Ep. 1964 Barbara Fitzgerald | Masterclass US Wine Market With Juliana Colangelo

The Italian wine podcast is the community driven platform for Italian winegeeks around the world. Support the show by donating at italian wine podcast dot com. Donate five or more Euros, and we'll send you a copy of our latest book, my Italian Great Geek journal. Absolutely free. To get your free copy of my Italian GreatGeek journal, click support us at italian wine podcast dot com, or wherever you get your pots. Welcome to Masterclass US Market with me, Juliana Colangelo. This show has been designed to demystify the US market for Italian wineries through interviews of experts in sales and distribution, social media, communications, and so much more. We will quiz each of our esteemed guests at the end of each episode to solidify the lessons that we've learned. To sharpen your principles, get out your notebooks, and join us each week to learn more about the US market. Hello. Welcome to Masterclass US Y market. Today, I am thrilled to welcome Barbara Fitzgerald to the Italian wine podcast. Barbara is a direct to consumer marketing expert with nearly two decades of experience in the wine industry. She's also a fellow Italian wine ambassador, entrepreneur, and leader of Apprilec Creative Consulting, a wine marketing agency that excels in developing omnichannel marketing strategies. In addition to this together with her husband, Barbara also owns and operates a boutique wine production company and a small import company specializing in bringing Italian wines to the US market. Welcome to the show, Barbara. It's okay to have you here. Thank you. I'm so excited to be here. And thank you for being a listener of the podcast. It's always great to hear feedback and on the show. So I appreciate that as well and being such an engaged member of the Italian wine ambassador community. Really, I have to thank you for having me here because I am such a religious listener of the podcast. It's such a fantastic way to keep these kind of strategic global wine conversations going, and I've learned so much from you and your guests. So thank you. Oh, I'll just hang that. Absolutely. Well, we're gonna learn a lot from you today about direct to consumer and the opportunity for Italian wine in that industry, but Before we dive in, Barbara, tell us a little bit more about your background and how you came to work in so many facets of the wine industry. Yeah. So my own journey in the wine industry is really rooted in my family's rich history. So I was born and raised in San Francisco, and I come from a family that is really among the the pioneers of the California wine industry. It was my great grandfather, Nelo, pellegrini, and his brother, Luigi, who immigrated to the Bay Area from Luca. After the first World War and they became great distributors. So, obviously, this time period coincided with prohibition, but I think one thing people often forget is that it wasn't the production of alcohol that was illegal but the sale of it. So you were still allowed to produce I think it was, like, two hundred gallons for personal consumptions. So my relatives And for religious. Right? As well, a lot. A lot of people got got through it that way. Twenty enough, like, during that time period church attendance really spiked, which Wow. That's a nice one. Yeah. That's that's probably wasn't a coincidence. Yeah. But my so my relatives established a really, thriving business in which they bought, sold, and traded Sonoma County Grape and distributed them across the country. And then once prohibition was repealed, they immediately became a bonded winery. And for people that don't know in California, you know, your bond licenses, they're dispersed in sequential order. My husband started a winery in two thousand eight. His bond is twenty four thousand zero ninety two, but in nineteen thirty three, my family, became bond number four. Number four, wow. It's really, that's kinda long. Yeah. So, really, one of the first ones. That's pretty amazing. And then they established a production facility, and they developed an import and distribution company, which by the nineteen seventies became one of the largest independent distributors in the country, In the late nineteen sixties, my grandfather purchased our first vineyards in Russian River in Sonoma County implanted what would become some of the oldest pinot noir vines in the area. There's some debate as to whether they were the second or third plantings, but definitely, again, among the first. And, yeah, so kind of this really exciting, this really passionate thing that has been an important part of my family for for so long. So aside from the wine, they also we've remained so deeply connected to our Italian roots, you know, we spoke a considerable amount, Italian at home. We would spend a considerable amount of time in Italy. We only cooked Italian food. We attended Italian cultural events. So, like, these two things together are such a core part of my my wine my identity period and and really the wine industry is in my DNA. After I went to CRQs in New York and after I graduated, I actually thought entering the wine industry because I was like, no, I'm gonna march my own drummer. Right. Really the call was too strong. And eventually, I realized this is where it was meant to be. So I worked for my family for a couple years and then eventually branched out to other wineries around the state, always involved in DTC marketing and working my way up to senior