Our YouTube Channel has nearly 40 new videos that were filmed in and around town. We’ll be chronicling the exploits of Hugh as he canvasses the Texas Desert Building our brand and hopefully making Stormhoek the biggest selling South African wine in all of West Texas.

We’ve already got half a dozen placements around town, and Hugh is now working on Marfa and Terlingua. With some luck and a good breeze, we should pick up a few more. Here is Hugh doing some more missionary work. Don’t know if the guys at Mondavi should be worried yet.

Center of the Universe?

We’ve been thinking about small. The sorts of places that don’t really matter much to most people. The kind of place that folks have maybe heard of, but will never find the time to visit. The fact that they are ‘out of the way’ doesn’t make those places less special, or interesting, but it in the eyes of some, it does tend to marginalize their importance.

For most folks in London, Shanghai or New York, South Africa is one of these places. While that doesn’t sit well with us, it is a fact of life. But, we come to realize that once you accept the fact, then the world looks like a much different place. We see the potential of small. The beauty of simple and the promise of an elegant idea that could make a difference.

What’s this got to do with wine, you ask?

Well, we are doing a launch for our new label in the US. But, we’re thinking: Why do the usual? Why beg the people who view us as being from a place that doesn’t matter to pay attention to our wine- let’s talk to people who actually view the world more the way we do. People who have rich lives in small towns, who make a difference every day and yes, who still “Dream Big” from little places.

So, we’re off to Alpine, Texas, not far from Marfa and just up the road from Valentine. We’re looking for Dreamers and people who stand out from the crowd. We have great hope that these folk by Dreaming Big, can Change the World.

Stay Tuned.

There continues to be a lot of discussion in the wine world about “The Long Tail”, and  am sorry to have to go against the prevailing trend and advise that there is no “Long Tail” for wine – at least not in the ‘category killer retailer’ sense.

For those who are unfamiliar with the concept, a few years back, Chris Anderson, Editor-in-chief of Wired Magazine, wrote a book entitled “The Long Tail”:  Why the Future of Business is Selling Less of More. In this book, he put forth a case that describes the niche strategy of businesses, such as Itunes or Netflix, that sell a large number of unique items, each in relatively small quantities, and the belief the business done with the small volume items, when taken together, can in fact be larger than the sales of the few high volume items. 

On the face of it, wine would seem to be the perfect “Long Tail” category. Tens of thousands of producers, millions of SKU’s, lots of passionate consumers. However, digging in a bit more, it becomes clear that wine, as a product, does not fulfill some of the basic requrements of being a ‘Long Tail’ product.

The Long Tail requires some fundamental conditions that do not and never will apply to wine – I’ll mention only three of the biggest obstacles to wine being a Long Tail product:

1)    Storage: The issue is obvious here: You can store a music file on a server at virtually no cost, which can be downloaded millions of times at no incremental cost to the retailer (other than bandwith). Even for books, you can build a large warehouse, without worrying about temperature control, regulations and distance from the producer, and hold vast quantities of titles at relatively little cost. Not so with wine.

2)    In the US, anyway, wine cannot be sold to retailers on consignment. This means that the retailer is going to have to invest vast amounts of capital in the skinny part of the tail, which in and of itself, will make the model unsustainable. There are ways around this legally, but they will require complicity from suppliers in subverting the existing distribution model, and I doubt any major importer/winery will want to do this.

3)    Shipping is a nightmare. Hard to do it in the heat of the summer, breakage an issue, heavy, expensive to move. Compare this to a book, or any digital file delivered over the internet and the challenge is very clear.

Amazon has been getting into the wine business since 2005. Amazon defines the Long Tail model, and today when I searched their site, I found wine books, wine accessories, but no wine. For a business that changed the retail scene virtually overnight, that is a long time for nothing to happen- and I suspect a symptom of the fact that it is hard to use their model for wine. 

So, while The Long Tail may be a fantastic model for books, music and software, it doesn’t really work for wine, and I think that to the extent that retailers are interested in new models for the category, this is not one of them. Having said this, there is probably a model for linking together existing inventories of retailers in some seamless fashion as an aggregator, and this is perhaps already being done, but it isn’t quite the same thing.

I relied heavily on this  excellent Wiikpedia article, which spells The Long Tail theory.

My name is Chris and although I’m originally from the UK,for the last year and a half my job has basically been to help get new clients and then make sure they are well looked after over here in South Africa. Yes I love my job and all my friends are jealous (doing lots of wine tasting’s can be hard don’t you know) and although I do get called a soutie every now and then, generally life is fun in the sun.

This week during one of my rounds to make sure that all the Stormhoek clients in the Cape are pampered and happy, I saw the above sketch in a popular bar called Long Street Cafe, which is surprisingly located in Long street (the main party street) in the city center.

