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COPPER PEAK LOGISTICS

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Address

5555 Broadway Street/Hwy 29, Suite 100
American Canyon
CA, 94503
United States
Phone
(707) 265-0100
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(707) 265-0105
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Dave Dobrow

Copper Peak Logistics

Craftsmanship Fulfillment!

Copper Peak Logistics specializes in the art of fulfilling your brand promise to your consumer. Our services are custom crafted to support you as you create, market, store, pack, and deliver your passion to people across the nation. That’s more than just shipping. That’s helping you deliver on your brand promise..

The Copper Peak Logistics team is comprised of eCommerce and logistics industry veterans who are just as dedicated to your product as you are. Strategic warehouse locations allow us to cost-effectively deliver your hard work to 98% of the doorsteps in America in under two days.

For more information, visit us at http://www.copperpeaklogistics.com-- and don’t forget to check out our industry blog with wine industry and logistics news, tips, and expert insights.

 

Our Products and Services


We pick materials, package them correctly, and ship them by your preferred methods. These activities are coordinated with precision and completed using multiple quality controls to ensure accuracy and timeliness of every shipment.

What makes Copper Peak unique is that we are well versed in all types of order profiles – single lines, multiple lines, full cases, and full pallets – and can help companies manage both their B2C and B2B logistics models.

We are known for:

  • Pick, Pack, and Ship Services

  • Temperature controlled shipping and forward staging

  • Single Lines or Multiple Lines

  • Multiple Quality Controls

  • Our Proprietary Supply Chain Software Platform

  • Marketing and Sales Collateral with Analytics

  • Marketing Agent Programs

  • Kitting and Special Projects

  • Custom Branding Support

As Always We Are Very Thankful, But Maybe More So This Year

It’s Thanksgiving week. In coming days families across the nation will be sitting down to give thanks and celebrate all the good things that happened this year.

The Copper Peak team uses this time of the year to express thanks to our clients, business partners, family, and friends, and to celebrate another awesome year together.

But this year is different. The harrowing days of firestorms are still vivid in our memories, and so we also add our sincere appreciation to the brave men and women that came to fight the devastating forest fires of a month ago.

Our community has once again shown what makes it a great place to live and work. We have come through the worst that mother nature could throw at us a stronger and more resolute group.

Here are a few thoughts to keep in mind as we celebrate our great Thanksgiving holiday….

We’re thankful for the people. We have a great deal of faith in the people of California, and in the wine industry here. This is not the first time that the wine industry in California has had to deal with adversity. It has weathered floods and drought. It has tackled labor challenges, regulations challenges, and competitive challenges. It has even dealt with its share of fires before this year’s’ record-setting events. And every time, the people in this industry have met these challenges with hope, humility, and humor.

We’re thankful for life and opportunity. Our hearts go out to the people and businesses affected. We know that the impact of these fires for some is still being felt. That said, we also realize that things could have been much worse. We are relieved that so many stayed safe. And we know that with life and a good attitude comes opportunity. We are thankful for ours, and we hope that others will see the opportunity in this, too.

We’re thankful for help. From the brave people who fought the fires to those who volunteered their time and resources, we should be thankful for those who take risks to help others. We should also acknowledge the people all over the country who sent well wishes and offered support to everyone affected. That kindred spirit gave everyone strength as the firefighting wore on and continues now.

We’re thankful for everyone that loves wine. There has never been a better time to visit both Napa and Sonoma valleys to enjoy great winery properties and savor delicious wine and food. We hope everyone across the country and overseas will come see what wine country has to offer. And if a trip is out of the question, let your finger do the shopping online and let us bring our fabulous products directly to your doorstep. We are at your service.

In short, there is much to be thankful for this season. We hope that you will take a moment to reflect with us and toast all the things that bless you and yours.

Happy Thanksgiving!!

The Team at Copper Peak Logistics


News Archive


The Metrics of Wine Clubs
14 November, 2017

Many wineries have wine clubs. Far fewer invest in the tools, or take the time, to look at their wine club metrics and make improvements based on them.

This is a huge mistake. For one thing, DTC wine sales are on the rise; last year, DTC sales climbed 15%, and year over year are up 23%. They now account for 60% of wine revenue nationally (as we noted before). While this is great news, it also means that wineries not finding ways to improve their clubs will be left behind by the competition. Be honest: Are your DTC sales up 23%?

Another reason to look at metrics is churn. The average wine club subscriber keeps their subscription for 18-36 months, on average. Attrition rates vary wildly, but can run as high as 20% per year. That level of churn is incredibly costly. And yet, wineries who have been successful at using metrics to engage their customers have had subscription lifespans as long as 48 months.

In short, understanding the numbers behind your wine club gives you the ability to make strategic, data-powered decisions. Too many decision makers guess or assume that decisions they make for their businesses are the best course of action. Not only do you need accurate data, but you need to know which metrics you should be tracking. Doing so will empower you to forecast future needs, areas of potential growth, and opportunities for improvement– and start initiatives to address them.

Starting with These 3 Simple Wine Club Metrics

Though there are many metrics you can track, there are three main metrics, at three different scales, that will help club managers, as well as other winery departments, manage day to day operations, as well as helping to create a big picture strategy. Let’s take a look at the three scales of metrics:

  1. The Individual Level. This category includes some very important metrics that many professionals miss in their tracking programs. The length of club membership, what incremental sales are associated with each member, and the reason why members choose to terminate their membership all point to a concrete understanding of your customer. These provide a much better picture of your customer than the unfounded musings from staff about the customer experience, and can be used to launch loyalty programs or retention efforts.  Also, knowing the overall lifetime value of your club members not only helps you to qualify the customer to push to that value higher, and also helps you make determination on tasting room staff commissions.  
  2. The Club Level. This category includes tracking the attrition rate, the net turnover rate, change in club memberships (when customers move from, say, your Reds Only Club to a Mixed Wine Club, or 6 bottle to 12 bottle club) and percentage growth of each club. These are basic metrics that will help understand the overall health of your club as well as compare your club to industry standards. These metrics are also extremely handy when communicating to your vendors about packaging needs, fulfillment services and special gifting projects.
  3. The “Big Picture” Level.  This is the category that shows how your club relates to the rest of your business. Knowing historically how much wine in total, and by skus, your club demands will make forecasting with your production department clear and also helps to set realistic release dates .  Make sure to look at both the amount of wine sold and the percentage of DTC in comparison to the wholesale side of the business. The other decisions that this category will help with is forecasting your staffing needs. If your club is on a 5 or 10 year trajectory to double the percent of the company’s profits, it might be a perfect opportunity to adjust staffing to DTC.

Remember that the metrics are only as good as the accuracy of the data. As you create the tracking programs and what reports you will consistently run, be diligent in your records tracking so that your decisions are based on the most accurate data possible.


DTC Wine Sales and Wine Law: An Interview with Steve Gross, Vice President, State Relations at Wine Institute
08 November, 2017

For the second installment of our expert series, our own Dave Dobrow spoke with Steve Gross, Vice President, State Relations at Wine Institute and an expert in the DTC wine business. Wine Institute is the voice for California wine, representing more than 1,000 wineries and affiliated businesses. Dave and Steve sat down to discuss compliance, wine law, and the future of DTC wine sales.

 

DaveSo glad you could speak with me today, Steve. Before we get into stuff like compliance and industry trends, can you say, for our readers, a little about Wine Institute and what it does?

Steve: Of course. Wine Institute is the largest advocacy and public policy association for California wine. We represent the industry at the state, federal, and even international levels, finding ways to help the industry flourish and contribute in a positive way. So, for example, we might oppose bills that lead to franchise monopoly, or that limit the quantities of wine that wineries can ship directly to consumers. Or we might encourage wineries to adopt sustainable business practices, use responsible advertising, and stay in compliance.

At the heart of it all, though, we want to reframe the entire social debate about wine in this country. So a lot of what we do is just educating people, both consumers, and decision-makers, about wine’s legitimate place in a healthy lifestyle.

 

Dave: Amen to that! So where does Wine Institute sit when it comes to selling wine Direct to Consumer [DTC]?

Steve: Well, the goal is to get all 50 states to be DTC friendly, so to speak. And we’re close: Almost all 50 states allow for DTC wine sales, with a few exceptions. Mostly, we’re looking at minor tweaks to state laws at this point.

That said, the hard work begins after a law is on the books. There’s always the maintenance and improvement aspect. There are other interests who would love to weaken DTC laws, and they work hard, too, to get that done. So Wine Institute is often working on existing bills and legislation, making sure they remain friendly to the California wine industry.

 

Dave: Can you give me an example?

Steve: So, a state might have laws that allow DTC shipping. That would allow consumers to buy wine online, or be part of a subscription service. When subscription services start becoming popular, you begin to see amendments to the law popping up—you might see, for example, someone wanted to specify that DTC is OK only if the winery doing the shipping produces less than a certain cap. In 2017 we employed local contract lobbyists in 46 different states, and a part of their role was to try to keep their state’s laws DTC friendly, among other things. [We have written extensively on these subscription models before; for background, see here. —Dave]

There’s a lot more we work on, too. We might tackle taxation of wine, extreme DUI laws, or trade practice rules…anything that touches the wine industry.

 

Dave: Well, the DTC stuff is what I find interesting, obviously! So let me ask this: In all your work on DTC laws and compliance, what are you seeing? Where is the industry going? Is it an uphill battle for DTC, or is it time to jump on the bandwagon, for example?

Steve: Great questions. Overall, I’m seeing the industry as a whole growing. Business is beginning to ramp up. That’s due both to growth in existing segments and in new segments.

But you asked about DTC specifically. It is growing, but wineries need to be careful here. It’s not like the tasting rooms and retail locations and restaurants are going to go away. People still like that shopping experience. So people will continue to shop the brick-and-mortar stores in addition to taking advantage of the convenience of online shopping.

Indeed, the way pricing goes, it is sometimes cheaper to purchase from a local retailer than it is to buy online and pay shipping costs. So someone looking into DTC needs to find some smart ways to control those costs and still give the consumer the convenience and experience they want. But I guess that’s where you guys come in!

 

Dave: Yes, we might know a thing or two about shipping wine! And we do a lot of subscription services, wine clubs, that kind of thing. But back to your work: You’re saying that DTC is still going to compete with brick-and-mortar sales?

Steve: That’s part of it. But remember, retailers are allies here, not enemies. It’s very hard, if you are an established winery, to just switch over to DTC. You are probably selling to retailers through the 3-Tier system, and will need to continue to do so. So when a winery is setting its prices, it needs to do so in such a way that the retailers are kept happy as well, so they can continue to do a vibrant business. Wineries can’t undercut those merchants.

 

Dave: That’s very wise, Steve. But it also sounds as if DTC is something of a slow burn. Are you suggesting that wineries stay with what they are doing, and just do DTC “on the side,” so to speak?

Steve: I wouldn’t say that. Every winery is different. A newer, smaller winery might be able to start from scratch selling mostly DTC. It would take a lot of promotion, and maybe contact through social media, but it could be done. [Our last installment of the expert series talked about social media and winery promotion in an interview with Paul Mabry; you can catch it here. —Dave]

On the other hand, a more established winery might have a 3-Tier distribution agreement in place. So, if they want to bring on DTC—which they should, given the profit to be had—they need to think hard about their pricing and their shipping rates. They need to keep everyone happy.

 

Dave: And a 3PL, like Copper Peak, can help with that, obviously.

Steve: Of course.

 

Dave: What else do wineries need to think about with DTC?

Steve: Again, compliance. I see enormous room for growth in the wine club and subscription model space—that’s a good thing. But the more visible growth and success there is, the more scrutiny there is going to be. As DTC begins to take off, regulators are going to be taking a closer look. So are competitors.

This means wineries will need to make extra sure they are doing everything in compliance with local and state laws. States appear to be looking more at illegal shipments from retailers at this time, but that is slowly changing.  Wineries who aren’t following the rules are getting caught up in compliance stings more often these days as well.

 

Dave: When you say “a closer look,” what exactly do you mean?

Steve: States are trying harder to make sure folks are in compliance when it comes to the DTC laws that are on the books. This has trickled down to the carriers too; they are taking extra steps to make sure that all wine is being shipped in compliance with state laws. That means that sellers, 3PLs and 3rd Party Shippers will have to make sure they are following their Alcohol Shipping Agreements with the carriers.

 

Dave: Can you give an example?

Steve: Sure. So, private individuals often come to California for a wine tour. And they might buy some bottles here in the state for home consumption. The winery might not be able to ship those if it does not have the proper license.

Anecdotally, we hear of a number of 3rd party shippers that offer those consumers the opportunity to ship their bottles to themselves at home. That practice is getting closer scrutiny – at the state and carrier level too.  Most state laws allow ONLY for shipments from a licensed winery or retailer; there is no provision for a consumer to ship wine to themselves. And there are strict rules on this practice. The carriers and states are both focusing in to make sure that only licensed shippers are sending wine into those states where they can legally do so.

The details can get a little boring here, but they are quite clear! So I encourage your readers to follow up on their own. Suffice it to say, it pays to just get the license and do everything the legally correct way and on the up-and-up.

 

Dave: That’s important advice. Any final observations or thoughts?

Steve: Yes! We have a grassroots initiative called “Free the Grapes” that addresses these issues, and more. We want wine lovers to be a part of it. All it takes is two minutes to let your state legislators know how you feel about bans on winery and retailer direct wine shipments. Wine lovers can do this through an easy form on the Free the Grapes website, then sign up for updates.

For their part, wineries can encourage folks to do this. All it takes is a sign-up sheet or kiosk in their tasting room. In fact, that’s a great place to do it: Your customers will just have enjoyed your wine, and will be thinking about how to get more at home. When they learn that there might be some legal obstacles to doing so, they’ll be happy to send a note.

 

Dave: Plus, it’s another way to get them to linger in the tasting room!

Steve: <chuckles> Yeah, there’s that! But really, it’s all related, isn’t it? It’s all about the experience, right? I think that’s what this all comes down to. Wineries want to extend the experience customers have in the tasting room. DTC allows them to do that. Wineries will have to approach DTC responsibly, and Wine Institute will work on its end to make it easier for everyone.

 

Dave’s Follow-Up

Based on Steve’s discussion, here are 10 things to look at if you are a winery considering, or wanting to improve, DTC sales:

  1. Get your licensing in order.
  2. Get educated (if you haven’t already) on the different kinds of subscription services.
  3. Know the state laws when it comes to shipping wine.
  4. Get a process in place to make sure you are in compliance at all times.
  5. Figure out your pricing strategy and vet it with your retailers.
  6. Figure out your shipping strategy and how it fits with your promotions and marketing.
  7. Think about how your tasting room, if you have one, fits into the picture.
  8. Think about how you are going to promote your brand to consumers so they know to buy directly.
  9. Find trustworthy partners who can help you implement your compliance, marketing,  shipping and fulfillment strategies.
  10. Get those customers to join the fight at http://freethegrapes.org/.

For more content, please visit our blog.

Interested in some of those pricing and shipping strategies for your DTC sales? Call Dave at 707.265.0100.

Thinking of getting started with a subscription service, but don’t know where to start? Fill out our contact form.


Should Your Vendors Be Specialists, or Comprehensive Providers? Why You Might Be Promised Too Much.
23 October, 2017

 

There is a lot of blurring of traditional lines of business these days. Web designers are advertising content, SEO, and more; tech companies are selling themselves as eCommerce experts; marketing companies are claiming to be tech companies. In this environment, it is natural to ask: Does one look for vendors who offer a comprehensive set of services?  Or do you assemble a team of specialists who are best-in-class in their niche?

This very issue came up while meeting with a winery prospect not too long ago. They were looking for new ways to grow their business to ensure they were keeping pace with industry growth,  and considering the merits of a “one-stop-shop” solution that included not only 3PL services but eCommerce support as well (including web design, server maintenance, marketing—the whole nine yards).

So let’s tackle the question: If you are growing a business, should you turn to a logistics specialist for logistics, an eCommerce specialist for eCommerce, and so on? Or do you go with a firm that provides a comprehensive set of solutions all under one roof? Let’s look at the pros and cons of the “comprehensive” approach versus the “team-of-specialists” approach.

The Comprehensive Approach

There are a number of services that might seem like a natural “fit” with logistics and fulfillment services: eCommerce, channel management, website design, marketing, and so on. Some companies are catching on and offering the whole suite of services as a way to differentiate themselves.

Pros:

  • Researching and contacting the vendor takes less time (the process need be done only once)
  • Integration might be less of an issue
  • Only have to deal with one company

Cons:

  • No one is an expert in everything; additional services may be subcontracted or outsourced from time to time
  • Although the company might be best-in-class for one service, it might not be so for others
  • Siloed departments could still face communication and integration problems
  • Less freedom to shop around if one portion of the solution doesn’t work

The Team-of-Specialists Approach

Vendors who specialize in a narrow set of services within their core competency are much more likely to be best-in-class providers. Service tends to be better, prices more competitive, and technology used in ways that streamline processes. But given the narrow approach of these specialized vendors, several of them will need to be brought on board. Integration can be a challenge.

Pros:

  • Freedom: You are free to choose the solution that fits your organization for each need
  • Able to choose best-in-class solutions for each need (fulfillment, marketing, eCommerce, etc.)
  • No subcontractors and no “middle man” means less markup, more savings
  • Because each vendor specializes, it is easier for them to grow a book of business and achieve economies of scale

Cons:

  • Shopping around the various vendors can take time and effort
  • Management will have to ensure that vendors can work together
  • If data need to be passed from vendor to vendor, the relevant IT systems will have to be successfully integrated

 

How To Tell A Vendor is ‘Offering You the Moon’

At the end of the day, most companies are not worried about vendors using one approach or another. They want to find the simplest, easiest way to get their business done.

Vendors are trying to get the most business they can, naturally. There is nothing wrong with that in principle. But sometimes, in a rush to get new business, a vendor will dabble in services well outside their areas of expertise. You know what happens next: They over-promise, under-deliver.

So what are some red flags that should warn you that a vendor is offering too much?

