Top 5 Mistakes Made by New Wineries

1. Neglecting the business planning processes: Too often, new wineries launch without a roadmap -- a mission, vision, set of defined goals and aligned strategies and tactics. Owners and operators spend countless hours tending to vineyards or seeking grape contracts and debating desired styles, aging vessels, and packaging, and yet surprisingly little (or no) time is dedicated to concretely defining the direction of the business.

I’ve heard many excuses for not engaging in business planning: “it’s in my head”; “I need to focus on selling”; or my favorite, “I don’t want to lock into anything while I’m starting”. Rather than serving as a delay mechanism or absolute path, a business plan is a dynamic document that should be revised as the venture grows, and serve as a benchmark for progress evaluation. Operating without one is like arriving in a new city, hoping on the freeway, and hoping to make it to your destination. You’d probably eventually get there, but wouldn’t it have been easier and a lot more fun with an efficient GPS or even a map?

2. Lack of branding: The wishful or erroneous thinking that a wine will sell itself because it’s “good” or “made with passion”. Consumers have thousands of wine brands from which to choose, and they are notoriously disloyal when it comes to their choices. It’s convenient to think that your wine is above the identity creation process; there can be some benefit from being the new “hot” bottle, but over the long haul, the vast majority of successful wines are also compelling brands.

A strong brand consistently communicates its distinct identity and value proposition for the consumer. Identity is composed of a defined look and clear messaging; it includes logo, label, printed material and website design, and anything written -- name, label copy, printed material and website copy, etc. Both look and messaging serve together to communicate a foundational platform – the brand’s unique selling propositions that in turn create value for the targeted set of consumers.

3. Confusing a label with a brand: For many, the label is the fun part. It’s the visual extension of the winery owner’s dream, and can serve as a cue for memory among a sea of choices. Most people start a wine business with a label already in mind. And many start designing it well before they’ve conceived of an identity. This mistake tends to lead to a variety of less than ideal outcomes: messaging is unclear or inconsistent; positioning is not considered; and the target audience is not effectively reached. Furthermore, creating a label before a brand often makes it more difficult (and possibly expensive) to work with other service providers such as website creators, copy writers, and marketing and sales personnel.

4. Launching before it’s time: As the expression goes, “you get only one chance to make a first impression”. Whether it’s sending press announcement before wine is available in the market, emailing potential customers well before the website is launched (or has been checked for bugs), or releasing a bottling before it’s showing at its peak, all of these actions serve to diminish a wine launch. In general, media won’t write about a wine that’s not available, consumers won’t pay to reserve an unknown wine months before it’s released, and new wines released while suffering from bottle shock won’t be well received. The lack of action post pre-mature launch is discouraging and worse, there is no true opportunity to do it correctly.

Financial pressure often drives the decision to launch pre-maturely, and this is why having a business plan with strategies for staying afloat during best and worst case scenarios is a necessity.

5. Having a “build it and they will come” mentality: This thinking is a symptom of lack of true marketing-driven strategies. Consumers do not automatically appear just because a new winery creates a website or opens a tasting room. Similarly, just because you send a mass email asking for a sale doesn’t mean they’ll actually enter their credit card information. Growing sales is about cascading your winery’s unique message (see number 2 above) and creating meaningful customer relationships. It takes time, which is a particularly tough pill to swallow in the wine industry given the initial and early investment.

The good news for wine business owners who want to build their businesses strategically is that there is a wealth of information available. Successful Wine Marketing by Moulton and Lapsley, and Wine Marketing & Sales, by Wagner, Olsen and Thatch, are two great books with which to begin. Online tools for business and marketing plans are available on a variety of websites including the Small Business Administration, Harvard Working Knowledge, and Start Up Nation And industry publications like Wine Business Monthly and Wines & Vines cover trends and practices. Lastly, there are numerous talented industry experts available to meet your marketing and management service needs.