Building brand ambassadors through hospitality w/ Meaghan Frank, Dr. Konstantin Frank Winery

10/18/24 • 46 min

As the pioneer of Vitis Vinifera in the Eastern US, Dr. Konstantin Frank is one of the key leaders of the Fingers Lakes region in New York. Meaghan Frank, a fourth-generation vintner, has been leading the charge to evolve its hospitality program to create brand ambassadors for the winery and the region. Its 1886 Wine Experience has won Best Wine Tour by USA Today in the last two years. Meaghan breaks down their hospitality program and its impact on their business.

Detailed Show Notes:

Finger Lakes region, NY - 150 wineries (of 400 in NY), NW NY State - 5 hrs from NYC

Skinny, deep lakes that moderate weather
Glaciers left diverse soils
Tourism-driven, seasonal visitors (spring to fall) for lakes, hiking, close to Niagara Falls, Corning Museum of Glass

Dr. Konstantin Frank - PhD in Viticulture from Odesa, Ukraine; a grape scientist; fled to NY during WWII

35 years of cold climate grape growing experience when moved to NY
1st to plant vinifera in Eastern US
Planted experiment station in the 1950s - 68 varieties, including Furmit, Pedro Ximenez, and Touriga Nacional) to research what would work best

Dr. K Frank Winery

17 vinifera varieties → 40 wines
60% wholesale, 40% DTC
40 states, 9 export markets (5%, incl Japan, Aruba (lots of NY visitors), UK)
DTC 60% e-commerce (driven by wine club), 40% hospitality

Hospitality program

The goal is to create brand ambassadors and loyalty, get the word out about the Finger Lakes
Inspired by Australian hospitality programs - private, educational
~40k visitors/year (#1 PA - 1 hour away, NJ, OH, NY core markets) - all seated, paid
Pre-pandemic - ~80k visitors/year for free bar tastings
Moved to an experience-driven program with wine educators, take advantage of lake view

Three experiences:

Eugenia’s Garden - modeled after great grandmother’s garden, most casual, can do a la carte glasses/bottles/flights; enables people to enjoy the day; targets a younger demographic
Signature Seated ($15pp) - most popular, educational, 1 hr, 6 wines, 5 different themes that are part of the winery’s story (e.g., traditional sparkling, Riesling pioneer, groundbreaking grapes, red wines)
The 1886 Wine Experience ($75pp) - only May-Oct, 2-2.5 hrs, led by wine educator, a tour of the vineyard, sparkling and still wine cellars, seated tasting of 4 wines with bites, followed by additional tastings; won best wine tour by USA Today last 2 years; lots of 1st-time visitors book 1886 due to unique nature
Lessons learned - used to do 6 wine flight w/ bites, which was too many; did themed months (e.g., sparkling) - did not work with mostly tourists
Differentiators - spend lots of time, has a separate private space for 1886

Wine club evolution

Used to have people pay upfront for the year - bigger barrier to signing up, always feel like “playing catchup” to ensure value delivered, concentrated work during shipment periods
Moved to more subscription model - quarterly, 3 wines w/ default package, fully customizable, no upfront fee, 20% discount on wines, and get free tastings (no limit)
8% club conversion - the only way to get free tastings now, used to waive w/ 4 bottle purchase
Locals small portion of the club - pickup option only 10%, PA #1
Avg tenure 1.5 years, seeing it extend with the new club model

Popular wines

Hospitality - Rkatsiteli #1, traditional method sparkling
Wholesale - #1 & #2 - dry & semi-dry Riesling
Riesling 60% of production, traditional method growing

Increasing issues around climate change - 2023 had the largest spring frost in history, increasing water issues

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Detailed Show Notes:

Finger Lakes region, NY - 150 wineries (of 400 in NY), NW NY State - 5 hrs from NYC

Skinny, deep lakes that moderate weather
Glaciers left diverse soils
Tourism-driven, seasonal visitors (spring to fall) for lakes, hiking, close to Niagara Falls, Corning Museum of Glass

Dr. Konstantin Frank - PhD in Viticulture from Odesa, Ukraine; a grape scientist; fled to NY during WWII