  • There’s no discovery process. A good vendor asks questions and tries to get a feel for your business. That lets the vendor figure out what, exactly, they can do for you. If a vendor just offers a price or a package before getting clear on the details, they are selling a service, not a solution.
  • They can’t say, succinctly, what their specialty is. Let’s face it, when you say “My company specializes in…” it also means there are things it doesn’t do. And that scares some people because they think it means lost business. But the opposite is true: If they can’t say what their specialty is, they either don’t have one, or they are trying to subcontract out a lot of what they do.
  • They can’t say who a good “fit” is. Same principle as above. Not every market is a good fit for a vendor. If they say “We serve everyone…” that’s a bad sign.
  • There’s no plan for visibility. Will your vendor let you see your data? How often do they report to you? Are processes mostly transparent? If the answers are “No, not very often, and no,” you are headed for problems later on. Having distinct processes in place to provide visibility, on the other hand, is a good sign.

As the wine industry’s’ DTC space continues to evolve, so does the role of fulfillment centers. If you would like to see a good illustration of a vendor that specializes, but that can also work as part of a team of specialists because they know the space, we offer ourselves as an example. Check out our capabilities page or contact us.  We’d love to help.


Differentiation with Digital: An Interview with Paul Mabray, Vice President at AveroBuzz, Champion for Social Media in the Wine Industry
11 August, 2017

Paul Mabray is the founder of WineDirect, VinTank and currently a Vice President at AveroBuzz. Our own Dave Dobrow sat down to talk with him about social media, digital engagement and using data to craft the customer experience.

Dave: So Paul, you started Vintank (now operating under Avero as AveroBuzz), which is social media software designed specifically for the wine industry. And you’ve been a champion of social media and branding in the wine space for years. Why do you think social media and social media engagement is so important for wineries these days?

Paul: Well, let’s take a step back. What is one of the biggest challenges for wineries these days? Without question, it is the need for differentiation. You need something different in this space in order to make it. This is especially true now that eCommerce has hit the mainstream. Customers aren’t just purchasing a few dozen brands from a handful of local stores. They literally have thousands of options available. And too many of those options look, sound, and feel the same.

So what can you do in a world where wine and wine brands have been so homogenized and commoditized? That’s really the first question we have to answer.

Dave: OK, so let’s go there! What can wineries do to break through the noise and really offer something different?

Paul: I think it all comes down to experience. And that takes engagement. Wineries have done pretty well at innovation when it comes to product. But they are still trying to figure things out when it comes to engagement.

So how do you engage? The main thing right now is the digital user experience. Nowadays that’s the key to how you engage your clients when they are not at your tasting room. You need to put your best foot forward and create the best experience, all the time, every time. That’s how you turn average consumers into raving fans.

The first thing you can do digitally is learn about your customers. Segment your market and your customer lists, and use social graphics to really dig into the data. What does your average customer like to do? What music do they listen to? What news do they follow? If you know these things, you can speak to their interests and their lifestyle, weaving a brand story around that.

You can also identify types of wine buyers. Who goes for new products? Who signs up for your wine club? Who is buying the premium stuff? Any bit of information can be relevant: Demographics, social graphics, conversion analysis, audience insights, and so on. These should inform your overall strategy.

Here’s another thing you should do—it’s not digital, but it can inform your digital strategy: Visit your top 25 customers. Talk to them. See what makes them buy, what they like, and what they dislike. And then reach out to your underperformers too. What’s missing that could drive further engagement and sales?

Once you’ve learned about your customers, start creating the experience. For example, wineries should be rewarding customers for retention and participation. Suppose you have a subscription service, a wine club. Are you rewarding customers for each year they stay with the club? Miner does that: They give loyal members an extra gift card each year, just to say “Thanks.” People remember that, and they stay in the club to reap that reward year after year.

You can also use rewards to encourage further purchase and engagement. Once a customer is in the funnel, have a system where, the more they spend, the more they can unlock in terms of experiences and value adds. FedEx does this to an extent, right? The more you spend, the deeper the savings they give. There’s even more you could do in the wine space: Premium bottles, winery tours, limited editions, case discounts.

Finally, you need to pay special attention to the end-user experience. This might not go beyond your wine label when talking about the big box stores, but you can definitely control the experience when you are shipping direct to consumer. Ask yourself: What happens at home once the package arrives? Do you communicate with them? Encourage them to reach out? To buy more? Are you making them nostalgic for their trip to your winery, and continuing those warm feelings? All of these are to get you thinking: How are you making the receipt of that wine an experience in itself? [Note: We actually give several detailed examples of how to do this in our blog post and white paper on the “unboxing” experience. —DD]

Dave: What I’m hearing is a three-step process: Gather your data to get to know your customers, reward them for spending and for loyalty, and create a great end-user experience. How does this all work with social media?

Paul: Glad you asked! This is really the groundwork. If you do these things, you’ll see the effect on social media. People are sharing their experiences of brands, making recommendations to friends, and so on. It’s great free publicity—but you really have to wow them first.

Social media is also your go-to place for information. It lets you know customers at scale. You really have to become a kind of CRM anthropologist…look at your customer data every which way until you feel you know your customers, what makes them tick. And, of course, you need to look at their buying history or subscription history.

It’s not just data either. Many people are reaching out to brands on social media when they have a question or a complaint, or just want a recommendation. If you are responsive and helpful, that, too, is part of the customer experience. And again, it’s one where you’re in control. You’re creating your own brand experience for them.

Dave: What about subscription models? You mentioned them earlier as a way to create a great end-user experience. Is this where the industry is going? How does it link up with branding?

Paul: Look, the subscription economy is here to stay. No doubt. Really, it’s been around for a while; newspapers did it, record clubs did it. [Note: For interested readers, we wrote a little bit about the history of flash sales and subscription models in this earlier post. —DD] Now we’re seeing many more companies that have nailed it. Who doesn’t have a subscription to Netflix, or Hulu, or iTunes? Who hasn’t heard of Dollar Shave Club, or Stitch Fix? They get it. There’s even a subscription service for flavored waters, Hint Water, and they’re doing great.

It makes sense. The best way to realize a profit is to sell directly to a customer, and sell to him or her multiple times. If you can encourage customers to buy wine to drink (and not just to store in a cellar somewhere), and get them really excited about your brand, it’s a no-brainer as a business model.

That said, the subscription services economy is an underachieving segment, in my opinion. There is a lot of opportunity there, but you have to get a lot of things right. For example, you need to really target and understand your customer, and then data-analyze that customer…who they are, where they are, purchasing history, and social media activity. You have to have good content that resonates with those customers. And you have to communicate with each shipment. [Note: We discuss what Dollar Shave Club got right in our analysis of Unilever’s purchase of it, here. —DD]

Gone are the days when you could just “spray and pray” with your marketing messages. You need to tailor your messages to your segments, even down to the individual. Social media lets you do that.

Dave: Sounds like some wineries have a lot of work to do! Can you wrap up by maybe speaking to the ROI of all this engagement?

Paul: Of course. First, let me say that this is a process. It doesn’t happen overnight, and you won’t have all the answers out of the gate. You need to set some digital plans, figure out your spend, and track your efforts to see what is bringing the most value to you. Every brand will be a little different. That’s the point. But you have to crunch the numbers.

Here’s a prediction I can make, though. Ten years ago I was saying that the people who excelled at DTC, who knew how it works backwards and forwards, would be the ones stepping into the Director, VP, and CEO roles. That has come true today. Now I am predicting that tomorrow’s VPs and CEOs will be the folks who excel at digital. They will be winning the battles for differentiation and brand exposure.

Dave: Great, thank you Paul—hopefully we can talk in 10 years and see if your prediction has come true!

Dave’s Follow-Up

Based on Paul’s discussion, here are 10 questions that wineries should be asking themselves when it comes to their digital efforts:

  1. How will your brand differentiate itself in the eyes of your market?
  2. What are your digital plans, and how do you plan to spend your marketing dollars?
  3. What are your customers “into”?
  4. What are your top 25 spenders telling you? Your underperformers?
  5. What data are in your CRM, and are they helping with engagement?
  6. What can you do to acquire and retain customers?
  7. How are you encouraging more spending? Sharing? Loyalty?
  8. Are you finding ways to sell to customers multiple times?
  9. How are you improving your customer experience?
  10. Are you making an investment in your own people, so that they can master the new digital frontier?

For more content, you can visit our blog.

Have a tasting room, but want to explore subscription services or digital engagement? Contact us here.

Already have a subscription service, but want to maximize it? Call Dave at 707.265.0100.


The Industry Speaks: DTC Wine Revenues Up, And Subscriptions Will Soon Be Nailed Down
02 August, 2017

The most recent issues of Wine Business Monthly had some astonishing (and telling) things to say about the growth of DTC sales in the wine industry, based on their 2017 Wine Business Monthly/Silicon Valley Bank tasting room survey. We thought it best to highlight some of them, and then ask “Why?”

First and foremost was that DTC sales were up 15% on average (including both tasting rooms and wine clubs), with direct sales now accounting for 60% of winery revenue nationally. We suspect that these numbers would be even higher if we looked only at small-to-medium-sized wineries.

Furthermore, the increase in DTC sales seems attributable to two main factors: 1) A sharp increase in the number of millennials and gen X-ers buying DTC, and 2) An increase in the price of DTC products (i.e., more premium-brand sales vs. simple increase in volume). As these links show, we here at Copper Peak have been reporting on these trends for some time.

But why, as a winery, should you care about the industry trend? We’re reminded of that motherly wisdom: “Well, if everyone jumped off a bridge, would you do it too…?”

Granted, wineries have limited resources, and they need to make careful decisions about where to invest their time and energy. Still, these reports serve as great benchmarks against other wineries. Everyone is trying to, as the article states, “up their game.” If more and more are investing in their DTC models, something is afoot.

What’s Going on with DTC, and Why?

What is going on is that wineries are realizing there is more margin in selling direct to consumers—if you can manage to do it right. This is because:

  • DTC sales cut out the middleman. This already means more profit for the winery itself.
  • Selling DTC means more opportunities to turn buyers into loyal customers and fans. Selling through restaurants and big box stores does not give brands the opportunity to tell their story and let their personality shine through. Selling direct to consumers, however, affords wineries the ability to build a relationship with potentially loyal customers. These customers tend to spend much more over time, compared to casual buyers.
  • DTC allows recommendations and personalization. Once a relationship is built with a consumer, there are many opportunities to personalize the sale: Personal recommendations, “unboxing” experiences, and more.

Again, the demographics are shifting in favor of DTC models: Millennials, for example, are more interested in brand stories, more accustomed to having goods delivered to their home, and more apt to share positive brand experiences on social media. Older generations, for their part, are reaching a stage where they have more disposable income and are willing to experiment with trying premium brands on a more regular basis.

What About Wine Clubs, Specifically?

While the data on tasting rooms are interesting, we should take special note of the survey’s paragraph on wine clubs, located further in the article:

“The most important metrics wineries track include conversion of customers to sales, average rate of conversion to wine club, and length of wine club membership. These metrics are trending upward. Average wine club conversion rates rose to 7 percent in this year’s survey, compared to 6 percent in the previous survey. The average tasting room purchase reached $122 this year. The average wine club member now stays in the club for 30 months.” 

This shows that wine clubs are slowly gaining in popularity. Many more wineries are discovering how to run them, and run them according to best practices. (For more on this, see our white paper on subscription services.)

Furthermore, location matters. For example, the greatest percentage of DTC sales coming from wine clubs (as opposed to tasting room sales) are occurring in Napa, Sonoma, Santa Cruz and Monterey, Santa Barbara, and Mendocino County; these regions are the ones showing the largest increase in new members. These are also the regions where the lowest percentage of customers actually live in the region. This signals prime opportunities for wineries in these regions to expand their footprint via wine club sales.

All of which means there is still time to get up to speed with your wine club—but not much. Processes surrounding marketing, social media, fulfillment, and shipping all need to be perfected, and all done with the end customer in mind.

If you don’t, plenty of others will. It is they who will win market share and drive next year’s increases.

If you are considering moves to “up your game,” read our piece on the different kinds of subscription wine models, or else feel free to reach out and call us.


How Should Wineries Structure Their Shipping Deals? 8 Awesome Ideas.
12 July, 2017

Roughly 88% of consumers say they would be more likely to shop at a site online if they were promised free shipping. No wonder so many merchants are considering discounted or free shipping.

The question is: Should wineries be doing the same for their DTC sales? Or for their wine clubs and subscriptions services?

More importantly, are such incentives a solid part of a long-term business strategy, or are they more a short-term band-aid that only serves to squeeze margins thinner?

The shorter answer is that there is no easy answer. There is no single strategy that will work for every winery or wine business. Still, we’ve found that some solid “best practices,” along with some creative ideas, can be an awesome combination:

 

  1. Know the laws regarding shipping. For example, the California ABC states that No free goods or premiums may be provided in connection with the marketing and sale of alcoholic beverages. This includes free shipping. Shipping may be included in the price but it cannot be offered as “free shipping.”
  2. Measure the effects. If you sell online, look at your numbers for cart abandonment. Try to figure out if consumers really are abandoning the sale at the point where shipping rates are revealed. If so, discounted shipping may be the cure. If not, look elsewhere, or you might be cutting into profits with little to show for it in terms of increased order completions.
  3. Be cautious about devaluing your product. Discounted shipping can keep you relevant in the marketplace, but be wary of the impression you are creating. Also, pay attention to the pace of discounts: Are frequent discounts making you look like a value brand when you are not a value brand?
  4. Pay attention to context. Where is the offer being made? Digitally, through emails exclusively, or in the tasting room? Consumers may be used to receiving shipping offers via email, for example, but find the discussion awkward in person.
  5. Make them “work for it.” Many retailers offer free shipping when customers spend a certain amount ($50, for example). Then, instead of balking at shipping rates, the customer receives an incentive to spend more. The free shipping is partly paid for by the increase in average order size.
  6. Include shipping as part of a “membership.” Amazon figured this out with their Prime membership. If you have a wine club, charge an up-front members’ fee to help offset shipping costs, then make each order free or “shipping included.”
  7. Try “promotional period” shipping deals. These are shipping offers that are good for only a limited time, perhaps even a single purchase. For example, you could offer a seasonal deal, a “first-time buyer” deal, or a loyalty or wine club bonus.
  8. Look for efficiencies. Would it be easier to ship kits or bundled items instead of solo products? What is the ideal purchase size where a shipping discount makes sense? Can you encourage larger purchases with flat-rate shipping? Sometimes the question to answer is not if to use a strategy, but when.

 

In short, the question should not be whether free shipping or shipping discounts are “worth it.” The real questions are what matters to consumers, how do you want your brand to appear, and how can your establishment offer creative shipping deals that do justice to both?

Many of these ideas above came from our panel discussion at the 2016 Direct to Consumer Wine Symposium held in January 2016. We have a brief transcript of the panel, along with other useful tips, in our white paper “Discounted, Flat Rate, or Free Shipping: What’s the Right Strategy?” available for download now!

You can also discuss your particular pricing and fulfillment challenges with one of our experts by contacting us.  We’re at your service!


How Should Wineries Structure Their Shipping Deals? 8 Awesome Ideas.
12 July, 2017

Roughly 88% of consumers say they would be more likely to shop at a site online if they were promised free shipping. No wonder so many merchants are considering discounted or free shipping.

The question is: Should wineries be doing the same for their DTC sales? Or for their wine clubs and subscriptions services?

More importantly, are such incentives a solid part of a long-term business strategy, or are they more a short-term band-aid that only serves to squeeze margins thinner?

The shorter answer is that there is no easy answer. There is no single strategy that will work for every winery or wine business. Still, we’ve found that some solid “best practices,” along with some creative ideas, can be an awesome combination:

 

  1. Know the laws regarding shipping. For example, the California ABC states that No free goods or premiums may be provided in connection with the marketing and sale of alcoholic beverages. This includes free shipping. Shipping may be included in the price but it cannot be offered as “free shipping.”
  2. Measure the effects. If you sell online, look at your numbers for cart abandonment. Try to figure out if consumers really are abandoning the sale at the point where shipping rates are revealed. If so, discounted shipping may be the cure. If not, look elsewhere, or you might be cutting into profits with little to show for it in terms of increased order completions.
  3. Be cautious about devaluing your product. Discounted shipping can keep you relevant in the marketplace, but be wary of the impression you are creating. Also, pay attention to the pace of discounts: Are frequent discounts making you look like a value brand when you are not a value brand?
  4. Pay attention to context. Where is the offer being made? Digitally, through emails exclusively, or in the tasting room? Consumers may be used to receiving shipping offers via email, for example, but find the discussion awkward in person.
  5. Make them “work for it.” Many retailers offer free shipping when customers spend a certain amount ($50, for example). Then, instead of balking at shipping rates, the customer receives an incentive to spend more. The free shipping is partly paid for by the increase in average order size.
  6. Include shipping as part of a “membership.” Amazon figured this out with their Prime membership. If you have a wine club, charge an up-front members’ fee to help offset shipping costs, then make each order free or “shipping included.”
  7. Try “promotional period” shipping deals. These are shipping offers that are good for only a limited time, perhaps even a single purchase. For example, you could offer a seasonal deal, a “first-time buyer” deal, or a loyalty or wine club bonus.
  8. Look for efficiencies. Would it be easier to ship kits or bundled items instead of solo products? What is the ideal purchase size where a shipping discount makes sense? Can you encourage larger purchases with flat-rate shipping? Sometimes the question to answer is not if to use a strategy, but when.

 

In short, the question should not be whether free shipping or shipping discounts are “worth it.” The real questions are what matters to consumers, how do you want your brand to appear, and how can your establishment offer creative shipping deals that do justice to both?

Many of these ideas above came from our panel discussion at the 2016 Direct to Consumer Wine Symposium held in January 2016. We have a brief transcript of the panel, along with other useful tips, in our white paper “Discounted, Flat Rate, or Free Shipping: What’s the Right Strategy?” available for download now!

You can also discuss your particular pricing and fulfillment challenges with one of our experts by contacting us.  We’re at your service!


Starting a Business is Like Raising a Child…
21 June, 2017

 

Elon Musk, CEO of SpaceX and Tesla and a world-renowned investor, engineer, and inventor, once said, “Creating a company is almost like having a child.” Man, was he ever right.

Ten years ago we gave birth to our baby, Copper Peak Logistics. It wasn’t just a matter of getting an idea on a whim, raising some capital, and hanging a sign on a building. Like raising a child, it has been a slow and steady growth, full of challenges and (more often) rewards.

