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Virginia Wine, VWDC, Waterless Carwash and Al Gore

Although I have no actual statistics to support the following statement, I believe that Orlando, FL is the unique convention capital of the world.  Not the standard medical or legal association annual boondoggles, but interesting and unique gatherings like conventions for circus clowns, annual gatherings for people that like to dress up as comic book characters, meetings for people who really like body piercing, little people conferences, seminars for very committed Dungeons & Dragons fans (the most interesting), conventions for people who have been abducted by aliens, and of course a number of Multi-Level Marketing pyramid sales meetings.

Spending the better part of 2008 and 2009 working in the Orlando area provided me the good fortune of observing many of these unique conferences first hand as my hotel of choice in Orlando hosted many of these gatherings.  As an avid observer of human behavior and curiosity seeker, I have on occasion, slipped in to a couple of these meetings to listen and observe.  One of the more memorable events I happened in on was a multi-level marketing sales meeting to promote a lotion product used to wash vehicles without water.

Photo Credit: Chevy Chase Central

I don’t remember much about that meeting other than I didn’t ‘get‘ what was so neat and gee whiz about using a lotion substance instead of soap and water to wash a car, and, of course, the ‘fella that hosted the sales presentation was quite memorable as well – think cousin Eddie in National Lampoons Christmas Vacation.  It was clear that everyone else in the meeting ‘got it.’  The audience, which numbered about 75, broke out in unison with loud ‘whoops!‘ and enthusiastic applause every few minutes.  Due to my chronic confusion, I was the only guy not ‘whooping‘ and clapping throughout the presentation.

I found myself in a similar state of confusion – another ‘I seem to be the only person that doesn’t get this’ moment – last week when the Virginia Department of Agriculture and Consumer Services (VDACS) announced the launch of a new “state-of-the-art online ordering system” for restaurants and retailers ordering Virginia wine through the Virginia Winery Distribution Company (VWDC).

Note that I only use (and emphasize) the phrase, “state-of-the-art online ordering system” because this is the description used in the official press release:

The Virginia Department of Agriculture and Consumer Services (VDACS) announced today the launch of a new state-of-the-art online ordering system for restaurants and retailers ordering Virginia wine through the Virginia Winery Distribution Company (VWDC)…The new system uses OnlineOrderDesk, a cloud-based e-commerce platform that allows Virginia farm wineries to list and describe their available wines and allows restaurants and retailers to place their orders quickly and efficiently via the interactive site. VWDC is the first wholesale distributor in the United States to utilize the benefits of OnlineOrderDesk. ~ Excerpted from the official Press Release.

For those unfamiliar with the Commonwealth’s distribution company, the VWDC is a non-profit, non-stock corporation created by the VDACS in 2008 (conceived in 2007) with the intent of providing wholesale wine distribution services for Virginia farm wineries.  A worthy and noble mission to benefit our smaller wineries!

Providing the technology solution for VWDC is OnlineOrderDesk, based in Kelowna, BC, Canada.  From the company’s website, it’s unclear how long the firm has been providing this state-of-the-art online ordering solution.

Online ordering, ‘state-of-the-art?’  Really?  Online ordering may have been ‘state-of-the-art‘ in the early 90’s just after Al Gore invented the internet, or in 1994 when Pizza Hut launched online ordering, or perhaps in 1995 when Amazon.com went online, or maybe in 1998 when Wine.com (formerly eVineyard) started schlepping wine via the ‘net.  In December 2010, does anyone in the industrialized world consider online ordering of anything ‘state-of-the-art?

Given the number of tweets and retweets about the VWDC-OnlineOrderDesk announcement – especially within the #vawine community – many wine tweeters seemed impressed by the new online ordering system (assuming everyone actually read the press release before retweeting it).  Even Jeff Lefevere, one of the most respected and accomplished writers in the wine blogosphere, weighed in with a mention in ‘This Week In Wine’ post at Good Grape.

After skimming through the numerous tweets and reading the VWDC-OnlineOrderDesk press release, I thought I had been Twitter Punk’d.  From the initial buzz, one would have thought HR5034 had been stopped, or that TCA had been eradicated.

