Interview with Randall Grahm, California Winemaker #winemktmonday

Bonny Doon Vineyard

Randall Grahm was invited to speak at a one-hour panel discussion on Twitter’s #winemktmonday. In this article, he’s edited his responses together, because twitter has a 140 character length which can appear disjointed.  #winemktmonday is meant to be a brief and candid discussion about a chosen marketing topic and is hosted each week by a wine marketing expert in the field. Contact Randall Grahm for futher questions @RandallGrahm or @BonnyDoonVineyd

Jessyca 1) What major structural changes have you observed in the wine industry in the last 30 years that have an impact on your ability to present your brand?

Randall 1) I’m hardly the first person to have remarked it, but there has been an extraordinary proliferation of new brands and brand extensions entering the market, not just domestically but world-wide. Concomitantly, there has been an enormous consolidation of the distribution network, with the essential disappearance of the “middle-class,” (i.e. mid-sized traditional distributors). So, with but a few exceptions, the scale of distributors has shifted to the very large and the very small.  As a result, this has shifted the viability of the scale of wineries as well to the very large and the very small. A mid-sized distributor – however that is defined- usually between 30K and 70K cs. is too small to be taken seriously, i.e. promoted by larger wholesalers and has too much product to generally push through the smaller wholesalers. The other problem with selling smaller volumes is that the cost of travel and promotion is really pretty much the same whether you are selling 35K cs. or 75K cs. You still have to get on an airplane and go somewhere.

In general, wineries have to work much, much harder to sell the same amt. of wine as they did years ago. There is enormous pressure on margins (grape prices, labor rising), and of course the price that you can charge is largely determined by what your competition will let you do. If you are small to mid-sized winery, you cannot really compete if you are selling a wine that is perceived as anything like a commodity product. It has to be very highly differentiated – either stylistically, qualitatively and ideally receive a substantial amount of third-party endorsement.

Jessyca 2) How has wine packaging changed during your tenure in the wine industry?

Randall 2) Again, because of the enormous amount of competition, wine packaging has had to evolve and become a lot better, i.e. more attractive, compelling if not the sale, at least a second look at the bottle.  So much more wine is being sold in supermarkets and likely by novice wine drinkers, whose buying decision is mostly being dictated by the visual impression of the package.

Jessyca 3) In light of the enormous competition in the wine industry, which wineries will survive into the future?

Randall 3) The wineries that will survive are the larger ones with the deepest pockets who can spend their competitors into the ground, and/or have been able to achieve significant efficiencies due to scale, or who have been successful in forging relationships usually with retailers or restaurant chains.  The wine biz, like any biz, is mostly about power relationships.  If you have a product that people want, you find a way to maximize your own profitability (if you can, knowing that your healthy margin is likely not guaranteed forever).  Typically this is often done by collaboration between supplier and ultimate retail vendor, squeezing the wholesaler’s margin if they can.  The smaller wineries that will survive are the ones that have been meticulous in cultivating personal relationships with their direct customers – staging multiple special events at their winery, making sure that there is always a fresh influx of new blood into their buying pool.  (You don’t want a geriatric following, as I’m afraid we have allowed ourselves to do @ BDV.)  But most importantly, you need to have a product that truly is distinctive.  There’s a universe of wine out there, much of it quite serviceable; unless you’re doing something really unusual, there’s generally no real compelling reason for customers to buy your wine.

 Jessyca 4) What are the emerging wine styles and wine regions?

Randall 4 )Damn good question.  My guess is that despite the gazillion new acres of grapes going in, the California moment has largely passed.  CA wines are just too expensive for what they deliver and generally pretty damn generic.  I think that Washington and OR still have plenty of room to grow.  Still, I wouldn’t write off the Old World; the warmer regions of Italy, southern France and Spain continue to deliver great value; it is really just a matter of getting Americans to try the wines.  As far as changing wine styles, it is more my hope than belief that the over-the-top high-octane, over-extracted, highly alcoholic wines days are numbered. But it is a beast, may be hard to kill.

 Jessyca 5) You have a gazillion followers on Twitter.  Has it done you or your wine brand any good?

Randall 5) Not as much as I would have hoped. That is to say, I haven’t yet figured out to monetize it, but I’m still trying.  (In fairness, I have used my Twitter connections to make some connections in the real world, resulting in some occasional sales opportunities, and to that extent you can’t think of Twitter as existing in a parallel universe.  You have to make things happen in the real universe, i.e. pick up the phone to take your relationship with your Twitter buddy to the next level.  Ironically, it is generally a lot easier to contact someone w/ a DM via Twitter than to actually get them to pick up their phone.

Jessyca 6) Have you ever seen a UFO?

Randall 6) No.  But many days I’m ready to leave if they’ll take me.

Jessyca 7) How do you introduce customers to a wine style or to varieties to which they are unaccustomed?

