Sonoma County Winegrowers takes lead in using app to draw customers to their wines
Despite the disruption taking place within the U.S. wine marketplace, traditional wine stores should be able to survive by providing a service shoppers can’t get elsewhere, a top wholesale executive said Thursday.
“They (consumers) want human interaction,” said Eric Hemer, senior vice president and corporate director of wine for Southern Glazer’s Wine & Spirits of America. The Miami-based company is the largest wine wholesaler in the nation, serving 44 states and the District of Columbia, and can help make or break labels.
Hemer was a featured speaker at the Sonoma County Winegrowers’ Dollars & Sense conference that was held at Luther Burbank Center for the Arts. The annual summit signals the kickoff of the growing season for the 2019 vintage for the trade group, which represents more than 1,800 grape growers in the county.
During the event, growers heard about a slowing sales market in which wineries now are reluctant to raise bottle prices. That will affect local growers because they will be unlikely to charge more for the premium grapes they grow in Sonoma County in the aftermath of a 25-percent increase in grape prices over the past five years.
“Sales are sluggish. Buyers are cautious. Supply is more of a bad word today,” said Glenn Proctor, a partner at Ciatti Co., a Novato-based grape brokerage.
The wine sales slowdown also is occurring at the same time there is more competition and consolidation within the wine retail sector. In 1995, there were only 1,800 wineries nationwide with 3,000 distributors. Last year, there were 10,016 wineries with only 1,213 distributors, with retail shelf space now at a premium, Hemer said.
That has led more wineries to sell their product directly to consumers through digital channels. In 2017, there were?$2.7 billion of such direct sales. Many analysts also are keeping their eyes on when e-commerce juggernaut Amazon will take another crack at the wine market - which has so far eluded the Seattle company - since it finalized its acquisition of Whole Foods Market.
“Beverage alcohol is ripe for a disruptive competitor,” Hemer said.
Wine, however, remains a product that most consumers need some guidance regarding decisions over price, taste, suitable food pairings and even how the grapes are grown, he said.
“Wine can be so confusing and overwhelming for many consumers. To have somebody that they have developed a level of trust with is something they will never be able to replace,” Hemer said.
Wine retailers also are embracing the digital realm by selling their products online to states that allow such interstate shipping, which now includes 13 states and the District of Columbia. The U.S. Supreme Court heard a case on Wednesday that may open up their ability to better compete with wineries in that marketplace and expand online wine sales.
“I always recommend a retailer that I know personally that has a high level of knowledge - that is also not going to rip you off and they will steer you to what you want in your price range,” he said.
To help better compete in the marketplace, the county winegrowers’ trade group on Thursday unveiled a new app that will allow users to scan the label of certain locally produced wines to learn more about the product. The app will open a video and additional text explaining how the grapes were grown and more information about the winery that produced the wine.
“Have you ever had a wine bottle come to life?” said Karrissa Kruse, president of the trade group, in unveiling the app.
Ferrari-Carano Vineyards and Winery of Healdsburg and Dutton-Goldfield Winery of Sebastopol will be some of the first local wineries to have such “augmented reality” placed on their wine labels.
You can reach Staff Writer Bill Swindell at 707-521-5223 or firstname.lastname@example.org. On Twitter @billswindell.