Mark Feinberg

Tied-House Laws & Digital Marketing? I’m So Confused!

Yes, tied-house laws are confusing, and violating them may have serious consequences – fines, impacts on your license to do business in other states, and even potential suspension of your license.

“Tied-house” – to most people outside the alcoholic-beverage industry (and a fair number of us in the industry), this is an unfamiliar term. What is the history behind the term tied-house, and why do we have these laws?

In the United Kingdom, a tied-house is a public house (a.k.a. pub, saloon, bar) required to purchase its beer from a particular brewery or pub company. A free house, in contrast, may choose to purchase any beers from any company.

In the late 19th and early 20th centuries, bars (or saloons, as they were called then) in the U.S. were often tied-houses with exclusive brewery contracts. These exclusive supply arrangements led to fierce competition among saloons, with the result of lower prices to gain market share, and excessive consumption. This excessive consumption, due to the tied-house arrangements, led to Prohibition, or the Eighteenth Amendment, in 1919.

In 1933 Prohibition was repealed, but alcohol remained heavily regulated throughout the U.S. with the passage of the Twenty-first Amendment (this amendment allows states to enact alcoholic beverage control laws or tied-house laws). These laws were implemented for two reasons: 1) to limit the ability of large companies to dominate local markets through vertical and horizontal integration, and 2) to minimize excessive sales and consumption from overly aggressive marketing programs.

The primary method used by states to achieve these two goals was the creation of the 3-Tier distribution system (Supplier -> Wholesaler -> Retailer) and specific licensing requirements for Suppliers, Wholesalers and Retailers.

There are both federal and state (California , Chapter 15) tied-house laws, which makes compliance even more challenging. And the tied-house laws can vary between federal and state, and between states. Federal and state tied-house laws have a similar intent, but their rules differ greatly. Even those with the best intentions can run afoul of tied-house laws.

The advent of Social Media and websites has created the potential to violate tied-house laws in new and unforeseen ways. One might think that it’s just fine to communicate the fact that your new Alsatian Riesling is now available at Whole Foods or at Bonefish Grill. Wrong!

Federal and state regulators view websites and social media pages and accounts as advertising platforms. Certain tied-house laws prohibit suppliers from providing anything of value (such as free advertising) to alcoholic beverage retailers. Announcing that your new Alsatian Riesling is available at Whole Foods or Bonefish Grill is a form of free advertising, and may result in a tied-house claim.

So how do you proceed with social media and retailer posts? Keep this Golden Rule in mind: Don’t take any action on social media where a post favors one retailer over another. If you can answer these basic questions you should be OK:

  • Is a specific retailer named in your post? If so, you have most likely violated tied-house laws.
  • Does this post provide value to a specific retailer? If so, you have most likely violated tied-house laws.

Is it frustrating that you can’t talk about what is happening with your wines and retailers? Yes, it is very frustrating. However, it’s not worth the risk to violate tied-house laws.

And of course, there are always exceptions. Some of you may ask, “But what about winemaker dinners? I thought they were OK to post on social media?” One exception to the California state tied-house laws is advertising for instructional events or winemaker dinners at retail premises. A winery may include the following in their advertisement (be sure that this exception exists in other states prior to posting):

  • Name and address of the retailer (but not too prominent to the rest of the advertisement)
  • Name of the wines being poured
  • Date, time, location and other information about the event
  • The advertisement can’t include:
    • Price of the wine
    • Complimentary statements about the retailer
    • Pictures or illustrations of the venue

Another common scenario is the post, “Where can I buy your wine?” It is legal to respond to customer inquiries, and you must list two or more retailers (not controlled by the same company). You may not mention the price in your response.

Finally, some of you may ask, “Can I list retailers on my website?” Yes, according to the CA ABC, a customer’s visit to your wine finder page is a customer inquiry and allowed – just be sure to have more than one retailer listed.

At Balzac, we work with our clients on a day-to-day basis on digital marketing programs, guiding them on best practices while avoiding any potential tied-house law infractions. Have a question? We’re here to share our expertise, help you achieve your goals and avoid any pitfalls. Be safe, know the laws and work with the experts.

Balzac Communications

It’s Critical to Tell Stories That Resonate with Media

Communications and marketing are the cornerstone pieces of our business. It’s in our company’s name and it is a part of our promise to our clients to deliver superior results. After all, we are only successful when our clients are successful.

Every client is different in terms of what they want to achieve when they initially reach out to us, but one common client objective is to increase brand awareness/equity. And more often than not, that means an increase of coverage in the media.

Sometimes, that is easier said than done. Telling stories that strike a chord with the media is a critical component when it comes to achieving results.  And often times, those stories are best told by the people behind the wines – the winemaker or the winery owner. We have discovered, however, that not everyone is comfortable talking to the media.

