Ep. 2282 Adopting AI at Treasury Wine Estates with Justin Noland | wine2wine Business Forum 2024

We use AI to take the information that us as a business people look at us as a marketing people, all of these consumer insights. We put that data into different AI systems. And it spits out additional insights and additional information that we can hand over to our winery teams. So we can hand over to our winemaking teams and say, this is the direction we see the consumer going. How can we get there and meet them where they're at? How can we continue to produce things that they are going to enjoy? Official media partner, Italian Wine podcast is delighted to present a series of interviews and highlights from the twenty twenty four wine to wine business forum. Bringing together some of the most influential voices in the sector, we discussed the hottest topics facing the industry today. Don't forget to tune in every Thursday at three pm or visit Italian One podcast dot com for more information. I am honored to announce our next speaker. His name is Justin Nolan, he will be talking about the AI application when it comes to the entire group of treasury. It is rather quite large. I think the Italians are not a familiar with perhaps the group, but and Justin, you can tell us all about that. And he is the vice president of digital experience for Treasury Americas. So you'll tell us what that is all about. And Justin Nolan, let's give a round of applause. Thank you. Justin Nolan, vice president of digital experience at Treasury America's. Who is familiar with Treasury wine estates? About half of you. Who's familiar with penfolds? Okay. So treasury wine estates is the company that owns penfolds. Who's familiar with nineteen crimes, the wine? Another one of our brands. We are the fourth largest wine producer in the world. Based out of Melbourne Australia, but I lead digital experience at Treasury Americas. So everything from Canada all the way down to the very bottom of South America, my job is to ensure that our brands show up on screens to consumers across the entirety of the Americas in the ways that those brands want to show up. So how are we adopting AI at Treasury? And I wanna get into some context. Before this. Right? So focusing mostly on the United States as we think about this, but Treasury is doing this on a global scale. We are in a new digital era for wine. In a few different ways, not just the e commerce component where people can buy wine, but the pandemic has forced us all to rethink how we connect with consumers. We can't you know, completely and a hundred percent say, you know, our customers are gonna go to our tasting rooms and visit with our winemakers and we can have a conversation with all of them. And even if they could, it's not really a way that we can grow and deliver scale. My headquarters where my office is in Napa, California. We think very much about Napa as, you know, there's a lot of wine, a lot of wine production, and people will love to come to Napa. But the reality is that a very small percentage of people will ever visit Napa. Even in the United States. So how do we reach people beyond that? And that's really the conversation that has been progressively getting bigger and bigger at Treasury over the last few years. Now, the opportunity with e commerce is what makes that conversation meaningful from a revenue perspective. Right? It's not only can we reach people online, but they can buy our wine online as well. And the direct to consumer side is certainly a big deal, but it's also how do we help our retailers sell our wines online. How do we help all of the other third parties that are out there that are talking about our wines? How do we direct people in a way that allow them to be easily purchased? Right? So we want that to be as seamless as possible, be very, very easy because e commerce is that opportunity. When we think about the way people learn about a wine brand, the top three ways Number one is still family and friends recommending it. It's still having a conversation with people and them saying, you should try this. The next two involve screens. One of them is Google and the other one is social media. So thinking about that, right? I can't hire somebody's aunt Sarah to walk into you and say, Hey, I want you to try this wine, but I can absolutely influence the next two. And if I influence the next two well, I'm also going to influence number one. So that's the opportunity in e commerce. So treasury looks at this and says, okay, we need to have a bigger conversation around how are we going to be innovative? How are we going to be different? How are we going to be thoughtful? And I wanna give a little bit of context here because I think it's helpful. Prioritizing innovation isn't a buzzword. It is part of who we are. Treasury has what we call our tweed DNA. Treasury wine estates just get shrunken down to twee, and it's kind of one of the funniest things we get to say all the time. But our twee DNA is three different things. The first one is that we deliver together. So I wanna start by saying a lot of the work that you're gonna see here or some of the things that I'll talk about is actually being done by some brilliant colleagues all over the world. It's not just me, right? Like, I think I'm good at my job, but we're doing stuff all over the place and learning and developing, and I do get the opportunity to work with some incredibly brilliant people, and we figure out how to do this together. The second one is that we bring our whole selves. We are given the space to be different. We are given the space to not be that same mindset over and over and over and over again. We're given the space to not even