Vineyard and Winery Management Article.

By Thea Dwelle

VinTank chief strategy officer uses technology to connect wineries with customers aul Mabray grew up among Napa Valley’s vineyards and graduated from Napa’s Vintage High School. He went on to earn his bachelor’s degree in English and film at San Francisco State University before plunging into the wine and spirits industry. He’s been involved with the business for more than 15 years, including a stint at Niebaum-Coppola, before founding Inertia Beverage Group (IBG) in 2002. His primary goal in founding IBG was to bridge

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the gap between wineries and their customers – something he continues to strive for at VinTank. As the company’s chief strategy officer, Mabray drives the vision for the company. His primary purpose is to “make wine online work. Period.” I sat down with Mabray to discuss what’s happening with VinTank, as well as the importance of technology in today’s wine industry. As one of the longest-standing champions of technology in wine, Mabray has unique insights to share on this topic.

Vineyard & Winery Management (V&WM): How did you make the leap from English and film studies to the beverage industry? Paul Mabray (PM): My first job was working for John Wright, who founded Domaine Chandon. While I was in college, John made me vice president of Napa Ale Works, his micro-brewery. I found that I had a particular acumen for sales during that time. I really made the leap into the wine industry when I was finishing film school. I had the opportunity to work for NiebaumW W W. V W M - O N L I N E . C O M

Coppola, which was a perfect blend of film and wine. Eventually, I left film and continued down the wine path. After Coppola, I went in startup mode with Wineshopper.com. V&WM: What appealed to you about a startup environment? PM: There is a lot of creativity that you have to do in a startup. You have to think out of the box, and manage constant and fastmoving change, while always thinking ahead. I found my training as a director in film school was really about managing chaos; that is W W W. V W M-ONLINE.COM

what startups and entrepreneurial life have been for me for the last 15 years. V&WM: After your success with IBG, what brought you to VinTank? PM: It was a couple of things. I felt that I hadn’t achieved my goal at IBG, which was solving the wine industry’s problems through digital. The wine industry was challenged because (its members) were, and are, unable to touch their customers every day. This was true for wineries, retailers and the distributors. I knew I could do better and I worked very hard to make that happen with VinTank. After leaving IBG, I wasn’t sure what direction I wanted to go in. I had a lot of CEO positions offered to me in technology, as well as some general manager positions at wineries, but I wasn’t sure that I wanted to do either of these. My decision to go to VinTank in 2008 really came out of my surveying my network. I went to my most trusted mentors and asked them what I should do next. Every one of them said that I was the guy that brings the future to today, and that they expected me to continue with that path. With that backing, and the promise of my first few clients, I made the jump. V&WM: What does VinTank do? PM: When I started VinTank, it was a digital think tank. We focused on the problems we had to solve, and how to figure them out. What VinTank did and what VinTank does are very different things. What we are now has evolved to be the digital answering machine for

social media. We collect every conversation about a winery, wine, and related to wine, and present them to wineries on a unified platform. We do social listening, social media management and social CRM (Customer Relationship Management). We are the social platform for the wine industry. V&WM: What is social listening? PM: We listen to the entire category of wine on the Internet. With Social Connect, we listen to over 40,000 keywords about wine, their misspellings, their synonyms and their abbreviations. We collect this data and present it to wineries. What makes us unique is that we listen to every single conversation from the category, and analyze over 300 million conversations. That gives us a rich perspective on what the customer looks like based on what they are talking about. It’s not something that any of the other (social CRM) platforms can do. We don’t want to narrow our focus; we listen to everything, and allow the customer to choose what information to pull from – whether it’s about their brand, their competitor, varietal, region, sub-region, brand, vineyard designation, etc. By listening to all the conversations about the customer, we can start understanding who they are by what they say. V&WM: You have quite a history as a revolutionary in wine technology. Why do you think technology is so important in today’s wine industry? PM: People ask me this question a lot. The reality is that we live in

PAUL MABRAY’S RESUME  Birthplace: Tacoma, Wash. Moved to Napa in 1982  Education: B.A. in English and film, San Francisco State University  Current Position: Chief Strategy Officer, VinTank  Previous Experience: Project manager, Niebaum-Coppola. Senior director of trade development, Wineshopper.com. Founder, Inertia Beverage Group.  Personal: Proud father of Finn, India and Dryden, and partner of Angelica. He’s a voracious reader, and loves to play Xbox in his spare time.

