COMMENTARY

The Lowest Hanging Fruit

May 2009

By Karl Klooster

In case you’re not fully tuned into the times, a new phenomenon that’s clearly here to stay is social networking on the Internet, or “InterNetworking,” if you will.

Facebook, MySpace, Twitter and LinkedIn appear to be the most popular of these online communities currently, but they represent only the tip of an exponentially expanding cyberspace iceberg that runs the gamut in shared interests.

These social media websites epitomize the free form, open forum coveted by users of the Internet, where every person’s opinion has the opportunity to carry equal weight, as long as they’re willing to devote enough blogging and/or programming time to establish a strong presence.

Not surprisingly, wine rapidly emerged as one of the very actively and avidly engaged, special-interest areas. So much so that within a matter of just a half-dozen years, wine blogging has grown from a mere handful of hardcore contributors to a full-blown online communications category, complete with annual conventions and national website awards.

For the wine industry in general and Oregon wineries, in particular, this heralds a ground-floor opportunity that could significantly enhance the bottom line. Of course, as with anything worth doing, it works best when done well.

That means a small company must make an investment in the process and regularly add to that investment. Fortunately, it’s an investment that isn’t prohibitively expensive and one that will likely repay itself many times over.

If nothing else, the Internet is egalitarian. Whether someone links to the site of a winery that produces 1,000 cases a year or 100,000, their eyeballs are focused on that message and only that message for a period of time.

The number of hits the site attracts each day is a function of how effectively the owner gets the word out of its presence. How long viewers stay and surf within the site depends on how compelling they find the content.

None of this is new news, at least in concept, to anyone even casually acquainted with this unique mass communications medium. As a result, almost every winery in the state of Oregon has a website.

However, the ways in which the sites are configured, their programming sophistication, the images they portray and the methods used to create brand awareness vary widely.

Some romanticize the owners’ personal involvement and their love of the lifestyle. Others stress their commitment and dedication to quality above all else. Still others emphasize the physical and geographic attributes of their vineyards.

Almost all incorporate wine ordering and direct shipping into their sites. And for good reason.

Next to sales at the winery tasting room, itself, Internet sales are the most profitable for a smaller winery. No middleman. Full retail mark-up. And, if properly promoted, it may ultimately prove to be the largest avenue of sales generation.

Since the vast majority of Oregon wineries are by definition, “small”—having an annual production of 5,000 cases or less—the manpower required to run a direct-shipping operation can seem daunting.

But, if set up to take advantage of shipping to states of least resistance, so to speak, the task can be simpler, easier, more efficient and more profitable.

All it takes is a little time to list the restrictions and limitations in each state. All have some restrictions, so the idea is to determine which are the least onerous.

Most states impose a limit on the quantity per month that one individual can receive. Only a few—California, Colorado, Florida and Washington—have no limit. Twenty states allow up to two cases per month, and one allows three cases.

That’s 25 states all told. If you’re small, why waste time and effort elsewhere? Then analyze other regulations such as fees charged to wineries by individual states, legal forms and requirements and zip code restrictions

For example, California’s fee is just $10 annually for a winery-shipping permit, whereas Nevada’s is $500.Obviously, in this instance you’d have to weigh the cost against potential sales.

In other words, pick the lowest hanging fruit for your individual situation. Unless, there’s some compelling reason—a distributor in Kentucky who loves your stuff and is willing to jump through all the hoops—forget it.

Even then, consider the substantially lower price per case you’ll get from the three-tier system.

As for getting the word out about your brand, every media write-up, award, advertisement, event sponsorship, promotional dinner and wine tasting adds to the sum total of exposure and awareness.

But, as with so many other discretionary purchases, nothing is more powerful than word-of-mouth. And, for the Internet generation, that means a personal recommendation from someone who has no vested interest whatsoever.

To maximize the potential of the Internet as a selling tool, a winery must make a serious commitment to cultivating that cutting-edge customer. In doing so, the same message that gets out to all interested parties will reap the benefit of the blogger belief system as well.

There’s no disputing the fact that blogging is gaining ground by leaps and bounds among the denizens of our brave new iPod/iPhone/Blackberry wireless world. And there’s every indication that wine is becoming their social beverage of choice.

It’s time to start a dialogue with the inhabitants of this mega-bitten society. For those who feel a little long in the tooth to relate, why not hire a younger family member with some cyberspace savvy?

One thing is for certain: The Internet is the future, and it’s the primary domain of those who are destined to determine that future. Underestimating them would be shortsighted. Ignoring them altogether would be foolhardy. 

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