General Information about the Sample
This study gathered information on winemakers' positions, motivations, and challenges to better understand the market of online wine tastings throughout Germany. The research project was conducted in the frame of the Strategic Planning module by the students of the International Wine Business study program at Geisenheim University. The research project aimed to identify prospects and ideas to keep this new niche of the wine business viable as a strategic business model even after the pandemic.
A heterogeneous sample of wineries and wine-related businesses throughout Germany, including a wine marketing enterprise, a wine event organizer, and an online wine retailer located throughout several different federal and wine-growing regions, were achieved. In total, ten separate interviews were conducted. The small number of interviewees does not reflect the positions of all German winemakers. However, the study is by its nature explorative for the German wine market. All wineries and enterprises were currently providing online wine tasting services at the time of the interviews.
The sample was representative of German winemakers' diversity and their entrepreneurial pursuits during the pandemic as the companies ranged in size, cost structure, and existing client base. Interviewees ranged in size from six-hectare wine estates selling mostly to private consumers, cooperative wineries collectively owning over 1,200 hectares and selling most of their wines through supermarket channels, to winery event organizers representing six separate wineries.
The frequency in which online wine tastings were conducted varied dramatically: some reported that they happened when possible; others reported tastings were scheduled every two weeks; and still others already had five planned for the week of our interview. The number of participants per tasting varied extensively as well. Many wineries held more intimate gatherings of 10-20 people whom all knew each other. One of the larger wineries and one of the large enterprises reported hosting 300-600 people at a time.
The Motivation for Conducting Such Events
Despite varying responses towards main motivations for conducting online wine tastings, all wineries and businesses reported they began online wine tastings to respond to pandemic closures. Slight variations in their initial motivations include maintaining existing customer relationships, selling wines even as tasting rooms were physically closed, promoting their wines despite closures, and covering losses from the Covid-19 global health crisis. The three non-winery interviewees hoped to retain and gain business partners, continue their accessibility to local winery partners, and support the winemakers to endure the closures of 2020.
Several wineries used social media to promote their tastings but reported that word of mouth was essential in attracting new customers. Some distributed leaflets at the winery or sold wine packages, and some mainly advertised online wine tastings on their website and through the German Wine Institute's page advertising all available online wine tastings throughout Germany. One winery reported they collaborated with two other local wineries to share a customer database and increase their customer reach collectively.
The interviews revealed points of similarity and points of differentiation with the format, which allowed to quantify the vintner's experiences, beliefs, and challenges to gather a better overall understanding of the online wine tasting options. The formats varied with a diverse range of entertainment and minor additions to the wine deliveries, but most offered three to four wines in their tasting packages. A few interviewees felt their digital resources and experience with excellent host personalities helped carry their platform's success.
The format for many was described as "edutainment," a term embodying a sprinkling of education about the winery, the wines, and the region, focusing on entertaining the crowd and building relationships that would extend beyond a one-time tasting experience. Several wineries added food and wine pairing suggestions that would accompany each wine's flavors and aroma, hoping to encourage a repeat sale. One vintner often added pieces of slate soil from the vineyards to the winery packages to invoke a sense of place for their wines and local food items such as cheeses if the budget allowed. One interviewee collaborated with other young vintners in the region to host entertaining evening events with live music and chats during the tastings, video samples, and game challenges to hold the audience’s interest and keep the entertainment level high.
Several vintners described storytelling as a critical aspect of their tasting platform as it provides meaningful content for the online wine tastings giving context to the wines as participants tasted. A range of wines for different preferences and palates was desired by both the producers and the consumers to keep the audience engaged, but excellent moderation and entertainment were continually reported as a must-have for online wine tastings.
Several expressed how much effort the online wine format requires both with the logistics ahead of the tasting and the amount of energy required to entertain. The enthusiasm required to keep all participants involved seemed like too much work for some vintners. "I am a winemaker, not an entertainer," remarked one vintner who found hosting online wine tastings exhausting. Several drawbacks included a limit to the number of different wines that could be sent and tasted for a single household at one sitting, the lack of emotion in the interaction was often noticeable, and the lack of audience engagement often led to uncomfortable silences. A few wineries thought the effort and payback of online tastings were out of balance, as they required many more resources than the revenue they generated.
