So the big buzz word in the wine world these days is Social Media. Everyone is curious, everyone wants in, some people get it….and some people don’t. Facebook, Twitter, Blogs, MySpace, Snooth….there are a ton of social media outlets to participate in on the wine side of things. But these things all take time and resources, so CLC’s strategy has been to pick a couple and focus. The two we chose to work with, for now, are Facebook and Twitter.

Facebook is interesting….Clos LaChance has a group, a fan page and is set up as a person (which I think we may have to change soon….I believe that is against the rules.) We probably have access to about 900 people via those individual channels on Facebook.  And pretty much everyone that works here has a personal Facebook page. When we have something to say or something is going on….it’s easy to get the word out via Facebook. The winery updates its page for friends and fans. Everyone who works here updates their page via status updates or posts. It’s incredible the amount of people that can be reached via Facebook with just a few taps on a keyboard. In January, we had a cellar sale that we promoted pretty much only through Facebook and our email list. We had a record breaking (by FAR) weekend. We haven’t done much with Facebook ads, yet. It’s next on the always growing list.

Twitter is still an animal we are trying to tackle. There is so much going on with Twitter, it’s hard to keep up. People are twittering about wine, wineries, food pairings, events and more. We are pretty excited for a big event we are doing this Friday night called Twitter Taste Live.  People can all get online from 4-7 (PST) and join us in tasting three wines—the 2008 Glittering-Throated Emerald Chardonnay, the 2007 Crimson Topaz Meritage and the 2006 Ruby-Throated Cabernet Sauvignon. You can do it from home….or come to the winery. Melanie Gameng, our Social Media Superstar and former Princess of Fun, has been working hard all week to throw a great party.

Follow any of us from CLC on Twitter at:

For more information about TTL, please visit www.winetalk.org, www.closlachance.com/ttl, www.tastelive.com

First there are the regional associations. We are members of the Santa Cruz Mountains Winegrowers Association and the Wineries of the Santa Clara Valley. These organizations are important to us for two main reasons.

1. They are primarily focused on getting attention and recognition for their particular region—and therefore attract visitors and buyers to the winery.  Sell, sell sell!

2. It is a great way to get to know your fellow local winemakers. One thing that I have found to be really cool in the wine industry is that people are very interested in talking about how they made something. People discuss the grapes they used, the barrels, the fermentation methods, the ageing techniques. They also share stories about accounts and distributors (good and bad) and even certain customers that are “memorable.”  There are very few secrets in this part of the world—and the a-hole to non-a-hole ratio is pretty good. I would say 2/100. Most people are in this industry because they love it and are passionate. They want to be here vs. HAVE to be here.

We used to be members ofMonterey County Vintners Association when we had a tasting room in Cannery Row, but have since dropped out since the tasting room closed.  But every winemaking region has a Regional Association. The Napa Valley Vintners Association, Livermore, Sonoma, Oregon, Long Island etc. I would venture to say that if there are wineries in an area, there is bound to be an association close by.

Then you have the California winery associations. The Wine Institute and Family Winemakers are the two we are really active with. Both of these are very important in terms of lobbying in Washington on behalf of wineries. They also offer marketing opportunities in the form of tastings, International support and compliance advice. There’s also Free the Grapes, which has been instrumental in opening up the direct shipping channel for wineries all over the country—therefore increasing sales and customers overall.

Then there are the consumer organizations. These are often broken down by varietal or category of wine: Zinfandel Advocates and Producers and Rhône Rangers are two that we are involved in. But there are so many more: PS I Love You (Petite Sirah), RAP (Rosé), Sweet and Fortified Wine Association, Cal Italia, Women for Wine Sense to name a few.

So how does one breakthrough all the noise and decide what to be involved with? Honestly, it’s hard. We want to reach as many customers as possible….and each group caters to a different audience. However, it costs money to join these organizations—and time to attend the meetings, pour at the tastings and maybe do some actually work if you get involved on a board or a committee.  

Sometimes it’s really overwhelming.  And we have discovered that it is not really worth being a member of an organization unless we can dedicate the time to be involved. So being the good delegator that I am, I dole these organizations up amongst everyone here. My dad is really involved in the Wine Institute, I do the Santa Cruz Mountains Winegrowers and Free the Grapes stuff, Dominic is part of the Wineries of Santa Clara Valley and Melanie is involved with ZAP. It’s good networking for all of us and keeps any one person from becoming overwhelmed. We still have a few more we need to get moving on. There are a few other groups that we are members of—but don’t actively participate in.

I wonder if at the big wineries there is an actual position of “Winery Associate Liaison” or something of the sort. Wouldn’t it make sense to have one person leveraging every possible opportunity?  And what a good job to have! Go to tastings and promote the winery, go to meetings and meet wineries (and drink wine…cause at every meeting, it is pretty much mandatory to bring a bottle to share). But not as good as the 10K per month to twitter about wine for Murphy-Goode.

There are so many types of wine related groups that I haven’t even mentioned here….grape growing, winemaking, wholesalers, retailers, restaurants etc. It’s incredible. But the power of 100 voices vs. 1 is much more impactful….it’s just a matter of figuring out which ones work for our business.