And we hope that, by sharing a little bit of this journey, we can give you a true feel for what Copper Peak Logistics is all about.

The Concept(ion)

Importantly, we did not simply choose to form Copper Peak on a whim, nor was it an accident. Ours was a carefully crafted decision, based upon quite a bit of due diligence and a gut feeling that, in the end, it could be the most rewarding thing we could do.

We also decided that we wanted to be different. And I do think Copper Peak really is unique in the industry.

Raised to be Special

It has been 10 years since we made that initial decision, and we are certainly proud parents. Our baby is exactly what we wanted—unique and unlike any other. We like it that way.

For example, we put a special emphasis on craft and craftsmanship fulfillment. We invest in our employees and make them like family. And while we do keep up with trends in the industry, we know that the core of our business is hard work, close relationships, and knowledge based on experience.

We also made sure that we were good parents by using the money we had saved to pay for the best education and upbringing we could find. This meant making sure that we had the industry knowledge and business savvy to make Copper Peak into a thriving business…without losing that character that makes us different and special.

 

It Takes a Village

The old adage “It takes a whole village to raise a child” certainly applies to our metaphor as well. We couldn’t have done it all by ourselves. Our village embodies an entire group of companies and individuals that have helped shape our personality. It would be downright rude not to give them a shout-out here!

Our Employees

We’ve managed to employ some of the best and brightest in our industry, and they have turned out to be wonderfully creative and supportive. By giving them a great place to work and treating them like family, we’ve built a team of dedicated, highly motivated members. We couldn’t work with better people!

Our Business Partners

Just like our employees, our business partners are some of the best. We complement each other with common goals, making for profitable and fun partnerships. More importantly, we have found that, because our business partners understand our goals, they really do help us be stand out.

Our Clients

In this industry, there is no one-size-fits-all—and that’s true whether you are a vendor or a client. Our clients have found the right fit in us, and we in them. We call them our partners or “soul mates.” That allows us to put the human touch on everything we do.

Our Owners and Founders

That idea of not trying to be one-size-fits-all came from our founders, who truly felt that our goal should be to be the best, not the biggest. These folks were true risk-taking entrepreneurs, but they still understood the need for sound principles and a good dose of understanding and support.

Our Industry and its Community

Let’s face it, Copper Peak would never have been born if we didn’t love the wine industry. We are all part of a larger family through this industry, one that is bonded by the land and the people who work it. Everyone at Copper Peak will tell you that we love where we work, where we live, and where we play. And I think that it shows in our work, every day.

 

So as we celebrate our 10-year anniversary this month, we hope you will join us in celebrating everything our village has done to help raise this child! We give thanks to everyone that has helped us along the way. The journey is really just beginning, and the next chapter in our life is certainly looking to be the best!


Summer Shipping Is Here – Are You Ready To Keep Deliveries Cool? – Food and Wine Shipping Options
06 June, 2017

Summer heat is again upon us and many companies may well be into their planning for heat-related shipping. Summer deliveries are a unique challenge for the food and beverage industry, particularly when it comes to wine shipments. Ship during Summer and the heat can easily spoil an entire truckload of goods if you do not plan appropriately…

…delay, and you’ll be postponing shipments of those tasting room and wine club orders. Who wants to wait four months for their order?

UPDATE: Since we first wrote about this topic last February, we’ve received a lot of hits on this article – and had a lot of conversations. Naturally, it’s a topic that comes up every year… but things change, and it’s time to take a fresh look at Summer delivery options.

So what options currently exist for summer deliveries? And what are the pros and cons of each? Here is a quick look at the most common alternatives:

Ice Pack Shippers

Warehousing Inventory in Multiple Locations

FedEx Cold Chain

Zone Skipping

Weather Holds

 

Ice Pack Shippers

Ice pack shipping has been the traditional way of maintaining a package’s temperature during transit. There are a variety of ice pack choices available depending on your product’s temperature needs.

Ice Pack Shippers: the Pros

  • Helps maintain a consistently cool area around the product
  • Can be used from any shipping location
  • Ice packs can stay with the product up through “the last mile”

Ice Pack Shippers: the Cons

  • New shipping boxes needed
  • The Ice packs can be costly in and of themselves
  • Increases the bulk of packages, which can increase the cost of transportation based on DIM weight.

Update 2017: Ice pack shippers are evolving just like many packaging options, and they work well with ground or air shipping methods. But be careful because not all styrofoam molds are the same and certain ice packs can ruin labels.  A 3PL can help you know how to correctly pack with them.

 

Warehousing Inventory in Multiple Locations

A second option lets you reach distant customers via ground shipping more quickly by warehousing some stock in a second, more central location. For example, Copper Peak offers warehousing and shipping from our centrally located St. Louis facility. This also means that your products spend fewer continuous trips in potentially hot trucks.

We discuss the option of multiple facilities at greater length in this post.  With considering warehousing in multiple locations for summer deliveries, keep in mind the following:

Multiple Locations: the Pros

  • Decrease shipping time without paying for air freight
  • Faster delivery to market while improving the customer’s’ experience
  • Use of ice packs shippers can be added for additional protection/ peace of mind

Multiple Locations: the Cons

  • More lead time needed for sending products, packaging, and marketing collateral to the additional location(s) unless you are sourcing products close to that location
  • Production forecasting for kit builds and order processing will be needed for all locations
  • Inventory management and movement will need consistent attention

FedEx Cold Chain

Your third option is with FedEx Cold Chain service from California. Packages are picked up by FedEx Supply Chain Transportation and delivered to their consolidation point and mixed with other FedEx Cold Chain clients. Packages are arranged by recipient zip code location and are placed on FedEx Supply Chain temperature-controlled line haul trucks to be delivered to any of six different FedEx hub locations around the country. Cold chain can be used in conjunction with FedEx Delivery Manager or the FedEx, “Hold at Location” (HAL) services.

FedEx Cold Chain: the Pros

  • Closely monitored temperature-controlled line haul vehicles
  • Live tracking through FedEx.com
  • Packages deliver via the FedEx Express Delivery Network, typically by 10:30am, to beat the summer heat

FedEx Cold Chain: the Cons

  • More expensive than ground service (though a little less than the typical FedEx 2Day air service)
  • Follows a once-weekly pickup/ delivery schedule.
  • Reroutes, redirects, address changes will delay shipments and keep packages from delivering in a timely manner

Update 2017: Last year (2016) we saw a significant number of shippers investing in the cold chain service offering. We predict that this option will become even more common this year. Wineries that use it may well earn a competitive advantage.

 

Zone Skipping

A fourth option to consider is zone skipping. This is where a shipper consolidates many individual packages, holding them until the number of items reaches a full truckload. Those items are then sent together from one zone (location) to another. For example, Shipping from Napa Valley/ Sonoma Valley might be in UPS/FedEx Zone 2, while New York is in Zone 8. Shipping directly from Zone 2 to Zone 8 via consolidated truckload would be zone skipping. From New York, the shipments would be inserted into the UPS/FedEx network and ship from that location’s zone to the delivery recipient zone. This will change a zone 8 shipment to a Zone 2 or Zone 3 shipment. The idea is to eliminate small package movements one at a time and insert a consolidated move of many packages across the country for potential savings. Copper Peak calls this the Zone 78 program.

Zone Skipping: the Pros

  • Orders can be processed for each hub location drop in batches for bulk load onto pallets
  • Great for pre-kitted club shipments
  • Reduces Zone 7 or Zone 8 moves from California to Zones 2 or Zone 3 from an eastern hub facility

Zone Skipping: the Cons

  • There is no tracking visibility until a package is scanned at the forward hub location
  • Zone skip packages often take up more space and require additional  pallets/trucking to move the same amount of volume than case goods
  • No ability to add ice packs at forward hub locations

Weather Holds

As a last ditch effort, you can always put orders on hold during the hottest times of the year. Your customers won’t likely be happy with the delay, but better to have an order arrive late and safe than have it arrive spoiled.

The decision to put a weather hold on your product is not an easy one; we discussed the decision process at greater length in a previous post. If you would like to walk through the business case for weather holds, we would be happy to do that with you as well.

If you would like to discuss these options in more depth, contact us on the web or call 707.265.0100. We would be happy to consult on the best ways to save your wine!


A Deeper Dive Into the Unpacking Experience in DTC Wine Sales
16 May, 2017

Retailers have known for decades that packaging represents an important touchpoint with consumers. This has lead to an entire field of package design, which has kept a massive army of designers and engineers employed and making ever-more-interesting boxes and displays.

When it comes to DTC shipments, however, things are much more akin to the Wild West: Best practices are suggestions more than strict laws, and every day new players are trying new things. There is danger, but also much opportunity.

And this goes double for wine.

Consumers and internet entrepreneurs alike are sharing their unpacking experiences more and more via social media. (Some are making a ridiculous amount of money doing so.) The more brands can create a “WOW” experience, the more they can leverage this trend, especially where millennial consumers are concerned. Given the strict regulations around wine shipping and the conservative nature of the industry, the field is wide open to take advantage of this trend.

For this reason, we’ve expanded our study of the unpacking experience with regard to wine and other industries. Our findings can be found in our white paper “How to Heighten the Experience of Opening a Wine Shipment,” which is now available free for download.

In this paper, you’ll learn:

  • How DTC wine shipping differs in subtle ways from traditional packaging design
  • How feelings about fulfillment and delivery are shared via social media, and what this means for the brand experience
  • What unboxing is, and how this trend can inform DTC wine shipments and subscriptions
  • What the 8 tactics are for heightening the unpacking experience for wine

After you download the white paper, we’d love to discuss further how you can implement these tactics to create a unique brand experience that really WOWs your customers. Copper Peak Logistics provides craftsmanship fulfillment for specialty products, specifically wine, food, and nutraceuticals. We would love the opportunity to craft a unique experience for your consumers too. Just contact us to find out more.


Not All Subscription Models Are the Same…
12 April, 2017

In the past we’ve written about subscription service models, comparing them with the “fruit of the month” clubs of past decades. While the idea of regularly sending items to club subscribers is certainly not new, today’s subscription models have grown and diversified in many exciting ways. Wineries considering a wine club subscription service will want to think through the different types and ensure that they are getting the right fulfillment services in place to maximize success.

 

The Basic Foundation of All Subscription Services

There are literally hundreds of subscription services serving consumers today. Popular ones, such as Birchbox, Blue Apron, Dollar Shave Club, Graze, Winc, and others have received considerable attention from consumers, bloggers, and the business community at large.

While all these services vary in their details, the business model behind them all is the same: Subscribers to a “box” club pay a monthly fee to receive a package of products compiled by the company and sent straight to their doors. The company gets predictable cash flow by charging a subscription fee, and the consumer can have the experience of trying new products (or cherished familiar products) without the need to spend time shopping. 

On top of this basic model, there are different variations on the subscription club idea:

 

Curated vs. Customized

With a “curated” subscription box, subscribers receive items chosen by the company, with little to no input of their own. This allows the experts at the company to carefully select a variety of items and expose customers to products they might not try on their own—hence the curation concept.

The opposite of this would be the “customized” model, where subscribers have input into the contents of their boxes. This is usually controlled by a profile containing their answers to key questions asked during the signup process. For example, a customized service might ask about wine preferences (red or white, dry or sweet, etc.) and then select bottles accordingly.

 

Shared Drop vs. Anniversary Drop

Many companies, especially those that do curated boxes, ship on a shared drop date. Their customers all get their boxes at roughly the same time—a crucial detail when social media sharing and anticipation building are a huge part of the brand experience.

Other companies deliver boxes at regular intervals starting from the date of sign-up/purchase. This means that boxes are continually being shipped out, depending on when during the month the subscriber joined. This makes more sense for customized boxes but works with curated boxes as well.

 

Fixed Subscription vs. Rolling Subscription

How long the subscription lasts can vary as well. With a fixed subscription, a customer pays for a period of one, three, or six months (although other time periods are possible). This is a good option for letting customers try the service without worrying about cancellation if they do not like it. Fixed subscriptions also give you the option of offering a discount if the entire subscription is paid up-front. 

The other option is a rolling subscription. With a rolling subscription, a box is sent every month for the same fee until the subscriber cancels (or subscription plans change). This is an easier option that can often keep consumers on the books longer.

 

Flat Fee vs. Pay for What You Keep

Most box services charge a flat fee for their delivery (although some services offer different tiers of products). Still, a different model is becoming popular for clothing and fashion: Consumers receive a box of items, get to try on the various articles, and see what works for them. They can then keep what they like and return what they don’t. Subscribers are then charged only for the items they keep.

Some services are also experimenting with a “hybrid” approach, where a monthly curation ”stylist” fee is charged every month but put toward the price of any items kept. While this would not work for wine per se, it does suggest other ideas—for example, charging a flat fee but then offering a discount on wines that are re-ordered.

 

Subscriptions Are A Logistics Game

To create a successful subscription service, you need to make some choices as to the above. For example, suppose you want to create (or modify) a wine club. Do you send out a carefully curated collection of your wines? Or do you allow consumers to take a quiz? Do you send out the wines at the same time every month, or on the anniversary of a subscriber’s join date?

After you’ve made these choices, you will want to talk to some 3PLs to get an idea of what services are needed to fulfill your particular model. This is important, as subscription services are a different beast from typical eCommerce: Instead of shipping one-off orders as they’re received, you will need the capability to send thousands of similar orders, perhaps more, all within a tight timeframe.

To do this, you will likely need outside help from a 3PL. Specifically, your particular business model may require:

  • Advanced packing and kitting abilities
  • Cold shipping options (during warm weather)
  • Compliance with laws in the state to which you are shipping
  • Tracking tools
  • Analytics (to predict churn rate and estimate inventory needed)
  • Procedures for adding marketing materials (catalogs, coupons, tasting cards, etc.)
  • Procedures for processing return 

In short, subscription box services are much more than simply throwing a few items in a box. There are a number of small details that have to be managed, from customization and curation to packing and presentation. (Our expert panel white paper on the topic covers many of these.)

Copper Peak can help you figure out these details and scale your operation to meet demand; we specialize in craftsmanship fulfillment for the wine industry and have much experience with subscription services and wine clubs. Contact us to get a discussion going. 

Remember, 13% of all subscription services fail within a year. You can’t afford to get the details wrong. But get it right, and your subscription service might be the next Birchbox, Blue Apron, or Dollar Shave Club. The DSC story, in particular, had a happy ending, and yours can as well.


We Were Right: Millennials are Changing the Wine Market!
01 March, 2017

In 2015, we published some materials that predicted, in part, that Millennials were a growing segment in the wine market—and that with their entry into the market would come a change in consumer behavior toward brands and the wine experience.

After listening to the Silicon Valley Bank 2017 Wine Report (SVB report for short), I was relieved to hear that we were, by and large, right…. But who’s gloating?

The ways in which Millennials are changing the market are sometimes subtle, so it is easy to miss some of the trends. It might be worthwhile, then, highlighting what is happening…and what forward-thinking wineries are doing about this demographic shift.

The Growing Millennial Market

Looking across generations, Baby Boomers are still the largest segment of U.S. wine consumers, making up 41% of the total market. But their share is declining: Just four years ago, they were 44% of the market. By contrast, both the Millennials and Gen-Xers grew in terms of share of the DTC market. We predicted that their market share would grow over the years and see no reason why this trend would reverse in 2017.

Brand Loyalty

At the 2015 Direct to Consumer, Wine Symposium, we hosted a user group panel on the very subject of Millennials in the market and followed that up with our whitepaper. “Socially, Mobile, Millennials: Farming for the Future User Group.” There we quoted Susan DeMatei, owner of WineGlass Marketing, on brand loyalty across generations:

“We observed that while Baby Boomers would stay attached to a brand once they were familiar with them; [they were] high loyalty (I’m a ‘Chevy’ guy, I’m a ‘GMC’ guy, etc). On the other hand, Millennials have grown up with technology, cable TV, etc. They were born with more choices in everything. ‘They have A.D.D.’ so they are always on the hunt for the next ‘thing’, always.”

These claims were borne out in the SVB report, which noted that “Per capita consumption faces crosscurrents, with retiring wine-loyal baby boomers being replaced by less affluent millennials who seem to be  ambivalent about their alcoholic beverage of choice.” This seems to match what we’ve heard elsewhere in the industry, too.

Restaurant Consumption

The SVB report also noted that restaurant consumption of wine was down in 2016. While there are many factors contributing to this, Millennial behavior is part of the story. To quote the SVB report:

“Our frugal millennial consumers don’t want to pay restaurant wine markups. They know they can buy a bottle of wine at the store for less, so in the restaurant, they are more likely to satisfy their consumption needs by starting with a beer or cocktail and having a glass of wine with dinner. More baby boomers are retiring and living on fixed incomes, and that influences their restaurant beverage choices, as well.”

Another sign of the impact from Millennials: Red varietals and blends above $25 were the only growth category for restaurant channels, growing at 1%. These tend to be favored by Millennials, so this growth might be a further indication of Millennials’ rising market power.

Millennials are Experimenting

Another aspect of Millennials that we picked up on was that they experiment. “Millennials are willing to try new things (growlers, wines on tap, etc.). Think of different and new ways of doing things,” says DeMatei.

It appears that Millennials are also demonstrating a willingness to substitute (Craft beer and spirits for wine, for example). They are price conscious and quality conscious more than brand loyal or product loyal.

Remarking on Millennials’ entry into the wine market, the SVB report notes that “millennials are no different [from Baby Boomer or gen-Xers], but they have the added advantage in their formative years of the digital age, which allows them wider selection, better pricing information and greater ease of purchase.” In other words, they are both accustomed to choices and expect good deals. No wonder they experiment.

But this isn’t indicative of an “I’ll try anything” attitude. Patrick Sullivan, a DTC general management executive, told us in 2015 that “Millennials are ‘fantastic testers’ and they will find all flaws in the entire chain (from e-com to receiving of product), so be prepared to address their concerns.” Their experimenting really is testing to see how they can get the best experience for the best price. And as the SVB report notes, “Perfect digital price information in the hands of a thrifty consumer is a nightmare for marketers.”

Some Final Thoughts

The Millennials’ influence on the marketing is small but growing. Baby Boomers still dominate, and so go-to-market tactics still have to work for them. Smart wineries, however, are making changes in anticipation of the growing Millennial market.

