Adding features: why the bolt-on approach to growth rarely works in wine

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Recently I was driving a hire car. Back in the day, cars used to have radios, and perhaps a cassette player. Then there were a few knobs to control the heating, the airflow, the heated rear window, windscreen wipers, indicators, and that was about it. With small variations, every car was pretty much the same, and it was simple.

Now, modern cars have small computers on board. There’s an integrated sat nav, and the entertainment options are myriad, with multiple menus to scroll. The steering column has numerous switches in addition to the windscreen wipers and indicators. It’s quite impossible to navigate all the options. There are just so many features. I’m quite smart at this sort of thing, but even I find the modern options daunting.

This is how things seem to work these days. A product is produced, and then it is usually improved, by adding extra features. Often, these features are tangential to the main purpose of the product. In the case of cars, there is feature bloat. I want a car to do what it is supposed to do: allow me to drive. I want it to be reliable, economical and safe. Possibly also fun, and aesthetically pleasing, and I want it to be affordable. Some entertainment system is useful, but all these multiple menus and options are annoying. Super complex air conditioning/climate control is also annoying, because it’s so hard to get it right. Adding extra features isn’t always the best option for product improvement. There’s something to be said for stripping features away and concentrating on the main purpose of the product, doing that really well.

Many wine businesses evolve organically. They are modestly successful so they keep going on the same path that they started out on. There is no strategy involved.

There’s nothing wrong with this. If you have a great vineyard, and make the wines you’re your patch of ground gives you each vintage in an honest and terroir-transparent way, and you have enough customers, and you pay your bills and make some profit, then that’s entirely the right approach.

But there are a lot of wine businesses that are more complex than this, where the production-led approach (make wine and then try to sell it) isn’t working very well. There are many producers caught in the middle ground: they aren’t making cheap commodity wines that the supermarkets can sell a lot of, nor are they making fine wines that are in such demand they have to be allocated. They know that they could be doing better than they are, but they are so busy working just to make a modest profit that they keep on going the way they always have.

When it comes to a wineries portfolio, growth is reactive, and the number of wines in the range usually expands. New ‘features’ are added, in the sense that the winery expands its offering. Because the old items in the range are still selling they aren’t culled. The result is that with time the offering becomes more complicated, and makes less sense to the outsider. Internally, the owners can justify each addition (or ‘extra feature’), but from any other perspective, the offering is a bit confusing.

3 comments to Adding features: why the bolt-on approach to growth rarely works in wine

  • kim

    Love the modern day car to modern day wine making/marketing analogy. As a fairly new cocktail / wine bar I can attest that the story behind the wine and some features can help some wines sell. On the flip side, it’s truly the taste that really helps a wine take off – especially when it’s expertly paired with some great food. Not all “features” are created equally and most are really unnecessary.

  • Right on both counts. My car aircon is annoying, it always thinks it knows better than me what I want. Wines – steady portfolio creep often not the best way to go. Godo post.

  • Jamie – gotta call you out on this one – you never answered the “Why” here. Your examples and analogies are spot-on, but when you get to the vino business, nada. IMHO, bolt-ons (or line extensions) don’t work because there is a lack of critical mass (ie. sufficient demand for your lead product) coupled with barriers to entry (shelf space, consumer eyeballs, etc.).
    Actually, bolt-ons do work well in one spot – Wine Club exclusives. Many a winery develops greater club loyalty and excitement by creating one-offs and unique wines only available to club members, thus creating a retention hook as well as a premium offering to boost profitability. The rise in DTC has been boosted significantly at certain houses with this product acumen.

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