09.01.2012

Newsletter September 2012

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  September 4, 2012
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WISE Bites

How to Justify More Tasting Room
Labor Hours


The topic of staffing is a constant struggle between too many tasting room managers and winery executives. The truth is, delivering a knock-your-socks-off, “wow” guest experience requires a little overstaffing. Maximizing wine sales and new wine club member signups does too, but no one wants to overstaff and end up paying too much in labor costs. And nothing drives winery management crazier than seeing tasting room staffers standing around twiddling their thumbs.
  Tasting Rooms in the Flesh

Oregon Tasting Rooms Among the Best
I took my tasting room focus to Oregon during the middle of August and found beautiful, hilly terrain that reminded me of Beaujolais, France--except that it was 103°F the day we arrived in Portland. We visited a dozen winery tasting rooms, and all of them were exceptionally well run (I called in advance). Due to the unusual temperature, the white wines were perfectly chilled, but some wineries served their Pinot Noirs a little too warm for my taste. It is always easier to warm up the wine in the glass than it is to cool it.
 
     
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"WISE Bites" continued

So how can you identify your labor sweet spot and justify staffing up to it? Let your tasting room metrics pave the way. If you are tracking the following metrics on a daily basis, you will have enough information to defend your case:
  • Tasting room traffic (subtotaled by consumer and trade)
  • Wine sales dollars
  • Wine sales orders
  • New club member signups
  • Number of staff members working
  • Number of labor hours
With these inputs you can calculate the following ratios:
  • Order conversion rate (% of total orders / consumer traffic)
  • Average order value (total sales / total orders)
  • Wine club conversion rate (% of new members / non-club consumer traffic)
  • Service level (total number of visitors / labor hours)
  • Sales labor rate (% of total labor dollars / total sales dollars)

The key here is to understand the service level at which your sales and club signups are optimized. These rates usually look better during slower times than during busy weekends. Too many wineries just accept lower success rates during busy weekends as something that can’t be avoided. They may be staffing for increased traffic, but still not staffing enough. WISE wineries watch these ratios closely and find ways to minimize performance dips by increasing staff levels during busy periods. Justifying your tasting room labor hours is all in the numbers: These metrics will show that having the well-trained extra staff members on hand more than pays for itself. You can’t afford not to find your sweet spot.

Source: WISE Academy,
www.wineindustrysaleseducation.com

 
 
"Oregon Tasting Rooms Among the Best" continued

You would think that most wine regions would have a tasting room association by now, but the only one I found is in Oregon. The Willamette Valley Tasting Room Managers Network (TRMN) is a nonprofit, tax-exempt corporation organized under the laws of the state of Oregon. It seems very organized, and I wonder if it could be a role model for groups in other areas.

I cannot list all of the places we visited, but some of my favorites included Domaine Drouhin, which is very large and multi-storied with great covered outdoor patio areas, and Domaine Serene, where the service was impeccable and all tasting room employees were super busy.


Domaine Serene

Josh Bergstrom, owner/winemaker of Bergstrom Wines, knows everything about the surrounding terroir. Here he is telling me about the evolution of the land and how events that occurred 50 million years ago create the best Pinots and Chardonnays.

Bergstrom

A note about incentives
While most states including California condone financial incentives for tasting room employees, readers wrote to tell us that a few states regulate such rewards, reasoning that they could prompt staff to encourage excessive drinking. Beth Costa, executive director of the Wine Road Commission, just finished an extensive survey about salaries and incentives at its member wineries (there were 190 as of 2011). Contact beth@wineroad.com to find more details about survey results.


Gifting in California
If you need to brush up on your knowledge of California laws regarding “gifting,” this is a great tool to help you sleep at night.



Cheers,
JB


Please send suggestions to trf@winesandvines.com


Jacques Brix is vice-president and director of sales, west coast for Wines & Vines. This column is based on his personal experiences at winery tasting rooms.
 
     
 
 
     

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