Some clients, for example, view the media as intimidating and are a bit nervous about going into that first interview. What if a client says the wrong thing or gets tongue-tied and doesn’t say anything at all? In order for our clients to have the tools they need to be successful, we have developed Media Coaching Guidelines to help them navigate those waters and be well-prepared to speak with a member of the media upon request.

Some Helpful Pointers to Remember when Speaking with the Media

  • Prepare! Develop copy points in advance and practice them so you feel comfortable with your responses. We often recommend to our clients that we schedule mock interviews for practice so they can hear how they come across to an interviewer.
  • Find out who is interviewing you. Spend time to understand who they are, what topics they cover and what they want to know from you. After all, you may find out that you share a common interest or passion with the writer which is a great way to begin any conversation.
  • During the interview, focus on your key messages. Key messages are critical because they help differentiate your company, your product, service or brand. Think about making those first 60 seconds as powerful and compelling as possible.
  • Be open, straightforward and competent. Don’t be afraid to weave in personal anecdotes or stories to show authenticity and more deeply connect with the journalist.
  • Remember that nothing is ever “off the record” so be sure to stay on message and not deviate into uncharted territory. Media are trained to put you off guard.
  • Lastly, with all interviews across any type of medium, always be prepared for the interviewer to ask one or two final questions.The first could be “Any final thoughts you’d like to share?” and the second, “Where can my [listeners, viewers, readers]” find out more information about you?”

At the end of the day, have fun with the interview and be yourself. After all, you may find it to be more rewarding than you originally thought and you’ll certainly appreciate a positive story.

Tiffany Van Gorder is General Manager with Balzac Communications and Marketing

Adam Sullivan

Stellar Winery Websites – From the Inside Out

Helping wineries build websites is a huge part of what we do. It never gets old, because it’s always a challenge. Why? Partly because just about anybody can sell anything online these days, but as soon as you’re selling that aged grape, things get a bit, well, interesting from a regulatory standpoint.

The other, more elusive challenge is the not-so-simple matter of content: that word that gets bandied about quite loosely in our digital world, and can mean so many things. For the sake of this post, let’s just define content as images-and-words. They absolutely define the fundamental structure and visual design of websites.

As Balzac’s creative director, I often find myself in the somewhat humbling and thoroughly modern position of allowing content to drive site design, while “visual design” in the traditional sense takes a passive, backseat role. Equally humbling for our new clients are the many “I hadn’t thought of that” moments that are revealed when they fill out our initial questionnaire.

It got me thinking about what’s most important to consider when getting any winery’s website off the ground. So, let’s turn winery website design inside-out for a minute, and take a look at the “Balzac way” of starting your website design project on the right foot…

Photographic Content Drives Site Design
With an explosive increase in bandwidth available to the average customer, modern websites have become far more visually expansive. Expectations are cinematic—site visitors expect an immersive experience that brings them into the middle of the “action”. So it’s up to you, dear client, to define what “action” means. Think of your website as a giant, empty bucket: the very first thing people will see is likely to be an enormous image of your location or product—inhabiting at least 75% of their initial screen view—with an extremely modest amount of copy reinforcing your brand message. With your entry page, you have but a single opportunity to establish a connection with your visitor, and it’s short attention span theater: suck ’em in or lose ’em forever.

As such, every single aspect of site design, from that expected “masthead” of logo-and-navigation that people’s eyes dart to first; to the structural composition of in-depth winemaking pages; right on through to that purchasing experience that you (literally) bank on visitors stick around for; everything is completely driven by photographic content. Every cute visual detail from your style guide that you can pile on top of that is secondary. In the first decade of website design, border treatments, magazine-style text layouts, and other traditional visual cues could get you where you needed to go. These days? If you don’t have lush, expansive photography ready to go, your bucket stays empty. It’s one of the very first things you need to consider.* Websites are really just a shell waiting to be filled those images and words.

Get In, Get What You Need, Get Out
This is what your visitor wants. Got it? Good.

I’ve seen many winery websites that uses clever-clever navigation, next-level motion graphics, and interactive activities to position itself as a place for visitors to hang out and goof around for a while. Let’s face it: they’d rather check out cat videos on their Facebook feed. If they’ve already taken the time to cruise over to your winery’s website, consider yourself one lucky business owner, and honor that gift. They’re here to find out about your wine—don’t let them down!

Studies that track eye motion in website visitors have clearly shown that the people have developed certain idiosyncraticies consistent with common expectations in website navigation.  In the vast majority of monitored activity, when people visit a website their eyes dart first to the upper left, then the upper, right, and finally upper middle. All this before they even let their peepers settle on all that cool stuff you put dead-center and “above the fold”. Give the people what they want: top-of-site horizontal navigation, with your most important branding messages on the extreme left, and your purchasing options on the extreme right. Everything else goes in the middle, and if you do the first two things right, maybe they just might stick around.