So yesterday our email, phone and cell service all went down for 18 hours thanks to this yahoo. It was a little surreal being completely out of touch, but kind of nice. I got some deep thinking done—made some decisions about production planning and cleaned out my desk a little.

We also went out to lunch as a group—which never happens. Since the winery is 10-15 minutes from restaurants and take-out food places, most of the time we all bring our lunch and eat here. Don’t get me wrong—I love our lunchtime here. We all eat together and talk about the topic of the day—movies, stupid people, bodily functions (don’t ask), Dominic’s passion of the month etc.

So on the way out to lunch, I made Claudia stop the car—cause in the vineyard there were four HUGE turkeys. Two male and two hens. It was really cool. Of course we don’t want to see turkeys in the vineyard when there are grapes on the vines—they eat them. But the shoots are just starting to grow on the vines right now…so no harm, no FOWL.  But there was something really surreal about these huge birds just walking up and down the rows.

I wonder sometimes if I don’t notice these types of things on a regular basis because half the time I am driving in and out of the winery I am looking at my Blackberry  (yikes) or dialing my husband to let him know when I will be home.  Did the cell service being down cause me to take the time and look around these gorgeous surroundings?

We discussed this a little in the car on the way back from lunch and then started listing some of the other creatures that we see around here, outside of the turkeys.

-White Herons
-Blue Herons  (saw a huge one yesterday right near the turks)
-Magpies, really pretty black and white birds.
-Deer (thankfully on the OTHER side of the fence)
-We have a few ducks that come back to the ponds every year to have their babies.
-Turkey Vultures (that’s how we know something is dead on the road)
-Brown eagle (we have one that come back every year in the summer. Its wingspan is HUGE.
-Mountain lion (one time when Bill was driving out at night, there was a dark colored mountain lion creeping beside his car on the road. We have only had that one sighting though).
-Hummingbirds. Tons of hummingbirds. Of course.
-Another type of bird that is black and red. Not sure what kind it is.
-Rattlesnakes. The baby ones are scary.
-Tarantulas. The guys like to bring them into the office to freak us all out. Ugh. So gross.

Supposedly there are some wild pigs in the hills too.

I hope I can continue to take time to enjoy the surroundings in which I work every day. I am lucky to have 100 acres of vines and gorgeous views just from my office window. Hopefully it doesn’t take another outage for me to appreciate it.

“Contrary to popular belief, Clos LaChance is not in the business of growing weeds.” 
Bill Murphy, Founder and CEO, Clos LaChance Winery
April 2, 2009

Why the statement from the big boss at our weekly company meeting?  We have some weeds in the vineyard that are growing over the vines. We’ve noticed them, and most importantly our guests have noticed them…and asked what the heck is going on.

Vineyard Manager Ben Scorsur explained that he really tries to shoot for only one herbicide application before Spring. Sometimes it works, sometimes it doesn’t. A vineyard is always a work in progress.  Ben and his team are constantly dialing in best practices and applications.

This year, the weeds came up a little early. So we have some big (5 feet tall) weeds. No big deal. The guys are spraying as we speak (we have seen budbreak out there….so we don’t want the vines to have to compete for nutrients and water in the soil now that they are awake)  and they will burn down (from the herbicide) in a few weeks.

But reducing our applications of herbicides to one pass instead of two is important to note. Less chemicals, reduced man hours, less tractor emissions and soil impaction from the tractor passes. It’s all part of our quest to be more sustainable as a company.  

Gone are the days of vineyards with perfectly manicured rows without a weed in sight. Weeds grow on bare earth, unless you continually scorch it with chemicals.  So what we want is grasses and plants that are beneficial to grape growing….and encourage them to grow on bare earth vs. spraying a bunch of chemicals on the ground.  For example, legumes are a natural way to increase the nitrogen levels in the soil.

So if you come to Clos LaChance this Spring—and you most definitely should (this weekend we are excited for our Odd Bottle Sale), don’t dis our crop of weeds. Ultimately, they are helping the environment.  Function over form-who cares how the vineyard looks...let's just grow some good grapes!

 The news about the EU’s recent decision to ban certain terms from US imports got me thinking about Seth Meyers from "Saturday Night Live." He has a segment in the news called “Really? With Seth Meyers.” If you haven’t seen it before, check it out here: 

Obviously this affects Clos LaChance. Technically, the Euro have banned the term "Clos" (means closed in area). And Chateau (means castle), and a bunch of others like classic, sur-lie, late-bottled, noble, superior, vintage and ruby.

Really?

A little background about why this makes me, as a US wine producer, just a little ticked off. I have tried to sell wine in the EU. The taxes on US wines are insane. Basically the price at least doubles once you get the wine there and on the shelf. Every deal we have done in the EU, we came down significantly on price. And we have also had to put on special labels....more materials and labor costs for us. Our margins barely break even. Over the last couple of years we have given up on the European market and focused on friendlier export territories like Asia and Canada.

Don't get me wrong, I totally get the sense of place in Europe. There is nothing like drinking Riesling in Germany, Pinot Noir in Burgundy and Soave in Venice. Eating and drinking locally allows one to experience the true culture of a region.   

