IN #VINO VERITAS

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?

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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?

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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.

3. Success Stories of Wineries Using Social Media

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.

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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:resizeCheers!

9 comments

  1. This was really interesting to read. I think that wineries and should definitely take advantage of social media and brand marketing through media in general. We see beer advertisements from Budweiser, Bud Light, and Corona all the time. Where are the wine ads? Sales could definitely be boosted as you mentioned in your post, so why haven’t wineries done this any sooner? I agree with some of the studies that you have mentioned that state how a lot of wine products are shared by word of mouth. I feel like this is a common trend with any alcohol in general, so at the end of the day, I guess the real question is: how necessary is it for wineries to use social media in the coming years?

  2. Jaime,

    Not only is the topic of this blog post amazing, but you also quoted one of my favorite authors of all time (Ernest Hemmingway, I wish I knew you). Something I found very interesting about social media strategy and the wine industry is how US-centric this concept is. I say this because branded wine is such a huge part of the US market, but is more of a new entrant in, say, Italy. On the restaurant side, brand still carries weight in Italy, but there is still a fairly large dependence on homemade wine within individual family homes. As wine becomes more brand-centric globally, hopefully they’ll be able to look to what US vineyards have done to set themselves apart enabling them to shorten the learning curve. I’m very excited to see how social media adoption happens within the wine industry, and hopefully they take some of your tips!

  3. Hi Jaime,

    Ever since we read the article about the NBA and their presence on Pinterest, I have been keeping my eyes open for social media in unusual places. You did exactly the opposite and I thought this was equally as interesting! It is very surprising that the wine industry does not have more of a presence on social media – a topic I have not given much thought since your blog. @minhytran raises a good point about all the beer marketing stimuli and I imagine that given the fragmented nature of the wine industry its harder to mirror the major label beers. When I think about wine, I think about the experience. I think about wine tastings and vineyards. To your point, about focusing on the brand rather than sales, wine labels must also focus on the specific experience they want to create when launching a social media campaign. The wine industry should perhaps mirror some of the craft beer strategies and build on the overall experience of drinking a unique beer and attending craft breweries. This was a strategy I noticed when in Charlotte this summer. All the local breweries had a strong presence on social media and engaged with their community in unique and artistic ways. I agree all the various wine labels should find ways to be tasteful online to encourage awareness and ultimately avoid customers like myself from grabbing whichever Malbec is on the shelf. great post!

    Laura

  4. You had me at #VINO.

    In all seriousness though, it is very surprising to me that the wine industry isn’t more active on social media. This summer we saw MASSIVE success for two alcoholic beverages: Not Your Father’s Root Beer and Spiked Seltzer. I discovered both brands through social media, and then spent weeks trying to hunt them down in stores. Both products seemed to be flying off the shelves, and every liquor store manager I spoke to was overwhelmed by the demand for the beverages. While most wine varieties are hardly innovative, like alcoholic root beer or seltzer were this summer, these cases prove that there is a huge alcohol-consuming audience on social media, and wine brands should make an effort to reach this audience.

    1. I completely agree! It was crazy how rapid people were talking about Spiked Seltzer and wanting to try it. I know I personally was eager to try this gluten free alternative to beer and was happy that my liquor store in Southie was in “the know” and stocked up on it. I actually spoke to the owner and he said he was overwhelmed with phone calls and requests for Spiked Seltzer – people were coming from all over to little Al’s Liquor because they were the only store at one point that had any in stock. I can only imagine what luck wineries could have by using social media to their advantage!

  5. Being a ‘wino’ myself, I really enjoyed your post. I think there’s a tremendous opportunity for vineyards to utilize social media’s capabilities. I immediately think of Napa valley, and the countless CA locations that people are looking to visit, taste, and experience. With online promotion and collaboration, there’s an endless untapped market for wineries to infiltrate.

  6. As a fellow vino connoisseur (and by that I mean anything Barefoot produces) I found your post really intriguing. I feel if there were more wine apps that not only marketed different brands but educated customers, wineries could definitely expect and increase in their sales. Especially for younger adults who have just jumped on the vino band wagon and are not well acquainted with all the various types of wine, this could be extremely beneficial for both parties. Considering we live in a highly digital and social media savy world, brands would be maximizing their profits if they decided to focus more of their efforts on how to implement social media into their marketing strategy. Great post!

  7. Great post. I think any industry must explore this emerging medium to be successful in the near and distant future. I’ve often viewed wine as something that only the rich or old fashioned are interested in, but seeing quite a few of my friends posting about trips to wineries and food and wine festivals makes me think otherwise. Looks like fun, although I do not drink. Regardless, no better way I can think of than to spread a brand name via social media, especially if you can find that magic topic that can go viral, and do your advertising for you.

  8. I often wonder if the recent shift in the U.S. toward craft beer and wine was inspired, in part, by social media. The culture of sharing drinks and related experiences on platform like Instagram makes social media such a compelling space for wineries (and small breweries) to enter. And on another level, I think binge drinking is losing popularity as more sophisticated drinking habits rise to the mainstream. TL;DR: Social media is good for drinking culture, and is a major strategic asset for wineries and breweries. Great post!

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