Own Your Website’s Future
We’ve seen the future of winery website design, and it’s segregated (sorry). Ever since selling wine online has come out of its most basic infancy, many of the big players in the game have touted “turnkey” systems where your site’s “brochureware”… the part of your website where people first identify with your brand and figure out what you’re trying to sell… is hosted under the same proprietary platform (which that vendor has invented and coded from the ground up) as the visitor’s “shopping experience”. On a basic level, it makes a ton of sense: the winery owner can control every aspect of their site’s content and wares from a single online control panel with a single set of login credentials.  And if you update your vintages, harvest facts, sales specials, etc, those changes happen site-wide with no need for duplicated efforts.

So what’s the problem with turnkey? The simplest answers are: WordPress and Ownership. Or to put it a little more globally, the issue is open-source.

While the turnkey systems rest on the laurels of one-stop site control, they simply cannot compete with the intuitive, user-friendliness and ease-of-use that open-source platforms (website construction systems that can be shared and easily manipulated by any code monkey worth their salt) offer. By their very nature, open-source platforms like WordPress—the global leader—have been universally adopted by coders and regular people looking to build their own websites alike, has created a symbiotic relationship and driven an exponential increase in ease of content management. This in turn has created a “WordPress culture” where the percentage of layman website administrators who understand the basic idiom of the WordPress “dashboard” (it’s set of online controls) dwarfs every other platform.

What was that I said about ownership? Well, to backtrack a little, the other “catch” with those aforementioned turnkey systems is that you are really just renting space on their NON open-source, proprietary platform. Every single one of the big players in the turnkey wine eCommerce game charge winery owners a minimum monthly “rent” of $150 for your shopping experience and brochureware. Let me be clear: this is not a ripoff. The glory of these shopping cart systems is in their ability to automatically navigate the hellish intricacies of selling alcohol online: compliance issues, fulfillment issues, state-by-state licensing and taxation issues…the list goes on. Any of these turnkey systems contain complex systems that provide the winery with tools to sidestep such intricacies with ease. You need this.

The problem is, your “brochureware” is on that platform as well. If you stop paying “rent” on that platform, you can’t just take that 75% of your website design to another turnkey solution and have them host it like nothing ever happened: their code will be totally different than the code your site was first built in. You’ll have to rebuild from the ground up. Yeesh.

I’m not some kind of oracle here: the turnkey peddlers are starting to see the writing on the wall. We’re already seeing a couple of the big players reposition themselves as providers of the comprehensive shopping cart system, while recommending that customers do in fact create the rest of their website on an open-source platform. And we’ll certainly see the rest of them pivot to this position in the next half decade. The question for now is: how elegantly do they deal with “segregation”…

Know Thyself, Know Thy Shopping Cart
You’ll recall I’d said something earlier about not duplicating your efforts as a site admin. E.g., if you change what vintage of your wine is available in your shopping cart, that new vintage and whatever winemaking notes come along with that should also change on your site’s “Our Wines” page without a lot of fuss. This is just one of many examples where you need your shopping cart to be able to “talk to the rest of your site in real time.

With the sea-change from turnkey wine eCommerce to the cart-plus-front-end, multi-platform ethos, the big issue becomes how elegantly these two elements can communicate with each other. How handily the various shopping cart services have developed code to bridge this divide is… and will continue to be… the element that defines their future success. It affects not only administrator and user experience, but the bottom line of how expensive it is for your web development partner to build your WordPress website and make it play nice with the shopping cart.

Add to this some other questions, such as how handily your shopping cart system deals with the POS needs of a brick-and-mortar winery (when applicable) or how well their purchase reporting plays nicely with your wine warehouse, and whom you choose to host your shopping cart becomes an extremely personal choice.

If you’re on the brink of making this decision, we’d love to help you figure out what’s best for you. You know where to find us.

*We’re also experts at photography and art direction, with a large roster of recommended professional to recommend and a peerless eye for communicating brand through proper direction. Just ask.

Adam Sullivan is Creative Director with Balzac Communications.

 

Mark Feinberg

It’s My Birthday – by Maggie

Today I’m six.

Dad woke up this morning and sang Happy Birthday to me while I lounged in bed – what else would you expect if you were The Princess. I don’t know how to tell him, but he shouldn’t give up his day job for a singing career.

People talk to me all the time and they think I understand what they’re saying.  What I listen and pay attention to is anything that has to do with treats and food. So, since it’s my birthday today (in case you forgot already), please don’t be shy with gifts of steak, steak, steak or perhaps steak. In case you’re wondering what I might like, may I suggest steak, on the rare side, please.

