Thursday, April 28, 2011

Thursday Wine News Bits & Pieces

A couple of news articles caught my eye today. One, via Dr. Vino aka Tyler Coleman, seems to confirm something I've felt since before I got into blogging. The other was more wine-oriented and dealt with Foley Family Wines and their seemingly ceaseless acquisition activity.

The title of the first article: "Social Media Has Almost No Effect on Online Retail" may come as a shock to some or a kind of vindication to others. A report was issued by Forrester Research and GSI Commerce that showed, using hard data, how social media interaction rarely leads to online purchases. According to the data, less than 2% of online purchases were made from a social network. 2%..That's a minuscule number from a percentage angle but it does represent hard dollars, to a degree. What went through my head after reading the article was whether that 2% of sales would have taken place had it not been for the seller's social media presence.

As I thought about that, I also looked at my own online behavior and purchasing habits. Most of my purchases, wine-related or not, don't come from social media like Facebook, Twitter, or Myspace. Hell, I don't even have a Myspace account anymore. The point is, and this seems to match with the report issued, is that a portion of my online purchases come from emails and the rest come from me going directly to the portal, be it Amazon, Ebay, or iTunes. Occasionally I'll see something on one of those networks that prompts a purchase, but even then I am likely to already know about said "deal" from email or the originating site itself.

So that led me to wonder if this report will gain any traction and what could happen if it does. All around us, companies are scrambling to establish social media teams and create Twitter accounts. Is it all for naught? Perhaps the views on social media's utility for a firm need to shift towards a more long-term approach, where the platform is used to spread the brand message and increase consumer awareness in the hopes of creating buzz and at least increasing the potential for future online (or offline) sales.

It's clear from the Forrester report that social media is not an instant-sales engine, but another channel to create relationships between brands and consumers. What exactly the outcome of the relationship is remains the $64,000 question...Will it lead to a sale (and increased revenues) or just a happy feeling because the company tweets a lot? I hope people like Gary Vaynerchuk and Joe Roberts respond to the report and it's implications.

Next up on the list was that the winery-buying-machine-known-as-Bill-Foley has set his sights on Australia. The article, posted here by Wine Spectator, reports that Mr. Foley has now bought a stake in Aussie wine company Wineinc. The wines that Wineinc makes are mostly low end value-priced, not the mid to high end wineries that Foley has been gobbling up here in California. Personally, I wonder if he'll run out of money..or time.

Does the guy want to own every winery on Earth? He's essentially steering the wine business into any other one, where mergers and acquistions are the name of the game. Granted, this did start in the 80's, but there's still something romantic about opening a bottle of wine made by a family-owned winery. The sentimentalist argues that wine should be made with passion, and selling your winery for a gazillion dollars to a mega-corporation is basically selling out...Like artists do in the music industry.

Foley claims that he plans to allow the Wineinc wineries to continue to operate independently, for the most part. I think he's lying and eventually we'll start to see operations at all of them streamlined to increase "efficiencies".. The premise is that Wineinc gets access to the Foley Family Wines distribution network here in the United States. I think there's more here than meets the eye but any changes he wants to make will take a few more years to develop.

Since he's obviously in the wine business to make massive amounts of money, the day could come when Foley makes all those great boutique producers use one single bottling plant and one single, giant facility to make the wine in. Within that gargantuan facility will be smaller-yet-still-massive aging rooms for each winery under the corporate umbrella. Sure, the vineyards will be spread out everywhere, as they always have been, but in the end the grapes will just be trucked to Modesto or someplace equally shitty in Australia and the wines will be created there. This is a bleak future, yet one that is not entirely outside the realm of possibility. Just look what Fred "I cheated once before and got caught" Franzia has been doing...

Anyways that's my rant, and the other side of the coin is that perhaps Mr. Foley's infusions of cash into the wineries will allow them to create better wines going forward. IF that is the case, I'll be happier than a college kid with a case of Four Loko.

Beau Carufel


  1. Interesting read, and good article! I'm local to Foley and have loved their wines! Having the former famed cult winemaker for Sea Smoke Kris Currans in their corner should be a big boost for that particular winery. I can certainly see based on other giants of the industry loosing the great experience of a family winery and create "efficiencies" that often mean a lose of something once much better in the end for the consumer. I'm keeping my eye on it myself and am very interested to see what happens. My hopes of course are that they keep doing good things. If you ever can get your hands on their barrel select Pinot Noir, it is worth jumping into a mosh pit to obtain.

  2. I have had Foley a few times and really enjoyed their wines too, but my fears come from watching the seemingly voracious appetite of Mr. Foley for buying every boutique/high end winery that he can get his hands on. Since he calls himself a businessman, I can only assume that over the next few years he'll see to streamline expenses to generate better ROI. When that happens, the wineries he's bought will be threatened with degrading quality.