California is known for a lot of things, but complacency is not one of them. The southern coastal state is the home of golden beaches and palm trees—a bright backdrop for technological disruptors, cultural tastemakers, and global influence. The state has a rich history of game-changing innovation, long before it became synonymous with the start-ups of Silicon Valley. Over fifty years ago, a group of Californian visionaries established—and continue to define—the “New World” of international winemaking; the modern frontier of a business steeped in tradition, legend, and centuries-old, specialized knowledge.

In 2019, the Harvard Business Review wrote, “Winemaking has remained largely unchanged for 7,000 years, but the United States wine industry has ballooned from just over $30 billion in 2002 to more than $60 billion.” While the actual art of wine production may have varied little over its lengthy past, that kind of boom doesn’t happen without a considerable amount of transformation from American wine producers. Napa Valley—America’s most prestigious producing region—is particularly demonstrative of such modernization in wine business strategies, influenced by its tech giant neighbours 50 miles to the south in San Francisco. And this is no more evident than in one of its biggest and most influential: Robert Mondavi Winery.

“Our founder Robert Mondavi was known as a true pioneer. He was a restless visionary who unceasingly achieved goals and then turned around and set new ones. He made countless advancements in viticulture, winemaking, and had the unbelievable energy that we see in start-up ventures today,” says Lauren Larabee, General Manager of Robert Mondavi Winery. One of the leading wine brands in the world is merging that pioneering spirit with digital technology to reinvent winemaking once again as the industry faces a crossroad.

Despite its reliance on the food, hospitality, and tourism industries, the U.S. wine industry has endured the pandemic relatively well. In fact, Americans are drinking more wine year-over-year, and U.S. sales of domestic and imported wine increased 16.8% in 2021 from $67.3 billion in 2020 to $78.4 billion. The U.S. remains the world’s biggest wine market, with tremendous room for growth still.

Even so, traditional gatekeepers in the wine industry have historically kept consumers at a distance from the winemakers themselves: agents, critics, restaurateurs, all infamously specialized with strict certifications, inscrutable language, abstract tasting notes and detailed varietals. Sometimes there are literal wrought iron gates of luxurious, remote locations. The industry has enjoyed a separation between consumers and producers who “see customers as having limited expertise and demonstrating inconsistent, difficult-to-predict preferences. This is why, rather than seeking and responding to consumer input, they seek to influence tastes,” says HBR (emphasis their own).

While sales may be steadily increasing, consumers are not so much. The Washington Post reports, “The image of wine is still geared toward boomers: Chateaus, villas and trophy cult wines that reek of privilege, entitlement and wealth,” and as markets emerge from the pandemic, pre-2020 trends have only accelerated “as wine’s core market—the baby boomer generation—ages and younger consumers branch out to spirits, craft beer and hard seltzer.”

Younger buyers are famously allergic to brands that are seen as inaccessible, elite or condescending, and stuck in traditional practices. As a result, Silicon Valley Bank’s State of the U.S. Wine Industry 2022 report states that the industry could see volume of wine consumption fall by as much as 20% in the next ten years.

To solve this problem, producers like Robert Mondavi Winery have used digital technologies to unlock new buyers and revenue potential through direct-to-consumer (DTC) strategies—even before the pandemic irrevocably focused sales channels to the digital realm. In 2019, the Direct to Consumer Wine Symposium announced sales in the U.S. had reached a new benchmark of 6,000 million cases through a combination of in-person, online, and subscription sales. And the numbers only continued to grow from there.

“While many regions experienced some level of growth in 2021, none were as impressive as Napa’s almost $300 million increase in value of (direct-to-consumer) DTC shipments,” says Andrew Adams, Wine Analytics Report editor.

In 2022, those areas are predicted to be even bigger revenue streams as pandemic trends hold steady beyond reopening.

Today, even the smallest independent wineries have a website, social media, and online points of sale. But that’s just the beginning of how modern establishments are using digital tools to bypass third-party retailers and agents to build authentic, meaningful relationships with new audiences directly. It takes vision, trust, and a bit of experimentation, but luckily, that was in the DNA of Napa wineries like Robert Mondavi from the very beginning.

\"Robert\" — Robert Mondavi body illustration

Californian innovation meets the world’s oldest beverage

Early Spanish and French settlers brought wine production to the United States as far back as the 1500’s with the native grape Muscadine. Any attempt around this time to produce European grapes, seen as more desirable to the winemakers from overseas, failed miserably. But it wasn’t until 1861 when Charles Krug, “the father of Napa Valley winemaking,” established his namesake winery in the Valley: an area that’s one-sixth the size of Bordeaux, perfect for growing wine grapes with its Mediterranean climate, diversity of soils, and fortuitous geography nestled between the Vaca and Mayacamas mountain ranges. Krug opened the state’s first public tasting room the next year, giving drinkers an up-close-and-personal view of the product and opening a direct line for communications and sales. This is the beginning of an industry that now creates over 90% of America’s domestic wines.

