San Diego AMA’s Hispanic Marketing special interest group recently enjoyed an informative day of networking, education, and — of course — wine tasting in Northern Mexico’s burgeoning Guadalupe Valley.
A group of eight stopped at three wineries Sept. 30 to indulge in insightful conversations and gain some business perspectives of the region from the owners. Following are some impressions from the trip’s leaders, Mary Beth McCabe and Marina Anderson. Photographs by Sandra Holloway Brown.
What were some of the main takeaways from the trip?
MBM: The wineries we visited were mostly the smaller ones, where we could talk one on one with the managers, owners and founders of the wineries. This made for some really interesting discussions. One winery made 800 cases, another 3,500 and a third 8,000 cases. None were mass producers. They each wanted controlled growth, and water was a factor in how much they will be able to grow.
MA: The area has been growing tremendously as there has been an explosion of wineries and tourism. Most of the wineries are boutique establishments with very small production (800 to 8,000 cases). The valley is not very large so there will probably be a limit to the number of wineries that can establish there. Some of the largest wineries like Santo Tomas or Adobe Guadalupe are already producing in other valleys on the peninsula. Nature is a huge factor to all winegrowers, as they have been very affected by drought in the last few years. Wine production requires a long-term mindset; first to let the vines grow to maturity (ca. four years) and then to ramp up production to sufficient levels to pay for the investment.
What did you learn about marketing and the wineries?
MBM: I learned that there is a maturation stage to the wineries perhaps. The Adobe Guadalupe Vineyards & Inn was started when there were only six wineries in the region. Now, we were told by the owner that there are more than 150, which makes for a bigger competition, and also forces them to differentiate.
The Adobe Guadalupe winery told us that the taxes they paid on wine sold in California was 47%. They see that tax as very high, compared to other states and regions. The point they were making was that California is protecting their own interests in wine making.
MA: Wineries are focused on the production part. The marketing seems to be mainly on the label. The marketing is more intuitive, for example, using metal sculptures of animals for the labels (Tres Valles) or their own philosophy of life (Clos de 3 Cantos). They focus on marketing the specific wine vs. the winery.
What were some of the biggest challenges the wineries are facing?
MBM: The biggest challenges are water-related ones. The lack of available water was an important challenge at each of the three wineries we visited. There is a great deal of water required to grow and maintain the vines, as well as in the process along the production.
MA: The drought was relevant to all. The lack of resources, such as land and labor limited some of their production. Mexico’s high taxes on wine are encouraging some wineries to look to the U.S. as an export market, due to higher profit margins both from a higher retail price and lower taxes.
How does being close to the border impact their business?
MBM: They are close enough for day trips from the U.S., especially the San Diego area. This proximity makes it attractive for a visit that could also tie in a visit to Puerto Nuevo or Rosarito, or even Ensenada.
MA: It is easier to export to the U.S., but since they are sharing the border with California, there are limitations to wine exports to American travelers as well as strong competition from California wines. On the positive side, they are getting tourism to the area which is making their wines more familiar and therefore demanded on the U.S. side.
How do they see themselves as a region (e.g. similar to Napa, France, etc.)?
MBM: They do see themselves similar to the Napa Valley region in California, and think that they have some superior wines. They do have a long history of winemaking, since 1821, so from that perspective, you could say they are well established as a region, especially within Baja, California.
MA: They don’t seem to compare themselves to either, they see themselves as an area of growth due to the tourism industry. However, some of the wine producers have won global competitions but are limited in their participation on the global market due to their production constraints.
What other insights would you like to share with the Hispanic SIG about the visit?
MBM: It would be nice to make this an annual trip for San Diego AMA, each September. Along the way, we made good friendships with each other, and found that the wineries were happy to hear our feedback about their marketing materials, and ideas on how they could improve the various marketing channels and pricing.
MA: Most wineries are focusing on production and do not seem to have a holistic marketing campaign. The smallest producer had very different labels in each of their bottles, only unified by a theme of the animal sculptures, however, key information such as type of wine was missing from the label. Wineries are doing events such as weddings and all of them charge for wine-tasting as a way to supplement their revenue. There may be opportunities for marketers either in consulting or doing joint programs with wineries in the Valle de Guadalupe.
Join our Hispanic Marketing SIG wine tour to three different wineries in Mexico and will also visit the Door of Faith Orphanage on Oct. 6.
Dr. Mary Beth McCabe is the Lead Faculty for Marketing at National University and the first Hispanic media expert in the U.S. with a Doctorate of Business in Marketing. She has traveled worldwide, publishing “The World’s First Guide for Independent Travel,” and recently, “Mobile Marketing Essentials.” Born in New York and educated in the Midwest and California, Mary Beth has owned Sun Marketing since 1993. In addition to teaching, she consults with brands in English and Spanish.
Marina Anderson is the Principal Consultant at Anderson Marketing Insights. Marina started her career at Procter & Gamble Mexico and later worked in Brazil and the United States. She was responsible for leading consumer research for a variety of home care and personal care products across the globe. She spearheaded the use of semiotics at P&G through a model of Hispanic acculturation and led the validation of the advertising testing methodology among Hispanics, which is still used to this day at P&G. Marina complemented her client-side experience by working at a consulting firm specializing in Hispanic research. Marina leverages her broad cultural experience and depth of knowledge of research methodologies and consumer behavior to help clients market their brands more effectively.