wrs part 1 crossroads july 2013
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Not for Public Distribution. ©2013 Wine RockStars, LLC All Rights
Reserved1
Introduction to
Wine RockStars, LLC™
PART I: THE CROSSROADS
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WELCOME!
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Our purpose today is to invest the next 20 minutes
or so to introduce you to the marketing concept that
we call Wine RockStars™.
Not for Public Distribution. ©2013 Wine RockStars, LLC All Rights
Reserved3
In this Part I of our presentation, titled “The
Crossroads”, we are asking you to invest the next 30
minutes or so to consider how the forces of change are reshaping our industry.
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The Great Alan FreedTHE DISC JOCKEY WHO
COINED THE PHRASE “ROCK ’N’ ROLL”
discussion / contents pageWelcome 2
Every Picture Tells a Story 7
Crossroads 33
PART I: CROSSROADS
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WINE ROCKSTARS, LLC™
Not for Public Distribution. ©2013 Wine RockStars, LLC All Rights Reserved
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“Some people have a hard time explaining rock 'n' roll. I don't think anyone can really explain rock 'n' roll. Like wine, rock 'n' roll is a lifestyle and a way of thinking... and it's not about money and popularity. Although, some money would be nice. So would some popularity. But rock 'n' roll is a voice that says, Here I am! But what it all comes down to is that thing. That indefinable thing when people catch on to something.”
Russell Hammond,Stillwater
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EVERY PICTURE TELLS A STORY DON’T IT
Begin the Beguine
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Rod Stewart
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We need to go “wayback”
in time to catch the
beginning of our story Michael J. Fox in
the movie Back to the Future
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"Sorrow can be alleviated by good sleep, a bath and a glass of good wine."
St. Thomas AquinasNoted Theologian, Raconteur of
White Wine, Mead, and a bunch of other stuff
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OOPS!We don’t need to go that far back in time, Marty. Let’s try
again to get it right this time.
ShermanChristopher Lloyd
Michael J. Fox
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Not for Public Distribution. ©2013 Wine RockStars, LLC All Rights
Reserved
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“Let’s start at the very beginning, a very good place to start…
Julie AndrewsSound of Music, 1965
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“Can you tell I’m about to retch right in my glass?
RockDoggie
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“Where are the Back Street Boys when you really need
them?” RockDoggie
BackStreet
Boys All Right!
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“Once more into the breach my friends.”
RockDoggie
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The Wine RockStars™
story actually begins the
pivotal year of
1 9 3 3
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Not for Public Distribution. ©2013 Wine RockStars, LLC All Rights
Reserved
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For the past 12 years the sale, manufacture, and transportation of beverage alcohol is considered to be a criminal offense.
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FDR, a noted lover of a nice Madeira, is sworn in as the 32nd President of the United States
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The GREAT Robert
Johnson is at the PEAK of
his career and is almost finished
“inventing” the modern
musical genre to become
known as the Blues.
No one really knows, but we suspect Mr. Johnson’s favorite wine was the highly rated Chateau Coutet, Barsac, 1934 which, unfortunately, was not always easy to find on
the dusty roads of rural Mississippi and Texas
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The movie “King Kong” opens to rave reviews in New York City on March 2, 1933
Ms. Wray was known to like French wine. Might we suggest a vintage 2004 California Cabernet instead?
Mr. Kong, however, was known to drink anything he could find that wasn’t nailed down! Such a pity.
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Influenced by Robert
Johnson, Muddy
Waters first picks up the guitar at the
age of 19 Our guess is that Mr. Waters would like a nice
Pinot Noir, perhaps the Domaine de la Romanee Conti (DRC), Romanee Conti GC, 1937
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Mr. president, might we recommend a luscious Sonoma County Chardonnay to go with that book on a sun filled Sunday afternoon. Your dog can drink, well…whatever
“Outside of a dog, a book is a man's best friend. Inside
of a dog it's too dark to read.”
The movie Duck Soup is released and Rufus T. Firefly is named fictional
president of bankrupt “Freedonia”
Groucho Marx
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Most important to our story, Great-Grandpa really wants a
drink!
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Long before Hannibal Lechter uttered his endorsement of the pairing of liver and fava beans, Great-Grandma was known to favor a nice Chianti”
“Look at Granny’s picture and tell me it doesn’t makes you think of flying monkeys.”
RockDoggie
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Few realize that
a NEW age is
DAWNINGHow about a “refreshingly
sweet” yellow tail pink moscato or a “light and lively” sweet white roo
and leave the Chianti to me?
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AND THEN ALMOST SUDDENLY IT HAPPENS
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Everyone Makes Money Again
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Ernest and Julio open their 1st
winery in Napa
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The 3-tier System regulating the manufacture, distribution and sale of
wine, spirits and beer in the US is introduced
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“Once, during Prohibition, I was forced to live for days on nothing but food and water.”
RockDoggie doing his best imitation of WC Fields
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GREAT-GRANDPA OPENS THE FIRSTRETAIL PACKAGE STORE
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And a Rockin good time was
had by all!
