Wrs part 1 crossroads july 2013
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  • 1. Not for Public Distribution. ©2013 Wine RockStars, LLC All Rights Reserved 1 Introduction to Wine RockStars, LLC™ PART I: THE CROSSROADS
  • 2. 2 WELCOME!
  • 3. Our purpose today is to invest the next 20 minutes or so to introduce you to the marketing concept that we call Wine RockStars™. Not for Public Distribution. ©2013 Wine RockStars, LLC All Rights Reserved 3 In this Part I of our presentation, titled ―The Crossroads‖, we are asking you to invest the next 30 minutes or so to consider how the forces of change are reshaping our industry.
  • 4. 4 The Great Alan Freed THE DISC JOCKEY WHO COINED THE PHRASE “ROCK ’N’ ROLL” discussion / contents page Welcome 2 Every Picture Tells a Story 7 Crossroads 33 PART I: CROSSROADS
  • 5. WINE ROCKSTARS, LLC™ Not for Public Distribution. ©2013 Wine RockStars, LLC All Rights Reserved 5 “Some people have a hard time explaining rock 'n' roll. I don't think anyone can really explain rock 'n' roll. Like wine, rock 'n' roll is a lifestyle and a way of thinking... and it's not about money and popularity. Although, some money would be nice. So would some popularity. But rock 'n' roll is a voice that says, Here I am! But what it all comes down to is that thing. That indefinable thing when people catch on to something.” Russell Hammond, Stillwater
  • 6. EVERY PICTURE TELLS A STORY DON’T IT Begin the Beguine 6 Rod Stewart
  • 7. 7 We need to go ―wayback‖ in time to catch the beginning of our story Michael J. Fox in the movie Back to the Future
  • 8. 8 "Sorrow can be alleviated by good sleep, a bath and a glass of good wine." St. Thomas Aquinas Noted Theologian, Raconteur of White Wine, Mead, and a bunch of other stuff
  • 9. 9 OOPS! We don’t need to go that far back in time, Marty. Let’s try again to get it right this time. Sherman Christopher Lloyd Michael J. Fox
  • 10. Not for Public Distribution. ©2013 Wine RockStars, LLC All Rights 10 ―Let’s start at the very beginning, a very good place to start… Julie Andrews Sound of Music, 1965
  • 11. 11 “Can you tell I’m about to retch right in my glass? RockDoggie
  • 12. 12 “Where are the Back Street Boys when you really need them?” RockDoggie Back Street Boys All Right!
  • 13. 13 “Once more into the breach my friends.” RockDoggie
  • 14. 14 The Wine RockStars™ story actually begins the pivotal year of 1 9 3 3
  • 15. Not for Public Distribution. ©2013 Wine RockStars, LLC All Rights 15 For the past 12 years the sale, manufacture, and transportation of beverage alcohol is considered to be a criminal offense.
  • 16. 16 FDR, a noted lover of a nice Madeira, is sworn in as the 32nd President of the United States
  • 17. 17 The GREAT Robert Johnson is at the PEAK of his career and is almost finished “inventing” the modern musical genre to become known as the Blues. No one really knows, but we suspect Mr. Johnson’s favorite wine was the highly rated Chateau Coutet, Barsac, 1934 which, unfortunately, was not always easy to find on the dusty roads of rural Mississippi and Texas
  • 18. 18 The movie “King Kong” opens to rave reviews in New York City on March 2, 1933 Ms. Wray was known to like French wine. Might we suggest a vintage 2004 California Cabernet instead? Mr. Kong, however, was known to drink anything he could find that wasn’t nailed down! Such a pity.
