Oct 19: A survey carried out by Wine Australia of 180 wineries indicates that those with cellar doors having an opportunity for matched food and wine flights and paid tastings were more likely to make sales at the cellar door, providing a clue to the Indian producers who would do well to keep wine tourism as a profit center and an integral part of their marketing strategy, feels Subhash Arora who has been disappointed by the tardiness shown by bigger producers like Grover and Fratelli over the last decade or more
The first findings released yesterday, October 18 indicate that cellar doors (Tasting Rooms in the context of India) are the driving force behind direct-to-consumer (DTC) sales in Australia, accounting for 44 % of DTC revenues which are higher than those of wine clubs, and mail orders (not allowed in India).
Overall, direct-to-consumer sales accounted for 10% of all domestic wine sales for the survey’s respondents. However, boutique wineries producing less than 1000 cases relied on direct avenues for 68% of sales and wineries in the 1000-5000 case bracket achieved 40% of sales through DTC channels. Wine brands with production greater than 50,000 cases recorded a mere 4%. Almost three quarters (74%) of visitors to cellar doors purchased wine. This percentage was higher in small wineries, according to the Report by Wine Australia and published by The Lead South Australia.
Peter Bailey, Market Insights Manager for Wine Australia, reportedly explains that this anomaly was because small wineries were usually less crowded and could spend more time talking with the wine tourists about the wine as also the inconsistent availability in Retail. However, brands from larger wineries were also more widely available on retail shelves. Although 86% respondents offered restaurant food or platters, only 28% cellar doors offered matched food and wine tasting experiences.
There is a big opportunity to draw Chinese Tourists. China is the largest consumer of Australian wines and 40% of the Oz exports are to China. Research from Wine Intelligence shows that 89 per cent of Chinese wine drinkers link Australian wine with food friendly wines.
The survey found that wineries were increasingly offering value added services and activities such as blending classes, live music and playgrounds aimed at attracting more visitors and diversifying revenue streams.
Only 29 % cellar doors charged for standard tastings but wineries with production under 20,000 cases generally charged a fee. Charging for a tasting actually increased the likelihood of a sale. “There is a perceived value when consumers interact with wineries that either charge or don’t charge for tastings but when a wine brand gives tastings for free, the perceived brand value is lower and in most cases this correlates to lower conversion rates as well as average order values,” Bailey said.
The anonymous online survey was conducted by Harrison Research on behalf of Wine Australia. It was sent to 2091 Australian wine producers in August and generated 180 responses.
California Experience
Californian direct-to-customer wine sales expert Sandra Hess was the keynote speaker at a conference titled “Making a Direct Impact”. She said sharing the story about the wine at the cellar door was crucial to building an emotional connection to the brand and increasing the likelihood of customers making future purchases.
‘The tourists want to understand who started the winery and why. They want to understand the passion behind the wine brand and how they can become a part of that. Then they would not only leave with wine in hand but with stories they love to talk about with their friends and clients’, she said.
But she added that finding ways to re-engage with customers beyond that first visit was needed to develop an ongoing relationship. “It’s not the first sale that is the most important in direct-to-consumer wine but the repeat second sale and beyond. If we don’t give them the opportunity to re-engage with the brand they had a great time with the first time, we are leaving money on the table,’ she said.
The 74% purchase rate at Australian cellar doors was higher than in the United States, which was about 66 %, Hess said.
The Survey has a lot of value for the Indian wineries. Though Sula has done very well, perhaps, jumping all the statistics with over 300,000 tourists a year visiting the cellar door, Grover and Fratelli did not understand the importance of these visits to increase sales and kept on postponing to venture in this area for a long time. Smaller producers had lack of resources and the knowledge of market dynamics. Unless they buckle up fast, they will continue to lose a chunk of their sales and the potential wine promotion this step accelerates.
Subhash Arora
If you Like this article please click on the Like button