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AND THEN IN A TIME OF GREAT ANTICIPATION…
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“Wait for it…” RockDoggie
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…NOTHING CHANGES
for the next 80 YEARS
“I’m not surprised. Are You?” RockDoggie
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“That is until NOW!” Guess Who?
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Guess Who? Is it any wonder that I’m not taken seriously? I do have a job to do you know!
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THE CROSSROADS
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Eric ClaptonCrossroads Guitar Festival 2013
“Time for a little of the old slow hand.”
RockDoggie
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More popular than ever, with more choices being offered to the consumer, wine has increasingly become an important part of the national lifestyle
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In many respects the wine industry has reached a crossroads
“Crossroads” Catch the reference? Ha!RockDoggie
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• The fundamental consumer base has and will continue to change.
• There has been a sustained shift in consumption patterns away from bars and restaurants and more towards at-home consumption.
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The Crossroads
Source: Beverage Information Group
Trends Driving Change
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• Core wine drinkers are those who drink wine daily, several times a week or about once a week
• While marginal drinkers are those who drink wine less often than weekly—the greatest number of whom drink wine two to three times a month.
• In 2010, marginal wine drinkers represent 31 million U.S. adults, making the total number of U.S. wine consumers 77 million.
35Source: Wine Market Council Estimate
The CrossroadsTrends Driving Change
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• According to the Wine Market Council, the U.S. market gained 71 million cases in total table wine sales during the first full decade of the 21st century; creating the most transformative 10 years of positive change since the 1970s.
• In 2000, 57 percent of all U.S. wine drinkers were marginal wine consumers, but today the core and marginal proportions have reversed.
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“In my humble opinion, this one of the most positive signs of acculturation if there ever was one!”
RockDoggie
Trends Driving ChangeThe Crossroads
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US Wine Consumption
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This equates to 9.9 liters or 2.6 gallons for every man,
women and child in the US. The burgeoning power of
the US market is undeniable.
Wine sales in the U.S. from all production sources—California, other U.S. states and foreign countries—increased 2% from the previous year to a new record of 360.1 million
9-liter cases with an estimated retail value of $34.6 billion, according to wine industry consultant Jon Fredrikson of Gomberg, Fredrikson & Associates. Wine’s share of total
adult beverage volume increased slightly to 10.7 percent.
The Crossroads
Trends Driving Change
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• Part of that growth in off premise consumption is due to the fact that “occasions”—events worth purchasing or opening a bottle of wine for—are increasing in popularity.
Source: Wine Market Council Estimate
The CrossroadsTrends Driving Change
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• Consumers are finding more reasons to “celebrate” with a bottle of wine or drinking more wine when a bottle is opened.
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Wine Market Council Update on Jan. 18, 2013
The CrossroadsTrends Driving Change
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Domestic table wines
in 2012 were a
major driver of the wine
market, accounting
for 67.9 percent of total wine volume. “A little class would be good for my image.
Don’t you think?”RockDoggie
The Crossroads
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• Of all wine drinkers, 57 percent are now considered “core” wine drinkers, and they account for 25 percent of the United States’ adult population.
• This represents a major shift in repeat purchasers and adds to the promise of a brighter future.
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Demos
CoreNON-CORE
Wine Market Council Update on Jan. 18, 2013
The CrossroadsTrends Driving Change
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• This group consumes an astounding 93 percent of the 175 million cases of wine sold off-premise last year.
• Most importantly, data shows price points increase dramatically when wine is enjoyed with friends
42Wine Market Council Update on Jan. 18, 2013
The CrossroadsTrends Driving Change
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• The point is that our base of regular wine consumers is not the same as it was even 10 years ago.
• And there is nothing on the horizon that suggests this expansion will not continue for the foreseeable future.
• In our view, the marketplace has never been filled with more opportunity.
• It is also evident that powerful market forces are at work that are changing virtually every aspect of our business.
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The CrossroadsTrends Driving Change
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Market forces such as the economic drivers of production; the distribution system is under
pressure to adapt to new methods of reaching customers; the pace of retail technological
and innovation is accelerating at an astounding rate; as people
view wine differently, new legal, political, cultural norms and the
forces of globalization are unleashing pressures to embrace
change.
Insert your own snide comment here
RockDoggie
The CrossroadsTrends Driving Change
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Crossroads – Part II
Le Raison d'être
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"Making wine - that's the easy part.” "It's selling it that's hard."
Dario SattuiSattui Winery
Napa Valley, California
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Crossroads – Part II
Le Raison d'être
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• The wine business today has become a high-stakes, high-risk, high-profile environment that is filled with uncertainty, ambiguity and opportunity.
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Crossroads – Part II
Le Raison d'être
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• The next five or 10 years are going to be even more intensely competitive than the past 10. More than ever success will require every one in business to get the “Rock On.”
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Crossroads – Part IILe Raison d'être
“So do we!”
