Introduction
How have major events like the pandemic and the wildfires affected the way we buy wine online? Do younger generations, such as Gen Y, Gen Z and Millenials, have different criteria for buying wine? What impact does storytelling have on wine sales?
In this episode of the Unreserved Wine Talk podcast, I’m chatting with Cathy Huyghe and Andrea Smalling, authors of the WineDirect x Enolytics 2021 Direct-To-Consumer Impact Report: What Wineries Need to Do Now.
You can find the wines we discussed here.
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Highlights
- What did Andrea’s previous career with Proctor & Gamble involve?
- Why did Andrea decide to move into a career in the wine industry?
- What was the realization Andrea had about wine being an agricultural business?
- How did Cathy fall in love with wine and wine writing?
- Why does Cathy consider herself primarily an issues writer?
- What’s the mission behind A Balanced Glass?
- Which key advice does Cathy wish she could tell her younger self, early on in her wine career?
- What do we mean by DTC (Direct-To-Consumer) wine sales?
- How does WineDirect serve wineries?
- Why was the WineDirect x Enolytics 2021 Direct-To-Consumer Impact Report created?
- What was the founding mission of Enolytics?
- What type of data was analyzed for the DTC Impact Report?
- How did the report track the impact of the California wildfires on the wine industry?
- What did the DTC Impact Report show about the impact of those wildfires?
- Why is the story behind the wine important to younger drinkers?
- Did the report reveal any insights about wine and gender?
Key Takeaways
- I found it fascinating to learn how the pandemic, the wildfires and other major events have changed the way we buy wine online.
- It’s interesting that younger generations, such as Gen Y, Gen Z and Millenials, really want that in-person experience when buying wine. I would have assumed they’d be all about online only.
- We’re back to storytelling, whether it’s wine or books, it has a profound impact on sales and connection.
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About Andrea Smalling & Cathy Huyghe
Andrea Smalling & Cathy Huyghe have recently co-authored a ground-breaking report on the wine industry that will be of interest to those who make, sell and buy wine, from wineries to consumers.
Andrea Smalling is Chief Marketing Officer and Head of E-Commerce Sales of WineDirect, a U.S.-based company that helps wineries sell directly to consumers. Andrea began her career in Toronto with Procter & Gamble, then moved to California to join Gallo Winery, where she worked before moving on to take executive marketing roles with Constellation Brands, Treasury Wine Estates, Foley Family Wines and Mark Anthony Group before joining WineDirect in 2021.
She graduated from the honours business administration program at Wilfrid Laurier University in Waterloo, Ontario, and now lives with her family in Livermore, California, where she enjoys food and wine, fitness and all things pop culture.
Cathy Huyghe is an award-winning journalist with a regular column in Forbes and co-founder and CEO of Enolytics, a data-driven business intelligence company for the $970 billion wine and spirits industry. She’s also co-creator of A Balanced Glass, which gives members of the industry tools to manage their personal wellness. In 2021, she was named one of the industry’s Most Inspiring People by the Wine Industry Network. She’s a two-time graduate of Harvard University and is certified to teach hatha yoga, mindfulness meditation, and Ayurveda. She now lives with her family in Atlanta, Georgia.
Resources
- Connect with Andrea Smalling & Cathy Huyghe
- A Balanced Glass
- Meiningers Wine Business International Article | The challenges of working with wine
- Diary of a Book Launch: An Insider Peek from Idea to Publication
- My Books:
- Unreserved Wine Talk | Episode 54: What’s Minerality in Wine? Plus California Wildfires
- My new class The 5 Wine & Food Pairing Mistakes That Can Ruin Your Dinner And How To Fix Them Forever
Tag Me on Social
Tag me on social media if you enjoyed the episode:
- @nataliemaclean and @natdecants on Facebook
- @nataliemaclean on Twitter
- @nataliemacleanwine on Instagram
- @nataliemaclean on LinkedIn
- Email Me at [email protected]
Thirsty for more?
- Sign up for my free online wine video class where I’ll walk you through The 5 Wine & Food Pairing Mistakes That Can Ruin Your Dinner (and how to fix them forever!)
- You’ll find my books here, including Unquenchable: A Tipsy Quest for the World’s Best Bargain Wines and Red, White and Drunk All Over: A Wine-Soaked Journey from Grape to Glass.
- The new audio edition of Red, White and Drunk All Over: A Wine-Soaked Journey from Grape to Glass is now available on Amazon.ca, Amazon.com and other country-specific Amazon sites; iTunes.ca, iTunes.com and other country-specific iTunes sites; Audible.ca and Audible.com.
