How wineries can improve their bottom line

by | October 2020 | Wine Businesses

October 2020 | Wine Businesses

Generations of vintners know that the wine business is not for the faint of heart. The industry demands plenty of business smarts, a full-time commitment, and a lot of cash to be successful — all before the first crush.

The packaging quick-win

All of us have made numerous purchase decisions based on packaging. In the traditional world of wine, this means a superbly wrapped bottle, thick glass, embossed label, wax capsules. In a COVID-world, wineries need to think of how the wine arrives. The “Apple-like unboxing experience” has led to thousands of online “unboxing videos”, mostly created by consumers and professional YouTubers, not the brands directly.

As a winery, you should be mindful of the integrity and quality of the carton used for packaging, as well as that of the filler used. When possible, adding a simple hand-written “thank you note” sets you aside from larger brands and this will also get you a long way to becoming the talk of the town. This is also a great opportunity to include a request for feedback or incentivize a follow-on purchase.

Remember: as consumers we tend to let our first impressions be the judge of whether we like a product or a brand. This would certainly impact what they think of the product itself.

Know your margins, aim for value-based pricing

Along with margins, know your pricing! This is one of the most fascinating topics around wine businesses, where much inventory is priced comparatively to other wines, and often at a very, very thin margin. Few wineries understand their costs, and fewer add a margin to establish their own selling price. Notwithstanding channel margins.

Value-based pricing in the industry has only been properly applied by a few. We’ve all seen a few examples of similar wines offered at a drastically different price (ie. $30 versus $60 or even $120). Even with similar winemaking practices, from similar regions, with similar packaging. Value-based pricing forces wineries to truly consider the overall experience, onsite and at home, that can be attached to their product.

Most would agree that processing “100 sales at $20 each” is more work than processing “20 sales at $100 each”. The same rationale should be applied when factoring in costs in your equation. Costs of production, costs of packaging, costs of sales, cost of transport; all should be factored in before a margin is added.

Simply put, the traditional approach to “I think that’s what customers are willing to pay” is not the right way.

Sustainability, all-around

Implementing sustainable processes in your business may sound obvious, but there’s often more to it. Sustainable growing practices are increasingly common, with solar power, water harvesting, etc. But what about sustainable business practices? Let’s explore doing more with less.

Don’t just increase production as a mechanism to increase your future revenue. Of course, more volume means more costs to make, store, and move the product. In most cases, however, making fewer products also allows for a less fragmented offering, better focus and quality on the production, and also sales fronts.

Don’t just increase sales volume and rush the product out of the door.

Don’t just increase your online marketing spend without also having a look at your goals. Online advertising ― irrespective of which channel ― will happily take your money and give you some basic “views and clicks” statistics. However be sure to understand conversion to sale ― whether it’s an actual sale to be shipped, a booking for virtual tasting or visit, a question about your product or shipping or else. In other words, a “click” and a “page view” are not sustainable, unless conversion is measured.

The team at Troly has created a neat Marketing Spend Strategy tool to help you make a good decision. Enter your conversion numbers and watch the strategies shaping up! Of course, if you’re using Troly, all of that is taken care of for you.

Practice software excellence

Anything not written down should be considered as lost. Every time a team member learns something new about a customer, it should be written down on their file. Most wineries reading this do not get 200 new purchases per week and so each individual customer matters. This information is used to better segment your list, better communicate with everyone, and altogether improve your customer experience.

Any question about your products, your team, or your winery, should also be written down. Much like customer feedback which should always be captured, or else you will never have the chance to review and improve your customer experience.

Balance your sales, brand, and marketing efforts

Solid sales are essential to all businesses. However many spend most of their energy on sales campaigns and fulfillment, and not enough on selling the brand. At its core, the brand is the most important company asset and will turn into sustainable profits by having a loyal customer base rather than a random sales-only approach.

Customers intrinsically ask themselves four key questions before any purchase decision. Your brand and products should answer these clearly.

  • Considering the price charged, will the product perform to my expectations? (yes, your brand should understand your customer expectations)
  • Should the product not deliver, will there be opportunity costs involved? (with wine, consider where is your product placed and consumed?)
  • Is the product/service safe to use? Healthwise and environmentally? Organic or biodynamic? (how are they consuming your product?)
  • Does it fit my values and personality? (which is impossible to answer unless your brand has and communicates their values)

For wineries, a brand goes far beyond a logo and label design on a bottle. Allocating resources to crafting a story is an important stepping stone toward longer-term, sustainable ― and possibly higher margins ― sales.

Original creation of our GOLD Partner Sebastien ― CEO
Fuelled by his desire to bring righteousness to the wine industry, Seb is driving numerous industry initiatives like Troly, working with producers to better understand their business, increase their margins, and shine the spotlight on their wines.

Read the original article at

Originally published at:

Written by Sebastien ― CEO at Troly
Fuelled by his desire to bring righteousness to the wine industry, Seb is driving numerous industry initiatives like Troly, working with producers to better understand their business, increase their margins, and shine the spotlight on their wines.