However, how would Old World wine producers be effected if Americans started having that isolationist attitude here in the US? Come on guys, let's make things as difficult for them as it is for us. Our consumption of wine per capita is growing significantly every year. France, for example, is going down (their new President is not a fan of the drink.)   We have the power people!

All these recession news reports have been telling me that the alcohol industry hasn&rsquot been affected that much. Makes sense. People drink to relax, let loose a little and forget their troubles. Nothing wrong with that.

Want to make a little extra dough US government? Start taxing imports the same way they tax us trying to get our wine into the EU. France for example, ships a sea of wine to the US every year. I would even venture to say they would be kinda screwed without the US market (well, most wine producing countries would).  Charge an equal percentage of tariffs or taxes or whatever they call it. Protect the US's home grown goods a little. It's hard for us to compete.....especially with labor and land prices in places like Australia, Chile, South Africa and Argentina. I can't tell you how many placements I lose to wines from these areas because it&rsquos just cheaper to make similar quality stuff.

Recently California wanted to raise the excise taxes by 400% on wines produced here in California and sold in California. Really? Why not slap those taxes on the French, Italians, Germans, Spanish, Australians, Chileans, South Africans, Argentineans and anyone else who is trying to bring wine in to compete with our locally grown wines? It didn't pass....but if it did, California wine prices in CALIFORNIA would have increased significantly. Really?

So, consider this an open letter to whomever is making the deals with the EU and this whole wine term debacle. Realize you are in a position of power. Tell those Frenchies that if they want to ban the term "classic" or "Clos" on a wine label then you can't use it on your labels that are shipped over here.  In addition, raise some money for our country, encourage people to drink US, and tax them how they tax us.

Really EU? You want to complain about words that are considered commonplace amongst winemakers all over the WORLD? I totally get the reason why you want to protect "Burgundy" and "Chablis"and "Champagne." Same reason we want to protect Napa Valley and the rockin' Santa Cruz Mountains. But come on vintage? Really? Classic? Really? Ruby? (means we can't sell our Ruby-Throated Cabernet in the EU). Really?

Like most people I know, I have a glass of wine pretty much every day. During the week, I drink usually just one glass of wine with dinner. On the weekends it ends up being two or three. Add that up…that’s five glasses on weekdays and four to six on Fridays and Saturdays. My maximum average consumption (outside of special occasions) is 11 glasses a week. A little less than three bottles (I pour approximately 4 glasses to a bottle).  Not too bad right?

In 1991, the French Paradox  story aired on 60 Minutes. Red wine sales boomed and the health benefits of wine in moderation were the talk of the town. Other health benefits of wine have since emerged, including:

-Women wine drinkers have fewer kidney stones
-Moderate Wine consumption reduces risk of stroke
-Studies link moderate alcohol usage to life longevity
-Drinking wine can reduce chance of upper digestive tract cancers
-Anti-oxidants in wine can reduce the occurrence of cancer in general
-Moderate wine drinkers have a lower chance of getting diabetes

(click here for an interesting summary of the aforementioned studies—compiled by a wine shop in New Jersey)

So this is great news, right? Wine is healthy and everyone should drink a glass a day for a longer life without strokes, cancer and diabetes. Well, then this came out last week:  a study saying that just one drink a day actually increases the risk of cancer in women.  

So now there are opposing studies….one says that wine decreases risk of cancer, the other says it increases the risk in women.   

Being in PR and knowing a little bit about how the media and news stories work—these “health benefits” or “health risks” stories always intrigue me. I am sure the reports are very complex….discussing the test group vs. the control group, taking socio-economics into consideration, age groups, etc.  But journalists have to fit the results of a giant report into a one or two column article. So they tend to leave out things about how the research was done and just focus on the sensational headline and reactions to it. Or they write their story based on the press release from the research facility—which essentially does the same.  

I feel the same way about the positive articles about wine consumption as I do about the negative ones. Skeptical. Who funded the research project? How were the test subjects chosen? How were the test subjects surveyed? How were the results compiled? What was the duration of the project?  It seems like every week there is a news article about one thing or another being bad or good for us. I would just hope that people question these things and do their own research before jumping on any type of mass hysteria bandwagon.

It has now come out that the one drink a day research was flawed.  Among other things, the questionnaires asked about weekly consumption and then divided by 7, vs. asking about daily consumption. If someone averages 7 drinks a week, but they were all consumed in one or two sittings, then that is bad for the heart, the liver and a bunch of other things.

In any case, risk or no risk, I will continue to drink in moderation.  For me, life without good wine and good food isn’t really living.

Product placements in movies have only become really popular in the last ten years—and now they are becoming blatantly obvious. The Sex and the City movie had about 10 different shots of Starbucks and Smart Water, to name a few. But with the rising costs of production, I am sure that these well-placed “ads” help defray some of the expenses (Sarah Jessica Parker’s fee, perhaps??) 

