Research

When Not Everyone Agrees With You

News From Napa…
As I am sure you have all heard and seen the images from Sundays 6.0 quake.  Thank you so much for all the calls and texts, and emails.  We were very lucky – the Benchmark family is safe and intact. We had a few few minor breakages, but overall we are grateful and our hearts and prayers go out to our neighbors and friends who did not fare as well.  

We wish a speedy recovery to our industry friends and families.
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When Not Everyone Agrees With You
The more invested we are in an idea, the more likely we are going to present an idea persuasively. And even if we do present it well, there will likely be some resistance to some or all aspects of it. How we react to resistance is a determining factor in both the growth of our ideas and ourselves.

What is there to do when not everyone agrees with you? You could rejoice at the evident diversity of perspectives, but realistically, you must remember that this is not a personal evaluation. Keep discussions objective and tightly anchored to the original idea.

Perhaps you feel very strongly about something. As situations become more qualitative than measurable, the ultimate redress may be impossible to define. As you may have previously noted, others will have their ideas and beliefs at least as strong from another perspective.  

Perhaps you have taken great pains in presenting an idea. Opening ideas up to questioning allows you to use the knowledge gained from experience and research to further elaborate on the merits of the issue. As you rationally express your points, you will learn more deeply about the subject, as well as increase your general ability to maintain a positive and productive attitude.

When Bad News Happens to Good Leadership

As is most often the case, we prefer to exist in a predictable world, where life functions almost like clockwork and without significant interruptions.  We say we understand that this is not a real possibility, yet we balk at delivering bad news or accepting the reality of adverse situations.  (Why me? Why now? Actually, why ever?)

In the ebb and flow of life (and business) each perspective provides necessary feedback to keep the entities vital.  News can contain some of both positive and negative, and effective leadership can see and convey the promise in the bad as well as the cautions inherent in the good.  Just as physical pain is ultimately a natural safety feature to prevent worse injury, working through bad news can stop an impending problem from becoming potentially worse.

A good leader will recognize and not shy away from difficult situations. Let the buck stop with you.  If you are delivering a message, say it concisely, clearly and compassionately.  If your company is at fault, own the responsibility.  Any specific plan in place to prevent reoccurrence or to compensate for any inconvenience should be addressed in a concise manner.  Then get out of the way, rather than belabor the effect of any negative situations.

When you detect incoming trouble, what is your response?  Are others comfortable sharing information without fearing a negative reaction from you?  Do you respond in a confidence-inspiring manner, whether or not it involves immediately addressing the problem?

Bad news can make for some amazing teachable moments.  A good leader appreciates the opportunity to help solve problems and to show others how to learn and grow from them.

Contact us for current wine industry career opportunities.

Hiring Great Talent

 

The key to hiring great talent is to cultivate a company culture that makes your company a place where talented people want to work.  Offering a great salary and generous benefits is all well and good.  However, talented people are that way partly because they love the work they do.  They also know, being talented, that they are in demand.  Hence they will be attracted to companies that cultivate this and empowers them to accomplish great things.

The first way to make your company a desirable place for talented people to work is to always give your employees respect.  That also means setting high, but achievable expectations.  Follow that example yourself and your employees will follow suit.

The next way to attract and hire talent is to always place your best employees in positions of power and influence.  This gives a signal to talented people that they will be able to grow in your company if they perform up to and beyond expectations. The sort of people you want to work with will consider this a challenge and will strive to achieve.

Finally, you need to be heavily engaged in the hiring process.  Many managers tend to slough off the drudgery of selecting and interviewing applicants to someone else, such as the human resources department.  The person applying for the job will be working with you, so you need to be involved in every stage of the hiring process.  You will be able to access the applicant’s skill set, intelligence and emotional intelligence in order to determine whether that person is the best fit for the position.

For more information, contact us.

Key Factors of Motivation

He who sees things grow from the beginning will have the best view of them. – Aristotle

Is motivation a plan, a state of mind, or an action? Motivation involves several key areas that start in the mind and move forward. First, in order to feel motivated, you need the energy of motivation itself. This energy can be found in the core of being where we find what matters to us.