Transcript
Cathy Huyghe 0:00
So we’re talking about 200 million data records, 162 million transactions, 26 million consumers, going back five years to 2017 and involves about 2000 wineries.
Natalie MacLean 0:13
Wow, that is massive. And so what trends were you seeing with the wildfires?
Andrea Smalling 0:19
It comes down to timing because you can chart sales by channel and you can see kind of impact. And then with the pandemic, of course, that was all exacerbated. With wildfires, for example, tasting rooms were closed. So you’ll see the onsite sales just drop off, especially during the summer, which is a really big time for them. So you can see that it is not normal seasonality, but they would get and you can kind of chart that path by region as they were impacted by those wildfires.
Natalie MacLean 0:55
Do you have a thirst to learn about wine, the love stories about wonderfully obsessive people, hauntingly beautiful places, and amusingly awkward social situations?. Oh, that’s the blend here on the Unreserved Wine Talk podcast. I’m your host, Natalie Maclean. And each week, I share with you unfiltered conversations with celebrities in the wine world, as well as confessions from my own tipsy journey as I write my third book on this subject. I’m so glad you’re here. Now pass me that bottle please. And let’s get started. Welcome to Episode 177. How have major events like the pandemic and the wildfires affect the way we buy wine online? Do younger generation such as Gen Z, Gen Y and the Millennials have different criteria for buying wine? And what impact does storytelling have on wine sales? You’ll hear those stories and more during my chat with Andrea Smalling, Chief Marketing Officer at Wine Direct, and Cathy Huyghe, Forbes wine columnist and CEO of Enolytics. They’ve recently co-authored a groundbreaking report on the wine industry that will be of interest to those who make sell and buy wine, from wineries, to consumers. Now, on a personal note, before we dive into the show, with the continuing story of publishing my new wine memoir Wine Witch on Fire: Rising from the Ashes of Divorce, Depression, and Drinking too much. I used to read a lot of fiction when I was young. Lord of the Rings, Narnia, Wizard of Oz. But when I finished a book, I really missed the characters, finding out you know what they were up to each day, like I’d lost a friend. Perhaps that’s why I love memoirs now. I still get to know the characters well, but I can stay in touch with them in real life, whether it’s following them on social media, attending one of their events, taking a course from. I don’t mean this in a creepy stalker way, but from a sense of having bonded with them, shared their emotional roller coaster. You know having felt the satisfaction of how they transform their lives in some way. And maybe I applied some of their insights to my own life. I also get to see how they’re living out the things they learned during their memoir journey after it finishes. You know, unlike an autobiography that encapsulates an entire life, memoir is only one small slice of it. Maybe a year or two, like mine is. The best memoirs, I want to keep these people in my life and continue to learn from them. Do you feel that way about memoirs? Let me know. I posted a link to the blog post called Diary of a Book Launch in the show notes at NatalieMacLean.com/177. And this is where I share more behind the scenes stories about the journey of taking this memoir from idea to publication. If you want a more intimate in inside her seat beside me on this journey, please let me know if you’d like to become a beta reader and get a sneak peek at the manuscript, email me at [email protected]. In the show notes, you’ll find my email contact, the full transcript of my conversation with Cathy and Andrea, links to the report and their websites, how you can join me in a free online wine and food pairing class, and where you can find the live stream video version of these conversations on Facebook and YouTube Live every Wednesday at 7pm .That’s all in the show notes at NatalieMacLean.com/177. Okay, on with the show.
Andrew Smalling is Chief Marketing Officer and head of E-commerce for Wine Direct, a US based company that helps wineries sell directly to consumers. Andrea began her career in Toronto at Procter and Gamble, then moved to California to join Gallo Winery where she worked before moving on to executive marketing roles with Constellation Brands, Treasury Wine Estates, Foley Family Wines and Marc Anthony Group, all the biggies before joining Wine Direct in 2021. She graduated with honours from the Business Administration programme at Wilfrid Laurier University in Waterloo, Ontario, and now lives with her family in Livermore, California, where she enjoys food and wine, of course, fitness and all things pop culture. Now Cathy Huyghe is an award winning journalist with a regular column in Forbes and is co founder and CEO of Enolytics, a data driven business intelligence company for the $970 billion wine and spirits industry. She’s also the co-creator of A Balanced Glass, which gives members of the wine industry tools to manage their wellness. In 2021, she was named one of the industry’s most inspiring people by the Wine Industry Network. She’s a two time graduate of Harvard University and is certified to teach yoga and mindfulness meditation. And probably another one I’ll muck up but Aveda, Ayurveda, Ayurveda goodness, thank you. She now lives with her family in Atlanta, Georgia. Welcome Andrea and Cathy, I’m so glad you’re here.
