Terry post:It would have been five, or so, years ago when a winery rep showed up at the door at Restaurant 213. She was rep'ing a mid-sized winery located in the beautiful rolling hills West of Baltimore and brought along twelve different wines.
We tasted them all and chose not to add any to our wine list as none were sufficiently interesting and they were pricey given the quality of the product.
I was thinking about this wine rep's visit this past weekend as I visited my brother in Iowa. He'll shortly be taking on rep duties for a Iowa winery and I was sharing my thoughts on the matter.
Forbes magazine recently carried a short article regarding a telephone conversation between Steve Jobs (Apple CEO) and Mark Parker (Nike CEO) in 2006 regarding quality. According to the article, Mr. Jobs recommendation to Mr. Parker was quite succinct: "...you also make a lot of crap. Just get rid of the crappy stuff and focus on the good stuff".
It sounds like common sense advice: do what you do well and get rid of the stuff you don't do well. But, how many of us would be willing to discard a large portion of our product line to focus on a few select items.
As a good comparison take a look at the web site for Apple and then Nokia and search for their phones. Both Apple and Nokia sell smart phones but it is evident that Apple follows Mr. Jobs advice to focus on the good stuff. The Nokia site is complicated and once you get to the telephone section you'll note that there are twenty-two phones to choose from. Apple has one phone, their best product, the iPhone 4.
Now how does this apply to the wine business? In my wine tastings it is far too common to see ten, twelve or even more wines being produced at a single winery: this is the equivalent of Nokia providing twenty-two cell phones.
It takes guts to reduce the size of any business portfolio be it consumer electronics or wine. When Mr. Jobs returned to Apple, the company had more than 300 different products. Today you could place the entire Apple product line on a small dining room table.
Apple's elimination of low margin products allowed the company to focus on their core competency of innovation and design.
It is inconceivable that small capitalized wineries have the time, expertise and experience to field a wide portfolio of offerings and that over-reach results in underperformance. The Apple model of concentrating on a small portfolio, executed well seems to provide the best example for the small winery.
Perhaps, just perhaps, small wineries could benefit from Mr. Jobs advice and, "Just get rid of the crappy stuff and focus on the good stuff".
~ Terry
Source: "Steve Jobs: Stop Making the Crappy Stuff", Forbes Magazine, May 16 2011