like wine and that's okay because we want to understand how people are thinking and get a lot of different perspectives, we absolutely value diversity, equity, and inclusion because that gives us a much broader set of values and a much broader set of thoughtfulness. The last one is we're courageous and courage is something that you have to have in order to be innovative because you have to be okay with failing. So with those three things, Treasury prioritizes innovation. We care about trying something new. The nineteen crimes wanted to create Halloween as a wine occasion. If you think about Halloween, you know, certainly in United States, you don't necessarily think about wine. Right? I've got two little kids. We think about trick or treating and candy and surviving the evening, but it is not necessarily thought about the wine occasion. Our team at nineteen crimes is like, well, why not? We could own that. We could try something new there. Let's put monsters on a bottle and have them come to life and let people take those to their Halloween parties. And it's been a raging success. We certainly do plenty of things that fail, but we also try new things. Nineteen crimes is also. We're gonna be putting snoop dog on a wine bottle. Again, we can, as a wine industry, we might look at that and be like, wow. That's definitely not what we think of when we think about wine as an industry and as a category. But snoop dogg's Cali Red has introduced more Americans to wine than any other wine has. Nearly a third of all bottles purchase of Cali Red are by people who have never bought a bottle of wine before. So before we talk about putting snoop dogg on a bottle and us thinking about how bad that is for wine, let's remember it's introducing people to wine. It's getting people to try it in the first place, which is what we need more of. Treasury, we also value data. And this is where it comes to, yeah, we are a big company. We have a lot of information. We have a lot of data. We have consumer insights teams. We have Viticulture insights teams. We have winemaking insights teams, not just winemaking, but What's all the data? What's all the things that are coming back from that? AI is not something new for us. We've been using machine learning. We've been using data to better understand the business, to better understand our consumers and hopefully to make better products for at least a decade now from a data perspective. One of the key things that people don't necessarily think about when they think about AI, because everybody talks about generative AI, and it's coming up with new content, and and we'll get to that. That's cool stuff too. But AI for us helps to play a very key role in how our organization can communicate to each other better. Because on one side of our organization, There's gonna be people like me who if we could show of hands of how many of you know more about wine than me, it would probably be like a nineties rap concert because every hand would go up because I don't know a ton about wine. I like it. It's fun. I enjoy it. I come from the marketing side of things. I started with an agency and continued a passion. One of the things I love about marketing wine is It's association with positive experiences, but I'm not passionate from learn more and understand the tasting stuff. That's just not who I am, but that's okay. It's also we bring her ourselves. We're okay with that. But we have huge parts of our organization that are about winemaking, that are about the Viticulture, that are about growing incredible wines. And again, we span the gamut. Right? Everything from, you know, wines like our nineteen crimes range to, you know, Grange. From penfolds and quite frankly everything in between. So we use AI to take the information that us as a business people look at us as a marketing people. All of these consumer insights We put that data into different AI systems, and it spits out additional insights and additional information that we can hand over to our winery team. So we can hand over to our winemaking teams and say, this is the direction we see the consumer going. How can we get there and meet them where they're at? How can we continue to produce things that they are going to enjoy? And vice versa, they're seeing things in wine. They're seeing things in climate change. They're seeing things in other. So they're saying, wait, wait, we've got an opportunity to produce these things. And here's all of the data that's showing that we can produce this and we can produce it really well. Can you guys create a market for it and build that? So that culture of innovation is something that drives us all over the place. Right? So we try new things, we build new things, and we think about AI from a standpoint of tool sets. Of how do we enable our teams to get better at what they do in some instances. In other instances, there are definitely ways in which AI, automation, and other things are replacing processes and are replacing some of the things that we were doing before. But if it drives greater employee safety and greater sustainability for our organization, we're absolutely going to do it. I'll get into a little bit of that too. So we look at how we're interacting and engaging with our consumers. We want to get closer to them. We want to understand more about our customers. We want to be part of their lives as opposed to having them part of ours. That makes sense. So let's talk about actual things that are happening at Treasury. Some of the things that we are doing today and things that we've been doing for a year or longer. Marketing and e commerce. Some of the cool things we've done. We actually built an entire website. We built an entire brand