I had sent the owner of the bar some of Hugh Macleod’s  great cartoons in an email a month or so ago as he wanted to use one as a screen saver. After a little catch up chat with him I found out he liked the above cartoon so much he had paid a local artist to copy it onto a 9ft wide and 6 ft high chalk board and hang it above his bar !

If anyone is taking a holiday in Cape Town and wants to go have a look the details are here, not sure how long it will be there for, but if anyone else knows of another ridiculously large version of one of Hugh’s cartoons please let us know.

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Nikki Dumas writes winelists. She takes all year to find the wines she wants. She secures the bottles she needs. They are paid for and locked up in a secure place.  She can’t have someone else buy them while she’s finishing the list. Her task is a work of passion that becomes a work of art.

Some people like Nikki’s wine lists a lot. Enough to try to borrow them for the long term.  The one she and Chris are looking at in the picture has a bar coded security tag attached. If you shoplift the winelist, you have to deal with security at the door, just as if you had stuffed a dress in your handbag in the clothes shop. Believe me, people do.

The judges at Wine Spectator are among the people who like Nick’s winelists. They decided that Nikki’s Balducci winelist is is one of the 50 best luxury, grand and deluxe winelists in the world this year. Balducci is the place to be seen eating, drinking or just sitting in Cape Town’s V&A Waterfont.

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[One of the thirty cartoons chosen to go on the bottles etc.]

Though Stormhoek generally doesn’t like to sponsor large events, an interesting opportunity came up.

On December 5th we’ll be serving Magnums of Stormhoek on the tables of the British Comedy Awards, which in British Media terms, is a pretty big deal. Lots of celebrities, TV cameras and paparazzi etc.

But rather than just plonk the bottles down on the tables and let the celebs get on with it [i.e. Drink our wine, yet ignore the brand completely- which is what normally happens with these kind of events], we decided to behave a little differently than your average gala sponsor.

We created a range of large bottles [Magnums], each with a different cartoon on it. Thirty cartoons in all.

Because of the event, we decided we didn’t have to worry about playing it safe [unlike say, with your average supermarket client]. So out of my collection of 6,000-odd cartoons, we picked 30 cartoon that were relatively edgy. The one above is a good example. Also, some of the cartoons from this page and this page made it into the mix. Generally, we picked cartoons we thought anybody who had spent a lot of time in the Soho/London/media/entertainment/cokewhore/glamorpussy world would click with. You get the idea.

As everybody will have a different cartoon on each table, we’re hoping people will check out the different bottles on the other tables. Yeah, you got it. Conversation starters. Exactly. “Social Objects”, Baby.

I hope the photographers get some decent pictures…

( Originally posted by Hugh at www.gapingvoid.com )

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[Official “Smarter Wine” logo etc.]

At Stormhoek, the wine company I work for, our basic schtick is this philosophy we call “Smarter Wine”. This is what Mark Earls would call the “Purpose-Idea” of the company; i.e. the reason we get out of bed in the morning and go to work every day. Here are some thoughts on what Smarter Wine means, in no particular order:

1. Smarter Wine does not imply that we’re “smarter” than anywhere else. It’s an ideal that we aspire to, not that we embody. The idea is not something Stormhoek will ever “own”, like a tagline in an ad campaign. It’s an idea I think EVERYBODY in the trade should get their head around, be they makers, sellers or buyers, large or small. But hey, I would say that.

2. Everyone’s definition of “smarter” will be different. I’m OK with that. To me, it means continually engaging the customer at a higher level, continually raising the bar.

3. The brilliant thinker, Russell Davies identified four keywords that will govern the future of the advertising business. About as succinct a list as I’ve ever seen:

Blurry. Useful. Interesting. Always In Beta.

“Always In Beta” is a popular term in Silicon Valley. In an ideal world, it would be equally popular in the wine trade as well. It’s unfortunate that this is not the case.4. A word people like using in the wine trade is “innovation”. Some companies pay it only lip service, some companies actually try to embrace it full-on. But it’s harder than it looks. Wine is one of the oldest products in the world; change happens slowly and with great reluctance. Sure, putting wine in funky-dunky plastic or aluminum bottles might be technically “innovative”, but does the average wine customer actually want that? A more interesting question for me is how the wine connects with people on an emotional and intellectual level. That to me is where the real action is.

5. Big ideas start out as little ideas, and lots of them. What do companies like Apple, Nike, Innocent Drinks and Starbucks have in common? Superficially, very little. But one thing you’ll notice about them is that they’re constantly coming up with new stuff. Constantly trying out new ideas, seeing what happens, and if it doesn’t work out, they move on quickly. Their schtick is all about taking frequent small steps in the right direction, as opposed to betting the farm on the annual Superbowl ad. Creating a constant stream of “Social Objects”. We take a similar approach at Stormhoek [We’re a small wine company, frankly, so we have no other choice]. Different branding ideas, different cartoon label ideas, different sponsorship and PR ideas. On one level it’s a highly unpredictable way to go about it. On another level, it’s amazing how certain we are that SOMETHING good comes out of it eventually.