I always look hard when I see a movie at wine labels.  Most are hard to decipher…but there is one clear stand out that is immediately recognizable: Clos du Val’s light brown label with the white script swirls.  Over the past 5 years or so, Clos Du Val has been in tons of movies and television shows. However, I do wonder if the expense and effort to get into all these movies was worth it. Amongst wine people, the label is most certainly recognizable. But I think that is a small minority of the general movie-going population, especially considering some of the programming—“In Her Shoes” and “Joey” to name a few. Although they were also in “Fever Pitch,” which as a Red Sox and Jimmy Fallon fan, I LOVE that movie.

When I look deep down inside though, I am definitely jealous of Clos du Val and all their Hollywood connections. I would love for Clos LaChance to have some kind of celebrity encounter. There have been a couple brushes with fame over the years:

• We had a taping of a reality show here called “Married By America.” This is pretty D-list in terms of the show, it was really, really cheesy. And the segment never even aired. The premise of the show was that 14 pairs of two complete strangers got engaged. One ends up winning a wedding at the end plus 200K or something like that. The couple that came to the winery for their “date” were so NOT into each other at all. It was kind of comical. The production crew was awesome though. They had just come off of the Bachelor shoot….working with Andy Firestone (another big Winery promotional gig). 
• We once got word from a friend of a friend of Ron Howard’s that he was a big fan of our Merlot. That was thrilling for me because I am a HUGE fan of Arrested Development, his now defunct TV show. But I heard its coming back in a movie. Hey Ron, if you are out there, we would love to do a product placement in the movie. Maybe Gob can make a bottle disappear to the sounds of “The Final Countdown.” That show NEVER should have been cancelled.
• Our Southern California Account Specialist was in a restaurant selling one afternoon and sat right next to Hillary Swank. Since all of our sales people are very social people, she struck up a conversation and got her to taste our Pinot. We then sent her a few bottles.
• Bode Miller stopped by the winery after a round of golf last summer. He was super cute but not very talkative. We are all skiers in our family, so it was pretty cool to meet an Olympian.
• We sponsored the LA screening of “The Departed.” It was a little slow in terms of celeb being at the actual event…as most of them attended the New York screening the week before. I couldn’t go (it was my son’s birthday), but my sister Kristin went. She did have a Leo DiCaprio sighting. He was also supposedly drinking our Merlot.

Over the years, we have had rumors of other possible celeb drive-bys or connections to our winery/brand. I have learned to not get excited about them until I actually see it happen. But if anyone out there who is reading this is somewhat famous, please do contact us for, well, we’ll probably give you pretty much anything.

A picture of the Married By America Couple, Jennifer and Xavier.

Surviving  Growing in a down market.

In over a quarter of a century of sales/marketing for small to medium sized California wineries, I have experienced numerous market fluctuations/recessions. I have never had a down sales year, and actually have often seen bigger than expected increases in tough economic times. There are several reasons I attribute to attaining growth:

The wine industry is somewhat resistant to bad economic times. People seem to drink more, but often trade down. This presents you with the perfect time to establish greater margin products in your portfolio. People will be moving away from their “standard ,“ that they have been purchasing in “good times,” and looking for direction in trying something new at a lower price.  This opportunity to establish yourself and your company is seldom witness to so willing a customer for change.

Many competitors look to do business as usual. They often look for a quick fix. Dropping prices and margins moves boxes, but does nothing for the future of the brand and its image. Being progressive and looking to the opportunities this type of market condition offers the greatest growth potential.

Be positive, what brings us out of this often is led by those who aggressively seek to grow rather than contract. They emerge faster and stronger, with greater positioning for when the market expands.

Compete in the right place (categories, price points, trends), at the right time. Establish for your company a new market footprint. Pursuing the same old is not a recipe for success. Typically a good portion of your sales increase percentage over the previous year is achieved through new products and new focus. This is an ever changing/evolving process that requires constant evaluation and re-evaluation.

Here are some observations to reflect on and to use to your advantage:

• Mass production wineries will look to big deals to make numbers. This erodes the market price point for their brand on and off premise. Panic mode seems to set in. The big deal you buy into now, is often followed by an even bigger deal that your competitor down the street will buy into. You are then stuck with large inventory of a product that your competitors have a price advantage on you.

• Consumers will be looking for more/better. They will seek out value. True there is a comfort level associated with mass production wines; however consumer brand loyalty is now less important to your bottom line than customer loyalty. Promoting brands that are not available everywhere is a key to establishing better customer relationships.

• Value/perceived value:  A small production wine has an intriguing story to tell the consumer. This perceived value to the consumer involves getting more for the same $’s. Whether the alternative to the mass production wine is a limited production/single vineyard/estate bottled/ hand harvested/organic/sustainable, these all offer the consumer more than the usual.

• Explore, expand and promote hot new categories/trends that are experiencing growth. These include Organic/Sustainable wines, Unoaked Chardonnay, blends, appellations, and countries. Less “manipulated” wines  can also offer opportunity; hand-picked, unfined, unfiltered, estate bottled, single vineyard. A more natural approach to winemaking.