Online wine tastings are more “natural” for younger consumers; it is slightly harder to convince the older wine-drinking population to turn on their screen and tune in for a digital experience they have often spent most of their life enjoying in person. Additional challenges for online hosting include technical skills and electronic device breakdowns, which occurred from time to time. A lack of winery staff with the proper virtual hosting skills was also a challenge as this genre requires a separate set of impromptu problem solving, and the ability to continually generate fresh and engaging content for a small family winery was also an issue.
Lastly, mailing logistics and costs for wines to arrive on time were a common challenge, nonetheless, still a challenge. One of the wine companies mentioned communication between the various winery partners was complex when hosting online wine tastings. They reported that the winemakers had different goals and expectations to manage and, therefore, different ideas about the structure, content, and the main idea presented. They also viewed one of their most significant challenges: creating innovative and original offerings.
As there was suddenly huge competition for online wine tastings overnight, it became challenging to gain consumers' attention against other wineries' business offerings. One interviewee stated that "Wine does not 'speak for itself’ in the same way out of context. Away from the winery without an in-person tasting experience, certain senses are less engaged, and therefore the moderators must work harder to keep their audience in awe."
Despite the drawbacks, the belief that online wine tastings helped increase company knowledge and capabilities was widely reported. In contrast, one vintner saw it as an opportunity to promote local wine tourism and extend the invitation to customers for a future visit to the region. All wineries agreed that online wine tastings are an excellent promotional tool and often created a small revenue stream for 2020. The collective attitude from vintners was that they would continue to utilize online wine tastings only when needed after Covid-19, as it would remain an excellent tool for international communications. Online wine tastings could potentially allow a small winemaker the ability to reach a larger audience. This communication medium spoke to a different type of wine consumer, which was overall positive in acquiring new, younger consumers.
Several vintners believed this experience had positively increased their social media presence and thought the newly gained tools and skills would be utilized for the business in the future. A few of the wineries thought that online wine tasting might still help them connect to business partners on a more personal level overseas, creating a closer connection with B2B customers and allowing their clients to “visit” the winery and the region with the click of a button. One vintner commented how the direct connection with customers and walking them through the vineyard on a virtual tour allowed foreign business partners to “experience” German wines wherever they were located.
As for the future of online wine tastings, most vintners believed the bulk of online wine tastings would drop off or disappear after the pandemic was over and restrictions were lifted. One vintner communicated they would revive online wine tastings next winter for the holidays, given the season's cool weather and sales demand. However, most believed that as soon as people were safely allowed to resume regular in-person tastings and purchasing through traditional supply channels, online wine tastings would remain a small niche. Most agreed that people craved in-person experiences, and the emotional draw of purchasing wine in the winery was too great for the online channel to thrive long term.
Despite the consensus that online wine tastings would be reduced to a small niche market after the pandemic, several companies hoped to continue to capture the young audience and recent customer acquisitions by encouraging drinkers to attend wine festivals and wine exhibitions.
Overall, the strategies differ significantly for individual wineries and wine companies depending on the size and type of business. On the other hand, although several companies could express what they believed to be their unique selling proposition (USP), it seemed difficult to identify a winery or wine enterprise with a competitive advantage over the other players in the online wine tasting market. In addition, most interviewees believed the effort required for online wine tastings was out of balance with the rewards that were acquired.
As expected, the future of online wine tastings is still debatable. Although most agreed that this category would struggle once the pandemic begins to disappear, several saw the opportunity to continue to connect with foreign business partners and new consumers as a positive proposition for their future sales. For most, online wine tastings was a response to the pandemic and a call to action to cope with the new regulations, maintain market relevance, and cover at least some losses. Nonetheless, there is a split in approaches; several wineries engaged in online wine tastings for a short-term solution. A few enterprises and larger wineries took longer strategy approaches integrated into their primary business activities during the pandemic and beyond. Given our current understanding of online wine tastings and the various attitudes over the channel's future, only time will reveal how much this new niche will thrive in Germany post-pandemic.