(Edward Deitch is an award-winning wine columnist based in the United States. He created and wrote a weekly column for eight years on MSNBC.com and in 2010 launched a wine blog, www.vint-ed.com. The opinions expressed are his own)
By Edward Deitch
NEW YORK (Reuters Life!) - Social media is exploding in the wine business and a new survey illustrates just how important it has become, especially in this tough economic climate.
More than 80 percent of 109 grape growers, distributors, retailers and other wine experts in the California who were questioned in a survey by the Wine Industry Financial Symposium Group and the University of California-Davis Graduate School of Management said they were using Facebook in their business, up from 46 percent in 2009.
Sixty four percent were using Twitter, compared to just 21 percent in 2009, and 52 percent had a company blog, a rise from 18 percent a year ago.
While the jury is still out on social media’s effectiveness in driving sales and profits, using Facebook and Twitter and blogging are relatively inexpensive ways for companies to get their messages out and get direct feedback from their customers.
So, it’s not surprising that the growing use of social media has coincided with the continuing hangover of the recession in the wine business.
The poll paints a picture of an industry hit hard. More than 83 percent of the wine professionals said they’ve had to be more flexible with their business plans.
About two-thirds have reduced operating costs and have made less profit, while more than half have reduced staff. Many have no plans to bring back those who had been laid off.
All of this comes as the professionals surveyed have seen wine drinkers cut back substantially, with more than 95 percent saying consumers have become more value oriented in the last two years, up from 75 percent in a similar survey last year.
Almost 80 percent say people have been “trading down” in their wine purchases, including buying more inexpensive store brands and private label wines.
Consumers are also less interested in wine ratings, in what some experts think is a positive trend because they believe the industry has relied too heavily on scores at the expense of educating consumers so they can make their own judgments about wine.
The poll showed that baby boomers seem to have been hit hardest during the recession because it has been more difficult to sell wine to them than to those younger or older.
Wine professionals questioned in the poll think the wine business will get back to normal but it is going to take a while, although not too long.
About half the wineries and two-thirds of wine distributors said it would be within three years. About 60 percent had a bullish view on growth and profitability, almost double the number last year.
Meanwhile, with discounting up and prices down, consumers are the big winners. With almost everyone looking for values, there are some very good wines around at unusually attractive prices.