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a digital world. We can’t get away from it. We are on our computers six to eight hours a day, and we’re constantly connected via smartphones. If we don’t start leveraging these tools, we will suffer digital Darwinism. (Digital Darwinism, as defined by American industry analyst Brian Solis, is “the evolution of consumer behavior when society and technology evolve faster than our ability to adapt”.) This is the way today’s consumers work, and they are going to work more like that tomorrow. This is true for every business, every customer, partners and press. If we leverage them to the maximum capacity, it will make us more efficient. V&WM: What do think the stumbling blocks are for these changes to be made? Why are people in the wine industry so afraid to make that change?

PM: There are a couple of reasons. Primarily, we are a manufacturing industry that has been trained for over 70 years how to sell to the wholesaler tier. When we sell to the consumer tier, it’s a hospitality function. Until recently, we were legally bound to do business the same way as we always have. Only in the last seven years, since 2005’s Granholm decision (allowing wineries to ship directly to consumers across state lines), has the real thinking started to change. We also suffer in this industry from being spoiled. Until the recession, it was easy to sell wine, with almost every wine region in California having incredible tourism traffic. Had the recession not occurred, we would probably still be thinking the same way. It forced us to think differently about selling wine because we had to.

We’re also still working from a playbook written (by Robert Mondavi) in the 1970s. The rules of the game have changed, and the old rule book didn’t take into account the different pieces now in play: the diminishment of wholesalers; the increase of competition; the creation of digital tools. None of these existed when that book was written, and yet it’s still the industry bible. The wine industry changes slower than any other business. We are hyper-focused on new customer acquisition, which makes us ignorant about the second customer sale because it doesn’t matter. Next week we’ll have a new customer in the tasting room. This creates a critical focus on the hospitality aspect. V&WM: You talk a lot about the 5th column. What it is and why is it important?

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PM: The 5th column, as it pertains to the wine business, was defined by Rob McMillan of Silicon Valley Bank. It’s comprised of all of the wine tech companies that focus on operationalizing or actualizing sales and marketing for the wine industry. These are companies that help with fulfillment, compliance, e-commerce, social media, or companies that actually sell the wine. V&WM: Where do you see wine and technology going in 2013? PM: There are a lot of things happening. The last year or so have seen a lot of changes in the 5th column. I foresee consolidation in this area; companies need to merge to produce a better value proposition. Otherwise, there just isn’t enough revenue. There will be maturation in the wine e-commerce companies as these platforms develop and adapt. It’s going to be an interest-

ing time for the wine service companies. Either the industry matures this year, or it suffers from not supporting the wine tech companies and delay their own success. V&WM: If you could give a wine business some words of wisdom on technology, what would you tell it? PM: Invest in the segment, with both people and dollars. Companies could succeed much more effectively if they just invested a few dollars in the right resources. We simply don’t pay well in this industry; we don’t pay well for technology, we don’t pay well for our talent. Wine industry members, like consumers, are wired people. They know that the digital market exists, whether they understand it or not. Ignoring it is like putting your head in the sand like an ostrich, resulting in digital Darwinism. We live in a Google economy. It’s evolve or die.

It’s a digital world; if you don’t have a digital presence, you will be left behind. V&WM: What’s next for VinTank? PM: We’re trying to lead the path in social media and we’re 110% focused on it. We believe CRM is the ROI (return on investment) proof point for everything. If you can connect social to the customer, in the right context, you’ll be able to demonstrate ROI successfully. We’re trying to follow the psychology of the hospitality focus. If we can deliver social in a tasting room environment, wineries will start to see the ROI more immediately. One of the main reasons our software platform is free, at the lowest level, is so we can show wineries the importance of social media until it gains momentum and they can understand it better. We have great things in store for Social Connect. We want to bring social context to commerce. This requires looking at the customer through a different lens, and we are constantly trying to impress this on our customers.  Thea Dwelle is the creator and editor of the wine blog, “Luscious Lushes,” which covers wine travel, wine business and technology. As a CRM implementation consultant, she recognizes the need to adapt solutions to business in an everchanging digital environment. Comments? Please e-mail us at [email protected].

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