What kinds of changes? Here are a few we’re seeing:

More DTC sales channels, and improved experiences surrounding them

  • More investment in technology
  • Moves to provide a seamless experience between the tasting room and DTC sales
  • Better attention paid to packing and packaging
  • More concern with “the final mile” of delivery
  • Marketing that is crafted around authentic stories
  • Much more social media engagement
  • Better content curation and sales history tools

If you would like to explore some of these options for your winery—for example, packing ideas, DTC sales, or “the final mile”—contact us. We specialize in craftsmanship fulfillment for the wine industry, and we would love to start a discussion.


8 Takeaways from the 2017 SVB Wine Report by Rob McMillan of Silicon Valley Bank
15 February, 2017

Recently, I had the pleasure of participating in a webinar about the state of the 2017 Wine Industry hosted by Silicon Valley Bank (SVB). Every year, SVB puts out one of the wine industry’s most authoritative annual reports, with forecasts based on a survey of more than 500 wineries.

Here are some of the main takeaways from that webinar:

  1. Younger generations are slowly creeping into the market. Baby boomers make up the largest demographic share of wine consumers, at 41%; however, their consumption has been declining for several years now. Compare this to millennials and gen-Xers whose share of wine consumers has been steadily growing. This is significant, as millennials especially are more ambivalent about brands and also more open to craft beer and cocktail options.
  2. Premiumization and substitutionality are occurring. Wines at the $0-$2.99 and $6-$8.99 price points saw steep drops in both dollar amount and cases sold, while more expensive wines saw growth.
  3. Red Blends experienced a lot of growth. This is especially true in the $8-$14.99 price range, signaling that millennials entering the market are gravitating towards these blends.
  4. Restaurant wine sales have not stabilized and shown continued signs of trouble. Restaurant wine sales have declined over the past three years, mostly due to changing consumer behaviors. In 2016, Most categories are showing signs of dropping across virtually all premium price points. The exception is premium red and red blends, which demonstrated positive sales growth last year. This may be due in part to millennials having a different pattern of consumption in restaurants, though small winery access to restaurants plays a role as well.
  5. A huge leap in direct sales growth.  Recent legal decisions have made DTC shipping easier and more widespread. Direct sales have been “on a steep growth ramp since and now represent 59% of the average winery’s, total sales.”
  6. Sustainability is on everyone’s radar. It goes by many labels, but whatever it’s called, sustainable practices are sought after in brands, and wineries are responding.
  7. There is a huge need for technology. Wineries want software solutions that can help them manage the entire brand experience, from tasting room to DTC sales to “the last mile” of shipping.
  8. Launching new products and managing their distribution is still a challenge. Though most wineries agreed that 2016 was a good year, creating, pricing, marketing, and distributing new products remains a challenge that is on everyone’s mind.

There are many more interesting trends covered in the webinar and its accompanying report. Going forward in 2017, we are going to break down some of these trends and take a closer look at why they are occurring, and what to expect in the future.

There are four areas that we’ve written about recently and have received a lot of attention: The growing Millennial Market, the Rapid Rise of DTC SalesTechnology and the Brand Experience, and lastly Distribution. We predict that new solutions will continue emerging to address these areas, particularly when it comes to Curation, Compliance, Logistics, and Brand Experience.

If you can’t wait and would like to discuss these or related issues, feel free to contact us. Copper Peak Logistics has a decade of experience in the wine logistics and shipping industry, and we would love to discuss these trends and more with you.


Wine Fulfillment: Looking Back, Looking Forward
10 February, 2017

 

2016 was indeed a busy year for us at Copper Peak, and we don’t anticipate 2017 being any different. That said, it is still well worth our time to review what happened in 2016, both here and in the industry at large. Doing so might just give us some glimmers of what to expect going into the new year.

Industry News

Wine and fulfillment are both niche industries. So the area where they meet is niche squared. Still, we saw some interesting things in the tea leaves. For example:

What these stories tell us is that DTC is becoming a standard way for consumers to get products; moreover, the pressure is mounting on the wine business to do the same. That said, this is leading to a more challenging and often changing regulatory environment.

Focus on Temperature Control and Weather Holds

This past year we wrote several pieces on keeping summer deliveries cool, including a piece specifically on deciding on weather holds. We’ve heard a lot of angst from customers about this very issue. We also found that not many customers were up on all the options out there for shipping wine, food, and other temperature-sensitive products over the hot summer months. So we tried in 2016 to provide a little education and help folks make those critical decisions. We’ll likely revisit the topic before summer 2017!

Flash Sales and Subscription Services

New business models for DTC wine sales were a huge topic in 2016. For example:

Needless to say, it will be interesting seeing how these models morph, evolve, and improve in 2017. We expect to see more hybrid models being used, too.

Craftsmanship Fulfillment

Toward the end of 2016, we became especially interested in what, exactly, “craft” is, and what it means to have craftsmanship fulfillment. This topic is near and dear to our hearts, given that we take what we do as craftsmanship fulfillment for industries that know craft when they see it.

While we’ve seen more and more of our competitors talk about things like white glove service (a phrase we applied to wine logistics first), we are not aware of anyone putting the same emphasis on craft. We find this odd, given that craft is everywhere these days, from the Makers’ Movement to STEAM education to artisanal everything-under-the-sun. We here at Copper Peak really do feel like we are spanning the gap between logistics (which, at times, focuses too narrowly on efficiency and automation) and the world of craftsmanship.

It will be exciting to see how that gap is further bridged in 2017. We hope to start out of the gate strong, with a full report on implementing white glove service in an organization. Keep an eye out for it!

And as always, thank you for reading this past year. Here’s to a prosperous new one!

The Team at Copper Peak Logistics


How Leading Companies Are Nailing the Whole ‘White Glove Service’ Thing
18 January, 2017

Waiter hands with cloche lid cover and towel vector illustration.

Some of the most successful brands in any industry have a service orientation. The height of service is often called “white glove service,” a term that is catching on in many places. But just what is white glove service? 

We take a serious look at this question and more in our latest report, “White Glove Service: 9 Case Studies That Reveal the Keys to Building True Customer-Oriented Organizations.” Our own Dave Dobrow referenced some of these examples during his participation at the 2017 Direct to Consumer Wine Symposium Private Client Sales – The Art of White Glove Service.

In this report (which is available for download here), we take a close look at companies that are knocking it out of the park when it comes to service—and doing so in a systematic way.  

For example:

  • We look at why Zappos CEO Tony Hsieh consciously wanted to build an excellent customer service culture, and how he did it.
  • We investigate why MidwayUSA, a small Midwest company catering to sportsmen, has repeatedly won awards for service standards.
  • We take a page from Four Seasons Hotels And Resorts with regard to their employee training for excellent service.
  • We look at the ways in which companies like Trader Joe’s and MINI have used proactive measures, winning them die-hard fans.
  • We comb through other examples as well, from State Farm Insurance, Chick-fil-A, Electronic Arts, Spotify, and more.

Throughout, we find a common pattern: White glove service is not just something that happens randomly with the occasionally stellar front-line employee. Rather, white glove service is a pattern of decisions and practices by organizations that routinely and consistently make this level of customer care possible.

Copper Peak Logistics provides craftsmanship fulfillment for speciality products, specifically wine, food, and nutraceuticals. A large part of craftsmanship fulfillment is a commitment to white glove service. To learn more, contact us and we will be glad to explain how fulfillment and customer service go hand-in-hand.


Makers, STEAM, and Craft: The Hidden Thread to Look for in Your Business and with Your Vendors
16 December, 2016

pressing of the must through press

Over the past couple of years, we’ve seen a surge of interest in things one would consider “craft.” For example, there is the culture of the Maker’s Movement, where champions of do-it-yourself projects share projects and tips for just about everything. There is also the rise of STEAM in education, meaning a renewed focus on Science, Technology, Engineering, Art, and Mathematics (and a natural outgrowth of STEM, which had the four elements minus the addition of art).

And we ourselves have been thinking hard about craftmanship and what it means for fulfillment.

To us, these are not separate threads or interests. They represent a renewed interest—a Renaissance, if you will—in craft and craftsmanship. Different areas of society are tapping into this feeling in different ways, but they all reflect a common interest and, more importantly, a common work ethic.

So, if you feel like you are in a “craft” industry, it might help to get clear on just what this movement is, how it affects your work, and how to find it in the partners and vendors you deal with.

Getting a Handle on Craft

Around the world and across time, every culture has had its craftsmen. More than someone who just produced goods, the craftsman was also a symbol of industry, maturity, and care. Instead of passively consuming products, the craftsman created much of what he or she needed. Instead of letting the world happen, the craftsman helped shape it and influence it, bit by bit.

Of course, the very word “craftsman” conjures an image of a bearded man clad in a leather apron and rolled-up sleeves, toiling away in his workshop to produce beautiful and useful items. This surely is one type of craftsman, but there are others. Men and women, young and old, are today discovering the joys of craft.

And craft is not limited to traditional makers of durable goods, either: Other cultures, like the ancient Greeks, included doctors, lawyers, accountants, and other such professionals under their term for craftsman. Even horse-breeding was considered a craft. Today, we see craft in things like the “Maker Movement”: A culture of independent inventors, designers and tinkerers.There is a Maker magazine (called Make, naturally) as well as hands-on Maker Faires.

These fairs include booths with people showing how to pickle vegetables, make soap, and get started in beekeeping. (There was even a Time magazine article on these fairs, and the movement at large.)

So what makes such diverse professions and interests count as “craft”? In short, it is a particular work ethic. Wherever you find that work ethic, you’ll find someone participating in a craft.

What does that craft work ethic consist of?

The Work Ethic of Craftsmanship

The craft work ethic is an attitude and an identity, undergoing a revival in a marketplace numbed by generic, mass-produced merchandise. It is difficult to pin down, but there seem to be five strains to it:

  • Doing Things Well for the Sake of Doing Them Well. Not for pure profit, not to hit production goals—a true craftsman works simply to create something of quality. If it takes more time, more effort, or more resources to make something right, it’s worth it.
  • Attention to Detail. A big part of doing things well is paying attention to the little things. Small problems are still problems—and they have a way of growing and expanding if not dealt with promptly.
  • A Balance Between Plans and Flexibility. A person involved in a craft definitely plans: He or she envisions, sketches, measures, and measures again. But this planning is balanced with flexibility. Craft means the ability to adaptively respond to contingencies when they arise, along with the freedom to try new things when the opportunity presents itself.
  • Less Ego in the Work. A craftsman really does learn to let go of ego. That’s how he or she learns: By taking feedback and criticism and using it to create something better next time. The final impression is much more important than the maker’s ego.
  • Learning Through Experience. Talk to even the most master craftsman, and he or she will admit that they have much to learn. Learning is ongoing and done without ego (see above). It also relies on trying things for yourself—theory is nice, but most learning is done in practice.

So What Does Craft Have to Do With Your Vendors?

We here at Copper Peak Logistics have been thinking a lot about that question lately, and ones surrounding it. Are we doing our fulfillment with true craftsmanship? (I think we are.) Are we serving our vendors who are dedicated to their craft? Are our vendors as into craftsmanship as we are?

We invite you, the reader, to join us in the exercise. Take a look at your vendors and ask yourself:

  • Does my vendor seem to worry about maximizing their profit or efficiency? Or do they bend over backwards to get the product or service “just right”?
  • Does my vendor proactively try to prevent problems, even small ones? Do they ask a lot of questions? Do they try getting to know all aspects of my business?
  • Has my vendor shown that they can adaptively respond to my needs, issues, and changes? Are they sensitive to changes in the market? Do they pair their planning with contingency planning?
  • Do the people at my vendors’ company get defensive if there’s a problem? Are they pushy about selling their products or services? Do they talk about themselves all the time, or do they listen more?
  • Is my vendor willing to try new things and learn from them? Do they come to me with ideas, or is it all just transactional after the agreement is signed?

Chances are, very few of your vendors are truly craftsmen. While there’s nothing inherently wrong with that, you might be disappointed if you expect craftsmanship-level service from an organization that does not cherish this work ethic to begin with.

At Copper Peak Logistics, we strive to provide craftsmanship fulfillment for the wine industry and any industry that appreciates craft in their work. Contact us to find out more.


What Does Craftsmanship Fulfillment Mean?
17 November, 2016

Shot of a man preparing bottles at a distillery

On the homepage of our website, we proudly display the fact that we are into “Craftsmanship Fulfillment.” If you haven’t heard the term before, you might wonder what it means.

One big assumption is that it means “fulfillment for industries where craftsmanship matters.” That is true. We specialize in wine logistics and fulfillment, for example, because we understand the heart and soul that goes into crafting a vintage. We appreciate the attention to detail and the “hands on” work that goes into making quality products.

But, for us, “Craftsmanship Fulfillment” also means a craftsmanship mentality applied to shipping and logistics. We feel that the same attention to detail and love of the process that goes into making a wine should also go into getting the wine to the consumer. We work hard in pursuit of quality, and always look humbly for ways to improve. That’s the crux of what craftsmanship fulfillment means to us. It’s simply a standard for how work–and our work culture– should be done.

So just how does that play out in the wine logistics and fulfillment sphere?

White Glove Service and Unparalleled Customer Service

More and more logistics companies are touting their own “white glove service” in order to woo wineries and makers of luxury items. Indeed, we were one of the first to do so. But what does “white glove service” really mean?

The term itself refers to service that is top-notch or without parallel elsewhere in the industry. It originated because butlers, who oftentimes had to serve very exacting clients from rich and powerful families, needed to make sure that all household affairs were carried out to perfection. To ensure this, they would wear white gloves, the idea being that, when they ran the white-gloved fingers over a surface, they would be able to tell immediately if there was even a speck of dirt. To this day, white gloves are a symbol of service and perfection.

We take that lesson to heart in our own processes. We pay a great amount of attention to detail, because we know that our clients do. And we want to give our clients the same attention that they give their craft. We try to be attentive, reliable, and quick in our support for not only orders going out the door, but for the exceptions that creep into everyday shipping scenarios.  

Weather and Compliance Support

There are many contingencies to consider in shipping a product like wine, and also many procedures that must be respected in order to stay in compliance. It often helps to have a partner who can guide you through these issues. After all, good wineries focus on making good wine, not on the complexities of laws regarding interstate commerce.

For example, how do you decide on a weather hold for your products? What are your options for cold shipping, and when do you need them? What sort of license will you need to start selling and shipping, and will you be able to sell internationally? As you can see from our posts, these are exactly the sorts of questions that we stay on top of so we can inform and empower our clients.

Accessible Technology

When people hear “craftsmanship,” they think of something that is the opposite of technology, especially because “technology” is synonymous with “automation” these days.

But this need not be the case. Technology can be used in a thoughtful way to improve and empower craftsmanship. The trick is finding the right balance: Using modern technology to improve processes where they can do the most good, but also having a human presence when customization, personal attention, and problem-solving are needed.

Embracing technology does not have to mean giving up on who you are. Heck, even the Amish use power tools and telephones!

Human Solutions

The other side of the coin from technology is, of course, human solutions. An app or an algorithm can tell you that wine sales spike at the end of November, but it can’t tell you to run a holiday promotion. Likewise, integrated software can let you or your customer track a delivery down to the minute until it reaches their door. But that software isn’t going to help you deal with an irate customer whose shipment was incorrect, late, or damaged.

No, those sorts of contingencies still need human beings in the mix for flexible problem-solving and people skills. The more your products are considered the result of a craft, the more important that human element will be.

Customization to Your Needs

All this talk of white glove service, accessible technology, and human solutions doesn’t mean much if our services don’t fit exactly what you need. The great part about all this flexibility is that customization is easy; for example, we here at Copper Peak combine experience from years of being on the client’s side of things with a deep understanding of the logistics and fulfillment side. We’ve seen just about everything, and we know how to get things done. We try not to over engineer our processes so that, in the end, we retain the full ability to customize a solution.

Increased Productivity

True, if you’re a craftsman, you probably aren’t focused on “productivity”—at least, not by that label. Quality and service come first. But here’s another truth: You can’t pay close attention to your product, or your clients, if you are putting out fires all the time or worrying about the logistics of getting bottles into customers’ hands. Part of Craftsmanship Fulfillment is taking care of our business so that our clients can have more time to do their job and follow their passion.

Protection of Your Brand

There are many forces in the market that can “dilute” a brand. Maybe items are offered at too steep a discount too often. Maybe the wine club has not provided upgrades or different experiences. Or maybe the delivery of wine was just too unpredictable, leaving customers’ expectations dashed. Whatever the cause, if your customers don’t have a great experience, they won’t come to get that “warm, fuzzy feeling” that keeps them coming back for more, again and again.

Every transaction is also the fulfillment of a brand promise. Helping companies deliver on time, track shipments, protect product, and incorporate marketing and incentives are all ways that we can help brands deliver on that promise. And again, customization has a role to play too: We are delighted when clients think creatively and want to try something new to differentiate their brands.

Connection with Your Customer

Productivity and brand protection are all important aspects of any business. But neither of these will keep a company afloat if it doesn’t also connect with customers. An engaged customer base is a loyal customer base, and they will spread the word about your company—if you can manage to connect with them on a personal level.

Explaining how that can be done goes well beyond this blog post! But we’ve touched on this topic before, in our 5 Marketing Fundamentals of Wineries.

That, for us, is what Craftsmanship Fulfillment is all about. If you would like to hear more about our specific approach—especially with regard to technology, personalization, content, and partnerships—we recommend you see our latest white paper: Subscription Services: Wine Industry Leaders Share Their Insights. Many of the lessons echoed here are at the core of what we do.

And, of course, you can always contact us.


Are Wine Subscription Services Today’s Flash Sales? The Evolution of Two Models
10 November, 2016

Flash Sale Design With Thunder vector illustration

In our previous post, we took a look at the history of flash sales and how they became a fixture in the DTC wine industry. Although this sales model has fared better with wine than with many other products, it does appear that the culture at large does not have the enthusiasm for flash sales that it once did.

Inevitably, any sales model will go through a cycle of high expectations and high popularity, followed by a “bursting of the bubble” and a leveling off. (For comparison, see the GartnerHype Cycle for new technologies—it predicts much the same sort of thing.) Although completely natural, such “renormalizing” makes wineries gun-shy about innovations that come down the road. That attitude persists even though data shows that flash sales have either held steady or grown over the years.

