Ep.705 Paul Caputo | Get US Market Ready With Italian Wine People

Thanks for tuning into my new show. Get US Market Ready with Italian wine people. I'm Steve Ray, author of the book how to get US Market Ready. And in my previous podcast, I shared some of the lessons I've learned from thirty years in the wine and spirits business helping brands enter and grow in the US market. This series will be dedicated to the personalities who have been working in the Italian wine sector in the US, their experiences, challenges, and personal stories. I'll uncover the roads that they walked shedding light on current trends, business strategies, and their unique brands. Hello. This is Steve Ray, and welcome to this week's edition of Get US Market Ready with Italian wine people. Today, I'm pleased to have as a guest Paul Caputo, who I met a couple of weeks ago in Verona. He was also a speaker at the wine to wine business forum. Paul, welcome to the show. Hi, Steve. Thanks for having me. Tell us a little bit about how you got here and how you got to, wine to wine that we came to meet you. Yeah. Sure. I I started importing Italian wines into the UK about fifteen years ago, you know, worked with reasonably prestigious brands, but ultimately I I enjoyed the the communication and the storytelling aspects of the wine business more than the the moving boxes and shifting units and I, you know, I gradually began to to write and judge generally pontificate on the on the industry as I searched to find my my place in it. And at some point in two thousand and nineteen, I did the the Via Ambassador course, took the opportunity to bring all that Italian wine information together and just see, you know, see what I knew when faced with an exam. So, yeah, that that was really how I got got here, and I I've been participating with Vin Italy projects and events ever since. I find that it It works quite well alongside my, my, my current project, which has been a random large database of producers wines, relations, all that kind of thing. That's really where I host the majority of my of my work. So that's vino random d u m dot com Yes. That's right. Selling to wine. It was kind of fun being able to travel and and not do things by Zoom. Didn't you think? Absolutely. It was great to put, real people to the, to the faces and voices I'd seen over my screen. Well, yeah. So you, you, your presentation, I thought was particularly interesting. And let me just say that for those of you who either couldn't make it or wanna hear the presentations, you can access them at wine to wine. That's wine, the number two, wine dot net forward slash registrasion. It's a z I o n e at the end. So your presentation was moderated by a a good friend of mine, Carlo Rossi chauvenet. I was pleased to see that. Kinda tell me how you thought it went and and what you think the reaction was, and then we'll get into the the specifics of what you're talking about. Yeah. Sure. Well, I think, you know, the presentation was, you know, it it it was a nine AM presentation after you know, a rather indulgent, night of wine and networking, but It's a better tree. That that's the way it seems to be in verona, you know, especially after so long without traveling. But I think what I what I tried to do was to bring together some some quite broad concepts, some of which I think are still largely unexplored in relation to the wine business. You know, and just pontificate and speculate really on how, you know, they may come to interact with with the wine business in the in the coming years. I think in some ways, it's quite quite a frustrating talk and topic because some of this stuff is quite abstract and still quite far away and and I think perhaps wineries and wine business people are sort of listening to it going, yeah, brought what can I need to That's all well and good? Right. So, you had started with the concept of fragmentation, and that that was kind of like the foundation for a lot of the things that you were gonna talk about. So kind of, start with that. Yeah. I mean, probably everybody who is operating on some sort of digital platform has probably noticed the way their own behavior on those platforms has changed, you know, the way in which they consume information, the speed in which they do it, you know, their attention spans when it comes to this kind of thing. And of course, anyone trying to market and sell on these platforms will. So I've noticed how how difficult it is to to really find you know, to find interaction, to find engagement. Obviously, if you're if you're a profile with a big audience already, then, you know, potentially that the snowball effect means you are, you know, maybe quite pleased with things. But if you haven't managed to achieve that, then it's it's really quite difficult. And the reason is audiences are increasingly fragmented, you know, the the sheer information overload and the the endless opportunities to engage with things that you find fun means that you know, people have very little time to to consume things that are not perfectly well pitched to them. So so so yeah, everything is increasingly fragmented and that makes things that makes it difficult to get get your message across? From from that perspective. How does that apply to the wine industry? Yeah. Well, I mean, I think if you look at the key key social media platforms, you look at Facebook, you look at Instagram, Twitter, I think many wine businesses, and and let's take production businesses, let's take wineries as an example. I I would suggest that many are starting to give up on Facebook and Twitter already, you know. Linkedin is maybe having a little bit of a resurgence, but you know, it's all about Instagram. It's and it's all about putting out pictures and reels and and and video. That's energy and effort is now increasingly concentrated just on that platform. And I think that shows you just how difficult it has become to get your message across on those other