The Power of Data-Driven Decision-Making in the Wine Industry

December 20, 2022

Wine professionals share their tips for acquiring data literacy skills and making the most of this emerging skill set.

Written by
Valerie Kathawala

This article was originally published on SevenFifty Daily, one of the Wine Business Institutes industry partners. 

Data is everywhere. But in the wine industry, the people skilled in capturing and working with data are in short supply—as is the mindset that sees these emerging skills as key business drivers.

Enter “data literacy.” Experts define it as a level of understanding and comfort around data relevant to a specific industry or industry segment. 

“Data is like a language,” explains Valerie Logan, the founder of the Data Lodge, which fosters data literacy across a spectrum of industries and organizations. “How do you read, write, and communicate with data in context—and be confident in this ability?”

Although data literacy may feel intimidating or off-putting in an industry where experience and intuition commonly guide decision-making, a growing number of experts argue it’s now a must-have competency, worth stepping outside comfort zones to acquire. Whether through formal training, trial-and-error development of personal data management systems, or any number of powerful new user-friendly tools and services for interpreting and acting on data, new paths to data literacy are opening all the time.

“The key is to get past the intimidation factor of not knowing enough,” argues Cathy Huyghe, the cofounder and CEO of Enolytics, a data visualization and aggregation company for the wine industry. “At some point, we all had to do that with wine. Now we’re seeing more people do that with data.”  

Why Wine Needs Data

“Historically, data hasn’t been a first-order item in how we talk about business,” notes Logan. “If you go back 20 years, discussions would be around people, process, and technology. But now, with the digitization of our world and our businesses, data has become an equivalent element.” 

Lisa Whinnie, the CEO of beverage alcohol data analytics firm Andavi Solutions, also emphasizes that as IT and data emerge from their “nerd-in-the-corner” characterizations to become integral to business, the perception and integration of data into the wine business are changing, too. 

Questions wine businesses should be asking themselves, Logan says, include how they are leveraging data, upskilling team members, and attracting talent around these skills.

From developing ecommerce capabilities to understanding depletion rates, all too often, putting data to use is the missing piece in wine sales strategy. Recent industry reports underscore the need to embrace data to adapt to the massive shifts in the business and social landscape of the past two-plus years. 

But the wine world has been slow to respond. “I’m always amazed at the extent to which an industry that relies on science doesn’t also have interest in the data that has to do with selling its products,” says Polly Hammond, the founder and creative director of digital wine marketing agency 5forests

Too often, major, multimillion-dollar decisions are based off “a gut feeling,” notes Joanna Eland, a former director of sales at Skurnik Wines, who is now an independent consultant. “There’s a much better way of truly zeroing in on opportunities. That’s through data. You get there a lot faster and spend a lot less money achieving it.”

How Wineries Are Harnessing Data

The pandemic and its knock-on effects—closures of on-premise outlets, vineyard labor shortages, supply chain disruptions—have accelerated the data-driven management of everything from vineyard work to direct-to-consumer (DTC) selling to wholesale supplier sales. This, in turn, has pushed businesses to confront the need for a clearer understanding of their own data and how to make decisions based on it.

Jessica Mozeico, who has an MBA and a background in biotech that involved drawing on large amounts of data from clinical trials and market research, is also the cofounder and owner of Et Fille, a small winery in the Willamette Valley, and the president of the Willamette Valley Wineries Association. As a tiny, independent winery, Et Fille has far less access to data than larger companies would, she says. By investing in data services, Mozeico has a new view of data sets that have helped her to get “highly targeted releases of wines to those [customers] that have bought those specific wines in the past.” As a result, she saw much higher engagement rates from those campaigns—measured both by same-day sales and by open and click-through rates from the release emails—and one release even sold out within hours. 

Small wineries also have the opportunity to team up and take data literacy beyond their individual wineries, Mozeico notes. She points out the advantages to tiny wineries in joining resources to gain access and insight into market data. 

In the Willamette Valley, for example, where 70 percent of wineries produce 5,000 or fewer cases, there are big advantages to working with pooled sets of DTC data that show a given winery’s statistics relative to regional data. Mozeico can assess where Et Fille’s sales channel trends, such as tasting room versus online sales, stand relative to her peers. “[It’s] much more meaningful data than for me being one of the nearly 1,000 wineries in Oregon trying to say, ‘Well, I think that’s good,’” she adds.

Aileen Sevier, the vice president of strategy and marketing at Early Mountain Vineyards in Madison, Virginia, “was always using data to a certain extent,” she says, “but [during the pandemic] it became one of the most important currencies we had.” Sevier has moved through several segments of the wine industry, including assisting in managing the beverage program at Legal Sea Foods and leading a marketing team at Terlato.

