Sell-out Crowd Learns Newest Winery Information Technology

WITS co-chairs Smoke Wallin and Lesley Berglund

Napa, Calif. -- More than 300 attendees from wineries, technology suppliers and other organizations attended the fifth Wine Industry Technology Symposium today in Napa. It was held at the Marriott Hotel, having outgrown last year's site, the Meritage Resort in Napa.

During general sessions held this morning, attendees heard about trends in logistics that could affect their companies and the power of e-mail campaigns for restaurants-including selling wine. They also heard CEOs and CIOs (chief information officers) discuss how they coordinate goals in simulated "couples' counseling."

WITS co-founder and co-chair Lesley Berglund said topics for the symposium were determined by a select winery CIO council, with key issues including the next generation of direct consumer interaction, notably online social networks. Other key topics include the next generation of compliance issues, "greening" of the industry, collecting and using meaningful data and strategic technical leadership.

Berglund also announced that the conference is donating funds for technical research to the Wine Institute.

Ben Gordon, the first keynote speaker and an expert in logistics (or supply chain), outlined the many changes occurring in shipping primarily due to the high cost of fuel. He noted that gasoline already costs more than $10 per gallon in parts of Europe, and oil could hit $500 per barrel-10 times the price only a year ago-if Iran should block the Straits of Hormuz, through which 80% of the west's oil passes.

Gordon reported that commerce is switching from airplanes and trucks to more efficient and less expensive transport, such as trains and ships; but customers also simply are shipping less. This could reduce outsourcing and encourage local production, particularly of heavy and large goods, which could help domestic wineries compete with other countries.

He also noted that fuel costs weren't the only threats to free flow of goods: Pressure on NAFTA and simplified unionizing are also possibilities.

Gordon also said that mergers and acquisitions might be accelerated by concerns that capital gains taxes could increase if Sen. Barack Obama becomes president. Logistics companies are consolidating, which could provide better service as companies specialize and expand their services, but could also lead to higher prices.

The second keynote speaker was Scott Shaw, whose promotional company Fishbowl is named after the common depository for business cards at many retails locations. His firm helps restaurants mount e-mail campaigns, and he said they've proven a very effective means for restaurants to promote their businesses. This includes wine promotions and dinners, and he suggested that wineries partner with restaurants to achieve market share and sales.

The general session was followed by four breakout sessions-one on consumer-direct sales that veered from its initial focus on compliance in general and instead addressed privacy and security issues, which are of increasing concern.

However, moderator Jeff Carroll did list the latest changes in direct shipping laws, which will be summarized in an upcoming Wines & Vines news story.

Much of the session addressed privacy issues and the new PCI (Pin Card Industry) compliance standard required for all companies that accept credit cards.

Eric Johnson of Ste. Michelle Estates pointed out that it's relatively easy for smaller companies (those accepting less than 6 million transactions per year) to comply with the PCI standards; however, it is relatively difficult to prove compliance. Johnson recommended using a third-party for accepting credit cards, so your company never sees the numbers, and using a black marker to cover any card numbers that customers submit on paper.

These issues are tied to new privacy laws that require companies to notify customers-and in some cases government agencies and others-if their privacy is breached. This can become a huge issue. Ste. Michelle underwent an extensive audit and replaced all its online, physical and club systems after a third party was compromised in winery posts.

Other serious issues still not addressed by most wineries are copyrights and libel. Attorney Rachel Matteo-Boehm noted that most wineries have become virtual publishers by posting material on the Internet, and they may not appreciate some significant consequences. Most material on the Internet is not in the public domain, Matteo-Boehm said, and it can't be used by others without permission; attribution to others isn't a defense against libel, and you may become liable for comments made by third parties (such as blogs) if you actively solicit on subjects or labels or comment on the material, she said. You also must post a privacy notice on your website if you collect information about users, including e-mail addresses.

Berglund and Smoke Wallin chair the Wine Industry Technology Symposium organized by the Wine Industry Symposium Group, which also holds the Wine Industry Financial Symposiums and Vineyard Economics Seminars and will hold the initial Green Wine Summit Dec. 1-2 at the Hyatt Vineyard Creek in Santa Rosa, Calif.