Winery Clubs - D2C At Its Best

May 14, 2021 Henning Schwinum

Sales Enabled by Sunshine, Location, and Alcohol

“in vino veritas”

After my rant a few months ago about salespeople in car dealerships, I now want to sing the praise of the professional (sales)people working in wineries.

In recent years they have done a fantastic job on me! When asked how many clubs we are members of, I can't even give a number. All I know is that there are charges on my credit card, and in turn, I receive very regularly the ‘gift’ of a great variety of wines unavailable in my local wine store.

The majority of wineries today focus their business model on growing their direct-to-consumer (D2C) business. At the core of that strategy is converting winery visitors to club members, where they will receive extra care, focus, and attention, to retain as loyal customers. Selling wine club memberships, in addition to on-the-spot wine purchases, are the core job duties of a wine industry professional.

“Direct-to-consumer (D2C) sales in the wine industry are through the roof. The D2C wine sale market brought in $3.1 billion in 2017 and is expected to reach $5.2 billion in 2022. Currently, 62% of wineries consider D2C to be their fastest-growing sales channel; in fact, while it makes up less than 10% of total sales, it makes up an estimated 20% of total profit.

Why? Because wineries selling direct-to-consumer yield higher profit margins than sales to wholesalers. For small businesses, this opportunity is even more significant. According to the same Silicon Valley Bank report, small wineries’ gross margins are doubled by selling direct-to-consumer.” (Oztera)

So, what motivates people (like me) to join a winery club? Here are a few reasons, some representing a professional view, some a more personal one (and please do not judge). Some speak to the quality of the people, and some are circumstantial:

· Deep discounts on wine purchases. It might be a 20% or 30% discount applied, though, on a really high list price. If you think of the margins mentioned above, buying at those list prices seems crazy.

· Proud to be a member. A club is perceived as exclusive and trendy. It also offers a sense of belonging, and that is a powerful motivator to anyone.

· Scarcity. Small wineries have limited production that is allocated for club members only, another powerful motivator. The winery may offer a few of its top wines on an exclusive basis to club members as a tactic to motivate buyers.

· Exclusivity. Especially the wines of smaller wineries are unavailable through retail channels or in restaurants. The only way to buy them is at the winery or through the wine club.

· Location. I have yet to visit a winery that is in an ugly location. They are all stunning, with great settings, amazing views, as well as features like caves and food pairings. Grapes also require sunshine to grow.

· Parties and more. Every club has more to offer than just wine: release parties, grape stomping, vacation homes, etc. Club members feel like they’ve discovered a hidden gem that gives them a sense of accomplishment.

· Being treated well. All salespeople take note because that is a powerful motivator, which is where exemplary hospitality skills come into play. The cost of an extra glass of wine is marginal compared to the value gained over the years from a new club member.

· Look behind the curtain. Wine club members are made to feel like part of the family when winery owners, winemakers, and staff get to know them and greet them like old friends. It's great fun for wine lovers to be ‘insiders’ who get a look behind the curtain!

· Discover New Wines. Most clubs offer a service where they will pick the wine for you based on your taste preferences. Along with being a nice surprise, this also strips out the decision-making process. Week after week, drinking the same old Rioja or Sauvignon Blanc? Did you know there are over 10,000 grape varieties out there?

· Wine makes people happy. This is where the alcohol comes into play. The sale happens AFTER the tasting, and even mediocre wine contains 12-14% alcohol.

Frankly, I have fallen for any one of those motivators. How about you?

And to wrap this up, I am happy to share some of my favorite wineries: