Editor-In-Chief’s Note: In this stimulating article, Cathy Huyghe, an entrepreneur and journalist in the intoxicating world of wine, draws parallels between working with data and dealing with wine, and sheds light on the common misconceptions and challenges surrounding both data and wine. From the perception of complexity and intimidation to the belief that one must possess specialized knowledge to engage meaningfully, this article confronts these barriers head-on. Through the lens of Enolytics, which Huyghe cofounded and still serves as its CEO, the article engages readers with stories and actionable insights. Huyghe is also the founder of the Harvard Alumni in Wine and Food (HAWF) Shared Interest Group.
Keywords: wine data, innovation, wine business, data analytics, Enolytics
The apparent challenges we face while working with data are similar to the apparent challenges that many people face as we start to drink wine. In both cases, there are the perceptions that data and wine are ‘difficult,’ highly specialized, intimidating, and expensive. There is, perhaps worst of all, the idea that there is far too much to know before anyone can ‘sound smart’ about either wine or data.
As a lover of both wine and data, and a professional at the intersection of those two fields, I am deeply invested in tackling the obstacles presented by these debilitating perceptions. In this article I address these challenges with an eye toward dismantling the traditional mores and biases that have long supported the conditions of misleading views.1
As a journalist by training, I have been writing about the business and politics of the wine industry for almost 20 years, most significantly for a column in Forbes online. Since my particular ‘swim lane’ for the column was the development of technologies within the wine and spirits world, it was clear to me that there has always been an abundance of industry data. There is also, however, comparatively little use or understanding or business intelligence applied to that data. Worse still, most wineries have been uninformed about their data or misinformed about their ability to access it, which disempowers them to put their own data to effective use over time.
Which is why we founded Enolytics in 2016: To demystify data for the wine and spirits industry, and to break down the barriers that stand in the way of use and application. Already, readers whose work focuses on data and analytics can start to recognize the familiar chorus of educators on the subject, which orients around understanding, demystifying, and making practical (and dare we say enjoying?) a culture of data. The very same chorus echoes for educators of wine, whose goals most often are to understand and demystify the subject for their students, and to make it practical and enjoyable in everyday usage and culture.
Here are are some foundational similarities and misperceptions about the subjects of wine and data, along with ‘boots-on-the-ground’ applications that have solved for the objections.
Whether discussing the subject of ‘learning wine’ or ‘learning data,’ three objections are voiced most often. They have to do with language, difficulty, and time.
1. ‘I didn’t study this’ and its corollary, ‘These people don’t speak my language.’
‘Wine people’ do not often gravitate toward the study of data, and ‘data people’ do not usually take courses in wine. That is fair enough—they are very different skillsets, not to mention systems of thinking—and it is clear that the traditional educational pathways of the two fields have not so far overlapped.
One creative way we use language—and the user interface of data analytical software itself—to address this concern is to adopt a narrative approach, where ‘narrative’ literally means telling a story along the familiar and easily understandable Who-What-Where-When-Why-How Much sequence of storytelling.
In the Sales module of our software, for example, the user (presumably a ‘wine person’ with limited experience of interactive dashboards) will click on a link that says, quite literally, “How Much Did We Sell?” They click through to a visualization that answers that question exactly, for a time period and channel that they are able to adjust and filter. It is an easy pulse-check on the most essential key performance indicator (KPI).
In the Wine Club module, the user will click on a link that says, “Who Is At Risk of Leaving the Wine Club?” They will be led to a visualization of their own customers who are at Very High, High, Medium, and Low levels of risk of leaving their club. The user can also filter their customer list by variables including demographic (Gender, Affluence, Generation), recency-frequency-monetary (RFM) analysis, and lifetime spend. Since wine club sales often represent the highest profit margin of any sales channel, this link is usually the most clicked-on visualization of the entire software. With that segmented list in hand, staff act proactively to retain those customers at risk.
In the Tasting Room module, the user can click on a link that says “What Was Sold Together?” They are led to an interactive visualization of basket analysis, where purchases and their correlations are represented on a heat map along two axes of varietals within that winery’s portfolio. This visualization shows Tasting Room staff the wines that guests are already requesting together, which guides adjustments to their offerings moving forward. Nadia Kinkade, as director of the direct-to-consumer (DTC) program at Far Niente Wine Estates in Napa, said in email communication (January 30, 2024), “We leverage the ‘What Was Sold Together’ report to identify popular wine pairings, enhancing club customization options and increasing the average order value.” The “What Was Sold Together?” feature is effective for live, in-person interactions in Tasting Rooms as well as written communications in the form of marketing emails or text messages. Nickel & Nickel, for example, has 18 distinct Cabernet Sauvignon wines and varying customer preferences, so Kinkade and her team “customize messages based on individual purchasing history, ensuring timely updates on new releases, vintage endings, and personalized recommendations.”
These easy-to-follow prompts within the software, when they lead to a well-designed presentation of information, immediately turns on an ‘I get it’ lightbulb in users’ minds, even when the user does not think of themselves as a ‘data person.’
2. ‘It’s too hard’ and its corollary, ‘I’d have to learn new things.’