35 years of cold climate grape growing experience when moved to NY
1st to plant vinifera in Eastern US
Planted experiment station in the 1950s - 68 varieties, including Furmit, Pedro Ximenez, and Touriga Nacional) to research what would work best

Dr. K Frank Winery

17 vinifera varieties → 40 wines
60% wholesale, 40% DTC
40 states, 9 export markets (5%, incl Japan, Aruba (lots of NY visitors), UK)
DTC 60% e-commerce (driven by wine club), 40% hospitality

Hospitality program

The goal is to create brand ambassadors and loyalty, get the word out about the Finger Lakes
Inspired by Australian hospitality programs - private, educational
~40k visitors/year (#1 PA - 1 hour away, NJ, OH, NY core markets) - all seated, paid
Pre-pandemic - ~80k visitors/year for free bar tastings
Moved to an experience-driven program with wine educators, take advantage of lake view

Three experiences:

Eugenia’s Garden - modeled after great grandmother’s garden, most casual, can do a la carte glasses/bottles/flights; enables people to enjoy the day; targets a younger demographic
Signature Seated ($15pp) - most popular, educational, 1 hr, 6 wines, 5 different themes that are part of the winery’s story (e.g., traditional sparkling, Riesling pioneer, groundbreaking grapes, red wines)
The 1886 Wine Experience ($75pp) - only May-Oct, 2-2.5 hrs, led by wine educator, a tour of the vineyard, sparkling and still wine cellars, seated tasting of 4 wines with bites, followed by additional tastings; won best wine tour by USA Today last 2 years; lots of 1st-time visitors book 1886 due to unique nature
Lessons learned - used to do 6 wine flight w/ bites, which was too many; did themed months (e.g., sparkling) - did not work with mostly tourists
Differentiators - spend lots of time, has a separate private space for 1886

Wine club evolution

Used to have people pay upfront for the year - bigger barrier to signing up, always feel like “playing catchup” to ensure value delivered, concentrated work during shipment periods
Moved to more subscription model - quarterly, 3 wines w/ default package, fully customizable, no upfront fee, 20% discount on wines, and get free tastings (no limit)
8% club conversion - the only way to get free tastings now, used to waive w/ 4 bottle purchase
Locals small portion of the club - pickup option only 10%, PA #1
Avg tenure 1.5 years, seeing it extend with the new club model

Popular wines

Hospitality - Rkatsiteli #1, traditional method sparkling
Wholesale - #1 & #2 - dry & semi-dry Riesling
Riesling 60% of production, traditional method growing

Increasing issues around climate change - 2023 had the largest spring frost in history, increasing water issues

Get access to library episodes

Hosted on Acast. See acast.com/privacy for more information.

Previous Episode

Bringing More People Into Wine w/ Jacki Strum, Wine Enthusiast Media

With ~2M monthly sessions on their newly unified commerce and media website, Wine Enthusiast continues to be a beacon for the wine industry. Jacki Strum, President of Wine Enthusiast Media, details their new wine review platform and global wine travel directory, democratizing access to wine and wine experiences globally. These initiatives help bring more people into the world of wine, including the younger generations, a critical part of building a vibrant wine industry.

Detailed Show Notes:

Covid altered the business model, led to re-structured organization and unified media and commerce divisions on wineenthusiast.com

2022 - WE paused reviews for emerging wine regions to recalibrate systems

Existing tasting process

1 of 2 publications that review every wine blind (high cost), taste in flights w/in region and price brackets
Need to store, archive, organize wines, set up tastings (in paper bags with numbers), and hire reviewers
50% of reviews are done at HQ (imported wines), and West Coast wines are done locally
The manual process of filling out a pdf and putting that into the box with wines, manually inputted into J Guide (legacy system, 20 years old), then stored and organized for tasting

New tasting platform (Sept 2024) - anyone can submit a wine for review and all will be reviewed

New digital platform - bar code scanners, printed tabs, can track shipments and deliveries, a more fluid database
Reduces large volume of questions from people submitting wine (can track digitally)
It has the same # of reviewers, but a more flexible infrastructure can allow for more wines to be tasted
$65/SKU processing fee - all reviewers charge in some way (e.g., require subscription, membership, or advertisement)
6-month processing time (same as before) - hope to reduce this over time, based on the schedule of reviewers
Printed reviews selected by the tasting dept, all scores published online for free

