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Sunday, June 8, 2014
How Much Do Wineries Really Make?
88 comments:
- Replies
Mark - I appreciated your well-thought post. I'm sorry you've pulled it down because the community is the worse off. I'm not supporting or disagreeing with your perspective, but it irks me that a single poster caused you to take down your opinion.
For the community here, please respect the posting rules. If you want to respond to a post, by all means attack the logic and offer your counter. Flaming the poster is not acceptable, especially if you are going to post a personal attack and hide behind "Anonymous." It's too easy to flame behind the curtain of anonymity, and then follow 4 minutes later with another Anonymous post – as if there is some vote about the content.
The reason I've allowed Anonymous postings is to encourage dialogue. I may have to rethink that however if the result of allowing Anonymous postings is the OP takes down their post. That is counter to the supporting rational discussion and debate.Rob...I thank you for a supportive note...my impression was that it was several people and I felt that it might be distracting from your meaningful blog.
I think that your blog is extremely important and timely...I think we will be enetering a period of hyper-competition and winery owners need to be honest with themselves and become proactive.Mark - I appreciate your perspective. Anyone with a brain should appreciate any opinion that is well-thought and rational, even if they don't agree.
This is a great place to point out falacy in an argument or forcefully offer a competing opinion. This isn't the right place to disagree with an opinion, hide behind the login of Anonymous, and then attack a poster instead of the perspective. That kind of behavior is chicken <%$#^> and pathetic in my view.
- AnonymousAugust 13, 2012 at 8:36 AM
This comment has been removed by a blog administrator.
ReplyDelete - AnonymousAugust 13, 2012 at 8:45 AM
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ReplyDelete Thanks Rob for couching this tough-love, hard-fact financial reality check with some cheeky humor. This industry would be so much healthier and successful if winery owners/managers did their short and long term business and financial analysis and projections. Bad news: this reality check can result in realizing that one's business model is not sustainable. The good news is that once the trends and margins are understood, one can begin to identify areas of concern and take measures to improve the business. A constant mantra of mine: find, engage with and sell direct to consumers, your ultimate 'end-users!'
ReplyDelete- AnonymousAugust 13, 2012 at 9:47 AM
Blinded by Romance. Haven't we all been there? The majority of winery owners -- especially owners of small boutique wineries -- enter the industry mostly for that reason and I've heard it all before: "my grandparents made wine in their basement, and I have fond memories....;" "'A Walk In The Clouds' is my very favorite movie and I wanted to experience it myself"; "I have long loved drinking wine and I know so much about it and want to own a winery that has my name on it"...blah blah blah. The honest truth: most of the time, an owner needs a wad of cash to keep the business going due to all of the upfront capital investment, product ageing time, time it takes to get enough momentum in the marketplace. If that cash is borrowed, then I really wish that person luck. If it is not, then I wish that person patience and perseverance. After that, the low profit margin means it takes a long time to break even. Thanks Rob for writing this. You are absolutely right that the truth is hard to come by and it is difficult to find real information from all the hype in the wine industry media. Unfortunately far too many people waste their money and dreams in this business because they don't have enough good information to begin with.
ReplyDelete - AnonymousAugust 13, 2012 at 9:52 AM
I spent many years in national sales representing small wineries around the country. Very few have an actual business plan.
ReplyDeleteRepliesThanks for the post Anonoumous. We believe our organization helps our clients succees by offering things like Peer Group Analysis. We also ask the tough questions when needed and try and steer them in the right direction. A business plan and a financial forecast is a must; not because the banker requires it, but because every business owner should have a plan and measure their performance in part by that plan.
Wow, lots of deleted commentary. Are you channeling famous wine lover and late ex-President RM Nixon, famous for "expletive deleted"?
Anyway, the opportunity is innovative packaging. Getting away from glass bottles will be a big advantage for mass market consumption. Or how about a glass lining in a rigid plastic container to cut weight?
I don't see cute labels as a profit oppty. I saw the new Shatter bottle from the written-up French trio, it weighs about 4 pounds empty and NO WORDING on the front, no name, nothing, just a closeup photo of glass crystals. Just what I want to put in my mouth. Or use to channel Nixon. No longevity if customer has to spend more than, oh, 2 or 3 seconds trying to figure out what the heck is this? See Bonny
Doon Graham for proof, or better, ask the marketing masters at Proctor & Gamble or Unilever. They die laughing at us. The wine industry is mandatory in all their "what not to do" seminars Cutesy labels die young. Straightforward label that does not insult your intelligence is a good place to start if you want to build a long term profit.
And the new bold world of blends might help cash flow for the big guys for a few years, but, neither cutesy labels nor "blends, wow" offer a path of customer migration up to annuity of $20-$30 retail where many wineries want to live. And if grape prices do escalate, then the "new blends" either go down in quality or disappear. What did you teach your customer then?
Moscato is an oppty. and can be a good wine. Down here in San Diego, small (tiny) wineries have a good oppty because Moscatos grow well here. But use it to build a brand.
Erica V. above has is right, you have to engage with your customer to build them into annuity customers.
But wine is a love affair, not a path to mansion ownership.RepliesThanks for the post. Your last line is a spot on remark MAW. So many see this business as semi-retirement .... at least from the outside. Its a tough business - pure and simple. There are more risks associated with the wine business than almost any other that I can think of. Lack of information is just one of the many risks. The business seems romantic but how much romance is there in losing one's shirt? Happens all the time.
Sorry for the deleted posts. One person decided to attack the poster instead of the post leading to the deletion so I had to < .....18:30 break in the tape with hissing sounds and electronic clicks....> nd like Nixon, never happen again.
Blinded by Romance...how many times have you hear the joke about making a small fortune in the wine busines...start with a big fortune...your comments and the one following your's (spent many years in national sales) combine for a good response...I doubt that you can successfully plan without good numbers and being romantically involved in today's wine market is not good enough...but if numbers are not available (short of spending big bucks with IRI or AC Nielsen)planning in a vacuum is difficult at best.
Do wineries simply leave and close their doors? I don't see that happening...do they keep trying until the market (& finances) forces them out of the business?
Even during the recession we saw a significant increase in the number of wineries..many probably can't become clients of SVB, so what are their choices? They do need to cooperate and share (solid) information. Perhaps a forward thinking association can start and lead the way...OK no one will want to share customer information but sales data could be accumulated by their association...individual winery names could be masked but at least the members can plan against real data for their specific area...Rob...I think this might go a long way to helping individual wineries see honest profit and loss data and have the basis for making better decisions in the future.RepliesThanks Mark. We are perhaps in the best place in the business to see real information. The combination of direct interviews, our internal data bases and externak surveys give us probably the best view of the business. Its a very expensive task to get all that in place.
Because wineries don't want to pay for information and because the business is so small and fragmented, I don't see anyone jumping in and creating the information that is needed. We'll continue to do our part for the industry as costs allow.Rob...SVB is a business not a charity...my business is focused on non-American wineries because I can't find a performance based strategy that works for American wineries even though I have been approached a number of times about our services...that being said it still irks me that in the next 3 to 5 years a significant portion of American wineries might not "make it" because they can't perform properly in the marketplace even though consumers want and are willing to pay for their products (wine).
Do you think if we both went out and bought some really big hammers and started knocking a few heads that we could see some results??? (LOL - only kidding folks)
- AnonymousAugust 13, 2012 at 10:16 AM
It was a beginning to the end when the liquor corporations came in and started buying wineries to pad thier portfolios. They don't understand why wineries can't turn the profits that thier liquor holdings can. So they lay off employees, trim equipment purchases, etc., and still can't seem to make it come out to how they like it. Then they eventually dimp the winery off to the next buyer, many times leaving the winery a shell of it's former self. It's happening every day up here in NorCal, and it is really sad. The 'romance' came from family ownership. Corporate ownership is transforming wineries into alcohol factories where the ONLY thing that matters is the bottom line. Quantitiy is going up, and quality is going down. Soon all of your favorite wines are going to be mostly water, concentrate and MegaPurple. Enjoy.
ReplyDeleteRepliesI worked for Seagram Chateau and Estates Wine Co. (prior to Diageo) and our wine businesses delivered solid EBITA/ROI with healthy margins. This was even before the last decade's move for consolidated bottling operations. It is all about portfolio balance and bottom line management. Liquour has high profit margins and is not as impacted by mother nature nor vintage restricted. The proliferation of any consumer product makes for hair-raising competition. However, the story (ROMANCE) and quality (QUALITY) is what resonates with consumers. Some wine is a commodity, others are true brands with USP's (ok, unique selling points, as in authentic story)
Blinded by Romance...I can see that you have an insiders perspective that I honestly do not...but this much I can say...that is not want consumers want...they want the quality...I think that is why we are see 25+% growth rates in the $20+ price category...its plain to see that there is something grossly wrong with this picture...small wineries make what consumers want...consumers (in ever-increasing numbers) are paying premium prices but these same small wineries can make enough profits???
