Let Your Sales Forecast Be Your Guide

What is the difference between these two perspectives?

1. Winery owner produces a wine(s) and needs to sell it to fulfill the sales goal.

2. Winery owner has a sales goal and needs a wine(s) to fulfill that goal.

At first glance, you may not think there is much difference. Or perhaps you see the difference, but don’t really understand what it has to do with you or with your winery. I say it has everything to do with your winery’s success. Let’s break it down.

Operational/Production View:  Plant what grows well. Make the best wine possible. Sell it at the highest price point possible.
Strategic/Business View:  Look at your sales goals. Plan your production. Plant your vineyard. Make the best wine possible that your customers will want. Sell it at the highest price point possible.

Do you see the difference?  As a winery in The Other 46, it’s common for the winemaker to look at the harvest and decide what wines to make. It’s easy to assume they had a plan when they planted the grapes. But often you are planting vines and hoping they will turn out out quality grapes. But sometimes they don’t come out the way you planned.

Thus even planning strategically with sales goals and customer preference leading the way, many challenges can present themselves.  Here’s a few:

1. Grapes planted are not producing the quality and/or volume you wanted. You can’t change the grape that is already harvested, but there are practices and techniques to pull the best of already harvested grapes forward. Example: One of our clients had harvested some Malbec. The grapes were harvested earlier than desired due to dealing with some environmental issues. Harvested grapes cannot be made any riper and thus was not going to produce the style of wine they wanted to sell as a Malbec. They were faced with two choices: (1) Figure out a way to make a Malbec by purchasing Malbec premium bulk wine and blending it. But then the volume would be much greater than their projected sales. (2) Make a different wine completely by making a blend in the same style. Possible use of estate grapes, but more likely would have to purchase bulk wine. This scenario would create a gap for the Malbec they no longer have and a larger volume than projected sales.

Challenge: Increased wine volume does not match the forecasted sales goals. You have a “hole” where your Malbec was supposed to be.

Solution: (1) Blend with another Malbec. Roll over the estimated surplus of inventory and age it another year. (2) Blend the Malbec with another wine and make a red blend. (This winery does not label any of their wines as varietal, thus they are able to manipulate their blends.)

2. Consumers in America have been taught to look for varietal names.It is easy for a winery to fall into the same mindset when looking at varietals to plant. Thus leading a winery to look at the vineyard to determine what wines they will sell. Just because you produce enough Syrah to make 1500 cases of wine, does not mean you will sell 1500 cases of Syrah. If forecasted sales are 1000 cases, this is a mistake regardless of the quality of wine.  This is actually more common a mistake than you might think.

Challenge: New wineries and vineyards (less than 20 years old) are often highly variable, i.e. 3 ton one year and 7 ton the next per acre. Commonly this is handled by producing some type of wine blend, which ends up becoming the “kitchen sink” wine. I recommend against this. In my opinion, blends need to be planned and balanced. Don’t just throw in a bunch of varietals because you need to get rid of something.

Solution: It’s better to either (1) sell some of the wine on the bulk market or (2) store surplus in inventory for use as a specialty reserve in the future. These options are commonly what we recommend for many of our customers.

3. Your customers don’t want the kind of wine you want to make. You like a particular wine, but your customers want something different, which we have talked about many times, but specifically here: What Do Your Customers Want?  If you have been open at least a year, then you now have real world information about what your customers want.

Challenge: Even though you now have a better understanding of what your customer wants, the wine already exists or you already have vineyards planted or contracts are signed that were originally for a set of tastes that is now changing.

Solution: Masterful blending. A small change in a wine blend can change a customers perspective of the wine significantly. While this may require bringing in some bulk wine, often it is a small volume that will just “finesse” the blend.

From Which Perspective Is Your Winery Operating?

Operational/Production View:  Plant what grows well. Make the best wine possible. Sell it at the highest price point possible.

OR

Strategic/Business View: Look at your sales goals. Plan your production. Plant your vineyard. Make the best wine possible that your customers want. Sell it at the highest price point possible.

Do you understand your customer’s tastes and are you using that information in your product plan? Do you know your forecasted sales?  If you do – Great!  You’re on your way to making your winery a successful business. If you’ve been making whatever grows well and ending up with a lopsided inventory, then I challenge you to review your perspective.

How does your winery operate?  Please share your successes & challenges!

 

Custom solutions for your winery.
Finely crafted wine blends and consulting
(because you’re not a Napa winery!)

Premier Wine Blends 888-767-7442
Email Us