from the code of the website to all of the content, all of the imagery, even the marketing plan, the email plan, how it goes to market. What do the ads look like? How are they delivered? All through AI. Every aspect was done through AI partly to see if we could do it, but also because we wanted to understand the effect that AI has on consumer connection. And what do we do as marketers? That's better than AI versus what does it do that's maybe better than us? So we continue to build things, but one of the things that we found is AI is great at creating bandwidth. AI is wonderful at taking all of the mundane things that we do every day and taking a lot of that off of our schedule. So taking notes and meetings. Right? So that at the end of a meeting, it can just take all the notes. It can send it out to the team. So you now have a record of what happened in that meeting. It's especially great as a manager because if you can't attend, it's gonna get it right back to you. AI's brilliant at helping us brainstorm, helping us come up with ideas. There's lots of times. And again, everybody sat in a meeting at eight o'clock in the morning where you maybe haven't had your coffee yet, and everybody's a little slow to get started. And I can kinda help kick start that. And again, some of the ideas that it comes up with are quite stupid. And other ideas that it comes up with are like, that's not that bad. So we can give it prompts that give it a very clear direction if we're trying think about something that will do this. And if it gives us ten ideas and, you know, one of them gets us to where we need to be by the end of the meeting, that's a success. But e commerce and marketing, especially e commerce, e commerce is data driven. Almost everything from performance marketing is data driven. So one of the things that we like to do is and obviously, we're a large company, so we spend money in advertisement. And everybody spends money in advertisement, whether you're spending it on fifty dollars in a local thing to spending, you know, five hundred thousand in a big ad campaign, understanding how your advertisement dollars are working, understanding what people are engaging with so that you can then either produce more of that, or you can pivot and try a different direction. We have created, through API connections, ways that our digital advertisements and the Google analytics that come from that, all of the digital analytics can feed back that information into another AI engine that can deliver us the insights. And even to a point where it can automate new content that meets the criteria of the advertisements that were successful. We're also getting ahead of things. So This is actually kind of a fun image. This is Dethro records sparkling wine. Dethro records, if you don't know what it is, that's the nineteen nineties wrap label that included Doctor. Dre, Snoop and Tupac. Sounds like a kind of funny thing to put on wine, but we had insights that people were interested. We had insights that said, this is a consumer that we could probably reach, and we could reach in an interesting way. Certainly because SnoDOG is part of our our broader team, but also we can create imagery that's going to work. We can do things that are different. This image showing the bottle and this kind of fun stuff was actually produced about three and a half months before that wine was ever bottled. Quite frankly, it was produced before that wine label was ever made. And we took that imagery and started creating ads We started creating a website. We started building out things in very small ways at very low cost just to determine if the insights that we had were correct, could this label drive enough engagement that people would buy it? So using AI, we're able to very quickly create advertisements, create websites, create art, create the verbiage that would work for this, and understand before we made the bigger investment of bottling wine, whether or not a consumer would care. But marketing isn't the only area in which we're using this, right? We're using this all over the company in very different ways. So this is one of the fun things where my PR team says, Hey, we need to talk about this part of it. And I said, no, no, no, I I I get it. This is important because almost every time I talk about AI, I get the question is AI replacing workers at Treasury, and it is absolutely not. We think about AI as a tool. In the same way that we think I'm dating myself here, but in the same way when Photoshop first came out, we thought it was gonna replace photographers, and that's just not true. There are different things that we can do. Right? There are different ways of going about it. So While we think it has the capacity to improve lives, it's not an exchange for people. We think we can drive new safety. We think we can drive better sustainability, but it's also going to require us to upscale our team. Because when we created a first of its kind, ten million dollar automation system in the Broosa Valley, it includes a this barrel software system that actually moves the barrels around and does all of things, but it also has forklifts that are completely without drivers. So running around the different warehouses doing different things. And what it did, was not just making much more efficient winery, makes a much safer winery because we don't have people doing this, but those same people are now the people that have to learn how to use this system. They have to learn how these driverless forklifts work. They have to learn the software associated to the barrel movement systems. So we spend a lot of time doing that upskilling component because, you know, I don't know how many people know