There are some very good minds here...where does it start? How do you get that first winery started in the right (correct) direct that skips the B.S. and does it right?Replies- AnonymousAugust 15, 2012 at 10:52 AM
Mark: I just want to clarify your statement here: 25% growth rate in the $20+ price category? We've been rebounding for years from sales declines in that price category, so from my point of view we aren't anywhere near where we should be or used to be. In the wholesale markets, in which most of us wineries play to some extent, prices haven't gone up much. I'll give you an example: I was happy happy happy in 2007 to sell a relatively hand-made Pinot Noir to about a dozen high-end, high-profile restaurants in San Francisco on their BTG (by-the-glass) lists for $192/case (that's $16/glass!) and it was flying out the door. Now, I'm relieved to be able to sell a similar wine at $144 case and it is 25 times more work to do it and not at near the depletion rate of 2006/2007. Consumers think they want quality, but when it comes down to it, price rules. Period. Marketing by large wine conglomerates to make their products accepted as "quality" rules. The gatekeepers (wine buyers) are extremely price sensitive -- they rule more than most anyone and they know it. Direct consumer sales in tasting rooms and wine clubs are improving, substantially, but the higher-priced wines are still not moving as quickly as those under $20 and I know because we offer a range of price points in our tasting room largely to accommodate that trend.
Delete RE: Sales growth rates, you can see from the above chart what the averages have been the past decade. 2004 growth was 25% but the rest of the decade was below that. Q1 this year the growth rate from our data was a little above 10% which is consistent with our earlier forecast between 8%-11% for the year.
- Howard RossbachAugust 13, 2012 at 11:39 AM
Good stuff, Rob. Whether a part of a lifestlye or not, a winery is a business. It is a production plant with loads of romance surrounding it, but it is a production plant none-the-less.
Unless the owner has unlimited resources, that manufaturing business (winery & vineyards) must have a solid business plan that projects and delivers profits. Yes, the capital investment in this industry is high, but that height can be relatively low or high depending on the whims, desires and objectives of ownership.
Strong cost controls are critical for the long term health of any business. Those controls along with strong cash flow are what allow for success in poor times. By the way, poor times can refer either to poor crops or lousy economic environment. The metrics are and should be similar to other manufacturing, except that much longer investment and production periods are involved in wine, so that needs to be factored into planning.
Looking at EBITDA is a good place to start, as one then sees the health or lack thereof in ongoing operations. If the debt burden is too onerous, then that will become apparent in the net numbers.
Knowing one's niche and customers is critical, and often incorrect assumptions are made and never revised.
Lastly, wineries are often reluctant to cut losses. Often it is far better to gain some cash (or working capital) by selling something off (even at a loss), than trying to remedy a problem. The problem may be able to be remedied, but the time to do so may be diverted from the key objective of the business.
Hope this helps!RepliesThanks for the comments for the neighborhood Howard. You've always run your business as a business and mixed in the romance.
I would underscore your perspective on strong cost controls (budgets and controls) as needed. The industry has evolved from making good wine being important, to selling wine being more important, but today - cost controls have to play into the mix. That is quickly becoming a dominant competitive issue and is being overlooked by far too many.- Bob HenryMarch 23, 2013 at 3:23 PM
Addressing Howard's observation about a psychological reluctance to cut losses, behavioral economists have been turning their attention to such "sunk cost" issues.
Excerpts from the Los Angeles Times "Opinion" Section
(September 17, 2006, Page M5):
"The 'Sunk-Cost Fallacy' "
[Link: http://articles.latimes.com/2006/sep/17/opinion/oe-schwartz17]
By Barry Schwartz
. . . is a professor of psychology at Swarthmore College and the author of "The Paradox of Choice: Why More Is Less"
. . . We make a significant investment -- of money, time or emotion -- in some project, relationship or business deal, and it doesn't seem to be working out. Do we continue to "throw good money after bad" or do we "cut and run" and "stop wasting time"? What's the right way to think about such decisions?
Psychologists, decision scientists an economists have an answer. They tell us it's a mistake to continue with a project or an activity because of what you have already invested in it. The time or money you've already spent is gone. You can't reclaim it. Using a past investment to justify a future investment is what they call the "sunk-cost fallacy."
Instead of thinking about the past, what we should be doing is thinking about the future. . . .
One can think through a problem in a logical and rigorous way, and formulate a sensible course of action, only to discover that it doesn't work out. Good decisions do not guarantee good results (just as bad decisions don't guarantee bad ones).
Yet people seem willing to waste even more (time, money or lives) to justify what they have already spent and avoid that sick feeling of failure. . . .
Rob, great post and it seems like it's getting crowed in here!
I disagree that wine is the only unique "romance" business, cause I come from the Restaurant/Inn business. I see a very similar correlation between the types of people that buy or invest in restaurants and wineries.
From my view the profits in the wine industry have taken a beating on two sides of a 3 or 4 sided coin. The producers (whom the consumer often idolizes) have been squeezed pretty well since 2008, but so has the retail side. The consumer treats wine like all other luxury and commodity products... meaning they assume that the retailer bought said wine for 5$ and are selling it for at minimum $10 and often more. Well those of us in the wine industry know better. But for those that don't, when I first entered the industry 50% mark-up was the norm and it snuck upto 60% in resort areas (hamptons?). Thanks to internet-marketing and the fight for SEO, that gross-margins has shrunk to as low as 20%. So what do I mean about only two sides suffering... the middleman hasn't lost their margins. I am not saying that distributors and wholesalers haven't suffered during the "wine recession", they have. But their margins haven't cratered (and if they have, it hasn't been nearly as detrimental to their business model as it has for the producer and the retailer).
When I crossed the line from Restaurant Business to Wine business in 1995ish, I think the wine industry was about $8B in US per year, what is it now? Pushing $40B? And I believe that Southern W&S is about $9B and that is a privately owned company! So the last Anonymous is correct, big business has indeed changed the wine landscape. Big Business has also learned to look small in the wine industry (with nice quaint marketing and labels and very little transparency). So the consumer often doesn't know who is getting their hard earned wine $'s and will blame the wrong person. I've been that person as a retailer and a sommelier and a distributor. It's always painful to be considered greedy when your margins are painfully thin.RepliesReally appreciate the restaurant perspective. Its not a perspective I have experience in. On the industry size, I'm pretty sure it was about a $25BN business back in 1995. It doesn't change your point though. The business is and has evolved from the sleepy cottage business to a mix of models that are fighting their way to just the right current.
DeleteObviously I need some assistance with figures! Thanks for the correction. A friend calls one winery owner from RRV "precious" because he was wearing a nice track suit like the one from your video while looking for some liquidity help from a banker.
Delete- AnonymousAugust 15, 2012 at 10:34 AM
I agree with everything you've said here, noblewines, I would only add this: when you say that "the middleman hasn't lost their margins" I would change that slightly to say the "large middlemen" or, um in my view, "the large middleman" aka Southern has not. The recession coupled with wine mass retailers/marketers has painfully squeezed small- to middle-sized distributors across the country, many of them quietly going out of business and/or quietly not paying their wineries. Many, many small premium wineries were dropped from distributors' books only to be replaced by cheap knockoffs. That in and of itself has been highly detrimental to the already squeezed profit margin and challenging market potential of small and mid-sized wineries during the last few years -- remember during this time small wineries were selling wines well below cost already to deplete inventories (the high costs having been incurred from high grape and processing costs from the few previous vintages). This and then add to the pain the rise in popularity of mixed drinks (more "bang" for your buck than wine in a restaurant setting; certainly more profitable for restaurants than wine) but perhaps I'm getting off topic here...perhaps this is off topic, too, but I can't help but say that this isn't going to change anytime soon. Through all the numbers and market analyses and talking heads and bloggers I read the say the economic situation, wine prices, grape prices, etc. are changing for the good, the most important bellwether as far as I see it are the supermarket buyers I know. When I asked a few the other day "how much heavily-discounted high-end wine is still available?" they all sighed heavily and said "A Lot".
Another point from a bankers view: note the paucity of comment from the wine bloggers, who like to lament that there is no money to be made as a blogger. Most bloggers don't know that a business creates profit by creating something of value.
Many normally steely eyed successful people from other careers and professions, lose their steely eye when they walk a vineyard, and 5 years later, the grapes are available again on the bulk market because Mr. or Mrs. Steely is pulling out of the business after losing a bundle, for all the basic Banking 101 reasons.
And if you want restaurant experience, Rob, I know at this point in your life you don't need a moonlighting job, but working as a waiter for a few months (weeks?, shifts?) is all it takes to see the similarities.
