To begin, let’s gather our historical data and get to work. If we’ve been vigilant in keeping up with recording sales history in our dashboards, this will be a piece of cake. If we haven’t, let’s vow to do this going forward so that we have the data we need at our fingertips.
Step 1: Normalize our sales history
The first step in planning our sales for next year is to normalize sales for this year. This means that we will project what our sales would have been without any of the unusual occurrences we saw this year. What happened that was out of the ordinary, and what revenue did it generate? What revenue did we miss? In August 2014, Napa experienced a 6.1-magnitude earthquake. This dramatically impacted sales for many wineries. In planning sales for August 2015, we needed to project what our sales would have been, had there not been an earthquake. Conversely, did a group of Texans visit your tasting room and buy a pallet of wine for corporate Christmas gifts? Unless we have information to the contrary, we will want to remove that huge sale when planning the same month for next year with the assumption that this transaction will not happen again.
Step 2: De-seasonalize our sales history
Next, we want to de-seasonalize our sales and adjust them. This means looking at the shift in holiday dates and making adjustments the calendar dictates. Is Thanksgiving earlier or later this year than it was last year? Visitor traffic—and therefore sales—may shift between November and December. Be mindful of a shift in calendar dates for the holidays that create three-day weekends such as President’s Day. The timing of Easter can also cause a shift.
Step 3: Adjust for business maturity
It’s tempting to envision a sales curve that keeps growing year after year. Unfortunately, that slope of sales increases will eventually taper off. If our new business has been increasing at a double-digit rate, we need to examine that growth rate and be realistic about what we can expect in future months. We may still be growing, just not at the same breakneck speed a new business enjoys. Likewise, what is happening in our neighborhood? If new wineries have opened in our area during the past year, will this impact be positive or negative for our business? Are the new wineries bringing us additional traffic or diluting our sales?
Step 4: Adjust for product
and pricing changes
How has the composition of our portfolio changed? Have we increased prices? Have we added a new tier of wines that we didn’t have last year? What will be the effect of these new products and pricing on our sales?
Step 5: Develop some revenue assumptions
This effort is greatly enhanced if we have done a SWOT analysis with our whole team, examining our Strengths, Weaknesses, Opportunities and Threats—both internal and external. What do we vow to repeat, get rid of or begin to do? How will our new initiatives impact our future sales performance?
We can then translate our beliefs about the future into numerical estimates for our sales budget. Consider changes with external sources: our customers, competitors and location. Include the impact of internal changes: our organization, training, incentive compensation, promotions and events.
When is the best time to plan for next year’s sales? We can make this budgeting process easy on ourselves by budgeting for next year every month. A WISE best practice is to plan each month for next year, when that same month this year has ended. If we’ve been vigilant and disciplined in making our diary notes, creating our new sales budget will be a piece of cake.
Following this simple five-step process will make us feel triumphant and ready to take on the new year. Remember, if we fail to plan, we will plan to fail. Let’s prepare and plan for a successful year!
Next month: Budgeting expenses.
Source: WISE Academy,
Winery Job Index
The start of the slower fall season saw the Winery Job Index fall 6% to 191 in September 2017 from a year ago. This was the second straight month the index fell.
Why Sausalito? Chris Madrigal explained that the main tasting room at the north end of the Napa Valley can only permit guests with reservations. Sausalito, on the other hand, is a Mecca for day-trippers, many of whom arrive via the passenger ferry from San Francisco. Madrigal sits on Bridgeway, the town’s bay-front main artery, where hundreds of visitors stroll by every day, enjoying the shopfronts and bobbing yacht masts. These tourists are welcome to drop in to the tasting room, where they can purchase flights or wine by the glass.
Appreciating Sausalito’s long reputation as an artist colony, Madrigal draws traffic with rotating monthly art exhibits created by locals and curated by Sheba Patel. There is no charge to the chosen artists, although Madrigal takes a 10% commission on pieces sold there. The space is tiny but welcoming, with comfy seating and thoughtful lighting.
Chris Madrigal said it took a year or so after he rented the space to get the formula figured out in Sausalito. It’s the only winery-owned tasting room in town. Although Sausalito rents are notoriously steep, they are still not as costly as in Calistoga. Tasting fees are higher there to accommodate the difference. Madrigal makes up for Sausalito’s lower fees with volume.
“The volume is huge on Thursdays through Fridays,” the owner observed. But international tourists are reluctant to purchase more than a bottle or two of wine, due to transportation difficulties and customs regulations, so Madrigal is extending its hours to bring in Marin County commuters as well. The monthly art openings are another draw, with free tastings from 6 p.m. to 8 p.m. Madrigal envisions the place as a neighborhood hangout, where residents can mingle with their neighbors, and has established a “locals” two-bottle-per-month wine club. He hopes, too, that these programs might encourage Bay Area residents to visit the winery in Calistoga.
The Sausalito venue employs only four servers, and recruiting them is challenging, due to high housing costs. Like most seasoned tasting room owners, Madrigal noted he looks for basic hospitality traits. “You can teach anyone about wine. The real skill is the hospitality,” he said.
Madrigal Family Winery sells 80% of its estate-grown wines direct to consumer (DtC). There are no logo goods in Madrigal’s Sausalito outpost. In a town with a plethora of T-shirts and ball caps on display, it makes Madrigal’s clean, well-lighted space stand out.
The point-of-sale system from E-Cellars interfaces with the winery’s DtC software and hooks up with UPS and ShipCompliant to coordinate shipping.
Even with an argon-preservation system, the tasting room only saves open bottles for a maximum of two days. The micro-fiber dish towels are from Costco, and the tasting room uses a commercial Hobart dishwasher.
Wines & Vines contributing editor Jane Firstenfeld has been writing about the North American wine industry since the 1970s. If there are any questions you would like answered by future Tasting Room Spotlight participants—or if you would like to have your tasting room featured—email her here.
can relocate tasting rooms
Wineries with destroyed or damaged tasting room premises will have some relief, thanks to California Gov. Jerry Brown’s Executive Order B-43-17, which relaxes ABC regulations about relocations. This does not permit moving production facilities.
Oregon producer opens tasting room
Lexeme Wine of Roseburg, Ore., welcomed the first visitors to its tasting room space in Elkton, Ore., on Oct. 7. The 325 2nd St. location will be open Friday and Saturday afternoons.
Mayacamas property suffers fire damage
Mayacamas Vineyards of Napa, Calif., sustained damage from wildfires in mid-October. The main residence used for hospitality events was lost, but according to the winery, “Our historic 19th century winery building and other winemaking spaces were almost untouched by the fires and remain intact.”
Maryhill expands to Spokane
The Maryhill Winery first covered by Tasting Room Focus here is opening an outpost in the Kendall Yards area of Spokane, Wash. The site, located nearly 250 miles from Maryhill’s estate on the Columbia Gorge, is expected to open later this month.
The Herald Palladium of Michigan reported that Chill Hill Winery is planning to open a third room in Baroda, Mich.
• Want to keep open wine fresh for weeks? Pouring by the sip or the glass may be more efficient with FreshPour, proprietary bottles from Kuvee. The company, which has partnered with Coppola, Vintage Wine Estates and Bonny Doon, claims the Kuvee Key dispenser allows consumers (and tasting rooms) to pour wines at their own pace. For details, visit kuvee.com.
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