• Look to re-align your selection and inventory. As the consumer trades down, key price points become more important and greater diversity in that range is the way to achieve growth. The consumer will be looking to move away from what was their regular wine in good times, to something new @ a lower price. This is your opportunity to steer them towards wines that offer you higher margin.  Higher end sku’s need to be replaced by those that will see movement, turn and greater margin %.

• Brands that are limited in production offer better margin potential, and less of a chance to your being exposed to the customer as having a higher price on a specific item than your competitors.

• Interaction with your customers is now more important than ever. They will look to you for direction and guidance. Let them know that you are there to assist them in their search for their new standard. Being prepared to offer them alternatives, accompanied by thought out reasons and options is an integral part of building customer loyalty.

Flat doesn’t have to be the new up for everyone. Good Selling !

So Kristin and I were carpooling that day and went to pick up Amber, like the good, obedient daughters we are. On the drive down 101, we noticed Amber was getting a little gassy. We didn't think much of it...she's an older dog, and well, who doesn't get gassy every once in awhile?

Things started going awry when we were going down 101, right about at the airport. Amber wasn't just a little gassy. She was VERY gassy. Audibly gassy. Disturbingly smelly gassy. . We opened the windows, laughed a little and felt bad for Amber, whose tummy was obviously hurting. We figured once we got to the winery she would “do her business” and be done with it.

That was NOT the case. I won’t go into detail about her “business” but it wasn’t pretty. She came back in the winery, tail between her legs, looking very sad. It was awful. The entire office smelled really, really bad. Someone even went home sick. I was trying to do some tasting of new releases for some marketing materials and ugh, that couldn’t happen.

That night, after depositing Amber back at my parents’ house, a few CLC’ers went to a Happy Hour thing. I had a glass of cheap chardonnay (Mexican Restaurant) then a beer, then a nicer glass of wine when I got home. All of it was grossing me out. Nothing tasted or smelled good. Even my dinner that night was unappetizing. And I always inhale any type of Mexican food.

This got me thinking—about branding and consumer experiences. How something completely out of a marketers control ( a dog’s smelly ass) can have such a profound effect on how someone experiences a product. I consider myself pretty aware of these things—having been in the wine business for some time now. However the average, or even above average consumer, probably does not realize that if you take a big whiff of skunk before you drink a glass of Syrah, that it was the skunky smell that caused it to be so unappetizing, not necessarily the wine. Same thing with food and wine pairing. Mix the wrong wine with a certain dish and blech. It tastes terrible.

With the thousands and thousands of different wine brands out there, what exactly is brand loyalty in this business? And when is it engrained in the consumer? After the first sip/glass/bottle? After the first 5 good experiences? It differs for everyone, but I would imagine that for the majority of consumers out there is that the first impression of a wine is a key moment. And that moment is so defined by many things that are out of a marketer’s control. I feel very different about the wine I was drinking when I broke up with a boyfriend vs. the one I was drinking when I got engaged.

I guess that’s why we have such a beautiful place here at Clos LaChance—so we can trick everyone into having a great time and thinking our wine is the best ever!   (tongue in cheek here).

Anyways, this is a little rambling—I think my brain is still suffering from the effects of Amber. She is much better this week. Thanks for asking.

Last weekend we had a 5-day Cellar Cleaning Sale. Wines were going from $3 to $7 a bottle, plus a few odds and ends of some old vintages we got back from our distributor.  The wines that were selling for $3-$7 were left over private label wines from a few clients we are no longer doing business with.  Most were Clos LaChance juice under a different label.  However, the retail prices were anywhere from $14.99-$19.99.

We initially brought over 300 or so cases of various items. We sold about 90% of it on Thursday from 5-8pm. Yikes!  Who knew it would be that successful?? On Friday we put a truck together (all of our case goods are stored off-site at California Wine Transport in San Jose) of another 1000 cases. On Monday, another truck!  It was incredible the amount of people here and the wine we went through.

It was funny on Friday. We open at 11am. I was sitting in the conference room having a meeting. From the conference room, there is a window looking out to the walkway and gardens leading into the front door. At about 10:30am, people started showing up. It was a steady stream into the tasting room right from the start.

If you were here at some point over the long weekend (especially Saturday), we apologize if our customer service was not up to par. It was an absolutely zoo on Saturday….and we were totally unprepared for it.

We have now had a few days (Dominic and Cindy have taken some time off to regroup) and we are sifting through the fallout that was our Cellar Sale. A few of the things we have learned:

• Overstaff. Especially with schleppers….people that can carry lots of 40lb boxes to and fro.
• Never underestimate the power of grassroots marketing. We did not advertise this event at all outside of our own resources. We mentioned something about it in our email newsletter in December, without a specific date. About two weeks beforehand, we sent out another email newsletter, this time being specific about the date. We put it on our Facebook pages. We Twittered about it. The week of we sent out a few update emails to our local list. And we had the biggest weekend in terms of incoming dollars and visitors we have ever had. Ever. By far!
• People are looking for a deal. The economy sucks big time…but people are still drinking, and they are drinking wine. They are looking for a deal and are willing to stock up on something that is considered value priced.
• Be a little more organized in terms of logistics. Taste and sell the wine in the Tasting Room. Physically deliver the wine to cars on the truck dock. Should make things a lot easier.
• Have a POS System that works (of all weekends, ours had to crash at the most inopportune time)
• Inventory after the Cellar Sale was so off it wasn’t even funny. And its taking a lot to time to fix. But it was worth it to move some wines that needed to be moved. Not that these were bad wines…the reds especially were very, very good.

