The wine business is not so easy anymore! I think you would agree that we are at a complex industry stage and that it is a lot harder for winery owners who want to build profitable businesses, to eventually SELL AND RETIRE.

I think you would agree that we are at a complex industry stage and that it is a lot harder for winery owners who want to build profitable businesses, to eventually SELL AND RETIRE.

Changing market dynamics are rapidly affecting how small and medium sized wineries compete:

(1) Generational shift with Baby boomer consumers slowing down and the Millennial not necessarily filling the gap anytime soon, if ever;

(2) Narrowing channel options with continued wholesaler and retailer consolidation*; restaurant sales declining;

(3) Large wine companies are premiumizing to build margin through acquisitions;

(4) Over 9,000 wineries selling well over 100,000 skus – are now competing for consumer share of mind;

(5) Cost of doing business is higher.

The wine business is not so easy anymore! The only choice for small producers is to specialize and to command a higher price through a much more differentiated/distinctive customer experience and product. What I would say is if you want to be around in 10 years, you need to figure this out and do it profitably. For some this is daunting; for others, an exciting proposition or challenge to meet.

As you kick off your annual planning process, here are six ways to be more proactive in addressing gaps in your business; up your game and likely improve winery cash flow in 2018.

  1. Facilitate a management team summer offsite, focused on 2018 operational planning:  engage your managers in goal alignment and tactics development (with a touch of strategic).
  2. Energize your team through a 360-degree assessment: understand strengths and gaps, and implement development steps.
  3. Run profitability scenarios before making decisions: develop realistic underlying assumptions and understand all options for changes in product pricing, committing to unplanned capital expenditures, hiring new staff, launching new products or brands. Here is a link to Scion Advisors’ offer.
  4. Lean on outside experience: consider investing in active coaching. A good coach can help you build more confidence and competence in key areas such as: understanding the profitability of each product; designing more effective financial and sales reporting, managing organizational changes, driving product pricing decisions. Here is a link to Scion Advisors’ offer.
  5. Seek out an unbiased needs assessment of your winery: increase productivity across sales, marketing, production, finance/accounting – through a clear-eyed view of your current operational situation and a set of recommendations on how to take operating practices to the next level,
  6. Get educated: sign up for seminars at Linfield College, UC Davis, and Sonoma State – there are many more resources these days that teach vintners how make better financial decisions. Additionally, here is an interesting presentation on How to nurture a health wine business – given at this year’s Oregon Wine Symposium and at an August seminar for the Walla Walla Community College. Here is a link to those presentations.

Find out how we can partner with your team to improve your operational strength and build roadmaps for future growth. Call Deborah Steinthal, to set up a meeting (707-246.6830).

* less than 700 distributors represent over 9,000 wineries or 100k+ skus nationally, versus 3,000 in 1995, representing 2,600 brands.

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ABOUT THE AUTHOR. Deborah Steinthal is Founder and Managing Director of Scion Advisors, a leading boutique, strategy consulting firm serving the U.S. wine industry. With a proven approach enabling business owners to position for profitable growth or for exit, she has worked alongside over 150 winery owners and CEOs; and has moderated over 80 Winery CEO Roundtables involving more than 50 top wine industry CEOs for over a decade. Deborah’s expertise is in the area of business growth strategy, family business transformation, and board and leadership development.

Based out of McMinnville, Oregon; born in Lima, Peru; raised in Belgium and Germany; Deborah has lived, worked and travelled globally. She is broadly published in the national business press, an invited speaker, panelist and widely quoted for research on key practices, such as such as How to Build a Pull Brand, Digital Commerce and Family Business Transition.

For more information call Deborah Steinthal at 707.246.6830.

Among her clients: Bledsoe Family Estates (Doubleback, Bledsoe family Wines, Bledsoe-McDaniels), Cristom Vineyards, Adelsheim Vineyard, Wine by Joe, DeLille Cellars, Woodward Canyon Winery, OVS, Willakenzie, Elizabeth Chambers Cellar, Patz & Hall Winery, Benziger Family Vineyards, Calera Wine Company, Delicato Family VIneyards, Cakebread, Spottswoode, Gundlach Bundschu, Luna Vineyards, Clos Du Val, Quail’s Gate Winery, Wente, J. Lohr, Choice Lunch,
 Cowgirl Creamery, 
Easton Malloy 
(producers of Peppermint Bark for Williams-Sonoma)
, and McEvoy Ranch.

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