XChateau Wine Podcast – Details, episodes & analysis

In an oversupplied market with rising costs, being a winegrape grower is probably the hardest it has ever been. Natalie Collins, President of the California Association of Winegrape Growers, breaks down the cost of winegrape growing in CA, the challenges in the marketplace, and the policy dynamics in the US, CA, and EU that continue to exacerbate the challenges for CA’s winegrape growers. 

Detailed Show Notes: 

CA Winegrape Growers - based in Sacramento, lobbies at the state and federal level

• CA has ~5,900 winegrape growers and 550k planted acres

Key cost drivers of winegrape growing

• #1 labor, ~45-50% of budget (30-45% CA interior, 45-65% CA coast); doubled in the last 10 years, driven by:
• High min wage ($16.50; most pay $18-30/hr) → increases take entire pay curve up, not just bottom
• 2016 labor law change reducing hours before overtime pay → reduced farmworker take-home pay (OR provides an overtime tax credit to employers)
• #2 regulatory compliance (water, air, worker health, safety), ~10% budget
• Cal State SLO study on lettuce growers - compliance costs ~$1,600/acre (1,366% increase since 2006, 637% since 2022)
• #3 land - CA has some of the highest land prices in the US 
• #4 crop protection/fertility tools
• Farming costs ~$4k/acre Central Valley, $6-8k/acre Paso Robles, $8-10k/acre Sonoma, ~$10-17k/acre Napa

Grape pricing not rising w/ input costs - Central Valley ~$500-600/ton, Central Coast ~$1-2k/ton

• Bulk wine from Chile is cheap, and the US can’t compete on price

The annual CA Winegrape Crush Report shows pricing for all varieties by district

• No US federal support vs EU
• EU subsidizes at every level (growing, marketing, production)
• >e2B/year in direct and local support, enabling cheap wine production
• Crisis distillation - buy surplus wine to convert to alcohol (e.g., hand sanitizer)
• Vineyard removal and vineyard planting subsidies
• Aggressive marketing support (France investing $5B to support wine exports to the US w/ new tariffs)

US wines can have up to 25% foreign wine blended in and be labeled as US wine

2023-2024 - CA left ~300k tons/year on the vines; 2025 ~50% of vineyards don’t have a contract for the 2025 harvest; industry calling for another 50k acres to be removed (60k removed since 2022); all regions pulling out or mothballing/minimally farming vines

Tariff impacts (May 2025)- input costs increase, but can be positive for CA winegrape growers

• 2019 tariffs saw domestic wine increase its share by 10% vs EU wines
• Canada is actively removing US wines from shelves in retaliation; the US exports 10% of its wines, 40% to Canada

Deportations - creating fear, people are afraid to leave their homes for fear of their families getting separated

Seasonal labor is not big, 90% vineyards are mechanically harvested; H2A temporary workers (mostly from Mexico, all-in cost ~$30/hr, often more productive, cannot be paid more than domestic workers)

Economic impact of CA wine - 422k CA employees / 1.1M across US, $73B CA economic impact / $175B/year US

All agriculture is struggling in CA, replacement crops for grapes not easy (some almonds, pistachios, cherries); costs ~$30-70k/acre to plant a vineyard

Duty Drawback - a federal tax refund program meant to encourage exports

• If a winery exports wines, then imports them back, it gets 99% of import fees (including the Federal Excise Tax of $1.07/gallon) refunded
• If importing ~$3/gallon bulk wine, can save ~30%
• Mostly used by the top 5 wine companies
• 2024 - 38M gallons bulk imported (70M in 2022) vs ~70M gallons left on the vine in 2023

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Having met at the UC Davis Wine Executive Program, Kia Behnia, CEO, and Mason Earles, CTO, founded Scout to replicate the best sensor in the vineyard, “the farmer’s eye.” Leveraging off-the-shelf hardware, Scout uses AI to process images taken from a tractor to automate vineyard mapping, vine counting, yield forecasting, virus identification, and more. From managing vineyard assets to implementing precision agriculture to improve quality, Scout is harnessing the power of AI to optimize vineyard management.

