Brand Managers and Sales Teams Readjust and Refocus on Relationships in Wake of Shutdowns

Long-term strategies are unlikely to be affected, but many say the number of tools they use has grown.

Developing a great channel management strategy is a bit like solving a Rubik’s cube. When one sales channel changes, others need to move around and shift in response. Eventually, one finds the right combination, and all the colors line up.

This is how Amanda Wittstrom Higgins, EVP of Ancient Peaks Winery, described channel management, and the belief that it’s a bit of a puzzle was echoed by so many.

When Wine Business Monthly started asking how wineries were adjusting allocations because of stay-at-home orders, restaurant shutdowns and pantry-loading seen early in 2020, we expected to hear that this Rubik’s cube was upended—almost as if a new color had been introduced to the cube.

While we heard that some shifting happened, brand managers and sales teams reported that instead, they doubled down on the core tenets of three-tier and direct-to-consumer management: balance, diversification, agility and relationships.

The positive news is that despite some of the shifts and pivots, COVID-19 wasn’t going to drastically affect the longer-term strategies at these companies.

A Reminder that Diversification and Agility Are Necessary

Overwhelmingly, those we spoke with mentioned “balance” as the most important factor when developing a channel management strategy—finding a combination of tasting room, e-commerce, retail and restaurant sales that fit the brand and generated enough cash flow to meet production. Those who had managed to find the sweet spot fared better when faced with the challenges presented in 2020, as they were able to quickly divert sales to, well, wherever they were happening.

“Obviously, some channels saw a lot more difficulty than others, and some channels grew. Then even on the DTC side, sales shifted from sales in the tasting room to sales through the mailing list,” said Melissa Devore, president of Calistoga-based luxury brand Amici Cellars. “So, it took a little while to figure out where the market was going to shake out, but we were able to pivot quickly and go where the sales were.”

Agility in the face of adversity is what kept many going. Ancient Peaks’ vice president of national accounts, Rachel Collier, threw out her short-term strategy (or rather, erased it) and re-focused her attention on what was working.

“I had a whiteboard that I used to track everything that we were doing by month, by quarter and the new accounts that we were going into, the programs that were happening. When COVID happened, it took me two weeks to realize that I have to let go of that,” she explained. “That’s gone. All those, they don’t matter. Two of those accounts are out of business. Or they’re not even buying, or people are furloughed. So, you just go, ‘Okay, I have to start something fresh. We’ve got to start new.’ It was such a hard pivot. Everything that was coming down the pipeline, you didn’t know if it was going to come now. I had to erase the entire board and start from fresh,” she recalled.

Collier said that they shifted quickly to bring in-person trade sales online. Within two weeks, they hosted their first virtual event and have since held more than 150, from engagements with local regional accounts to large tech companies.

“That has enabled us to bring winemaking and ownership out in front of people that have never met them, so it really offered us this great opportunity to get creative,” she said. “It was a huge mind shift because everybody was traveling. All of a sudden you have to say, “Okay, what do we need to do? We need to reach our customers. And we can’t physically do that. How do we do that now?’”

On the DTC front, pivots within the channel were common. At Desire Lines Wines, the limited-production business started by husband and wife duo Cody and Emily Rasmussen, the couple were inspired by one of the first wines made for the brand but hadn’t been sold prior.

“When COVID hit, we decided to do a special release based around that line, which we call The Gift because it’s a Syrah made from 1 ton of grapes that Cody’s bosses, Morgan and Chris, gifted him in 2014 to help him learn more about winemaking,” Emily recalled.

They had already completed their spring release; but as the Syrah was tasting so well, they decided to add another allocation opportunity. Desire Lines is sold direct to consumer via allocation. No physical tasting space exists, but they do let mailing list members pick up at the winery—shared with Bedrock Wine Co., where Cody is the assistant winemaker.

Doubling Down on Relationships

Relationships have always been important, whether building or maintaining them. Sales reps across the country doubled down on this aspect of the business through lockdowns, checking in on the health of the business, coming up with creative solutions or offering fundraising help, as a way to maintain existing accounts and keep allocations.