platforms. So just a couple of years ago, we're obviously absolutely critical to any digital marketing effort. So how does it apply to the wine business? Well, I think that's what we're all you know, beginning to ask ourselves, you know, what what's next? If those difficulties have appeared with some of those star platforms, it's only a matter of time before we begin to get frustrated at the opportunities that, that Instagram is gonna give us. You know, we'll be looking to the next thing in many ways, and this is what I touched on in the, presentation, is that in many ways audio is a new frontier if you like. We're looking at clubhouse. We're looking at potentially Twitter spaces. We're looking at opportunities to engage online, but through a more intimate medium. So elaborate on that a little bit because I'm not sure. I I agree with that. I think reading things is it's easier to be a visual letter. I'm gonna read this or I'm not going to read this with audio. You kinda have to listen to get the the sense of what what's going on. And clubhouse, while I participate in it, still isn't reaching anywhere near the level of, reach that Instagram and Facebook have. But on the flip side, having worked in social media for a long time, we used to count Facebook fans and followers and that sort of thing. And what value does that number have as as an absolute number? And and the answer is very little on the surface of it. It's what's happening with the information that's being exchanged. Engagement is kind of the the whole thing. You talk about audio being the the the next most important thing. How has that evolved from Facebook and Twitter and Instagram and the platforms that most of us are still very much engaged with today? Yeah. It's it's a good question. I think I'm not trying to suggest that one will replace the other, you know, and not everything is is is meant for everyone all the time. But I think if you look at the the development of audio and the opportunities it brings, you know, you can you can go back to these quite nerdy geeky podcasts, you know, well over a decade ago now, and there were some great wine podcasts incidentally. But you can you can now see where that that really intimate experience of listening to a good quality audio show fits into your daily life. You know, we're we're busier than ever before. We've got the technology in our pockets that we, you know, that not everybody maybe had a decade ago, you know, and and we are now used to consuming audio. And I think for the kind of people that tend to, you know, enjoy wine, especially on the, perhaps, the more wine enthusiastic of us, you know, I think that the medium really suits how many, you know, I'd like to consider myself as a wine writer, but if I think about how many people are consuming long form wine articles these days, it's considerably less than than ever. And of course, audio gives the the writer that additional medium through which to to reach people. You know, you only have to look at podcasts in different subjects, you know, everywhere to see the amount of money and investment that's pouring into that medium is really driving it forward Okay. So we're on a podcast now and and I've actually pivoted on this when we started this one with me just reading the book and then we went to an interview format, which is where we are today. I find it interesting because I get to pick somebody's brain and hear different points of view in some level of depth that you can't get, you know, from a one-sided article or, you know, a a a single point of view article. But you had talked about the renaissance in podcasts or the the rebirth of it. I didn't realize they were dead. So what happened? What did I miss? Yeah. I suppose in in some ways, maybe I was being, a little bit ambitious with my with my, characterization of it as a as a renaissance, you know, podcast has been steadily growing. For years, you know, but I think, you know, I included podcasting in a sort of range of other audio opportunities that are out there, whether that's participating in these, in these audio chat spaces, whether it's creating content that is compatible for audio in relation to the AI opportunities that are coming down the road, you know, you look at sort of what Alexa are trying to do on Amazon, you know, and as suppose I was trying to, you know, organize those ideas in line with, you know, well, just how many wineries and wine businesses are making audio versions of their existing content with those kind of technologies in mind. And and you're right. There's not a lot of it. That's, you know, kind of what what's happening here. For me, you know, if we're on that topic of what's coming down the line, the, you know, the, the blockchain technology is is really quite interesting because it's gaining massive attention worldwide, you know, across different sectors across across finance arts across, you know, in all sorts of places, people are beginning to talk about this technology and its use cases and there's so much money going into it that it's it's hard to ignore it. And yet there's this this big disconnect with with with a lot of people, and we're all wondering, well, is it really the future, or is it you know, as we were talking before away from this podcast, is it a case of emperors and new clerks? So that's I I think a critical issue. I think there's two things going on here, and I'm still trying to wrap my head around it too, but I'm an old guy. So one is the idea blockchain, and it's basically a a chain of a chain of evidence chain just like, you know, with a with the police dramas, you know, and make sure that the the, the blood samples from the victim, you know, you can always track exactly who had it and and when. It's similar in concept. But you're also dealing with a new form of currency, cryptocurrency Bitcoin and and and the like, which fundamentally is not any really different than the idea of a physical US dollar for example, because