3. Today’s Schedule
8:30 to 10:00 Understanding Cost of Goods
Introductions and acknowledgments
Keith Myers, CPA: accounting services and best practices
Overview of Program & OWB User Account and capabilities
Sourcing and cost of grapes
Production options and decisions
Cost of finished wine
10:00 to 10:15 Break
10:15 to 11:45 Cellar, Packaging and Bottling
Cellar and aging
Packaging
Cost of finished goods breakdown
11:45 to 1:00 Lunch break
1:00 to 2:30 Developing and Managing Your Wine Portfolio, Sales and Marketing Strategies and Budgets
Portfolio management
Establishing your FOB pricing
Sales channel options and pricing considerations
Allocation of products to sales Channel
2:30 to 2:45 Break
2:45 to 4:30 Distribution and Point of Sale
Tasting rooms, Wine Clubs and internet sales
Understanding distribution costs and options
Retail and restaurant pricing
Direct to consumer sales and marketing
Final Q&A Contact the Oregon Wine Board for more
information
3
4. Morning Part One
Understanding Cost of Goods
Sourcing and cost of grapes
Production options and decisions
Cost of finished wine
Contact the Oregon Wine Board for more
information
4
5. The Wine Supply & Value Chain
Permits
Licenses
Grapes
Production
Operations and
Admin
Sales and Marketing
Distribution
Point of Sale
CONSUMER
Quality
vs
Costs
Stakeholder
Perspectives:
• Seller vs Buyer
• Conventional
thinking vs. New
Thinking
• Wine enthusiast
vs. Business
• Winemaker vs
CFO vs Sales vs
B2B sales vs
consumer
Resource
Allocation:
Time &
Money
Contact the Oregon Wine Board for more
information
5
6. Think Differently!
• Critical Thinking
• SWOT Analysis
• Who Cares?
• How much does THAT cost?
• Consider alternatives
Contact the Oregon Wine Board for more
information
6
7. Critical Thinking
understanding differing opinions & points of view
Stakeholder
Perspectives:
• Seller vs Buyer
• Conventional
thinking vs.
New Thinking
• Wine
enthusiast vs.
Business
• Winemaker vs
CFO vs Sales vs
B2B sales vs
consumer
Contact the Oregon Wine Board for more
information
7
9. Grape Supply Chain
• Identify site
• Negotiate real estate
• Planning and layout
• Site preparation
– Ripping
– Soil prep
– Irrigation
– Drainage
• Install hardware
• Purchase and plant stock
• Primary cultivation
• Establish vines and canopy
• Fruition
• Harvest!!!!
Contact the Oregon Wine Board for more
information
9
10. Morning Part Two
Understanding Cost of Goods
Cellar and aging
Packaging
Cost of finished goods breakdown
Contact the Oregon Wine Board for more
information
10
11. Things to do AFTER this Workshop
• How much did THAT cost?
• What determines selling price?
• What does this do to costs, supply
chain logistics?
• Is this promotion sustainable?
• How do I market..
– Product
– Tasting room
– Wine club
Contact the Oregon Wine Board for more
information
11
12. Supply Chain Decisions
WINE
Grapes
Grow
Buy
Production
Full production
Contract/custom crush
Bulk
Shiners
Distribution
3-Tier system
Account direct
Direct to Consumer (DtC)
3rd Party online
Point of Sale
On-premise (restaurant/bar)
Off-Premise (retail stores)
Online , Wine Club, Internet
Contact the Oregon Wine Board for more
information
12
13. Key Wine Business Drivers
• Supply
• Demand
• Competitive options
– Spirits/cocktails
– Beer
– Cider
– Hard lemonade/soda
– Pot
• Domestic economies
• Global economies
• Exchange rates
• Taxes & Duties
• Consumer confidence
• Point of sale
– Tourism
– Retail
– Online sales
– Restaurant/Hotel trends
Contact the Oregon Wine Board for more
information
13
14. Afternoon Part One
Developing and Managing Your Wine Portfolio,
Sales and Marketing Strategies and Budgets
Contact the Oregon Wine Board for more
information
14
Portfolio management
Establishing your FOB pricing
Sales channel options and pricing considerations
Allocation of products to sales Channel
15. Marketing and Sales Channel
The route taken for getting the wine from point of
production to the consumer
Primary considerations:
– Costs incurred with each channel
– Profit margin potential
– Volume potential and quotas
– Additional sales support
Contact the Oregon Wine Board for more
information
15
16. Sales Channel Options
• Direct to Consumer (DtC, D2C)
– Tasting room (at winery or remote)
– Mailing list
– Internet direct
– Wine club
• Direct to account
– Retail (off-premise)
– Restaurant (on-premise)
• 3 tier system
– Required for doing business in many states
• Export
Contact the Oregon Wine Board for more
information
16
17. Marketing and 3 tier Distribution
Considered the ‘traditional’ way to conduct interstate wine business.
Required for doing business in many states, optional in other states.
1. Tier one: licensed producer (see previous)
– Basic marketing functions
2. Tier two: licensed distributor
– Participation in distributor selection process, provide marketing materials
– Create and manage promotional calendar
– Sales incentives
3. Tier three: licensed on- or off-premise reseller (store, restaurant/hotel,
bar) sells wine to consumer
– Pricing, displays
– Discounts and support
Contact the Oregon Wine Board for more
information
17
18. Afternoon Part Two
Distribution and Point of Sale
Tasting rooms, Wine Clubs and internet sales
Understanding distribution costs and options
Retail and restaurant pricing
Direct to consumer sales and marketing
Contact the Oregon Wine Board for more
information
18
19. Getting Wine to the Point of Sale
• Distribution is one of the four elements of the
marketing mix (PLACE in the 4 Ps of
Marketing).
• Distribution is the process of making a product
or service available for the consumer or
business user that needs it.
Contact the Oregon Wine Board for more
information
19
20. Selling to, and through, Gatekeepers
Know the market, and also know the game!
Contact the Oregon Wine Board for more
information
20
21. Tasting Room & Wine Clubs
• Cost of converting a shopper to a buyer
• Customer relationship management
• RETENTION!
• Shipping, compliance and logistics
• Hospitality and events
• Tourism and driving Tasting Room traffic
Contact the Oregon Wine Board for more
information
21
22. It All Begins and Ends with the Market
• Defining Product (development & value proposition)
• Connection (consumer awareness of product)
• Engagement (consumer interest)
• Point of sale (place where product can be purchased)
• Conversion (from shopper to buyer)
• Repetition (repeat purchase)
• Duration (customer retention)
Contact the Oregon Wine Board for more
information
22