RockDoggie
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• We have to accept the fact that business is only going to get weirder, tougher, and more turbulent.
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The speed of change in the wine business is being accelerated and many of the traditional economic drivers of our business and being
forever altered.
Crossroads – Part II
Le Raison d'être
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• Many of Napa's winemakers are in the throes of a classic market disruption. They can't go backward, and the way forward is still largely unknown. The only certainty is that they can't stay where they are!
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"Wineries that need to move inventory have gotten desperate.
Direct-to-consumer sales are becoming more critical.”
Peter Mondavi Jr.President
Charles Krug Winery
Crossroads – Part II
Le Raison d'être
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• It turns out that both men and women view wine as a high risk purchase.
• They want to avoid being embarrassed in front of business associates or friends.
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Source: Emerald Group
Crossroads – Part II
Le Raison d'être
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• Both men and women manage the risk by getting information at the point of purchase—which is where 70% of the purchase decisions are made.
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Source: Emerald Group
Crossroads – Part II
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Walk into just about any wine shop or grocery store and just look at the shelves stocked full, and row upon row of open crates; each crate plumped with a dozen bottles of the same wine.
Many of the wines, most even—are unknown to the typical consumer, at least as far as the producer was concerned, and much too often even more than that.
“I cannot take your call right now, but if it’s an emergency, white with fish and red with meat.”
Alexis Bespaloff’s legendary answering-machine message
Crossroads – Part IILe Raison d'être
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• Most of our messaging as an industry is traditionally geared toward men.
• Yet, 80% of wine buyers are women.
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Source: Emerald Group
Crossroads – Part II
Le Raison d'être
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• The sources of information tend to differ, however, for men and women.
• Men have a stronger tendency to read reviews and even books.
• Whereas women will look more closely at the labels and shelf tags.
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Source: Emerald Group
Crossroads – Part II
Le Raison d'être
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When I walk into a store I like all the
pretty labels to pick from. Its how I know they like me! They
really like me!RockDoggie
Crossroads – Part II
Le Raison d'être
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• Its not surprising then that Brands with eye-catching names, and some with themes aimed at women consumers dominated the Top 20 New Brands of 2012 as picked from off-premise sales data.
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Source: Symphony IRI Group
Crossroads – Part II
Le Raison d'être
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1. Skinnygirl,2. Be, 3. Bella Bottle, 4. Acronym5. Macaron6. Fancy Pants7. Thorny Rose8. Wine Sisterhood9. Flirt, and 10. Ooh La La
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“Another sign that the SUBSTANCE of the industry’s messaging is really connecting with consumers. My
personal favorite is Artisan Vintner’s Guild”RockDoggie
TOP TEN NEW BRANDS
Source: Symphony IRI Group
Crossroads – Part II Le Raison d'être
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Is it any wonder, then, that more than a third of all wines sold in America are purchased at grocery stores at a price point typically under $12.00?
Crossroads – Part II
Le Raison d'être
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• It is also a fact that when consumers find a toothpaste or a soda they like, they stick with it. The same is not true for wine.
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“We can learn a lot by studying other
industries and other retailers”
From the Wisdom of RockDoggie
Crossroads – Part II
Le Raison d'être
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• With thousands of wines to choose from and with wine being more of an adventure than other products, consumers are willing to try different brands much more frequently.
Crossroads – Part II
Le Raison d'être
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• In fact, with so many brands, it is often difficult for the consumer to remember the name of the brand they liked.
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Crossroads – Part II
Le Raison d'être
“We can learn a lot by studying other industries and other
retailers” From the Wisdom of RockDoggie
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• Consumers will, however, stick with a retailer that helps them get the right wine for the occasion.
Crossroads – Part II
Le Raison d'être
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• While consumers have lower loyalty to the wines them-selves, they have strong loyalty to their wine retailer.
Crossroads – Part II
Le Raison d'être
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• Simply stated, that’s why we created RockStars™.
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We have created Wine RockStars™ and
www.rockingoodwines.com to broaden our market, to find a way to tell the story behind each label, and to
create new and lasting connections between the
producer and the consumer in a way that is fresh, fun, entertaining and easier to
understand. Why? Because… “Its MORE than
Rock’n’ROLL BABY!”
Gene Faul, Co-founder
Wine RockStars, LLC™
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“Like the railroads at the dawn of the automobile age…”
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We would like to leave you with this
question?
Buster Keaton in “The General?
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“…do you want to be left standing at the side of the road, waiting for something to happen…”
Charlie Chaplin and Edna Purviance in “The Tramp”
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Or do you want to be at the helm, steering your way through the
changes reshaping our industry?
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You have already been very generous with your time. Please take a few additional minutes to review the information being sent to you separately via e-mail.
We hope that you look on our program with favor and are available to answer any questions and to discuss your potential participation with Wine RockStars, LLC™.
Kathleen HomyockDirector of Marketing
Co-founder, RockStars of Wine, [email protected]
(Mobile) 440-263-3124