Cutting out the middleman: can social media revive the luxury wine market?

Following Justin’s recent post on food and wine, I see that luxury wine producers are one of the casualties of the recession, according to the Wall Street Journal. In an article otherwise full of bad news, the paper mentions one success:

“Some of the newer operations are using new marketing techniques to cope. Alpha Omega, a boutique winery in Rutherford, Calif., has begun using online services Facebook and Twitter to reach out to its customers. The winery three years ago began targeting consumers directly, and the strategy is now paying off; revenue is up 40% so far this year, compared with a year ago, in part because it doesn’t have to share many revenues with a distributor, says co-owner Robin Baggett.”

It’s a tantalizing thought. Can something like the high-end wine market, with a long-established network of distributors and resellers, successfully sell directly to consumers? Are the sorts of people who drink expensive wine the same sorts of people who spend lots of time on social networking sites? Don’t these customers prefer the personal touch offered by a long-term relationship with a particular distributor?

It would be interesting to know how much of Alpha Omega’s increased revenue is down to cutting out middlemen costs and how much is down to improved sales. Blogger Dr Vino is a sceptic, arguing:

“I fail to see how the winery’s 296 friends on Facebook, 407 followers on Twitter and no blog can really help them move their wines…there must be some other secret sauce at Alpha Omega.”

The post has attracted some thoughtful comments, from social media fans and sceptics alike -  including one from an Alpha Omega winemaker. Whatever the firm’s secret ingredient, there must be many failing wine producers who would love to get their hands on it.

2 Responses to “Cutting out the middleman: can social media revive the luxury wine market?”

  1. George Rencontres Says:

    Actually is a great idea and it should be applied to other products as well!

  2. Eugene Relation Says:

    I am also one of the skeptics. The number of friends and followers is simply too low. I t is hard to believe that they converted all of them into customers. An increase of 40% could be related to the social media, but only if those 40% mean 10 bottles of vine… Nevertheless, I do think that it is a good strategy to address the customer directly and to cut of the reseller. Good for them!

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