The value proposition of a wine club is so big that to dismiss the idea would be a poor business decision.
Attention, all wineries: If you haven’t started a wine club yet, please make a pledge today to form one by tomorrow. Wine clubs are across-the-board important, no matter a winery’s size. For the bigger players, a wine club presents an added opportunity to further engage with customers who, in turn, continue to spread the word about their favorite brand. For small wineries, a wine club can serve as a profitable pathway for building brand awareness and attracting new customers.
Wine clubs have been popular for many years and continue to gain steam, notes Patsy McGaughy, communications director for Napa Valley Vintners, a 500-member nonprofit trade group celebrating its 70th anniversary this year. “There certainly has been an increase [in the number of wine clubs] over the past 10 years with the enhanced availability of shipping options throughout the United States.” And with e-commerce now an everyday way to conduct business, it’s easy for wineries to process transactions with customers near and far.
A pouring revenue stream
“Sales [from wine clubs] are at a higher profit margin because you’re selling the wine direct,” says McGaughy. “It’s also a consistent revenue stream for a winery, because they’re typically shipping throughout the year. So in January, when sales in retail stores might be slower, you can still be selling and shipping to your club members.”
Wine clubs are a win-win for all involved. For members, wine clubs are usually free to join and the perks can be substantial. Typical benefits include exclusive access to limited edition releases, deep discounts on favorite winesand invitations to pickup parties and other social events. Some wineries even offer educational opportunities.
For wineries, wine clubs essentially serve as a long-term marketing strategy. “Wineries often consider their wine club members to be brand ambassadors,” says McGaughy. “Not only do club members purchase wine for themselves, they often share it with friends or share stories of experiences they’ve had with a winery.”
When people join a wine club, they’re choosing a brand that resonates with them. For that reason, they essentially become walking billboards for the beneficiary winery, often spreading the word across state lines and beyond.
Wine club members are like treasured friends, she continues.“They’re a group of people who are loyal to your brand, so you can speak with them and gauge their opinions about things you might be doing,” notes McGaughy. “A wine club can be a barometer to your overall business.”
Keeping it fresh
With an annual production of 100,000 cases per year, St. Supery is one of the bigger players in Napa Valley’s wine industry. Its largest production is its Napa Valley Estate Sauvignon Blanc, of which it makes 60,000 cases per year, says Ed Curry, vice president, direct-to-consumer (DTC) sales and marketing. The winery also produces Cabernet Sauvignon and Bordeaux blends.
A fourth-generation business owned by the Skalli family, St. Supery is sustainably farmed and the largest estate winery in Napa Valley, says Curry. The Skallis started making wine in France in 1920 and produced their first St. Supery wine in Napa Valley in 1989; they launched their wine club shortly thereafter. Today, it boasts 7,000 club members.
For a winery as large as St. Supery, wine club members can really pack a marketing punch, especially when they visit their favorite restaurants and wine shops looking for their preferred brand. “It’s a classic example of a push-and-pull marketing strategy, where you’re both trying to have restaurants and wine shops carry your wines and sell them for you and also send customers to the shops to help drive demand for your wines at the same time,” says Curry. “So the restaurants and wine shops are providing supply, and we’re helping to create greater demand.”
St. Supery is focused on taking superior care of its valued club members by creating a robust menu of opportunities designed to engage, inform and have fun.
“We do a lot of activities that aren’t just limited to people who can visit Napa Valley but are applicable to people around the world,” explains Curry. St. Supery puts on an array of events, hosts wine dinners on- and off-site, and participates in festivals across the country. On the flip side, it’s not unusual for club members near and far to invite St. Supery representatives to their home or favorite restaurant, says Curry. “They take personal responsibility for helping us promote [our wine] and getting a bunch of wine enthusiasts to attend.”
St. Supery continually strives to keep the wine club experience fresh and exciting for its members. “We have an experience here called the Ampelography Master Class,” he says, explaining that Ampelography is the study of grape leaves to identify the various varietals. “That’s something new even to a lot of well-educated wine consumers. They really love learning something new and being challenged.”
Cheers to the mouths of babes
In some instances, education can be the incentive for starting a winery.
