Wine Tasting Room Success Strategies

Direct-to-consumer sales are key for three Napa Valley wineries

by Paul Franson
V. Sattui
St. Supery is well known for tasting room choices and amenities, including educational samplings.
Napa Valley, Calif. -- Many wineries have recently looked to tasting rooms and other direct sales to replace waning restaurant and retail business, but some have depended on direct sales all along. With that in mind, we interviewed the principals from three wine companies that are very successful at direct sales.

All are along the popular Highway 29 corridor in Napa Valley, an area hard hit by the economic slowdown because of its predominance of premium wineries. The four wineries profiled (two owned by the same principal), however, are very different.

Two boast two of the biggest attractions in Napa Valley. One is long established and mining social media, and one is a new winery designed to focus on direct sales.

Alpha Omega Winery: Created to sell direct
Alpha Omega Winery opened in 2006 in the space formerly occupied by Quail Ridge Winery, just off Highway 29 in Rutherford. As part of the purchase, it acquired a public tasting permit -- a real advantage, since Napa County restricts most new wineries to appointment-only visitors.

Alpha Omega was conceived to be consumer-direct from the beginning. Partner Robin Baggett had previously started Tolosa Winery in San Luis Obispo County (and custom-crush Courtside Cellars); that winery depended on sales through conventional distribution. The experience convinced Baggett that he didn’t want to depend on distributors. Now 90% of Alpha Omega’s sales are direct.

“The key is good wine and good people,” Baggett says. He and partner Eric Sklar focused on high-quality wines, telling Swiss-born winemaker Jean Hoefliger that he had “no budget” for materials and equipment for making top wines, but could spend whatever he needed. “We also promised him we’d stay out of his way,” Baggett says. The partners also hired consultant Michel Rolland to help.

Baggett hired quality tasting room staff who are focused on sales. “We believe in working hard and playing hard,” says Baggett, who emphasizes a team approach.

The key to success is obviously the tasting room, since that’s also where wine club members are recruited. “People won’t join a wine club unless they’ve tasted the wine,” he says. “Few join the club except at the tasting room.”

Because of the importance of the tasting room, it was vital to bring in visitors. The winery embarked on developing relationships with those who could help, including other tasting rooms, transportation companies, limousine drivers, concierges, destination management companies, restaurants and hotels.

It also arranged events at the winery, encouraged wine club members to visit (of course) and offered tours and tastings for parties of 10 at charity auctions.

The winery's sophisticated point-of-sale system allows it to track visits by specific limousine drivers, who receive incentives. “They’re like tips; the drivers would rather get cash than another bottle of wine,” Baggett concedes.

Alpha Omega does no advertising, but makes sure it’s on all the maps it can be. “Every visitor has a map,” Bagget says, mentioning that the one given out by Meadowood resort is especially helpful. (Alpha Omega doesn’t pay for placement on maps, but most include all wineries, even if advertisers are highlighted.)

The winery is open from 10 a.m. until 6 p.m. -- later than most, but Baggett says there has never been a problem with unruly drunks in the late afternoon. Instead, Alpha Omega gets additional traffic.

The focus is on hospitality and creating a memorable experience, combined with salesmanship. Managers enforce a rule to greet visitors with a smile within 15 seconds and make them feel welcome. They avoid the snobbishness and intimidation that are often barriers in tasting rooms, turning the experience into a subtle interview. “People purchase things from people they like,” Baggett says. Every visitor is treated equally: “You never know who the hot prospects are.”

The winery has four locations for tastings: inside and out, plus barrel and tank rooms. At busy times, a greeter outside directs visitors, and guests are never two deep at the bar. They’re offered a choice of the $15 basic tasting of four wines at the wine bar or a premium tasting in a private room.

The staff can offer “back pocket” wines that aren’t on the regular menu. A barrel tasting is used to sell futures. The crew waives the tasting fee if the visitor buys wine. “It’s rare that they don’t,” Baggett says.

Sales representatives always politely ask for the buy: “What would you like to take with you?” for example. They have daily sales goals and team incentives. The winery sets sales goals based on historical data and expected business each day. If those goals are exceeded, the whole team on duty shares in 10% of the excess. Because this is calculated daily as well as weekly, employees earn immediate feedback. This practice encourages the staff to take good care of late-arriving guests: “It discourages them from locking the door,” Baggett observes.

Sales are up significantly, and employees have been meeting their goals often this year. Employees get a $20 bonus for signing wine club members, paid after the member stays in the club for two months.

The club offers a 20% discount and six shipments per year; incentives for joining include 30% off the first purchase and invitations to events. There are now 3,000 members, with 30 to 40 new sign-ups each week. For $5 more, members can ship using Wine Assure packaging in hot and cold weather.

The winery has learned that about 15% of credit cards used by wine club members won’t work, usually because they’ve expired. Rather than forfeit or postpone sales, a staff member calls people -- usually in advance, because they know when the cards expire -- to update credit card information.

Baggett says that sales last year were up 30%, and so far this year, they’re up 70%.

St. Supéry: Using social media
St. Supéry Vineyards and Winery has always been known for providing a good visitor experience, with educational displays about winemaking, demonstration vineyards, informative tours and a dog-friendly patio. Still, sales have been down a bit during the past two years. “It’s tougher to get people in the door,” laments Lesley Russell, vice president of marketing.

The winery is trying new ideas to improve traffic. It reconfigured its upstairs to replace some of the display with sit-down private tasting rooms, and it’s working more with tourism partners.

