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Are Wine Groups Worth the Money?

I am genuinely curious about the Paso Robles Wine Country Alliance and other wine groups like them. I’m noticing some wineries leaving the PRWCA and it got me thinking. Are they leaving because they cannot afford it? Are they leaving because they personally do not feel they are benefiting?

When the curiosity came up I did some Googling to try to get more info and ran across this blog post from Tablas Creek Vineyard.

My thought is this; some wineries are going to feel like it’s completely worth it while a few won’t. Based on what I know membership dues are based on production so the smaller wineries may feel more benefit than the bigger ones?

Again, I am genuinely curious. I don’t have anything against anyone that wants in or wants out. I assume it has a lot to do with the business model of the individual winery as well as their personal feelings on whether they are getting some tangible thing back from ‘paying into the pot’.

What are your thoughts?

 

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16 Comments

  1. Hi guys,

    Thanks for posting the link, and for thinking about the question, which is an important one. I’ll address the details in part 2 of the piece you link to, which I hope to have finished next week, but I think that the answer is a conclusive yes. Most wineries know (or should know) what an average customer who walks through their doors is worth to them. This will vary from winery to winery, depending on the winery’s average sale, the percentage of the people who come in who sign up for a wine club, the average lifetime value of a wine club member, and its profit margin. For us, that figure is about $130. We’re one of the larger wineries in our area, so we pay a relatively high total in dues, but even at our size, it only takes about 130 customers to cover the cost of our membership. Is just being on the regional map is enough to bring an extra 11 customers a month into our tasting room? We average 2500 visitors per month, so 11 is four tenths of one percent of our traffic. That’s a no-brainer. And there are significant added benefits of supporting the direct marketing outreach that brings more people overall into the area (I talk about this a lot in the blog piece you link to), plus the value of the 2-5 news stories we end up in thanks to the PRWCA’s outreach, and the benefits from their trade tours, being in the social media and on their Web site, etc., etc.

    So, to my mind, it’s easily worth it. Now it’s just a question of convincing everyone else!

    Thanks again,
    -Jason

    • Jason, I always appreciate your view because it’s well thought out and well delivered. I have talked with a few wineries and winemakers that are members as well as some that are not and all be it a small number, some don’t feel PRWCA is including them in what they feel are obvious stories to be included in, etc. I know you can’t please all the people all the time so you are bound to have some unhappy campers. I look forward to your second part to the blog post.

      • Thanks, Matt. I think that wineries of different sizes see value in different ways. For a small winery (say, one that’s paying $2000 per year in dues) they have the same dot on the map, and might only need one or two extra people per month coming into their tasting room to pay for the membership. That’s a very flat benefit, where wineries of whatever size (and whatever dues they pay) get the same benefit.

        But there are some benefits (say, the trade outreach) that do mostly benefit larger wineries, because they’re the ones that have wine in wholesale that restaurants and retailers can buy. This has always seemed to me an appropriate reason for the larger wineries to pay more.

        Then there’s media. I know that the PRWCA does everything they can to share this fairly, but a lot of what they’re doing is helping coordinate itineraries that satisfy what the media people are looking to see. The media does tend to ask to see a subset of the membership, and while the group can and does flex that to bring more wineries in, it’s an incremental process.

        Finally, I’d suggest that wineries who feel that they’re not getting the exposure they’d like get involved in one of the many committees that help the PRWCA set and execute its mission. The squeaky wheel does indeed get the grease more often!

        • Great points, Jason. I agree with you mostly. I still go back to the idea that as one organization you cannot please everyone. The flip side is that if a winery thinks they can do better with the money they would normally pay into a wine group, good for them. I don’t have an issue with any winery that chooses to be involved or not. I do admit from a wine consumer point of view, it’s hard to find all the wineries unless they are on the map.

  2. Jennifer Porter

    Matt, I’m happy to satisfy your curiosity by meeting and showing you exactly with the PRWCA delivers for our 450+ members. I am incredibly proud of the accomplishments of the organization and our members in promoting this amazing wine region. Let me know when your free!

    • Jennifer, I’m always down to chat. I’m typically free weekends and evenings after 4:15pm. This whole work from home parenting thing soaks up much of my weekdays. If those times don’t work I can try to figure a babysitter for a couple of hours.

      • Jennifer Porter

        How about 4:30P next Monday or Tuesday? We have Bloggers Conference Pre-Excursion coming on Wednesday, so if that doesn’t work, we can shoot for the week of July 14.

        I am happy to show you our spreadsheet on how we track all member activity and inclusion in media tours— we do our best to be fair to all members and share the love. Happy for other suggestions though, since I do aim to make everyone happy! :-)

  3. Jeanette Mayfield

    At one time, we had a restaurant, we were partners In a winery, and we grew 300+ acres of grapes for a dozen wineries in the area. We did not join the group because there was no way to afford the costs it would take to be a winery, a grower, And a restaurant in Paso, with the group. The structure fits some folks, but not others. The financial return didn’t make sense. I don’t know where things stand now, but it was never a good investment for us.

  4. Too many people think the job of the PRWCA is to get people into winery tasting rooms. I have always felt it was the PRWCA’s job to get people into Paso, and it was my job to get them into my tasting room. Jason’s numbers are right on, and it doesn’t take but a few customers to pay for PRWCA memberships. I just want to get people here. If they come to go to Tablas Creek, or Tobin James, or Grey Wolf. Thats fine. They may buy a case at those wineries, but I’m going to sell them a couple of bottles, and on their next visit I may sell them a case. Dues in PRWCA is the cheapest investment a winery can make in direct to consumer sales in my opinion. The only reason I can think of for a winery to not belong to the PRWCA is if that winery doesn’t have a tasting room.

    • Gary, that’s a good point as far as the PRWCA being tasked with getting people to Paso and not necessarily into a tasting room. I guess much of the debate is based on expectation. The expectation of the individual winery specifically. I’ve had a few tell me that they feel they were looked over on specific things/ projects with PRWCA that fit right in with the personality or character of that particular winery. Generally speaking I think membership into a group like this is great but as I’ve said before, you can’t please everyone.

  5. Hey guys, I’ve published the second part of my blog series, focused directly on evaluating the benefits of membership.

    http://tablascreek.typepad.com/tablas/2014/07/game-theory-the-prisoners-dilemma-and-winery-membership-organizations-part-2-measuring-the-value-of-.html

    Note that providing a return on the investment in membership is only part of it. Equally important to the success of a membership organization is communicating the power of these benefits to its membership, and making sure that personal stuff (people feeling that they don’t get their fair share of the benefits) is handled productively so that everyone stays and can be in a position to pull together.

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