Regarding my previous post about Opportunity in packaging, I was wondering if mid-size successful Napa & Sonoma names will come out with a 2nd tier Cabernet, Zin, or Chardonnay, keep it with a good appellation, and format it in a 1.5 or 2 liter bag in box. The problem with the larger 3,4, or 5 liter boxes is you get tired of the same wine before you drink it all. But a quality product in a non-oxidize package for 3-5 uses, 1-2 weeks duration, might be a big seller. Free ideas available right here on the internet for any winery who wants to try it. I can see in 5 or 10 years a lot of portable (soft-sided) disposable packaging.RepliesMAW - Packaging is always something people talk about. Currently, I hear of wines 'bottled' in keggers for the restaurant trade, and a general trend toward lighter bottles (Hate it when I think there is more in the bottle but its empty). No ... I won't be waiting a table for a living any time soon, tho I entirely respect the profession. My best friend is a waiter. Its a tough job. I was a dishwasher in my first job at Copper Penny in the Sun Valley Mall in Concord. I was fired after my first day if that tell's you anything.
As accountants, we are doing what we can to help our customers understand their numbers and their relative success. As you know, we create a scorecard for our customers that compares different measures based on standardized inventory results. But we think it takes more than a new report or scorecard, we believe it starts with owner education, sharing of information with teams, and then clear measures and accountability. We've been working on that as well - via a series of free classes. We agree that there is room for improvement when it comes to winery finances, but we are encouraged by the progress that many in this industry have already made.- Lance MasonAugust 15, 2012 at 8:10 PM
This will appear, and probably IS, very pedantic, but I have to ask you, as a writer on a public forum, to please consider an experienced editor. N.b. "well-healed;" "pizza's" instead of pizzas; rife with punctuation errors; misplaced modifiers; mixed metaphors; "phased" instead of fazed; disagreement in number (singular-plural); failed sentence structure; spelling errors. And that's only as far as the third paragraph. A few typos are no big deal, but this article is riddled with the types of errors cited above. Okay, I'm in the 1% who cares, but if you're going to write professionally, especially for public consumption, your writing should reflect that standard. Otherwise, our language goes to hell.
Lance Mason, owner, Windrun VintnersReplies- Bob HenryMarch 23, 2013 at 3:44 PM
Lance, your observations about (self-) editing errors are self-evidently true.
In this era of Personal Digital Assistants with frustratingly small keyboards to compose replies on, and forgetting to engage "spell Czech" before launching one's thoughts, this is the "new normal."
See this "op-ed' on the subject:
Excerpt from the Los Angeles Times "Op-Ed" Section
(February 10, 2012, Page A19):
"Syntax? Logic? Why?"
[Allternate link: http://www.bloomberg.com/news/2012-02-10/on-web-no-one-cares-if-you-write-like-a-dog-commentary-by-michael-kinsley.html]
By Michael Kinsley
. . . is a Bloomberg View columnist
It's been going on now for too long, right before our eyes. . . .
. . . blog item this week about the quality of writing on the Internet. . . . his basic point is that on the Web, sheer quantity trumps quality. . . .
. . . all aspects of good writing -- accuracy, logic, spelling, graceful turns of phrase, wisdom and insight, puns (only good ones), punctuation, proper grammar and syntax (and what is the difference between those two again) -- are all overrated.
. . . Now one of our nation's leading bloggers has confessed what we all suspected: that bad writing is inherent to the online world. . . .
- Lance MasonAugust 15, 2012 at 8:34 PM
Now, for the important comments. I just got the news of an acquaintance who is pulling the plug on a VERY large family investment in vineyard land and a winery. He had become wealthy through his skills and long, hard work in other industries, but couldn't make those strengths gel around the wine business. We've heard this tale dozens of times. I've seen it unfold here, Spain, Chile, New Zealand, and Australia. Making a dollar is tough in this business, and if you're not prepared to listen to and follow the advice, experience, and resources of people like Mr. McMillan and others in this business, you're going to go down the gurgler.
Lance Mason, owner, Windrun VintersReplies- AnonymousMarch 30, 2013 at 2:54 PM
Wow this is excellent information!
I am about to embark on a very scary endeavor to take over (buy) the family winery. Almost everything mentioned is this blog makes me want to run very fast the other direction.
It seamed like a great opportunity but every single post here tells me it's a romantic vision of death by wine.
After reading this I seriously do not know why any of you are in this business. Do any of you have a good outlook on owning and running a winery? Dear Anonymous - fortunately there are many success stories in the wine industry, both at the giant (Gallo) level and at the small producer (Shafer). Like any business, it takes a plan with a solid financial infrastructure and a short/long term strategic vision to be able to succeed. Implied within this is an ongoing disciplined, tactical process. Hope and fantasy are often drivers, but rarely have enough gas.
- AnonymousMay 8, 2013 at 9:53 AM
The motor that runs the industry is passion. Money is the gravy but the lifestyle is the reward (this, in scale with your lifestyle needs). If you want to build a true legacy, you need passion to go the distance over the bumpy roads and be used to a good, old-fashioned gut check.
Me? 33 years and counting.RepliesCongrats Anon 9:53! You are a true warrior and aa person with a pretty clear view of the physic benefits ... or psychotic benefits? I hope I haven't pushed off too many dreamers with a real look under the hood, but I think we will always have a percentage of players enter the business with that dreamy look and find a poor ROE and a better ROL ("Return On Life.")
- Jim LapsleyMay 8, 2013 at 9:55 PM
A question on your database. Is this information primarily (only)from Silicon Valley Bank clients? If so, I wonder how typical it is. From past discussion with you, it seems that Silicon Valley Bank is pretty good at choosing its customers in the wine industry. If the information presented is based primarily on your clients, I suspect this represents the more/most successful segment of the industry.RepliesJim - The database is both clients and prospects. The statements are verified for accuracy via tax returns, or are reviewed or audited statements. Banking requests don't always turn out to work, so the database does include a level of wineries which are in a lesser financial state.
That said, it is probably skewed to higher performing wineries, simply because a majority are bankable clients and as part of our role with our clients, we consult with them and improve their odds of success through many different avenues.
There is no better database in existence however .... nothing even close to this.............and thanks for asking the question Jim and logging in. Sincerely appreciate it instead of calling you anonymous 924. Have a great weekend
Delete- AnonymousMay 16, 2013 at 9:17 AM
I agree that there is no better database around. I just wanted to point out that it is probably slightly skewed to higher-performing wineries because you guys know the industry and are very careful when picking clients. I suspect that the "typical" winery does not perform as well.
And would there be any pre-tax profit if winery owners fully paid themselves for all the time invested? (When it's said and done, most times it seems we are practically just giving our wine away.)
ReplyDeleteReplies- AnonymousMay 13, 2013 at 10:01 AM
In my case no, there are no winery owner paychecks, other than my HMO Health Insurance, and if I did pay myself an appropriate salary there would be no profit (such as it is).
Of course, I'm only 5 years into it, and I hear the magic owner paycheck comes in the 10th year.
Accounting in the wine industry especially at the micro scale is almost as much of an adventure as the rest of it. As with any startup business, the owners are often working for less $/hr than the help, if they can afford help. Choosing to "pay yourself" other than in owner's equity is a fast way to drain cash out of a business that needs all the cash it can acquire to survive the long cycle between pruning and selling.
It takes passion +/or cash to get out of bed before dawn and ride a tractor around in a cloud of spray, just as it does to finish racking at 3 AM, and then start to clean up.
But that is the nature of any business, and the added risks of farming as well as fashion in the market mean that you have to adapt and make do.
We're one of the newer and smaller wineries, but we have bobbed above breakeven a few months so far and see a path to a modest profit as we grow. Targeting the size niche we choose to inhabit will be the next challenge, to keep costs manageable and market large enough.RepliesOne of the issues that face the business is the lack of integrated software. There are some solutions but none solve all the needs from club, tasting room, POS, farming, sales and production. The solution will eventually come, but the business is so data intensive (or should be) and at the same time so small, its hard for a software provider to justify making the investment and seeing a return.
- AnonymousMay 13, 2013 at 11:27 AM
In decades past, all winery models worked. Today for many reasons like most other business, you have to pick a path: High volume low cost producer, or high price, custom lot producer. Stuck in the middle can be a death trap.
Selling direct when you are high-volume takes a special skill set if you want to make a profit in that channel. In the same way, selling through distributors when you are a small custom shop is equally difficult to find success.
This business has the added problem of "love." People fall in love with their product and are willing to work for less than they would in another business.
It's quite possible to make year to year profit in this business but in many cases, the real return on the business that justifies the hard work will be realized when the business is successful and sold for a gain later in the business life-cycle. - Joel MMay 13, 2013 at 11:53 PM
Rob - as usual, wonderfully insightful perspectives. I've helped lead companies in four different industries before coming into the wine world...and have been continually shocked by the lack of sophistication and biz acumen that is a prerequisite for success elsewhere in America. It is appalling, and is the root cause of many of the industry's failures.
It was explained to me early on that it is because it's an "Ag" business. I never bought that argument - it is more of an excuse, allowing for romance and pardons in the face of shaky decisions.
Take most any core function, they're all backwards (except Production - that is becoming world-class). Wine Marketing is remedial at best - no one can even measure market share accurately - show me any consumer goods company that would allow that to continue? Branding is done well by a few, awful by everyone else. Pricing - don't get me started. Accounting - serious lack of tracking costs and measuring profitability by brand/sku - and then they wonder why the overall numbers don't add up. Sales is unique - the challenge here, of course, is dealing with the 3-tier system and distribution oligopoly. You've shared previous learnings/aha's about DTC...all are typically mediocre. Just look at Merchandising in Tasting Rooms, and any savvy retailer groans...The response is usually "Oh - it is all about the wines"...yeah, right. And thus profits lapse into romance...
