From the desk of Brilliantcrank

Wine Storey

We Gotta Stop Blaming Gen Z.

I'm halfway through the book The Post-Pandemic Wine Market by James Silver and have thoughts to jot down. First, I was expecting more of the contents to be unique to the world of wine, but that doesn't happen until chapter four on wholesale distribution. As it turns out, DTC (direct to consumer) sales is DTC no matter what you're selling. The biggest difference between selling a bottle of wine and, say, a pound of coffee is in the amount of government regulation. Otherwise, much of the first half of the book is very familiar and could be applied to selling just about anything.

This is not a critique of Silver's work but another reflection on the state of the industry at large. The ideas and methods that Silver shares might be new to the wine industry, but to me they are tried and true. Some of them pioneered by Gary Vaynerchuk decades ago through his work on Wine Library TV. I take this to mean that the wine industry (front of house at least) hasn't evolved much, with maybe the exception of tasting rooms and member experiences. It makes a lot of sense why the industry flourished during the pandemic: so many wineries were already set up for DTC, whereas traditional retailers scrambled to shift everything to digital first.

I was glad to see Silver's thoughts on focusing less on demographics and more on psychographics. The industry line is that it's faltering because younger generations (Gen Z in particular) aren't consuming alcohol like their predecessors did at their age...that's starting to feel like a catch-all excuse. And it needs to stop, because if that were really the reason, wineries would need to take a hard look at developing new products the way McDonald's and Starbucks are battling each other with drinks that look like something from a tiki bar but likely taste like a snow cone—hold the snow. Hard pass.

I'm with Silver when he suggests that psychographics are more important than demographics. The latter worked well when we had just five television channels and people still read magazines. I get why businesses still look at that categorization, but the world continues to get a lot more complicated. If ecommerce is the main channel for DTC sales and the Internet is Tokyo, then the industry has to look at psychographics applied to segmentation differently.

Earlier this year, the Economist argued that wine sales are down because increasingly more people are eating alone, and since wine is what you drink with other people, nobody's opening a bottle.

"In 2023 almost 25% of American adults ate every meal alone on a given day, up from 17% in 2003; among under-30s the share has nearly doubled. […] The consequences are measurable. Around one in six people worldwide is lonely, reckons the World Health Organisation. In 22 European countries the share of people who said they were 'never lonely' fell from 59% in 2018 to 51% in 2022. The latest World Happiness Report found that across countries and ages, how often people share meals predicts life satisfaction almost as strongly as relative income or employment status."

This is but one signal. And my guess is there are a lot more. We just have to reconnect the dots in a myriad of ways until it makes sense and sells more wine.

#Unlearning

Unlearning Wine.

When I asked my Offset colleagues for reading and research recommendations, every single person pointed to the Silicon Valley Bank's Direct-to-Consumer Wine Report written by Rob McMillan, EVP & Founder of the bank's Wine Division. He's written this report every year for the last fifteen years. The strongest signal I took from the report is this line:

"When asked about plans for the year ahead, wineries responding to the survey tell us they are using the playbook from the past 30 years."

I read that and thought "holy shit, that's insane!"

Thirty years ago. That's almost ten years before the movie Sideways absolutely destroyed the merlot market. It's the year Dave Phinney fell in love with wine in Italy and began his epic journey. Thirty years! It makes me wonder how we have a wine industry at all right now.

Last week I came across Unlearn by Barry O'Reilly (highly recommended). The core message of the book is that what got you to where you are today will not get you to tomorrow. This is especially true for every person and every business right now. It's worth pointing out that in his January State of the U.S. Wine Industry Report, Rob forecasts a return to better numbers in the industry, but "what has been normal will not be normal again. The rising tide won't lift all boats after we bottom. You have to evolve now to be relevant and take advantage of what's coming."

Back to the June report, Rob writes:

"We are in a phase where the underlying market truths are finally being nearly universally accepted. As I often say, you can't fix what you can't or don't identify. Agreeing on what needs to be fixed aligns employees and empowers solutioning. This is an optimal time to reexamine tactics and strategies, take stock of company differentiation as assets and search for 'next.'

[That] means thinking in new ways to find new sources of revenue with upside; opportunities that can grow your top line without relying solely on the consumer walking through the front door or expecting distributors with their own issues to agree to take you on as their next client."

Here's where my old world has something to offer the new one.

In product work, "search for next" isn't a phase you enter when things get bad. It's a standing discipline with two parts: research and prototyping. Research means talking to customers before you build, not after you launch. Prototyping means making the smallest version of an idea that can teach you something, putting it in front of real people, and letting the results decide what happens next. Nobody bets the company. You bet an afternoon, then a week, then a quarter, and by the time you make the big commitment it isn't a bet anymore.

The wine industry seems to run (I'm still learning) on the opposite rhythm, and for good reason. A vintage is one shot per year. You can't prototype harvest. The whole culture is built around planning carefully and committing fully, because on the production side, that's the only way it works.

The problem is that mindset leaks into the commercial side, where it doesn't belong. A club tier, a tasting format, a price point, an email offer—these are cheap, fast, and reversible. They can be tested in weeks with fifty customers. The old playbook is well known: plan for months, launch at full scale, live with the results for a year.

Everything ships. Nothing pilots. Nothing learned.

So when McMillan says to search for next, I'd add one word: search small. Test the new membership idea with a handful of your best customers before building it for the whole list. Send the new offer to ten percent of the list before the full drop. None of this requires new software or a consultant. It requires permission to run something small that might fail, and developing the habit of measuring what happened, making adjustments, and repeating.

The industry already knows how to make thirty-year bets. The future will be decided by those who learn to make thirty-day ones.

#Meta

Hello, world.

My introduction to wine came from an unlikely but very lucky source: Master Sommelier Michael Jordan. We met in the early twenty-aghts at Napa Rose, the restaurant he co-created with Chef Andrew Sutton inside Disney's Grand Californian resort. Napa Rose was a celebration of wine unlike anything I have seen anywhere since. The wine cellar is a glass temple that showcases wines in every format and then some, but it's just a glimpse of an inventory that runs close to six figures.

My wife and I always sat at the chef's counter and visited often enough to become regulars, wining and dining off menu. Michael was generous with his time and his knowledge. Over many visits he took us around the world through different expressions of terroir, cultivation, and farming. He inspired a curiosity that continues to this day—we rarely order wine ourselves preferring to lean on recommendations from the people who know what's in back.

Earlier this year I started working with the awesome team known as Offset Partners. They continue to serve the wine industry after seventeen years with the kind of passion and care that I haven’t been around in a long while. Offset is a unique combination of DTC software platform and brand studio. Drawing on my years owning and operating a design studio and leading digital product teams, I've joined as a fractional chief of staff. It's the best seat in the house: I get to support everyone in the company. I know this work well, but my knowledge of the wine industry is not up to par, yet. 

As writing is the best ways to retain knowledge, this site will serve where I will build up awareness and document insights as they come. I'll share my notes as an outsider learning an industry I've always appreciated from a distance. 

Also, this should be obvious but let me be clear, the opinions expressed here are my own.