The February 2020 Wine Analytics Report is, as always, full of useful data.
In this edition, the Wine Analytics Report also discusses what buyers, as in companies looking to acquire wineries, are now cautious about, with comments Jackson Family Wines CEO Rick Tigner and wine industry data and business intelligence veteran Dale Stratton.
Quini’s CEO Roger Noujeim also shares his perspective in the report, on the use of consumer sensory data in the due diligence process. Both for wineries positioned to sell, and the buyer.
Here is the excerpt:
While smaller wineries may not spend a great deal of time analyzing their customer base, key figures such as customer age, length of association and purchasing history can be simple and helpful data that can help potential buyers understand who they’ll have as customers. It may be a more diverse cohort than the major distributors offer, but this increases the need to define its composition.
This is where companies like Quini, a software firm in Vancouver, British Columbia, can help. Quini helps wineries benchmark the performance of their wines in the marketplace. On the sales side, the information can point them to key market segments that boost revenues. It can also provide data documenting the performance and potential of their portfolios to potential purchasers.
“Quini’s ability to capture and analyze, deep, rich wine consumer sensory and behavior data helps wineries to document and highlight the performance of their portfolio,” said Roger Noujeim, CEO of Quini.
The company gathers its data from regular tasting events in select markets, gathering thousands of consumer reviews in as little as two weeks. These can serve as a counter to industry accolades and other indicators of how the wines should perform.
“In an M&A scenario, it is greatly beneficial to see the full picture in the due diligence process beyond total sales and accolades,” Noujeim explained. “[Parties] negotiate based on a good view of consumer preference for a winery’s products and brands, discounting portfolio laggards a smart buyer would rather stay away from, based on consumer sensory feedback and data. … A winery can easily document and highlight real consumer sentiment of their wines, and key competing products, to better position their own winery for the acquisition, and justify a fair, even higher valuation.”
But most companies will take a host of data points into consideration when evaluating a potential deal, not just one. “We’re not looking for any one particular metric that says that’s a winner, that’s a loser,” said Rick Tigner, CEO of Jackson Family Wines, which had a quiet 2019 but continues to scout opportunities.
A critical element for future consideration is climate change and the extreme weather that’s putting key growing areas at risk. “We have to look at alternative locations from a real estate standpoint to future-proof our vineyard and real estate assets,” he said. “We’re looking for world-class areas to make an investment.”
Read the full report on Wine Analytics Report