If you own a wine business in today’s market, you understand the challenges and delights of selling wine. While wine remains a strong member of the alcoholic beverage industry, the changing demographic of the customer base and the introduction of mixed wine beverages has created some wrinkles for the wine business owner. In this article, we’ll discuss the direct-to-consumer wine sales model that is informing growth across the industry, even as it is changing the traditional patterns of sales across the board.
The Silicon Valley Bank issued an industry report in early 2023 describing the band of growth in certain age ranges, “The proportion of wine sold directly to consumers over age 60 has continued to grow in total share over all other age bands, as consumers younger than 60 are less interested in buying wine today.” (www.svb.com/trends) With this confirmation, wine business owners would be wise to turn their attention to the direct-to-consumer model of selling wine and build marketing strategies to support those efforts. Given the lower levels of interest by consumers younger than 60, the emphasis in branding, marketing and sales should be squarely in line with the preferences and needs of those ages 60 years and older.
To meet the wine interest of the age 60+ group with an effective marketing plan, a strong business strategy can be constructed in a wine business plan. The business plan will combine several elements of the wine business into a cohesive roadmap for the present and the future of the company. It will also support the efforts that the marketing plan will embody. To create the business plan, add the following elements into one primary document:
1. Demographic of the customer: In this assessment, an image of the average customer is formed into a single “person” who exemplifies the wine consumer overall. For example, the customer is aged 55-75, has a moderate-to-high income level, travels, is possibly retired, and enjoys wine tastings. Gathering such data will build the image into one that fits into the marketing strategy and can be correctly identified for sales purposes.
2. Analysis of the competition: To assess the competition, begin with any wine businesses that are located in the general region of your business. List the pricing models of each, the labels and brands sold, any unique or special discounts, and the size of the wine business. Determine if sales are direct-to-consumer or if other forms of selling are also included. Note any other factors that indicate a credible threat to your business.
3. Prepare a financial overview and forecast: If your wine business is a startup, you may first want to know how to start a winery business in general. You’ll want to use the financials to assist in securing funding from investors or lenders, as needed. The current financial picture is important; however, the future forecast is crucial, as it identifies when you believe profitability will gain traction.
4. Build the marketing plan: This is the tool that will create success with the direct-to-consumer sales model. The brand strategy must be equally strong to inform consumers of the wine and remind consumers of the singularity of the wine brand and product. Firms such as Kru Marketing can assist you with local SEO to expand the reach of your brand.
5. Place the operational plan in the final document, as well. It will indicate the roles and responsibilities of each staff member, outline day-to-day operations, and bring scheduling to such tasks as maintenance and routine cleaning of operational areas.
Each of the elements listed above should be added to the business plan and reviewed regularly as the various elements need revision. Refer to it for future forecasting concepts and indicate which marketing strategies were most effective for future notice, as well.
To build direct-to-consumer marketing strategies, consider the activities and engagements most enjoyed by those individuals ages 60 and older. Each of the following will be an ideal setting for your direct-to-consumer sales approach:
- Wine tastings or wine and food pairing parties
- Classic movies and wine time
- A “days of wine and roses” garden party
- Travel films and wine-tasting parties
- Golf clubhouse appetizers and wine-tastings
- Cruising with the captain’s wine-tasting class
- 50s dance party with wine-by-the case sales
The elimination of distribution costs, storage fees, and other regulatory requirements boost the profit margin of direct-to-consumer sales considerably and should be considered if the profit margins need improvement in your wine business. Maximize the availability of cases of wine at all functions where it is sold directly to the consumer and minimize the effort of the consumer who is purchasing a case or two of wine by making a carry-out service available with all purchases.
Seeking a reasonable profit margin for your wine business is reasonable and built into your business plan. Employ this strategic shift in direct-to-consumer sales on an on-going basis to build profitability and gain long-term growth.
Also read: Jeremy Jerome: A Serial Entrepreneur Bolstering New Wine Trends
