Each week, we seek out expert advice to help a small or medium-sized firm overcome a key issue.
Wine drinkers are particular. They believe fine reds and whites should be uncorked at the table and dispensed by a human hand. That belief – or display of snobbishness, as he calls it – is the greatest obstacle for Jean-François Bieler to overcome. The Montreal entrepreneur sells dispensing machines that deliver fine wine from taps similar to those used to pour draft beer.
Those taps from Versay, Mr. Bieler’s company, are connected to temperature-controlled wine barrels. Versay buys wine from around the world and installs the kegs for clients who have purchased Versay taps. The average installation costs about $2,500, and the barrels run between $260 and $520 for the equivalent of 26 bottles of wine.
Versay has 15 restaurant clients in Quebec, and in July it introduced wine on tap to Ontario, installing one of its dispensing machines at Eight Wine Bar, in the Cosmopolitan Hotel in Toronto. Clients go through about five kegs of wine each month, Mr. Bieler says.
But many restaurant owners are reluctant when he first approaches them. “Without a doubt the greatest obstacle for me to overcome is perception,” Mr. Bieler says. “Restaurant owners will say their clients will never buy wine on tap. There’s a lot of snobbishness, even though it’s a better product when it comes right out of a barrel.”
The Versay system reduces the amount of harmful oxygen that comes in contact with the wine and maintains freshness. Mr. Bieler says his taps also save restaurants 6 per cent on the cost of wine by the glass because of a lower unit cost. Yet, despite those advantages and the fact that wine on tap is increasingly popular in the United States, he is having trouble attracting clients.
“I think it will be easier in Ontario, because restaurant owners are more business savvy. In Montreal, they’re all very passionate. They don’t want to do things differently,” says Mr. Bieler, who delivers 250 kegs a month to his clients. His wines range from Italian reds to chardonnay from Vineland Estates in Ontario’s Niagara region.
His sales figures are meagre in comparison to those of the U.S. operation that inspired Versay. Owned by Mr. Bieler’s cousin, that New York-based wine-on-tap business ships 4,000 kegs a month.
“There are many places in the world where wine on tap is accepted and very popular. But it’s still hard to convince people when you first tell them about it,” Mr. Bieler laments.
THE CHALLENGE: How can Versay convince connoisseurs that drinking wine on tap does not mean a sacrifice in quality?
THE EXPERTS WEIGH IN
Iveta Koskina, financial planner, Investors Group, Toronto
As a consumer I think this is an awesome idea. If given a choice in a restaurant to have my wine from a bottle or barrel, I would go for a glass from the barrel. There’s an authenticity to it, and that should factor into the marketing strategy for Versay. The company should incorporate a little history of the wine and of the benefits of drinking directly from the barrel.
Also, the description of the barrel could be used as a sales and marketing tactic. That way a client is no longer thinking whether he wants bottle or barrel but rather which barrel to go for. Approaching major steakhouses, such as the Keg or Hy’s, and their head offices with mathematically detailed figures might do the trick, as well. If you get through to one, the others will come along.
If not in existence, a tagline for the company has to be created. Versay also needs to get noticed by local high-end magazines.
Also, once Mr. Bieler’s company goes high end, they should stay high end. Maybe Versay’s system should be available only to restaurants with a certain price bracket per plate and never lower.
Heather Kirk, founder and managing partner, Immedia PR, Toronto
Versay’s wine-by-keg concept is a sensible and sustainable one that, based on the promise of better margins and a reduced environmental footprint, deserves support.
The first step is to tackle the marketing communications. Versay needs to clearly spell out its sexy new-wine world vision and proven operational benefits to the industry. They also need to inform and educate the public through social channels about the quality and sustainability of the wine. Testimonials from restaurateurs, wine makers, reviewers and customers can help rally support for the product.
Still struggling to win over customers on the fence? Versay may gain steam by ridding hurdles in perceptions caused by the language it uses. Tapping “kegs” is the beer baron’s domain. So play with messages and terminology. Give restaurants and serving staff the facts and communications tools they need to pull a crowd.
Doug Makaroff, president of the property development company Living Forest Communities, Victoria
All around us at Living Forest Communities, people can buy five and 10 acres of land for about the same price that we are selling a third of an acre. The thought that buying less land in a similar location for the same amount of money is a difficult idea for people to latch onto, so I understand that Versay has an obstacle with perception. Our challenge was: How do we sell a smaller amount of land for the same price?
We have done it successfully by emphasizing the community and sustainability aspects of our project, and showing the value beyond the property size. It’s about telling the right story for your business.
Versay has to take a similar approach. They have to play to the exclusivity that you might find if you were on a wine tour. If you go to a wine tour in the Okanagan, you’re in a cave or a cellar and you would be tasting wine directly from the keg. I wondered if instead of having a metal keg, if you could add a covering that made it look like an oak barrel, if it wasn’t so already, and position it in the wall. That would require the restaurants to really incorporate the wine-on-tap concept into their design elements.
What you want to do is introduce wine on tap slowly and make it feel like a unique experience that brings the patrons closer to the vineyard itself. What the restaurants will be saying is, “We love this winery so much that when we went on their wine tour we thought we would bring the keg straight back here for you to enjoy.” It is elevating the quality of the story behind the house wine.
THREE THINGS THE COMPANY CAN DO NOW
Make clear the proven operational benefits while educating the public. Testimonials will help.
Look for a partner
Approach major steakhouses with details on cost-saving benefits.
Go back to the barrel
Market the straight-from-the-vineyard experience, and encourage restaurants to incorporate the barrel into their design elements.
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