executive goals. And my career and the strategy of DTC has really been invaluable because, you know, DTC is really kind of the lifeblood of small US wineries, even if it represents a small percentage of total sales, but there's so many small wineries out there that it really matters. Right. Of course. And I think that now that you're bringing this strategy to Italian Winers, it's really exciting to see in such a competitive market in so many ways. Right? How can Italian is also engaged in this in this strategy. So, you know, on that note, our three key takeaways for today's episode and what we're really excited to learn from you, Barbara, our number one, what is the current business when it comes to direct to consumer in Italy right now? What does it look like? But number two, how does direct to consumer as a sales channel align with current consumer attitudes, trends, values? And finally, what does it mean for a winery to create direct to consumer channels? There's so much tourism right in Italy right now. How do they kinda link, you know, tourism with a strategy? So, you know, for starters, I love to start with definitions and and just getting yourself centered where we are. What does the current DTC market look like right now for Italian wine? Yeah. Well, I love your comment about definitions because we have to, I think, really define what DTC is because it's not one thing. A dictionary definition, it's the selling of your wine directly to a customer without going through a distributor and or an intermediary. But there are multiple ways to do that. So definitely, you know, tourism, wine tourism is is the number one way that's happening in Italy right now. There's also e commerce, you know, direct orders over the phone or through email. Events, wine clubs, subscription models, things like that. And so then to answer your question of how if DTC looks for Italian wineries in a word, incredible. Wine tourism is is really growing at an astonishing rate in Italy. It has an economic impact of about two point five billion euros. And we have now a lot of data to track this growth, thanks to, the work of a data management and marketing software company called WineSuite. So they aggregate data from their from their own anonymized customers and compare that to national and international studies. So we get a really clear picture every year. They publish a a DTC Italian DTC winery impact report, and they share it for free. So what what a viable school this is for so many. But in twenty twenty three, it was nearly seventy percent of the wineries solved between one hundred and two thousand visitors and about sixty percent of the booking. So the reservations were for two people And the average cost of that booking was about a hundred and nine euros, which is up eighteen percent from twenty twenty two. And that's usually paid upfront. And that is just for the cost of the experience. Wow. So now we add on to that, the fact that seventy six point five percent of people buy wine at the end of their visit, and their average order is about a hundred and forty euros, which is also up nearly twenty percent from twenty twenty two. Wow. And then, you know, think too that nearly forty what they discovered, forty four percent of the bookings are made by people ages twenty five to thirty four. So in an industry that is constantly asking how we can be better connected to the younger demographics, this is like a no brainer. Well, that's pretty incredible. Those numbers, Barbara, that you shared, you know, up twenty percent from the previous years and and just in recent, the recent years, the dollar amounts that people are spending not just on the experience. On the wine that they're taking home. And then as you said, the age and the demographics, twenty five to thirty four, that that sweet spot that we feel like we're really we are missing in the US in terms of consumption. So I wonder how do we take advantage of all those all that success we're seeing at the wineries themselves and translate that to more engaged consumers here in the US. Yeah. Well, you know, the US really went through the same the same growth spurt with DTC, like, really, you know, late nineties, early two thousands. We're seeing the same same growth trends that we had back here then, and that's what's happening in Italy now because this is such a new dynamic for them. I mean, years ago, If you went to a winery in Italy, you were lucky to find somebody to even answer the door. I don't to let you taste wine. So Right. The where Italy is positioned is great because they can learn from us and from here us here in the US and what has worked really well and what hasn't worked well. And also, they're they're they are now coming into this growth at a time where there's just a lot more resources to make this happen successfully, you know, the the the internet and technology and all of that is really helping But, yeah, so speaking more of the potential for Italian wineries, I like to distill it down. So, like, they gave a lot of, you know, specific stats, but I really wanted distill it down to just simple numbers. So for a winery that produces about sixty thousand bottles a year, If they were able to shift just selling five percent of their production direct to consumer, they would increase overall profit margin by about twenty five percent, which is heat. Wow. So, okay. So just I like to repeat. Impressive numbers. Just sold five percent of their wine through direct to consumer channels. They