“We caught my son making wine in the garage when he was 15,” says Lisa Amador who, along with her husband, Trini Amador III, operates Gracianna, a small winery in Healdsburgthat currently makes 1,000 cases per year. She says their business plan is for 6,000 cases, “but you have to pace yourself getting there.”By the time their son, Trini IV, turned 16, the Amadors realized he wasn’t just a mischievous kid: He was genuinely interested in how to make fruit into wine.
“We decided this would be a great education for him because he’s really connecting with it, so we gave him professional equipment to make wine,” she says, adding that he’s been making wine ever since. He’s now 29 years old.
The family winery, which makes Pinot Noir, Chardonnay and Zinfandel, produced its first vintage in 2007, and opened its tasting room (open from April to November) and wine club program in July 2012. Gracianna’s wine enthusiasts have two club programs to choose from: the Medallion Case Club provides 12 bottles shipped twice per year at an approximate savings of 15 percent; or the Medallion Quattro Club, comprised of four bottles, also shipped twice yearly, and at an approximate savings of 10 percent.
“The wine club is really the backbone of our business,” says Amador, noting that Gracianna has nearly 200 members across the country. People are discovering the brand not only by word of mouth, she says, but also through social media and review sites like Yelp and Trip Advisor, the latter where Gracianna enjoys a high ranking.
Built to last
Over the past 20 years, Stephanie Trotter-Zacharia has successfully created and developed wine clubs for several small, family-owned wineries in the North Bay. With a sales and marketing background in the hotel industry, where she successfully turned around distressed hotels, Trotter-Zacharia’s expertise was a natural for the wine industry.
Her first wine job was in a tasting room at a winery that made 50,000 cases per year. Though a wine club was already established, Trotter-Zacharia soon cultivated it by signing up an additional 2,000 people inside a year and a half. From there, she moved on to work her magic at other wineries. “The clubs I put together for each of those wineries fit their distinct personalities,” she says. “They were authentic to them. They weren’t based on an identical template of a wine club.”
In September, Trotter-Zacharia began working with Calistoga-based Tedeschi Family Winery to bolster its wine club. In a short time, she’s already made her mark and gained the trust of the family—so much so that she’s now director of sales. (She’s also independently releasing her first Cabernet Sauvignon, as Trotter 1/16 Winery, in May; www.116wines.com.)
“Stephanie is the first non-family member to work with us,” says Emilio Tedeschi who, along with his brother and sister, represents the third generation of the family business. “She has a lot of experience working with different wineries prior to us, all in the younger stages, and that’s a huge qualification.”
It didn’t take long for Trotter-Zacharia to identify and solve a problem with the operation of the winery’s currentwine club. “We started out doing quarterly shipments,” explains Tedeschi, “but when Stephanie came on board, she suggested we do [a maximum of] trimester shipments instead. It’s a little easier to avoid the hotter weather.”
Tedeschi Family Winery traces its roots to 1919, when Tedeschi’s grandparents, Eugene Tedeschi and Anna Lencioni, emigrated from Italy to the United States, briefly settling in Rhode Island before heading west to Napa Valley. In 1974, Tedeschi’s father, Emil, relocated the family toHawaii to cofound Tedeschi Winery of Maui, then moved back to Calistoga in 1991. The family still has a stake in the Hawaiian winery, which produces an exotic pineapple wine.
The family’s Calistoga winery began small and has stayed that way; it’s currently produces 900 cases annually. The long-term goal is to reach production of 2,000 cases and to sustain a growing wine club, Tedeschi shares.
The wine club offers four packages to select from: The Tedeschi Family Wine Club, which features four wines shipped three times per year; Our Chillin’ Club and Keep it Red, Fred, both offer twice-yearly mixed six-packs; and La Prima Fila, which consists of a case of red wines shipped twice per year. Each club option provides a discount of 20 percent for automatic shipments.
The winery makes more than a half-dozen varietals, including Cabernet Sauvignon, Merlot, Pinot Noir, Petite Sirah, Rose of Pinot Noir and Chardonnay. “Some of our wines are set aside just for the wine club,” says Tedeschi. “For example, if we have a small release of a Petite Sirah or Chardonnay, we’d hold back the initial release of that wine and allocate it to the wine club.” The remaining wine would then be officially released.
