immediacy advantages that you have buying wine from other retail sources.

[...] Direct Through Trade – Social Media Redefining The “Customer” [...]

There is a long-long journey for some producers to deeply understand and define who their clients are and what they need.

I am an influencer, writter, twittereR and a national sales manager for a boutique winery in South America. For years i have been opening spots in wine lists and shelves in the US among the 150K other products, and yes it is a challenge. We put big efforts in supporting the markets by visiting them because we understand how important it is to have sales through wholesalers, shops and restaurants because you see your words multiplied by their sales people and their communications. 

You are right, wine is consumable and experiential. When you are home you have both channels available, but when you export … oh how challenging can it be. Wine depends on relationships and it is clear we can not do it all. Direct sales are benefitial to build the experiential aspect but not the ultimate achievement of a winery. It is a plus just like organic products when purchased at location, but not everybody has access to it, and we shall aim to the other 99% of the world population.

Social Media and trends of consumers are vital to understand either if you are looking for volume or for image. It is a challenge for a few managers, but again since our trade is based on relationships you might want to include a young person in your team. 

I will be happy to translate this article and pass it along wine people in south america.It is great to have this reminders same as it is to wake up before sunrise to contemplate how it all begins. The wine trade is seing today one of its biggest challenges and it is only starting.

Cheers and thanks for sharing your article.
Sun shine from Chile

Thanks for the kind words and we’d love to have you translate this and republish the article.  You are right, the wine industry is transforming more today than it has over the previous seventy years.

Of course we all feel the pain of the very small wineries not being able to afford traditional distributors and wholesalers.  It’s time for artisan winemakers and marketers to get creative by hiring their distributed evangelists, aficionados, and advocates on a part-time commission-only employment basis in their home towns to represent the winery in the Direct-to-Trade sample
presentation and order formation in the smaller restaurants, wine bars, hotels, and wine shops, and grocery stores. 

Direct-to-Trade (and thus, Direct-through-Trade) hasn’t done well with the small winemakers because they can’t afford to send sales staff far from the winery in but a small number of key markets.  This is exactly where extending relationships with your best and most expert customers comes to the rescue. This is one of the key lifesavers in becoming a social business.

While it’s true that many of these “retail” establishments will balk at the idea of buying direct from
the winery (rather than the traditional supplier who might be overlooking the interests of the stores in their choice of inventory to offer), and that some states, counties, and municipalities might not permit doing so, it will help those who can where they can accomplish a level of sales in a brand spanking new channel that no one is talking about yet.  That’s about to change.

I think that’s exactly right, Paul. Although I’d personally back off the “only” part of your statement, as I believe your first commenter has something when he argues for the “relationship” that can develop between a winery and a consumer who buys directly.

I do believe “relationship” can *sometimes* trump price, etc. The
artisan and buy local “movements” support that notion. There are loads
of philanthropically minded people who want to support the artist
directly because they know that a greater percentage of their money is
going to person who actually created the art. I think that’s what
Jason’s getting at.

At the same time, Paul, I wholeheartedly agree that the hurdles you’ve
listed conspire against such a relationship. And I certainly agree that
“downstream customers” are every bit as important for the very reasons
you mention.

Well said although not really a new ‘social’ concept. Really a basic truth that has always applied to selling products through the channel.

Whether you sell direct or through distribution, the relationship of value is always that of producer to consumer. Giving that responsibility to the channel is ill advised, wine biz or not, now or pre-social web.

[...] Paul Mabray looks at wineries’ relationships with their customers (and exactly who are they?) in Direct Through Trade – Social Media Redefining The “Customer”. [...]