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Posts published in February 2019

The Process of Getting Wine to the Consumer Is A Circuitous Process

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The logistics in getting a product from the manufacturer to the retails shelf seems not to have changed much until the internet and now the drones. We don't rely on the brick and mortar store as much. But, there is one area where distribution hasn't changed greatly over the last 2 or 3 decades-wine. We even get our drugs delivered by USPS and FedEx. We simply assume the manufacturer is trying to keep the price of their product competitive and reasonable and are therefore using the cheapest means to get a product on the retail or consumer direct. Even automobile tires are sold on-line and delivered by UPS to our home; of course the buyer must get them installed. Yes, Amazon sells and fulfills most everything imaginable on-line.

These issues of distribution highlight the plethora of options available to the consumer in purchasing products, using multiple channels of free market distribution. The one area where consumer products are distributed using a federally mandated 83 year-old law are-wines, spirits and beer. The federal and state law mandated system for distribution of wine (specifically) is a Three-Tier System; a system of awarded monopolies condoned by the Federal government. But, recognize that each state controls and manages this system to individual state standards.

It is this system that gets wine on the shelf, which should concern any wine consumer because it impacts the wine consumers' pocket book. Let me illustrate. What if the government set up a system whereby dairies could only sell milk in their own cartons to milk distributors? Further, the diary must deliver their milk to a distributor who would off load it from the diary's truck onto their own truck and deliver it to the store. The distributor would get a 50% discount on the milk and then sell it to the store with their mar-up. The distributor would have the contracts with the stores and could also rep competitive dairies. And, the dairies would be responsible also for some advertising support. Would the consumer be happy with no price competition and the mandate from the government that there would never be any options available for milk? Probably not, but that is the issue today with wine. The lack of options are hidden.

The top four distributors for wine in the U.S. are: Southern Glazer Wine and Spirits, Republic National Distributing, Chamer Sunbelt Group (merged with Wirtz), and Young's Market. These companies sell, deliver, and represent a majority of the wineries selling products in the U.S. and they control 60% market share of a $52.7 billion U.S. market of wines, spirits and beer. In reality the top 10 distributors represent 68.4% of all wine/spirit wholesalers market share.

Technology Enhances Wine, Spirits and Beer Labels

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What's the purpose of a wine label; or for that matter a label on spirits and beer? Obviously, the first response to that question is: to satisfy the TTB (Alcohol and Tobacco Tax and Trade Bureau) regulations. Once that is accomplished, the label space remaining may be used for branding and marketing copy. The fact is, there is very little space on bottle labels to get creative with messages. Now technology is helping solve the limited space on labels by way of RFID (radio frequency identification/ID) technology. Tap a smartphone on a NFC (Near Field Communications) tag embedded on a bottle and see what comes up on your smartphone; assuming there is currently a tag on the label.

Depending on a winery's budget and the number of smartphones enabled with RFID tag readers (newer smartphones have built-in reader capability), wine, beer and spirits producers can communicate directly with the consumer while they are standing in front of the bottle or can. These electronic tags can impart information in any format. The information can be audio, a message or automatically opening a website page; the choice is up to the winery or craft beverage company. The most economical tag option is to use NFC tags embedded in a label or a very thin flexible film adhered to a bottle.

This NFC technology has different names such as Smart Labels, Tags, and OpenSense Tags; the moniker I use is "Tap Tags". Smart Labels (originated in the consumer products industry) are starting to appear on food, personal care and pharma items. Although extremely limited, spirits, beer and wine are recent joiners. In fact, companies using smart label tags are not just the big players in the food and personal care space but are also used by small start-ups. Basically, tags are a means for producers of products to give the consumer more information than is possible to print on a label. But, the benefits of such tags aren't just in dispensing more information, it is also about branding, loyalty, increased sales, etc.

QR codes have been around for decades. They can do some of the operations a NFC tag can perform but are limited. More on QR code versus NFC follows.