That attitude has begun to cast its shadow over subscription services as well. Subscription services have become increasingly popular, and many new companies are doing innovative things with them. But just as models for subscription services are being perfected, some wineries and wine sellers are voicing their skepticism. Indeed, a few have even wondered out loud whether subscription services are “the new flash sales.”

It would be beneficial, then, to compare and contrast the flash sales model with the modern subscription/wine club model. Although they share some similarities, each was born out of a different economic time, with marketing and sales goals. Thus there are some stark differences, and those differences can mean that their fates will differ. More importantly, both are unique solutions that wineries can adopt, depending on their needs and business situation.

The Evolution of Flash Sales and Subscriptions

The idea behind flash sales was simple: Provide deep discounts for a limited time, usually 24 hours, as a way to build excitement (and website visits) while off-loading excess inventory. The model really began to take off in 2007 and 2008, at the start of the recession. Sellers suddenly found themselves with excess stock, and consumers, for their part, needed to tighten their belts. Flash sales were an easy way to move slow-moving items, and customers felt like they were getting a real deal.

The idea of short-lived sales at steep discounts was not an invention of this century, of course. What made flash sales new and different was the extremely short duration of the sale—which marketers played up—together with the power of the web to deliver sales announcements and finalize transactions.

In a similar way, subscription services have also been around in some form or another for a long time. The fruit-of-the-month (or steak-of-the-month, or cheese-of-the-month…) idea has been around since at least 1910(!), and “wine clubs” have been around for a long time too.  So the basic idea has a long pedigree.

What has changed these days is the approach that many companies are taking to subscription services. Heavy market research has gone into what makes subscription services successful, and the services themselves are morphed to accommodate current tastes and trends. For example:                                      

  • Subscription services can now be molded to consumers’ individual tastes. Many subscription services start with a discovery process that homes in on new customers’ tastes and preferences. Existing customers have the ability to add, drop, or substitute items. More and more clubs are getting away from the “one size fits all” model.
  • Subscription services are as much about content curation as they are about wine curation. Reviews and recommendations are forming a larger part of the wine experience, as are engaging stories. Subscription services are including things like food pairings, recommendations for future purchases, humorous content, and stories about each winery and vintage. And, of course, technology is making it possible for consumers to track their own experiences with different wines, archiving their reactions for future reference.
  • Subscription services are much more engaged. Older subscription services simply sent out a new shipment every month. Today’s subscription services do more; they offer exclusive deals, inform about upcoming events, and reach out to members via email and social media. Club members feel very much a part of an actual club, and not just recipients of a monthly “mystery package.”

These are just a few differences between modern subscription services and older thing-of-the-month clubs. (For more on modern subscription services, see our post on Dollar Shave Club, or our white paper from the ShipCompliant Direct 2016 panel.)

So, subscription services and flash sales are both modern versions of older, existing models. And they are both methods for selling wine directly to consumers. Both attempt to engage consumers and rely heavily on email, social media, and a web presence to do so. These similarities make the two models seem very much cut from the same cloth.

But this is just an appearance. Psychologically, the two are very different.

Contrasting the Two Models—What Motivates Consumers?

Remember, flash sales gained in popularity when there was a two-fold need. Sellers needed to get rid of excess inventory, while buyers wanted a good bargain. In a scenario like this, price comes into focus. Sellers had to find a way to slash prices low enough to trigger the buy and still make a profit. On the consumer side, because the sale included just one or two items, there was no choice. Price was the main parameter in the decision—quality, speed of delivery, and content less so.

Subscription services have gained momentum in a post-recession economy. Here, a good deal is still appreciated. But it is the exclusivity of the offer, not its limited time span, that motivates consumers. With subscription services, personalization, quality, customer service, convenience, and content are all features that attract and retain those club members. Price is, if it matters at all, a secondary focus.

This means that the modern subscription service has much more flexibility to deal with changing economic conditions. If the economy were to worsen (knock on wood!), subscription models can easily adjust to retain their members by offering steeper deals, smaller shipments, or more suitable pricing tiers. This, plus consumer engagement, helps retain consumers until conditions get better, at which point the model can adjust again to offer more exploration and curation.

Psychologically, flash sales were driven by a scarcity mindset. Consumers were compelled to snap up the outrageously good deal before it was gone. And while these kinds of sales are still popular in the wine space, the marketing campaigns that went with them sometimes led to burnout. In contrast, subscription services are more driven by feelings of inclusion and community, as well as a sense of exploration and adventure. The feelings may not drive a sale immediately but grow steadily over time and create intense feelings of loyalty.

Thus, the two models differ greatly in what is actually motivating the sale and sustaining engagement. For this reason alone, one cannot predict how one will do by looking at the other. Both are part of a general expansion of DTC sales, which have already totaled $2.2 billion in the past year.

On the bright side, both are different enough that each can be a tool in a winery’s arsenal. For example, a winery can have a full-blown subscription club for loyal customers and still offer the occasional flash sale to offload slow-moving inventory. Better yet: Make the flash sale exclusively available to your club members. Or, if you are still building your club, give your members early access to the sale. Such hybrid models can work wonders, as they allow you to hit all the important customer motivation points.

And in the end, why wouldn’t a winery want to use every tool available to reach customers where they are today?

Copper Peak Logistics offers craftsmanship fulfillment for the wine industry. We have decades of experience with Direct to Consumer (DTC) wine sales, under a number of different models. If you would like to discuss options for starting one of these models or enhancing what you have, contact us.


Flash Sale Sites for Wine: Where Are They Today?
11 October, 2016

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If one were to look at DTC wine sales eight or 10 years ago, one would see that flash sales sites were all the rage. Many of those sites still exist, but they do not seem to be enjoying the popularity they once had. Is this just because they were a flash-in-the-pan trend? Or have economic conditions and competition changed the DTC landscape?

The answer is a little of all of the above. Diving into some of the details about the rise of flash sites can give us some insights, not just into that model as a way of selling DTC, but also as a kind of case lesson. Understanding the trajectory of flash sites might hold lessons, for example, about how to do wine clubs and other subscription services in a smart way.

The Rise of Flash Sales Sites (for Wine and Other Goods)

The first flash sale site was created by online retailer Woot.com in 2004 (although Sam’s Club had a similar “deal by email” model as early as 2000). This site had a “deal-of-the-day” format in addition to the company’s online store. Each day a special product was offered at a heavily discounted price, and consumers had 24 hours to pull the trigger on the deal or lose it.

The rationale behind the deal-of-the-day format made good sense. For the consumer, it meant heavy discounts on desirable items. For the seller, it was a way to offload extra inventory. Also at work was the psychology of scarcity: Because the discounts were steep but lasted only 24 hours, consumers felt they had to act quickly or else lose the deal on that particular item. It was the ultimate embodiment of the salesperson’s old pitch, “Act now! Supplies are limited!”

Since 2004, many other deal-of-the-day sites have sprung up. Some of these were additional offerings by established retailers, while some were “flash sale only” sites offering goods from multiple brands.

Importantly, flash sales enjoyed much success because of the way the economy was headed. Flash sales really began to take off in 2007 and 2008 when the market crashed and recession hit. Consumers, for their part, needed to tighten their belts, and so flash sites were a way to splurge a little on luxuries while still getting a really good deal. The “buy it or lose it” aspect also made the sale itself fun and exciting. For retailers, flash sales were often an easy way to move slow-moving items—a very important strategy when inventories were becoming backlogged with unmoved goods. Thus, flash sales fit with the scarcity mindset that came with the recession.

Another twist to the flash sales trend was the rise of social media. Because some deals required a “participant quotient” for the deal to activate, it became popular to share them across social media and invite friends to participate. This amounted to a kind of inexpensive word-of-mouth marketing.

The wine industry was no stranger to flash sales, either. Sites like WineShopper, Last Call Wines, Wine Woot, and Wines ‘Til Sold Out sprang up during the flash sale craze, and several of them are still with us today. Many of these companies offered wineries a chance to offload inventory and get cash on hand to improve cash flow but still offered steep discounts to consumers.

Non-Wine Flash Sales Hit Hard Times

Flash sales are by no means gone, but the gold rush has certainly petered out and the model has normalized.

For example, many flash sale sites are being bought out by larger, better-leveraged retailers—and at a rate that is far less than their peak valuation. Gilt Groupe, for example, once valued at $1 billion, was bought by retail conglomerate Hudson’s Bay Company for $250 million. Likewise Fab.com was valued at $1 billion but sold for $15 million in 2014. Sites such as Rue La La and Totsy have experienced major downsizing.

Even Groupon, a remarkably well known and successful site, has seen its stock value plunge about 80% since it went public, with fewer sales and local partnerships now than it had at its start.

The question is: Why? Part of the story is outright burn-out. An occasional barn-fire deal is an exciting thing; but one a day can be exhausting. As consumers were added to more and more marketing lists, triggered by their single flash sale purchase, the deluge of offers became too much for some.

Another part of the story is the recovering economy. A better economy meant less “excess” inventory laying around, and more discretionary spending. Deep discounts thus became harder to justify.

A final part of the story was, frankly, greed. A number of flash sale sites tried to widen their margins even as they offered huge discounts by marking up shipping rates and restocking fees. But those huge shipping and return fees devalued the deals in the eyes of the customer, further eroding customer loyalty.

In retrospect, though, that “greed” makes sense. Flash sales need a sustained marketing effort to re-engage past customers. But the average customer simply doesn’t drink wine fast enough for the model to be sustainable. Thus, there was always a mad drive to get new customers, and to squeeze more revenue out of existing ones. Still, how quickly companies could add customers dictated their ultimate success.

Wine’s Hybrid Model: Making Good?

There is an additional worry with flash sales sites in the wine space: The dilution of a brand. By offering premium labels at a steep discount, some wineries inadvertently “cheapened” their brand.

That misstep is being addressed, however, by wineries that are combining daily deals with subscription services and content/curation. For example, sites like Naked Wines, Winc (formerly Club W), and Blue Apron Wine are maintaining much better control of the customer experience, and thus actively building a brand around their core knowledge and service. Thus, even if wines are offered at a discount, customers are still coming back again and again for this kind of purchase experience.

This hybrid approach has many benefits. For example, good deals and fast DTC shipping are especially appealing to millennials, who are quickly becoming one of the largest demographics when it comes to wine purchases. Flash sales also make sense as seasonal “specials,” especially when existing wine club members get special treatment (for example, longer access to the deal, early bird specials, or even steeper discounts). Finally, some argue that such sites are good brand exposure, if the deals are couched as ways to sample new stock (a position often taken by subscription services).

Of course, the story is still being written, both for subscription services and for these hybrid approaches. But there are some important takeaways from the history of flash sales that are relevant to both of these newer models. That will be the focus of our next post.

In the meantime, if you would like more information on the subscription services topic from those working in this space daily, download our most recent report where wine industry leaders share their insightsI’m also happy to answer any questions you may have on this topic so don’t hesitate to reach out. Thank you for reading!


Shipping Wine (and Non-Wine) Products: FTL, LTL, and 5 Other Considerations
20 September, 2016

When it comes to shipping, few products have seen more changes than wine and related products. Not only are there regulations to contend with, but the very models that wineries are using to market and sell wine are changing. This makes the process of getting products into the hands of customers that much more complex.

Traditionally, wineries would start their research into shipping by getting quotes for Full Truckload (FTL) and Less Than truckload (LTL) shipments from carriers. Before doing that, however, today’s savvy shippers ask themselves a number of questions so that they can request the right services and minimize future surprises:

Question 1) What is the product classification? Each product has a different classification. Wine has a different classification than lightbulbs or golf clubs, and that classification needs to be known in advance of getting a quote. For example, wine is typically considered a class 100 product.

Question 2) How fast does the shipment have to happen? Carriers like FedEx Freight, Roadrunner, and others offer different pricing based on the service requested. The various services often differ in terms of speed. For example, priority service has a faster delivery time, but will be more costly than an economy service with a slower delivery time. (FedEx freight offers a Money Back Guarantee with their Priority Service offering.)

When it does come time to request quotes, it is worth asking if drivers will be working alone or as part of a tag team of drivers. A tag team of drivers can usually produce faster delivery, as the truck can continue to operate with minimal rest stops.

Question 3) What will loading be like, and what will receiving be like on the other end? Is the shipment going from a facility with a dock to a facility with a dock? If so, there are a number of vehicles that can handle that move. Different vehicles with different capabilities will be needed is the move is door to dock, or dock to door. Without knowing what the loading and receiving requirements are, you may end up choosing the wrong vehicle to deliver your freight and thus the shipment will get charged additional fees..

For example: A dock-to-door shipment will require that the final mile delivery vehicle will need a lift gate—a device on the back of the vehicle that can be raised and lowered during the loading and unloading of goods. A pallet jack, which is a basic form of forklift for moving pallets, might also be required.

Question 4)  What kind of operation is on the receiving end? Is the shipment being sent to a residence? A business? Will the delivery need to be taken inside a building or an office? While large bulk wine move are typically dock-to-dock transfers, it is important to note when they are not, as these kinds of moves often result in additional charges.

Question 5) What kind of shipping “environment” is needed? Most trucks are not temperature controlled. For the most part, these “dry van” trucks are fine for shipping products that are not temperature sensitive. Even products that are temperature sensitive, like wine, can be shipped during the cooler months, or for short distances. However, shipping wine or temperature sensitive products long distances, especially during the summer months, is gamble. Temperature controlled shipping might be the way to go.                

An increasingly popular way to preserve wine from undue heating (or freezing) during shipment is to use thermal foil blankets, which provide additional insulation. Fedex, for example, provides a blanket service that saves wineries the cost of providing their own blankets. Protek Cargo out of Napa, CA, also provides a number of thermal pallet covers and has a blanket service lease program for temperature sensitive deliveries.

Before getting quotes for FTL or LTL shipping, it pays to ask and answer these kinds of questions. Doing so ensures a more accurate quote and limits the “surprises” that can arise.

 

At Copper Peak logistics, we have done many quotes for LTL, FTL, and other kinds of shipments, all as part of our craftsmanship fulfillment for speciality products. If you would like to learn more, please contact us.


Subscription Services: Wine Industry Leaders Share Their Insights
20 September, 2016

Subscription services, in the form of wine clubs, are a hot topic today. This past summer, Copper Peak Logistics conducted a user group panel at ShipCompliant DIRECT 2016 (of which we are also a sponsor).

Now, our readers can get the fully distilled content from that panel in our most recent white paper, “The Cutting Edge of Wine Subscription Models: How the industry is driving engagement with technology, personalization, and more.”

Here are a few key quotes you’ll find there...

  • On Technology: “Just getting to know our customers better is really what we’re excited about with all this new technology…[modern tools can] continue the care from the tasting room all the way back to the home.”
  • On Personalization: “Personalization is critical; we’re in an age now where everyone wants to feel connected to the brand they are consuming. Whatever that is, you want to feel a bond to it.”
  • On Content: “We’re testing to see what content resonates the most; for example, how to taste, what foods or wines pair with which meals, what the backgrounds of the wines are, and so on. We try to understand what’s generating the most value for customers.”
  • On Churn: “The issue of churn is very near and dear to our hearts. It’s the number 1 source of leakage in any subscription-based monetization model, regardless of what your subscription is.”
  • On Partnerships: “We were doing in-house fulfillment for a long time. We’ve found a wonderful fulfillment partner that is able to help us achieve what our goals are and because those customers are generally the customers spending a significant amount of money, more than an average wine-club member would spend in each shipment, so having a really good fulfillment partner in place has really helped us.”

 Of course, the full list of trends, tips, and advice can be found only in our white paper. We are providing this so that both wineries new to this market, and those searching to improve what they already have, can find ways to gain customers, fight club attrition, and bring their wines to the world. Who better to get advice from than the industry experts?

 

Copper Peak Logistics provides craftsmanship fulfillment for speciality products, specifically wine, food, and nutraceuticals. We’ve helped many wineries and merchants of all sizes find peace of mind in their wine club and subscription services fulfillment.  Let us help you, we're happy to answer any questions you may have.  Don't hesitate to contact us.  


Unilever Buys Dollar Shave Club: What This Means if You Have a Wine Club
22 August, 2016

It was recently announced that European giant Unilever purchased the Dollar Shave Club, to the tune of a cool $1 billion. This signals that a disruptive shift in the economy has come of age. It also means that wineries should take a long look at modern subscription models to keep up with best practices when it comes to their own wine clubs.

As we mentioned in our previous white paper on subscription serves, Dollar Shave Club (DSC) has been a success story worth emulating. Their model is simple: Send a small quantity of razors for a low monthly fee. CEO of DSC Mike Dubin launched the company four years ago with a hilarious tongue-in-cheek YouTube video that mocked the industry and quickly went viral. (If you’ve never seen it, you should.)

Although DSC is still working toward profitability, their subscription service boasts 3.2 million members to date. According to sources at Unilever, DSC had revenue of $152 million last year and is on track to exceed $200 million in 2016.

Most importantly, DSC has been able to chip away at the goliath in the room: Market leader Gillette (owned by Procter & Gamble). Gillette responded to the outsider, first by suing them (claiming that one of DSC’s razors was a patent infringement) and then by launching their own subscription service, Gillette Shave Club.

The move makes sense for Unilever (the European consumer products company behind Dove soaps and AXE body sprays), which now has a backdoor to the North American razor market. More importantly, the deal will give Unilever unparalleled data and consumer insights, as it will have access to DSC’s aggregated data on subscriptions, attrition, cohorts, and so on.

It will be interesting to see how much free reign DSC is given to “be itself.” Its viral videos, its hipster-esque newsletters, and its no-nonsense selling style have made it the brand it is today.

So, before DSC changes with the transition, we thought it would be helpful to look at a list of all the things it has done right in the past four years, noting that wine clubs and gift services are increasingly following suit.