Yet there is serious money to be made in the business. Right now, it's the distributors (oligopolies can print money, and they do) and family institutions with megabrands to support the infrastructure needed. The small guys will continually be challenged due to 3-tier - until there are changes to the bizarre array of channels and laws, only the cult smashes will have sufficient leverage against the machine - everyone else needs to maximize Direct to turn any profits.
Bottomline - the next generation of wine leaders need to take all aspects of the business seriously and hold their teams accountable for all aspects of running a business, not just making tasty juice, IMHO.
JoelRepliesThanks for the comments Joel. Great observations.
My belief is this business was raised up with a farming mentality - not even a winemaking perspective. Winemaking improved dramatically through the nineties and distributors begged for product because demand was truncated by short supply. At no time did winery owners learn about marketing. Starting around 2000 that changed and not everyone was able to get distribution. Fortunately, at the same time, the internet started to evolve allowing on-line retailing and that's where the focus pretty much left off.
The question today for me is will producers also become expert on-line retailers, or will the 5th Column continue to evolve and replace the role distributors played prior to the 2000's. The jury is out.
- AnonymousMay 14, 2013 at 9:06 AM
Your videos could not possibly ring more true. I spent almost a year consulting for a group of high end (and in a few cases, very well known) boutique wineries about their distribution/sales problems in the heavily euro-centric markets of NYC, Chicago, DC and Boston. It turned into a bizarre experience that bordered on something out of Kafka. Wineries, who despite a decade of stellar Parker scores, that had been dumped by wholesalers, imperiously insisting that their wines not be sold to retail. Wineries in the group constantly lied to other member wineries about how well things were going, eliciting the inevitable call from the other winery as to why he was not doing so well. I listened to the (now terminated) sales manager for a winery that I knew to be down to only five states of distribution and sitting on three released vintages in the warehouse, brag to several of his peers that he sells 85% direct to consumer and "has no wine left" for distribution.
The reality that I came away from this surreal "Emperor Has No Clothes" mentality is that much of Napa Valley doesn't want to know the truth nor wants to truly understand current market dynamics and trends......not if it butts up against their dearly held self-image and delusions. The fact that for a majority of winery owners, profit from the winemaking operation is but a small percentage of their total net worth only fuels the delusions and myths. It only further insulates these people from an unpleasant reality with which they would rather not be confronted.
Oh no, it was much much easier and psychologically soothing to blame all ills upon the distributors. Now, I am far from an apologist for the wine wholesalers of America. I've managed distribution in multiple states for over a decade, and I know exactly how frustrating things can be. The distributors, however, are not Napa Valley's problem--market rejection at the restaurant, retail and consumer level (at least in the four major metropolitan areas listed above) are the problem. The distributors are merely a reflection of that underlying problem.
A distributor and its sales force will always take the path of least resistance. That is an unfortunate reality, but a reality of the marketplace nonetheless. If those New York and Chicago sales people are overwhelmingly choosing to take a $75 bottle of Barolo or Burgundy out to sample and push rather than a $75 bottle of Napa Cabernet, there's a reason for that. It's because that's what the market is demanding....that's the current path of least resistance....the easier sale! The distributors aren't causing that; they're reflecting it!
Until Napa Valley is able to jump the psychological hurdle and accept that therein lies the base of their troubles, they will not begin to address their problems and will continue to fall further and further behind in those markets that they hold most dear.RepliesAnon 9:06. Thanks for the comments and perspective. I most appreciate the props for the cartoons. It's a lot of effort to put those cartoons together but I have fun doing it.
Important to recognize they aren't referencing any AVA or region. The wine community is on the one hand a very open one, but when it comes to any negative news, that's when you see this is a family business. In the same way you never really know what is happening in your own neighbor's home, winery owners a naturally silent when it comes to struggles. Similarly with finances, winery owners and your own neighbor aren't likely to share openly. That's why the SVB Benchmarking program is so vital to our clients. Its real data and information from which they can check their performance against peers.
Specifically as it relates to Napa, I don't share your view that they are falling to your last paragraph. I didn't share the like slide that I have that is Napa specific but can tell you financially, Napa is doing quite well in virtually all measures. Napa is the benchmark by which other AVA successes are measured. While there is a lot of room to improve, that appellation is typically out ahead of change.
A point of agreement however is that Napa can't stand still and expect to maintain their world reputation. The world is smaller and alternative wines of great value are easier to find than ever. It is possible to lose ones place in the business world. But that doesn't mean we will end up with homogenous pricing of wine, because in this business variety is the spice of life. Our winemaking neighbors even agree that they appreciate other regions wines too.- AnonymousMay 17, 2013 at 10:04 AM
Interesting points, Rob, and I don't dispute your data. I, however, would make a clear distinction between the macro and the micro. Napa may very well be doing better than the rest of California on a macro level--though "better than the rest of California" is in itself a loaded term given that imports as a share of total US wine sales have gone from 18% in 1999 to 35% last year and, at current trends, are expected to hit 50% before the decade's end.
My experience is specifically on the micro level in the urban markets of NYC, DC, Boston and Chicago. Here, Napa is absolutely struggling. The wines have largely fallen out of favor everywhere except the steakhouses. Even (according to a Napa based marketing "guru" who while a true believer in Napa managed to not be a kool-aid drinker once told me in a moment of candor, "I can't give expensive Cabernet away in the city anymore") San Francisco doesn't seem to be immune from these market trends.
Perhaps these high end Napa wineries would relieve themselves of much of their frustration and get much more bang for their marketing buck were they to focus on secondary markets where their wines still are in demand and command a certain amount of cache. That, however, is the Catch 22. The wineries don't want to be in Indianapolis or Reno. A few of the ones that I worked with literally considered it an embarrassment and a negative to their brand to have distribution in such places. They considered it their god given destiny to be in Michelin starred restaurants in Chicago or New York. Again, it all goes back to putting ego and image above sound business and marketing decisions.
- AnonymousMay 15, 2013 at 10:02 AM
As a 5 year winery owner in the East, I have experienced most of what has been stated here. My advice to new winery owners is measure every metric that you can so that you can quickly tell which products are contributing to profits and which are not and quickly tell whether you are pricing correctly, and watch expenses like a hawk. It's easy to let expenses get away from you in this business because you always need something, especially as you are (hopefully) growing. As someone stated, this is a manufacturing business, but compounding that is this is a manufacturing business with a volatile agricultural product with a long manufacturing cycle, so you have to keep a close eye on every phase of the manufacturing cycle. If you don't already know how to do them, you will learn the following and much more very quickly: Farming, Heavy equipment operator, Chemistry and chemical analysis, Biology and biological analysis, Cleaning, cleaning, cleaning, Bookkeeping, accounting, tax laws, Federal and state laws (more than you can imagine, I'm sure I still don't know all of them relating to the wine biz), Marketing, marketing, marketing, efficiency analysis, unemployment compensation, workmens compensation, human resource procedures, product design process, product segmentation and differentiation, product pricing theories (not many worth implementing, use your own data and understand your market), pump and equipment repair and maintenance, electrical repair and plumbing (my advice, call a professional), landscaping, refrigeration, website creation and seo optimization, newsletter writing, wine serving (you finally get to meet your customers, the best part of it all for me), logistics (how to fit many cases of wine where there's not space for it), entertainment booking, politics (how to get the local zoning board to let you expand), liquid and gas flow process, and yes, winemaking (never stop learning, there are new techniques and products all the time). But after the 16 hour day (if you're lucky) is over (that you didn't even make minimum wage per hour rate for) and you sit down with a glass of your finest that you helped create, and you can still muster a smile, then you are in the right business.
ReplyDelete - Bob HenryMay 15, 2013 at 10:29 PM
Excerpt from The Atlantic Magazine
(December 2000, Page Unknown):
"The Million-Dollar Nose"
[Robert Parker profile]
[Link: http://www.theatlantic.com/past/docs/issues/2000/12/langewiesche3.htm]
By William Langewiesche
. . .
The truth is that even the best wines cost only about $10 a bottle to produce, and they are not inherently rare. If the initial cost is tripled to allow for profits along the path of distribution, one can reasonably conclude that retail prices above $30 are based on speculation, image, and hype.
. . .
Excerpt from Los Angeles Times "Business" Section
(June 15, 1988, Page C3ff):
"Profit a Key Ingredient of Fine Wines"
[Link: http://articles.latimes.com/print/1988-06-15/business/fi-4284_1_wine-market]
By Bruce Keppel
Times Staff Writer
[Certified Public Accountant] Dennis Groth prices his Napa Valley Cabernet Sauvignon to sell for $13 retail. That price, he said, will net his family's young winery here just 34 cents a bottle in profit.