“We always pride ourselves on having really strong relationships with the accounts that we work with. So, with restaurants, we were trying to figure out how to sell to customers in the new operating world. We were able to partner with a lot of our really strong local restaurant partners and develop programs so that they could still manage to sell, just in a different manner,” said Devore.

With this in mind, Devore worked with her restaurant partners to really understand what they needed to carry and what worked well with take-out programming. That meant providing more of the brand’s $50 Napa Cabernet and $25 Sonoma Chardonnay. In addition, the winery did a lot of virtual tastings with the accounts, as well as with retailers, to bring hospitality and experiences to their customers, just in a new, digital way.

The Rasmussens also wanted to do their part and donated a portion of the profits on their one-time only allocation of Syrah to the Restaurant Workers Community Foundation and to UndocuFund, an organization that supports undocumented workers in California.

How They’re Moving Forward

In the longer term, the wildfires that tore across St. Helena and Calistoga will play a small part in Devore’s allocation management. While there was no physical fire damage to the tasting room or winemaking facility, the fire came within a quarter mile of the property. Amici has publicly announced that they will not produce any reds for the 2020 vintage, and that will play into Devore’s decision making in the future.

“We’re in growth mode too, so it’s definitely something we have to plan strategically for and be more diligent about making sure that our main accounts are serviced and how we’re allocating wine,” she stated.

For the most part, those interviewed said that while COVID-19 and the Glass Fire proved to be major setbacks, the two events haven’t altered their long-term goals. Instead, they’re learning from the experience and using it to fuel growth in newer channels.

“The positive that I see is that we’ve all learned to do business differently and learned how to adjust and adapt,” Devore said. “There are a lot of new ways of working and new ways of reaching consumers that we have to embrace and blend into the strategy going forward. For us, it’s not a matter of shifting overall strategy, but just taking the learnings that we have in terms of how to do business a little bit differently and continuing to push ourselves.” So, what are some of those best practices and how do these wineries find balance while growing?

Using One Channel to Build the Other

Based in Paso Robles, Calif., Ancient Peaks Winery has a strong mix of direct-to-consumer, on-premise and off-premise sales, and actively uses each channel to fuel the others. Collier said that it’s important to her and to the company to ensure that placements serve to build the brand and promote different sales channels.

“I think that we always looked for a healthy balance of on- and off-, and we’ve achieved that,” she said. “You want to have both sides of the business growing at the same time. In order to be a healthy brand, you need the on-premise and the off-premise at the same time.”

If placements are made in area restaurants, for example, it’s important to have representation in mom-and-pop, independent, specialty and regional/national retailers nearby, she said, adding that they complement each other. Should a diner enjoy their wine with a meal, it’s crucial that they should be easily able to purchase a bottle of the same wine, or at least another SKU from the brand’s portfolio. The balance appears to be working as the Ancient Peaks brand has experienced healthy double-digit growth through distribution.

“I think the reputation of what we’re offering, and the experience, is still gaining notoriety. We’re still in growth mode, so to speak. In our national sales program or national distribution, part of our goal is organic growth. The percentage changes just based on what the market will bear and how successful we are at achieving some of our larger goals, so to speak,” said Ancient Peaks’ EVP Wittstrom Higgins.

Furthering that philosophy, Wittstrom Higgins added that the direct- to-consumer offerings build on what’s available through three-tier. While a visitor to their Santa Margarita Ranch tasting room could find the same wine they would at Whole Foods, they are more likely to have the chance to taste something new and that, in concert with ziplining adventures and other experiences, is a reason to visit.

“It’s a combination. Because we’re still finding the sweet spot with our vineyard, our direct-to-consumer program is a wonderful way to really identify the best locations in our vineyard and have half the wines be hyper-focused on new and exciting varietals or tweaks from a winemaking perspective so that we can offer something really exciting,” she explained. “We always try to offer about 40 to 50 percent of the volume through the tasting room this way. It’s usually wines that you can only receive through the tasting room or the hospitality center.”