Motivation for professional success, healthy living, and helping others all relate to one another because motivation increases with each area of life that we put energy into. The beginnings of motivation often relate to ambitions and the desire to accomplish, which is also what helps us maintain high motivation when we face problems and difficulties.

It takes time for motivation to turn into reality, yet through consistent efforts, we become able to actualize what we envision for ourselves. Motivation doesn’t stop when we accomplish one goal or one-hundred goals: it keeps propelling forward, feeding itself toward greater and greater accomplishments that lead to a profound sense of life purpose.

Another way to maintain motivation is to take pride in what you do. Jobs and tasks well done involve enormous attention to detail, awareness of extenuating circumstances, and knowledge. This process of attention, awareness, and knowledge doesn’t stop either: it grows as we grow. If we don’t take time to appreciate when we do a good job, then we in turn lose motivation. Whenever possible, congratulate yourself for the things you have accomplished.

Motivation and success mean little over time unless we care about what we do. In this sense, motivation becomes a way to create meaning in our lives. It involves understanding how and why you care about certain goals and aspects of life. Remember that no one can tell you what anything means to you, as you are always tasked with the responsibility of creating meaning for yourself. Everything you see and do has meaning, and other people only influence you as much as you allow.

The Trouble with Hanging on to Misfit Employees

 The following article is by Judith Sherven, PhD 


It would be ideal if recruiting worked perfectly and all new hires were perfect assets to your specific workplace culture. But that’s not ever going to be the case. We humans are a widely varied bunch and every process — recruiting, onboarding, and management — is dictated by the uniqueness of the people involved.
So there are always going to be some new hires that in due time reveal themselves as inappropriate to the requirements and spirit of your workplace culture. And typically, all too often, these people are kept on and on and on until the inevitable has to happen. They must be let go. But usually this follows months and even years of team upheaval, manager distress and disappointment, and of course inadequate work ethic and output.
What’s the problem? Why is it so hard to pull the plug on these folks early on?

Three Key Management Traps:
1 – False Hope
You believed in the person when you agreed to hire him/her, so you want to give that person as much time and freedom to get acclimated and prove you were correct in your decision. You know it’s often challenging at first when someone joins an existing team or takes over for a leader that has now left the company or been promoted to new stature and greater responsibilities.
So you continue to hope that all will be well — in due time — even when the signals start to appear that it won’t. After all, you are terrifically busy and you don’t want to believe that you made a mistake and now have to let this person go and hire someone new. After all, that’s going to be a drag on your time AND on your ego AND on your professional reputation.

2 – Not Wanting To Hurt Anyone’s Feelings
Most people would prefer to never hurt anyone’s feelings or upset the status quo. And business managers and supervisors are no different. So rather than bring up the evidence that someone is having a difficult time, or is acting out their dissatisfaction by coming late to meetings, refusing to be present in team meetings by monkeying around in their iPhone, or routinely turning in their work after the deadline you wait, you put off the “big talk for small boys/girls.”
And it just gets worse. And worse. And even worse. Until you absolutely have to take action or your entire team or company will be all over you to do something.

3 – Hating To Admit The Mistake In Hiring
It’s not just that you have to face having confrontational conversations with the misfit in question; you also have to come to terms with the fact tat you got it wrong during the recruiting process. And even if you inherited the person when their former manager left the company or got promoted, you still had faith that everything would work out.
But now there’s no room for turning a blind eye, hoping against hope that you will be redeemed as having made a good decision in bringing the person on and/or having hoped they will turn themselves around and become reformed. You must accept defeat and it feels terrible.  So what to do the next time?

Three Management Misfit Musts
1 – Address Issues Immediately
The biggest mistake managers make is to wait to bring up problems. It gives both people a false sense of optimism that everything will be alright when it isn’t now and may never be. Nip problems in the bud, as they say, and you’ll be way ahead of the game when the person does step up to the plate OR they continue to spiral downhill making their exit a foregone conclusion.