  • 19. 19 Influenced by Robert Johnson, Muddy Waters first picks up the guitar at the age of 19 Our guess is that Mr. Waters would like a nice Pinot Noir, perhaps the Domaine de la Romanee Conti (DRC), Romanee Conti GC, 1937
  • 20. 20 Mr. president, might we recommend a luscious Sonoma County Chardonnay to go with that book on a sun filled Sunday afternoon. Your dog can drink, well…whatever ―Outside of a dog, a book is a man's best friend. Inside of a dog it's too dark to read.‖ The movie Duck Soup is released and Rufus T. Firefly is named fictional president of bankrupt ―Freedonia‖ Groucho Marx
  • 21. 21 Most important to our story, Great-Grandpa really wants a drink!
  • 22. 22 Long before Hannibal Lechter uttered his endorsement of the pairing of liver and fava beans, Great- Grandma was known to favor a nice Chianti‖ ―Look at Granny’s picture and tell me it doesn’t makes you think of flying monkeys.‖ RockDoggie
  • 23. 23 Few realize that a NEW age is DAWNING How about a ―refreshingly sweet‖ yellow tail pink moscato or a ―light and lively‖ sweet white roo and leave the Chianti to me?
  • 24. AND THEN ALMOST SUDDENLY IT HAPPENS 24
  • 25. Everyone Makes Money Again 25 Ernest and Julio open their 1st winery in Napa
  • 26. The 3-tier System regulating the manufacture, distribution and sale of wine, spirits and beer in the US is introduced 26 ―Once, during Prohibition, I was forced to live for days on nothing but food and water.‖ RockDoggie doing his best imitation of WC Fields
  • 27. GREAT-GRANDPA OPENS THE FIRST RETAIL PACKAGE STORE 27 And a Rockin good time was had by all!
  • 28. AND THEN IN A TIME OF GREAT ANTICIPATION… 28 “Wait for it…” RockDoggie
  • 29. 29 …NOTHING CHANGES for the next 80 YEARS “I’m not surprised. Are You?” RockDoggie
  • 30. 30 “That is until NOW!” Guess Who?
  • 31. 31 Guess Who? Is it any wonder that I’m not taken seriously? I do have a job to do you know!
  • 32. THE CROSSROADS 32 Eric Clapton Crossroads Guitar Festival 2013 “Time for a little of the old slow hand.” RockDoggie
  • 33. More popular than ever, with more choices being offered to the consumer, wine has increasingly become an important part of the national lifestyle 33 In many respects the wine industry has reached a crossroads ―Crossroads‖ Catch the reference? Ha!RockDoggie
  • 34. • The fundamental consumer base has and will continue to change. • There has been a sustained shift in consumption patterns away from bars and restaurants and more towards at-home consumption. 34 The Crossroads Source: Beverage Information Group Trends Driving Change
  • 35. • Core wine drinkers are those who drink wine daily, several times a week or about once a week • While marginal drinkers are those who drink wine less often than weekly—the greatest number of whom drink wine two to three times a month. • In 2010, marginal wine drinkers represent 31 million U.S. adults, making the total number of U.S. wine consumers 77 million. 35 Source: Wine Market Council Estimate The Crossroads Trends Driving Change
  • 36. • According to the Wine Market Council, the U.S. market gained 71 million cases in total table wine sales during the first full decade of the 21st century; creating the most transformative 10 years of positive change since the 1970s. • In 2000, 57 percent of all U.S. wine drinkers were marginal wine consumers, but today the core and marginal proportions have reversed. 36 ―In my humble opinion, this one of the most positive signs of acculturation if there ever was one!‖ RockDoggie Trends Driving Change The Crossroads
  • 37. 0 0.5 1 1.5 2 2.5 3 1934 1936 1938 1940 1942 1944 1946 1948 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Gallons US Wine Consumption 37 This equates to 9.9 liters or 2.6 gallons for every man, women and child in the US. The burgeoning power of the US market is undeniable. Wine sales in the U.S. from all production sources—California, other U.S. states and foreign countries—increased 2% from the previous year to a new record of 360.1 million 9-liter cases with an estimated retail value of $34.6 billion, according to wine industry consultant Jon Fredrikson of Gomberg, Fredrikson & Associates. Wine’s share of total adult beverage volume increased slightly to 10.7 percent. The Crossroads Trends Driving Change
