I called the TTB (Alcohol and Tobacco Tax and Trade Bureau) yesterday to request an update on my bonded winery permit application. The lady I spoke with could not help me much because the TTB’s database was down at the time.
While on the phone she mentioned that the division which handles winery applications is extremely busy these days. How busy? They are receiving <<on average 10 to 15 new winery applications per week>>. That is a fairly large number of potential new wineries. Indeed, the number of wineries in America has exploded over the last few years. As of early 2008, there were more than 6,000 wineries in the country. This number represents a growth of more than 25% since 2004. If so many people think that opening a winery is a good idea, I must have picked the right business to get into. Or have I?
First the good news… Given that still only one-third of Americans drink wine there is a considerable potential for growth in the wine business. Over the last decade the wine industry in the USA has seen a steady increase in sales. Bottles $12 and up have increased in sales of approximately 20% resulting in a higher average value spent by wine drinkers on a single bottle.
But we must not forget the thousands of foreign produced wines that are imported into and sold in the US, many of them bringing an excellent QPR. When you put it all together, between the large number of new American wineries and already existing ones, the word that pops into my head is… competition. Things like “local”, “distinctive terroir”, “hand-crafted”, “gold-medal winner”, etc. can only take wineries so far. So in which new ways are wine brands going to distinguish themselves from the rest of the pack? More importantly to me, how is Travessia going to distinguish itself? Obviously I put a lot of thought into this before I even decided to go for it, but if anyone has any ideas or comments don’t be afraid to share.
The proliferation of wine producers is an interesting subject and one that I've been contemplating a lot lately, and plan to write about sooner or later.
I think the competition aspect that you raise is not really unique to the wine industry. With just about any product, producers all tend to use the same claims. It can be hard to find something that differentiates you, particularly when the product is still in development.
In my opinion, focusing on "the experience" is the way to relate to consumers. Anyone can put shallow claims into their marketing, but doing something that enhances the experience differentiates you. What that enhancement is, I don't yet know. But there is a lot or ritual that goes into consuming wine and to build on that ritual would give you something unique and memorable.
Posted by: Tim | July 29, 2008 at 09:13 PM
Hi Tim, great comment! I'll keep an eye out for your view on the proliferation of new wine producers. I do agree with most of what you say, though we must be careful not to overwhelm those who just want a good glass of wine without necessarily looking for an educational experience or any form of ritual. I believe the key is to find a balance... be prepared to provide more than just a glass of wine if that's what the consumer is looking for while not overdoing it.
Posted by: Marco Montez | July 31, 2008 at 11:58 PM
The rituals associated with wines surely exist and I have to admit I enjoy the process... from picking a new wine... to wielding the old waiter's corkscrew... to jamming your nose deep in the glass for a good long whiff... to swirling the juice around your tongue... and finally waiting for the flavors to evaporate back into the universe.
Posted by: Dave Trieger | August 01, 2008 at 10:57 AM
Hi Dave, welcome to my blog. If you enjoy all that "stuff", we have something in common... :-)
Posted by: Marco Montez | August 04, 2008 at 09:33 AM