In the intensely competitive world of wine sales, wholesale and retail sectors are consolidating. Amazon, WineDirect and other online outlets are expanding direct-to-consumer sales, making wine-buying as easy as clicking a button. Local governments are tightening visitor restrictions on tasting rooms, narrowing a crucial road wineries use to drive sales to consumers. There are more labels today than ever, making it difficult for a wine to stand out from the crowd.
What’s a winery to do? Go old school.
Landing on the wine lists of the top restaurants in the country is still an effective way to distinguish a wine. In an effort to do that, more and more wineries and wine companies are increasing their outreach to sommeliers, or wine stewards, and wine directors to personalize and distinguish their brands.
On-premises sales at restaurants and bars still represent about 16 percent of the average winery’s business, according to one survey, and these tastemakers can help build a buzz for a label or a region that can translate into consumer loyalty down the road. In some cases, such as Meiomi Wines, it can help launch a brand into massive sales.
“You can create the super ambassador for the brand. You can find people who maybe appreciate Sonoma County more,” said Karissa Kruse, president of the Sonoma County Winegrowers trade group. The winegrowers believe so strongly in such outreach that it is hosting a group of 10 sommeliers Oct. 8-10 during the peak of harvest for many grape growers. “It’s really more about giving them a hands-on experience,” she said.
There’s a long tradition of that outreach within the industry. The most notable example is the late Jess Jackson, who personally buttonholed Manhattan restaurateurs in 1982 and convinced them to take the first cases of his Kendall-Jackson chardonnay. He offered steep discounts to skeptical managers to get his bottles placed on their wine lists, and the perseverance eventually paid off, including acceptance at the famed Tavern on the Green. His Vintner’s Reserve label went on to become one of the most popular chardonnays in the country.
Napa vintner Joe Wagner founded his Meiomi brand in 2006. Wagner, in an interview earlier this year, talked about consciously making an effort to get his jammy pinot noir label into restaurants, despite the difficulty of breaking through. “Getting sommeliers to buy into wine can often be almost impossible. You are dealing with such an array of different palate preferences,” he said.
Wagner’s goal was to get placed on wine-by-the-glass programs, especially because they are a less-costly purchase than buying the whole bottle.
“I feel that is a good place for exposure,” he said. “If people like the wines, they will continue to buy them.”
The outreach allowed Meiomi to grow at a more measured pace, he said, before it really took off in the retail marketplace. It sold more than 800,000 cases before it was purchased in 2015 to Constellation Brands Inc. for a whopping $315 million.
“It doesn’t grow at a level that is crazy — like when you get into retail. It grows at an organic level,” Wagner said of restaurant sales.
Still, the market is increasingly harder to crack because of consolidation in wine distribution. In addition, the largest vintners are venturing more and more into the premium market, where their size gives them a big advantage placing their wines on the lists of large chain restaurants and hotels, said Rob McMillan, executive vice president of Silicon Valley Bank’s wine division.
“You will find those lists are dominated by E&J Gallo and Constellation Brands,” he said of chain hotels and restaurants.
In 2014, the bank’s annual survey of more than 500 wineries found on-premises sales represented 31 percent of the average winery’s business — about twice as much as last year. They remain a crucial sales channel for many vintners, especially during years that produce large vintages, such as 2014. Restaurants can play a vital role by taking that extra volume. The average winery now generates slightly less than 60 percent of its overall sales from its direct-to- consumer business, such as online sales and wine club purchases.
But McMillan said there is still opportunity for smaller brands to get placed on wine lists, especially at nonchain restaurants. “If you are one of those foodies, you are probably turned off by the corporate list,” he said. “You are looking for something more authentic.”
The competition can be fierce, as North Coast premium wineries are not only up against upstart regions such as Oregon and Washington, but also foreign brands from Europe, South America, Australia and New Zealand.