would increase their profit margins, sit by twenty percent. Twenty five. Twenty five, even better. And if you thought that was impressive, then a winery of the same size sixty thousand bottles. If they could ship to selling twenty percent of their production direct to consumer, they can increase their overall profit margin by nearly one hundred percent. Wow. That's pretty incredible. So, obviously, clearly, there's a lot of financial gain when it comes to direct to consumer. But, Barbara, let's talk a little bit about the the why around the direct to consumer. Why right now is it such a big opportunity in the way that it connects with consumer values. Talk to us a little bit about that. Definitely. And I I will get to the consumer values in just a moment, but I wanna point out one of the most common phrases I hear from my clients in Italy is that They say, and I send my wine, you know, to a distributor, and I just don't know where it's going, and I don't know how they're talking about it, and things like that. So I'm like, this is your answer. This is you telling the story yourself, messaging it exactly how you want, you know, giving you back some of that control that maybe they feel like they haven't had as as much of. In that direct relationship with the consumer, right, giving you the way to own that relationship directly. And still, like, we're I'm not advocating here for doing away with distribution. That, like we said, that is where, like, the bulk of the exchange and the brand recognition and everything happens, but there's DTC is just different and a different opportunity. So I think I can all identify three really key areas that fit with the current market trends consumer preferences. And number one is that consumers are increasingly experientially driven. So they want authentic and transparent experiences that make them feel like part of the story. And what is more authentic than visiting an Italian winery that often has centuries of history and heritage, you know? So and this is especially true when we're talking about the high end wine consumers. So those that regularly purchase bottles over twenty dollars. In recent wine market council research, they did some psychographics of this consumer, and they identified that sixty percent of the respondents, had a gateway experience that in wine that influence their decision to either start or increasing the purchase of of wines over twenty dollars. And that seventy five percent of them believe that traveling to visit wines is the best way to discover new wines. So by traveling and having experiences directly at wineries, doing wine tastings at actually has inspired them to increase the dollar amounts they're spending on a bottle, average bottle line. Yeah. And increase their engagement with the product overall. So it's it's increasing the role of line in their lives. Very cool. So when we think about, you know, and use the phrase on ramp or gateway a lot in the wine industry and how do we Yeah. Onboard new new consumers, it seems like, you know, tasting rooms and and wine tourism is such a huge opportunity for us to really, as a whole industry, have more engaged consumers in the US. So for all of our Italian wineries listening, but, you know, Portugal, Spain, etcetera. I mean, I know there's been tremendous pushes in tourism to all those countries and getting the wine tourism to really keep up and keep pace, but the overall increases in tourism seems like a no brainer in terms of the value and opportunity that it can provide. Absolutely. I mean, we're seeing record numbers of travelers from everywhere. I mean, I wanna I wanna drill down to that. Yes. Record numbers of Americans are traveling to Europe right now. But direct to consumer for Italian and like you said, maybe Spanish or Portuguese or French wineries, It's not about only American consumer basis, but interestingly enough about two thirds of winery visitors in Italy are actually Italian, and only about one in ten come from the US. And an really bright for them too, about twenty percent of the visitors are European borders. And this is a really high particularly high potential visitor because they often travel by car and tend to purchase large quantities of wine much higher than average because they're just like stocking, you know, stocking everything that can fit in the back of the car. Yeah. Oh, that's interesting. So obviously, there's a lot of domestic opportunity in addition to to the US market. Obviously, like, title of this show is That's our customers in my market. So I'm always focused on the US, but I think really important call out Barbara there on, like, the domestic sales opportunity too. So back to your question about consumer preferences, the next one that this really aligns with is they're the consumer lean into wellness and and socially conscious brands. Because sustainability is a really important value for our consumers, and they're really considering environmental and social impacts when developing relationships with a brand, and many Italian wineries have incredibly sustainable farming and winery practices. And the key is to just understand you as winery, your environmental impact, and, you know, how you're mitigating carbon footprint, things like that, and really clearly communicate it to your consumers. Because so many of them are are already, you know, still doing things by hand or have wineries that are very green and are capturing water or capturing solar powered and things like