On to more serious note: Though I may seem young, I’m quite philosophical. Here are a few choice treats I’ve learned:

  • More nuzzling, wiggling and kisses and less growling, barking and biting makes a better world.
  • There’s nothing better than a nice nap (except maybe some rare steak).
  • Diamonds are not a girl’s best friend – I am.
  • Yes, you can knit a sweater with my hair (Dad’s just lazy).
  • And, always, take the time to stop and smell the steaks.

Adam Sullivan

A Balzac Case Study: Tony Arcudi by Tiffany van Gorder

At Balzac Communications, we work hard to connect with our clients and deliver the results they want. After all, having strong client and media relationships is what public relations is all about. That’s why initial face-to-face meetings with potential new clients are so valuable. It’s the opportunity for us to listen to them speak about their goals and tell us who they are. We ask questions and probe for the stories that will resonate with the media.

Tony Arcudi with Arcudi Winery first approached us in early March with a very straightforward objective– he had an up-and-coming business trip to Los Angeles and was wondering if we could set up any one-on-one meetings with media who were based in that market. He was savvy enough to realize that articles touting his wine could turn into sales and help create a name for him that he hadn’t yet been able to achieve.

Before we ctonyarcudi.webould get started, we needed to hear his story. As communication experts for the leading wine agency in the country, it’s our job to sell our clients. What makes him unique? What would make him fascinating to a wine writer? Why would a writer want to focus on Tony? After a few initial face-to-face meetings with Tony, we realized that his journey to get to where he is today, working as a winemaker in California, was the heart of the story. Not only was his story incredible, his humble and likeable personality made it even more captivating. We discovered that he had an innate ability to really connect with people. We were excited, and we knew others would be too!

The next task was creating the communications materials we would need to tell his story and then reach out to our target list of writers to gauge their interest. Once complete, it didn’t take long to hear back from writers who were interested in meeting with Tony. We secured meetings with Anthony Dias Blue with The Tasting Panel, Cori Solomon with Los Angeles Examiner, Shawn Burger with Wandering Wino and Jay Selman with Grape Radio, a James Beard Award-Winning Audio and Video program that discusses wine related topics that are broadcast over the Internet. And we prepped Tony with key talking points so he felt confident to meet the writers directly.

Three months later, Tony has new ways to talk to his customers. He is leveraging the following press articles that appeared in Los Angeles Examiner.com and Shawn Burgert’s Wandering Wino Blog, the audio interview that appeared in Grape Radio and the high score of 96 points that appeared in The Tasting Panel through his social media channels, in his monthly newsletter and through other wine industry conversations. The additional third party endorsements not only validate his wine, but they give him ammunition as he gets ready to launch the next vintage of 2013 Arcudi Cabernet Sauvignon.

His success continues: coming up, sommeliers will be reading about Tony’s story in an upcoming issue of Somm Journal.

Paul Wagner

What’s a Press Kit? by Paul Wagner

A Press Kit is a critical part of any winery’s public relations program.  It defines the company, provides reference materials to any journalist who is interested, and should serve as the primary source for all messaging and information that comes from the winery.

So why are so many press kits so bad?

The first reason they are bad is that the company doesn’t want to define itself in terms that really matter.  Every winery wants to have a unique story—but most don’t have the courage to really step outside the box. As a result, we read the same stories about the same topics:  carefully tended vines, handcrafted wines, passionate winemaking, and true dedication to quality.

The character and identity of the winery is blurred by these platitudes, and the remaining point of difference ends up being the personality of the owner.  This is all well and good, but I was always taught that the key message had to focus on benefits, not features.  How does the personality of the owner of your winery affect the flavor of the wines?  Where is the real benefit to the consumer?  If you can’t answer that question, then maybe the personality of the owner isn’t the key point of differentiation after all.

Do you want an even scarier thought?  Maybe your winery doesn’t have a key point of differentiation.

This is why writing a Press Kit is such a critical element in the development of a public relations strategy—and why it often takes an inordinate amount of time.  The writing isn’t hard, but getting the winery management to agree on the direction is often almost impossible.  All the internal disagreements about direction, focus, and style bubble to the top, and have to be resolved before the kit can be finalized.

Of course, you then have to make sure that it is true.  More than once, we have completed the kit to the exact specifications of the winery, only to discover (sometimes months later) that the information we were given was not true.   In the worst-case scenario, a friendly journalist tipped us off to the fact that the press kit was not only inaccurate, but intentionally so!  That is a nightmare waiting to happen.

Out of fear and trepidation, the winery fails to take important or significant positions.  It won’t make the necessary policy decisions to really stand out from the crowd.  It doesn’t want to strike off in a new direction, or boldly go where no winery has gone before.  And the press kit reflects this, from start to finish.

If I were a journalist, by the time I had read through about ten of these, I would be plenty tired of the whole idea.  And journalists get hundreds of these a year.  You job is to make sure this doesn’t happen with your kit.