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Morgan & Moore

 

Get Ready for Harvest: Sell, Sell, Sell

April 2009
 
by Jeff Morgan & Daniel Moore
 
 
    HIGHLIGHTS
     

     
  • Now's the time to put sales in the driver's seat. Make them your top priority throughout the day.
     
  • It's time, too, to evaluate your costs. Look at everything from grapes to oak to packaging, and make prudent adjustments.
     
  • Save wear and tear on your fingers, and communicate by phone instead of e-mail, for faster, more personal results.
     
For this issue, our editors asked us to write about what we are doing to prepare our clients for the 2009 harvest. The answer is simple. We are preaching sales, sales and more sales. In this economy, what matters more? Sales planning, sales execution and then more sales planning is where it's at. Your annual sales may pleasantly surprise you -- if you can shift focus and make your sales efforts the most important part of your day. We don't mean this in a random manner. We mean that it's important to become better organized and execute the sales part of your day more efficiently -- especially if you have daily production issues to deal with as well. Many of the wineries we work with have small staffs who wear many hats. The sales hat--in case you haven't noticed our drift--is the one we recommend wearing most.

The distribution hammer

The quintessential folksinger Pete Seeger couldn't have sung it better: "If I had a hammer, I'd hammer in the morning…. I'd hammer in the evening, all over this land!" If only we all had a distribution hammer. But the distribution hammer is typically the tool of the big brand--one with product and numbers power that a distributor can't ignore.

What a feeling it must be to have sales managers mercilessly hammer their sales force on your winery's behalf, pounding them into making their numbers for the year. This is exactly why there are so many small winery consolidations today. They create powerful groups that provide significant attention-getting muscle within their distribution networks. When up against the big boys, what's a small winery to do?

Hammer in the morning. The first part of your day should be spent on sales. Get an early start and work your East Coast markets. Follow the sun and contact the Midwest and West Coast accounts as the morning advances. Make direct contact with special accounts and sales people you have relationships with. A down market is a critical time to strengthen these bonds.

Hammer in the evening. The evening is a good time to manage your sales information, contact database and e-mail outreach. You need to communicate with all of your accounts and distribution partners to makes sales personal. There are just too many wines in the marketplace, and this has caused buyers to become overwhelmed and unavailable. Keep communicating. Even one-way communication will help you in the long run.

Hammer all over this land. Take a hard look and evaluate your market base. Now's the time to eliminate markets that make you little money--for example, those markets where distribution is not worth the price of maintaining compliance and license costs. Travel to see customers who respond to your efforts, because there is absolutely no substitute for a market visit. Finally, remember that at the end of the day, no one really likes to be hammered. To soften the blow, use a bit of guile and humor when navigating crowded distribution waters.

Bottling and harvest planning

It's important to have a solid business plan looking at least three years ahead. With looming economic uncertainty, now is the perfect time to evaluate your plan and make any corrections you feel will help weather the current climate. Perhaps it's time to streamline the number of lots you produce or reevaluate your oak program? If you are currently making 16 different labeled lots of wine, you might consider streamlining your program. Evaluation of your gross margins should also be conducted. If your cost of goods is high and you can't charge an adequate sales price, this is a good time to look at what you are paying for grapes, barrels and packaging supplies.

After more than a year of price increases due to energy surcharges, it's time to keep your packaging suppliers honest. No supplier has called recently to inform us that due to the decrease in energy cost and strength of the dollar, they are lowering the price of things like bottles or capsules.

If you put your business out to bid, you may realize some cost savings. Oak barrels are typically offered in euros and should be $100 per barrel less this year. Consider trying a new (less expensive) cooper on a trial basis. Eastern European oak might also be another avenue to explore. Oak adjuncts have been available for quite a while, recently improving both the quality and diversity of their products. And of course, American oak is also a consideration if your wine can handle its distinctive flavor profile.

Some grape varieties are still in short supply, specifically Pinot Noir, Chardonnay and Napa Cabernet. If you are paying more for grapes than your bottle price supports, you should consider a new vineyard source. We have always advocated paying a bit more for fruit in a buyer's market, and a bit less during a seller's run. This even-handed approach is good for both grower and producer over the long haul.

The death of communication efficiency

Alternative text
Is it a sign of getting old when you shun today's technology for that of yesterday? Our thumbs have forgiven us for not exercising them daily on the thumb track also known as a smart phone. In a moment reminiscent of reading an eye chart, we strain repeatedly to read down to the bottom of the page previewing 15 lines of e-mail.

When did it come to pass that a phone call was too much to deal with, and that e-mail was the mandated, efficient communication mode of choice? We believe it's important to answer questions in real time, with the ability to understand the tone and tenor of a conversation. How many hours should you have to spend jumping in on the middle of e-mail threads copied to you? Five minutes on the phone would be far more efficient. Following the conversation, if you must CYA (cover your ass), a quick follow-up email will usually suffice.


Jeff Morgan of Napa Valley and Daniel Moore of Sonoma County are partners in M Squared Wine Consultants, m2wine.com, and jointly own and operate SoloRosa and ZMOR wineries. Morgan also makes two kosher Napa Valley Cabernet Sauvignon wines: Covenant and RED C. To comment on this column, e-mail edit@winesandvines.com.
 
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