2 – Allow Only One Second Chance
The second biggest mistake we see is managers waffling about what to do. They announce one thing (“You have to meet the next deadline or we’ll need to meet with HR.”) and then do something else (“I appreciate that there was some difficulty in your family this past month, perhaps you can get everything on track now.”) leaving the manage to believe they have many more options and/or chances going forward and therefore making the task of letting them go more prolonged and more painful—for both of you.

3 – Cut The Connection ASAP
We’ve seldom seen a PIP (performance improvement program) lead to someone turning it around and being able to stay on the job. We’re not saying never do it, but it’s cleaner and more in keeping with fair treatment to let the person go, allowing HR to take care of the specific details, so that the person can get on with their professional life and you can move on to recruit a more appropriate replacement. The sooner you can come to the conclusion that the person will not ever be a good culture fit, the better for everyone involved.
The key to moving forward with less pain and considerably reduced use of your precious time is to remember that almost never do people change their stripes in order to fit in where they don’t actually belong in the first place.

Original article can be found here

The True Meaning of 'Ladies and Gentlemen Taking Care of Ladies and Gentlemen'

The True Meaning of ‘Ladies and Gentlemen Taking Care of Ladies and Gentlemen’

Above the door of any serving area in a Ritz Carlton hotel is a sign that reads, ‘Ladies and gentlemen taking care of ladies and gentlemen.’

We’ve always like that phrase because it is a dignified and courteous reminder that the way we present ourselves to one another matters greatly.

This is never truer than it is in a professional context. It should go without saying that the quality of your work matters, but the way you conduct yourself and the image you project are of great importance, too.

To put it simply, people like to work with other people who are clean, collected, well-mannered and polite. No one wants to work on a project with a coworker who is sloppy, and people will avoid a team member who is mean, spiteful or rude.

Remember — each of us is always on stage. You make have heard the saying, ‘You only get one chance to make a first impression.’ To that, we’d add that it only takes one misstep — one instance of thoughtlessness, one day of poor personal appearance — to undo many days of meticulous upkeep. This is why it’s vital to be consistently courtly and polite.

So, back to that sign on the Ritz Carlton; if you can carry yourself like a lady or gentleman in any work-related context, chances are that you are well on your way to being the sort of worker employers value and coworkers want to be around.

As we all know – in the wine and spirits industry we always want to be that person on and off the stage.

 

Are you Curious?

4 Reasons Why Curiosity is Important and How to Develop It

Curiosity is an important trait of a genius. I don’t think you can find an intellectual giant who is not a curious person. Thomas Edison, Leonardo da Vinci, Albert Einstein, Richard Feynman, they are all curious characters. Richard Feynman was especially known for his adventures which came from his curiosity.

2013 is a new year. A new time for all of us to discover what makes each of us unique and wonderful and how we pull that back into the universe.

In the Wine Industry, curiosity is the mainstay of our existence. Ask any Winemaker, if it wasn’t for curiosity wine would not be what it was is today. With the shrinking of the individual family wineries and the drive to recreate over and over again the same wine flavor profiles we may be losing what makes us special on many levels.  Not allowing ourselves to take the time to allow curiosity and discovery to take over we will lose what makes us special.

When looking at yourself or your team or your company…ask yourself, “Are you curious?”

If you discover that you have been in the weeds and lost your way to curious behavior..I have listed a few ways to take it back.

But why is curiosity so important? Here are four reasons:

  1. It makes your mind active instead of passive Curious people always ask questions and search for answers in their minds. Their minds are always active. Since the mind is like a muscle which becomes stronger through continual exercise, the mental exercise caused by curiosity makes your mind stronger and stronger.
  2. It makes your mind observant of new ideas When you are curious about something, your mind expects and anticipates new ideas related to it. When the ideas come they will soon be recognized. Without curiosity, the ideas may pass right in front of you and yet you miss them because your mind is not prepared to recognize them. Just think, how many great ideas may have lost due to lack of curiosity?
  3. It opens up new worlds and possibilities By being curious you will be able to see new worlds and possibilities which are normally not visible. They are hidden behind the surface of normal life, and it takes a curious mind to look beneath the surface and discover these new worlds and possibilities.
  4. It brings excitement into your life The life of curious people is far from boring. It’s neither dull nor routine. There are always new things that attract their attention, there are always new ‘toys’ to play with. Instead of being bored, curious people have an adventurous life.