Randall 7) Historically. we’ve used humor as a way to disarm people’s objections, or at least to pique their curiosity. We have benefited greatly by this strategy in selling wines to a mass market, but, as I mentioned earlier, this is a sword that has cut both ways, and in many cases has undermined the perception of gravitas of the brand.  At the end of the day, if your “category” is perceived as a derivative wannabe, “Cal-Ital,” for example, or even “Rhône Ranger,” many buyers will ask themselves with some justification, why should I buy a wannabe when I can be the original, which will likely be better or maybe even cheaper.  (Absolutely fair question.)  It’s really not until a category has established its own independent legitimacy like California Pinot (sigh) that you can really begin to talk about its merits without first apologizing. But, I don’t think that the New World can afford any more to be derivative – the world’s gotten too competitive……

Jessyca 8) Which brings me to ask you the most important question of all.  You are embarking on a very ambitious new project – Popelouchum – where you plan to breed 10,000 new grape varieties and grow grapes and make wine in a very non-conventional way.  How do you plan to (once and for all) change the perception of your brand, from that of being a mostly easy-to-drink, good value, fun wines/ fun labels, that don’t take themselves too seriously to wines that are to be seriously reckoned with (and sold at a much higher price point)?

Randall 8) I am glad you asked me that question, because I can tell you how important messaging is, and give you a couple of instances of what has worked and what has not.   If you’re selling wine (or a politician, for that matter) to a very large audience, generally broad strokes are what is needed, especially creating a sense of identification with the customer.   Joel Peterson of Ravenswood and to a great extent, Robert Parker in an analogous way, both created incredibly powerful brands because of their great consistency and ultimate resonance of their message. Parker’s message:  Wine is like high school.  We are graded on a score of 1-100 (and you usually get 50% just by showing up).  Great wines all have certain kinds of characteristics:  Power, persistence, concentration. Parker’s palate is incredibly consistent; if you like his style of wine (I don’t), you will almost never be disappointed with his high scoring wines.  Joel at Ravenswood found an incredibly sympathetic message in “No Wimpy Wines!”  (This is the enological equivalent of “Make America Great Again!”)   Who wants to drink wimpy wines or be a wimp?  By making the equation of quality to non-wimpiness and generally delivering on his promise of making concentrated, highly extracted wines, Joel was able to find his audience, keep them as well as providing them with a certain template for what greatness (or goodness) was in wine.  Pure genius.

Which takes me back to the BDV conundrum.  We are trying to rebrand the company, and most significantly change the perception of the wines.  I think that we have to do this by actually changing the way that we talk about our wines and wines in general, but most significantly, we need to make wines that are qualitatively different and exciting.  (The reality has to back up the narrative.) I think that it is well and good to talk about the virtue of dry-farming, the virtue of low SO2 addition, of organic or biodynamic practice, even the virtue of producing from Estate wines. All of these words are signifiers of quality and bolster one’s credentials, if you will.  But the real question is if you aspire to make elegant wines that are not powerhouse, blockbuster, tannic monstrosities from the Parker paradigm, how do you get a critic to even notice that the wine is as great as you think it is?  How do you make sure that elegance does not get mistranslated as “wimpy wines?”   The French were clever enough to discover the phenomenon of “terroir,” or the unique expression of place.  Frankly, it’s been a tough sell to hard-boiled, dense Americans, who generally don’t really even like wines that exhibit soil characteristics.  But, the few that do, are my target audience.

 My challenge is to persuade them that my efforts have comparable merit. So, it is to bear in mind that in future I’m really not trying to make my case to a larger population – these wines are likely not even to their taste, and an appreciation of them really does take some specialized knowledge.  But, it is extremely important that I make my case to the people who are capable of grokking the wine and the intention behind it. I want to introduce two ideas, which I’m hoping will resonate. The first is to bring the discussion to a question of “life-force” in wine.  On the face of it, this seems very woo-woo, Californian New Agey, but it is actually a demonstrable phenomenon – the ability of the wine to tolerate oxidative challenge.  I do believe that all great wines are capable of doing this, and while the wine itself must be delicious to drink, this should also be a criterion of excellence. And then as far as the methodology of some of the things I’m doing in our vineyard (certainly not the case with all of our grapes).  I’m trying to introduce the idea of “auto-tuning” of grapes, which is the idea of breeding grapes (either a given vinifera variety crossed with itself or going back to a rebreeding effort of its original parents).

 The thought there is to create a lot of variants of a chosen target variety with the intention of finding which amongst these many hundreds (or thousands) of variants is absolutely best suited to the site in question – this is kind of selection massale on steroids.  More than a bit tedious – takes years and years, but ultimately, if done properly, will yield a new variety (or actually, more likely a mix of different biotypes) that are optimally suited to the site.  All of this discussion will likely go over the head of many if not most even dedicated wine lovers, but ultimately, I’m convinced, the path to true sustainability is based on true differentiation and qualitative difference.

If interested in the top of wine marketing, plan to check out Jessyca Lewis #winemktmonday twitter chat the 2nd and 4th Monday of each month at 9am PST. Thank you Phillip for this wonderful opportunity. 


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