  • 38. 38 • Part of that growth in off premise consumption is due to the fact that “occasions”—events worth purchasing or opening a bottle of wine for—are increasing in popularity. Source: Wine Market Council Estimate The Crossroads Trends Driving Change
  • 39. • Consumers are finding more reasons to “celebrate” with a bottle of wine or drinking more wine when a bottle is opened. 39 Wine Market Council Update on Jan. 18, 2013 The Crossroads Trends Driving Change
  • 40. 40 Domestic table wines in 2012 were a major driver of the wine market, accounting for 67.9 percent of total wine volume. “A little class would be good for my image. Don’t you think?” RockDoggie The Crossroads
  • 41. • Of all wine drinkers, 57 percent are now considered “core” wine drinkers, and they account for 25 percent of the United States’ adult population. • This represents a major shift in repeat purchasers and adds to the promise of a brighter future. 41 Demos Core NON- CORE Wine Market Council Update on Jan. 18, 2013 The Crossroads Trends Driving Change
  • 42. 42 • This group consumes an astounding 93 percent of the 175 million cases of wine sold off-premise last year. • Most importantly, data shows price points increase dramatically when wine is enjoyed with friends 42 Wine Market Council Update on Jan. 18, 2013 The Crossroads Trends Driving Change
  • 43. • The point is that our base of regular wine consumers is not the same as it was even 10 years ago. • And there is nothing on the horizon that suggests this expansion will not continue for the foreseeable future. • In our view, the marketplace has never been filled with more opportunity. • It is also evident that powerful market forces are at work that are changing virtually every aspect of our business. 43 The Crossroads Trends Driving Change
  • 44. 4444 Market forces such as the economic drivers of production; the distribution system is under pressure to adapt to new methods of reaching customers; the pace of retail technological and innovation is accelerating at an astounding rate; as people view wine differently, new legal, political, cultural norms and the forces of globalization are unleashing pressures to embrace change. Insert your own snide comment here RockDoggie The Crossroads Trends Driving Change
  • 45. 45 Crossroads – Part II Le Raison d'être
  • 46. "Making wine - that's the easy part.” "It's selling it that's hard." Dario Sattui Sattui Winery Napa Valley, California 46 Crossroads – Part II Le Raison d'être
  • 47. • The wine business today has become a high- stakes, high-risk, high-profile environment that is filled with uncertainty, ambiguity and opportunity. 47 Crossroads – Part II Le Raison d'être
  • 48. • The next five or 10 years are going to be even more intensely competitive than the past 10. More than ever success will require every one in business to get the “Rock On.” 48 Crossroads – Part II Le Raison d'être “So do we!” RockDoggie
  • 49. • We have to accept the fact that business is only going to get weirder, tougher, and more turbulent. 49 The speed of change in the wine business is being accelerated and many of the traditional economic drivers of our business and being forever altered. Crossroads – Part II Le Raison d'être
  • 50. • Many of Napa's winemakers are in the throes of a classic market disruption. They can't go backward, and the way forward is still largely unknown. The only certainty is that they can't stay where they are! 50 "Wineries that need to move inventory have gotten desperate. Direct-to-consumer sales are becoming more critical.‖ Peter Mondavi Jr. President Charles Krug Winery Crossroads – Part II Le Raison d'être
  • 51. • It turns out that both men and women view wine as a high risk purchase. • They want to avoid being embarrassed in front of business associates or friends. 51 Source: Emerald Group Crossroads – Part II Le Raison d'être
  • 52. • Both men and women manage the risk by getting information at the point of purchase— which is where 70% of the purchase decisions are made. 52 Source: Emerald Group Crossroads – Part II