Now, knowing the importance of curiosity, here are some tips to develop it:

1. Keep an open mind

This is essential if you are to have a curious mind. Be open to learn, unlearn, and relearn. Some things you know and believe might be wrong, and you should be prepared to accept this possibility and change your mind.

2. Don’t take things as granted

If you just accept the world as it is without trying to dig deeper, you will certainly lose the ‘holy curiosity’. Never take things as granted. Try to dig deeper beneath the surface of what is around you.

3. Ask questions relentlessly

A sure way to dig deeper beneath the surface is asking questions: What is that? Why is it made that way?When was it made? Who invented it? Where does it come from? How does it work? What, why, when, who, where, and how are the best friends of curious people.

4. Don’t label something as boring

Whenever you label something as boring, you close one more door of possibilities. Curious people are unlikely to call something as boring. Instead, they always see it as a door to an exciting new world. Even if they don’t yet have time to explore it, they will leave the door open to be visited another time.

5. See learning as something fun

If you see learning as a burden, there’s no way you will want to dig deeper into anything. That will just make the burden heavier. But if you think of learning as something fun, you will naturally want to dig deeper. So look at life through the glasses of fun and excitement and enjoy the learning process..

6. Read diverse kinds of reading

Don’t spend too much time on just one world; take a look at another worlds. It will introduce you to the possibilities and excitement of the other worlds which may spark your interest to explore them further. One easy way to do this is through reading diverse kinds of reading. Try to pick a book or magazine on a new subject and let it feed your mind with the excitement of a new world.

Ok, now that you have had good read about curiosity, if you are curious about the Benchmark process – please give us call 707 933 1500 or shoot us an email.  We would be delighted to connect with you.

 

The Age Equation in Employment Numbers

The Age Equation in Employment Numbers

By DAVID LEONHARDT-NYTimes

The rosiest take on the jobs report is that the aging of the country’s population has made the employment statistics look worse than they really are.

That rosy take, in brief, goes like this: Yes, the percentage of Americans with jobs may not have risen much in the last couple of years. But the unemployment rate has fallen substantially during that time, and the unemployment rate is a better measure of the health of the labor market because its calculation excludes people who have stopped looking for work. With more people aging into retirement – the leading-edge baby boomers are now in their late 60s – it’s perfectly natural for more people to have stopped looking for work. The fact that the percentage of adults with jobs has held steady, rather than declined, is a sign that the economy is getting healthier.

To figure out whether this take is basically correct (and whether those of us emphasizing the lack of increase in the employment-population ratio have been too downbeat), you can look at the employment-population ratio for people 25 to 54 years old. They are in the prime of their working lives, old enough to have graduated from high school or college and young enough not to be retired.

Not surprisingly, a larger share of this group is employed than is the case for the overall population:

Source: Bureau of Labor Statistics, via Haver Analytics

And the trend in the overall employment-population ratio does make the job market look a little bit worse than it truly is. As you can see in the chart below, the ratio for people between 25 and 54 has not dropped as much as the overall ratio since the downturn began in late 2007:

Source: Bureau of Labor Statistics, via Haver Analytics

Yet it’s hard to take too much comfort in this chart. The percentage of prime-age Americans with jobs fell sharply during the 2007-9 downturn. It did not budge from 2009 through mid-2011, before rising somewhat in late 2011. In the last year and a half, it has not risen much further.

The fairest conclusion seems to be that the economy really is weaker than the declining unemployment rate suggests. The aging of society should indeed change the way we think about jobs numbers – causing us to look more brightly on a gain of, say, 150,000 jobs and an unchanged employment-population ratio than we would have a decade or two ago. But the aging of the country isn’t the main story. The economy’s continued weakness is

How to Use Linkedin To Get A Better Job

linkedin logoThere are many online tools out there to help you land your dream job, but social networking website LinkedIn seems to be the place everyone turns to. So how do you use LinkedIn to get a job? There are a few simple steps you can follow to help employers see that you’re the best candidate around.