Andrea Smalling 7:22
Thank you.
Cathy Huyghe 7:24
Thank you so much. I also just want to say that I’m the interloper here, the non Canadian interloper.
Natalie MacLean 7:33
You’re most welcome. We’ll make you an honourary Canadian by the time we’re done, Cathy.
Andrea Smalling 7:37
Exactly.
Natalie MacLean 7:40
Oh, that’s awesome. So let’s dive in. Andrea, you worked at Procter and Gamble as did I – unbelievable connections. You started in Ontario. So we all have to be wine sisters here today. But Procter and Gamble. Out of my own curiosity, which brands did you work on while you were there?
Andrea Smalling 7:56
So I was in beauty care, which I loved. I call it Procter and Gamble light, because we were able to actually try and do different interesting things. I worked on Clearasil as a summer intern before I graduated. Then I was on Oil of Olay. I was on Old Spice before it was cool the way it is now. Yes, and also a little bit of CoverGirl. So it was really fun.
Natalie MacLean 8:17
Oh, that’s amazing. I was on Pringles, Crisco and Duncan Hines. Food but not really food. I shouldn’t say it’s a great training ground.
Andrea Smalling 8:27
I had a blast. Isn’t it.
Natalie MacLean 8:29
It’s so good, especially when it comes to marketing. It’s like going to graduate school for marketing. Exactly. Yeah, I learned a lot there. So cool. So what was the moment you decided to get into the wine industry? Why not continue with packaged goods? Because that was the gold standard. What happened to convince you?
Andrea Smalling 8:46
Definitely, well, it’s really interesting. Because I’d like to say I put a lot of thought into it and made a decision to go into the wine industry. But that’s not really the case. Gallo was recruiting what they called traditionally trained marketers to build their brand programme. You know, I think they were among the first wineries to really look at the wines as brands. And their attitude was, we’ll hire people who have marketing training, and then we’ll teach them about the wines themselves. And so they came looking for people, you know, my husband and I had been married for a year, we didn’t have kids or a mortgage, and it was like, sure, we’ll go to California, why not? We don’t like it, we’ll come back. And I think what attracted me at the time was I was realizing that I really love that kind of entrepreneurial spirit that the wine industry has. Procter and Gamble, as we said, fantastic training, but it’s very, very tightly controlled, you know. You can only do this and you can only do that. Whereas the wine industry to be able to come in and actually, you know, make a difference and come up with some really fun ideas and try some things was really appealing to me and then just fell in love with it from there.
Natalie MacLean 9:49
Wow. Cool. Well, you’ve kind of answered this already. How is it different for packaged goods? You mentioned that you had a moment when you realized wine was really an agricultural business. What made you realize that?
Andrea Smalling 10:00
Yes, well, it was interesting because this was in the mid 90s. We did have a high end offering for which we ran out of wine. And my first reaction was, can’t we just make more? If we ran out of oil, and we’ll let you just make more. And that whole idea of no, no, no, we can’t make more right now. We have to wait until the next vintage and we have to have it sit in the barrels. And there’s all this work that needs to be done before we can release more was a big learning experience. And it’s something that we really talked about wineries about now, which is that whole production planning because you can’t just make more in most cases, right?
Natalie MacLean 10:37
Oh, my gosh, that is so true. It took me a little bit to realize, you know, wine seems luxurious snd there’s all the branding and sunny verandas and everything, but it’s really fancied up farming. I mean, it’s, it’s really in the dirt.
Andrea Smalling 10:52
Exactly. Yes.
Natalie MacLean 10:54
So Cathy, what was the moment you realized you wanted to get into wine? And in particular writing about it?