Detailed Show Notes: 

Mason’s background - UC Davis Professor, Apple, AI & agriculture

Kia’s background for Scout - owns the Neotempo wine brand, worked at Splunk, the “data for everything” company

The official company name is Agricultural Scout, dba Scout, the website is agscout.ai, so it can be called any of those names

Founded in 2022, initially more hardware-based, but pivoted to an intelligence company using off-the-shelf hardware

The goal is to “replicate the farmer’s eye” with an AI-based solution using cameras, tractors, and Scout cloud and mobile app (which can be used offline); the brain is centered around a phone

US only today (~50-100 clients, 300 blocks, 2M vines, processed 56M photos), going international in 2026

4 main use cases currently: 

• Automate vine count, inventory, and mapping of vines - 4x faster than people could do
• Estimate crop performance - both vigor and fruit
• Yield forecasting - can use every step in the growing season to forecast yield with historical performance and weather forecasts
• Health performance and vine mapping - leveraging AI for virus detection

3 types of clients

• Estate wineries
• Vineyard management companies (“VMC”)
• Real estate investors or owners to track vineyards

Benefits include: 

• $400-1,200 savings/acre
• Productivity gains through managing more acres with fewer people, identifying low-performing vines, and the program tells farmers where to sample
• Remote monitoring of faraway vineyards
• Early season yield forecasting
• Disease management - virus can cause $170k/acre damage over 3-5 years, costs $40/PCR test, the goal is to keep virus <15% not to lose the whole block, has a 7,000 photo database on vine disease

Bench Vineyards discovered 1 acre of missing vines out of 24 acres and filled them in

Pricing is a subscription model, $150-180/acre per scan

• Volume discounts >50 acres
• Neighborhood and AVA discounts
• Starter - 2 scan package (for inventory and virus)
• Professional - 6 scan package
• Typical customer starts w/ 2 and upgrades to 6
• Monarch promotion, customers get 1 free scan
• Up front hardware costs ~$3,000

New product in beta in July 2025 - ChatGPT Scout for vineyards

Marketing mostly through word of mouth, industry trade shows, and webinars have been effective, as has partnership with Monarch (already tech enthusiasts)

Barriers to purchase are often due to farming budgets built around labor

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After struggling with tracking vineyard data firsthand, Shawn DeMartino, CEO and Founder of Sentinel, decided to create a solution with his partner. Enabling vine by vine mapping and data collection that could stand the test of time enables vineyard managers to increase the lifespan of a vineyard, manage viruses, and effectively create a “medical record” for each individual vine.  

Detailed Show Notes: 

Shawn’s background - winemaking, viticulture, now general management

Sentinel was a Covid project that became real, software that collects individual vine information over time

• “Patient medical system of record for vines”
• The solution includes a mobile app, desktop platform, and high-accuracy GPS (receivers that clip onto phones)
• Maps all the vines in the field
• Configurable data collection forms
• Available in 5 countries currently

Mapping the vineyard

• Create a 3D model with lat/long and elevation
• Basics (variety, clone), images, comments, discrete statuses (e.g., life stage, virus status)
• The vineyard mgmt team populates data, can walk up the vines and record
• Work with/ Sentinel to put in bulk metadata (e.g., block info, varietal)
• A client mapped 100 acres in 1 week

Work order function

• E.g., irrigation can be recorded
• Roguing, planting, and grafted statuses can auto-update when the work order is completed

Core benefits

• Extend the life of the vineyards
• Virus/disease management, see the program more clearly, identify asymptomatic vines in hot spots (case study: ~10% of vines asymptomatic) 
• Optimize pick areas (through mapping flavor profiles)

Pricing

• Mostly software, hardware costs small
• Annual subscription based on acres, not users (<1% of farming cost)
• Biggest growers ~$2k/year

ROI example: client roguing 1% of vines/year w/ growing virus problem, Sentinel enabled them to get ahead of the problem in 1 year