  • 53. 53  Walk into just about any wine shop or grocery store and just look at the shelves stocked full, and row upon row of open crates; each crate plumped with a dozen bottles of the same wine.  Many of the wines, most even—are unknown to the typical consumer, at least as far as the producer was concerned, and much too often even more than that. ―I cannot take your call right now, but if it’s an emergency, white with fish and red with meat.” Alexis Bespaloff’s legendary answering-machine message Crossroads – Part II Le Raison d'être
  • 54. • Most of our messaging as an industry is traditionally geared toward men. • Yet, 80% of wine buyers are women. 54 Source: Emerald Group Crossroads – Part II Le Raison d'être
  • 55. • The sources of information tend to differ, however, for men and women. • Men have a stronger tendency to read reviews and even books. • Whereas women will look more closely at the labels and shelf tags. 55 Source: Emerald Group Crossroads – Part II Le Raison d'être
  • 56. 56 When I walk into a store I like all the pretty labels to pick from. Its how I know they like me! They really like me! RockDoggie Crossroads – Part II Le Raison d'être
  • 57. • Its not surprising then that Brands with eye-catching names, and some with themes aimed at women consumers dominated the Top 20 New Brands of 2012 as picked from off-premise sales data. 57 Source: Symphony IRI Group Crossroads – Part II Le Raison d'être
  • 58. 1. Skinnygirl, 2. Be, 3. Bella Bottle, 4. Acronym 5. Macaron 6. Fancy Pants 7. Thorny Rose 8. Wine Sisterhood 9. Flirt, and 10. Ooh La La 58 ―Another sign that the SUBSTANCE of the industry’s messaging is really connecting with consumers. My personal favorite is Artisan Vintner’s Guild‖ RockDoggie TOP TEN NEW BRANDS Source: Symphony IRI Group Crossroads – Part II Le Raison d'être
  • 59. Is it any wonder, then, that more than a third of all wines sold in America are purchased at grocery stores at a price point typically under $12.00? Crossroads – Part II Le Raison d'être
  • 60. • It is also a fact that when consumers find a toothpaste or a soda they like, they stick with it. The same is not true for wine. 60 ―We can learn a lot by studying other industries and other retailers‖ From the Wisdom of RockDoggie Crossroads – Part II Le Raison d'être
  • 61. 61 • With thousands of wines to choose from and with wine being more of an adventure than other products, consu mers are willing to try different brands much more frequently. Crossroads – Part II Le Raison d'être
  • 62. • In fact, with so many brands, it is often difficult for the consumer to remember the name of the brand they liked. 62 Crossroads – Part II Le Raison d'être “We can learn a lot by studying other industries and other retailers” From the Wisdom of RockDoggie
  • 63. 63 • Consumers will, however, stick with a retailer that helps them get the right wine for the occasion. Crossroads – Part II Le Raison d'être
  • 64. 64 • While consumers have lower loyalty to the wines them- selves, they have strong loyalty to their wine retailer. Crossroads – Part II Le Raison d'être
  • 65. 65 • Simply stated, that’s why we created RockStars™.
  • 66. 66 We have created Wine RockStars™ and www.rockingoodwines.com to broaden our market, to find a way to tell the story behind each label, and to create new and lasting connections between the producer and the consumer in a way that is fresh, fun, entertaining and easier to understand. Why? Because… “Its MORE than Rock’n’ROLL BABY!” Gene Faul, Co-founder Wine RockStars, LLC™
  • 67. 67 “Like the railroads at the dawn of the automobile age…” 67 We would like to leave you with this question? Buster Keaton in “The General?
  • 68. 68 “…do you want to be left standing at the side of the road, waiting for something to happen…” Charlie Chaplin and Edna Purviance in “The Tramp”
  • 69. 69 Or do you want to be at the helm, steering your way through the changes reshaping our industry?
  • 70. 7070 You have already been very generous with your time. Please take a few additional minutes to review the information being sent to you separately via e-mail. We hope that you look on our program with favor and are available to answer any questions and to discuss your potential participation with Wine RockStars, LLC™.Kathleen Homyock Director of Marketing Co-founder, RockStars of Wine, LLC kathleen@rockingoodwines.com (Mobile) 440-263-3124