Q&A With Gary Vaynerchuk

New Jersey wine retailer Gary Vaynerchuk is a celebrity of sorts in the wine world and is known for the video blog Wine Library TV. Vaynerchuk is on tour promoting his new book “Crush It! Turn Your Passion into Profits in a Digital World.” Winebusiness.com caught up with Vaynerchuk via his cell phone as he boarded a train leaving Washington D.C., yesterday. Excerpts of a short interview follow:
 
Q. How’s the book tour?
 
“It’s going well. It just started last night. The book came out yesterday. It’s off to a good start. I’m excited.
 
Q. It was a seven-figure, 10-book deal?
 
Yeah, it is, it’s pretty crazy
 
Q. What’s the book about?
 
This book is really made for a lot of people that read your stuff. The fact that we can go direct to consumer with the new internet tools is powerful, its game changing. For a lot of those reasons you want to talk to me in the first place. Otherwise I would have been another wine retailer in the sea.
 
We think vineyards should build their brand equity. The way they do that now is not because they sell through to a winery that then gets a 95-point score from Parker, and then everybody wants it. There’s a lot of different ways to go about doing that.
 
I leveraged new internet tools to build my brand and I don’t think I’m so super special. I think other people can as well. It’s really a tutorial of where the world business market is going and a step by step guide on how to execute.
 
Q: What was the most popular episode of Wine Library TV you ever did?
 
Number 148, where I tasted all the weird things and showed how I built my palate when I was under 21. People thought it was funny that I was eating Cinnamon Toast Crunch and jalapeño peppers.
 
Q: What’s your view on 2009 fall sales? What are you expecting?
 
It’s going to be real tough. I expect the premium market, anything that’s $40 wholesale and above, to still be very sluggish because there’s more supply than demand. There will probably be more activity, but there’s still a flushing out period that hasn’t gone down.
 
Q: What have you seen in the wine market since last December?
 
There’s an enormous amount of dumping going on at the premium end. If you’re sitting on inventory that’s $360 a case or more wholesale, you’ve got to get real creative and start discounting. I have 5,000 emails in my inbox right now about 95-point wines that nobody can move. It’s not going to be pretty.
 
Q: What are your customers buying?
 
Portugal is hot - $8 to $20 Portuguese wines are ripping hot. We’re a unique store – we sold 100 cases of a single vineyard gewürztraminer last week. We’re good at telling stories about the wines we’re interested in to our consumers. If we can find profitable well-priced wines, we’re always going to look for that. It’s not category driven.
 
There’s a lot of pent up demand for ‘07 NapaValley reds. We’re getting a lot of emails saying, “When are you getting 07 NapaValley Cabs?’ because there’s been a lot of hype on the wine forums and pre press about the vintage.
 
Q: When you spoke at a Napa Valley Grapegrowers event last year, your message was “Napa wineries: you better watch out.”
 
Yep –If you look back and watch what I talked about in February and what actually happened to a lot of wineries in October and November, my message was very much on point. I wish people listened to me that day because a lot of wineries continued to not build real brand equity and to not build real relationships with their customers. They’re relying on press in the old way.
 
Q: How should they rely on it in a new way?
 
Look at what St Supery or Gallo is doing. They’re hiring social media people. Go direct to consumers. Don’t rely on your distributor or on Robert Parker or me, or a wine retailer. Have relationships with consumers.
 
Q: What has surprised you in terms of what worked that your customers responded to sales wise?
 
What’s really surprised me is the lack of action by wineries to move inventory. The consumer habits are in line with where I thought they would go. What has surprised me is how many people think taking something from $4.80 wholesale to $4.40 wholesale is actually going to move wine.
 
Q: How about distribution?
 
Distribution is going to continue to consolidate. I spend all my time engaging with consumers and don’t really worry. Distribution is a tool. It’s far more interesting to me what’s going on in the vineyards and the wineries. Distribution is systematic. Brainless reordering is not really a factor in my world.
 
Q: What’s going on with Pinot Noir versus Merlot? Has that played out?
 
Varietal-wise, the only thing going on right now is that Malbec is whipping hot.
 
Q: And about the book?
 
I’m really excited for wineries and vineyards to recognize how important branding is direct to consumer There’s a lot of great growers out there and the fact that they have to rely on the wineries to get good press to build their brand name is a huge mistake. There’s a massive opportunity for them. They need to build brands.