It is also using social media such as Twitter and Facebook for outreach. “This allows us to reach a broader audience,” Russell says. The winery hired a full-time social media specialist and is using the Internet to encourage visitors. Results are still mixed. “It’s not driving hundreds and hundreds of visitors yet, but it helps," Russell says. Traffic has reached 70,000 per year.

Yelp!, the online service that allows individual consumers to rate products and services, has become increasingly important. Tasting room personnel monitor these and similar services: The winery is getting mostly good comments. “It tells us how we’re doing, and if someone does post a bad review, we can respond and even apologize to them. We’ve had some change their reviews as a result.”

Russell says that the winery hires tasting room staff primarily for personality, not wine knowledge. “We can educate them and send them to classes,” she notes.

St. Supéry offers team incentives, not individual ones. “We didn’t want heavy competition among the staff trying to snap up the better buyers.” Russell also didn’t want them to overlook club members, who don’t pay for tastings.

The winery has about 7,000 members and needs to sign up about 300 each month to overcome normal attrition. Club members are important to the winery, accounting for three-fourths of direct sales.

The winery allows members to “go on vacation,” and suspend shipments without actually leaving the club, which helps in times like these.
V. Sattui
V. Sattui's shaded picnic grounds tempt visitors to enjoy a bottle of wine and a gourmet lunch from the winery's deli.
V. Sattui Winery: The food’s the hook
No visitor to Napa Valley could miss V. Sattui in south St. Helena. It’s the only winery in Napa County with a delicatessen, which it combines with a picnic area to lure visitors.

Castello di Amorosa, which like V. Sattui is owned by Dario Sattui, is a $35 million replica of an authentic 15th century Italian hilltop castle complete with a moat and dungeon and a modern winery hidden within. Touring the castle has become a must-do for valley visitors. Together, they attract about 400,000 visitors per year, according to Sattui.

Other vintners mutter about Sattui's profits from sandwiches and sometimes use the term "tourist trap," but they miss the point: To Dario Sattui, those are the hooks to get customers in the door. After that, it’s all about customer service. He misses no opportunity to satisfy the customer: More than 40,000 receive wine shipments or buy at least a case of wine from V. Sattui every year.

Sattui acquired the site for V. Sattui with great purpose: It’s located mid-valley, since many visitors don’t drive past St. Helena and its historic wineries. And it was zoned commercial, allowing him to start the deli. It’s also on the right-hand side going north, an easy turn. “They’re tired and heading home when they're going south,” he says.

Overlooking the grounds is what appears to be an ancient stone, which is really less than 30 years old. “People don’t come to Napa Valley for modern buildings,” he claims. “They like dusty caves and old cellars. They like them to look old.”

A lower building houses the deli and tasting room; the food is of highest quality and overseen by an Italian chef. Sattui notes, “Wines taste better with food, and we encourage customers to pair them. Then when they go back to snowy Iowa, they can recapture the experience when they drink our wine, and they pick up the phone and order.”

The winery has four tasting rooms. The largest has a choice of tastings: a classic tasting of five of 11 wines for $5, or a premium tasting of six of 11 for $10. The mood is very friendly. “We don’t condescend to people,” Sattui says. “We try to treat everyone like a friend.”

Unlike most Napa Valley wineries, Sattui offers everything from neophyte-friendly sweet wines priced as low as $15 to serious vineyard-designate wines for more than $75. These include eight vineyard-designated Zinfandels, but also off-dry Riesling and frizzante Moscato. “Other vintners don't want to make sweet wines,” Sattui says. “That’s fine; I’ll sell people what they want.”

Upscale wine and food pairings are offered on weekends and during the busy season, no appointment required.

Other tasting rooms are the Cellar Club, in the “old” building, for club members, including those who buy a case per year. They get free tastings of the best wines, including from barrels: Sattui sells futures this way. The small Vittorio Room, named after Dario’s grandfather, who founded a wine business in San Francisco 125 years ago, is in the tower and offers wine and cheese parings for $17. The new Gold Room is for people who buy five cases: It offers free food and wine pairings for members ($25 for their guests).

Sattui has many long-term employees. He’s known to be demanding but fair, paying well (up to more than $20 per hour) and offering 401(k) plans and long vacations. The company offers individual incentives for wine club memberships and sales. The company also pays half tuition for wine classes at local institutions. “But you have to pull your own weight,” Sattui says.

Is the strategy working? Sales were flat in 2009 over 2008, which Sattui considers an accomplishment, given that many wineries’ sales dropped 30% during the same period.

Castello di Amorosa: Napa’s most colossal attraction
While the castle itself is an attraction, and entry costs $16, it’s there to sell wine. For $31, visitors get a one-hour tour of part of the 107 rooms and eight levels, including a barrel tasting and six wine tastes ($10 more for a reserve tasting). Groups can also have private tours and tastings; club members can taste in the Passito Room.

Of course, the winery has clubs. You can join the club by buying a case of wine, which also nets one admission free and 10% off the wine. Buy three cases at once to get free admission, wine club membership and additional privileges when you return. Spend $3,000, and you become a member of the 500 Knights with special attention. Club members are invited to parties, as well.

Sattui emphasizes that it’s more about the relationships than the wines or the prices. “The customer is buying the salesperson he’s talking to. It’s simple common sense. Treat people the way you want to be treated.” Since it’s about the people, Sattui says he shares profits at the castle.
Posted on 06.18.2010 - 13:50:00 PST
It sounds like the only thing Apha Omega needs now is a PR director with common sense or at least an appreciation of the concept of silence. (See comments above; e.g. "tracking limo drivers", "unruly drunks", and "late arriving guests.")
Benicia, CA USA