this, but many, many, many, many years ago, there was a class of workers that would literally walk around every morning and knock on your door because alarm clocks didn't exist, electricity didn't exist, and they wanted people to wake up. That was like the time you were supposed to get up. Obviously, we don't have those people anymore. There used to be people in hotels that would call you to wake you up in the morning. Everybody ever remembers that. Right? Like, that was a thing. Those were jobs. Again, as we continue to advance in technology as we continue to do this, we have that skill set gap. So we're focusing heavily on ensuring that the team that we have in place gets these skills necessary to continue to drive this. We also believe in sustainability. It is a huge component of treasury. We care about the land. We care about the people. We care about our effect on the world. We continue to expand this program. Over one hundred and fifty water telemetry units. So these are essentially computers out in our vineyards that are supplying data constantly back to our headquarters, back to our mainframe, that gives us much, much greater insights as to how much water is in the ground, how much water is in the air, what is the temperature? What's the wind? All of the different things you could possibly imagine associated to water in a vineyard that it's not taking away the decision power of our winemakers and our Viticulture team, but it's allowing them to be far more precise so that it's not how do we ensure that we're irrigating a particular area, but it's How much water does it exactly need to do what I want it to do? And allows the data to do that for us. So we continue to deliver value, and we're looking for how that positive impact can be through AI. We're expanding programs, not necessarily from a standpoint of we wanna be more efficient and have one person do the job of six other people, but what are the ways that we can use AI to create bandwidth for our team so that they can be more focused on the items that they're really passionate about. From a marketer's perspective, writing copy for SEO, is not very much fun. You start with Google AdWords and say, what are all the, you know, what are the key phrases that people are searching? And then you say, okay. Now, I've gotta create ten blog articles that stuff some of these keywords in and I've gotta put them in this and that. And again, if you don't know what I'm talking about, I'm glad for you because it's a tedious job that's not a lot of fun. That's something AI is actually really good at. So instead of that writer, instead of that copywriter marketer having to deal with that, we allow AI to do that. And that person focuses on the content that's going out to a consumer. The content that is about storytelling, the content that matters. Right? That's what they're passionate about. That's what they're passionate about telling that story in a unique and interesting way. We also look at AI from a standpoint of thinking about our customers in much more segmented ways. Creating one story typically doesn't resonate with everybody. And I mean this in the nicest possible ways. There's a very small segment of customers that have a hyperfocus or interest on the technical value on the technical qualities of wine. That doesn't mean it's not important because it is where wine comes from who's making it. All those stories matter because that's the authenticity of the winery and the authenticity and story of the quality of the wine. But for people who consider wine to simply be a piece of a much much larger puzzle of how am I gonna enjoy my evening? How am I gonna relax? Do you know the number one reason people drink wine is to relax? It's not really relaxing to really get into all of the technical details necessarily. I wouldn't think so, but maybe some people do. So AI is enabling our teams to be much more thoughtful around trying storytelling in a lot of different ways, looking at a very small niche of people and saying, how does our wine become part of their life? How does our wine compliment the things that they're already doing? And how do I insert ourselves in a small way while providing them some value in that aspect. Right? And notice I didn't say anything at all about demographics or about age. And we'll have a a conversation on that later, but I'll give you a little bit of a preview. Reaching the younger audience isn't about the story. I would just, again, finish by saying technology is something that we're all going to have to embrace. We are all going to have to start being able to reach people in a digital way. We can't rely certainly on people visiting our tasting rooms. You know, one of the things about e commerce, while it gives us the opportunity to reach a broader amount of people, and it certainly from a consumer standpoint makes their lives a little bit easier. But it's even taking away that experience of somebody going into a wine store and having that retailer, that person that you've relied on for years to be able to tell the story and deliver it. A lot of that is even now shifting online. So how are you telling the story? How are you reaching people? How are you engaging people? How are you giving them something of value as a part of the process in the new online world? Thank you very much. Thank you very much, Justin. Listen to the Italian wine podcast wherever you get your podcasts. We're on SoundCloud, Apple Podcasts, Spotify, ImLIFM, and more. Don't get to subscribe and rate the show. If you enjoy listening, please consider donating through Italian wine podcast dot com. Any amount helps cover equipment, production, and publication costs. Until next time, Cheaching.