We will do the Cellar Sale again at some point in the future. Next time, our Wine Club members will have time  to go through the wines before we open it up to the public.  And we will be more organized.

Were you at the cellar sale? Any thoughts to share? Here is blogger David Tong’s tasting notes of a few wines we sold at the Cellar Sale.

We concluded our Annual Company Meeting on Friday, after two days of meetings, presentations, tastings and dinners. It was actually a lot of fun. We have a really good group of people working here right now....in the office, the vineyards, the winery and the field.

We came to a number of conclusions this year....with the most obvious being that the economy really sucks. Most of our presentations were geared to how we were going to get revenue to where it needs to be while cutting back on pretty much everything.  We seem to be in a good spot with our pricepoints in the Hummingbird Series. Our Estate and Special Select Wines--unfortuantely it is not a good time to be introducing these to the broad market. With prices of $30 and above, our distributors are very wary, no matter what the quality. But our volumes are such that we can keep these in the Tasting Room and the Wine Club.

We also talked about what is working....and what is not. We have some great Syrah from our Estate Vineyard. We all love it, the critics love it. It just doesn't sell. So we are cutting back on it, selling some juice, selling some grapes. Same story with Rose. I love it. I personally drink 4-5 cases myself in the summer, minimum. It just doesn't sell. I remember a few years ago being in the market around April/May and all anyone can talk about is Rose and how it is the next big thing, Think Pink, RAP, etc. If it is the next big thing, I am just not seeing it. So we will probably be doing away with Rose. It is just so difficult to get distributors to take on additional SKU's in their book. I would rather use that valuable line item with a year round product. Any Rose that is hanging around in October is very difficult to sell.

It is so important to get everyone together at least on an annual basis. We have 4 full time employees that live all around the country in their respective markets. They have their fingers on the pulse of the local market and trends. We need to hear from them and they in turn need to know all that is going on here. And to taste the wines we have coming up.

Good wines that I tasted last week: surprisingly the 2007 Hummingbird Series Merlot ROCKED my world. it was fantastic. And I am not a fan of Merlot. I also liked the 2008 Unoaked ET Chardonnay and the 2007 Biagni Chardonnay were stand-outs in the white category. And, as always, the Viognier. Yumm.

Here is a picture of everyone together. Thanks for a great meeting. I learned a lot....and had some fun doing it.

Top Row: Plamen, Dimitar, Dominic, Ben, Clair, Jason, Paige, Ulises, Kevin, Melanie

Bottom Row: Heike, Linda, Tom, Colleen, Erica, Brenda, Cheryl (Me), Kristin, Bill, Stephen, Cher, Cindy, Matt, Frank

It's 2009 and everyone is back in the office and into the full swing of things. We have an all-company meeting (officially dubbed OMAO, or The "Offsite Meeting that is Actually Onsite") taking place tomorrow and Friday, so everyone is hard at work preparing their presentations about 2008 results and plans for 2009.

These meetings are interesting, and as the marketing person for the brand and all the business units, I, of all people, should be paying the closest attention to any updates, changes or anecdotes that I can use throughout the year in whatever it is I am doing. But usually after lunch, it gets harder and harder to pay attention. That's why we have started including a "State of the Winery" Tasting after lunch. We taste through everything we have in the cellar, make group decisions on blends, new products, old products, etc. Its fun and informative all wrapped in a big buzz, especially after 30-40 wines in one sitting.

It certainly makes the OMAO that much more interesting.

Unless you have been living in a cave for the last six months, then you are aware we are in the midst of tough economic times. The financial crisis has taken a toll on everyone and Clos LaChance is certainly not immune.

So what are we doing about it?  It’s hard to predict what is going to happen with sales for next year. So if we can’t guarantee additional revenue, then there is only one thing left to do: cut expenses

What are we cutting back on as we plan budgets for 2009? Christmas cards, for starters. Between our investors, wine club members, vendors, wholesalers, accounts  and growers…we were sending over 500 Christmas cards per year. With the cost of the card, postage, labor to address and stamp them all….we are talking over a grand to get our Christmas cards out.  There has got to be a better use of $1,000. Don’t get me wrong, I love a good Christmas card from friends and family, with pictures of the kids and updates of where the family traveled (as long as it’s not too braggy).  But business Christmas cards…eh, I can leave them.

So this year we did an electronic card. With a custom Christmas Carol. Didn’t get it? Click here. Yours truly wrote the song.

http://www.clos.com/index.cfm?fuseaction=category_detail&category_id_int=16082

What else are we cutting back on? On an annual basis, we have two departments that book the most expenses: Production and Sales and Marketing.

 On the production side, Mother Nature solved our expense cutting decisions for us. Yields in 2008 were very, very low. We did not pick as many grapes as we expected to, so we are bottling less next year.  By not bottling, we save on the costs of the packaging, the transport, the storage. Also on the production side, we purchased more barrels then we needed to in 2008 (again, low yields)—so we will be buying less in 2009.