Twenty years ago, I was involved with a gentleman who is an expert integrator of RFID (radio frequency identification/ID) tag technologies for casinos. His patented technology is used today in allowing casinos to authenticate and track their gaming chips within a casino. Ken Smith, writing for Blackjackinfo.com on November 5, 2012 reported that Wynn/Encore Casino's in Las Vegas starting using chips embedded with RFID tags in 2005. Point being: the level of sophistication offered by "tag" technologies allow companies to communicate with consumers, even before they buy the product.

Decades ago barcodes started allowing companies the means to track inventory, monitor parts and adjust pricing instantly. Then RFID tags came along which expanded the capabilities of product monitoring passively and actively; reading and writing information to a RFID tag. Depending on the capabilities of an RFID tag, information can not only be read from a tag, but that tag can also be written to; adding more/different/updated information on the tag. We don't want to forget the QR (Quick Response Code) that most smart phones can read optically and provide an on-screen response via a link to a landing page. The QR code, invented in 1994 has a similar application as the barcode. Smartphones today come with QR reading capabilities and more recently antenna to communicate with NFC tags.

Wines, Spirits and Hampers Are Not Always Good Value As Corporate Gifts

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Corporate gifts of wines, spirits and hampers are different from many business and promotional gifts in that they are not usually personalized in the same overt way as corporate gifts for the office - sometimes just a tag from the sender is notification.

Other than this there is very little actual advertising associated with these products although some companies do use their own personalized wine labels. Their own labels are often affixed to standard wines and, to some eyes, may look a little tacky when the quality of a wine should be all-important.

Corporate gifts of wines, spirits and hampers include champagne, smoked salmon, succulent hams, Stilton and hand-made chocolates. All of which - and this is most important - are exquisitely presented in stylish presentation boxes and contemporary basket-ware.

Whether launching a product, holding a conference, giving a gift to your own staff, sales force, retired employees or your own valued clients, brand names on this prestigious gift are all-important to emphasize the high perceived value.

Here are some suggestions that may tempt you; however, remember once these gifts are gone, they are gone, and, unlike desktop corporate gifts, your logo and contact details are nowhere in sight.

If you decide on champagne then choose only the prestigious brands and do not forget they come in other sizes as well as bottles; you will certainly stand out from the crowd if you give a jeroboam or a Methuselah.

A two or three bottle presentation pack of selected themed wines is always acceptable; favorites being French wines but quality Californian, Australian, South African or New Zealand are acceptable. Alternatively, send a presentation case containing three wines from different countries.

Pursuing the themed idea, you can build a presentation box around a selection of port, sherry or whiskey.

Even though the perennial favorite, a presentation pack of quality port together with a half moon of finest Stilton, is not very original it is still a corporate gift to savor. Alternatively, ring the changes with the classic combination of caviar and vodka or perhaps a bottle of port together with a pack of the finest French truffles.

Traditional hampers filled with a choice selection of delicious food and wine are always popular whether in the original willow hamper basket or an attractive decorated carton giving scope for imaginative full-color personalization. Hampers are especially versatile in that you can choose a stock item or select the contents from a predetermined budget menu.

Favorite hamper contents are wines, cheeses, hams, smoked salmon, chocolates, oatcakes, jams, brandy snaps, shortcakes, mince pies, Christmas puddings, brandy butter, Christmas cakes, nuts and deluxe Belgian chocolates.

However, corporate gifts of wines, spirits and hampers are not the most economical and it is certainly questionable whether they give the same value for money as other corporate gifts and promotional items. Nonetheless, if the budget is flexible enough you will certainly have a bunch of satisfied customers; at least for a little while.

On the other hand, will they remember the provider of the magnificent gift of a luxury hamper later in the year? Perhaps not; so it is maybe yes or maybe no to corporate gifts of wines, spirits & hampers.

Organic Wine, Spirits and Beer

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A key point to add at this stage is the difference between organically grown grapes - fruit from vineyards grown without the use of industrial fertilizers, herbicides, fungicides and pesticides - and wines made without synthetic preservative additives.

Organic Vineyards – Where it all begins!