Marketing mostly organic search

• Articles and podcasts helped
• Last 18 mo, mostly word of mouth
• Referral program: The referrer gets a bottle of Krug

Barriers to adoption

• Worries about time requirements; the goal is to collect data when already in the field
• Worries about less flexibility to manage vineyard; full customization of data enables more flexibility
• Next on the product roadmap - continue to flesh out more work order functionality

Other tech Shawn is interested in

• Winery management platforms (e.g., Innovint)
• Soil moisture probes for irrigation

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Sharing a name causes confusion. Trademark and appellation laws are there to protect them. However, it can be harder to resolve when this confusion is within the same country. That’s the challenge Montepulciano (both the town and and the wine Vino Nobile di Montepulciano) faces against its bigger neighbor Montepulciano d’Abruzzo. Max de Zarobe of Avignonesi describes the history, challenges, and steps taken to clarify the names and the wines.

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Detailed Show Notes: 

Max’s background - in shipping, ended up in wine by mistake

Avignonesi background

• Originally a noble family from Montepulciano
• Based in the SE part of Tuscany, close to Umbria
• Best known for Vin Santo
• Top 5 producers in the region (~175ha planted; ~100/~1,300ha of Vino Nobile)

Vino Nobile di Montepulciano (“VN”)

• From the town of Montepulciano, Tuscany
• Historically controlled by Florence
• Min 70-80% Sangiovese, trend for all local varietals
• Three years to produce
• ~10M bottles annually
• ~3x the price of MA
• Named “Nobile” due to nobility consuming the wine in history - only two places in Italy were known for noble wine vs. wine for food, Barolo and Montepulciano
• Once famed as the best wine in Tuscany - it was imported by Thomas Jefferson to the US (~$250/year)

Montepulciano d’Abruzzo (“MA”)

• From the province of Umbria (East Italy)
• It uses the Montepulciano grape variety
• One year to produce
• ~120M bottles annually

Other naming confusions resolved by the EU: Champagne/Cava, Tokaji/Tocai, Prosecco/Glera. Internationall, cross border conflicts get good support from their governments

Naming conflict a domestic dispute - VN did not get gov’t support as it is small (Montepulciano has ~18k people/~15k voters; Abruzzo is ~2.2M people/~2M voters)

VN is challenged by the squeeze between Brunello (confusion w/ Montalcino, leads the American market due to investment of Banfi) and MA (shared name)

VN promotion challenges & actions

• No one spoke English (even the President and GM of Consorzio do not speak English); Avignonesi has organized local English classes for children
• Consorzio tried to get support from politicians but unsuccessful
• As of last year, put “Vino di Toscana” on the label - limited impact as many don’t know Abruzzo is a province
• Want to highlight “Nobile” vs. full VN name
• Issue: can’t use an adjective to name a wine (EU law), “Nobile” is both an adjective and a noun; thus the full VN name was adopted
• Alliance Vinum, a band of 6 producers, uses “Nobile” by printing it on the “back” label, which is functionally the front label

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The low and no alcohol wine space is growing rapidly. Enough so that a company specializing in spinning cone technology to reduce alcohol, ConeTech, changed its name to BevZero. Debbie Novograd, CEO, and Kayla Winter, Director of Product Services & Winemaking, discuss the technology, the challenges of producing good no alcohol wine, and the market for low and no alcohol wines.  

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Detailed Show Notes: 

Alcohol reduction technologies

• Reverse Osmosis - pass wine through filters, removes water and alcohol, can only bring down abv by a few % per pass, requires multiple passes to get to 0% (more taken out of the wine)
• Spinning Cones - creates thin film vacuum distillation with heat added (37C) to extract alcohol w/o cooking wine, only spends a few seconds in still

BevZero history

• Founded in 1991 as ConeTech as a tool in the winemaker’s toolbelt to adjust alcohol to hit a “sweet spot”
• Before 2018, >14% abv wines had a higher excise tax, alcohol reduction used to bring wines below 14%

Spinning Cone technology

• Can pull off different substances with different molecular weights (more than alcohol if desired)
• Small units (1,000L/hour) start at $1.5M
• GoLo tech starts at $500-650k