At Desire Lines, the Rasmussens are branching out from the allocation-based DTC business and slowly growing the wine’s distribution. The duo’s restaurant and retail placements were based on existing relationships—the restaurant where a lot of the initial conversations to start Desire Lines happened, local wine shops, the like. The channels have been part of her plan to strategically gain customers for the DTC allocation business.

“We think of restaurants as more of a marketing opportunity, a way for people to discover our wines for the first time,” she said. “If we offer a really compelling by-the-glass pricing, maybe people will try the wine and then look it up and hopefully join the mailing list as well.”

While she had been planning to move more wine through restaurants in the lead-up to March 2020, COVID-induced shutdowns caused her to scale back those plans. Because so much of the business was already through a mailing list, the pivot wasn’t too difficult, and the team was uniquely positioned to continue selling product.

Rasmussen and her husband instead doubled down on building their off-premise presence. “Because we didn’t necessarily have a lot of relationships established with wine shops, we ended up dropping off full bottle samples to a lot of stores for a couple of reasons. We were able to say, ‘Here, have some wine, extra wine for the team, because we’re all going through it right now. Also, we’d love for you to try our wines. It’d be fun to have our wines in your store,’” she recalled. “We ended up selling some wines to some local stores that way. Cody basically put on his mask and his gloves and sanitized the heck out of everything and did a couple of those contact list drops.”

Amici Cellars has a strong direct-to-consumer presence as well; but because of the tasting room’s location, off the beaten path toward the northern end of the Napa Valley, Devore knows that focusing too much on DTC would be a hindrance to growth. While DTC is a large portion of current sales, Devore said that she has always strived to have a more balanced strategy.

“We do have a very strong off-premise presence and have over recent years been really growing the on-premise. Our DTC is very strong, but we also are a very tucked away, remote location, so our percentage isn’t going to be as high as the main tourist wineries in Napa. We’re a little bit more of a hidden gem,” she said.

What Tools are They Using?

Combinations of e-commerce software, as well as data sets from distributors, are used at Desire Lines and Amici Cellars, but in the end, it all feeds back into Excel. “Unfortunately, a lot of allocations come down to good, old-fashioned Excel,” said Devore. She uses VineSpring for her DTC needs, and feeds in depletions and RAD data when it comes in from her distribution partners, whether that’s weekly or monthly. It’s up to her to monitor what’s happening with her allocations and sales on a monthly basis.

The Rasmussens use Figure e-commerce for their website, CRM and order processing, but Cody’s spreadsheets hold all the information they need to keep the business running. With the company’s production less than 1,000 cases, it works well for them, and they just remain in communication with their distributor partners if there are problems with depletions.

National brand Ancient Peaks even uses Excel in some form. Though Collier is checking the depletions and daily RAD data she receives from her distributor partners, it all feeds back to Excel. This information, Collier says, is the most important tool in her arsenal.

“If you don’t have it, it really puts you at a disadvantage as a supplier, because we can see things pretty quickly,” Collier noted. “The quicker you can see it, the quicker you can react.”

Each morning, she runs a report that includes year-to-date and month-to-date, as well as previous year comparisons, looking for anything that might stand out as “off.” To help manage it, the team uses Karma, the customer relationship management add-on to the VIP data platform.

What Does this Mean for the Long Term?

For the most part, long-term strategies aren’t being upended by the events of 2020; they’re just evolving. Emily Rasmussen, for one, said hers won’t be altered too much.

“We really cherish being able to sell so much of our wines to our direct customers across the country. It feels very personal,” she said. “I don’t think we’ll change anything other than we’re very naturally increasing production every year—because we can’t help but add vineyards to our portfolio. There are elements I like about off-premise, on-premise and direct. I like the idea of continuing to explore all three, but I wouldn’t say our strategy is going to change.”

This article originally ran in the February 2021 edition of Wine Business Monthly.