that. The consumer wants wants to know. So they also just like want this authentic experience in contact with nature and I'm sure you know too, Julian. I certainly know the feeling of being in a vineyard that someone's family has been tending to for generations and how connected that makes you feel to the natural aspect of line and and how much you feel to kind of care for the land through the year. Oh, absolutely. So, yeah, so all those things, you know, the the experiential focus, the sustainability experience, and interests, and and sustainably made products, you know, all of those values can play into how a winery can connect with a consumer directly by engaging more with these direct to consumer channels. So let's talk next a little bit about the how, like, how I'm, you know, I'm that Italian winery selling sixty thousand bottles or producing sixty thousand bottles, and I wanna increase my margins and sell more of my wine directly. How do I do that? So a very it's a very long answer. So I'll keep you the short of it because I could spend hours on this. That's what Well, you know, make something on a different way. We've got time. So, really, there's there's no one size fits all, and that is kind of the challenge maybe with people coming to understand DTC but I think that's also the benefit of it is you get to mold it to fit your winery exactly. But the first thing when, you know, how can a time winery create a DTC channel? The first piece they need is technology. Because this DTC distills your customer down to the level of one. And if you think back to what I said earlier, about seventy percent of winery is seeing between a hundred and two thousand visitors, you can't maintain a personal relationship with two thousand people. And keep up with all your other responsibilities. So technology like customer relationship management software is really essential. And the beauty too of DTC is it's not a one and done interaction. Right? Your goal here is to build a relationship human to human that, you know, in some cases in the US, we've seen last twenty, thirty years. So we really need an efficient way to manage all of this. And so that's just in terms of, like, keeping, you know, understanding who, Luigi is and and who Alice and all these things, but then beyond that. Right. The ability to for people to book experiences online is huge because nobody wants, you know, today, nobody wants to go back and forth in an email or on the phone to organize an experience. So with the proper technology, they can book directly online, they can get their confirmation online, they can get a reminder online, they can get directions to the winery online, you know, and also pay for the experience online. So you as the winery realize that revenue right away. It's just a smoother process for for everyone and simplify for the winery too. So freeze your time up to focus more on the interaction as opposed to kind of the mechanics of it. Italian wine podcast, part of the mama jumbo shrimp family. So step one is really getting tech savvy. And if you don't have someone already on your team that can set up a a CRM, a customer service, platform, as well as set up e commerce and booking systems, and that definitely sounds like a consultant that you might need to hire. So Yes. Absolutely. But also, like, what the companies that you work with to do this, so I mentioned earlier wine suite or wine around or Divinaia. These are all Italian companies. They also, their team will spend a lot of time onboarding you and guiding you through the process because, you know, your success is their success. So this is really, like, a group effort and and, you don't you don't have to you don't have to be I guess you have to to be feel comfortable enough using, you know, a computer and the features of it, but you definitely don't have to, like, know how to code something or anything, anything like that. Okay. That's helpful to hear. Yeah. Great. So that's the tech and step one. And then now, like, you know, let's think about the different channels and and how you can think about projecting what your potential revenue streams might be. Yeah. With the potential channels too, I'll say, you know, when somebody is building this from the ground up, what I always recommend to my clients is just start with one maybe two channels. So just start with you know, you know, tourism and and maybe e commerce because sometimes they feel like, you know, doing this poorly is almost worse than not doing it at all. So you wanna make sure that you have the the bandwidth to get to know really well The this so if you're if you're doing, you know, tourism, like, you wanna get to know the ins and outs of how it works best for your winery really well. And this comes to actually hosting the guests, but it also comes to all the stuff behind the scenes of like What times are you offering appointments? How many people can be in each appointment? How much staff do you have on each day? You know, all of those things is like you wanna spend all of your time in that strategy. All of your attention rather focusing on that strategy. So you get really good at it. And then it kind of runs a little bit more smoothly, almost self sustaining, you know, with regular check-in and and watering, but the seed really starts to grow. So but the second really is kind of important thing for wineries to be able to do DTC well is to start, capturing data. And this is really made possible at really detailed levels by technology. Though, you