6. Eighty per cent of vineyards in the world do not make a profit. Eighty. Per. Cent. Other fun stats: There are 50 countries in the world that have wine industries. Italy alone has 500,000 vineyards. Sicily has ten times the vineyards as Napa Valley. Conclusion: The competition is off the scale. Besides making good wine [obviously], the only way forward is to somehow figure out, by any means necessary, how to rise above the clutter. The only way to do this is to speak to people in a way our industry has never spoken to them before.

7. I am not a wine expert. I am not a wine snob. I am not a wine bore. I am not even a wine geek. When I think of the business I’m in, I do not think of the vineyards, the lifestyle porn that’s famously attached to the industry, the “hummingbirds gathering nectar in the morning dew” palaver. My thoughts are more prosaic. I think about a person pushing a shopping cart through a supermarket, a teacher or a nurse, perhaps, who’s there buying food because she’s cooking spaghetti for her boyfriend that evening, who just wants a good bottle of wine for under ten dollars to go with it. Her needs, as simple and basic as they are, interest me FAR MORE than satisfying the vast sea of social pretentions that lives inside the wine trade.

8. Not everybody inside the trade will “get” the Smarter Wine idea. In marketing terms, it not that big a deal. As Oscar Wilde once quipped, “A man cannot be too careful in the choice of his enemies.”

[This was originally posted on my personal blog, gapingvoid.]

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BOGOF (Buy One Get One Free) is the UK wine industry’s drug of choice these days. The promotional mechanics take various half-price forms, but they revolve around wines sold briefly at prices like 7.99, then “promoted” at what cynics would call their “real” price, of 3.99.

The question that nobody seems to be asking is: Do half-priced features violate the trust of the consumer? Does it undermine the market for premium wine? How is the producer and retailer trade going to end a practice that moves so much volume on what many would consider to be a less than objective practice?

A MAJOR retailer this week was promoting Fetzer, barrel select California Cabernet at £3.99 (regular price £7.99) with a screw cap closure. It was a deal so good that I had to buy a couple. I got it home and unscrewed the cap. The wine was, shall we say, a very nice bottle of 3.99 wine. A fair deal for the price I paid.

But, there was a nagging feeling inside me about this wine. I tasted it again, could I believe given Fetzer’s amazing winemaking prowess (they’re a subsidiary of Brown Forman) , that this is a wine that the winery and retailer would have sold at £7.99. Well, the answer is, probably not. More to the point, would a consumer buy the wine at £7.99?

I went to Fetzer’s website, and looked at their positioning for the brand:

At the end of the 1800s, Valley Oaks was a center of livestock production in Northern California. The land was ideally suited for grape production and in 1984, Fetzer took over Valley Oaks to help it realize its full potential. It was then that we committed ourselves to a new winemaking philosophy. A philosophy grounded in a sense of responsibility to the land, our community and our customers.

As you explore, we hope you get a sense of what life at Valley Oaks is like and feel inspired to pay us a visit.

It was all about “place”, history, quality. The sorts of things that make me think, Gosh, this is a winery that is passionate about what they do. There is a lot of very specific information on the site about their commitments to using recyclable materials, import and treatment of cork in the US, etc etc.

I then went back to the wine and took a closer look and saw that the wine was shipped in bulk and bottled in the UK. A practice that seemed rather inconsistent with many of the messages in the site.

Well, Stormhoek are big fans of non-source bottling, although we do not currently do it. There are many, many, good reasons to do it: Cost savings, Better supply chain and packaging, there are people in our business who believe that we could keep our wine fresher if it was bottled closer to the market. However, if your brand message is all about a sense of place and history and promises are being made about the packaging used and its provenance, is non-source bottling a consistent message? I will let you judge for yourself.

Fundamentally, if the industry is going to build brands, then the brands need to be true to their stated objectives and keep the promises that they make to the consumer. If the industry is going to build sales at higher price points, then a good way to do it is to sell wine that is legitimately worth £7.99 at £3.99. I am afraid that the message that is being perpetrated now is: There is NO reason to spend £7.99 on a bottle of wine, because it doesn’t taste any better than a £3.99 bottle.

BOGOF is a drug. Like all intoxicants, too much gets poisonous.

[PS:] A couple of days later, On a visit to another BIG retailer, there was Fetzer Sundial Chardonay and Cabernet on sale. Same mechanic, oddly Cabernet “half priced” at 8.49 down to 3.99 and Chardonnay at 7.99, down to 3.99. California, natural cork filled, I didn’t buy the wine, but it looked like the “normal” stuff i.e like it was acutally bottled at source. I think this retailer has more Christmas cheer in their offer.