we all have faith in that dollar that it's worth something, and we assign a value to it. The same thing is true electronically. There may not be the US backing it, but that's really the function that blockchain technology supplies is this is not arguable. This is true and trackable and unchangeable. Okay. That's fine. Now you add in this new thing called NFTs and as I mentioned earlier, there's an article in the Wall Street Journal this morning about NFTs as a new tool for marketers in the toolbox, and I wanna read a quote, which I think captured it very well. Somebody said owning NFTs is like investing in cultural stock. It's kind of like you have skin in the game. Right? And it's the fact that he ended that statement with a question, like, I don't really understand this either, but this is my explanation. Does this make sense to you that it's this function of everyone kind of believing, as you said, the emperor's new close, that such and such and such is such is true. Blockchain technology gives you proof of that in some manner, shape, or form. But what we're seeing is a lot of the NFT stuff is kind of like, how does something electronic that is ephemeral and not physical have value. Like, the person who bought what's his name's artwork for six million dollars or more. Can you respond to that? I because I don't understand all this. Yeah. I mean, okay. So a a lot to unpack there. I I suppose the first thing to say is, look, I'm, by no means an expert on blockchain technology or NFTs. However, you know, reading between the lines and sort of trying to think what the logical progression of some of this stuff is. I think, you know, we can begin to identify some use cases in the wine business. You know, I I suppose I like to come at this conversation from from the position of, you know, the idea that we as individuals have a digital identity. For some people, it may only be having an Instagram profile, you know, for some people, it may be only they only use email, whatever. But increasingly, we are incorporating more of the things that matter to us into some sort of online, you know, shape or form. Some sort of for example, I I got into the event in verona using my vaccination status. Little QR code that's stored in my in my Apple wallet on my phone, you know, if you if you think about that, I am carrying around my health information in a in a format that is quickly showable to complete strangers, you know, and who knows where that goes. Right? So we we got this We've got this idea that our digital identities are going to expand. I mean, Facebook certainly believes that. You'll probably have heard their, project to build the metaverse. You know, they've renamed their business in line with this kind of concept of building a new online space in which we as, as individuals can interact with each other digitally and, you know, in a in a whole new way. I mean, and that's not new, by the way. You know, there's things like, decentral land at the moment, which is, you know, this is it's almost like, you know, for those that haven't heard of it, if you if you sort of think back to these games, like the sims where you see a little sort of like virtual people wandering around, seemingly doing nothing. These these spaces are growing and they exist. And of course, there is obviously money to be made by servicing the character and the identities within that space you know, fashion houses are beginning to, you know, sell tokens, which can, which represent clothes for these, you know, little avatars that run around in these virtual. So it's like electronic clothes for electronic people, but it doesn't have a lot of reality to it. And that's the NFT, the non fungible token. And every every time I hear that I have to look up the word fungible. But so I I look at something like that, and I'm gonna be the, the downy Thomas here. How is this different from the tulip mania that happened in the sixteen hundreds or any other, the number of things that the dot com bust that happened, you know, nineteen ninety nine to two thousand and one. And there's a lot more money in it. I mean, we're we're talking about orders of magnitude in terms of billions of dollars that people are are spending and investing and agreeing that this currency is worth, making eminently a whole lot of money within that concept without kind of saying, well, I don't understand it therefore. I don't believe in it. Some of the fundamental tools are whole technology that seem to have come to a new life again. I use one. You mentioned it in QR code. I always thought QR code was dead that that advertising agencies killed it about ten, fifteen years ago when they slapped it on everything, and all it did was take you to a, destination. It was the homepage of it given's website. Nobody wanted to go there. So nobody's nobody uses the QR code. So I think we all felt oh, it's dead. No one's gonna use it. Now you just mentioned it. It's at least in Europe. You can use it as your digital vaccination validation in the US. You can't. You might be able to bring up a photo, but all it is is an image of a piece of paper. But yet, we're finding a lot of marketers, going back in in to the QR code and incorporating it into a lot of the things they're doing. Where does full technology like that fit in with the with this new well, these QR codes we understood. Right? If you click on this, it will take you to a certain page. NFTs, I'm not sure I understand it. So talk about QR codes. Yeah. Well, I mean, I think you've gotta remember that when these ideas begin to, you know, they they begin to emerge and people start to to experiment with them and they start to use them. You know, normally always, it takes some considerable time for the rest of the the world to catch up. You know, if you think about those early QR experiments on wine labels, you know, on posters and flyers. First of all, the content at the other end, what was often not great. And secondly, you know, the