Cathy Huyghe 11:01
Yeah. And I also want to say that, Andrea, I didn’t know any of this about you. Yes, yes. Natalie, I feel like at some point, I just realized that whenever I would have a sip of wine. I was working in restaurants. I was actually working at Shawn Thomas Colours place at the Venetian Hotel in Las Vegas. And I realized that as I would take a sip of wine every so often here and there, I tended to really like it. It made me smile, and I always just like, I really liked it. But like what happens when I drink it? Like what happens when the people around me drink it? It’s just fun. Like, let’s just do more of this. And then I was lucky enough to connect with a sommelier named Jeff Eichelberger, who literally took me under his wing, and he lined up a whole bunch of bottles, and he said “This is why we drink wine”. And we went through one by one. And he literally said, “This is why we drink this wine”. “This is why we drink that wine”. I was hooked. I was hooked from there. And I’ve always been a writer. And I told you that twin boys shortly after I stopped working at du Sean, and moved back to Boston, actually where my husband and I had met, and started my first online blog. It was called 365 Days of Wines. And I promised myself that I would drink a sip of wine even or a glass of wine or more every day for a year in order to teach myself about it or learn about it. And there is Boston University has a great wine studies programme. And I signed up for that as well Sandy Block and Bill Nesto, both Masters of Wine, teaching that programme, and they were fantastic. So it really started there. And the writing started there as well. So started writing literally for a local newspaper, the Gloucester Times, that was my first wine column in Massachusetts, and then I just started getting more clips, more publications, and ultimately demanding a column at Forbes, because the editor who hired me said that you don’t write about wine in the way that most people write about wine.
Natalie MacLean 12:55
What did he mean by that? And Erika Crawford, the winemaker has noted that too, so what are they getting out there, Cathy?
Cathy Huyghe 13:01
It was she actually. Oh, okay. She hired me. She said that. And what Erica meant as well was that I’m basically an issues writer, I just happened to write about the wine industry. So I’m the one who’s interested in labour, and health care for vineyard workers, and gender. And in sort of the global politics of wine. One of my favourite stories, and the one actually, that probably got me a column at Forbes, was about how to make wine when your country is at war. Wow. And this was in 2010, I was writing about a Syrian family who had vineyards in Syria, that has been exiled in Lebanon. And this was before even Syria blew up basically. They still wanted to make wine in Syria, but do it from Lebanon. So that was sort of, to Erika Crawford’s, she’s like, that’s not a wine story. That’s like the issues story. That I feel like writing about it with that lens just opens up a whole other ways to enjoy wine and to share wine and to talk about wine. And to kind of keep that conversation going.
Natalie MacLean 14:06
Yeah, that’s so timely now. I mean, have you revisited that topic in light of what’s going on in Ukraine?
Cathy Huyghe 14:12
In the Ukraine, actually, I wrote recently. Vinitaly. This is, you know, in April, next week is happening. It starts tomorrow, actually on Sunday. And the way that that idea kind of transfers over to today is that I wrote about the Ukrainian presence in Verona, which is the town where Vinitaly happens. So there’s a train station in Verona that everybody who goes to Vinitaly will recognize but it’s now like today become a triage station for Ukrainian refugees passing through the Veneto region. So I’m still writing about wine in that way. And I think it’s just really adds another layer of appreciation for how wine gets to our table and you know, the wine that’s in our glass.
Natalie MacLean 14:55
That’s part of the story too, and I think that’s part of the fascination of wine are the stories that are locked up in those bottles until we open them. And now just one more thing. Another approach you have is very much about wellness and spirituality, you co founded A Balanced Glass. Just tell us what is that exactly.
Cathy Huyghe 15:15
Absolutely. And let me clarify, Rebecca Hopkins founded it. Okay. Rebecca was my friend and colleague, I co created the content with her and have done since the beginning. So A Balanced Glass. And this was totally Rebecca’s idea that her observation that none of us were talking about the potential damage that alcohol does to our lives and to our professions and to our colleagues. She wrote this article for Meininger Wine Business International. And it just set off a firestorm of responses and just hit a nerve. And Bec thought we need to do something with this. And so that launched A Balanced Glass. I really want to do this, but I need you to do the meditation part. And so can we do it together. And that’s where it started. And it’s evolved since then, but I think it’s the community and its a platform to bring the the idea and the topic of wellness front and centre, when alcohol is at the centre of our work.
Natalie MacLean 16:13
Right, so people in the industry. And you do phenomenal work. And number two, and I get your newsletter is so good. It makes me pause. Once a week, whenever I get the newsletter, and it’s one of the few newsletters I actually read and don’t just have on auto delete. It’s so thoughtful and excellent work that you’re doing. Thank you. And Rebecca.
Cathy Huyghe 16:33
I’ll take that as a big compliment. Yes, yes.
Natalie MacLean 16:36
All right. So back to you, Andrea. Is there anything you would have done differently on your path to where you are now, if you had the benefit of hindsight? Anything, you would have told your younger self along those lines?