In addition, we have consolidated a lot of our supplies for labels, bottles, capsules, corks….and are streamlining everything to be as simple and economical as possible. For example—our Vineyard Designate Pinots have traditionally been packaged in heavier, more expensive bottles. The fancy bottles cost A LOT more per case (we were buying very small quantities and they are pricey models), as was the transport because of the extra weight.  So we ditched the expensive bottle and are now using the same Burgundy bottle as our regular Pinot Noir.  

In addition, we have been re-evaluating all of our outside service contracts (thanks to Tom our Maintenance Supervisor) and made some major changes to our landscaping maintenance and regular deliveries of things like water, linens and doormats. We are saving a ton of money by hiring someone part-time for landscape maintenance and using our own crew vs. hiring an outside gardening service. Next up for review: phones, Internet, fax, cell phones for everyone that has one on the company. Telecommunications is expensive! But I bet we can get a better deal then we are getting right now.

On the Sales and Marketing side, our other major expense category, marketing expenses have been cut in half. Absolutely zero advertising (stop calling me if you are in ad sales), dropping out of a few trade organizations and tastings, and putting a hold on any press events or tours in 2009. However, on the sales side, this is not a good time to scale back. When times get tough, the big suppliers pull out their giant marketing budgets and start flying buyers around the world, giving huge incentives, and selling wine at a giant discount (can you say “2fer?”).  So to cut back on my miniscule sales budget—which pretty much includes only salaries, benefits and expenses for 6 people—is not an option. We would be completely ignored by distributors and accounts—who can be easily mesmerized by the flashy things offered by the “big boys.”

There are many more examples of the “little things” that are being done around here to cut expenses.  And we are doing them so we don’t have to raise prices or lay people off. Because two of my favorite things in life (outside of my family) are the people I work with and drinking good wine that is not crazy expensive.   I also like to combine the two. Bring on the Clos LaChance Christmas Party!

We start planning for 2009 in October, putting together budgets and revenue plans. It’s a nightmare process…with 30 different products at different price points across different channels. Makes my head spin every year. But a necessary exercise.

Monday we had fun planning meetings—production and vineyard. It also make my head spin, because once again I have to predict sales numbers for the bigger ticket items in the Hummingbird Series. But the fun begins when we talk about the little, esoteric things that we can make….exclusively for Tasting Room, Web sales and Wine Club.

Here are a few of the things we discussed.

*Sales of Syrah are tough. Syrah was supposed to be the next big thing, but never really took hold. Did the Aussies flood the market with too much cheap Shiraz? Are people confused by the whole Syrah/Shiraz “mystery?” Over planting?  All of this and more has probably caused varietal to never really taking off big. Oh yeah, and Cab is still king when it comes to red wines.  So we are going to make more Cab and less Syrah. This means a combination of budding over, selling fruit, selling juice.  We will have some Syrah in our portfolio…its damn good from the Estate Vineyard. But less of it.

*The sweet version of our Muscat Blanc is not selling well in the tasting room anymore. We had a good run when we first released it. But that was when we did not have anything else in the sweet category. It’s a low alcohol, a little spritzy, fruity aperitif (Asti Spumante style). Nothing fancy, but a nice, refreshing drink. Now, its competing with Nectar, our late harvest Semillon, and the Zin Port and Late Harvest Zin. And Amber’s Cuvee, our sparkling Blanc de Blanc.

We have one acre of Muscat Blanc. The vines are not strong (might have a virus), so budding over is not really an option. The next step is to find something else to make with the grapes or to pull the entire block of vines and replant. Next year (08 Muscat Blanc has already been made) Stephen, Bill and I discussed making a dry Muscat. I-N-T-E-R-E-S-T-I-N-G. Maybe age some on its lees in the tank? Who knows….but it will be fun doing some trials and coming up with a new product. Muscat is a fun grape cause it tastes like, well, grapes.

*Talking about the Muscat got us discussing the need for another white wine in the Estate or Special Selection category. I need something for the Wine Clubs that is unique and exclusive. And good. We have Chards and a Viognier….I need one more. The dry Muscat has potential to fill that vacancy. But what else could we do? 

Stephen and I remembered that we have a couple acres of Marsanne and Roussanne  that came on line this year in one of our CK Vines vineyards. What about a white Rhône-style blend, the yin to Lila’s Cuvée red Rhône blend’s yang?  And we could call it…AJ’s Cuvée! (Lila’s brother, and my son. Yes, I am biased about the name). Again, can’t wait till we get to the trial process.

None of these things are final until we get the wines and try them in their infancy. Sometimes I wish I worked at Ben and Jerry’s. One day you come up with a new ice cream flavor. A few weeks later, you get to try your big idea. In our case, we have to wait for the fruit, then the ageing process. It can take 1-4 years before a new product is ready. On the other hand, if I worked at Ben and Jerry’s I would undoubtedly be huge. I guess staying in my current position is a good trade-off to fit into my skinny jeans (on most days).