internet wouldn't work. The camera wasn't good enough, whatever, you know, just enough people didn't have the technology in a sort of landscape that would facilitate it quick and easy enough for it to, you know, for it to work properly. I think now that's changed. Most people have a decent camera, decent roaming internet connection, and most people can create websites on the other side of these QR codes that can give the correct relevant information to make that little action worth the effort. Worth the effort. Yeah. And I think, you know, when you look at blockchain and NFTs now, I think, you know, we're at a similar in a similar place. It's for the average person. It's a considerable amount of time effort and and expense needed in order to fully engage with those opportunities. But as as this technology gets deployed, you know, and and is spread more evenly throughout society, there will be huge opportunities for people to to do stuff and as marketeers, you know, and as marketers who are thinking about the expansion of our digital identities and are thinking about the fragmentation of audiences, I think using this technology does present some interesting things to think about, especially, I think, the gamification of, you know, of your sales journey. That's a really interesting point. Can you expand on that and and define what you mean by gamification? Yeah. I mean, if you're, a winery and you're producing a hundred thousand bottles a year, two hundred thousand bottles a year, you are looking to try to engage your audience. You know, you may not have the luxury of a long established distribution network, and it really doesn't matter. You know, how much you produce, you've got enough, you've got enough connections to make sure those bottles move almost by themselves. If you're not lucky enough to have that, you know, I think you have to work really hard to engage your your audience. You know, it's not just enough to say, oh, our vineyard is is this, and it's on the southern slope and it faces this way. And guess what? My grandfather, he bought that vineyard. I mean, my father bought that one. And here I am today, still doing the same thing. You know, people are bored of that story, even though they absolutely love wine and they're fascinated to try it. They're bored of that story, and I think people need a little bit extra. And I think, you know, giving somebody, you know, one game isn't right. One game isn't necessarily right for everyone. You know, for example, then you and I have talked before about the nineteen crimes brand, you know, and the the use of augmented reality, that particular story and that particular approach to engagement wasn't aimed at me, but it's a hugely commercially successful project and idea. So, you know, not everyone wants to collect non fungible tokens that express some sort of loyalty to a particular wine brand, but I think others will. And I think there are opportunities for prestigious wine brands to reward the top end of their client base with these kind of these unique tokens and, you know, they can be carried around in digital wallets. They're almost a form of collecting in the digital world that perhaps, you know, culturally going forward is maybe the next generation of collectors do not have the space to be able to accumulate a seller of five thousand bottles, but actually perhaps that top end of of of the fine wine market can can reward them and engage them in some other way. This technology provides the opportunity. Okay. So when we think about wine company leadership and particularly on the marketing side, which is where where I mostly live, I recognize that there's not a lot. There's not as much digital expertise digital marketing expertise or digital knowledge in the wine industry compared to some other less regulated industries and and categories, whether it's, you know, make up clothes, food, books. How do you have any examples of how one minories other than the nineteen crimes, which I think we're all, familiar with. And what you and I had talked about is that the initial implementation of that was an animation of a label, but it wasn't engagement with the audience. But as the first went out there, that was fine. Now we're seeing I think we're seeing companies try and take that the next step. Do you have any examples that you can share with us of, companies who you think are doing that well or or at all? The somewhat crude answer is, unfortunately, not. I'm I'm sure there may be some out there. It's still I think, in many cases, a bit experimental. That, I mean, I do know a Bordeaux, winery who started to accept Bitcoin. Yes. I've I've I've read a couple of those as well. Right? Yeah. You know, and, okay. We haven't really delved into the sort of just casual business process opportunities that this technology provides. Perhaps that's one for another time, but I do think if you look back at some of the top the top line brands and, you know, for example, take on a liar you know, they're famed for, you know, their ongoing collaboration with famous artists. You can look all over Italy for premium wineries who are collaborating with local artists in some way. I think there is a lot of there is a lot of possibility there. It is indeed, it is in fact the art market that is is creating a lot of the hype. You know, once you take out the speculation and the investment element of cryptocurrencies, it's the art market and artist's ability to reach new audiences through this technology that is driving a lot of the the conversation. Right? So there must be opportunities for wineries to engage in collaborations like that and and promote these links you know, and use that work and that collaboration to to reach new tribes, basically. Yeah. I think I think that's spot on that there's a new gen yes. Okay. We tend to talk in terms of generations and millennials and now gen z and how they're different and they act alike. Well, when you're talking about