All these skills came into play in the spring of 2020, when hospitality-focused Early Mountain was forced to shut its doors for three months. Sevier and her team “went from believing there was only one way to get those hyper-valuable, super-engaged wine club subscription consumers”—by having them walk through the door and taste the wines—“to ‘Oh, no! There is another way to do it: through really focused mining of data.” The results helped them to plan more thoughtfully for connecting consumers with new releases and to add a new wine club that allows consumers to explore not just their wines, but other wines and projects from across Virginia. ​

Riley Wathen Slack works in sales and business operations at her family’s small estate, Foxen Vineyard and Winery, in California’s Central Coast. Her previous experience working in Bay Area tech equipped her with a valuable outside-the-industry perspective on data and related skills. 

“Even basic stuff, like A-B testing and looking at which words we’re using to reach certain sets of customers,” she says. “Or looking at trends of people who are buying product X and also buying product Y. We want to reach out to these people, do warm intros, and keep them interested when we have product X available, because we know we’re going to have product Y available and they are more likely to buy that.”

For a small team like Foxen’s, drilling down on easily accessed data is key. Slack points to birthdays, which the winery is required to log for compliance reasons and can enter into their POS and CRF systems. “We can do a reach-out to customers in their birthday month with special offers that happen automatically,” she says. “That becomes another touchpoint with customers that doesn’t require a lot of work on our end.”

Utilizing on-hand data plays a powerful, if underappreciated, role on the production side, too. “Even large wineries aren’t able to do large-scale market research projects,” Sevier notes. “So it’s about getting creative with finding ways to find relevant data and then analyze them. Things like digging into the Wine Spectator database, where people provide production information, and you can look at the production of your competitor.” 

Using data to model future markets is another tool in Sevier’s kit. “What if we invested in this 15-acre vineyard that could produce this type of wine?” Sevier asks, by way of example. “Let’s project this out 10 years. That’s a very easy modeling exercise because of my focus towards the data side.”

She also believes in the empowerment data literacy gives across staff levels. When Early Mountain’s vineyard manager made a purchase request for automated pruning shears, for example, instead of running the numbers herself, Sevier showed him how to work out “a quick and dirty breakeven analysis” so he could figure out how many hours of labor this would save. “It helped him make a pitch to say ’Let’s go spend $5,000 on these tools.’”

How to Become Data Literate

Most data-savvy industry pros recommend asking questions, reading widely, taking online classes, and reaching out to mentors. “Take a simple, online Excel class, take a data analytics class,” says Meaghan Qian-Fu Becker, who has an MBA and a background on Wall Street and in Silicon Valley, as well as a breadth of winery and wine publication management experience, and now runs her own consultancy In Vino Veritas. “A lot of it’s free. There’s really no reason not to pick up little skills here and there. You’d be surprised at how much it layers on over time.” Above all, she urges, don’t be afraid to ask questions. 

While Becker and Sevier bring explicit business and data training to their jobs, others came to data literacy through curiosity and necessity. “It was an intuitive journey,” says Eland, of a career that started as a young sales rep in the Phoenix market. “I was never asked to do it or encouraged to develop it, but that was the way I found to be very good at my job.” 

By creating basic spreadsheets to track sales, she says, “I knew that on Tuesdays, I would get this much in, Thursdays this much. If I didn’t, that would give me a little flag.” Then she could dig into her data and figure out why. Building on this approach, she rose to launch and become the director of sales for Skurnik Wines West. Through it all, she’s seen data literacy as her “secret superpower.”

“Data analytics is at the core of how I provide my services,” says Eland, “specifically as it relates to national sales strategy and distributor engagement. We work together to establish goals, and then I get to work collecting, organizing, and integrating all their data into a customized sales operations and reporting system. What I end up building for each client will vary depending on their needs, however my basic philosophical principle remains the same—the answers, the solutions, the opportunities are in the data.” 

Among the questions data answers for her clients, Eland notes, are: Should we increase production of Chardonnay next year and if so, how much? Was my marketing initiative/travel/program successful? Are my wines priced correctly? Are enough or too many samples being pulled? 

Becker has also noticed that the ability to back up her conclusions with data-driven insights sets her consultancy apart. “I often spend the first part of my projects diving into industry data, company financial statements, and customer interviews, which provides a pretty clear picture of what’s working well and what’s not, and some clues on how to change the trajectory,” she says. “It’s like a doctor looking at all the lab reports and patient symptoms to come up with a diagnosis and course of treatment.”