First, create an online profile that is flooded with keywords. Use words that describe what you do, while also making it easy for potential employers to find your profile. This is one instance when creativity will actually hinder your chances.

Next, you should find your college and univeristy alumni groups. This is a great place to start networking because you will already have something in common. Regardless of how active the group is, start a conversation and see where it may take you.

When you are inviting a contact to network with you on LinkedIn, you should customize the invitation, especially if this is someone you don’t know personally. Add how you met and why you’d like to get in touch. This will show the contact that you have something in common and lessen your chances of being ignored.

Lastly, be active on LinkedIn and pay attention to what your contacts are doing. Congratulate a contact when they have listed a new accomplishment, comment on articles posted and lend support by endorsing contacts for their skills. This will make sure you’re always on the radar and your contacts will be more inclined to help you if and when the time comes.

Other simple tips like searching through LinkedIn contacts to see if they are connected to a job you might be interested in and looking into a company’s LinkedIn page can also help you in your job search.

The New U.S. Wine Market

The U.S. wine market fell off a cliff in September 2008, and it is still hanging in mid-air.

Far more has changed in this market than the behavior of the American consumer: The companies that distribute and sell the vast majority of wines have dramatically changed the way they do business.

To begin to understand this new market, Stonebridge Research created its Fine Wine Trade Monitor in March 2010, with support from industry groups including Napa Valley Vintners, the Paso Robles Wine Country Alliance and South African Winegrowers, and with help from industry leaders across the country.

From March to June 2010, we conducted telephone conversations of one hour or more with more than 50 top managers in the wine trade: eight distributors, 17 independent wine retailers and 25 full-service restaurants (both chains and independents, including national accounts) in the top wine markets in the United States (New York, Boston, Miami, Atlanta, Washington, D.C., Chicago, Las Vegas/Reno, Dallas, Houston, Seattle, Los Angeles and San Francisco) and several smaller markets.

In each conversation, we asked:

  •  How has your wine market been, over the last 24 months?
  •  How have you adapted your business?
  •  What is selling and what isn’t?
  •  What moves wine in this marketand what doesn’t?
  •  What notable trends have you seen in consumer behavior?
  •  What has been the impact of changes in distributor business?
  •  What can – and should – producers do?
  •  What worries you about the future?In the process, we learned what exactly this new market was and how the trade – wholesale, retail, restaurant – has changed to adapt to the new economy.

BEYOND GROCERY STORE DATA

We know that Americans are still drinking wine. They are just paying less for it. Consumers have changed what they buy, what they are willing to pay for it, and particu- larly, where they buy it – with consequences for everyone in the wine business.

You may have read that not only are retail wine sales rising, so are wine prices at retail. But that is InfoScan data, which is primarily grocery and drug store data, in the states where wine can be sold in those channels. In late 2008 and early 2009, grocery stores closed out – at huge discounts – most of the higher-priced, small-production wines on their shelves. Pretty much everything else has been heavily discounted.

So what does it mean if those prices appear to be increasing? Either that discounts may be some- what smaller or that consumers are taking advantage of better wines being discounted.

So, wine prices are rising…from what?

Are wine prices recovering?

What is really going on out there?

RETAIL

Here are some basics on wine sales. In the “normal” market, before the recession, it would take about three months to move an inventory of wine at retail (described in the trade as a “turn rate” of four times a year). Some lesser-known or more expensive wines might take longer to move. Thus, much of the cost of wine in all parts of the market is the cost of holding inventory. That inventory turn rate for wine has now slipped to once a year: 12 months to move all but the strongest brands and biggest values. This happened at a time when credit was becoming scarce and more expensive.

From the third quarter of 2008 through the spring of 2010, retail wine sales revenue declined 15%- 20% in most parts of the country, while sales volume – the number of bottles sold – rose. Many retailers found they were “working twice as hard for less money.” Wine would only sell with large discounts – 30% being the norm – or a special event. Many retailers cut staff by as much as 20%. “Hand-selling” of wine was an expense few could continue to afford.