Groth is far from complaining, mind you. After all, he points out, 34 cents represents a 5.2% return on the $6.50 he collects from distributors. "That's about midway among the Fortune 500 companies and a fair return on my investment."
. . .
According to Groth, the $13 retail price of his Cabernet Sauvignon provides for a 34-cent profit and 34 cents in federal and state taxes. Payments on the loans taken out to acquire the 165 acres of vineyards take $1.46, and he figures another $1.43 to cover the cost of growing and harvesting the grapes. Producing the wine itself costs $1.19, and marketing it adds $1.74. That, at any rate, is the way Groth allocates the $6.50 wholesale price he receives from his distributor.
The distributor, in turn, will typically take $2.17 for bringing the wine to market, where the wine merchant will add $4.33 to promote and sell the bottles to the public, producing an undiscounted retail price of $13.
"To survive," Groth said, "I have to be successful at that price. Nobody in the Napa Valley will survive on producing the low-end wines. I want to be in the top third of the marketplace."
. . .
[For those with l-o-n-g memories, Groth's 1985 "Reserve" Cabernet was the first California wine to be awarded a "perfect" 100 point score from Robert Parker and The Wine Advocate. As I recall, the suggested retail release price was $150.]Replies- AnonymousMay 16, 2013 at 9:30 AM
What is the point of posting a 25 year old article?
What possible relevance would it have today? Its an interesting article, if for nothing else to see how the world has changed. I still have some bottles in my cellar with a price tag (pre bar code era) and its not uncommon for the price to be under $10.
It wasn't that long ago Napa real estate was $25k and acre. Now a planted acre is going to cost $250k. Obviously that price is going to be reflected in the bottle and in grape prices. I can sell those same $10 bottles in my cellar for substantially more. The same holds true for the production of other West Coast Appellations.
The U.S. wine business is growing up, losing its modest beginnings and becoming more of a serious business daily. Profitability in the business however is not universal and winery owners seldom live the opulent lifestyle others believe. Its essentially a family farming business at its core."Anonymous":
For those not familiar with accounting, the Times article provides readers with "benchmarks" on cost allocations associated with bringing a wine to market.
And winery owners can index their costs against Groth's for a quick assessment of how well they're doing.Bob - Thanks for logging in and contributing. Benchmarks are important for measuring success. In this business, good ones are hard to come by.
DeleteRob -
Over the arc of the past 25 years, I have never seen another business press article like that 1988 Los Angeles Times piece that so succinctly "de-constructed" the costs associated with producing and marketing a California fine wine.
Leave it to Dennis Groth, a CPA, to lift the veil of mystery.
Glad to share it with your readers.- Bob HenryOctober 13, 2014 at 11:54 PM
Dear "Anonymous":
Your ship has come in -- albeit one-and-half years later -- questioning the putative value of reading a 25-year-old newspaper article "benchmarking" wine input costs.
A contemporary example was provided by the Sacramento Bee in 2008 (found over the weekend).
Compare and contrast 1988 versus 2008 input costs on a $20 retail bottle of wine.
~~ Bob
From Los Angeles Times "Business" Section
(June 15, 1988, Page C3ff):
"Profit a Key Ingredient of Fine Wines"
Link: http://articles.latimes.com/print/1988-06-15/business/fi-4284_1_wine-market
By Bruce Keppel
Times Staff Writer
According to [winery owner and CPA Dennis] Groth, the $13 retail price of his Cabernet Sauvignon provides for a 34 cent profit and 34 cents in federal and state taxes. Payments on the loans taken out to acquire the 165 acres of vineyards take $1.46, and he figures another $1.43 to cover the cost of growing and harvesting the grapes. Producing the wine itself costs $1.19, and marketing it adds $1.74. That, at any rate, is the way Groth allocates the $6.50 wholesale price he receives from his distributor.
The distributor, in turn, will typically take $2.17 for bringing the wine to market, where the wine merchant will add $4.33 to promote and sell the bottles to the public, producing an undiscounted retail price of $13.
Excerpt from The Sacramento Bee "Business" Section
(February 14, 2008, Page D1ff):
"Full Bouquet on Wine Costs;
From grapes to glass, prices vary by region and quantity"
Alternate link:
By Jim Downing
Staff Reporter
"Breaking Down a Bottle"
The value of wine grapes depends on where they're grown. While grapes are the primary ingredient in wine, they make up only a splash of a bottle's retail price. Here's a breakdown of the estimated costs in a typical $20 bottle of wine:
Grapes . . . . . . . . . . .$ 1.95 Petite Sirah (Mendocino)
Winemaking ops . . . $ 3.25 medium-volume
Oaking . . . . . . . . . . $ 0.75 American oak barrel
Bottle glass . . . . . . . $ 0.90 Midrange glass
Label . . . . . . . . . . . . $ 0.25 Midsize order
Closure (cork) . . . . $ 0.30 Midquality cork
Capsule . . . . . . . . . $ 0.10 Aluminum
Bottling . . . . . . . . . . $ 0.45
Subtotal . . . . . . . . . $ 7.95
Winery mark-up . . . +75%
Winery mark-up . . . +$ 5.96
Subtotal . . . . . . . . . $13.91
Wholesaler m-up . . +20%
Wholesaler m-up . . +$ 2.78
Subtotal . . . . . . . . . $16.70
Retailer mark-up . . . +20% supermarket
Retailer mark-up . . . +$3.30
Total . . . . . . . . . . . . $19.99
Sources: Sacramento Bee; Robert Yeltman, UC Davis; National Agricultural Statistics Service
As an ex-commercial and corporate banker, I feel it imperative to both forecast and look back (costing) all our finances of our small brand. That said, we didn't get into this business for the mansions or Ferraris, we love wine and we are committed to making a living in a business that provides much more than financial satisfaction. Cheers and thanks for the post!
ReplyDeleteRepliesThanks for logging in Thomas. Forecasting is critical for managing any business. Working in several different businesses early in my career, the hardest thing to forecast was sales. In the wine business, its easier comparatively - simply because you can only sell what you made from the harvest (ignoring going back to the bulk market). Sales aren't automatic, but forecasting is needed and helps a company from several surprises when added with scenario planning.
DeleteTHIS "ABSTRACT" ON FORECASTING IS PROFFERED FOR THOSE WHO MIGHT BENEFIT FROM IT . . .
Excerpts from The Wall Street Journal "Special Report" Section
(July 7, 2008, Page R10):
"Thinking About Tomorrow;
Seven tips for making forecasting more effective"
[Link: http://online.wsj.com/article/SB121441324219503927.html]
By Chaman L. Jain and Mark Covas
[Dr. Jain is a professor at St. John's University in New York. Mr. Covas is global innovation diamond manager at Procter & Gamble. They can be reached at email@example.com.]
Forecasting has never been more important -- or harder.
Customers are less loyal, and global competition more fierce, making it difficult to predict where sales are going. Adding to the problem: Products, sales and distribution channels all have proliferated, and the life spans of products have gotten shorter.
As a result, some companies are being forced to adopt new ways to improve forecasting and planning. And a common theme links them all: collaboration.
More specifically, these companies are requiring different departments -- chiefly sales, production and marketing -- to share more information and work together on setting sales and production goals. They are regularly reviewing how close forecasts come to actual results, and making adjustments in production and marketing as needed. They also are increasingly using full-time demand and supply planners who prepare forecasts and related recommendations about demand and production.
Cutting-edge companies take collaboration further, integrating operations with vendors and suppliers in ways that give each party access to data that helps keep the supply chain flowing and inventories lean. Once such links are established, a manufacturer, for example, no longer has to guess at a vendor's inventory or future promotional plans, hence forecasts -- and sales -- improve.
We expect to see widespread use of such processes someday. For now, though, many companies pursue collaborative forecasting in ways that limit its effectiveness, if they pursue it at all. In some cases, not enough departments are involved, while in others, planning meetings aren't held regularly, or support from management is lukewarm at best.
What follows, based on our research and experience, are SEVEN RULES companies can follow to make the most of collaboration in their forecasting efforts.
Get Senior Executives Involved
. . .
Explain the Mutual Benefits
. . .
Clearly Define Goals and Agreements
. . .
Use the Best Technology
. . .
Focus Where Revenue and Profits Are Greatest
. . .
Link Incentives to Companywide Goals
. . .
Aim for Continuous Improvement
. . .
[Go online to see suggested reading list from MIT Sloan Management Review.]AND THIS OBSERVATION: DON'T BEAT YOURSELF UP IF YOUR FORECASTS/PREDICTIONS ARE WRONG. YOU'RE NOT ALONE . . .
Excerpt from Fortune Magazine:
(February 6, 2006, Page 44)
"Ditch the 'Experts';
Grading pundits and prognosticators:
More famous = less accurate."
[Link: http://money.cnn.com/magazines/fortune/fortune_archive/2006/02/06/8367977/index.htm]
By Geoffrey Colvin
"Value Driven" Columnist
You have been a world-class sap for years. Why? For listening to the economic and political forecasts of experts. We in the media have been irresponsible fools for reporting those forecasts. And the experts themselves? Delusional egomaniacs--and maybe even con artists.