Andrea Smalling 16:48
I wouldn’t change anything for the world. You know, I think it’s been a wonderful journey. And I’ve enjoyed every minute of it. I love this industry so much. I’m so glad that I, you know, stumbled into it. Because really, that’s what I did. And I just am really looking forward to what’s to come. So yes, nothing I would change.
Natalie MacLean 17:06
Well excellent. How about you, Cathy, any advice you would have given to your younger self? Even if you still ended up in the same place? Would you have done anything differently to get where you are?
Cathy Huyghe 17:15
Yeah, as a writer, and somebody who entered the industry, as a writer, I feel like sooner I would have recognized the unreliability of being a wine writer in terms of the financial perspective. Like it’s not going to pay the mortgage, it’s just not. So how do you then still do that and pay your bills? So I feel like earlier, I would have told my younger self that so that I could have made a plan sooner. No complaints like Andrea, no complaints about how things have gone and how the trajectory has been. But I actually think that this is too far beyond wine, that journalists and we’re paying, quote unquote, journalists today is just not sustainable. And there’s effects of that. There’s consequences of bad news. So I think that that is something that I would have paid attention to sooner.
Natalie MacLean 18:03
You make some great points. And that is a whole other discussion, but especially with the collapse of traditional media after 2008, their outlets shrank. And there was the rise of the Internet where no one wanted to pay for anything. Right. So yeah, it’s been cataclysmic for my writing, but also journalism more broadly. But some good insights there, Cathy. All right. Why don’t we dive into the report? It’s called the 2021 Direct to Consumer or DTC Impact Report What Wineries Need to do Now. And so for those who don’t work in the wine business, which are the majority, maybe not the majority, I think the majority of who listened to this podcast, I should do my own research sometimes.
Cathy Huyghe 18:48
Get into the data, Natalie.
Natalie MacLean 18:51
I’m talking to the data mavens. It’s like, what should we talk about? Whatever I feel like. I don’t want to be data driven. Anyway, what does direct to consumer mean? What channels, sales channels, are we talking about in this report? And I’ll leave it open to whomever wants to pick up the questions going forward here. I’ve been kind of structured like a school teacher up till now. But now it’s a class discussion.
Cathy Huyghe 19:15
All right, Cathy do you want to take that one? Sure. So DTC direct to consumer. It’s kind of an umbrella term for a lot of different channels quote unquote. The channels being website, tasting room, or cellar door. When you go and you visit a winery and what you buy there? If you buying through the website online and having it shipped to you. There’s also wine clubs, when customers sign up for regular shipments of wine from a winery, which also sort of the admin panel which is a little bit of a catch all phrase for things that fall outside those other channels. Typically its phone orders that are just called in sort of old school wise into the winery and fulfilled that way. And also the newer channels like telemarketing, whether there’s outbound calls from a winery going out and trying, prospecting for sales. And also texting, which is kind of falls I guess under the rubric of telemarketing. And buying wine through text is a thing now. And so that’s really interesting. But all those channels, so to speak of where wine is sold and how wine is sold fall under the rubric or the umbrella of DTC or direct to consumer.
Natalie MacLean 20:19
Okay. And why did you want to do this report? Maybe Andrea, like you’re working with Wine Direct. Maybe we should find out a bit more about Wine Direct first, actually. Oh, sure. So is it software? Or what is it that your company offers to wineries?
Andrea Smalling 20:35
It’s both. So we have a software business. And we also have a fulfilment business, however, not in Canada, because the regulatory situation Canada’s completely different, of course, with the liquor boards. But basically, our mission is we’re the wineries champion and we provide everything that wineries need to run their direct to consumer business. So we have everything from websites to email platforms to just club tools, anything that you need to kind of manage that business to get the wine directly to consumers.
Natalie MacLean 21:05
Okay, so you would have access to a lot of data. What was the driving force behind wanting to do this report?
Andrea Smalling 21:12
Well, going back to you worked at Procter and Gamble, and you knew what we did for our first year at Procter and Gamble, right? We wrote business reports, based on data, and we had rewrote them and rewrote them. But we knew everything that was going on with that business. And it was the biggest opportunity area that I saw when I moved to the wine industry is that we did not really have access to that level of data. And you take that further into the direct to consumer side of the business, and there was really just no access to that data. There also wasn’t the skill set to kind of know what to do with it, because that’s just not kind of how winery careers had worked in the past. But wineries are kind of flying blind. And so I’d been on the client side, I’d worked for wineries until let’s see, I joined Wine Direct in January 2021. So when I joined Wine Direct, that was one of the things that I saw as a big opportunity was there’s all this data. The wineries want this data. They want to know what to do with that, which we’ll get into. And so I just really wanted to have a report that was robust, and that was going to be able to take all this information that we had, and make it useful. Of course, how to do that is where Cathy came in, because that was a big, big task in terms of, you know, taking all of those records and making them useful.
