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Lieb Behind the Scenes

Lieb Behind the Scenes – April 2016

April 14, 2016

april blog

Lieb Behind the Scenes – April 2016

While my blog posts normally focus on what’s happening here at Lieb, I’m deviating from protocol this month to report on my experience “behind the scenes” in California last month.  I’m still reeling from the week and everything I learned and can’t help but share.  I hope you’ll indulge me.

You can’t be in the wine business in the US and not know about University of California at Davis.  UC Davis’ Department of Viticulture & Enology is widely considered the premier source for undergrad, grad and continuing education degrees in wine in the US if not the world.  Since entering the business 5 years ago and catching the wine education “bug,” I’ve dreamed of stepping foot on UC Davis’ campus.  To be in the same halls, the same classrooms and in front of the same professors who’ve educated some of our industry’s most esteemed wine professionals – what an honor that’d be.  Well, last month, I had the opportunity to live that dream.  I flew out to California and attended UC Davis’ 2016 Wine Executive Program.

The Wine Executive Program is a prestigious, hands on, 4 day intensive course designed to teach the full range of management skills necessary to be successful in the wine business.  It attracts students from all over the world in various positions with varying levels of experience – winemakers, vineyard managers, packaging companies, distributors, importers and producers/wineries.  For me, it was an opportunity to receive a formal, crash course in all of the aspects of Lieb’s business that I currently oversee but am only informally trained in.  Upon stepping into my role as GM at Lieb 2 years ago, I was confident in my ability to lead our team because of how much I learned from others and taught myself in the years prior.  But, UC Davis’ program was a chance to – hopefully – get definitive affirmation (from the best in our field!) that what we’ve done, are doing and plan to do in the future here at Lieb to improve and grow our business is…right.

I’m happy to report that during those four 12-14 hour days of learning, tasting, observing, and networking, I did just that.  I learned not only are we on the right path in all aspects of our business – from winemaking to viticulture to branding & marketing, distribution, even finance (Monday morning 7:00am GAAP accounting class was a killer!) – we are even, in some cases, at the forefront of our field.  It was unbelievably gratifying to discover that all of our hard work these past 2 years has put us in the position to be competitive with some of the top wine brands all over the country.  We’re a small, self-taught winery in an isolated, up-and-coming region, but we’re doing things right!  We can stand shoulder to shoulder with the likes of wine companies like Duckhorn and Cakebread!  So so cool.

That’s of course, though, not to say that my work here is done.  While I do believe – and UC Davis certainly confirmed for me – that we’re on the right path, I also believe that we’ve just started down that path.  We’ve just tapped the potential for what this team and this company can accomplish.  To that end, I’ve compiled a list of the top 5 things I learned at UC Davis that will help us do what we’re currently doing better and to ultimately reach our goal of becoming a successful national wine brand.

Number 1 – Viticulture (Grape Growing) & Winemaking

Holy automation!  I knew that the majority of California vineyards were machine (vs. hand) pruned and harvested, but I didn’t know that number stands at about 90%….AND that extensive studies have shown there to be no significant qualitative difference between wine made from hand vs. machine harvested grapes.  So interesting.  Further, because my exposure to the technical side of winemaking has been limited to the machinery and processes we use at Premium Wine Group (our winemaking facility), I was also unaware of all the recent advancements in winemaking equipment.  At UC Davis’ winery (they have a fully operational, state of the art winery on campus), I stood in front of a wireless, fully automated, self-sustaining wine fermenter tank. These are tanks that control load-in, fermentation, real-time juice analysis, pump-overs, clarification and even cleaning (!) by the touch of a button on a computer at the end of each row.  Now, I’m not advocating that we abandon our hands-on approach to winemaking or that our winemaker could in any way be replaced by a computer, but as we grow and look to make more and more wine, moving to a more automated model – especially for our Bridge Lane (entry level) wines – is certainly something I think we should consider.

