Selling at the cellar door

Tasting room survey: selling at the cellar door

Larry Walker

Whether you are a small winery off-the-beaten path or a multi-million dollar operation at the gateway to Napa Valley, direct-to-consumer sales can make a big difference on the bottom line. And the key to running a successful tasting room with significant sales is the staff: the people on the front line who meet and greet winery visitors.

That’s the story Wines & Vines heard from every part of the U.S. as we surveyed tasting and sales room staff. That’s especially important if 100% of your sales are at the cellar door, as is the case at Tri-Star Vineyards and Winery in Shelbyville, Tenn.

Elaine Casteel, co-owner of the winery with Perry Casteel, said their production is so small, between 750 and 1,000 gallons a year, that distributors and wholesalers “just don’t want to meet with us.” Gasteel said they make a number of wines, including Cayagua, Chancellor, Catawba, Muscadine and Baco noir.

“We have a good local base and a good mailing list. We also put cards out at local welcome centers,” she said. She added that they have no problems finding good tasting room staff. “We do it all ourselves.”

Casteel said they often have out-of-state visitors who would like to have wine shipped to their homes, but they can’t do it because of interstate shipping regulations. She said their Web site has been very helpful at spreading the word about their wines, as they can contact more people at a lower cost than with direct mail.

When Lou Preston at Preston Vineyards of Dry Creek in California’s Sonoma County decided to cut back from 20,000 cases a year to 8,000, he knew he wanted to do as much business as possible out of the tasting room to maximize profits.

“The key is having a well-trained, friendly and knowledgeable staff. That seems like a no-brainer, but if you visit tasting rooms, you don’t always find that,” he said.

Preston has always worked to create a friendly environment for visitors. “We like to think of it as a family farm,” Preston said. There are picnic areas, olive oil and other local food products for sale, and a huge garden that people can wander through. The centerpiece is a massive outdoor oven where Preston bakes bread for special events.

“The point is, you have to integrate all of those elements. You can’t just throw them out there. You have to work to create the feeling for visitors that they are on a family farm. Staff is important in that area, too,” he said.

Although Preston is doing about two-thirds of his sales through the tasting room and a wine club, he says that having wine in retail outlets is also important. “If your wine is in the marketplace, it acts as a conduit, leading people to the winery. You need both.”

Shipping a Problem

At the North River Winery in Jacksonville, Vt., Annmary T. Block-Reed said business there would increase dramatically if they could ship out-of-state. “Every day we have calls or e-mails from people who have visited the winery and want to buy more wines. We are in Southern Vermont, really a four-season resort area, so about 80% of our customers are tourists. If I could ship, I could retire!”

North River produces about 5,000 cases of wine annually, but has distribution only in Vermont. About 60% of sales are out of the tasting room. “It is very difficult for small wineries like us to work the three-tier system,” she said. She added that she believes it is only a matter of time before the traditional system is upended. “We try to keep up-to-date on legal actions and we work with Free the Grapes! on those issues,” she said.

According to JoAnn Bentryn of Bainbridge Island Vineyards & Winery outside of Seattle, the key to tasting room sales is authenticity. “We are a small family farm estate winery. We grow all of our own grapes right here. People who come here know they can talk to the owner. And we don’t rush them. We have a small tasting area with room for maybe 15 people, but we take the time to talk to them and answer the questions they ask. If I don’t know the answer, I find out.”

She said it was very important not to intimidate people. “They drive up and see the dogs and cats sleeping on the porch, they see the vineyards right next to the winery with a picnic area in the garden. We have wine-related antiques in the tasting room that are for sale. People love it. It’s a real place they can visit, not a virtual place,” she said.

The Bentryn family grows about eight acres of grapes and makes some 1,800 cases of wine annually. About 75% of that is sold at the winery.

People Are the Key

Domaine Carneros, the Taittinger champagne outpost in Napa Carneros, manages to sell almost 30% of its wines through the tasting room or its wine club, according to hospitality director Sandra Hausser. Anyone who has driven to Napa from San Francisco has seen the imposing chateau-like winery. Those who have stopped for a glass of wine find themselves in one of the most pleasant tasting rooms imaginable. In good weather, there is a terrace overlooking the rolling hills of Carneros, with a glimpse of the San Francisco skyline on a clear day.

Inside, there’s a minimum of clutter and the usual tasting room shlock. Instead of tasting while standing at the counter, there is table service with a bite of food if you wish.

But, once again, the key is people. None of the amenities would matter without the right staff. Hausser said there is an extensive training program involving not only wine knowledge, but how to serve on the floor. “A lot of our success is the fact that people are treated well here,” she said.

Hausser said the wine club program is also an important part of the Domaine Carneros sales program. “The wine club builds a strong customer base,” she said. Wine club members can opt for either one or two bottles shipped to them six times a year. They also get first chance at limited release and library releases.

Hausser said they are now setting up a three-tier shipping program which will enable Domaine Carneros to ship wine anywhere by working through local retailers. “We are just getting that program in place.”

The winery is also working with Benson Marketing of Napa to set up an e-marketing program, which will include e-newsletters with information on food and wine pairings, recipes and other features. “We aren’t sure how effective that will be yet,” Hausser said.

Chateau Julien in Carmel Valley runs a successful wine club and extensive hospitality program, which account for about 8% of sales. Patricia Brower, the winery hospitality director, has chosen not to attempt to sell through the Internet. “We do a lot of promotions and put out a lot of information. We prefer to build a client base through those kind of direct approaches, rather than random Internet contacts,” she said.

By the Numbers

Now, let’s do the numbers. The Wines & Vines mail survey of tasting room and winery hospitality managers drew 681 replies from across the U.S. and Canada. Questions asked included the following:

Do you have a tasting and/or sales room? As might be expected, 89% answered “yes.”

If so, can you say what percentage of winery sales are made in the sales room? The answers varied so widely that an average number would be meaningless. Some wineries sold as little as 4-5% on site, while for others, the number is 100%.

Do you offer wine from your tasting room not otherwise available? Fewer than 20% did so.

Do you charge for wine tastings? Again, under 20% charge for tasting and in those cases, almost all refunded the charge if the customer bought wine.

Do you have a wine club for your customers? Surprisingly, only 51% take advantage of this simple way to build sales and customer base.

Do you send a winery newsletter to customers? Another no-brainer, but only 71% of respondents send newsletters.

Do you have a Web sire? Web sites are posted by 62% of the respondents.

If so, do you offer wines for sale from the Web site or otherwise through the Internet? Only 14% offered Web/Internet sales.

Overall, what percentage of total sales come from tasting room sales, wine club sales and Internet sales? Total Internet sales were about 2%.

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