Definitions

• Low alcohol wine: 5.5-10% abv
• No alcohol wine: 0-0.5% abv

Uses of technology by geography

• Europe - 99% for 0% abv products
• USA - until 2 years ago - 90% for alc adjustment, 10% for low/no alc
• USA - 2022 - 30% low/no alc -> 50% in 2023
• Very large players doing adjustment
• No alc - mostly startups, recently, big players interested

Market Sizing

• Non-alc space $2B in 2021 -> forecasts range from $3.5 - 6B over next 10 years
• IWSR projects no/low growing faster (7% CAGR) vs. alcohol (1% CAGR)
• Wine has been slower growth 
• North America no alc wine market - $450M in 2021
• Low alc mainly US (bigger than no alc) and Australia
• No alc beer - 75% of total space

Producing no alc wine challenging

• Need suitable grape varieties for base wine - fruit-forward and aromatic work best
• Acid, color, tannin get concentrated
• Sparkling does well; bubbles mask the lack of weight (bubbles through forced carbonation)
• No alc is an FDA product - can add more ingredients (e.g., natural flavors, mouthfeel agents), must have a nutritional panel
• Initial no alc wines used bad base wine and added lots of sugar to compensate
• Many sweeten with grape juice concentrate, but trend is towards less sweet (now ~high 20g/L sugar)

Price points

• Original products were $5-6/bottle, now up to $30/bottle
• Majority are in the $10-15/bottle range, largest customer does still & sparkling wine in the $25-30/bottle range

Consumer use cases

• Main segment (70%) - people who still drink alcohol, drink both low and no alc wines
• Abstainers a small %
• Gen Z pushing growth
• Low alc targets lower calorie, lower carb segment
• Meets a ritualistic need that non-alc fills

Branding and sales

• No alc startups sell DTC, leveraging social media marketing
• Low alc has some big players - 50/50 develop new brands, some use existing
• Specialty online retailers for low/no alc

Higher quality products will drive future growth

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With the rapidly changing social media landscape, TikTok has started (as of late 2021, early 2022) to arrive as a place for wine lovers. Wine influencer Amanda McCrossin (somm_vivant) has gained momentum in this “wild west” and now has over 100k followers. She shares her journey, best practices, and what makes TikTok special. 

Detailed Show Notes: 

Former sommelier and wine director at Press Napa Valley, full background on Episode 12

Featured in SF Chronicle article about TikTok and wine (March 2022)

• 2 of Amanda’s videos converted well for wineries, 1st proof of ROI
• Duhig got 1,100 signups for their mailing list from a video
• Massican got $3,000 in sales and 70 list signups from 1 video

Recent shifts that allowed Amanda to excel on TikTok

• Understanding TikTok is short form content vs dance videos (not social media)
• Time limit increases (15 sec -> 1min (summer 2021); 1 min -> 3 min (Fall 2021)) -> enabled ability to dig in deeper (can technically do 10 min videos)

TikTok vs other platforms

• Can’t DM w/ people, need to be following them
• Conversations happen in comments
• Ability to go live
• Ability to reply w/ video in comments (“Duets” - do side by side w/ another’s content, Amanda did one w/ port tongs that has 2M views)
• IG reels (only 30 sec - 1 min) don’t have as much educational content, trends usually 3 weeks later than Tiktok
• IG feels older, more copycat, behind on trends

Demographics - female leading

• Amanda’s - 75% female, 25% male
• US, Canada, Australia top regions
• Over 21 years old, deep into 30s and beyond, Over 50% of platform is over 30 years old

Amanda’s TikTok journey

• Started July 2021 as an experiment
• Decanting video got 30k views, but stalled out
• Dec 2021 - started posting 2-3x/day, 1 video hit and others started snowballing
• Still “wild west” on TikTok for wine
• In 1 month went from 250 -> 30k followers (Jan 2022), now 110k followers (Mar 2022)