Natalie MacLean 22:29
Nice segue, Andrea. Cathy, what is Enolytics your company? And how did it marry up with Wine Direct? They’ve got the data. And you’ve got the technology.
Cathy Huyghe 22:41
All right, absolutely. To Andrea’s point about the business intelligence and the skill set around analytics to make something out of this massive amount of data that’s accumulating and accruing every single day. And that’s actually why Enolytics was founded in the first place. So you know that Eno is the wine and Lytics is the analytics part. And I’m the only wine person on our team, right? Everybody else is part of the analytics part. And that’s super important, because it’s their skill set that makes what we do possible. So about two years ago, we started building a software that’s layer of software that sits on top of DTC data were built natively to Wine Direct. And there is such an incredible opportunity there. And it was a little bit of a diplomatic conversation as well, going into kind of knocking on Wine Direct’s door and saying, like, look, we see that you have all this data, and we think there might be a chance to do more with it. And to Wind Direct’s credit, they said, we agree with you.
Andrea Smalling 23:45
Wait, we were looking at that data, actually. And we were wondering how we can make that happen. It’s like it was actually perfect timing.
Cathy Huyghe 23:53
It was perfect timing,
Natalie MacLean 23:54
Wow. That’s so good. And there’s a massive amount of data like in this report alone, give us an idea of just how much data you were dealing with data points or whatever, however you wanted to describe it really.
Cathy Huyghe 24:05
So we looked at and Wine Direct’s team to their credit as well pulled together this data in order to transfer over to Enolytics for us to work with it. So we’re talking about 200 million data records. So all transactional, all anonymized. So no winery’s proprietary or customer information is exposed. So that’s important to say from the very beginning. About 162 those 200 million were transactions like actual purchases of wine that happened through the DTC channels, and the other was consumer information. And when I say consumer information, it’s first name, it’s the zip code that’s kind of as deep as it goes in terms of identifying information. That’s not our game. We’re not interested in that part. And so transferring all that data over was a challenge to begin with, but also working with it once we had it. We kind of narrowed it down, so to speak, to the past five years, going back to 2017. And the reason we did that was that we wanted to certainly see the impact on the DTC market of COVID, pre COVID, during COVID. And in 2021, more or less after sort of the COVID lockdown situation. But also going back to 2017 meant that we could take a lot of the seasonality of it. We could really kind of take a big like a step back and get the overview. And its also about for looking at the impact of wildfires in different places and different months. So those are kind of the the parameters that are laid so that 160 million transactions, 26 million consumers going back five years to 2017, and involves about 2000 wineries that are Wine Direct customers.
Natalie MacLean 25:50
Wow. That is massive. And so what trends were you seeing with the wildfires? And how were you able to separate that out from other factors, environmental factors, whether it was COVID, or other things? Like how did you know, first, what was the impact of the wildfires on online buying? And then how did you know it was that specifically.
Andrea Smalling 26:10
It comes down to timing. It’s really interesting, because you can literally chart sales by channel, which is important when it comes to wildfires, and you can see kind of the impact of what is going on. And then with the pandemic, of course, that was all exacerbated. With wildfires, for example, tasting rooms were closed in any given area. So you’ll see all of a sudden, the onsite sales just drop off, especially during the summer, which is a really big time for them. So you can see that is absolutely not normal seasonality, but they would get and you can kind of chart that path by region as they were impacted by those wildfires.
Cathy Huyghe 26:48
And also a sort of a secondary part of the answer is that we could get really specific and really granular about when we’re talking about it. If we were looking at during COVID, for example, Natalie, we could say March to May 2020, was the primary lockdown period. So what we can do is pick the sort of – the date picker is what it’s called – to isolate March 1 through May 30, say, and look only at the performance of that time, then we could zoom out and kind of open it up to a larger period of time. And then that’s how we’re able to see the trends over time. We could look at March to May 2019, versus 2018 versus 2017 versus 2021. And so that’s how we’re able to really good look at the impact of certain events.