I didn't always think this way. But I've been reading a book that marshals powerful evidence to make this case. For all of us in the world of business, economics, and capital markets--a world that often turns on the judgments of experts--the question is whether we're brave enough to face these uncomfortable facts.
The book is "Expert Political Judgment: How Good Is It? How Can We Know?" by Philip E. Tetlock, a professor at the University of California at Berkeley. It summarizes the results of a truly amazing research project: Over seven years Tetlock got a wide range of experts and nonexperts to answer carefully constructed questions about the likelihood of specific future events. He ended up with a staggering 82,361 forecasts, expressed in quantifiable form and thus able to be analyzed deeply. His definition of "political judgment" included plenty of topics that you and I would call economic, such as government spending and national economic performance.
Tetlock then cranked all those numbers through every kind of statistical thresher, flail, and grinder you can imagine, and THE RESULT WAS CLEAR: EXPERTS DON'T ACTUALLY EXIST. SPECIFICALLY, EXPERTS WERE NO BETTER THAN NONEXPERTS AT PREDICTING THE FUTURE. [Capitalization used for emphasis. – Bob]
They weren't even as good as computer programs that merely extrapolate the past. The best experts could not explain more than 20% of the variability in outcomes, but crude algorithms could explain 25% to 30%, and sophisticated algorithms could explain 47%. Consider what this means. On all sorts of questions you care about -- Where will the Dow be in two years? Will the federal deficit balloon as baby-boomers retire? -- your judgment is as good as the experts'. Not almost as good. Every bit as good.
Which is not to say that experts are no different from you and me. They're very different. For example, they're much more confident in their predictions than nonexperts are, though they obviously have no reason to be. . . .
Another part of the answer is especially troubling for the media. The awfulness of Tetlock's experts was almost uniform whether they had doctorates or bachelor's degrees, lots of experience or little, access to classified data or none. HE FOUND BUT ONE CONSISTENT DIFFERENTIATOR: FAME. THE MORE FAMOUS THE EXPERTS, THE WORSE THEY PERFORMED. [Capitalization used for emphasis. – Bob]
. . .
[Bob's aside: for related reading, check out Nassim Nicholas Taleb's book titled "The Black Swan" on how some experts' hubris and myopia can lead them to overreach and fail.]Bob: Good articles. Thanks for posting them.
Regarding the Wall Street Journal article: Did you notice that they left something out of their "Seven Rules"? Something really critical. Read them again.....what got left out?
Customers. Nowhere in that entire article do they mention meeting with customers, understanding customers' needs and goals, how they're going to address those needs and goals, etc.
Regarding wine (and keeping the large-scale producers, like Gallo, out of it for a moment), it's important to build long-term habitual-buying relationships with customers. Customer acquisition and retention is the top priority for wineries. When someone buys, the winery should use that as a *starting point* to build a solid relationship so that the buyer actively seeks out their wine later.
This takes working at the customer level, not the 50,000 foot level that executives occupy. This can be done with email follow up, special invitations to special occasions, requesting their input for food pairings, connecting on social media, etc.
I could go on and on, but I won't. The point is: every small to medium winery needs to actively develop their customers. Stop worrying about what's happening in the world and instead build the opportunity that's sitting right in front of you on the bar stools in your tasting room.Gordon,
I respectfully differ with you on these observations:
"Regarding wine (and keeping the large-scale producers, like Gallo, out of it for a moment), it's important to build long-term habitual-buying relationships with customers. Customer acquisition and retention is the top priority for wineries. When someone buys, the winery should use that as a *starting point* to build a solid relationship so that the buyer actively seeks out their wine later."
From a winery's perspective, their primary "customers" are the wine retailers and restaurateurs who buy their product.
Not consumers.
Their limited and infrequent interaction with consumers comes from visits by wine tourists to their tasting rooms, participation in charity events, and participation in winemaker dinners.
On an everyday basis, wine retailers and restaurateurs are the closest "touch point" that consumers have with a winery. The best willingly serve as "good will ambassadors" and taste-makers.
And the key evidence that wine retailers and restaurateurs are a winery's "primary" customers is found in their marketing budgets: the lion's share of the money is allocated to "trade" promotions to "push" the product through the channels of distribution.
Only the largest wineries have consumer marketing budgets to "pull" product through the channels of distribution.
Ask yourself: When's the last time you saw a paid media ad for your favorite brand of wine in a consumer publication? Heard an ad on the radio? Saw an ad on TV? Saw a roadside billboard?
SIDEBAR TO ROB: I don't "archive" my issues of Marketwatch, the trade magazine published by Marvin Shanken (who also publishes Wine Spectator).
But if you do retain your copies at the office, perhaps you can dig out the annual issue in which Marketwatch identifies the top brands of wine sold in the U.S., and cites each brand's consumer advertising budget.
Even the "big boys" like Gallo and Kendall Jackson spend surprisingly little "talking" to the public through paid media.
Unlike the beer and spirits companies.
~~ Bob
What I've noticed is a lack of marketing effort.
Example 1: I've gone into many tasting rooms, paid the fee, tasted the wines, and then walked out without a staffer tempting me to buy the wine. Even the phrase "which bottle would you like me to wrap up for you?" would be better than nothing.
Example 2: No follow-up. I've put my email address on many lists at wineries, and I've never heard back from them. Well, an occasional email about their harvest, but that's it. If I got sent a coupon or a couple of recipes that paired with their wine, I'd track that wine down just so I could try the pairing.
I could go on and on, but that's the main point. People *want* good wine, and they want to have friends at the winery. If the wineries put a bit more effort into their marketing, they'd get a lot more sales.- AnonymousJune 9, 2014 at 6:58 AM
There is a long standing joke in the wine industry. If you want to be poor, buy a winery.
A lot of wineries make money off events. Rob -
Thank you for updating this post. I've not seen the little videos in a while, and they remain as funny as ever!
Are you able to share what all is in the COGS? Is that direct product only (grapes, bottles, corks...) or would it also include some direct labor such as winemaker costs, certain depreciation charges / allocation of barrels (if capitalized), and/or other charges. Just curious.
I know we need to be SVB clients to see more of the data and the different cuts, but I wonder about the profitability comparison of wineries primarily DTC as opposed to distribution - is there a meaningful difference?
I also wonder whether there is a meaningful difference in "lifestyle" wineries as opposed to "real businesses", if I can use those terms. I suspect SVB doesn't have many "lifestyle" clients as they might be simply funding themselves without your services and therefore don't submit their information. But I don't know... I'm trying to find insight to the numbers.
Again, thanks for the posts and the information.RepliesChris - You should be SVB clients!
The peer group analysis we do for our clients gratis, provides side by side comparisons of wineries who are peers (We dont use names and there is no way to guess because of the way we present the information.)
Answering your questions isn't going to be satisfying because it includes wineries from entirely different peer sets - some direct and some though 3 tier. Some are negociants and some estate .... etc.
An important topics & article on make money posted by you on your website. I like these tips. This is great and important elements in the modern world that mean how to make money . Tips and tricks to how to make money from online. Let's we know learn how to make money and earn money. An easy way earn money. thanks so much!
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text:
MMM793 - Managing Cultural Projects and Events
Unit details
Year | 2015 unit information |
Enrolment modes: | Trimester 2: Cloud (online) |
Credit point(s): | 1 |
EFTSL value: | 0.125 |
Unit chair: | A Kershaw |
Prerequisite: | Nil |
Corequisite: | Nil |
Incompatible with: | Nil |
Contact hours: | Learning experiences are via CloudDeakin |
Cultural projects and events are a feature of vibrant and dynamic places. Arts and cultural events contribute to a range of artistic social economic and environmental outcomes. As a result a growing number of arts organisations, government departments, community groups and commercial businesses are engaged in delivering arts and cultural events that respond to diverse communities, local cultural identities and distinctive locations. This unit develops students' skills in designing, planning and delivering cultural festivals and arts events. It examines the use of a range of management processes, including: project management; operations and risk management; financial management; human resources; and strategic marketing.
Written Assignment 1 2000-2500 words 40%
Written Assignment 2 4500-5000 words 50%
Written Assignment 3 1000 words 10%
Unit Fee Information
Student Contribution Rate* | Student Contribution Rate** | Fee rate - Domestic Students | Fee rate - International students |
$1283 | $1283 | $2962 | $3697 |
* Rate for all CSP students, except for those who commenced Education and Nursing units pre 2010
** Rate for CSP students who commenced Education and Nursing units pre 2010
Please note: Unit fees listed do not apply to Deakin Prime students.

subset: commoncrawl


text:
So DR17 was just the beginning. Kudoz!
Phoronix: Enlightenment EFL 1.8 Coming Next Week, 1.9 In 2014
The EFL 1.8 release for the Enlightenment project should be out next week and there's already plans for releasing EFL 1.9 in February!..
So DR17 was just the beginning. Kudoz!
