Saturday, 11 June 2011
The No Thank You Economy
Gary Vaynerchuck's entertaining and thought provoking book entitled the Thank You Economy is certainly of the current zeitgeist. The book is at one end of the social media spectrum - the end that chooses not to question the return on investment of Social Media, taking it for granted in the same way that few would question the return on investment of your mum. More analytical commentators on social media such as Dan Zarella choose to measure the performance of all key indicators in a bid to demonstrate the impact of social media in a way hitherto neglected.
However, reading Vaynerchuck's work, compelling as it is, I wondered whether caring for our clients is really at the heart of some businesses' (or indeed industries')problems.
Alliance Wine is a business that has cared for its clients from day one and whilst the company has grown significantly, this has never changed. Directors still drop the odd case off for a desperate restaurateur on a Friday evening and no customer dissatisfaction goes unanswered or neglected. And we are not alone - whilst the wine industry is not guilty of being overly innovative, it does generally care for the people within it and for its consumers. A lack of caring just isn't the issue...
Indeed, somewhere else in Vaynerchuck's book lies the clue to some of the UK industry's current problems - think about the title. More often than not, when we think about "thank you" we think about the word "yes" and herein lies the rub.
We are an industry that say "yes thank you" far too often and it is to our detriment. Due to a fragmented, highly competitive supply base that sells to a consolidated, all powerful retail culture, the wine industry has become scared of saying no to deals that simply do not stack up.
At London Wine Trade Fair this year, a conversation with a leading Australian winemaker was enlightening. UK buyers have got used to being all powerful on their trips to an oversupplied, ailing Australian wine market and almost without exception, the answer has been yes to any vaguely reasonable offer to buy large quantities of wine at below cost prices. However, this particular winemaker, having been approached by a buyer for one of the big UK retailers had the audacity to not only refuse a visit but to say that they were not interested in supplying. The bemused buyer, when on Australian soil, called again but was told the same thing - not interested, no thank you.
This is a vital step - the producer may well have had some wine to sell but not at any cost and it is only by more people doing this that we will change both the way that the buyers approach the product but also how the consumers are catered for.
The Australian winemaker was not the only one talking about "No Thank You" at the London fair - there was a general feeling that something has to change, we need to be in a strong enough position to turn away business that will ultimately damage the industry.
Elsewhere in the UK trade, the position is similar, though not on quite the same scale. Within the on-trade in the UK, the legal system is regularly abused by unscrupulous operators who open and close limited companies at the drop of a hat - killing off small suppliers indiscriminantly. Numerous are the cases where an operator, already in a voluntary arrangement, will be offered further credit by suppliers desperate to take advantage of the situation. We need to learn to say "No Thank You"
In Paul Henry's recent blog on the New Currency, he talks about how, in the new economy, instinct will be more important than learning but perhaps the truth lies somewhere inbetween. Most of us know when we do a bad deal, one that is for the short term, one that may damage our future. So, we should learn from our mistakes and use that instinct to be more discerning and when faced with the lure of the short term over the long term, politely say "No Thank You"
However, reading Vaynerchuck's work, compelling as it is, I wondered whether caring for our clients is really at the heart of some businesses' (or indeed industries')problems.
Alliance Wine is a business that has cared for its clients from day one and whilst the company has grown significantly, this has never changed. Directors still drop the odd case off for a desperate restaurateur on a Friday evening and no customer dissatisfaction goes unanswered or neglected. And we are not alone - whilst the wine industry is not guilty of being overly innovative, it does generally care for the people within it and for its consumers. A lack of caring just isn't the issue...
Indeed, somewhere else in Vaynerchuck's book lies the clue to some of the UK industry's current problems - think about the title. More often than not, when we think about "thank you" we think about the word "yes" and herein lies the rub.
We are an industry that say "yes thank you" far too often and it is to our detriment. Due to a fragmented, highly competitive supply base that sells to a consolidated, all powerful retail culture, the wine industry has become scared of saying no to deals that simply do not stack up.
At London Wine Trade Fair this year, a conversation with a leading Australian winemaker was enlightening. UK buyers have got used to being all powerful on their trips to an oversupplied, ailing Australian wine market and almost without exception, the answer has been yes to any vaguely reasonable offer to buy large quantities of wine at below cost prices. However, this particular winemaker, having been approached by a buyer for one of the big UK retailers had the audacity to not only refuse a visit but to say that they were not interested in supplying. The bemused buyer, when on Australian soil, called again but was told the same thing - not interested, no thank you.