Are wine distribution laws so arcane and convoluted (yes), and our expectations so low that some consider online wholesale wine ordering ‘state-of-the-art?

At the risk of offending the sensibilities of the Virginia wine establishment, I must admit that I am mildly skeptical of the ‘real‘ usefulness of this new system.  Providing in-state licensees the ability to order wine online doesn’t seem so state-of-the-art, at least not to someone who has had internet access for a couple of years. I am by no means a shipping or distribution expert, or even a state-of-the-art system expert, but even a novice observer like me can see a number of limitations.  Most notably this system can only be used within Virginia.  I realize that the mandate of VWDC and this online ordering system is not to facilitate out of state sales, but providing that level of ordering would be closer to state-of-the-art.  I wonder if other providers were considered before moving forward with this solution?  To the casual observer like me, solutions like IBG Direct-to-Trade appear to provide a more robust system that includes out of state sales options.

The fact that the system cannot be utilized to sell wine to an establishment that was previously serviced by a distributor seems limiting as well.  Since I’m simply a casual observer and not Virginia ABC licensee, my opinion really doesn’t count for much any way.🙂

There are of course benefits to using the new VWDC-OnlineOrderDesk system like the potential for timesaving from the licensee side of the transaction, especially for those placing orders from multiple Virginia wineries.  If wineries take the time to input detailed information about each of their wines, this new system could potentially serve as a valuable educational tool for restaurants and retailers.  I suspect only a small handful of wineries fully utilize this option.

Since I’m not familiar with the inner workings of in state wholesale ordering/distribution processes and have no context of the old-vs.-new system, I contacted several Virginia wineries and retail shops for their thoughts on this subject.  Most of the responses I received were positive and optimistic that the new VWDC-OnlineOrderDesk system would result in less processing time and more sales for their winery.  Not surprising, there were a couple wineries that share my opinion that this new system will do little, if anything, to move the sales needle in the long-term. Unfortunately these winemakers did not want to be quoted on the record (for obvious reasons).

As a wine retailer in the state of Virginia I am always excited to be able to buy directly from the winery.  After the ability for wineries to direct distribute was taken away a few years ago the VWDC has emerged as an option to directly buy from wineries within the state.  The new online ordering system is a benefit in a couple of ways to a retailer. First it lets us know which wineries work within the VWDC system. Seems simple but with over a 150 wineries in the state it’s hard to know which ones are able and willing to use the system. Second, online ordering takes out the middle man of the distributor and/or having to pick up the phone and call the winery – which during certain times of the year can be bothersome on both ends.  I do understand after talking to the VA Wine Board that processing of monies will be quicker as well, cutting the payment to bank time in half. I don’t know if this new system will markedly improve sales, but I know there are a few wines that I will be ordering that I didn’t order before. ~ John Witherspoon, owner, Wine Cellar Wine Shop, Midlothian, VA

More than any other retail shop owner I know, John is the most engaged in the Virginia wine scene, so I’m not surprised that he would leverage this new system to order wines that he had not previously ordered.  I hope many other Virginia retail establishments do the same. If more retailers follow this practice, the system will be a huge success for licensees, wineries and the Virginia wine industry as a whole.  I am a tad skeptical that this will be the case, but I hope I’m wrong.

I used the new system for the first time just a few days ago. Within about thirty minutes, I registered, set up some administration settings, edited my product listings, logged my first order, and printed out the paperwork. We made the delivery about an hour later. So inside of two hours I was able to enter an order and have it delivered.

This standard capability and usability for the user / licensee’s of this new system over the old is vastly improved.  I was actually proud to see this project launch in what I believe was a relatively short timeframe. I think it is good example of the states commitment to support our industry.