Looking foward to playing with E19 + wayland + systemd + efistub to see just how fast I can boot to desktop.
Three months till E19?! wow, getting faster and faster with releases. Can't wait for E19 + Wayland. I wonder if anyone has been looking into porting Enlightenment to BSDs?


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Kingdom Rush
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Super Bean Jumpby True Valhalla
As the name implies, this is a jumping game … with a bean. Send the sombrero-sporting bean higher and higher with nothing but your thumb. Well, more like well-timed presses of the thumb so as to collect coins and other power-ups.
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Get out and enjoy a show before it's too late!
The window is closing on outdoor, summer activities in Lake Country. It's a slippery slope into fall, which brings its lovely array of color, but also cool, crisp days and nights.
So before you have to get out your parka, be sure to visit SummerStage for one of its entertaining shows at the beautiful outdoor venue surrounded by nature.
The current offering is "Talley's Folly" with shows at 7:30 p.m. Thursdays, Fridays and Saturdays this weekend and next weekend. The show takes an irreverent look at Shakespeare's plays as men in tights romp through the Bard's comedies, histories and tragedies.
SummerStage is located in Lapham Peak State Park, W329 N846 Highway C, Delafield. Tickets are $17, $15 for seniors and students. For tickets, call (262) 337-1560 or visit www.summer-stage.org.
Also this weekend is the Antique Automobile Club of America Car Show from 11 a.m. to 3 p.m. Saturday at Olympia Resort & Conference Center, 1350 Royale Mile Road, Oconomowoc. See more than 100 restored and preserved vehicles from 1902 to 1989 and meet their owner on the grounds of Olympia Resort.
» Read Full Article'Shrek' on stage this weekend
St. Anthony on the Lake drama club presents "Shrek Jr.: The Musical" April 24-26 on stage at Kettle Moraine High School in Wales. Performances will be at 7 p.m. Friday and Saturday, April 24 and 25, and at 2 p.m. Sunday, April 26. Tickets are $6. Call (262) 968-3805 for more information.
Initial Reaction Podcast: Bucks; Kaminsky; Brewers; WIAA balance rules
Do the Bucks have a chance against local rival Chicago in the NBA playoffs? Also, will the Badgers make Frank Kaminsky their first-ever retired number, does the poor early start foretell doom for the Brewers, and how the WIAA landscape could dramatically alter on April 22.
Hartland plan commission again reviews plans for proposed memory care facility
recently proposed memory care facility in Hartland.
Village of Hartland - The approval process is coming to an end for aThe village's joint plan commission and architectural review board on Monday, April 20 again looked over planning documents for the facility, which if ultimately approved would be built near the intersection of Merton Avenue and Sunny Slope Drive.
A public hearing about the facility was held at the April 20 meeting and two residents with property abutting the proposed development expressed concern about the proximity of the facility to their existing land.
The couple was also concerned about the long-term care of a wooded area near both properties, which they said has not been kept up by previous neighbors.
Project developer Jay Schnorenberg assured the residents that a buffer between their respective properties would remain in place and said he and his design team had already considered upgrading some of the surrounding landscape.
» Read Full ArticleBrian Dorow joins Kapenga in District 33 state Senate race
The field now includes two.
After earlier saying he was strongly considering a run for the District 33 state Senate seat, Brian Dorow made it official when he announced Monday at Waukesha City Hall that he will run for the position.
Dorow joins Rep. Chris Kapenga (R-Delafield) as two Republican candidates seeking to win the seat that will soon be vacated after Sen. Paul Farrow (R-Pewaukee) steps down to solely assume his duties as the newly elected Waukesha County executive.
Dorow, a workforce development professional, community leader and associate dean at Waukesha County Technical College (WCTC), made the announcement surrounded by family and his colleagues from the public safety community.
Dorow supervises more than 150 employees and oversees a multimillion dollar budget at WCTC.
» Read Full ArticleOHS students "Sleep Out for Homelessness Awareness" event
Oconomowoc High School students will participate in the ninth annual Sleep Out for Homelessness Awareness event Friday-Saturday, April 24-25. About 30 students from the IB History of the Americas class will spend the night outside in cardboard box shanties on the outdoor stage courtyard on the west side of the high school.
The students will also collect monetary and nonperishable food donations for the Oconomowoc Food Pantry. Donations can be dropped off at the location of the sleepout between 6 p.m. Friday, April 24 and 7 a.m. Saturday, April 25.
Waukesha Kiwanis Early Risers holding annual tree sale in communities May 2
The Waukesha Kiwanis Early Risers will hold its 19th annual Black Hill Spruce tree sale from 8 a.m. to noon or until sold out, on Saturday, May 2. The trees are about 16 inches to 20 inches in height and will be sold for $5 each.
The trees will be available at the Bauer Bros Produce Stand on Highway 164 and Skyline Avenue in the town of Vernon; St. Mary's Church at Highway 67 and 18 in Dousman; Finn's Bar and Grill, 200 W. Summit Ave. (Highway 18), Wales; Citizens Bank of Mukwonago at Highway NN and Godfrey Lane in Eagle and Bill's BP and Mini Mart, Highways 59 and E, North Prairie.
To reserve trees call John at (262) 364-8298. All profits will be donated to local charities.
Mukwonago medical assistance fund holding pancake breakfast fundraiser
Village of Mukwonago — A local nonprofit organization will hold a pancake breakfast next month to raise funds for families in need of financial assistance.
The Mukwonago Catastrophic Medical Fund will host a pancake breakfast fundraiser from 7:30 a.m. to noon Sunday, May 3, at St. James Catholic Parish, 830 County Road NN E, Mukwonago, in the activity center. The breakfast will include all-you-can-eat pancakes, sausage or bacon, coffee, juice and a raffle.
Admission is $5 at the door.
The Mukwonago Catastrophic Medical Fund was established in 1984 and assists Mukwonago residents with medical bills they are unable to pay. The pancake breakfast will raise funds and awareness for the nonprofit's mission.
Only families and patients living in the Mukwonago School District are eligible to receive assistance. Beneficiaries are not required to repay the money they've received.
» Read Full ArticleMukwonago drug collection day scheduled in May
Village of Mukwonago— Residents are encouraged to bring unwanted prescription and over-the-counter medication to a drug collection day in May.
From 10 a.m. to 2 p.m. May 16 at the D.N. Greenwald Center, 240 Maple Ave., residents can bring medications, ointments, sprays, inhalers, creams, vials, herbals and pet medications to a drug collection drive, according to a news release from the Village of Mukwonago Police Department.
Residents are asked not to bring biohazardous materials including sharps, mercury, household hazardous waste or personal hygiene products.
Dousman Main Street project nears completion
Starting today, Monday, April 20, 2015 the finishing of Main Street in the Village of Dousman will begin.
That includes the finishing of curb and gutter, final layer of blacktop, striping, and landscaping. The finished project is expected to be done by the end of May.
Village officials as residents and motorists to please be aware of construction workers and equipment.
East Troy man sentenced to prison for role in Eagle resident's heroin overdose death
Troy Pennoyer will spend 30 months in prison for his role in the 2013 overdose death of 35-year-old town of Eagle resident David Teske.
Pennoyer was sentenced on Monday, April 13, in Waukesha County Circuit Court to 71/2 years behind bars, but will spend the remaining five years of his sentence on probation, according to online court records. Circuit Court Judge Michael Aprahamian handed down the verdict.
Pennoyer, 33, of East Troy, was charged in January 2014 with first-degree reckless homicide for allegedly delivering the heroin that ultimately killed Teske, and faced up to 40 years in prison and $100,000 in fines. He pleaded not guilty to the felony murder charge later the same month.
In response, according to court documents, Waukesha County District Attorney Susan Opper last December extended a plea bargain to Pennoyer's defense team, which called for Pennoyer to plead guilty to a lesser offense — conspiracy to deliver heroin — that carried a less severe penalty in exchange for Pennoyer covering the cost of Teske's funeral expenses.
Court records show that Pennoyer pleaded guilty to the amended charge in February, and, according to the conditions of his bail, must maintain absolute sobriety and is prohibited from associating with any known drug users or dealers.
» Read Full ArticleRolling Hills, Eagleville Elementary Girl Scouts holding donation drive to benefit Hope Center
Rolling Hills Elementary and Eagleville Elementary Girl Scouts are holding their fourth annual clothing and household goods drive, Project Hope, from 2:30 to 4:30 p.m. on Wednesday, May 6, at Rolling Hills Elementary School, W322 S9230 Beulah Road in Mukwonago.
This drive is created and run by the grade school Girl Scouts to prevent and assist the homeless in Waukesha County. All donations will go to the Hope Center of Waukesha. A Hope Center representative and Hope Center truck will be on site for the event, along with 50 to 60 Girl Scouts, leaders and volunteers.
A drive-thru drop off for donations will be available where Girl Scouts accept and load items onto the Hope Center truck.
Household goods, used clothing and furniture donations are needed. Donated items should be in good, usable condition. Visit the Hope Center's website for a complete list.
All donations are tax deductible.
