A topic I’ve thought a lot about since before this class
started is what role wine will or can play in our lives post-GSB (besides the
drinking of it).
An often-trod path is that of the late-career
vinoculturist, who makes a few million at a hedge fund or in tech and then
decides that owning a vineyard would be fun. As we discussed in class, this
type of ego- or interest-driven production not
primarily concerned with the actual economics of the business contributes to
oversupply and a fragmented producer market.
Last weekend in San Francisco, I came across an
interesting case study of another possible path. Elijah Pfister was
looking at tech jobs when he graduated from the GSB in 2008, but founded a wine
import business instead (now called Maritime Wine Trading Co,
with various locations in SF). This happened without any kind of family
background in the industry, just purely based on his own interest. In 2012, he
and his partner also took over the Nine North Wine Co
from the previous owners and entered the production segment of the value chain.
Similar to our last guest speaker, they don’t have any vines, but source grapes
from third-party growers.
The takeaway to me is that: 1) if you’re passionate
enough about the industry, you can find a way to be successful in it even if
your last name isn’t Mondavi (Prof. Rapp is an example of this as well), and 2)
as we learn more about the value chain we’ll hopefully understand different
ways to play in it that make more sense than simply buying a vineyard. That
could include tech platforms or apps, which I think we'll cover later in the class.
Soren -
ReplyDeleteI think you make several interesting points here. I agree that wine will likely play an important role in many of our lives and could do so in ways in which we are not currently aware. It is really interesting to think about the application of technologies from other industries coming into the wine industry (much like the agricultural approach discussed today could be extended beyond the wine industry, as Lilly suggested). Another category I would add is distribution - there have been so many interesting new models with brands like Warby Parker, Harry's, etc. (could even include Amazon Prime, although on a different scale), I am excited to hear what is going on in distribution to change the wine industry.
The one point I wanted to push back on is the "interest-driven" production. I agree with you that it may create a fragmented producer base, and it likely is ego-driven at times. However, is this sort of production really a bad thing for the industry? Your comment may be neutral in terms of evaluating it, but wanted to raise the issue.
Aren't there several industries (restaurants, etc.) where people start something for personal value, as opposed to strictly for money making? Even owning something like a professional sports team (minor) could fit into this category - although obviously the oversupply issues are not as relevant there. I do agree that some who open wineries probably in part like to be able to tell their friends they opened a winery (which at the very least feels like the wrong reason); however, my sense is that the vast majority of the fragmentation within the industry arises from other structural factors. Not necessarily disagreeing with you - your opening comment just piqued a curiosity for how relevant these little wineries are to the actual functioning of the industry as a whole.
Soren -
ReplyDeleteI think you make several interesting points here. I agree that wine will likely play an important role in many of our lives and could do so in ways in which we are not currently aware. It is really interesting to think about the application of technologies from other industries coming into the wine industry (much like the agricultural approach discussed today could be extended beyond the wine industry, as Lilly suggested). Another category I would add is distribution - there have been so many interesting new models with brands like Warby Parker, Harry's, etc. (could even include Amazon Prime, although on a different scale), I am excited to hear what is going on in distribution to change the wine industry.
The one point I wanted to push back on is the "interest-driven" production. I agree with you that it may create a fragmented producer base, and it likely is ego-driven at times. However, is this sort of production really a bad thing for the industry? Your comment may be neutral in terms of evaluating it, but wanted to raise the issue.
Aren't there several industries (restaurants, etc.) where people start something for personal value, as opposed to strictly for money making? Even owning something like a professional sports team (minor) could fit into this category - although obviously the oversupply issues are not as relevant there. I do agree that some who open wineries probably in part like to be able to tell their friends they opened a winery (which at the very least feels like the wrong reason); however, my sense is that the vast majority of the fragmentation within the industry arises from other structural factors. Not necessarily disagreeing with you - your opening comment just piqued a curiosity for how relevant these little wineries are to the actual functioning of the industry as a whole.
I agree wholeheartedly that some of the most interesting opportunities include innovation re: distribution/creation of new distribution channels.
ReplyDelete