 

7 Things DSC Did Right (and You Can Too)

(Note that all 7 of these things are strategies that your wine club and your brand can implement to grow membership and profit):

  1. It was funny and memorable. So, the mechanical act of shaving is, itself, not that interesting. While other brands touted the latest “technology” needed for a good shave, DSC went for the humor angle with their videos and newsletters. This allowed them to tap into customer pain (expensive blades, over-the-top advertising) while staying memorable.
  2. It created a brand that resonated with the market. DSC knew its market: Men aged 22 to about 40. This was a demographic that was increasingly interested in beard style, and that had a quirky, don’t-take-yourself-too-seriously sense of humor. Their communications reflected what this market liked and resonated with.
  3. It was reliable. The packages available represented three easy-to-understand tiers that changed little in quality and price over the years. Razors went out like clockwork, and customer satisfaction stayed high.
  4. It was flexible. Consumers are becoming increasingly demanding when it comes to personalizing their service. Flexibility in offerings is key. For example, consumers could choose from three basic packages and then request various “add ons”: Gels, shaving butter, soaps, and so on. Simple and intuitive web forms allowed consumers to change their package and frequency of delivery, or suspend delivery for a few months.
  5. It found the right price points. Monthly fees were modest and allowed three pricing strategies  that were readily distinguishable in terms of value.
  6. It communicated with each shipment. Each shipment came with a newsletter filled with stories, humor, and, of course, new deals. Sometimes shipments came with free samples as well. Every monthly delivery was an opportunity for reaching out to the subscriber.
  7. It made offers that had value—without pressure. One email that DSC sent our simply said, “Your new razors are about to ship. Can we throw in anything else for you?” This was followed by pictures and prices of three popular add-ons. The offer was brilliant: It was an upsell that didn’t try to disguise itself with a complicated deal or a “Buy now while offers last!” pressure tactic. It simply offered further products in a friendly way and made buying those products very, very easy.


If you would like to read more about 
category leaders in the subscription services area, or about what recent experts had to say at the ShipCompliant “DIRECT 2016” panel on subscription services, follow these links to our white papers. You can also see the PowerPoint presentation here.  and the video here.


Copper Peak Logistics is a 3PL service specializing in craftsmanship fulfillment for specialty products. We handle a number of subscription club services, maintaining a high degree of customer satisfaction.

If you would like to discuss what you can do with a new or existing wine club, please contact us!


Gear Up for Corporate Gift Season
27 July, 2016

Yes, even with the summer heat bearing down on us, it’s time to start thinking about corporate gifts for the holidays—Especially if you are in a wine or food business.

We suggest that companies start planning now, since there are several opportunities and pitfalls that come with holiday shipping. For example, there’s:

  1. The seasonal spike in demand. Demand for wine and food products rises substantially around the holidays, and this added demand puts additional strain on storage and shipping operations. You will need to make sure you have the inventory on-hand to handle the spike, as well as the capacity to move it. If you are using a 3PL, they should be getting ready for that spike now—and you should be communicating with them to make sure everything is in order.
  2. The possibilities in kitting. Done right, kitting can be a tremendous marketing tactic that creates excitement (and incremental sales opportunities) with customers. Kits have become more and more popular over the last decade and are now common gifts for both business partners and family and friends. And by far the most common kits involve alcohol, food items, and/or beauty items. To get the most out of kitting, start planning now so that your shipping operations or 3PL can find the most efficient means for storing, packing, and shipping those kits.
  3. Getting some head space with branding. Companies love to send clients and prospects gifts with their logo emblazoned on it. Imagine if you could offer your corporate customers a holiday gift of food or wine with their name and logo on the label. Those customers would surely pay a premium for a gift that gets their company some top-of-mind awareness.
  4. Coupons, discounts, and specials. The holidays are a great time to showcase what’s new in the coming year. If you plan on shipping to customers directly, consider adding a catalog or promo with each order to encourage the recipient to try more; even better, include a coupon or offer as well. These take a little planning, but easily pay off in repeat business.

With a little foresight and planning, your company can be an ideal destination for companies looking to give corporate gifts. But, to fully take advantage of the holiday season, you will need to start planning now.  We would love to help answer any questions or advice you're seeking!  Contact us, we're help you get your planning squared away!

 

Subscription Services a Hot Topic at ShipCompliant Direct 2016
12 July, 2016

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Last month, we had the pleasure of conducting a user group panel at the ShipCompliant Direct 2016 event, of which we were also a proud sponsor. That panel included industry experts weighing in on a topic that everyone is exploring these days:

Subscription Services.

The idea of a subscription service is not new in the wine space; wineries have been running wine clubs for decades. What is interesting, though, is how other industries have gotten into the game—and what the wine industry can learn from successful models. (For a more complete review of this topic, take a look at our white paper, “From Wine Club Subscription to Wine Club Experience”, available for download.)

The panel included some knowledgeable experts in this space, including:

Evy Chu, Ecommerce Manager., Blue Apron

Sam Straka, Product Manager., ShipCompliant

Laila Subaie, Wine Club Manager., Miner Family Winery

Ariel Myers, VP of Sales,  Recurly, Inc.

We’ve made available our slides from the panel here for those who couldn’t make it. And we will also have a forthcoming in depth report with detailed information from the panel.

To give you a taste, we discussed:

  • How curation and personalization WOWs customers--and why they are needed for any wine club or subscription service.
  • What customer relationship management is, and why it is critical to success.
  • Why “pricing to perform” is a critical factor in increasing value to your existing customers and reducing churn.
  • How millennials are driving the wine market more and more.

If you would like to be put on a list to receive our white papers & blogs, contact us, or find more content on topics like this, just click here.  Thanks for reading!


4 Tips for Sending Wine Media Samples
30 June, 2016

Tasting rooms and wine clubs are not the only way to spread the “good news” about a winery’s outstanding product quality (and thereby boost Direct-To-Consumer (DTC) sales).  Getting your wine in front of reviewers, writers, and other influencers, as well as into wine competitions, can be an important part of the marketing and outreach program for any winery.

To do that, your winery will need to send media samples to these reviewers, influencers and competition holders. At first glance shipping Media Samples might seem exactly the same as any other wine shipment—but there are some complications. Even when sending samples, you will want to make sure you are in compliance and that your samples are not delayed because of shipping issues. Some things to consider include:

Wine Media Samples Are Not Licensee to Licensee

Contrary to popular belief, sample shipments are not typically licensee to licensee shipments. Most writers, bloggers, influencers, and reviewers are not licensed by any federal or state agencies as a grower, producer, manufacturer, warehouse, retailer, winery, or importer/exporter.This means there might be restrictions in shipping to them, as well as taxes that must be paid.

Treat Media Samples as Direct-To-Consumer

There are no current federal or state rulings in regard to sending sample shipments. Industry best practice is to treat media sample shipments as if it is a Direct-To-Consumer (DTC) shipment. Since wine may not be given away, taxes must still be paid and reported as a DTC shipment. Typically, the winery or its marketing department would be listed and reported as the purchaser for a media samples shipment being received by a writer, blogger, or similar reviewer.

Know Their Name and Notification Needs

Not all bloggers, reviewers, or influencers freely accept samples without prior authorization. Before you ship, identify the end recipient and verify whether he or she needs to be notified in advance. This keeps the package from being rejected once reaching its destination—plus, it’s an excuse to start a conversation and build rapport.

Even Media Samples Need the Right Paperwork

Some shipments may require specific forms to be sent with the packages. These may require additional information such as appellation, vineyard designation, alcohol content, winemaker, and so on. Organizations like Wine Enthusiast and Wine & Spirits, for example, require these types of forms. Again, best practice is to contact the organization or people you want to send samples and ask what information they require.

Wine Media Samples are a great way to get your wine and your brand out into the wider world. Just keep in mind that they are wine shipments, and so all of the caution and common sense that goes into DTC orders applies to wine Media Samples as well.

Merilee Anderson
Vice President of Client Services

Copper Peak Logistics specializes in shipping wine, including Direct-To-Consumer (DTC) shipping. If you would like to find out more about what is involved in shipping Media Samples, contact us. We would be happy to help.

*** Please note that Copper Peak Logistics is neither a compliance expert nor a legal expert, nor are our employees lawyers. Therefore, the material in this post is for informational purposes only and not for the purpose of providing legal advice. Please check with an appropriate legal or compliance expert if that is your need. 


How to Decide on a Weather Hold for Your Products
14 June, 2016

With summer approaching, companies are planning for summer shipping. In a previous post, we addressed the various options for temperature controlled shipping and other methods for keeping your products safe from the summer heat.

Many companies have a long established history of holding shipments until the Fall and have set customers expectations that no shipments will occur until the weather gets cooler. But this practice is quickly changing. More and more wineries are exploring options for summer shipping, weighing the risks and costs against the possibility of damage (and the cost of returns). And they are weighing those options in communication with their customers, in many cases putting the decision to hold or ship in their hands (along with the higher cost of heat-protected shipping solutions). What was once common practice is now a risk calculation for both parties.

On the one hand, delaying orders when the heat is too intense will prevent spoilage during shipping. However doing so may lead to cart abandonment (and less revenue) because newer customers may not be willing to wait for 4 months to get what they want. Remember, well known brands such as Amazon, Apple, and Zappos have trained the average eCommerce consumer to expect fast shipping and two-day delivery.

On the other hand, providing that “instant gratification” does come with a risk--but that risk landscape is changing. While there is some possibility that wine can be heat damaged during shipping over the summer months,the body of work over the last 5 years has yielded only a handful of instances of clients telling us that there has been heat damage, seepage or cork push.

Forward staging, FedEx Cold Chain, UPS Temp Control and ice pack shipping are all options available to wine shippers to prevent possible heat damage. This means that you can provide customers that instant gratification--especially for special occasions like an anniversary, a birthday or other special event.

So, though weather holds might be an ingrained practice, they should not be a “knee jerk” reaction to hot weather. The decision to do a weather hold should always be a calculated one. While not an ideal option, delayed shipping can reduce the cost of replacement in the event of heat spoilage and/or the cost of returns arriving back at the winery or fulfillment center. But those costs need to be measured against cost of lost opportunities that come with a weather hold.

 

To make such a calculated decision, you should consider:

How long will the weather hold need to be in effect? The longer a shipping delay, the more customers become impatient. While a delay of a day or two might not be a big deal, a delay of a month or more  will be. You will need to determine whether your weather delay is likely to last a few days, or for most of the summer.

Have you promised a specific shipping window? Customers hate broken promises. It’s easy to lose potential repeat customers if you promise quick shipping at a certain rate, but then have to delay shipping the product to ensure quality. A contributing factor of wine club attrition is customers not getting the regular shipments they expect. In the end, keep your promise and if you can, exceed expectations. Communicate!

Have you built a “regular expectation” of delivery? Even if you don’t explicitly promise a shipment by a certain date, customers might nevertheless come to expect prompt shipments, especially if they have received them in the past. For example, if you have a wine club that delivers to members every quarter on or around the 15th of the month, it builds the expectation that every shipment will come on the 15th.… of every month. A weather hold can violate that expectation, even if you did not explicitly offer it.

What is your exposure if a product is shipped in a line haul truck? This starts to get down to the nitty-gritty of a weather hold calculation, specifically when moving larger volume. Shipping within a single zone might not expose your product to much risk; but shipping, say, from zone 2 to zone 8 will. If you know how much product is going to be shipped in an FTL or LTL shipment, you can estimate how much product can be potentially ruined. (Exact percentages will vary by wine and by route. But some estimates are that as much as 50% of a shipment can be ruined.) Sum the cost of the damaged product.

If a DTC delivery gets returned, how much would it cost you?A similar issue arises at the package level when considering DTC sales. The farther a DTC shipment needs to go on the ground, the longer it will be in a potentially hot UPS,  FedEx, or GSO truck. In such cases, even wine that is technically not “ruined” might lose many of its characteristics and get sent back by the (now dissatisfied) customer. Sum the cost of replacing the product and shipping replacement orders--assuming, of course, that you are picking up the shipping costs for the replacement. (Multiple warehouse and staging facilities can mitigate this some, as products can be stored in a temperature controlled facility and then shipped via a shorter ground or air route.) But no matter what, remember that 2Day Air packages, 3 Day Air Packages and Ground/ Residential Delivery packages all have a shipment commitment by the end of that service's’ business day.

What is the cost of the alternatives? There are alternatives to weather holds, of course: ice packs, Fedex cold ship, warehousing in multiple locations, and so on. We describe some of them here. Once you know the potential cost of lost or damaged inventory, you can compare this to the cost of these shipping alternatives.

 

Copper Peak Logistics specializes in shipping wine, food, nutraceuticals, and other temperature sensitive products. If you would like some help going through the calculations and seeing if a weather hold is the right move for your operation, contact us. We would be glad to help.


Is the Data Generated by Your DTC Sales Protected? What Wineries Should Know.
14 June, 2016

If you are in (or getting into) the Direct to Consumer (DTC) wine space, there are likely a lot of issues you are trying to tackle at once: containing shipping costs, choosing warehousing solutions, keeping products cool during transit, and exploring options for multiple shipping locations, just to name a few that we’ve written about.

So it’s understandable if the issue of data security practices at your strategic partners has not been on your radar. Still, it is a very important subject, as your customer’s privacy could easily be at stake.

Our sister blog over at Materialogic handled this topic well in a recent post about data security and what you need from your 3PL. They suggest, rightly, that shippers look past the headlines and the hysteria and ask what is really at risk, and what positive steps can be taken to avoid problems. The piece ends with an excellent list of questions to ask a 3PL to ascertain whether they have a solid data security plan in place according to best practice.

We suggest you take a look at the post and, if you have any questions about data security and 3PLs, reach out and talk to us. Your customers privacy is important, and safeguarding it is another way to keep those loyal customers.

 

So, You Want to Be in the Wine Business?
14 June, 2016

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You’ve decided to enter the wine space and you’re looking into logistics. You might be considering a 3PL to handle your DTC shipping details. As a winery, an importer/retailer, or as a marketing agent, you will need to become educated as you do your diligence to find the right fulfillment partner.

To help with this process, Copper Peak Logistics has put together five important considerations you will need to research before you begin contacting 3PLs in order to make your engagement more productive.

Consideration #1: What license type you have dictates which states you can ship to.

Before you contact a 3PL, be clear about what license type you have and set your expectations accordingly:

Type 02 Winery can ship to as many as 43 states, provided the winery has permits in those states. This license is typically reserved for wine growers.

Type 17/20 Retailer can ship to as many as 16 states, provided the retailer has permits to ship into those states. Holders of this license are typically considered retailers under state direct-to-consumer shipping statutes.

Type 85 Online Retailer can ship to 14 states provided the online retailer has permits to ship to those states. Type 85 enables the licensee to make direct sales of wine to consumers via the internet, direct mail or phone (from a location not open to the public) without the requirement to also hold a wholesaler license.

Out of the 50 states, three—Mississippi, Utah, and Kentucky—specifically prohibit the direct shipment of alcoholic beverages to consumers. Some counties within states do as well.

Consideration #2: Compliance is extremely important.

In the wine space, legal compliance is as important as it is complex. A wine retailer basically has three options for handling compliance issues: designate an employee to handle them, choose an independent consultant to handle them, or select a SaaS product such as ShipCompliant to manage your compliance needs. (In some cases a winery may use multiple solutions simultaneously.)

As of this writing, ShipCompliant is the industry standard for accessing up-to-date state regulations and tax rates for direct shipments to consumers, as well as tracking shipments to ensure compliance. It also handles tax filing, label registration, and much more. To get an idea of what it costs to get a permit in the state you would like to ship to, use ShipCompliant’s handy ROI calculator.

Whatever option you choose, you must have a system in place to ensure proper compliance and keep your business running without legal entanglements.

Consideration #3: Importers face a number of restrictions.

Federal law states that, for an importer to ship Direct-To-Consumer (DTC), they must meet two requirements: 1) the importer needs to have a Federal Basic Permit to import wine, and 2) they must comply with all state and local laws for the states to which they want to ship. For example, many states (Louisiana, Nebraska, New Hampshire, Nevada, North Dakota, Oregon, Virginia, Wyoming, West Virginia) require a direct shipping permit, a license fee and/or application fee, sales and excise taxes, and reporting.

Most states will restrict the types of businesses that can properly receive a permit for DTC sales. For example, a state might require that only properly registered wineries actively practicing winemaking can receive a permit. And, even if an importer has a winemaking operation, states may limit it to wines produced in the United States.

Marketing agents, for their part, act as an agent of sale on behalf of a winery. This usually means a company that is advertising the winery’s products on their platform and then facilitating the sale. The actual sale, however, is between the winery and the consumer. It is up to those parties to determine what states the winery can legally ship to and what restrictions are in place.

Contact information, including websites for the alcohol beverage control board in each state, can be found on the Wine Institute website.

Consideration #4: Not all eCommerce platforms are equally equipped for selling wine and spirits.

eCommerce sites for the wine space differ slightly from typical eCommerce platforms like Magento, Shopify, and WooCommerce. Those platforms do not integrate readily with software solutions like Shipcompliant and others used by fulfillment centers. So, before you engage with a 3PL, make sure that you’ve taken the appropriate steps to ensure your eCommerce platform is suited to the wine space and either is or can be made compatible with standard software solutions.

For example, both Magento and WooCommerce have plug-ins that help with integration (Magento’s plug-in is through a company called Vonnda, while WooCommerce has a plug-in through a company called h2 media). Shopify does not currently have a plug-in, but there is one in development.

eCommerce platforms and sites specialized for the wine industry include eCellar, VineSpring, Vin65, Cultivate, Captina, 750, eWinery, and many more. These are all compatible with ShipCompliant out-of-the-box. You might want to look into some of these solutions if you plan on conducting online sales in the wine space.

(For a list of all platforms compatible with ShipCompliant, see https://www.shipcompliant.com/current-partners/).

Consideration #5: Will you need warehousing, fulfillment, or both?

Warehousing and fulfillment are often seen as two separate sides of the same coin. You can engage a partner for handling one, the other, or both. There are business models that make sense with each choice.

Typically a fulfillment center is not a bonded facility. The fulfillment center would only want enough tax paid inventory on hand to fill  a certain amount of orders. For example, they might only want a 30 or 60 day supply of the SKUs you are selling. Once that inventory is depleted, the winery will pay any taxes to the government and then the product will move from the bonded storage facility to a fulfillment operation.

For that reason, many wineries will use a bonded/long-term storage warehouse facility to store the majority of their goods until it is time to sell the product. Since importers pay their tax at time of import and retailers pay tax at the time of purchase from a winery or importer, the inventory is technically tax paid. The inventory can go directly to a fulfillment center when needed or else stay in a long-term storage facility.