Setbacks like Prohibition, the Great Depression, and the vine disease phylloxera almost extinguished the craft before it could regain its footing. Luckily, the Californian entrepreneurial spirit ushered in modern winemaking techniques, tourism-boosting visits from Hollywood stars, and an overall drive from winemakers to take their products to a world class level.

This is where the Mondavis come in.

Krug died in 1892 and his winery went dormant after that—until Robert Mondavi, a Stanford University business graduate with an ambitious vision for this nascent American industry, convinced his Italian immigrant parents, Cesare and Rosa, to turn their business from shipping grapes to home winemakers to themselves becoming winemakers. In 1943, the Mondavis purchased Charles Krug Winery and began an American winemaking dynasty (the family of Robert’s brother, Peter, runs the winery to this day).

But Robert was meant to be a solo act. A long-simmering feud over the direction of Charles Krug—Peter aiming for growth, Robert aiming for quality—literally came to blows and Robert was ejected from the family business at 53 years old. So, in 1966, he started his own winery to make the elite level wine he knew the Napa product could be. The Robert Mondavi Winery, located in the historic first-growth To Kalon Vineyard in Oakville, was the first major operation to open in Napa since Prohibition.

It was “a venture that some dismissed as ‘Robert’s Folly’ and others as an example of his hubris,” as Julia Flynn Siler writes in her book The House of Mondavi: The Rise and Fall of an American Wine Dynasty. Siler quotes wine historian Paul Lukacs: “The construction of the Robert Mondavi Winery marks the effective beginning of American wine’s rise in both quality and prestige. What happened there helped ignite the revolution in American tastes. It also helped change broad public attitudes toward wine in general and American wine in particular.”

By 1969, the Robert Mondavi Winery Cabernet won a blind taste test organized by the Los Angeles Times’s wine writer, Robert Lawrence Balzer. The “Balzer Tasting” was Napa’s first boon on the wine world stage. But not only did the Winery’s famous archway become the symbol of fine American wine, Robert Mondavi became the face of it. As The Washington Post writes, “His tireless promotion of Napa and its wines helped turn the valley into the tourist mecca it is today. Concerts and dinner parties in the vineyard, festivals and other attractions only tangentially related to grapes made a visit to wine country more an event than an errand to buy wine.”

Today, the region boasts over 43,000 acres of vineyards, 612 wineries, and 4.5 million annual tourists who flock to sip and purchase their favourite varieties in person, straight from the source, surrounded by vines, rolling hills, and pristine winery tasting rooms.

“Robert Mondavi Winery is the soul of Napa Valley. Having that intrinsic connection to Napa Valley is a powerful tool that we feel resonates with the consumer today. It is not only a familiar name, it is a name that is respected, renowned, and synonymous with the great wines of Napa Valley and the world,” says Jeffrey Meisel, Vice President and General Manager of DTC for Constellation Brands, which acquired the Robert Mondavi Winery brand in 2004.

“Robert Mondavi was a pioneer, a visionary, and a man of action. During his lifetime, he personally influenced so many winemakers and wine professionals, including me.\"

“The winery now carries that legacy into the future, across all facets of the company—winemaking, hospitality, education, and DTC ecommerce with wine clubs and more,” says Meisel.

Finding the millennial fine wine drinker online

As with most high end or luxury products, consumers are paying for quality, yes, but also an undefinable essence associated with a brand: an aspirational lifestyle, history, exclusivity, insider cache, and an attachment to a personal memory or moment all play into a higher price point (which became more valuable than ever during the pandemic).

The Robert Mondavi Winery brand has benefited from a narrative that matches the New World wines it came to define: audacious, world-renowned, and almost mythological. To Larabee, that luxury customer persists even now, over 50 years since it was founded.

“They are inquisitive explorers in their life, career, and wine choices. They choose our wines because we offer a compelling story about our legacy and impact on the American wine industry; the story of our home in the legendary To Kalon Vineyard; and the story of our talented people and their relentless pursuit of craftsmanship and quality,” she says.

But she also admits that isn’t enough to create a lasting brand relationship with the next generation of wine drinkers who may not be able to access a high-end price point, let alone a winery visit where employees can speak to a wine’s qualities on a one-on-one basis, or better yet, upsell to an annual wine club membership to build stronger brand loyalty. The challenge comes in conveying the same experience in the online space.

