Planners discuss impacts of wine industry marketing

Higher sales can worsen congestion
2013-09-04T19:00:00Z 2013-09-04T19:00:11Z Planners discuss impacts of wine industry marketingPETER JENSEN Napa Valley Register
September 04, 2013 7:00 pm  • 

The changing nature of wine marketing and how it will impact Napa Valley traffic prompted another discussion Wednesday by the Napa County Planning Commission.

Industry speakers noted the trend to place bottles of wines directly in the hands of consumers using online social media and e-commerce as a way to circumvent traditional sales techniques that rely on wholesalers, retail markets and wine lists.

But this new approach requires expanded tasting rooms, increased marketing plans, and more tours and tastings to connect consumers with a service and experience that help wineries stand out from the crowd.

The commission spent an hour talking about growing traffic congestion and how land-use planners could soften the impacts in the face of more wineries seeking use permit expansions.

The purpose of the talks, Commission Chairman Terry Scott said, was to spark a dialogue, and not to try to resolve an issue in one meeting.

“One of the industry’s greatest challenges is creating a balanced marketing approach,” Scott said. “This leads to a challenge that faces us. It is considering combining the impacts and benefits of the wine industry and the rest of the county’s population. Our task is varied and difficult as well.”

Paul Mabray, chief strategy officer for VinTank, started the discussion by saying that wineries continue to miss sales opportunities because they aren’t doing enough to engage potential customers on social media networks.

Acquiring two to 20 new customers daily — many more than that visit Napa Valley and post on social media networks every day — could mean $90,000 to $900,000 in additional sales annually, Mabray asserted.

But Mabray said 80 percent of social media posts from Napa Valley tourists go unanswered. The mean number for wineries’ posts to Twitter is 2.2 per day, and less than 20 percent of winery websites are enabled for mobile devices.

“There’s a huge disconnect,” Mabray said. “We are unbelievably great at the tasting room. The tasting room is fundamental. We need to make the customer stay engaged and stay with us longer.”

Michael Honig, president of Honig Vineyard and Winery, followed Mabray and said as the Napa Valley brand continues to expand into new international markets, tasting rooms will continue to offer a basis for some wineries’ sales operations.

“In the last five years, there has been more interest in the Napa Valley brand,” Honig said. “People need to come and see our valley. They need to see our barrels. They need to kick the dirt. Then they become lifelong customers.”

Citing a 2012 Visit Napa Valley survey, Honig said 82 percent of visitors’ primary activity is going to winery tasting rooms, and 70 percent are likely or very likely to purchase wine.

“Anyone with grapes and enough money can make wine,” Honig said. “What separates the failures from the successes is sales and how wine gets sold.”

Commissioner Bob Fiddaman said he appreciated the comments, but directed the conversation toward the cumulative impacts wineries’ expanded marketing plans could have on the rest of Napa Valley — a topic at the forefront of the commissioners’ minds. Increased traffic and road congestion could be a byproduct of this, he said.

“We have to take into account not just the biggest industry, but living here,” Fiddaman said. “I think it’s a great first step to being educated on what’s happening in the rest of the world.”

Honig said that based on his experience, tourists coming to his wineries are carpooling, with two or more people per vehicle, or relying on tour bus companies as transportation. He hasn’t seen many one-person-per-vehicle trips among tourists, but acknowledged that winery staff often drive solo.

“It’s certainly our staff that creates some of the backup,” Honig said.

Mabray said that while Napa Valley will continue to rely on selling bottles priced at $20 or greater to the baby boomer and Generation X crowds, the wineries can’t get complacent in relying on their luxury brands. They will have to continue to draw new customers through social media, with an emphasis on service and experience.

“We are now digital human beings,” Mabray said. “It’s about the service. The reality is our mindset has to shift.”

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(5) Comments

  1. naparealestate
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    naparealestate - September 04, 2013 9:29 pm
    The winery Use Permit process is completely broken:

    1) There is no "Use Permit" form. A Use Permit is really a mis-mash of various Word docs cobbled together, edited, and redlined. Nearly impossible to read / understand.

    2) There are no definition of terms. Unlike a regular contract which defines terms within the body of the document, use permits use create limits on "car trips", "marketing events", "temporary events", "signage", etc. without ever defining these terms.

    3) They are unread. To my knowledge no Napa County department actually reads a Use Permit as standard process before making a decision. So forbidden activities are subsequently permitted. And if a neighbor fails to appeal within the limited time window to appeal, those changes become permanent.

    4) They are unmonitored. Oversight is extremely limited; enforcement lax, neighbor complaints are routinely ignored, and in the rare event a winery is found red-handed, there is no good punishment mechanism.

  2. Michael Haley
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    Michael Haley - September 04, 2013 11:35 pm
    naparealestate, I agree with you, although the county has just in the last year or so actually started to enforce regulations to some extent.

    People have to realize that things are changing and regulations and planning has to change with it. We have had two years of "discussions" about all the increased growth and it is time to move to the next phase which is an actual evaluation of negative impacts.

    This is all numerical. If you build x feet of winery production and x number of tasting room visitors and x number of marketing events you can accurately estimate the number of cars on the road as a result. You can measure the amount of new housing that will be needed, etc.

    What humans invariably do is exhaust a resource then fight over what is left. See: northern San Luis Obispo and their water problems created by overdevelopment. We can anticipate what is going to happen and create innovative solutions before we hit the wall. Will we? That's what the ag preserve was--do it again.
  3. winebroad
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    winebroad - September 05, 2013 10:46 am
    naparealestate you know that the county randomly audits 20 wineries per year and has for 5 years now, right? It is no longer neighbor complaints that are the "cop." The result is higher attention to abiding by use permits, which is a good thing. Additionally, if traffic is the concern, and I agree it is a concern, the problem is not visits to winery tasting rooms as much as it is commuter traffic. We need to look in the mirror to identify the contributors and start there for solutions.
  4. naparealestate
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    naparealestate - September 05, 2013 10:54 am
    Michael, the negative impacts are here. And the most basic negative impact is the conversion of residential neighborhoods to commercial / industrial zones. These "small production" wineries technically sit on Agricultural Watershed (AG) zoned land but the operations are so large as to be effectively industrial operations.

    Case in point: An operator with a "Small Production Winery" Use Permit turns around and builds an 8-story, 100,000 sq.ft. facility in a formerly residential neighborhood. After construction is complete, Napa County Planning converts the "car trip" allowance to a "daily visitor count" so it can start bringing in tour buses. The wine is crap but the buses continue to roll to bring people to see the facility itself.

    One bad apple spoils the whole lot...

    Unless the wine industry is willing to regulate itself (which it is not), the bad actors will continue to spoil the valley for everyone. And it's a sad situation since there are so many conscientious winery owners.

  5. Cadence
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    Cadence - September 06, 2013 6:42 am
    Have you seen the heavy, heavy northbound traffic Saturday and Sunday mornings on hwy 29? I have. They are not commuters.
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