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Vineyard Mustard

Mustard growing between rows of vines along Solano Avenue near Yountville. 

Is Napa’s wine industry ready for the future? Paul Mabray thinks not.

Mabray, CEO of market research company Emetry.io, offered this take at a Napa Valley Grapegrowers’ symposium Wednesday, distilling a vision of winery businesses embracing a future heavily threaded with tech and in turn, succeeding where they now stutter-step in “future-proofing” themselves for the digital age.

In this future, wineries voraciously collect consumer data, they elaborately package their wine shipments to make unboxing its own experience, and their focus has shifted to bringing Napa Valley wine to their customers without needing to reach them through tasting rooms here.

For an industry that has for years moved broadly toward business models that rely on winery visitors and tasting room sales, that last part may seem unlikely.

But not to Mabray. “I fundamentally believe that the only way we’re going to survive as an industry is how we can help bring Napa Valley into people’s homes, without them coming to Napa Valley.”

“We need to get out of the tasting room,” he said. “We need to touch consumers when they’re at home.”

Casting a languishing image of the industry today, Mabray echoed findings from the recently released State of the Wine Industry report from Silicon Valley Bank, including the years-long drop in tasting room visitors per winery, despite tourism being on the rise for the valley as a whole. In part, Mabray cited the move to seated versus walk-up tastings at wineries as having pushed visitors to visit fewer of Napa’s tasting rooms and stay for longer periods at each.

As tasting room visits have dropped, even with record numbers of tourists flooding into the county, today’s business models aren’t enough to counter what is now also a record number of Napa wineries and tasting rooms. “The funnel of the tasting room is too small,” Mabray said. “We can’t get much more velocity through this process.”

He noted the deepening experiences at wineries have also cut deeper into tourists’ wallet share. Visiting more than a small handful of tasting rooms begins to add up quickly, especially when paired with dining, hotel prices and the other aspects of eno-tourism visitors come for.

“It’s like an arms race,” Mabray said. “Everyone has to get a better tasting room. We’re all chasing the new Prisoner tasting room or Ashes and Diamonds. It’s unsustainable, by the way.”

What’s more, he added, “Wine consumers themselves really don’t care about wine that much. They’re not a big group that really care,” – something of a hurdle for most Napa wineries, whose price points rely on drinkers with more than a passing interest in wine.

Add to this now the “indulgence gap.” Coined by Rob McMillan, author of the State of the Wine Industry report, the “gap” is where the bridge between the disposable incomes of baby boomers to millennials falls off, in what is expected to bring a period of depressed sales and growth to the wine business.

However, mentions of millennials’ relation to Napa wine tend to incense Mabray. “I hate to say this – I think I’m sick of hearing anyone stand on stage and talk about millennials to Napa Valley, because our price point puts them out of that category. We need to think about it a little differently,” he said, to scattered applause. “It’s true,” he added. “Most people just don’t have the money.”

So, how does Napa move from here to “future-proof”?

For one, a more sweeping embrace of tech is crucial for sales and marketing, Mabray said, urging wineries to explore the digital tools and strategies used by other sectors to sell their products today.

His suggestion: follow the path of the “digitally native vertical brand.”

These are brands that, like wineries, are niche focused and own the production process from manufacturing to sale, Mabray explained. “The difference is they invest in tech.”

To succeed, such brands uncover virtually every aspect of their customers, he said. “Do you guys know your customers and where they live?”

To do so, wineries could regularly collect customer data, even matching it against social media data. From there, Mabray said, “You can do amazing reports and analytics that say ‘My customers look like this. Here’s the different kinds of places they go online to shop.’” Such insights would potentially help wineries better reach and interact with prospective customers, easing the pressure to engage them through a physical tasting room.

Beyond a tech-driven doubling down on reaching wine consumers, Mabray pointed to companies that also maximize how they package their products. “We don’t incentivize someone and say, ‘Hey, by the way, if you put some more wine in your basket right now for your wine club, we’ll cut the shipping down less.’ We don’t think through these processes.”

And when it comes to the packaging itself, a more consumer-centric approach is to go all out. While unboxing videos exist for a wide range of products, Mabray said, “I’ve never seen a wine shipment unboxing video.”

Some wine companies are already on track to this sort of “future-proofing.” One company doing it right digitally, Mabray offered, is Bedrock Wine Company in Sonoma County. Among other fringes, the winery’s website offers a deep cut of the people and the story behind the wine.

Noting that almost 70 percent of visitors to Napa travel beyond a 90-mile radius when they leave, Mabray pointed to the wine club of Ashes and Diamonds winery. By joining the wine club, members receive flat rate shipping of $15 in California and $20 in the continental U.S. “They actually understood that their customers are leaving out of a 90-mile radius and how do they help give them the benefit of getting their wine.”

Then there is the “Instagramable” Scribe winery, which takes their events to their various market regions. “They have parties all over the country trying to bring it back to them.”

“So one of the things I highly recommend to help future-proof you is go look at some of these future-proof companies,” Mabray urged. “Go see how they’re doing this.”

But, as one skeptical grape grower put it, does “future-proofing” Napa wine in such ways run the risk of dumbing it down?

The grower pointed to a “fundamental schism between the folks that grow and make wine” and aspects of future-proofing, like the unboxing experience.

“When we’re tasting, creating, making wine, it’s blind almost all the time,” they said. “We don’t look at labels, there’s tasting groups that get together, we put things in little sleeves… we don’t care about all that. We don’t want that influence. We’re here just to taste the purity of the wines. Yet everything you just showed just had nothing to do with the quality of the wine in the bottle.”

Mabray got rhetorical. “Who thinks they make the best wine in Napa Valley?” he asked the room.

When the laughs subsided, he added, “I’m not diminishing the value or the intellectualism of wine. But if we look at the consumer behaviors, our job is to add more than just the flavor of the wine. Only a certain percentage of the population cares about what you’re caring about.”

But, he ceded, “We have a lot of masters of wine that really argue against it, that we should not be dumbing down wine. And I’m not saying that we’re dumbing down wine. I’m saying that we’re weaving story around it, we’re adding experience just like every other product is, and we’re not staying back in 1970 under the Robert Mondavi playbook. We’re actually moving to where everyone else is.”

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Wine Reporter / Copy Editor

Henry Lutz covers the local wine industry. He has been a reporter and copy editor for the Register since 2016.