The appeal of the wine gift

Merchandise is helping to build winery profits. Rebecca Gibb MW reports.

Merchandise from Mercantile 12
Merchandise from Mercantile 12

By offering fine wine, delectable food and a good time, the world’s wine regions lure more than 50m tourists to their romantic villages and vine-lined slopes. Spending in excess of $20bn globally, these tourists have made wine tourism a significant niche in the travel sector.

Research has identified many positive consequences of wine tourism for producers, including increased sales – and greater profit margins through direct-to-consumer sales – new customers, greater brand awareness and loyalty. Wine tourism is not all about the wine though: cellar doors have become more than places purely to taste and buy wine, offering everything from branded merchandise and wine-related paraphernalia to locally produced cheese, art and clothing. 

Extra revenue

The sale of non-wine items at the cellar door is an area that is little studied. However, the University of South Australia’s Ehrenberg-Bass Institute for Marketing Science has conducted studies in Australia, North America and Canada which provide some revealing numbers. In a 2013 study of Australian cellar doors, which involved more than 3,300 participants, 67% of visitors bought wine and 26% purchased non-wine items – whether food, a wine tour or merchandise – and a total 75% of visitors purchased something, spending on average A$90 ($64). The average spend on merchandise was more than A$37 although less than 5% of visitors bought merchandise. A similar study in the US and Canada found that wine accounted for 55% and 71% of sales value at cellar doors in those countries, with non-wine items accounting for the remainder, suggesting that there is money to be made beyond fermented grape juice. 

In New Zealand, Misha’s Vineyard in Central Otago has created a small non-wine gift offering at its cellar door since launching two years ago. Director Misha Wilkinson understands its importance to visitors despite it accounting for just 3% of sales by value. “Our main activity and revenue generator in the tasting room is wine, of course.” She says it’s important to acknowledge why people might be visiting the tasting room, especially in an area where nearly all guests are tourists. “They are often looking for mementos of their visit to your winery or to the region, or to take a gift back home, which is very common with visitors from Asia.” Wilkinson says offering options in the tasting room “enables people to do what they need to do – purchase gifts, souvenirs – in addition to their wine tasting,” and creates a more complete customer experience. 

While some see non-wine items as nonessential, the retail experience is a major revenue generator for others. Hameau Duboeuf, a ‘wine park’ created by Beaujolais dynamo Georges Duboeuf, attracts more than 80,000 vistors each year. Its 600m2 shop offers 1,000 items from 150 suppliers and non-wine items represent 30% of sales revenue. It has a broad range based is on its customer set, Anne Duboeuf says. “We are lucky to receive very diverse customers as part of the visit to the wine park. Some are not wine consumers and are pleased to be able to find other products in our shop.” She says the park welcomes a lot of international visitors who can’t take much wine home with them because they’re travelling by plane. “They are happy to be able to take home souvenirs other than bottles of wine. Families with children often visit, so we offer products in keeping with this demographic.”

Something for everybody

Catering for a diverse set of visitors with a diverse set of motivations is essential, whether the visitors are domestic or international. The 2013 Australian Cellar Door Visitor Research Study found that locals account for a large proportion of visitors – the main feeder source being a large city near the wine region, such as Adelaide in South Australia or Sydney in New South Wales. It’s a similar story at English wine producer Denbies: an hour’s train ride from central London, it attracts city slickers at weekends. It also has a strong customer base locally. With space for 300 cars to park, two restaurants, and a farm shop in addition to the cellar door, locals come in search of produce, gifts, cards and refreshment rather than a wine tour. “We have regulars who might pop in for a cup of coffee or lunch as well as look for a nice present for someone,” says COO Jeanette Simpson. “We do a wide range of wine-related accessories and little objects of desire to encourage secondary spend.” As a result, non-wine items account for 35% of gift shop sales. It is a similar story at Hameau Duboeuf, whose “very important local clientele” often visit its store for gifts. 

 

Image removed.

Denbies’ visitors are as interested in the farm shop and merchandise as in the wine.

The US model

A 2017 white paper on winery merchandise by California-based wine fulfilment company Copper Park Logistics reported that, on average, US tasting rooms were “looking for 10% of their monthly sales to come from non-wine merchandise, with the initial return on investment occurring on average between six weeks and three months”.
The primary reason for visiting a cellar door is to taste wine, not to buy glasses, keyrings or T-shirts. Displays of non-wine items should add to the overall appeal of the cellar door without distracting or diverting from the wine. Laila Subaie, wine club manager at Miner Family Winery in the Napa Valley, explained in the white paper that too much merchandise could detract from the overall experience. “It can be burdensome,” she said. “If you get walk-in traffic, you don’t want them to see a room full of other things, so much that they feel like they can’t get to the counter to purchase or taste the wine. And let’s face it: that’s what they’re there for.”

And yet businesses have spawned out of the non-wine purchases made in tasting rooms around West Coast wine country. For example, Napa-based Mercantile 12 is a gifting business dedicated to producing and supplying wine-related gifts to wineries, gourmet markets and gift shops. Founder Janet Tupper launched the company in 2014 after visiting a cellar door in Walla Walla several years earlier and being unimpressed with the merchandise available. She now employs four staff. Sales are split between off-the-shelf products and those that can be customised with the winery’s name.  In terms of value, Tupper reports that apparel including hooded jumpers is the number one seller, followed by ceramic mugs, tea towels and tote bags.

The choice of branded or non-branded merchandise also needs to be considered. “Merchandise will not move just because it has your winery’s logo on it. It will move if the item is useful, entertaining, socially valuable, and part of a larger shopping experience,” warned the white paper. In Jerez, Spain, Tío Pepe’s range of non-wine goods ranges from useful branded items such as USB sticks and luggage tags, complete with its iconic logo of a bottle dressed in a bolero jacket, cordobes hat and guitar, to leather goods, clothing and olive oil. “Our aim is to complete the Tío Pepe experience at the end of the [winery] tour and provide visitors with a range of tastefully designed, branded products... and other cool items which will spark interest and, hopefully, inspire purchase,” says Beatriz Vergera, tourism and events director, Tío Pepe, which attracts more than 180,000 visitors each year. 

It’s also important to consider who is buying non-wine items. It has been claimed that women are responsible for as much as 90% of merchandise purchased in tasting rooms, while men are more likely to focus on wine purchases. Academic literature on gender-based shopping trends and behaviour is extensive, with women perceived to be more likely to participate in shopping and gift-giving than men. Traditional gender roles suggest that women enjoy browsing and shopping while men see shopping as task-oriented, serving a function, which suggests gender might be considered when considering stocking.

There is certainly a strong case for wineries to offer more than wine at the cellar door, particularly those with sufficient footfall to drive sales. However, as with any new product, desirability or ability to meet a customer’s need is key. This requires asking the questions: who is the customer and what do they want from the cellar door? Will non-wine items add to the experience and cellar door revenue, and what items should you stock? Get it right and wineries could enjoy a small share of the $20bn wine tourism purse. However, it should not detract from the most important function of the cellar door visitor experience – encouraging future sales beyond the vineyard. 

 

Rebecca Gibb

 

This article first appeared in Issue 2, 2019 of Meininger's Wine Business International

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