Retailers also responded by cutting inventory, by 20% or more. They swapped out wines costing more than $50 for wines under $20. Anything that didn’t move quickly was closed out. Imports were the first to go, then smaller producers, library wines, multiple vineyard-designates, all those “new varietals” – all gone. And if they haven’t seen you lately, you are probably one of the brands they cut.

If it looks like retail shelves became filled with large-volume brands, they were. Risk-averse consumers were reaching for not only less expensive wines, but familiar labels from large producers able to fund the promotional allowances and discounts needed to sell wine.

The only alternative to discounting that seems to work has been special events with winemakers. Vintners’ travel is up 30% or more.

We do a lot of consumer research at Stonebridge. A few years ago, price was a factor in wine purchases – one of several, along with brand, variety, ratings, the occasion when the wine would be served, etc. Wine was, to use a wonderful phrase from Yankelovich Partners’ study for the California Wine Institute in 2005, a “safe adventure” – consumers were excited about trying something new, even dangerous, in wine. Well, that’s over.

Today no one is quite sure what consumers want, other than price. At least at retail, they are not being adventurous. Not that they are being given much of an option, either, because there is less and less adventurous wine on the shelf.

RESTAURANTS

Restaurants have been much more creative in responding to this economy.

The year 2009 was the worst for U.S. restaurants in almost 40 years. Full-service restaurants were the hardest hit, with particular pain coming from the loss of corporate and expense-account business. The average check was down 15%- 20%, but the average wine sale was down 20%-50%. Wine sales were down far more than spirits or beer, which were seen as more economical alcoholic beverages.

Restaurants responded by adapting their menus to allow customers to “manage their spend” through increased choices in more price categories and flexible portion size, prix fixe meals, special offers, food sharing and small plates. And they have adapted their wine lists accordingly.

Customers have been turning toward wine by the glass for several years, but in 2009, the shift was drastic, from bottle purchases to a cocktail, followed by a glass of wine with dinner. Restaurateurs described their new business as “selling more wine to fewer people at lower prices.”

The “sweet spot” for wine bottle sales dropped to the $40-$60 range from $90 or more – and it hasn’t improved. We even began seeing “house wine” again, albeit of better quality than in years past. With wine sales slowing, restaurants began cutting new purchases, cutting lists and selling from inventory. They put the expensive wines on special and when they sold out, they were replenished with wines they could sell for $40 or less.

Inventory levels were cut, long- term, to reduce costs. Individual orders got smaller – cases became six-packs and six-packs became two bottles – to limit inventory exposure.

Restaurants have long expected to be able to re-order regularly, monthly or bimonthly, for their more active wines, which became more important as individual orders dropped in size.

With the wines they do offer, restaurants have taken a different road than retailers. They are looking for “esoteric” imports, new wines, small producers, wines not available at retail. The last thing customers need to see on a restaurant list is a wine they could have bought in the grocery store or (horror of hor- rors!) at Costco at a fraction of the price.

Thanks to creative wine lists and support from energized sommeliers and trained servers, consumers have regained some of their cour- age to experiment with wine, seeking new, affordable alternatives to the more expensive wines they used to order in restaurants. Thus, wine sales on premise have been shifting toward small-production imports: particularly Veneto whites and Rhône reds. Restaurant traffic was revived in much of the country in 2010. Corporate and private dining business is coming back — yet wine lists have not returned to their glory days.

With restaurants and retailers heading in different directions, how do you build a brand today?

DISTRIBUTION

Now we get to the distributors.

Think about it: The whole structure of the three-tier system depends on distributors holding inventory. Inventory costs have multiplied as turn rates collapsed. Restaurants cut their purchases by as much as 50% and many closed. Retailers cut orders. Inventory credit costs rose and conditions tightened.