Tasting platform benefits for new and small wineries

Opens up reviews to all regions across the globe
The US market is still heavily score-driven for distribution (some major retailers, e.g., Costco, Kroger, Albertsons, require scores from major publications)
Helps with tasting room and local distribution sales

Media trends

Print is still doing well (e.g., books outsold movie tickets last year), and magazine subscriptions are increasing (free tote bags help)
Advertising up slightly
Digital media is growing, with a targeted advertising focus
Events - biggest growth area - launched Sip of South America, Sip of Italy, and biggest event is Wine Star Awards (25th Anniversary in SF this year)
TikTok now allows alcohol advertising, getting Gen Z engaged with wine knowledge

New travel division for WE

Tasting room directory, partnered w/ Tock - 1st agnostic travel global wine travel guide
Leverages Tock’s wineries as launching list (~1,200 wineries, CA focused), building out globally with WE relationships (~100 wineries reached out in 1st month to be included)
The 2nd most trafficked page on the site

WE revenue mix

Covid - led to explosive commerce growth
Today - back to 2019 levels, ~80% commerce / ~20% media

Getting Gen Z engaged with wine

Print enables content absorption without ad bombardment (e.g., book reading bars in NYC)
Need to change content for each channel to target audience (e.g., Google as people’s “secret diary,” article on how to hold a wine glass became a top 5 article)
Influencers, infographics, video - bring in new consumers (e.g., wine & potato chip parking article led to major influencer doing every pairing on TikTok)

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Next Episode

Always have distribution w/ Cheryl Durzy, LibDib

Having struggled to manage and maintain distribution for her family winery, Cheryl Durzy, CEO of LibDib, decided to start her own distributor. In comes LibDib, a tech-enabled distributor that lets any alcohol producer have distribution in most of the key US markets. Cheryl provides background on the US 3-tier system, the role of a distributor, and how LibDib is helping producers get distribution, enable wine sales, and become a tech platform for other distributors.

Detailed Show Notes:

US 3-Tier System

Put in after prohibition to keep one tier from owning alcohol distribution
Tiers - producer, distributor, retailer

US distribution heavily consolidated into 3 large ones, lots of smaller specialty distributors vs. many distributors in the 70s/80s

Distributor function

Helps consolidate suppliers for trade accounts; accounts don’t have resources to manage each supplier separately (e.g., invoices, checks)
Pay taxes, do compliance
Logistics (heavy, fragile product)
Customer service (mistakes, breakage, returns, samples)
Sometimes act as a winery’s salesforce

Getting a distributor

2024 - distributors are shedding brands vs. taking on new ones
Typically - look for fit w/in a distributor’s portfolio, pick someone with a good reputation
Distributors will ask - what will be your investment in the market? How often will you be here? Do you have feet on the street?

LibDib - enables wineries to sell themselves, a tech-enabled distributor

Started as a wholesaler in 2017 (CA, NY), enables distributor for any producer
The platform enables rich content and e-commerce
Has license in 9 states, enabled through RNDC in 6 states (e.g., Texas)
~1,500 suppliers w/ active accounts, ~700 wineries w/ ~450 actively selling
Originally focused on spirits, wineries have increased by ~50% in the last few years
Uses FedEx to send wine, integrated API to track status, negotiated good rates <50% of DTC rates; have cold chain, ice pack options for hot temperatures
New markets launching late 2024 / early 2025

LibDib use cases

Get wine to specific accounts in a market
Enable wine brokers in other states
Importers sell directly to accounts
Ship special projects from large wineries that distributors don’t want to touch

Pros/cons of LibDib

Pro - always have distribution, good communications/customer service, good technology experience for producers and trade accounts
Cons - no salesforce, need to be a little tech-savvy

Business model

Markup of 14-18% on sales (vs. 30-35% for most distributors) + producer pays for shipping
Subscription service (Gold, Silver, Plus) - get lower markups and services (e.g., portfolio management, VIP chain assistance, advertising on platform)
~250 subscriptions (of 1,500), mainly on Gold for chain services

RNDC partnership - OnDemand division