The survey was conducted among 109 California wine professionals by the Wine Industry Financial Symposium Group and the University of California-Davis Graduate School of Management. More than half the participants were wine producers, the rest wine grape growers, distributors, retailers and others.
In 2009, for example, 46 percent of them were using Facebook in their businesses. This year the number had grown to almost 83 percent. Twitter? While just 21 percent were “Tweeting” in 2009, 64 percent were doing it this year. A year ago, only 18 percent had a company blog; now it is almost 52 percent.
And with good reason. While the jury is still out on social media’s effectiveness, employing Facebook and Twitter and blogging to get your message out is relatively inexpensive, and the growing use of social media has coincided, not surprisingly, with the continuing hangover of the recession being felt in the wine business.
Indeed, the survey paints a picture of an industry hit hard. More than 83 percent of those questioned said they’ve had to be more flexible with their business plans; roughly two-thirds have reduced operating costs and have made less profit, while more than half have reduced staff. Many have no plans to bring back those laid off.
All that comes as the professionals surveyed have seen wine drinkers themselves cut back substantially, with more than 95 percent saying consumers have become more value oriented in the last two years, up from 75 percent in a similar survey last year. They’ve also noticed that consumers have been buying more store brands and private label wines and are less interested in ratings from the likes of Wine Spectator and the critic Robert Parker (I, for one, believe less reliance on ratings is a positive trend in and of itself).
In a separate survey of wine industry CEOs, one noted: “It seems we have shifted from aspiration buyers to value buyers. I think the value buyers have found that there are some very good wines at reasonable prices.”
In terms of sales, the wine professionals say that baby boomers have been hit hardest during the recession – it has been harder to sell wine to them than to those younger or older.
On the key question of when the wine business will “get back to normal,” the wine professionals think it’s going to take a while but not too long. More than half the wineries and two-thirds of wine distributors said it would be within three years. Almost 60 percent had a bullish view this year on growth and profitability, almost double the number last year.
Meanwhile, with discounting up and prices down, this is a very good time to be a wine consumer.
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