TikTok best practices

• The “hook” is key - 1.5 seconds to catch people’s attention (e.g. - what you do, say, or put on the screen; Amanda puts topic of video on top)
• Spend 2 weeks - 1 month to watch and listen
• Post multiple times per day (Amanda now does 1/day)
• Need quickness in video
• Stay within a niche -> helps algorithm find the target audience
• Optimal video length - 2 mins for Amanda (was 7-9 sec on TikTok for a while)
• Need to react quickly to trends

Restrictions on alcohol (a grey area)

• Similar to IG and FB, but enforced differently
• No alcohol w/ minors
• No excessive consumption
• No solicitation of alcohol
• Doesn’t drink on videos b/c got a disclaimer flag on one

WineTok creators: winewithdavid, themillennialsomm, jaimeegriffwine, legallywined, lexiswinelist

TikTok for wine brands

• Joe Wagner - 30k followers - mostly production videos
• Brands should respond in comments
• Need a presence so people can find them
• Establish relationships with creators first

Social media tips for brands

• Don’t recycle content across platforms
• Tiktok - looks less polished vs YouTube

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Constantly looking to improve its environmental impact, Jason Haas, Second Generation Proprietor of Tablas Creek Vineyard in Paso Robles, recently released a trial of 3L bag-in-box wines at $95/box. Though this is 15% lower than the normal bottle price, it still represented ~3x the highest boxed wine in the market. However, the potential to lower the total carbon footprint of the wine by 40% led to trialing and a terrific reaction to the 300 box trial, which sold out in 4 hours. Jason explains the rationale, strategy, and process of going bag-in-box and for other alternative packaging.

If you love the show, please consider supporting us on Patreon.

Detailed Show Notes: 

The rationale for trying bag-in-box

• Did a self-assessment of the winery’s carbon footprint - on the Tablas Creek blog
• For the average CA winery, >50% of the carbon footprint is from the glass bottle (including transportation), as glass requires high temperatures to mold and has a heavy impact on shipping and transportation
• Tablas Creek moved to a lightweight bottle in ~2010, which saves ~10% of CO2 footprint; heavier bottles are ~10% more
• 3L bag-in-box reduces packaging carbon footprint by ~84% and ~40% of the total carbon footprint
• A wine blogger commented on Jason’s Facebook that Tablas Creek is well-positioned to create change w/ bag-in-box
• Previously topped out at ~$35 for 3L, or ~$7.50/bottle

Tablas Creek bag-in-box trial

• Bottled 100 cases of Patelin de Tablas Rose, ~300 3L boxes
• Got ~60k views on a blog post on boxes in 2 days, lots of positive comments
• In mid-Feb 2022, released the boxes to the member email list and sold out in 4 hours
• Wines are currently under screw cap, meaning they are similar and don’t need adjustments to be in a bag-in-box

Future bag-in-box efforts

• May extend to all 3 Patelin de Tablas bottlings (red, white, rose), which sell for $28/bottle retail, and other wines not meant for long aging
• Likely will not sell in distribution - an “uphill battle,” with the price point being too high vs. the existing market
• Bag-in-box ties to Tablas Creek’s mission - “to have a positive impact on the way grapes are grown, wine is made, and how wine is packaged and sold”

Box pricing

• $28/bottle retail would be $112 for 4 bottles (1 box)
• Cost is less for packaging, which was passed along to customers
• Priced at $95/3L box, thought it was good to be under $100

Bag-in-box bottling & storage process

• Bottling boxes was the biggest challenge at a small scale
• Rented a semi-automated filler (would cost ~$10-12k to buy)
• Very labor-intensive, took 4 hours for 324 boxes
• There’s now a mobile bottling (boxing) line with bag-in-box capabilities based in Sonoma, may rent this for future boxings
• Not a lot of reliable data on how wine ages in boxes outside of 6-12 months, will be tasting and testing
• Bags in the boxes have higher oxygen transfer rates (“OTR”) than glass bottles
• Once opened, the boxes stay fresh for at least several weeks

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Combining a passion for wine with a background in marketing to Millennials from Proctor and Gamble, Ben Matthews launched Terratorium Wines. Building a brand for Millennials has led to creating target personas, packaging elements that lead to more transparency, and pricing to create a fine wine entry point. Hear about how Terratorium is creating brand alignment with its Millennial customers.  

