There is trouble ahead for Napa Valley wineries in 2009 and maybe beyond. You might think that all California wineries will suffer equally, but Napa wineries may be more vulnerable. A trip to the Napa Valley costs more than going to Paso Robles, Mendocino, or the Russian River wine region. Lodging and restaurants are more expensive, tasting room fees are higher, and on average, the cost of a bottle of wine is more expensive in the Napa Valley.
Since January we have been to the Napa Valley on three separate occasions. Granted we always visit during the week but almost every tasting room we have been into has been empty, void of visitors. Where are the tourists? In each tasting room we have heard the same lament about winter months being slow, but never this slow. The outlook for visitors the rest of the year does not look good. The San Francisco Convention & Visitor’s Bureau is predicting a drop in European and Asian travelers and in corporate travel by U.S. companies. No company wants to look bad for taking unnecessary travel junkets. More tourists are traveling on a beer budget.
There have been article upon article about how wine buyers are scaling down. This past Thursday the Wall Street Journal in its Personal Journal section ran an article entitled “Buying Wine on a Dime.” The article points out that wine sales in the $11 to $20 range are very healthy. I would venture to guess that 90% of the wines from the Napa Valley are above this range. The article indicates that restaurant wine sales have dropped dramatically. Napa Valley wines are always a prominent part of any restaurant wine list.
We travel with a group of wine-loving friends and we all consider ourselves to be wine club junkies. Since October of 2008 all of us have dropped memberships in at least half of our wine clubs. In 2009 wine clubs will be a tough sell for wineries.
What can a winery do to attract tourists and sell wine?
We don’t pretend to be wine business experts by any means, but we do think of ourselves as seasoned travelers to wine country. These ideas are from our perspective and we would love to see the wineries consider the following. Lowering tasting rooms fees and/or apply the fees to a purchase of wine. Start thinking about making great everyday wines in the $11 to $20 range. Work with local lodging and restaurants to put package deals together. We all want to travel to the wine country; we just need to scale it down a bit. If a wine is not selling and inventory is building, have a blowout sale. It won’t ruin your image, everybody knows times are tough. Partner with other wineries for special sale weekends where people must come to the winery to take advantage of the wine sale. If you have a great wine blowout sale tell the wine bloggers, or post it on Good Cheap Vino. If you are a restaurant, how about waving the corkage fee if the wine is from Napa Valley?
Napa Valley has not been in this position before. The image of being a chic, fashionable and a world-renowned wine region has kept the tourists flowing. But this year things are much different. Take the offensive and do things differently than the past. I’m reading a book entitled “What Would Google Do?” by Jeff Jarvis. The premise of the book is that businesses should take a look at what they do through the eyes of Google. Google looks at itself differently than any other company. It is open and embraces the ideas of the outside community and that is why it is the fastest growing company in the history of the world. Wineries might ask the question, what would Google do if it were a Napa Valley winery?