Natalie MacLean 27:37
So I’m curious then when it comes to wildfires, did that hurt online commerce? What was the relationship there?
Cathy Huyghe 27:46
Well, certainly, to Andrea’s point about the tasting rooms being close, I feel like there’s a residual effect of the wildfires in the sense that there was uncertainty over smoke taint, and what kind of impact could that have had through the wine club channel, for example, or through a website buy. Andrea, maybe you could speak to this more from a marketing perspective?
Andrea Smalling 28:07
Sure, yes. So that goes back to the point about wine is an agricultural business. And so it didn’t necessarily impact consumer purchase behaviour. Certainly, when it comes to on site, it was more in the tasting rooms. But the bigger challenge that it presented for wineries was in production planning. Because basically wildfires happened, you pick the grapes anyway, and you put them into barrels or you know, whatever container the winery chose. And then you kind of have to sit back and see what happens. Because smoke taint is something that emerges over time, and you just don’t really know how it’s going to impact your business. So, as a result as Cathy said, club planning, not really knowing how much wine you’re going to have of any particular varietals, and being able to plan that throughout the year made wineries really, really hesitant. The other thing is, I believe it also, in some cases, at least impacted price, because wineries didn’t want to discount a lot when they just weren’t sure what they were going to have. So I think more than anything, it was uncertainty around what was going to happen within the next year. And then, of course, you know, for a lot of people when the pandemic came out afterwards. So it was just a big time of uncertainty and made it tough for wineries to plan how they were going to run their business.
Natalie MacLean 29:22
Yeah, excellent insights. It’s not a direct comparison, but there’s something about wine, as you say, being an agricultural product and the uncertainty that on the flip side also makes it more exciting. As we know, there’s vintage variation, you know, one year this one might be spectacular, and you just never know what you’re gonna get. And I think like my background is dance so it’s in a way why sometimes we go to a live performance because you’re not hoping that the ballerina is going to like twist an angle. But there’s something exciting about this is a live performance. It’s not on TV, it hasn’t been edited. There’s an immediacy and a risk that it is exciting at the same time. But anyway, just thought I’d throw that out there.
Andrea Smalling 30:05
I agree completely it is so, so interesting, because you’re right, you don’t know what you’re going to get even bottle to bottle. You don’t know what you’re going to get. But it is very fascinating. That is so true.
Cathy Huyghe 30:17
And also to that point, I think that the buyers and one of the things that it underscored was how much of an agricultural wine is. There should be the vintage variation. There should be, and that I feel like it emphasized for consumers especially, it’s not like, we’re gonna get the same thing every single time. I mean, we could. But if you’re looking at maybe smaller production lines or something like that, there will be a difference this year.
Natalie MacLean 30:46
And that, again, makes it more exciting, I think, in many ways than consumer packaged goods. Consumer packaged goods, definitely have the discipline of, as you’ve already said Andrea, that will help wineries be better marketers, but the excitement of the product itself is irreplaceable.
Andrea Smalling 31:02
Yes. And the ability to tell the stories around that product, I think is something that is becoming even more and more important, because and we’ll talk about it later. But you know, younger consumers want that information, and they think it does help them get more engaged with what they’re drinking. And that’s really fun.
Natalie MacLean 31:19
Oh, that’s a good segue, though, I’d love to talk about that. The younger drinkers, did that come through in the study? Or is that something you’re seeing more broadly, from your experience as a marketer? Why did the younger drinkers want the story behind the wine?
Andrea Smalling 31:34
So I will say the study in general was very much a combination, which is why it was so fun working with Cathy and Chris at Enolytics. It was very much a combination of taking that data. But then it was really important that we turned it into usable insights. But as we said, the wine industry isn’t really used to working with data. So I felt like for our clients especially we wanted to kind of take it and then turn it into well, now what do you do with it? So Cathy, and Chris did a amazing job at pulling out those kinds of gender and a generation insights. And then we were able to dig deeper and say, well, why would that be the case? And you know, when we did a little research, of course, and looked at, you know, just general trends around the industry, but some of them became very clear, you know. When we looked at, for example, the younger generations had a higher percentage of their purchases being done on site, which I thought was really interesting. It surprised me, because I think we just, you know, I’ve got a 19 and a 21 year old, and I just think, oh, they’re so completely internet based. And so I thought that website sales would be a huge percentage of what they were doing. But no, it was the on site experience. And then you start to think, what do you hear about Gen Z and Millennials, it’s all they really are about the experience over the product to a certain extent. So then we started thinking about, oh, we can imagine how they’re going to be winery, and they’re having that wonderful experience. And they’re learning about the stories. And that’s kind of what’s getting them to purchase the wines. So it was a combination of like looking at the data, but then also just kind of using our experiences to figure out what that might mean.