I thought I would address a question that we get all the time, in the tasting room, amongst our wine Club members and with potential new restaurant or independent retail accounts that we are pitching. “Your wine is at _______??” (insert Safeway/Vons,  Lucky's, Costco). The tone of the voice can often be one of disdain.  

My answer to that question is an enthusiastic “Yes!” and then an under my breath “Thank _____.” (insert whatever deity/higher power you believe in).

The signifigance of the grocery chain has grown significantly over the last few years, and is so very, very important, especially in these economic times. Restaurants are struggling as dining out has become a luxury. People are eating in more often and therefore buying more at the grocery store. Grocery stores are doing more to become “one stop shopping” for their customers, expanding their offerings in all categories to include higher end, “gourmet” or “luxury” types of items. For example—I use a shampoo called Pureology—something I could only get at the salon or a special store. Safeway and Target now carries it. Also, specialty and local breads from Watsonville and Santa Cruz is carried at my local Safeway and Costco.

This trend obviously expands into the wine department. About 2 years ago, Clos LaChance was lucky enough to get a meeting with the beverage managers at Safeway. The “Cluster 1 and Cluster 2” (newly remodeled or new stores) stores that have expanded wine sections (with approximately 1,000 different wine SKU’s, no joke) took on three of Clos LaChance’s Hummingbird Series Wines. Those are our best selling wines now—the Zinfandel, the unoaked Chardonnay, and the Cabernet Sauvignon. Not just via Safeway, but through other channels too…restaurants and other wine shops.

In my little control group of 1, I would venture to say that the awareness of those three wines has increased significantly over the last two years because of the exposure at 200+ California Safeways and Vons, among other things. So when I get a restaurant I am pitching that asks if our wines are in the chains, I say yes! And that’s a good thing because now people will recognize our name on a wine list. And those that recognize the name are more likely to order it.

However, the great thing about Clos LaChance is that we also have wines that are not in the chains (because of the small volume) and are only available at the winery or a couple of restaurants/specialty retailers (those that are buying right now, which are not many). So there is something for everyone. Our Estate Syrah, Grenache, Petite Sirah, Cabernet Sauvignon, our Vineyard Designates—the Biagini Pinot Noir and Chardonnay, Lila’s Cuvee, etc. I could go on and on. In total, Clos LaChance over 30 different products. Considering Clos LaChance’s total volume (approximately 60,000 cases annually), we are talking about 26 different, small lot (under 500 cases produced annually), artisan-type wines (we have 6 wines that are made inm qantities over 1500 cases).

Having the three wines that we do in the chains helps sell through the other, more expensive products on wine lists or in specialty retail shops. Customers recognize the name and the brand because of our broader distribution. And recognition is half the battle when it comes to marketing Clos LaChance—especially considering that we have 50,000 competitors (there is at least that many wineries in the world….probably a lot more. Couldn’t find an answer to this question online.)

Sometimes the chains offer some pretty amazing deals—especially at this time of year. At Safeway, they have a “Club Card” that gives incredible discounts across all departments—sometimes “2 for 1” offers (I got one of those this weekend on pickled jalapenos, go figure).  Wine is certainly no exception. Knowing what I know about wine pricing and the distribution channel, the store and/or the distributor is making little to no margin on these deals. It doesn’t matter who is losing money at this point (well, it would matter if it was me, but it’s not)—all the matters is that the customer is getting a good product at an unbelievable price.

So when people call me and say “Wow, your wine is only $7.99 at Safeway, that’s almost half off!” I tell them…BUY IT. The pricing comes down so much because of larger deals our distributor makes with the account that are often across other brands. It moves wine, and raises awareness of our brand. Most people that drink it are amazed at the price (“I would have paid more $ for that!”) and keep coming back for more. These prices tend to be 30 or 60 day programs, so they won’t last forever.

I also get the question “Aren’t you afraid that the low price will bastardize the Clos LaChance brand?” I personally think that the only thing that will ruin a brands reputation is bad wine in the bottle. Everything goes on sale every once in awhile. Does that make you less likely to buy it in the future at the regular price? Maybe, but not if you have some brand loyalty.  I tend to stock up on things when they are sale, but I don’t stop buying them all together when the price goes back to normal. If I get a wine for eight bucks, but it tastes like it is worth fifteen? Point me in that direction.

As for our wine club, we really try and focus on sending out wines that are not widely available. 90% of the time that is the case, no problem. Sometimes, when we are grasping at something to put in the club (usually a white wine, we only have 5 different white wines) it happens. No problem, give us a call if you have any concerns and we can take care of it. We are working next year to make sure this does not happen…as our Wine Club members are our most important customers and we want to make sure they are getting wines that no one else can get. Ironically, next year will be one of the first years that Wine Club members are the only ones to get our Biagini and Erwin Vineyard Pinots. Yields in the 2006 vintage were very, very low. We have just enough cases to send out to our Platinum Club members. These two wines won’t even be available in the Tasting Room. Fun!

Does any of this resonate with you? Am I in a vacuum here? I would love any feedback.

There is so much more to say on this issue, which I will get to in future blogs. Thanks for listening to my rant and go buy some wine!