“The goal with any wine club is to be able to go directly to the people who like your wines,” says Tedeschi. “We usually meet our new wine club members while they’re visiting our winery. This one-on-one interaction lets us really visit with our customers and get to know what they want.”
When less is more
Preston Vineyards has maintained a significant presence in Sonoma County’s wine industry for 40 years. At one point, the winery produced nearly 25,000 cases per year on its farm in Healdsburg. But in 2000, after many years of selling wines cross-country, the family scaled back to about 8,000 cases per year so it could focus more on local business and diversify the property with fruits, vegetables, grains and pasture animals. By 2005, the property became CCOF certified organic.
“The idea was to sell most of the wine direct through our tasting room, the wine club and online,” explains Ken Blair, director of sales. “So that’s what we’re still doing.”
Preston’s wine club—currently at 950 members—represents a substantial amount of its business, Blair says. Depending on the year, the winery produces between 15 and 16 different wines, all produced from estate fruit. Preston’s varietals include Rhone-inspired wines such as Mourvedre, Cinsault, Syrah, Viognier, Roussane and Grenache Blanc. The winery also makes Zinfandel, Barbera, Sauvignon Blanc and two Rhone-style blends. Many of the wines are made in small quantities, all of which are allocated to Preston’s wine club members. “It works out really nicely for [members], because you have a lot of unique offerings that are pretty much wine club only,” he says.
The winery ships six bottles of three or four different wines to its members on a quarterly basis. Members receive a 25 percent discount per shipment; a 30 percent discount is offered to members who sign up to receive 12 bottles each quarter. Preston’s wine club consists of enthusiasts from across the nation. All members are invited to exclusive events, one being the winery’s quarterly pizza pickup party; it also hosts a few wine club dinners each year using a local chef to prepare ingredients only from the farm, such as estate lamb or pig and seasonal vegetables.
“We’re fortunate enough to have a wood-burning oven [for] bread baking and we actually mill our own wheat,” says Blair. “We grow a lot of produce, so we’re able to make pizzas with [ingredients] from our own property.”
Preston strives to make the farm as economically sustainable as possible, adds Blair, and the direct sales business of its wine club is one aspect of that thriving business.
Pulling it all together
At the end of the day, a winery is only as successful as its business model. More and more, wineries are investing in customized software solutions to help manage the many components of their direct-to-consumer business: wine production, mobile and tasting room point of sale (POS), content management, customer relationship management (CRM) and wine club order processing, among others.
Napa-based eWinery Solutions is one such provider of these services. In business since 2003, the company offers a full suite of sophisticated software solutions that support its 600 winery clients around the world—some with up to 15,000 wine club members. Its wine club platform has many features, including the ability to process numerous wine club batches simultaneously, says Richard Kline, founder and CEO. “And since this is a cloud platform, it frees up [a winery’s] computer while it’s running in the background.” The software can also customize member benefits, set individual shipping preferences, run compliance checks, automate member notifications and integrate profiles.
Kline explains that the company’s monthly fees start at $250, depending upon the winery’s size and number of transactions. The wine club component is part of eWinery Solutions’ base platform, which also includes content management, ecommerce and CRM, the latter being a particularly significant piece to running a successful wine club. The CRM platform lets wineries get a comprehensive view of its customers and interact with them based on their behavior, attributes, purchases and preferences, he says.
“Our software is helping the wineries build long-term relationships with their customers,” says Kline. “So as much as we’re about technology, we’re really about helping our clients sell more wine.”
And, in the end, that’s what all wine clubs are designed to do.
Keeping Your Wine Club in Check
Ed Curry from St. Supery has a bit more to say about the importance of wine clubs.
• Wine clubs are the foundation of a winery’s direct-to-consumer business. Members commit to a set number of shipments, which lets a winery plan its allocation of wine to its direct channels. While it’s difficult to claim an “average” due to the wide variety of wineries and clubs set-ups, wine club sales are often 50 percent more than visitor center sales.
• Wine club members are your most engaged customers—those who want a deeper relationship with your winery. A wine club member often spends as much as 15 casual guests who only visit a winery once.
• People are only going to sign up for a wine club if they love the wines, feel the prices are fair and enjoy the visit to the winery. If the percentage of new members starts to decline compared to history, it’s indicative of a problem either with your wines, the prices or your hospitality.