This is a vital step - the producer may well have had some wine to sell but not at any cost and it is only by more people doing this that we will change both the way that the buyers approach the product but also how the consumers are catered for.
The Australian winemaker was not the only one talking about "No Thank You" at the London fair - there was a general feeling that something has to change, we need to be in a strong enough position to turn away business that will ultimately damage the industry.
Elsewhere in the UK trade, the position is similar, though not on quite the same scale. Within the on-trade in the UK, the legal system is regularly abused by unscrupulous operators who open and close limited companies at the drop of a hat - killing off small suppliers indiscriminantly. Numerous are the cases where an operator, already in a voluntary arrangement, will be offered further credit by suppliers desperate to take advantage of the situation. We need to learn to say "No Thank You"
In Paul Henry's recent blog on the New Currency, he talks about how, in the new economy, instinct will be more important than learning but perhaps the truth lies somewhere inbetween. Most of us know when we do a bad deal, one that is for the short term, one that may damage our future. So, we should learn from our mistakes and use that instinct to be more discerning and when faced with the lure of the short term over the long term, politely say "No Thank You"
Thursday, 2 June 2011
Natural Disruption
This year’s London Wine Trade Fair was intriguing in that the wine trade zeitgeist is currently defined by an event that happened prior to the official fair and by an event occurring at the heart of the fair but with the intention of “disrupting” the traditional model of the wine trade – whatever that may be.
Both events, the Natural Wine Fair and the “Disrupt” pan European wine blended on Thierry’s stand rightly attracted a good deal of attention but what is it that so intrigued commentators and consumers alike?
It is easy to like the ideals behind the Natural wine movement ( yes, I know there is no organised movement!) and the individuals concerned present a highly eclectic, bohemian front but, as it stands, this is not an inclusive development aimed fairly and squarely at the consumer. This is a movement, or collection, of producers whose ideals are to be admired but whose wines are unlikely to be mainstream any time soon. Proponents argue that the mass market wines that the majority of consumers buy are full of chemicals, yeasts and additives that are hidden from the consumer. I think that most of us would argue otherwise but we are wise enough to listen to those calling for lower sulphur levels, more moderate alcohols and less intervention – in this respect the Natural Wine movement could be said to act in a manner similar as Haute Couture does to high street fashion – influencing, improving and leading new styles.
At the fair itself, and arguably more contentious, the Disrupt crowd- sourced and blended pan European wine, reflects not only the current, innovative model adopted by Naked Wines, but also a more disingenuous agenda adopted by the likes of Wine Options.Org. It goes something like “ the wine trade has been ripping the consumer off for years, shrouding wine in mystery in order to maintain control and not giving the consumer what they want”. Is this the wine trade that you recognise?
Now, whilst the wine trade is far from perfect, it is generally run by people with ethics, who value the product that we sell and whilst profit generation has generally come second to product enjoyment this cannot be characterised as a trade hell bent on making money at any cost to the consumer.
The trade has lacked professionalism, especially when it comes to genuine product innovation and marketing expertise. Far from not wanting to hear what the consumer wants, the wine trade has been hampered by a lack of the skills needed to both listen to the consumer effectively and to react to the findings. In light of this, perhaps it is not surprising that certain elements of the trade and of the consuming market have become frustrated.
So how might we improve?
One of the outcomes of the interest in Natural Wine has been to make all of us more aware of how we might influence the production of the products we sell in a positive way. However, calling Natural wine natural suggests that all other wines are not natural and this does us all a great dis-service. If we are going to convince the consumer that the variety and diversity of wine that they face is both enjoyable and worth paying a premium for, we will not do by creating division and chasms.
Wine is essentially a natural product – no one thinks that the freshly prepared fruit salad sold in various supermarkets is unnatural and yet it most likely has very much higher levels of SO2 than any wine would be allowed – and we should strive to convince the customer that individuality and diversity are an integral part of a natural category.
However, few other industries who market natural products do so with one universal packaging option. Take bread for instance – the packaging or lack of it immediately gives the consumer the clues needed to make a decision. If consistency, convenience of use and blandness of flavour are required, the plastic wrapped, pre sliced industrial loaf is ideal. However, the loose, artisan stone baked loaf with its irregular crust and crumb automatically connects with the consumer at a different emotional level. Does wine do that?