Support the show on Patreon.

Detailed Show Notes: 

Millennial purchase drivers

• Want straightforward, more “natural,” less manufactured products - concern for clean ingredients for products that are “in you,” “on you,” or “around you”
• Want alignment on brand values, it’s more than just economics
• Like transparency for the manufacturing process
• Not as price-sensitive as people think they are
• Want to support brands you’re proud to tell your friends about, which increases the word of mouth velocity, e.g., Tom’s Shoe’s “Buy 1, Give 1” 
• Need the right price point (there’s a ceiling for Millennials) - ~$25-low $40s for a single vineyard, craft wine; the market entry point for fine wine
• Millennials are now 50% of parents, which is influencing buying practices, sustainability becoming more important

Developed personas for their target consumers - “who is my who?”

• Came up with fictitious characters - “Jake” and “Meaghan”
• Average older millennial professionals
• Creates a brand lens for wine style, packaging, varietal selection, etc...

Terratorium varietals

• Try to bring in not quite mainstream varieties
• Millennials like learning about things

Packaging - P&G says it’s “the 1st moment of truth” - need to capture the eye

Front label

• abstract graphic to visualize tasting notes, colors represent flavors that correlate to tasting icons on the back

Back label

• Tasting icons on what the tastes of the wine are
• Regional / vineyard information (new) - more hooks to remember the region (e.g. - soil types, climate)
• QR code for the website - will be more targeted in the future
• The Instagram handle on the back label - try to drive more traffic
• In the future - will have ingredients, nutritional information on the website

Winemaking for Millennials

• They like lower abv, fresher wines vs. heavier, oaky, more savory beverages

Wine Clubs

• likely to remain a viable system w/ Millennials, like regular shipments, discounts, and some form of community

Building awareness through marketing

• Active on social media - Instagram, Facebook, YouTube are the main channels for the older Millennials
• Partnerships with adjacent categories (e.g., nutritionists, health-conscious proponents)
• More in-person events in core markets - create more word of mouth presence, can’t replicate the in-person tasting experience
• Podcasts - saw some sales from the Inside Winemaking connection

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Taking over from his father, 2nd generation proprietor of Tablas Creek Vineyard, Jason Haas left a career in technology to dig into the soils of Paso Robles. Spearheading the conversion to Biodynamic farming and now the certification of Regenerative Organic farming, Tablas Creek has pioneered not just the Rhone movement in California, but of Regenerative farming, which looks to take into account the farm’s impact on the soil, community, and region. Jason believes that Regenerative farming is the only truly sustainable way to farm. Listen in to Tablas Creek’s progression from organic to biodynamic to regenerative. 

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Detailed Show Notes: 

Tablas Creek

• Pioneer of the California Rhone movement
• Based on Paso Robles - because of the calcareous soils, long growing season, and enough rainfall to dry farm
• Founded and run by two families
• Robert Haas, Founder of importer Vineyard Brands
• Perrin Family, owners of Chateau Beaucastel in the Rhone
• All Rhone varieties, including rarer varietal wines
• Own 270 acres, 125 planted to vines

Regenerative farming - similar to biodynamics, but thinks more about the externalities of agriculture

• Has commitments to less use of shared resources (e.g. - water, power)
• Has an additional focus on the big picture (e.g. - climate change with a metric to increase the carbon content of the soil)
• Biodynamics is process-based whereas regenerative farming is results-based
• Requires a series of audits - soil health audit, animal welfare certification (that they are treated humanely), farmworker audit (paying fair wages, increasing their skills -> led to weekly roundtable meetings)
• Focus on the positive impact on the soil, community, and region
• Does not have cow horns or the cycles of the moon like biodynamics
• Regenerative is an alternative to biodynamics that is more focused on science vs mystical processes

