A Novel Approach to Wine Marketing
Jewell Towne Vineyards develops wine club alternative in the model of CSAs
A year ago, Oldak was looking for repeat sales and considered starting a conventional wine club where two bottles would be sent to customers each month. When he did the math, he found that the cost of packaging and shipping would exceed the cost of the wine. Around the same time, Jewell Towne’s assistant winemaker told Oldak about a community supported agriculture (CSA) program in which his family had taken part in New Hampshire, and Oldak decided to model his program after the CSA program to build consumer loyalty. (CSA has become a popular way in many states for consumers to buy seasonal food directly from local farmers.) Katie Hendery, Oldak’s tasting room manager, organized and implemented the program.
Oldak’s CSW plan ran from May 1 through the end of August. Shipping was not allowed, and customers had to pick up their two bottles of wine each week at the winery or at one of the seven farmers markets where Jewell Towne wines were sold. CSW participants, who were issued membership cards, were asked to pick up their wines Thursday (when the tasting room was least busy), Friday or Saturday. On Saturday they were requested to arrive before the tasting room opened at 11 a.m. Members also could go to one of the farmers markets to get their wines, as long as they advised the winery in advance.
While Jewell Towne makes about 26 different wines ranging in price from $8 to $15, members had no choice in the selection of wines. Each week the wines in the package of two bottles was the same for all members and, over the course of the 18 weeks, they received all of the winery’s wines plus a few duplicates. Before the start of the program, Oldak scheduled the wines for the entire program to ensure that each week’s offerings would be balanced. The packages were prepared at the winery each Wednesday. A typical package might contain a red and a white wine or a dry and a semi-dry wine.
Initially, Oldak thought he might have 10 or 12 takers, but he wound up with 50. Members frequently bought additional items when they picked up their bottles, and collateral sales averaged 50% of the amount paid in their membership fees. Members not only bought a favorite wine, they often chose a wine that had been in the previous week’s package. Jewell Towne gives a 10% discount to customers who buy six bottles or more; CSW members receive the discount on any amount.
CSW members were invited to a party at the end of the program, and the winery held a barbeque. It was also a time when they could comment on CSW. Overall, the members were favorably impressed with the program, and many said they liked the opportunity to enjoy the entire line of Jewell Towne wines, something they probably otherwise would not have done.
For Oldak, the program was something of a loss leader in that the $350 membership fee did not completely cover the cost of the wine. On the other hand, it was money up front, and the additional purchases by customers when they picked up their wines each month was added income. The bottom line for Oldak was that the program helped cement customer loyalty and build the business.
“We’re definitely planning do the CSW program again next year,” he told Wines & Vines.