By packaging all wine in 75cl glass bottles we level the playing field to such an extent that however creative the label (and however much lipstick we apply to a pig) the consumer struggles to see credible reasons to pay more for their wine or to understand the inconsistencies and diversity of the premium category.
Perhaps we have lessons to learn from other markets. Scandinavia is dominated by bag in box, some markets use tetra-pak or plastic but whatever the package, distinguishing the everyday from the genuinely special in amore tangible form than label or price is a very real way in which the wine trade could innovate and provide an effective ladder of consumer experience that does not exist at present.
Whatever happens, we have to be grateful for those currently challenging the status quo and encouraging us all to think in ways that will ensure that there is a still a wine trade to enjoy in 10 years time.
Both events, the Natural Wine Fair and the “Disrupt” pan European wine blended on Thierry’s stand rightly attracted a good deal of attention but what is it that so intrigued commentators and consumers alike?
It is easy to like the ideals behind the Natural wine movement ( yes, I know there is no organised movement!) and the individuals concerned present a highly eclectic, bohemian front but, as it stands, this is not an inclusive development aimed fairly and squarely at the consumer. This is a movement, or collection, of producers whose ideals are to be admired but whose wines are unlikely to be mainstream any time soon. Proponents argue that the mass market wines that the majority of consumers buy are full of chemicals, yeasts and additives that are hidden from the consumer. I think that most of us would argue otherwise but we are wise enough to listen to those calling for lower sulphur levels, more moderate alcohols and less intervention – in this respect the Natural Wine movement could be said to act in a manner similar as Haute Couture does to high street fashion – influencing, improving and leading new styles.
At the fair itself, and arguably more contentious, the Disrupt crowd- sourced and blended pan European wine, reflects not only the current, innovative model adopted by Naked Wines, but also a more disingenuous agenda adopted by the likes of Wine Options.Org. It goes something like “ the wine trade has been ripping the consumer off for years, shrouding wine in mystery in order to maintain control and not giving the consumer what they want”. Is this the wine trade that you recognise?
Now, whilst the wine trade is far from perfect, it is generally run by people with ethics, who value the product that we sell and whilst profit generation has generally come second to product enjoyment this cannot be characterised as a trade hell bent on making money at any cost to the consumer.
The trade has lacked professionalism, especially when it comes to genuine product innovation and marketing expertise. Far from not wanting to hear what the consumer wants, the wine trade has been hampered by a lack of the skills needed to both listen to the consumer effectively and to react to the findings. In light of this, perhaps it is not surprising that certain elements of the trade and of the consuming market have become frustrated.
So how might we improve?
One of the outcomes of the interest in Natural Wine has been to make all of us more aware of how we might influence the production of the products we sell in a positive way. However, calling Natural wine natural suggests that all other wines are not natural and this does us all a great dis-service. If we are going to convince the consumer that the variety and diversity of wine that they face is both enjoyable and worth paying a premium for, we will not do by creating division and chasms.
Wine is essentially a natural product – no one thinks that the freshly prepared fruit salad sold in various supermarkets is unnatural and yet it most likely has very much higher levels of SO2 than any wine would be allowed – and we should strive to convince the customer that individuality and diversity are an integral part of a natural category.
However, few other industries who market natural products do so with one universal packaging option. Take bread for instance – the packaging or lack of it immediately gives the consumer the clues needed to make a decision. If consistency, convenience of use and blandness of flavour are required, the plastic wrapped, pre sliced industrial loaf is ideal. However, the loose, artisan stone baked loaf with its irregular crust and crumb automatically connects with the consumer at a different emotional level. Does wine do that?
By packaging all wine in 75cl glass bottles we level the playing field to such an extent that however creative the label (and however much lipstick we apply to a pig) the consumer struggles to see credible reasons to pay more for their wine or to understand the inconsistencies and diversity of the premium category.
Perhaps we have lessons to learn from other markets. Scandinavia is dominated by bag in box, some markets use tetra-pak or plastic but whatever the package, distinguishing the everyday from the genuinely special in amore tangible form than label or price is a very real way in which the wine trade could innovate and provide an effective ladder of consumer experience that does not exist at present.
Whatever happens, we have to be grateful for those currently challenging the status quo and encouraging us all to think in ways that will ensure that there is a still a wine trade to enjoy in 10 years time.
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