As for the systems functionality beyond the standard ordering, I have yet to opt or utilize.  In general though, I think it all has great potential and offering functionality such as that is important to the evolution / growth of our business. It definitely makes a bigger picture statement.  I plan to utilize in the future. ~ Bob Rupy, Bluemont Vineyards

The VWDC makes the best of a bad situation. The bad situation being that a winery cannot self-distribute and must go through a distributor to begin with. The VWDC can only market to Virginia retail, so it does nothing for “new” markets. Of course, the VWDC is basically only an order-taker; it doesn’t market your wine for you. And for our winery this is the number one issue I have at the moment. Our winery is registered with the VWDC and will use it on a limited basis as we already deal with a distributor.  The VWDC will be of limited use to any winery that already uses a distributor because of the Wine Franchise Act that prevents a winery from limiting the sales area of their existing distributor (i.e. you can’t use the VWDC to self-distribute to an establishment that was previously serviced by your distributor). ~ Virginia winemaker, name withheld

Perhaps this is ‘the’ key – making the best of a less than optimal situation.

While it’s nice to have, [VWDC-OnlineOrderDesk] doesn’t seem like it’s going to change much in terms of increase wine sales.  Unless I’ve already gone out to a retailer and poured my wines and they’re familiar with us, I don’t think anyone’s going to order Hume wines out of the blue. ~ Stephane Baldi, winemaker, Hume Vineyards

I agree with Stephane, this new system is nice to have, but I feel any sales gains will be modest, especially in the long-term once the newness and novelty wears off.

I think it will provide a huge plus in our marketing opportunity.  Unlike the old system, retailers can access the web site themselves and scroll through all of the VWDC wineries.  As a winery, we are able to enter information about our wines so a retailer who may not know about us can be introduced to our wine via the web site.  Retailers can also directly place an order but we have complete control of putting that order through.  If that retailer is in an area we can’t easily get to, like Northern VA, we can contact them and let them know we don’t deliver to that area but can then try to figure out with other wineries who does deliver in that area and try to coordinate deliveries.    We are already using the new system.  Placing my first order was a breeze and all the paperwork is generated immediately, it’s wonderful.~ Amy Steers, co-owner, Well Hung Vineyard

We have used the new system and it is much easier to use, from both the winery side, and the licensee side.  Because this new system is web based, it can be accessed anywhere at any time.  With the old system, the software was installed on one physical computer, probably located in the winery.  Wineries now have the ability to add wines, add marketing information, and change pricing on our own, which we could not do with the old system.

In the past, the licensee would have to contact us, either by email or phone, to place an order.  With this new system, licensees can now order online through a very straightforward interface.  The new system has basically provided wineries with a point and click online ordering interface to service their wholesale accounts.  It’s like adding online ordering to your website, but directed and marketed exclusively to wholesale clients, taking care of all of the legalities as well.  It makes it easy for licensees to have access to over 100 wineries that are currently registered in the system.  There should be no excuse why your favorite local restaurant does have at least one Virginia wine on the menu.   It is now as easy as it should be. ~ Vicki Fedor, winemaker, North Gate Vineyards

I see nothing but upside with this new web based system for us.  It’s a time saver for a VA ABC licensee if they currently spend a bit of time ordering from VA wineries in the VWDC system.  A licensee that uses the VWDC to order from multiple wineries will find it timesaving to create an account and place orders.  They can order from multiple wineries with one PO on their side and the individual wineries will fulfill the orders individually.  But for now, this system is a upgrade for me to use for order processing with a huge potential upside to be leveraged both in terms of licensees finding me and in terms of share delivery.~ Derek Pross, winemaker, Gadino Cellars

Again, for the record, I will restate the obvious fact that I do not possess shipping or distribution expertise. I would also like to emphasize that my intent is NOT to minimize of the efforts of those at VDACS, VWDC or within the state government who worked hard (and quickly) to put this arrangement together.   No doubt my lack of understanding of shipping/distribution laws is preventing me from fully appreciating how state-of-the-art this VWDC-OnlineOrderDesk arrangement is.

Perhaps someone from VDACS, VWDC, or OnlineOrderDesk will weigh in and clear up any confusion or clarify any incorrect information I presented here.  I welcome all comments and look forward to the information/opinion-sharing.

Until then, I will continue to wash my car with good ‘ol soap and water, poke fun at Al Gore, and cast a yawn in the direction of the “state-of-the-art” VWDC-OnlineOrderDesk system.

Note: I plan to (informally) track use of the system through the wineries and licensees and post a follow article in three and six months.

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