There are only a few companies that offer bonded/long-term storage of goods, and even fewer of those can offer DTC fulfillment in addition to the storage. They are two different business models. You will need to carefully consider your needs and search for partners that can fulfill those needs, keeping in mind there are usually additional costs associated with moving wine into and out of storage.

The Final Word: Considerations for a Wine Business

Making and selling wine can be a fulfilling line of work, as well as a tremendous business opportunity, but it cannot be taken lightly. Before you craft a business model around DTC sales, consider several issues with regard to licensing, compliance, technology, warehousing, and fulfillment.

If you feel you have these areas covered, and you are ready to speak with a representative from a 3PL, we suggest you download our Wine Fulfillment Pre-Engagement Checklist. This will help you organize your questions and make the engagement process more productive.
*** Please note that Copper Peak Logistics is neither a compliance expert nor a legal expert, nor are our employees lawyers. Therefore, the material in this post is for informational purposes only and not for the purpose of providing legal advice. Please check with an appropriate legal or compliance expert if that is your need.


From Wine Club Promotion to Wine Club Experience: Lessons from Subscription Services
30 April, 2016

There are many ways for a wine company to build their brand. Of these, wine clubs are a great way to build a loyal customer base while creating a consistent revenue stream.

Still, many wineries face a challenge when it comes to sustaining effective wine clubs. In fact, some of the industry statistics tracking wine club participation paint a less-than-rosy picture[…]

To learn more and read about Lessons on Subscription Services click here.

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The #1 Cause of Surprises in Wine Logistics
27 April, 2016

Most wineries don’t bother with RFPs when looking for a logistics partner. That’s OK: A good referral to a company experienced in your vertical, or well established in your geographic area, is often a preferable way to find a 3PL partner– and it takes less time and effort.

Still, there are times when an RFP is needed. And the worst thing that can happen is when you go through the RFP process in all its grueling detail, only to have the service not be what you expected, or to have hidden fees eat away at your bottom line.

When costs far exceed what a winery originally contracted with their 3PL, we’ve found that the #1 culprit was an inadequate or misleading RFPs. So, if you are thinking about sending out an RFP to 3PLs, you’ll want to know best practices for getting the service you need–with no “surprises.”

If this is your situation, you might want to download this white paper published by The Global Supply Chain Institute over at the University of Tennessee Haslam College of Business. (There’s also a very nice overview of this paper over at our sister company blog at Materialogic.) It’s a great overview of best practices for selecting and managing a 3PL; general enough that someone new to RFPs can understand it, but detailed enough that even an RFP veteran fill find useful information.

We understand that, of all the activities that go into a running a successful wine or food business, mastering the art of the RFP is probably low on your list of priorities. But not being up on best practices can cause headaches down the road. If you’d like a fair assessment of whether an RFP process is right for you, or if you want a partner to walk through the logistics process and skip the RFP altogether, give us a call.

 

Copper Peak Logistics provides craftsmanship fulfillment for speciality products, specifically wine, food, and nutraceuticals. Our white glove service is deeply rooted in customer relationships– starting from the very beginning.


Is DIM Weight Pricing Hitting Your Bottom Line?
16 March, 2016

Our sister blog over at Materialogic just put out a great piece about dimensional (DIM) weight pricing that is worth a read. FedEx and UPS adopted new rules for DIM weight pricing about a year ago.  These rules not only changed the pricing for shipped goods, but also meant that more items would be subject to DIM weight pricing (as opposed to actual weight).

The details of how DIM weight is calculated -- and what this means for shippers -- is covered in the post. But the basic idea is this: less dense packages (large but light items) may now be subject to increased shipping rates.

We wanted to bring it to our reader’s attention because there might be some special cases where DIM weight makes a big difference in shipping costs. For example:                          

  • Temperature controlled food and nutraceuticals. The new DIM weight rules make less dense material more expensive to ship, and few things are less dense than Styrofoam. So, if you need ice pack shippers with Styrofoam, you really should research new strategies for keeping shipping costs down.
  • Corporate gifts and club packages. If you aren’t being efficient in grouping and packaging items, you might be throwing money away.
  • ecommerce. Gone are the days when you could take a single item and throw it in a box with some packaging. Shippers now have to be more efficient with each item sold (and more efficient with warehousing and shipping locations, too.)

We would love to hear from our readers whether DIM weight pricing has affected business, and how you have been dealing with the change.


Shopping Cart Abandonment: More Emails, More Patience
16 March, 2016

Shopping cart abandonment is the bane of ecommerce, and retailers try all sorts of strategies to re-engage customers who have forsaken an order. A new study by retail marketing company Listrak looked at the top 1,000 internet retailers and their use of shopping cart abandonment (SCA) campaigns . This was the fifth consecutive year that Listrak ran this study, and the main finding was that, although use of SCAs is still growing, it seems to be reaching a plateau -- and well before its use has become widespread.

 

Here are a few of the interesting highlights of the report:

  • About 1 out of 3 top internet retailers use SCA campaigns.
  • Most Top 1,000 retailers are still only sending a single email message, but the overall ratio is dropping. The number of Top 1,000 retailers sending 4 or more SCA email messages increased in 2015 to 9.5% (up 31.9%).

 

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  • For the first time since 2001, there was a decline in retailers sending the first retargeting email within 24 hours. In 2014 around 80% sent the message within the first day, but that number dipped to below 60% in 2015.

 

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  • Retailers are waiting longer to offer discounts and incentives. (Providing  free or discounted shipping, for example, can sometimes entice a customer back that abandoned a cart due to “sticker shock” upon seeing the shipping and handling costs.) While more than two-thirds (75.8%) of retailers provide offers, only 17.3% offer an incentive in the first email.

 

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  • SCA re-engagement campaigns are still a useful tool. The average open rate for these emails (across verticals) was 24.3%, the click-through rate was 26.9%, and the conversion rate was a whopping 19.7%.

 

Those interested can download the entire study from Listrak. The numbers here seem to be pretty clear: There is still a lot of money being left on the table when it comes to using SCA re-engagement campaigns. Best practices are gravitating towards more emails (at least four) with discounts and incentives offered later in the sequence.


Copper Peak Logistics provides craftsmanship fulfillment for speciality products including wine, food, supplements, and nutraceuticals. We pride ourselves on our insights into intersection of logistics and marketing for these industries. Contact us if you want to learn more.


Keeping Summer Deliveries Cool: Food and Wine Shipping Options
16 March, 2016

Though summer is still months away, companies may well be into their planning for summer shipping. Summer deliveries are a unique challenge for the food and beverage industry, particularly when it comes to wine shipments. The heat can easily spoil an entire truckload of goods if you do not plan appropriately. Otherwise, you’ll be postponing shipments of those tasting room and wine club orders…and who wants to wait four months for their order?

So what options currently exist for summer deliveries? And what are the pros and cons of each? Here is a quick look at the most common alternatives.

Ice Pack Shippers

Ice pack shipping has been the traditional way of maintaining a package’s temperature during transit. There are a variety of ice pack choices available depending on your product’s temperature needs.

Ice Pack Shippers: the Pros

  • Helps maintain a consistently cool area around the product
  • Can be used from any shipping location
  • Ice packs can stay with the product up through “the last mile”

Ice Pack Shippers: the Cons

  • New shipping boxes needed
  • The Ice packs can be costly in and of themselves
  • Increases the bulk of packages, which can increase the cost of transportation based on DIM weight. See our upcoming Blog Post on this topic.

Warehousing Inventory in Multiple Locations

A second option lets you reach distant customers via ground shipping more quickly by warehousing some stock in a second, more central location. For example, Copper Peak offers warehousing and shipping from our centrally located St. Louis facility. This also means that your products spend fewer continuous trips in potentially hot trucks.

We discuss the option of multiple facilities at greater length in this post.  With considering warehousing in multiple locations for summer deliveries, keep in mind the following:

Multiple Locations: the Pros

  • Decrease shipping time without paying for air freight
  • Faster delivery to market while improving the customers’ experience
  • Use of ice packs shippers can be added for additional protection/ peace of mind

Multiple Locations: the Cons

  • More lead time needed for sending products, packaging, and marketing collateral to the additional location(s) unless you are sourcing products close to that location
  • Production forecasting for kit builds and order processing will be needed for all locations
  • Inventory management and movement will need consistent attention.

FedEx Cold Chain

Your third option is with FedEx Cold Chain service from California. Packages are picked up by FedEx Supply Chain Transportation and delivered to their consolidation point and mixed with other FedEx Cold Chain clients. Packages are arranged by recipient zip code location and are placed on FedEx Supply Chain temperature-controlled line haul trucks to be delivered to any of six different FedEx hub locations around the country. Cold chain can be used in conjunction with FedEx Delivery Manager or the FedEx, “Hold at Location” (HAL) services.

FedEx Cold Chain: the Pros

  • Closely monitored temperature-controlled line haul vehicles
  • Live tracking through FedEx.com
  • Packages deliver via the FedEx Express Delivery Network, typically by 10:30am, to beat the summer heat

FedEx Cold Chain: the Cons

  • More expensive than ground service (though a little less than the typical FedEx 2Day air service)
  • Follows a once weekly pickup/ delivery schedule.
  • Reroutes, redirects, address changes will delay shipments and keep packages from delivering in a timely manner

Zone Skipping

A fourth option to consider is zone skipping. This is where a shipper consolidates many individual packages, holding them until the number of items reaches a full truckload. Those items are then sent together from one zone (location) to another. For example, Shipping from Napa Valley/ Sonoma Valley might be in UPS/FedEx Zone 2, while New York is in Zone 8. Shipping directly from Zone 2 to Zone 8 via consolidated truckload would be zone skipping. From New York, the shipments would be inserted into the UPS/FedEx network and ship from that locations zone to the delivery recipient zone. This will change a zone 8 shipment to a Zone 2 or Zone 3 shipment. The idea is to eliminate small package movements one at a time and insert a consolidated move of many packages across the country for a potential savings. Copper Peak calls this the Zone 78 program.

Zone Skipping: the Pros

  • Orders can be processed for each hub location drop in batches for bulk load onto pallets
  • Great for pre-kitted club shipments
  • Reduces Zone 7 or Zone 8 moves from California to Zones 2 or Zone 3 from an eastern hub facility

Zone Skipping: the Cons

  • There is no tracking visibility until a package is scanned at the forward hub location
  • Zone skip packages often take up more space and require additional  pallets/trucking to move the same amount of volume than case goods
  • No ability to add ice packs at forward hub locations

Weather Holds

As a last ditch effort, you can always put orders on hold during the hottest times of the year. Your customers won’t likely be happy with the delay, but better to have an order arrive late and safe than have it arrive spoiled. Still, we find that the above options are worth the investment in terms of customer experience. It is money well spent.


Multiple Shipping Facilities – Does it make sense?
16 December, 2015

Not all strategies wineries can adopt when it comes to wine storage, logistics and DTC shipping are created equal. A good example of this is the question of whether it makes sense to use multiple facilities for shipping.

This might sound like a minor issue. One warehouse or two? Who cares? It sounds like the kind of issue that a shipper or 3PL might worry about, not a winery. But when wineries are the consumer of shipping services, choosing certain services becomes an important business decision. Consider these facts:

  1. The direct-to-consumer (DTC) wine industry saw a record 15.5% increase in sales from 2013 to 2014. Wineries are now able to ship to 42 out of 50 US states, plus Washington DC. And as of January 2016, South Dakota will be the 43rd state allowing DTC shipments of wine.
  2. Most wineries are small-to-medium operations; in fact, they account for over 76% of DTC wine sales. This means that there are many, many players, and only a few really dominant brands. So competition is fierce.
  3. While only about 23% of habitual wine buyers in the US are “online,” that number is set to spike as millennials become increasingly sophisticated about wine - and are more comfortable buying wine online. (Note- See the last CPL whitepaper on building Brand Loyalty with Millennials. http://www.copperpeaklogistics.com/millennial-marketing/).

If you are one of these small-to-medium sized wineries, these numbers are a bit frightening. They mean that it is going to be harder and harder to get your brand “out there” and in front of customers.

So what does this have to do with location? Using facilities in multiple locations makes sense when certain goals are part of your sales and marketing strategy—like increasing customer satisfaction with an improved speed to market and the potential to save dollars on shipping cost.

Multiple Locations can Increase Customer Satisfaction

Ecommerce has been around long enough that customers expect certain things. They have grown up in a world where Amazon offers 2-day shipping on just about anything, and “on demand” means, literally, on demand. But if you have a vineyard in California, there’s no way to ground ship to the East coast in that time.

Enter forward staging. With forward staging, some proportion of your inventory is sent to a second location that is more centrally located in the middle of the country for storage. When orders are processed, they are packaged and shipped from the location that is closest to its end destination, thus achieving a faster delivery to market. This multiple location strategy allows you to greatly reduce the time in transit for packages (typically reducing east coast orders from 5 days down to 2 days), and thereby increasing customer satisfaction. This solution also minimizes some of the risk to your product due to weather issues and handling by the carriers.

Multiple Locations can play a Financial Role

True, the above advantages can be had by using air freight, but at a significantly higher cost. Using ground shipping with forward staging can be up to 35% less expensive compared to 2nd Day Air shipping. That’s a significant savings and major impact to your bottom line. (Additional savings can be had as this does not account for fuel surcharges, which are historically charged at higher fees for air service versus ground service.)

So, if you really are focusing on the customer delivery experience as part of your business model, it would be better to use forward staging with ground shipping everywhere in the country. We’ve had clients tell us that this enables them to offer multiple promotions to increase brand loyalty (for example: Shipping Included, Add another bottle for only X dollars, etc.) thus encouraging more reorders and helping retain wine club members[BNT1] .

All that said…

All that said, using multiple shipping locations is not a one-size-fits all, cookie cutter solution for every winery. For example, it does require some additional analytical work and planning ahead to make sure enough product is located in each location to prevent out of stocks. It is a tool that some wineries effectively use to their full advantage when it comes to managing the customer experience and standing out in the crowd. 

Things to consider when contemplating multiple shipping locations:

  • The greater the number of skus you have the more complicated it can become. Be careful not to bite off more than you can chew.
  • Decide if you want to handle club shipments as well as daily orders out of a forward staged location. Focusing on club shipments only can simplify things greatly.
  • Analyze your previous shipments by zip code to determine how many customers will see an improvement in their delivery experience, and which ones can be switched to ground shipping if they have been previously shipped using air.
  • Remember to add the time it takes to have product moved in bulk to the second location.
  • Keep it simple – test the waters. Nothing says you can’t take a small sample size and see how it works out – either from a customer or financial point of view.

As we all know competition in the Wine industry is fierce and continues to accelerate. It’s great to have a craft brand experience that wine enthusiasts can enjoy - but when there are literally hundreds of those to choose from, you can’t rest on your history, personality and craft alone to stay memorable and profitable. Executing a multiple location strategy might be the smart move to get your chosen brands into the hands of your customers more quickly, more safely, and at a more affordable rate that can encourage additional sales growth. 

Thank you for taking the time to read our article. If you have any further questions on how Copper Peak Logistics can help your winery manage it's fulfillment, plese contact us.

Milton Cornwell- President


5 Marketing Fundamentals for Smaller Wineries
07 December, 2015

With major retailers like Costco buying up private label brands and hard liquor becoming more and more trendy, smaller privately-owned wineries have more competition than ever. We’ve witnessed many smaller wineries languish even though they had a great product, just because they couldn’t build that loyal fan base. 

But over the years we’ve seen some true and tried things that work. And while it may seem beyond your budget to invest in expensive marketing-- we get that-- the truth is, it’s also out of your budget not to invest in it. 

Fortunately, building your business doesn’t have to break the bank. So let’s go back to basics: here are some simple ideas you can implement that will grow your customer base while giving you the most bang-for-your-buck.

  1. Tasting Kits. A true wine fan might only know you by a single label or vintage. Why not give them the opportunity to try a wider range of product? Selling affordable tasting kits is a great way to allow potentially loyal customers to try your stock with less risk. It’s a classic cross-selling move.
  2. Wine Tours. By banding with other local wineries and shops, especially if you are off the beaten path, you can help each other build business. Sure, it may seem counter-productive to send business to your competition, but wine lovers want to experience different kinds of wine. Developing a wine tour can be a novelty for an urban wine lover.
  3. Special Offers with Shipment. Including special offers with each shipment also encourages your customers to keep coming back. This could be something as simple as a coupon code that offers discount on a special item, or on the next shipment. As offers gets used, you’ll also start amassing useful data-- for example, you can see which products make good “introductory” products, encouraging further purchases. And remember, there is nothing better than offering “shipping included in the price of your order” as a means of getting new on-line shopping customers to try your brands.
  4. Customer Loyalty Programs. It costs more to gain a new customer than it does to keep one. And your current customers will spend, on average, 67% more than new ones will.  No wonder customer loyalty programs are so hot. These programs reward customers for frequent and repeat purchases, often with special gifts or points. But the real payoff is that they are great for gathering important demographic information about your customers, which in turn allows you to tweak your marketing messages and strategies. Another twist is to include a free gift in each club shipments you make – your loyal customers will remember the thoughtfulness of your efforts.
  5. Tell your story: Be sure to take pictures and videos of your harvest at harvest time, and post them in social media channels. This will make your customers feel more connected to your wine and your business. When customers feel connected to your business, they are more likely to trust it. And that’s really the key to developing customer loyalty. And remember, this plays right into what the coveted millennial target market is looking for. 

What is great about each of these programs is that you can track their effectiveness with metrics, which are which is a key part of an intelligent marketing plan. The more data you have, the more you can see what’s working, and what’s not, so you can spend your marketing dollars more wisely.

These ideas are just the tip of the iceberg, of course. Keep in mind that with a little creativity and a marketing plan, your small winery can bring in bring in big business. 

At Copper Peak Logistics, our focus is on helping wineries meet the growing demands of shipping. Give us a call at 707.265.0100 or check out our website at http://copperpeaklogistics.com.

 


The Spin on Kitting: Product Presentation and Creating a Memorable Experience
19 November, 2015

A vendor of ours once admitted that he never would have had a “Dark and Stormy,” nor kindled a love of ginger beer, if it weren’t for a holiday gift from his mother-in-law. That one kit introduced him to a new drink, and netted a new customer for the company that made his favorite dark rum.