An organic vineyard is one where grapes are grown without chemical fertilizers, weed killers, insecticides, or other synthetic chemicals. This prevents damage to soil and ensures that no chemicals end up in the wine as residue. Organic farmers aim to maintain healthy, biologically active soil whose fertility is provided by plants that fix nitrogen from the air. In the vineyard it means planting cover crops between the avenues of the vines instead of applying herbicide. Naturally occurring plant or mineral extracts leave no residue in the soil, and weeds are kept down with the use of mechanical and hand hoes. Biodiversity is promoted through the plants, which help regulate the vineyard soil by attracting beneficial insects, spiders and predatory mites.

The Role of Certification and the Organic Market

When a label says organic, it means the wine has met certain standards that are set by a government agency. Different nations have their own certification criteria, so whats organic in one country may not be so in another. In the UK the Soil Association is the most recognized and used certification body.
Many wineries that are technically organic still choose not to be certified. There are many reasons for this. Some do not want the added costs and bureaucracy of registering. Others may disagree with their governments standards. Whatever the case, they are not allowed to use organic on their labels.
There is a national government target for 30 per cent of all UK farmland to be organic or in conversion by 2010, and 20 per cent of the food consumed to be organic by 2010. The UK grocery market was worth $206 billion in 2006 and USA 634.7$ billion. This growth in the organic food market will have a knock on effect on the drinks industry and will meet the ever-growing demand from consumers for organic wine, which is better for drinkers and better for the environment.

Financial Incentives to Companies to turn Organic

In 2005, 39% of the world organic farmland is in Australia and New Zealand. To combat this The European Union (EU) offers financial support to organic farmers as an incentive for farmers to convert to organic production and help the sector grow. These grants provide farmers with assistance during the period of conversion to organic farming which usually takes three years.

Organic spirits

While not so widely available as organic wine, organic spirits are available through specialist suppliers. The production process for organic spirits does not differ widely from conventional production. The main difference lies in the use of organic raw materials. Organic beers tend to use organic hops in production. Organic beer is now available in a number of pubs and supermarkets throughout the UK.

Fancy visiting an organic vineyard?

If you are into Organic wine why not visit Englands Premier organic vineyard. In addition to processing fruit on site, Sedlescombe Organic Vineyard is one of the main tourist attractions in the 1066 Country region in and around Hastings attracting some 5,000 visitors per annum to its Vineyard & Woodland Nature Trail + Wine tasting.

How to Open Wines and Spirits Stores

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If you love fine wines and spirits, you can consider turning this into a profitable business. The health benefits of wines have resulted in many wines and spirits stores around the nation, in recent days. There is a growing number of consumers of wine and spirits, and the number does not seem to be decreasing any time soon. Therefore, opening up a business in this industry helps you to become an important player, contributing millions to the economy in the form of taxes.

Benefits of operating a wines store

When you open up a wine store, you stand to benefit from insider information pertaining to the most recent trends and sought after wines. Furthermore, you will be able to access the world's leading and finest wines and spirits. You will also have the privilege of selling any type of wines that you may wish to sell.

When you open your own store, you will have the freedom to be creative and to make decisions pertaining to all functions of your store. In addition, you can choose to sell wine accessories and gift items, such as wine racks, wine glasses, carafes, corkscrews and more. You may consider using your store for exciting events like wine tasting. You will have the liberty to attract customers of your choice like fellow wine lovers or customers from the affluent, upscale market- to become lifelong friends.

How to start wines/spirits stores

· Options: Decide the kind of store you want to open. You have the option to buy an established wine store or a franchise. Alternatively, you can open a new wine business. Choose a name for the store that sets you apart.

· Location: It is important to choose your target market carefully before choosing a location for your business. If you are targeting the upscale customers, you may need to set up a fine wine & spirit boutique in an affluent community. This will help attract your target market. As you choose the location, it is important to determine the amount of space or square footage you will need for your shop. It is equally important to determine the store's interior and exterior design.

· Licenses & insurance: Look for information about permits, licenses and other regulations. You need to make sure you are operating within the law. Moreover, you need to find important information that affects the wine business including insurance. You need to ensure your investment is protected.

· Financing: Before starting out the business you need to determine how you will finance the business. You may choose to use your savings or borrow from friends and family. You may also consider borrowing from the bank. The most important thing is to ensure you get enough funds at the lowest cost possible.