“Buyers and wine enthusiasts have become more discerning, and they look for authentic experiences. We believe in the cultural truth that heritage alone no longer drives meaning nor inspires consumer behavior. We have taken this insight and used it to implement an elevated, unexpected and future-forward mindset designed to engage fine wine consumers in their quest for authenticity,” she says. And authenticity, of course, is the name of the game when it comes to marketing to Millennials and Gen Z.

Industry reports, even prior to the pandemic, revealed the tasting room model “had reached an apex in effectiveness and the sales approaches used by most wineries were in need of an adjustment… The pandemic exposed the industry’s overdependence on the tasting room model in a new way.” Wineries that were able to adapt to ecommerce, or had already expanded into that area, were rewarded.

“While the ride was wild through the past year, average winery sales of those selling direct to consumer fell only 7 percent, with a third of wineries having better year-over-year sales than the prior year,” says the 2021 State of the US Wine Industry report.

Both Larabee and Meisel say the swing from in-person to digital purchasing was the biggest impact from the pandemic, but the winery was relatively prepared for it in the beginning.

“In 2019 we started to make significant investments in our DTC ecommerce sales strategy,” Meisel says. The brand is continuously finding improvements to the online customer experience, even as they are an industry leader in usability. Right from the website, potential customers can browse through over twenty grape varietals by type or tier, read their taste and aromatic notes, learn food pairings, scan critic and user reviews, learn about their origin, and purchase a single order or wine subscription. But the online experience doesn’t only facilitate sales, it helps tell the Robert Mondavi story.

“[Ecommerce] is a great opportunity to bring the winery to life on the small screen. The site is often the first place a consumer interacts with us, and we are therefore always finding better ways to share the story of Robert Mondavi in a beautiful and simple way,” he says, “We have consumers all over the country who purchase online, and we have a great collection of international consumers who visit the winery, purchase wines, and stay involved through our newsletters and emails.”

Larabee notes that the digital experience should mirror the best practices honed through the winery’s in-person hospitality, no matter if it’s a tasting room, website, or Instagram feed a customer is using. With this approach, all channels—offline and online—are unified, allowing customers to move from one to the other seamlessly.

DTC and digital platforms are not the only ways to bring younger drinkers into wine culture. Larabee says that the Robert Mondavi Winery has also been a leader in another key priority for millennial consumers: aligning with moral values and ecologically friendly practices. Robert Mondavi spearheaded sustainability in Napa producers and recently converted its To Kalon Vineyard to be 100% organic, which will achieve certification in 2023. But there’s already hope that these tactics and a deeper understanding of consumer philosophies are working: the 2021 Wine Market Council Benchmark Segmentation Survey found 29% of consumers aged 40-49 drank wine compared to 33% of consumers aged 30-39.

https://www.instagram.com/p/Cc8FvAHMtM_

Bridging omnichannel wine buying experiences

The in-person winery experience will never become obsolete. For a product so tied to the land, it’s still the best way for consumers to fully understand the product. Wine countries around the world are famously picturesque and excellent travel destinations. It also goes hand-in-hand with the romanticism and exclusivity inherent to wine’s appeal. That’s why the Robert Mondavi Winery has gone to great lengths to have the offline and online experiences speak to each other.

“With a strong return to travel to the winery, as well as an overall return to the on-premise channel [restaurants and bars], we are seeing some shifts, which is why the integration of our hospitality and DTC ecommerce is so important. We are also closely aligned with our colleagues in three-tier ecommerce, US wholesale, and international sales,” says Meisel. More updates will soon create closer ties between platforms.

“In the last several months, we have more closely integrated our hospitality team with our digital DTC ecommerce team. We connect in a variety of ways that leads to a consumer experience that is omnichannel, because the consumer is omnichannel. They see us as one entity, and rightly so,” he says.

For example, soon, visitors to the winery will be able to scan QR codes to visit specific mobile pages as they explore the winery in person. Customers will be able to join the wine club via online registration instead of a handwritten form. The onsite POS system already uses Shopify so it mirrors the online checkout experience. The winery’s reservation system connects directly to a diner’s email and text communications and is also tailored to a customer’s interests and level of wine knowledge (expanded tasting experiences are designed to educate any expert or burgeoning wine connoisseur). Even Robert Mondavi’s shipping packaging leads drinkers to continue their winery experience online.

The potential connections between online and offline DTC sales are endless, and as online sales trends hold steady even through post-pandemic reopening, the wine industry likely won’t have one without the other again.

“We’re committed to carrying forward our founder’s legacy,”says Larabee. “We believe his values are more applicable than ever in our industry today and the significant change it has experienced in the last few years.Robert Mondavi Winery has an everlasting commitment to push the boundaries of what is possible—in wine and beyond.”

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How the legacy Californian wine producer is prepared for the future of wine selling.

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Carly Maga is an arts journalist and writer based in Calgary. Her work has appeared in The Toronto Star and CBC.

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