Now think about this for a bit. What for most bar owners would be a mere restocking exercise was turned into an actual experience just by putting some spirits together with a ginger beer and a fancy glass. And we see this pattern over and over: people trying new things just because there is the right presentation, leading to the right experience.

We’re talking, of course, about kitting. Generally speaking it just means the process of assembling, packing, and shipping multiple products in a single package or sku. Done right, kitting can be a tremendous marketing tactic that creates excitement and incremental sales opportunities with customers. Kits can be built in advance and carried in inventory (typically the preferred and less costly option), or built on the fly as orders are received (best used when kit component stock is limited and adding a day to turnaround times isn’t an issue). 

A Wide Range of Applications

Kitting takes on an important dimension when talking wine, spirits, and food items; it actually becomes a marketing tool. Kitting can be a whole new way of marketing your products, cross-selling, and adding value. For example, successful wineries can use kitting for a wide range of applications:

  • Variety Packs (aka a tasting kit). Building a kit that holds a variety of wines is a good way to expose new customers to your brands or other products, and a way to let existing customers branch out and try some new favorites. Tasting kits are commonly put together with catalogs, coupons, and club membership deals—anything that potentially leads the consumer to the “next step” with your brand.
  • Club Theme Packs. The typical wine club shipment has wine and marketing materials – and that’s it. Why not create additional excitement by adding winery logoed premium items that can extend your brand awareness. Or add food related products focused on seasons or themes to make wine shipments more memorable—and teach customers about food pairings through hands on engagement.
  • Holiday packs. Never underestimate the power of good presentation through good packaging. Kitting can make for great gifts around the holidays, meaning a great holiday product you can sell without creating new products or inventory.  It can also be a good way to offload excess inventory towards the end of the year.
  • Corporate gifts. Gifts are an unsung staple of marketing efforts. You can offer kits as gifts to your best partners, vendors, and clients… or better yet, that businesses can offer as gifts to their client.

Sure, most products can be sold separately. But many products have greater marketability when they are seen as something bigger. Kits tend to stand out more, and when coupled with a good deal can be a powerful enticement to consumers. 

Remove the Fear Factor – Kitting Doesn’t Have to be Hard

Of course, the above ideas speak to why wineries, tasting rooms, and similar outfits should consider using kits. In small quantities it may be simple to do kits in house. But if you have large volumes, complexities around packaging, or need help sourcing companion items, you should call in experts. A good 3PL will know how to help you navigate the ins and outs of managing kitting activities. Here are a few things to consider when blending kitting in with other warehousing and logistics operations.

  1. Reduced cycle times. 3PLs generally do kitting more efficiently than in-house operations, and can ship kits straight to consumers or businesses. Faster turn-around means happier customers.
  2. Lean operations. By combining warehousing and packaging into one facility, you save some transportation and inventory carrying costs. Your own facilities can be dedicated to production.
  3. More effective use of labor. When your 3PL handles your kitting (or any other packaging services), it frees your skilled labor so they can focus on making products, not on searching for inventory, packaging, checking, etc.
  4. Inventory updating and control. When you set up a product kits or bundles as a single product, you still need to keep track of the inventory used. When the kit is ordered, a good 3PL will decremented the inventory for each individual SKU that makes up the kit.

One last piece of advice: To get the most out of kitting, plan ahead in partnership with your 3PL.The more you can plan upstream, the smoother things will go. If you are thinking about getting kits together for the Christmas Holiday here in November, you are already too late! But there are plenty of opportunities around kitting, and it’s never too early or late to start the conversation.

If you are interested in how to use kitting to your advantage in advance of a special event, or as a general offering, contact us. Copper Peak has expertise in kitting and its potential applications for wine and food.

 


Nutraceuticals: Do You Have What it Takes to Scale Up your Nutraceuticals Business? Industry Veterans Weigh In
09 November, 2015

The nutraceuticals industry is growing rapidly these days; one study predicts that nutraceuticals will grow to be a $250bn market by 2018. And whereas many of the early players were smaller companies, nutraceuticals companies with over 500 employees and millions in revenue are no longer unusual.

This fast growth means that nutraceuticals companies are facing all sorts of new challenges, many of which have to do with scaling up their businesses. More..

 

 Nutraceuticals

 

 

 

 

 

 

 

 

 

 

 

 

 


Socially, Mobile, Millennials: Farming for the Future User Group
16 March, 2015

One of the highlights of the 2015 Direct to Consumer Wine Symposium agenda was the user group focused on Millennial marketing. Over 100 industry professionals attended the discussion and learned how shifting demographics in the “Direct to Consumer” wine sales channel will have a major impact on current and future marketing activities.

In short, retiring Baby Boomers are shifting their spending habits and will be taking over $400B in eCommerce spending with them. Generation X and Millennials are the present and future of “Direct to Consumer” eCommerce, with an expectation that this group will spend over $600B annually. Building brand loyalty to Millennials is more challenging than doing so with their parents/boomers. The traditional approach to marketing is no longer captivating to a generation that is used to everything happening at the speed of wifi. Social media, mobile applications, value added services, and most importantly, telling the brand story are all front runners to engaging this group.

THE PANEL

The Socially, Mobile, Millennials: Farming for the Future session, hosted by Copper Peak Logistics, brought together four wine-industry and marketing experts who gave a look into the next generation of wine consumers. Their knowledge and expertise in this field oered insight and actionable takeaways to help the attendees build brand loyalty with Millennials, suggestions on how to capture the growth of the DTC market among Millennials using social mobility, and tips on how to create added value without turning to discounts.

THE FREE ADVICE

Their expert advice and responses to questions posed by both audience members and moderator, Dave Dobrow, are chronicled here.


Copper Peak Logistics Names George Ross as Business Development Associate
02 December, 2014

George RossNapa, CA – December 1st, 2014 – Copper Peak Logistics (www.copperpeaklogistics.com), the trusted name in winery direct to consumer fulfillment, logistics and brand building services, announced today the addition of George Ross to the Sales and Marketing department in Napa. George will be joining the team as a Business Development Associate reporting to Dave Dobrow, Vice President of Business Development and Marketing. His responsibilities will include sales, account development, and various marketing initiatives. Ross comes to CPL from Bacchus Fulfillment (a division of Wine Shipping), where over a period of nine years he advanced to an Account Manager role, and was previously the Warehouse Manager at Napa Valley Packaging.

“We are really excited to have someone like George join the CPL team” said Milton Cornwell, General Manager of CPL. “George has accumulated a tremendous amount of experience in the wine industry, most of which has been focused on direct to consumer sales, building brand awareness, as well as developing relationships with existing clients and new prospects. As such, he is comfortable with our organization and we feel his skills and experiences will blend perfectly with the current and future sales and marketing directives of CPL.”

“I am excited and honored to be joining the CPL team,” Ross added. “CPL really promotes a family atmosphere where each individual’s efforts boost the company’s success, as well as making each person feel empowered and valued. This dynamic naturally extends to all of our customers, making them more than clients, but partners.  I look forward to both contributing and benefitting from this great company, and all of the people involved.”

For more information, contact Milton Cornwell, General Manger of Copper Peak Logistics at (314) 692-9555 or mcornwell@copperpeaklogistics.com.

About Copper Peak Logistics:

CPL is an experienced third party logistics provider serving the American wine industry. CPL delivers a compelling suite of marketing, fulfillment, print, software and value added supply chain solutions for winery clients to grow their business in the direct sales channel and beyond. The combination of CPL’s services, people, and geographic footprint has created a compelling point of differentiation and helped build an impressive client base. CPL is a privately owned company and a member of the Materialogic Supply Chain Alliance, a strategic partnership of supply chain industry providers whose members collaborate to provide total solutions for their clients. For more information visit www.copperpeaklogistics.com and/orwww.materialogic.com.


Copper Peak Logistics Names Meghan Letters as Account Manager
02 July, 2014

Napa, CA – July 1st, 2014 – Copper Peak Logistics (www.copperpeaklogistics.com), the trusted name in winery direct to consumer fulfillment, logistics and brand building services, announced today the addition of Meghan Letters to the Client Services department in Napa. Meghan will be joining the team as an Account Manager reporting to Merilee Anderson, Director of Client Services. Her responsibilities will include client support, account development, and preserving the hands on service CPL is known to deliver to its customers. Letters comes to CPL from West Coast Wine Partners in Sonoma, where she helped rebrand the wine clubs for Valley of the Moon and Lake Sonoma wineries and she previously represented Oregon's Montinore Estate as Regional Sales Manager.

“We are very pleased to have Meghan join the CPL team” said Milton Cornwell, General Manager of CPL. “Meghan has held a variety of positions in the wine and craft beverage industry, most of which have been focused on direct to consumer sales, building brand awareness, as well as developing relationships and marketing activities for the wholesale and direct channels. As such, she is comfortable with ecommerce platforms, CRM applications, logistics, and social media marketing.  We feel her skills and experiences blend perfectly with the foundation CPL has built in delivering industry leading solutions through best in class technology, operations and customer service.”

"CPL has the reputation, not only as a trusted partner for the wine industry, but as a savvy team of true logistics professionals," Letters added.  "Their focus on building brands through progressive technology and creative logistic solutions is exciting and I look forward to working at their high standard of customer service. I have always admired their client centric approach and am honored to be joining the team."

Letters joins the Napa team this week and will begin assisting current winery clients in their direct to consumer fulfillment needs immediately. 

For more information, contact Milton Cornwell, General Manger of Copper Peak Logistics at (314) 692-9555 or mcornwell@copperpeaklogistics.com.

About Copper Peak Logistics:

CPL is an experienced third party logistics provider serving the American wine industry. CPL delivers a compelling suite of marketing, fulfillment, print, software and value added supply chain solutions for winery clients to grow their business in the direct sales channel and beyond. The combination of CPL’s services, people, and geographic footprint has created a compelling point of differentiation and helped build an impressive client base. CPL is a privately owned company and a member of the Materialogic Supply Chain Alliance, a strategic partnership of supply chain industry providers whose members collaborate to provide total solutions for their clients. For more information visit www.copperpeaklogistics.com and/or www.materialogic.com


Copper Peak Logistics is Growing & Hiring for an Account Manager
10 March, 2014

COPPER PEAK LOGISTICS, Napa Valley’s premiere direct to consumer wine fulfillment and logistics company, is looking for an ACCOUNT MANAGER (AM) to join our growing team. This position reports to the Director of Client Services and will be based in our American Canyon headquarters. We are looking for a high energy, team oriented person that posses a strong desire and work ethic to be the best in the business. The ideal candidate will have wine industry experience and a demonstrated track record of providing superior client services and account management, along with flawless communication skills, a sense of urgency, and a consultative approach to drive value added thinking that helps Clients grow their brands.

Along with your résumé, please include a cover letter explaining your experience as it relates to this position and industry, and your compensation and benefit expectations. We WILL NOT review any resumes without ALL of the requested information.

OVERVIEW
The Account Manager (AM) will be responsible for managing and performing the support activities and tasks of designated Client fulfillment and distribution accounts, including daily oversight of order flows, inventory management, resolve sensitive Client issues thoroughly and timely, and assist in various company initiatives, such as the roll out of new products or solutions. In addition, the AM must be able to understand Client business objectives such that they can ultimately ensure that Clients are satisfied with the overall services provided by CPL.

ESSENTIAL RESPONSIBILITIES
• Develop a comprehensive working knowledge and understanding of all systems, processes, and methodologies utilized by CPL to provide services to Client accounts.
• Become proficient in the CopperLink, INFOplus, and Ship Complaint software systems used to support Client accounts.
• Provide daily oversight of direct to consumer (DTC) orders flowing from various web services portals, data bridges, and entered directly into CopperLink to ensure they are received by CPL for processing.
• Provide inventory management oversight, including consultation regarding transfers, receiving, low stocks, backorders, and storage.
• Coordinate shipping requirements with CPL Operation staff, and ensure Client expectations are internally communicated in a timely and accurate manner, and where conflicts may arise, assist in working with Clients to schedule workload.
• Support on-going reporting needs and respond to ad hoc Client reporting requests.
• Provide secondary back up support all CPL accounts as directed.
• Establish and maintain a complete understanding of direct to consumer wine shipping laws and regulations to ensure our Clients are compliant with current state and federal legislation.
• Conduct periodic account reviews to build Client relationships and insight.
• Conduct new account implementations and Client training on CopperLink.
• Assist in support for new business development by participating in sales calls, sales presentations, industry conferences, and demonstrations of software solutions.
• Develop a basic understanding of CPL pricing strategies and contractual requirements.

MINIMUM REQUIREMENTS
• 3-5 years client service experience in logistics directly related to customer service/client services order management and fulfillment.
• Strong knowledge of and passion for fine wines, previous experience in the wine industry preferred.
• Support our Clients through informative and clear communication, complete follow through and proactive problem solving.
• Must multi-task, be quick to respond, and demonstrate a high level of competency in the subject matter.
• Solid communication and interpersonal skills. Must have strong command of the English language both oral and written.
• Operate office equipment including computers and be proficient in Microsoft Word, Excel, as well as experience with UPS, FedEx, and GSO tracking and shipping management.
• Establish and maintain effective professional working relationships with all Clients and internal CPL employees.
• Be able to multitask, promote teamwork, and be willing to work in the trenches, when necessary, and help in any area.
• Four year degree in related field is preferred.

ENVIRONMENTAL CONDITIONS
The majority of the time will be spent in an office environment with the possibility of assisting in the warehouse when needed. The warehouse environment is temperature controlled to be below 65 degrees. Working in the warehouse will require extended periods of standing and the possibility of lifting up to 50 lbs.

For consideration please sent application to Terri Grace


Winery Do-It-Yourself Fulfillment vs. Outsourcing: Things to Consider in DIY Evaluation
17 April, 2013

Outsourcing non-core business activities has quickly become a mainstay in the business world as companies of all sizes strive to find ways of cutting back internal operating costs without hindering service and quality to customers. When examining wine direct to consumer (DTC) order fulfillment services, an overwhelming majority of wineries choose to outsource to a third party logistics (3PL) provider. Those wineries not embracing the practice are typically married to some simple motivations, characterized by the following:

  1. We can do it cheaper ourselves.
  2. I don’t want to lose control.
  3. I have special needs that can’t be addressed by outside providers.

These perceptions are certainly common, but can be properly addressed by taking an unbiased and objective approach to considering outsourcing. Added to the mix are the multitude of intangibles a 3PL provider can bring, which adds up to a compelling argument in favor of working with a 3PL. Let’s look closer at these areas.

Comparing Costs

Completing a true apple to apple benchmark comparison of your internal cost as compared to outsourcing is the key starting point. It is important to ensure effective financial analyses using true total costs for warehousing, order fulfillment processing, returns processing, freight, administration, and other functions. These costs should be evaluated on a per order and per unit processed basis. To arrive at these numbers, we suggest using actual, fully loaded, direct and indirect costs including labor (recruiting, benefits, payroll taxes, vacation/overtime pay), warehouse space (prorated rent or mortgage expense, utilities, equipment, real estate taxes, insurance), actual freight (including fuel surcharge, trailing accessorial surcharges), software and IT support (including data manipulation, data entry, communications, equipment), and packaging materials. You may find that your internal costs are far higher than you think.

Control & Visibility

You don’t have to lose control when using a reputable 3PL, in fact it should be just the other way. 3PL’s are driven to adopt best practices in IT systems, warehouse processing, and customer service. Wineries can take advantage of these investments to provide real time visibility into on hand inventory, orders, compliance, reporting, and complete customer detail and history to deliver transparency and peace of mind.  If you don’t find these services readily available in your review of 3PL capabilities, you need to keep looking.

Special Circumstances

We hear many reasons why someone feels they can’t outsource. Sometimes they are right, but more times than not they haven’t asked the right question of the right party. Good 3PL’s are in the business of providing value added services. Consider them the “we fix it” people whose job it is to find solutions to simple and/or complex problems. Perhaps they can find a way to solve your inventory availability and local transfer problem, or can integrate your club system with the fulfillment and compliance solutions they already support. Put the burden on them to find a solution tailored to your needs.

Once you have completed these assessments, consider these factors as well:

  • Scalability – One of the considerable advantages to using a 3PL for DTC shipping is the ability to scale up when needed, then go away until needed again. The term “scale” of course goes beyond pick and pack order processing capacity.  Spikes in order processing create a trail of associated complexities like returns, redirects, address corrections, and the like…activities that fall under the umbrella of customer service and need to be attended to promptly, thoroughly and professionally for the benefit of the overall customer experience.
  • Volume Aggregators – One of the financial advantages of using a 3PL for DTC shipping is the ability to take advantage of the provider’s discounts on freight and packaging.  As an aggregator of volume, 3PL providers have negotiated aggressive freight rates and packaging costs that create savings that can be passed on to its winery clients. They are typically conducting these negotiations with much greater frequency than are wineries on their own, and therefore should have the best value proposition.
  • Gain Their Expertise – Good 3PL’s are experts at what they do so you should be gaining access to all of their experience and wisdom. They will know the best, most efficient and cheapest way to store and ship your products. If you have more than just wine to take care of, find a 3PL that can handle products beyond just alcohol.
  • Less Is More – Outsourcing by design is meant to remove headaches, bottlenecks, and allow your internal staff to focus on their core competencies. Your staff is your most valuable asset, so why not have them focused on activities that can move the business forward.

Copper Peak Logistics (CPL) provides flexible 3PL services to the wine industry. We can assist in completing the analysis of in house cost as compared to outsourcing and can provide general logistics consulting advice. We routinely look for out of the box solutions for winery clients, and enjoy sharing our expertise and success stories.  A concept pioneered by CPL is Wine Club Mobile Processing, not unlike mobile bottling lines, which is “DIY with help”. In cases where a winery can’t take advantage of a traditional outsourcing arrangement, CPL can provide all the necessary processing equipment, labor, and software systems to complete wine club pack out on the winery premises, where the winery benefits from the integrated technology, volumetric discounts, and the overall reduction in moving parts. Contact us today for more information.

Title Name Email Phone
VP Business Development and Marketing Dave Dobrow ddobrow@copperpeaklogistics.co
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707-779-9324