After my class presentation and follow up blog post about social media and the legal industry, I decided to give my #IS6621 readers a break from the ethical dilemmas and legal issues that fascinate this recent law school graduate (me). While sitting in my apartment trying to think about potential blog topics, I kept pacing to my kitchen, by my wine bar, trying to seek inspiration… And voila – there it was – why not discuss social media and the wine industry?
Let me start off by saying that I am no wine connoisseur, and my knowledge of the wine industry is limited beyond an older case study of Robert Mondavi I had to read for Strategic Management last semester. Although I may not be a connoisseur, I am most definitely a wine lover and have been since studying abroad in Florence, Italy back in the fall semester of 2010. Still sitting in my apartment, I decided to research whether the wine industry is or should be using social media and how a winery can best implement a social media strategy.
1. Are Wineries Using Social Media?
My initial question upon starting my investigation was whether wineries are currently using social media. A 2013 study in Australia, Canada, New Zealand, Spain, Italy, South Africa, and the United States found that only 35% of wineries were using social media. The study also found that the wineries’ number one reason for using social media was to communicate with customers about events, while the second reason was to promote and market wines. While this number may have slightly increased, my guess is that less than half of all wineries worldwide combined use social media. This brings me to my second question…
2. Should Wineries Use Social Media?
According to Wines & Vines columnist, Andrew Adams, “the old- fashioned wine industry needs to wake up to the power and potential of social media.” Why must the industry wake up?
Wine has historically been an international staple for social interactions and gatherings – think all the way back to Shakespeare or even to the Bible.
Today, there has been a rise of the iGeneration, which is a 60-million plus, tech-savvy segment of emerging wine drinkers, born between 1995-2015. At the Wine Market Council’s tenth annual presentation on U.S. consumer wine trends (for 2015), John Gillespie (the Council’s president) called this generation “the most diverse and connected of all generations before it.”
To support Gillespie’s statement, a 2011 study found that social media assists with wine sales because word of mouth is so effective amongst wine consumers, while another study in 2012 found that the socialization aspect of social media was a good fit with wine because consumers could exchange information and encourage others to try different wines. Personal recommendations were identified as one of the three most important influencers in purchasing wine.
Moreover, the Wine Market Council and the Nielson Company reported recent findings that social media is the key to wine conversion. Their research discovered that 62% of millennial consumers and 40% of Gen X wine drinkers are using Facebook to discuss and recommend wine to each other, while 38% of Millennials and 21% of Gen X are using Twitter for the same purpose.
In 2010, Pacific Rim Winery invested $10,000 in a social media campaign focused on educating consumers about the Riesling grape. The winery created an online book that was free if consumers “liked” their Facebook page, and it invited consumers to participate in a contest describing why they loved Riesling. Pacific Rim’s campaign achieved a 15% increase in revenue by driving over 7,000 consumers to the winery’s website.
In 2011, Murphy-Goode Winery managed a 6-month social media strategy to obtain 880 million media displays. The implementation of this social media strategy led to 130% growth in sales revenue and 70% rise in tasting traffic.
Most recently, one of the world’s largest wine companies, Constellation Wine Corporation, established a new digital marketing division as part of their global marketing efforts. Over the past few years, Constellation has strategically placed their wine brands on different social media platforms, including 27 brands on Facebook that have received 1.5M “likes” (which equates to a $17 million increase in incremental retail value). Constellation recently conducted an email promotion for its Woodbridge brand, which grew its retail sales by 127%. The company also placed an ad on the app, “Hello Vino,” that elicited 13,000 consumers to include Constellation brand wines on their shopping list. While the ad may have cost $70,000, Constellation had a positive ROI because it received $876,000 in retail value.
4. How Wineries Can Implement their Own Social Media Strategies
From all of the research I have done on social media and the wine industry, there seems to be a common theme of connection driving returns. Customer relationship appears to be the most valuable part of a winery’s social media presence. Wineries should focus their strategy on connecting the consumer with their brand, and not by merely trying to get customers to buy their products with sale offers and promotional content.
An example of why wineries should focus social media on connection rather than just sales can be seen by the experiment that General Manager of Tablas Creek Vineyard winery, Jason Haas, recently conducted. Haas experimented with his winery’s use of social media by posting the same offer to the broad audience on Facebook and via email to the winery’s club members. He discovered that if he uses Tablas Creek’s Facebook page to promote a tasting room special or shipping deals to the 6,000-7,000 people who “like” Tablas Creek, the post will only generate about 1-2 orders. Conversely, he discovered that the same offer made to the winery’s club members will generate 150+ orders.
Due to the latest research on wine trends I mentioned above and some wineries’ success stories with social media, I would suggest that wineries tailor an integrated social media strategy that can best target their specific consumers. As the iGeneration grows and continues to consume more wine, it could be useful for wineries to begin their social media strategy with Facebook and Twitter. Emails should also never be overlooked, especially if they are tailored to a niche group of consumers (such as the wineries’ club members). Lastly, Instagram, Pinterest and wine apps are also a great tool for wineries. Google Analytics from 2012 showed that wineries were the 3rd most popular subject on Pinterest, and there are over three hundred wine apps available today.
I hope all of you learned a little from reading my research and analysis on social media and the wine industry because I know I sure have. With that, I will leave you with the famous words of Ernest Hemingway:Cheers!