Benefits of the various farming practices

• Conventional - cheapest in the short term
• Organic - in the long run, not more expensive than conventional. Organic certification in wine has been mostly for lower-end wines in the $10-15/bottle
• Biodynamics -Initially believed it would increase the lifetime of vines and gain in quality from older vines. Discovered that lots grown biodynamically were the best lots right away in blind tastings.
• Regenerative farming - Less about the grapes vs biodynamics, more in externalities

Regenerative farming pilot program

• 6 Regenerative Organic certified wineries at the moment
• Got invited to the pilot w/o knowing what “regenerative” was or meant
• Can use the “Regenerative Organic” seal on their wines (vs just for the grapes)

Costs of farming

• Biodynamic/regenerative - have more hands-on labor vs organic or conventional farming
• Less chemical purchases
• Cost on a $/ton basis for farming has not increased significantly vs organic (~$3-5,000/ton)
• Has not experienced yield reductions, the yield has been more dependent on water (e.g. - 2-2.5 tons per acre in a dry / frost year vs up to 3.5 tons per acre for a wetter year)
• Has been able to avoid significant labor issues by maintaining its own vineyard crew (10 FTEs, started w/ own crew in 1996), paying a living wage and good labor conditions have led to good recruitment and retention of crew workers

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Seemingly overnight, 19 Crimes, a division of Treasury Wine Estates, has become a Top 15 brand in the US and has a global impact. Re-imagining what a wine brand could be, 19 Crimes has had many innovations, but found lasting success with augmented reality and celebrity partnerships with Snoop Dogg and Martha Stewart. Ming Alterman, Brand Director for 19 Crimes, gives us the history, best practices, and keys to success for the brand and AR. 

If you love the show, please consider supporting us on Patreon.  

Detailed Show Notes: 

19 Crimes Overview

• A Top 15 brand in the US according to Nielsen IRI, ~500k cases sold at $11.50/bottle average
• A virtual brand, no winery, no visible winemaker - disrupts what a wine brand can be - “The non-wine drinkers' wine”
• Americans often pick up a bottle because of the look and feel - developed the packaging and story to engage the consumer
• 1st black matte bottle, collectible corks with crimes on them, and augmented reality (AR
• Still need a wine that delivers for the price point and consumer first -> the wine quality creates repeat purchase
• Average consumer - 35-55 years old, wants to be a part of something and can relate to the story of the 19 Crimes
• Snoop Dogg's partnership has brought in 200k new consumers into wine from beer and spirits

Augmented Reality

• App has over 5M downloads
• Started w/ both AR and virtual reality (VR) to tell the story of the brand
• In 2017 - people didn’t want to put on the headset (VR) in-store but were okay downloading the app and AR took off
• Created a 3d puppet of the person, animated it, and recorded lines
• AR came a few years after the brand launch, was supposed to be a sales tool, but morphed into a consumer thing
• Consumer awareness - QR code on bottle to download the app, invested in POS displays and in-store marketing, some screens in aisles
• People scanned and download the app while in the aisle
• Success factors - instant gratification, people shared it and it went viral, good shareability, great creativity, and simple
• Requires ongoing investment in the app - e.g. - built ability to record in-app
• Usage goes up during holidays (people like to share it) or the launch of a new SK

Launching AR

• Easier now w/ web AR - can just do through camera phone vs needing an app
• Still have the Living Wine app
• Apple now recognizes QR codes with a camera, making it easier
• Getting cheaper, but still ~$80-200k to develop
• Ongoing costs - website updates, tech licenses (e.g. - AR engines), if there’s an app (easily 6 figures), creative updates
• Need a reason for people to come back and use it again

Marketing 19 Crimes

• Got tons of earned media
• Paid for Google Playstore/Apple App Store to get app downloads
• PR efforts and social media
• Ads feature AR as the hook

Success w/ celebrities

• Need them to be really passionate and involved
• Need marketing dollars to promote it, not just the celebrity deal
• ROI - for 19 Crimes, looked at the impact on the entire brand, not just the dedicated SKUs
• Compensation models - equity, royalties, up-front fees, annual fees

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