Starting in late 2008, most dis- tributors started trimming everything that had not moved in 30-60 days. During the past 18 months, there were hundreds of closeouts, if not more, flooding the market at discounts to retailers and res- taurants of up to 80%. Accounts often could not find out where to buy many of their usual wines.

Distributors have since cut 20%-30% of brands from inventory, primarily slower-moving small producers, library wines, new brands and imports.

One sales director described distributors as “triaging” customers, with major national brands at the top and smaller brands on the third level, described as the “if you are lucky, we might return your phone call” customer group.

Distributors have targeted inventory for no more than 30-60 days, even if it means out-of-stocks. They are not holding inventory for mid- season re-orders. Allocations go out once or not at all.

In the long run, long after the consumer starts shopping again, it is these changes in distribution that will have the greatest impact on the U.S. wine market.

WHAT DOES THIS MEAN TO PRODUCERS?

First, few, if any, producers will be able to depend on wholesalers to simply take their production off their hands and find a market for it. This situation has been coming for several years, and producers have largely been in denial.

The most immediate impact is on producer cash flow.

Distributors are decreasing what they are willing to buy, and completely eliminating some brands. In September 2009, wineries began dumping inventory to distributors with discounts as high as 60%, after spending much of the year insisting they could not even moderately adjust the pricing they had built up during the boom years.

The idea was presumably to clear out inventory to enable a healthier market with the new vin- tage, yet the discounts continue.

The expectation that pricing would return to old levels is unlikely to be met. Trade and consumers who purchased wines earlier in the year, at higher prices, felt betrayed, and those brands are likely damaged for the long term with these customers.

Next is the realization that producers are indeed responsible for generating their own demand.

Vintners need to nurture their relationships with their accounts, understand what they can sell and be out in the market to provide the training and support sales.

Independent sales and marketing companies are proliferating, assisting producers who can’t afford a sales force, yet this also adds another layer of costs.

Wine companies are learning they need to manage their distributors, monitor their inventories to avoid out-of-stocks, keep an eye on pricing to avoid closeouts, keep tabs on warehouse situations and check on deliveries.

They must work harder to make sure they get paid, and to ensure their wines are valuable to their distributors.

Finally, it comes down to more rigorously managing the business of wine: building sales planning and inventory management capabilities, and understanding and controlling costs.

Most important is to protect and improve quality while tightening business practices.

There is already concern that wine quality may be compromised as vintners try to protect margins, a counter- productive strategy when consumers are discovering that good wine can be found at every price level.

Cost savings will have to come from improved business, financial and operations management, with retaining and improving wine quality a top priority. Or, in the words of one former large-company executive, “taking money out of process to put into quality.”

What other options are there for producers?

Consumer-direct sales have revived in some regions, making up for some of the lost trade markets. But as ShipCompliant data has shown, consumer-direct is still a small segment of wine sales. Most wine will continue to be sold through retailers and eating-and- drinking establiishments.

Attention is gradually focusing on the opportunities for direct-to- trade sales, through so-called clearing distributors. There is anecdotal evidence of distributors setting up clearing divisions to process three- tier paperwork for a fee, leaving actual sales and physical distribution to wine producers. Many of the new sales and marketing companies and brokers, started by distribution veterans, are developing comparable services.

Restaurateurs report that distributors are proposing to take orders for smaller wines they do not usually stock, if the trade commits to pay in advance and to take immediate delivery, so that no inventory costs are incurred.

I had a conversation several months ago with a friend in the industry who remarked, with a startled expression, that he had just realized that he usually said “supply and demand” and I say “demand and supply.” Perhaps, he suggested, that says something about the industry and the market today.

Sadly, selling wine has always been more difficult than making it. Today, it is definitely what a vintner needs to think about first.

Barbara Insel is president and CEO of Napa-based Stonebridge Research Group LLC, a leading strategic advisory and research firm servicing the wine industry. Insel has led major projects for the French Trade Ministry, Wine Institute, California Association of Winegrape Growers, Napa Val- ley Vintners and many others. To learn more about Stonebridge Fine Wine Trade Monitor, visit www.stonebridgeresearch.com or contact Insel at binsel@stonebridgeresearch.com.