millions and millions of people acting like, well, maybe there's a trend, but there's differences within all of that. That said, they're coming to wind through a different route than an older generations, either Gen X or even the boomers. It was the print media influence of friends and so forth. Now all that's exploded to your point about fragmentation. Now we have this new generation of people who go to different places, aren't necessarily, you know, subscribing to magazines, aren't reading those types of authoritative publications where owning the, printing press kinda defined control of the message. Now anyone can be a publisher because anyone can publish anything on any platform, challenges getting them to listen to it. So we have this whole new generation of people who may not know anything about wine, but it's they understand the foundation of the world that they're living in, whether it's cryptocurrency, whether it's non fungible tokens, whether it's anything like that. It's a way for them to gather and discuss things that are of mutual interest when you may not even be able to gather at the same time. So you're gathering asynchronously, and you're not doing it in real life. You're doing it virtually. So the pandemic, I think. That's what we all know. Right? It's it's Zoom conversations and those kinds of things, but you're missing the the physical element. But for the last two years, that's kind of what we've all been living with. I think that's kind of gonna define where we're going in the future. And I think that's kind of what you're saying. Am I right about that? Yeah. You know, in reality, this is not a conversation about any one thing. What it is is a is a conversation around the cultural shift that, you know, obviously that we've talked ourselves. We've talked ourselves blue in the face around the cultural shift that the pandemic has sort of accelerating. Right? So it is about how all of these things come together. We haven't mentioned wearable tech. It's probably not too far away. When you consider the point of using wearable tech, it's to enhance your sort of real life experiences with a big pile of extra digital information. So where's that digital information coming from? Well, we as wine producers as wine merchants, as wine writers, as wine communicator, we are responsible for creating that information. You know, and it the question then is where does that fit in the marketing toolbox and blah blah blah, and is it worth the budget to invest in this? Should we carry on just doing email marketing and just going to trade fairs, you know, I think all of this stuff sort of working together is what provides the opportunity. Right. So let's cut to the chase on a practical question. I was just talking with someone who I happen to meet at the the the wine to wine business forum. And she was talking about the importance of the US market and how they're gonna be doing some new things and digital marketing is going to be important more than just Facebook fans and followers. Any commerce is a big piece of that. There's huge disconnect between knowledge and appreciation of that as a possibility and the actual things that you can participate with in the United States. So whether it's Gopuff, whether it's Amazon, whether it's wine dot com, whether it's drizzly all of these new ways of buying and sharing and conversing about wine. It's inevitable that we're all going to change. What's, I guess, very difficult now has always been the case is to look into the future and see what that's going to be. But when I talked about the practicalities of all of these things to this person, all of a sudden, I was like, yeah, I understand it in theory, but I don't understand it in practice, and I need somebody to show me, not explain it to me, but to show me how this works in terms that I understand as a marketer. So the question becomes, is the export manager position changing and what role does the digital evolution and fragmentation play in changing the job specs? Mean, I'm not an export manager. So, I have no doubt there'll be plenty of export managers telling me I don't know what I'm talking about, and I will take that that criticism on board. Right? But I think that role is changing. There is no doubt that the wine industry's still a relationship business. But I think the way in which relationships are made and maintained must be different than it was five years, ten years ago, five years ago, you know, All the amount of export managers I talk to, back into to New York, back into to China and Japan, whatever, there are other ways of doing that. No. Right? Now I I'm not saying people don't need to meet face to face. Of course, they do. But I think the role of the export manager is must also include some of those digital marketing tasks and responsibilities, you know, that we're talking about. Okay. Our guest this week was, Paul Caputo. And, well, thanks to Paul, as I said before, this was, presentation that Paul gave at the wine to wine business forum in Corona. If you wanna access his presentation and mine and others, go to wine to wine. That's wine, the number two w I n e dot net forward slash registrarcon. And, Paul, I wanna thank you for sharing your time with us today. No. Thank you very much for the opportunity to, to chat more about these, these ideas. This is Steve Ray. Thanks again for listening on behalf of the Italian wine podcast. Hi, everybody. Italian wine podcast celebrates its fourth anniversary this year, and we all love the great content they put out every day. Changing with Italian wine people has become a big part of our day, and the team in Verona needs to feel our love. Producing the show is not easy folks, hurting all those hosts, getting the interviews, dropping the clubhouse recordings, not to mention editing all the material. Let's give them a tangible fan hug with contribution to all their costs, head to Italian wine podcast dot com and click donate to show your love.