04.12.2012  
 

Tech Maven Decries Wine's Innovation Problem

Tastingroom.com founder Tim Bucher addresses Sonoma State wine school

 
by Andrew Adams
 
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Tim Bucher speaks with students and the business community at SSU’s School of Business and Economics on Wednesday about the need for innovation in the wine industry.
Rohnert Park, Calif.— Tim Bucher, a tech maven looking to change the way wine is sold, said the wine industry has an innovation problem. Not in making wine, but in selling it.

Bucher, who addressed a group of Sonoma State University business school students and professionals at the school’s annual mixer Wednesday, said his business resulted from him seeing an opportunity to bring something new to wine. “I’m challenging the industry, and I’ve been challenging the industry,” he said. “We meet brick walls every week, and we want to break through them for the sake of the industry.”

Launched in 2009, TastingRoom.com Inc. first specialized in filling and selling 50ml bottles that wineries could use for trade and press samples—and for consumers to create tasting flights of various wines to try before buying. Bucher said he developed the idea when looking at the staid sales channels of the wine industry and seeing an opportunity. TastingRoom.com is now moving away from just selling tastes to selling single-serve wines.

Sampling a ‘core consumer behavior’
Sampling before buying—be it test-driving a car, trying on clothes or visiting open houses—is “fundamentally a core consumer behavior,” Bucher said.

TastingRoom.com’s sampling packs offer wine drinkers the chance to taste through different varieties, regions and even try flights prepared by celebrities such as chefs Mario Batali, Michael Chiarello and wine personality Gary Vaynerchuck, who recently prepared a sampling of “Wines for Dudes.”

Bucher said there’s great potential in single-serving sales. TastingRoom.com made news recently with the announcement in March that it would sell a glass, or 3.4-ounce bottle, of Silver Oak for $19. “I want to sell the consumption format,” Bucher said.

He said he sees huge growth in the single-serve segment, pointing to the rapid growth of single-serve coffee products such as Keurig coffee. The company has plans to launch in Asia, where Bucher said the demand for single-serve wine is especially robust. “We think it’s going to be a home run.”

While TastingRoom.com offers full bottles of wine for sale, Bucher said he wants to differentiate his firm by selling something different. Bucher also was clear that his operation is not a flash site. “I don’t believe in Flash, I think the Groupon stock price is proving that. I don’t want to be in the business of selling 750s for less; that’s a race to the bottom.”

Quality control
Key to TastingRoom.com’s business strategy is its extensive quality control program and proprietary bottle-filling system. Bucher said much of the equipment used for transferring wine from 750ml bottles to smaller formats has been adopted from the software and pharmaceutical industries and occurs in an anaerobic environment. Bucher said he doesn’t want to fill from tanks or barrels because it doesn’t truly reflect the finished, bottled product from his client wineries.

Before transfer, each 750ml bottle receives a full quality analysis, and then TastingRoom.com’s own SKUs undergo quality and sensory analysis. The results are being compiled into what Bucher described as a wine genome project. Quality control analyses are also being correlated with consumer ratings as part of a database that could guide market trends and new products.

Sonoma State University’s Wine Business Institute, offers specialized classes in business specific to the wine industry. The institute also recently launched an intensive 17-month, executive masters’ program designed for people currently working in the industry.

Bucher told the audience of students, many of whom were networking for possible internships and job opportunities at the event, that successful entrepreneurs are those that take risks and innovate. “You can innovate your way out of anything,” he said. “At our company we say if you stop innovating you die.…We need more innovation. I’d love to see you do some crazy stuff in the industry.”

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