Rodney Strong Estates in Healdsburg participates in at least seven sommelier education programs throughout the year and hosts wine directors at their estate. The programs include the Alexander Valley Cabernet Academy and the Sonoma Sommelier Star program, sponsored by the Sonoma County Vintners trade group.
“There so many brands now …. There are so many options,” said Rachel Thralls, director of wine education for Rodney Strong. “That’s the main reason we invest in these sponsorships.”
About 60 percent of Rodney Strong’s luxury wines are sold on-premises (in restaurants and bars), she said, with Texas, Florida and Chicago representing the top markets.
Her pitch to sommeliers is that she can deliver high-quality wine at a better cost than some of her competitors in the premium market, which is important, as wine directors have to work within a budget. “We have single vineyard cab for half the price as Napa,” Thralls said.
At Jordan Vineyard and Winery in Healdsburg, on-premises sales represent more than 70 percent of its overall business. Over the past 20 years, the landscape has gotten more difficult, said John Jordan, chief executive officer of the winery.
“There’s a lot more competition for the limited spots on wine lists,” Jordan said. “You have huge companies with enormous resources, so you have a lot of discounting.”
Jordan noted a younger generation of sommeliers and wine directors — Generation X and millennials — are now working the restaurant floors, so the outreach is vastly different from his parents’ generation. For example, the winery’s foray into whimsical videos and its annual Halloween bash aid in maintaining such crucial relationships. “It helps us distinguish ourselves from the larger corporations,” he said.
Wineries also continually need to be on the outlook for new markets, Jordan said. “Twenty-five years ago, Las Vegas was not what it is in terms of fine dining,” Jordan said. “Now, Vegas is one of the biggest markets in the country.”
The relationship also is beneficial for fine-dining restaurants because they derive about one-third of their revenue from wine sales, said Geoff Kruth, president of the Guild of Sommeliers and former wine director at the Farmhouse Inn and Restaurant in Forestville. Some generate as much as 50 percent of their revenue from wine.
“It’s an important profit center for the restaurant,” Kruth said. “It makes sense to have a person there, even if they are not dedicated full time to selling wine.”
Reflecting the importance of wine to the dining experience, the guild has seen a 20 percent annual increase in its membership in recent years to an overall total of 12,000, Kruth said. Sommeliers not only work for restaurants, but also are increasingly employed by wineries, wholesalers and retail locations. The median income last year for sommeliers was $60,000, though some top ones who have advanced certification can average around $155,000 annually, according to the guild.
At the Dry Creek Kitchen in Healdsburg, the Charlie Palmer-owned restaurant features a wine list that exclusively features Sonoma County wines, totaling about 500 labels.
“We see people visiting from all parts of the country and from all over the world,” said Jeff Creamer, sommelier at Dry Creek Kitchen.
“Specifically, they are looking to discover new wines. That’s why they’re here. We are helping them identify new wines.”
Many of the restaurant’s customers are vinophiles, so Creamer said he looks for a diversity in his wine list that includes such lesser known varietals as vermentino and trousseau gris.
“The customer really keeps you on your toes. There is a level of sophistication, and it’s growing all the time,” he said.
Creamer hears from many customers: “Show me something we haven’t seen before.”
If a customer enjoys the wine, they are much more likely to visit the winery before they leave town to purchase more bottles or join its wine club, Creamer said.
“We are a good conduit for sales,” he said.
In the end, wine directors and sommeliers are invaluable because winery staff cannot be everywhere, said Jean Arnold Sessions, executive director of the Sonoma County Vintners association.
“I always think of them as image builders and storytellers. They are the ones out on the floor telling your story,” she said.
Sessions previously served as president of Hanzell Vineyards in Sonoma, where she worked to court famed wine critic Robert Parker Jr. to no avail. But Parker later dined at restaurant Daniel in New York, where Hanzell wines were on the wine list.
The result was a wonderful review of the wine brand by Parker, Sessions said.
“It was an invaluable relationship that paid off,” she said.