Natalie MacLean 33:09
Well, yeah, my experience is not things. I guess it’s the thing I’ve heard before.
Andrea Smalling 33:14
Yes. And I’ve heard consumers literally say that, you know, kind of lecturing me as a not young person, saying, Oh, we’re more about experience than we are about the actual product. So don’t expect them, you know, when we’re setting them up wineries, don’t expect them to spend, you know, 1000s of dollars, we’re more about the experience, and maybe we’ll buy some wine, but we want to experience what that winery has to offer.
Natalie MacLean 33:37
And Cathy, was there anything else that came out about the younger generation? I feel like I should say, Get off my lawn, the younger…
Andrea Smalling 33:47
Those kids today
Natalie MacLean 33:50
Did anything else come out in the study in terms of those young folk terms of their buying habits, they want the stories they want the experience anything else about the types of wines they buy or anything else from the study?
Cathy Huyghe 34:02
Yeah, and I hope that what comes through in the study is that started out saying Wine Direct has the data. Enolytics has the technology. Within those teams are definitely specializations of expertise. So Andrea, with her marketing and our team with the analytics underwriter, so hopefully what comes through is a complete synthesis of those things. And to be able to say yes, to be able to say, this is the insight that we’re seeing about gender, for example. And one of the questions that we get asked a lot is how do you know gender? And that’s not something that necessarily comes is marked anywhere. But we run an algorithm is the answer when the algorithm based on Christine. Andrea would register female. Natalie would register female, Michael would register male. Chris would register androgynous. Mr. and Mrs. would register as unknown. So that’s how that algorithm works. That gets us to the insight of gender and now gender and sort of teasing out gender by different generations, choosing out gender by geography, choosing out gender to your question that will be around wine style, and price point and things like that. And in a way, one of the things that was clear, I think, in the report was that younger people are ageing through the process, right? So they don’t have as much disposable income as the boomer generation, for example. So, of course, but the boomers are, maybe they’re buying less in different markets or in different channels in particular. So there’s a little bit I think, something to be said, it’s, I don’t want to join the bandwagon and say Gen Z is going to rescue the wine industry. But I do think that it’s clear through the data, that they’re ageing into buying wine or drinking more wines, or buying more expensive wine. That’s just natural. That’s just going to happen because people get older people, you know, have birthdays. Sure.
Natalie MacLean 35:59
Well, there you have it. I hope you enjoyed our chat with Andrea and Cathy, here are my takeaways. Number one, I found it fascinating to learn how the pandemic wildfires and other major events have really changed the way we buy wine online. To it’s interesting that younger generations, such as Gen Y, Gen Z, the Millennials really want that in person experience when buying wine. I would have assumed they’d be all about online only. And three, we’re back to storytelling. Whether it’s wine or books, it has a profound impact on sales, as well as on connection. In the show notes, you’ll find links to Cathy and Andrea’s website and the report, my free online wine pairing class and the video versions of these conversations. That’s all in the show notes at NatalieMacLean.com/177. Email me if you have a sip, tip, question or want to be a beta reader on my new memoir at [email protected]. You will want to miss next week when we continue our chat with Andrea and Cathy. In the meantime, if you missed episode 54 go back and take a listen. I chat about both the wine region wildfires and what minerality is in wine. I’ll share a short clip with you now to whet your appetite. What is minerality when it comes to wine? Is it a taste, a feeling or some bogus concept meant to keep wine mysterious? What’s the latest with the devastating wildfires in Sonoma wine country? And how will that impact the wines we drink? Why are winemakers wary of cannabis producers? It’s not what you might think. And what is a new wine group doing to help with A Balanced Life? That’s exactly what we’ll be learning on today’s episode of the Unreserved Wine Talk podcast.
If you liked this episode, please tell one friend about it this week, especially someone you know who’d be interested in the wines and stories we discussed. Thank you for taking the time to join me here. I hope something great is in your class this week. Perhaps a wine that you recently purchased at a winery as we get back at last to those in person experiences.
You don’t want to miss one juicy episode of this podcast, especially the secret full body bonus episodes that I don’t announce on social media. So subscribe for free now at NatalieMacLean.com/subscribe. Meet me here next week. Cheers.