» Read Full ArticleMukwonago woman charged with stealing from former workplace
Village of Mukwonago — A Mukwonago woman is charged with stealing from her former employer late last year.
According to a criminal complaint filed on April 10, an officer was dispatched on Dec. 2, 2014 to Asset Management Inc., 807 Swan Drive, for a burglary report. The business' owner said seven $100 bills were missing from his office desk.
The owner said he reviewed surveillance video and discovered at around 8 p.m. Dec. 1, former employee Elizabeth Koty, 37, could be seen walking in the hallway past the video surveillance camera and toward the owner's office.
The business was closed at that time and the owner said Koty was on the property without consent. To the owner's knowledge, Koty did not have keys to the business.
The owner said it's common for him to keep an envelope of cash in his desk to pay for things necessary at work and a few employees — including Koty, whom he paid from his desk a few days before the burglary.
» Read Full ArticleEntertainment appears like magic
Everyone loves a magic show. And when the magic includes tigers it is even more thrilling.
On Saturday, Jeremy Allen's Grand Illusions will come to the Hamilton Fine Arts Center with shows at 2 and 6 p.m. The show features live tigers plus death-defying escapes and awesome illusions that will keep you on the edge of your seat. You might even be chosen to assist in the show. All VIP ticket holders ($50) can take a photo onstage with the tiger following the show
The Hamilton Fine Arts Center is located at W220 N6151 Town Line Road, Sussex. Tickets are $30 for adults, $20 for students 18 and younger, and free for ages 12 and younger. For tickets and information, visit hamiltonfineartscenter.com
Wisconsin's new Poet Laureate Kimberly Blaeser will be at the Delafield Public Library, 500 Genesee St., Delafield, at 10:30 a.m. Saturday. Blaeser, a UW-Milwaukee English professor of Anishinaabe ancestry, will discuss poetry, answer questions, and sign books.
Chris Kohn will bring his original songs and unique blend of acoustic rock, funk, jazz and soul to the Delafield Brewhaus, 3832 Hillside Drive, Delafield, at 9:30 p.m. Saturday. His music moves from deeply moving to laid-back jams with mellow vocals on top. His shows feature something for everyone – a new take on a cover song, or a fresh original. For information call (262) 646-7821.
North Shore Middle School presents Seussical the Musical
Seussical the Musical, presented by North Shore Middle School, takes place on Thursday, April 23 (7 p.m.), Friday, April 24 (7 p.m.) and Saturday, April 25 (2 p.m.).
Cost is $5 per ticket and may be purchased at Piggly Wiggly and North Shire Middle School. Tickets are also available at the door.
North Shore Middle School is located at 800 N Shore Dr, Hartland, WI 53029.
Two injured, one seriously, in two-car head-on collision in Lisbon
Town of Lisbon — Two area residents were rushed to the hospital after a head-on, two-car collision at about 9 a.m. April 16 near Highway 164 and Riverview Drive.
According to a news release from the Waukesha County Sheriff's Department, both victims of the crash were the lone occupants of their respective vehicles and were trapped inside their cars after the collision.
The release said a 23-year-old Merton man was driving south on Highway 164 when his car veered into the oncoming lane of traffic and struck a vehicle driven by a 47-year-old Delafield woman.
Waukesha County sheriff's deputies along with members of the Lisbon and Sussex fire departments responded to the scene of the crash, and fire department personnel had to extract both crash victims from their vehicles.
The 23-year-old man was transported via Flight For Life to Summit Aurora Hospital for "substantial injuries," according to the release, and the 47-year-old woman was transported by ambulance to Froedtert Hospital.
» Read Full Article


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Texas Rangers Gear
Texas Rangers Ladies
Texas Rangers Ladies Home Office & School
(3 items)
Product ID: 1104433
Main Content
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Case | HBS Case Collection | January 2015 (Revised January 2015) Rebranding Godiva: The Yıldız Strategy Rohit Deshpande and Esel Çekin This case concerns Yildiz Holding's acquisition of Godiva Chocolatier from its previous owner, Campbell Soup, and its strategy in preserving Godiva's "made in Belgium" brand position. Provenance paradox, a problem faced by companies in emerging countries trying to establish their brands in developed markets, had not become a problem for Yildiz Holding. After patiently waiting five years and seeing the company not performing as desired, Murat Ülker, the chairman of Yildiz, decides to change the management structure and encourage rethinking brand positioning, channels, and communications in the U.S. market. How was the Godiva brand affected by the execution problems of previous management? Why did Godiva succeed in international markets while it declined in the U.S.? What were the implications of the change in marketing strategy to Godiva's brand image? Keywords: branding; internationalization; provenance paradox; emerging markets; Acquisitions; change management; positioning; innovation; customer-centricity; Marketing; Strategy; Food and Beverage Industry; North America; Turkey; Japan; Citation:Deshpande, Rohit, and Esel Çekin. "Rebranding Godiva: The Yıldız Strategy." Harvard Business School Case 515-059, January 2015. (Revised January 2015.) View Details CiteView DetailsPurchase Related
Teaching Note | HBS Case Collection | May 2014 Building a Social Media Culture at Dell Rohit Deshpandé and Michael Norris Citation:Deshpandé, Rohit, and Michael Norris. "Building a Social Media Culture at Dell." Harvard Business School Teaching Note 514-113, May 2014. View Details CiteView DetailsPurchase Related
Case | HBS Case Collection | April 2008 (Revised March 2014) Flying J (A) Rohit Deshpande and Lauren Barley The largest retailer of diesel fuel in the U.S., Flying J, is rethinking its growth strategy as the economy goes into a recession. Its major customer base, owner-operated truck drivers, are facing increasing costs of doing business. Yet Flying J is considering whether to increase its price of diesel fuel. Keywords: Decision Choices and Conditions; Growth and Development Strategy; Price; Consumer Behavior; Non-Renewable Energy; Energy Industry; United States; Citation:Deshpande, Rohit, and Lauren Barley. "Flying J (A)." Harvard Business School Case 508-074, April 2008. (Revised March 2014.) View Details CiteView DetailsPurchase Related


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Hello im Nick, recently signed up to the website, however i have been browsing for quite a time behind the scenes. Im fairly new to reading (about a year) and i started with 'A game of thrones' last year after watching the first season of the TV show, i quickly finished the 5 books currently out in the series and moved on to Patrick Rothuss's 'Name of the wind' and 'Wise mans fear' which i loved, so thats 2 series ive started but as of yet cannot finish, my latest read has been Robin Hobbs 'Farseer Trilogy' and 'The Tawny Man Trilogy' which again i absolutely loved. So any ideas where i could go from here? I dont really want to start another epic like ASOIAF as i think it would be too much with 2 series already unfinished, i do like the young protagonist finds his feet and changes the world type of books as in rothuss's and hobb's work but stuck on where to go, ive looked at the Liveship traders but dont really fancy it if im honest and people have recommended the Malazan books but i think that would be too much for me at the moment. any help would be very much appreciated, thankyou
Hello and welcome Chocobo. I actually haven't read many shorter, finished series like this that fit your requirements, but the Night Angel Trilogy by Brett Weeks would include everything that you list. The writing style, imo, isn't up to the same standards as Martin, Rothfuss and Hobb, but most books aren't, and so it might be worth looking into.
That's a tough act to follow if you ask me, but there are lots of great trilogies out there. Prince of Nothing - Bakker War with the Mein - Durham First Law - Abercrombie Mistborn - Sanderson Empire - Feist/Wurtz Inheritance - Jemison Cold Fire - CS Friedman The Swan's War - Russel Chalion - Bujold Bartimeaus - Stroud Just to get you started.
thanks guys, ive read up about the books and the Mistborn trilogy and the Night angel trilogy have taken my liking so im going to go with one of those, thanks for your help i think im going to enjoy reading both of those.
Hi Chocobo/Nick First, let me welcome you to the SFFWorld forums. Next, you're going to find tons of recommendation threads throughout each section. We get a lot of "what can I read next" threads on just about a daily basis. We find that such posts usually get the same response. Actually looking at what's already on the Web site or utilizing our SEARCH function will usually answer most people's requests. Perhaps it is uncommon, but we like people to have a look around rather than just demand (even if it's polite!) immediate gratification for their own personal needs. With such a large and complex site it can be difficult to see everything going on, admittedly. But if people think that there's answers out there they will point people in the general direction. So, rather than people coming here and repeating the recommendations they've provided in other threads, I'll direct you to some of those threads: The New and Improved Recommendation - Fantasy / Horror If you like ^^^^^ then you might like ##### Just started in Epic Fantasy - What to read? / Epic fantasy suggestions... (Merged) Gimme some good adventure books! (Similar to Three Musketeers,Locke Lamora or Sharpe) Book that just blew your mind.... Looking to start new series Need help picking new fantasy series to read **looking For Fantasy Trilogies** Hopefully putting this in the right place (looking for a new series to read) my next series to read Fantasy series Looking to start new series ETA: Closed the thread to keep the recommendation-thread population down.