know, back in my early days in California before this technology existed, it was like, yes, customer data was just a giant spreadsheet that you you filled in. And so if, you know, there are other you can do it that way too, but you can't have a profound personal connection with someone if all you know is their name and their email. You can be capturing data on their wine preferences or their preferences outside of wine even, you know, like imagine knowing that a customer has a passion for hiking or cycling, and now you can invite them to explore your territory on foot or on bike and create a unique opportunity for them to indulge in their favorite pastimes while strengthening the bond with your brand. Right. I love that. Yeah. Really kind of going deeper in on those connections that you're you're building with a customer. And you're demonstrating to them that you're committed to understanding and also celebrating their passions and their desire, you know, their their wants. And then a third piece that I'd really like to emphasize too which goes beyond, I guess, just single winery is really to build a community with other wineries in your area because most people that want to engage in wine tourism will likely visit more than one winery in that area. Right. And if you can band together with your community, you create a stronger draw first for wine tourism to come to your wine tourists, excuse me, to come to your area, and maybe even create some kind of shared marketing campaign that really encourages visitation to your area. But also this cultivation of strong relationships with with the other wineries around you is is allows for an exchange of ideas and insights and it just helps everyone's growth and learning. And a guest who can feel this kind of spirit of camaraderie because and they'll feel the, you know, the passion and the commitment that binds a community together. And that goes back to kind of the that social sustainability piece. You know, they want they want to feel the kind of aspirational qualities of heritage and what has kept, you know, local culture together for so long. Right. So also looking beyond your own backyard, but to your neighbors as well to come together to make really unique experiences. And to create, you know, recognition of a region, like in Sicily. Right? For example, and, like, you know, the the sales of Sicilia wines are doing well in the US market. So you can see some success stories and how how it can work. Well, Barbara, we've learned so much today from you about direct to consumer, and I love all the facts and numbers you gave to to really highlight for us where the opportunities lie, how successful these strategies can be in terms of your bottom line. But as we wind down, as always, we'll do our rapid fire quiz. So if you can do your best to answer these questions in just a couple sentences, that would be great. So question number one, what is your number one tip for mastering the US wine market? I would say that mastery is in the pursuit, so never stop learning. Listen to podcasts like this one or read data analyses, attend mass or classes, network with your colleagues, but just be a sponge. I love that. Great advice. Number two, what is something you might have told your younger professional self, and it sounds like you started pretty young on the wine industry. It's still about selling wine in the US. I would prioritize quality over quantity. So it's more fruitful to place your wines in front of the right audiences, even if that means fewer locations. Understanding demographics is key because at minimum, the US has fifty different markets, but we all know they're so much more diversity within each state too. So targeted engagement, I think, goes farther than broad reach. Very true. And I think what you're explaining to around DTC really speaks to that philosophy in so many ways. And then finally, I know you travel back and forth to Italy and, between Italy and California quite a bit. What's your favorite travel hack or one of your favorite travel hack? Okay. I'm sure some people will think I am nuts But the first thing I do when I arrive, if if I don't have a meeting to go to straightaway is I get to my hotel or my apartment or whatever, and I go for a run or a brisk walk, which, like I said, I know it sounds crazy, but After a long flight, it just gets blood pumping and endorphins flowing and my muscles moving again. And especially if I'm in a new neighborhood or a new city, it's really the best way for me to get my bearings and kinda understand the geography around me. I love that advice, and I try to do the same thing. I try right away. I think it's really important to help you get acclimated. Right? So that's great advice. Totally. Totally. Great. Well, Barbara, thank you so much for being here today in the podcast. It was so much fun to have you. How can our listeners follow along with you if they're not already? Yes. I've admittedly terrible at social media, but I do love to connect on LinkedIn so you can find me Barbara Fitzgerald. And please always send me an email. I love to connect with people. So my email is my first name Barbara at opry law, a p r I l a creative dot com. Okay. Fantastic. Thanks again for being here. Thank you so much. Thank you for joining me today. Stay tuned each week for new episodes of Master Class US wine market with me, Juliana Colangelo. I remember if you enjoyed today's show, hit the like and follow buttons wherever you get your podcasts.