There is a learning curve to be overcome, no doubt. But leaders in both areas are breaking down traditional barriers of entry, such as more inclusive language and representation within the wine world to the data literacy movement, most especially Valerie Logan of the Data Lodge and her coining of the term “Information as a Second Language” or ISL. The learning curve remains and so too, now, do more creative approaches to stepping onto the curve and overcoming it.
More and more, given the recent climate of decreasing wine sales, wineries are turning to data analytics tools to buck downward trends. “Coming out of a hard year where most wineries saw their DTC business remain flat or decline, we saw ours grow,” Kinkade said. “I believe one of the most significant keys to our success is how we mine and use our data. We are in an age where our customers want us to talk to them as if we know them, and we should know them—we have the data.”
3. ‘I don’t have time’ and its corollary, ‘I’m already wearing so many hats.’
This objection becomes a question of resources, particularly time and bandwidth of people who already feel weighed down by their professional responsibilities. Overcoming the objection then falls to leadership and management who carve fresh space and time into schedules, both for the learning of new skills and for the implementation of them.
Black Ankle Vineyards in Mount Airy, Maryland, is a small estate winery that uses data to punch well above their weight class. Black Ankle produces just over 11,000 cases annually and cultivates a list of 3,300 wine club members, 80% of whom live within driving distance of their tasting room. “In 2023 we saw significant DTC wine sales growth, coming in at just over 14 percent when measured across all sales channels,” reports general manager Melissa Schulte in an email communication (January 30, 2024). “Member, repeat and first-time customer Tasting Room visitor traffic was up by eight percent.”
As a point of reference, industry-wide DTC sales for the same 2023 period were down by about two percent. How did Black Ankle manage such a differential, with a very small team?
For them, it came down to segmenting their customer data. “We can analyze our customers' buying habits, and target market certain groups to sell them the wine they want, before they ask for it,” said Black Ankle’s DTC manager, Zoe Lucas, in an email communication (January 30, 2024). “We have also found this effective in selling ‘last call’ wines, building relationships with our top-tier members, and alerting customers to events and experiences that will be offered. We have also used segmentation to build even stronger relationships with our top-tier customers by reaching out after visits, offering very specialized/older vintage wines, and making them feel recognized by our management team.”
In both wine and data, there are long-held misperceptions about the kind of people who engage with them. For data, the assumptions are clustered around math-oriented engineers and analysts. For wine, the assumptions tend toward people with ‘refined’ palates and deep pockets in order to afford more expensive bottles, travel, and experiences. The common denominators of both groups are that they are predominantly male, Caucasian, and socioeconomically privileged.
There is a certain amount of historical justification for these assumptions and perceived barriers, namely, that entry into previous generations of both ‘wine people’ and ‘data specialists’ was largely limited and exclusionary of diverse genders and ethnicities.
It is time for a ‘redo’ of the profiles of both ‘wine people’ and ‘data people.’ An immediate, and possibly surprising, statistic to light the fire is that two out of every three users of Enolytics’ software are women. In addition, 60% of super users are women. They have seized the opportunity to make noticeable differences on their teams and to their bottom line.
Here are three opportunities—around knowledge, momentum, and headwinds—for redefining personas and roles that I am seeing now in the wine space, 6 or 7 years into our journey with Enolytics.
Knowledge
Knowledge, or even the courage to try to learn and engage with both wine and data, earns a person a seat at the table. It has to do with value. In wine, there is social value to being the person to whom the wine list is handed when dining out with a group of friends. At wineries, there is financial value to the staff role of generating revenue through the use of data. We have seen this play out at both big wineries and small.
Momentum
The conversation, and the willingness to have the conversation, about the strategic use of data within the wine industry is very different than it was 7 or 10 years ago when winery owners and staff were still parroting the old adage that they were farmers, not ‘number crunchers.’ The difference between then and now can to some degree be attributed to the COVID-19 pandemic, when wineries were forced to move business online and engage digitally with consumers in order to maintain awareness and sales traction. Wineries know now that they can succeed digitally; their awareness is higher than ever before that data is a key lever of that success.
Headwinds
Full disclosure: I am concerned about the future of wine, and I am concerned what will happen if we as an industry continue to procrastinate around applying the most up-to-date technologies to our business challenges. To be clear, some wine businesses do use technology, data, and analytics to their distinct advantage, and they are frankly hitting it out of the park. Others, though, are being left behind. Amid general concern about the declining consumption of wine globally and within the United States specifically, the issue is pressing and increasingly urgent.
What differentiates one “future-proof” winery from the other? Within the wine world, who wins and who loses when it comes to data?
A low-hanging-fruit answer might be ‘bigger wineries,’ assuming larger budgets for investing in the technological tools as well as the human resources to put them into play. Although it is true that some of our biggest clients are also some of the super users of our technology, it is also true that other big clients underutilize the system, and that tiny wineries over-index on successes.
So, what is the common denominator among those wineries who are winning with data? Someone, or several people, who take ownership of the initiative, learn the software, take workshops, ask questions, and generally jump in with both feet.
The bottom line, then, quite simply, is effort and the right tools to transition ‘wine people’ into ‘wine people who are also data people.’
Cathy Hugyhe has no financial or non-financial disclosures to share for this article.
©2024 Cathy Hugyhe. This article is licensed under a Creative Commons Attribution (CC BY 4.0) International license, except where otherwise indicated with respect to particular material included in the article.