Number 2 – Wholesale Distribution

If there was one key take-away from all of the time spent covering the topic of wine distribution, it’d be…it’s ALL about who you know.  This is a lesson our director of sales, Mike, and I unfortunately spent most of last year learning the hard way.  When attempting to establish a distributor relationship in the Mid-Atlantic, we spent months researching, cold calling, sending samples and trying to pitch a number of small to mid-sized distributors on us and our wines…to no avail.  They didn’t know us and didn’t have time for us.  Then, after losing almost all hope, we decided to take a different approach and see if a friend of mine in DC who worked in the restaurant business would be willing to personally connect us with one of the distributors he worked with.  He did, and a month later, we shipped our first pallet of Pinot Blanc down there.  8 months of cold calls – nothing.  1 personal introduction – IN.  As UC Davis confirmed, building out a distributor network isn’t about having 90+ point wines (everyone has them) or even an amazing brand story (it helps but isn’t enough).  It’s about knowing people.  And that’s the single approach we’ll take to expanding in the future.

Number 3 – Direct to Consumer (DTC)

Tasting room – check.  Wine club – check.  While there’s constant room for improvement and refinement, we for the most part have these DTC channels covered according to what I leaned.  Our internet sales (or e-commerce), on the other hand, could use some work.  Not because most top wineries in the US are doing a killer job with this channel and we’re way behind the curve, just the opposite actually.  I was surprised to learn that while we (Lieb) have started to put real focus and resources behind it, the majority of other wineries represented in the class had largely ignored it.  Professor after presenter made the case for the wine industry to step up our game online and go all in.  Consumers, especially millennials, are becoming increasingly more comfortable buying product online and wineries have yet to tap into the potential for more online sales.  Over the past 2 years, we’ve dipped our toe.  We improved our online ordering tool, instituted a successful “free shipping” promotion and utilized social media to drive online sales.  Next year, we’ll look to design and launch a fully-integrated e-commerce campaign.  DTC e-commerce is where the world is going and it’s time to get fully on board.

Number 4 – Finance

In between fighting the urge to nap and/or run away (ugh, 7:00am accounting class!), I did learn a valuable lesson from the multiple finance-related seminars I attended.  That is, understanding and controlling costs is absolutely vital for success in this business.  Sounds obvious, I know, but it was astounding to learn that most wineries don’t have a clear understanding of how much it costs them – all in – to make each of their wines.  And further, they devote an alarmingly small amount of energy to monitoring spending.  They love to know how much they’re selling but don’t pay too much attention to how they’re spending.  Seems crazy considering what one presenter aptly pointed out: spending is how you gain competitive advantage in the wine industry, not sales.  While many of us try our damnedest to set prices according to how we value our wine, the truth is, the market ultimately decides what it wants to pay. We don’t control pricing, the consumer does.  What we have complete control over, however (and can hide from our competitors), is our costs of goods.  We have the ability to source cheaper materials, achieve efficiencies and keep operating expenses down.  Selling more than our competitors means nothing if we’re spending our margin away.  Controlling and maintaining (or growing) margin is the key to gaining advantage.  At Lieb, we’re more focused this year than ever before on understanding and controlling our costs.  In future years, we’ll strive to be even more diligent.

Number 5 – Marketing & Branding

Finally!  My favorite day of the four by far was the last, branding & marketing day.  The Director of Marketing for Wente Vineyards, one of California’s oldest and most highly regarded wineries, gave a spirited presentation on how they successfully branded their portfolio of wines.  What was interesting to me, however, was that their branding wasn’t anything amazing or original.  It was all about their commitment to family and tradition and excellence – pretty standard stuff.  When I raised my hand and (delicately) asked how they became so successful with a brand positioning that seemed to be somewhat conventional (I mean, who doesn’t tout “family-owned”??), she responded – “It’s less about what you stand for than how you stand for it.”  Ah, she was so so right.  From top to bottom, from their cellar crew to their president, from their tasting room to their back office, from their wine labels to the bags they put them in at point of purchase – everything was on brand.  No detail overlooked.  It all meticulously fit into the story.  So, that was my final key take-away from UC Davis.  I think we’ve done a great job over the past two years of rebranding both Lieb and Bridge Lane.  The press has even praised us for it.  Next level, though, is for us to go all in and comprehensively align every single aspect of our business with what we now stand for.  To be continued, for sure.

Thank you for taking the time to indulge me with this post.  If you’re in the industry, I hope you were able to identify with some of the topics.  If not, I hope you at least found them interesting and look forward to sharing our journey over the next few years, as we look to implement my learnings.

Next month, back to business as usual.  It’ll be May, so we’ll take a look at how we’re prepping our tasting rooms for the upcoming summer season.

 

Cheers!

Ami Opisso

General Manager & Certified Sommelier, Lieb Cellars

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