Hammond recommends drawing knowledge from a wide net of data sources. “Where do we get our data?” she asks. “This is where wine has a problem. A lot of people rely on data from the wine world. I don’t think it’s because we’re lazy, it’s because we don’t know any better.” She argues for a broader perspective, citing the value of looking at data from reports from comparable industries such as jewelry and fashion, and understanding PESTLE factors. “Data coming from what’s going on in the world around us gives us a way to break down all of the external factors that impact our possibilities for successes,” Hammond adds. 

Empowering Women in Wine Through Data

Industry pros also see data literacy as a skill set that may help women earn and succeed in decision-making roles. Catherine MacDaniel, the senior vice president at the Wine & Spirits Wholesalers of America and director of its Women’s Leadership Council, says her organization has been investing in data literacy training for its members. For example, they have sponsored workshops by Logan and Huyghe on topics including leveling up data and decision-making abilities, innovation and transparency, and fostering data literacy for teams and organizations.

“We want to make sure that more women in the tier are becoming data literate,” she says, “because it will develop them professionally and when they are at the table having conversations around data, metrics, and problem solving.” 

This can play out at all industry levels. “Women typically over-index, at least historically, in marketing, hospitality, and direct-to-consumer, which, by the way, are huge growth engines of the business,” says Becker. “Those functions have a ton of opportunity for data.” Understanding which data is relevant and how to make good decisions based on that data “gives you a huge leg up in terms of growth and success,” she adds.

In fact, women have been some of the strongest adopters and proponents of data literacy. “We didn’t start out with the stated objective of empowering women in wine around data,” says Huyghe of her company. “Soon enough, however, we recognized that the people we were speaking to on a day-to-day basis were primarily women.” She believes this can be explained by a combination of factors, including the higher percentage of women in marketing and tasting room roles (which Enolytics’ ecommerce system tends to attract as users) and the fact that Enolytics is a woman-led business. 

However, Huyghe believes there’s another factor at play: “Women owners and stakeholders [see] our solutions as innovative, distinctly not-business-as-usual approaches to growing their business.”

Data-literate industry experts point to another advantage this skill set confers: the ability to identify and address bias. Erica Davis, the cofounder of The Sip, an Oakland, California-based sparkling wine delivery service designed with inclusivity in mind, says that before she and her partner Catherine Carter launched their business, they used data to research whether alcohol was being marketed “incorrectly” to women, particularly Black women. Their market research told them it was. Now they rely on data-driven AI specifically designed to make “judgment-free” recommendations to their customers. 

Expanding Data Literacy Across Wine Teams

In an industry with an entrenched culture of following feelings, habits, and handshakes, many people feel uncomfortable around—or even threatened by—data. 

Becker recalls working with a winery team, most of whom had hospitality backgrounds: “Up until that point, they hadn’t had a ton of exposure to numbers, and I witnessed the initial glazing over: ‘we can’t do this, we don’t have the education.’” The solution, she found, was small steps. “No one’s going to go from zero to 60 overnight, and they don’t need to,” she confirms. Instead, she suggests breaking data down into bite-sized pieces and helping people understand the value of each piece within their specific roles. 

“Let’s say you manage a tasting room,” says Becker. “Here are 10 numbers you should always know about the business. And this is how to understand what’s going well, what’s not, what the signs are that tell you what’s going to happen next.” Once people start having small successes, she says, data can become “really addictive.”

Wine-focused data analytics companies recognize how important this human component is in the services they offer. Huyghe’s Enolytics is designed to give clients more ease and confidence around data by transforming it into something both visual and narrative, and by providing a supportive framework for mastery. Her own background as a journalist, rather than a coder or finance person, sensitized her to the need for a different approach. 

To this end, Huyghe says her company has developed several ways to make winery employees feel more confident around everyday data: A user-friendly interface and a support portal that includes videos, articles, and definitions of data terms, even masterclasses to increase literacy. For wineries, for instance, “topics include understanding wine club members’ churn rates and risk of leaving, figuring out which wines to include in which club shipments, segmentation ideas to get to know the different cohorts within a winery’s customer base, [and] how to increase average tenure of current club members and determine their lifetime value,” says Huyghe.

Data-driven decision making doesn’t have to remain a secret power of industry early adopters. The skills, tools, and services that make data accessible and actionable have never been more widely available. This, says Riley Slack, “is what the future looks like.”

This article was originally published on SevenFifty Daily, one of the Wine Business Institutes industry partners.