Many wineries are currently struggling to survive. But how winegrowers and their families are faring is rarely publicised. Consultant François-Michel Albrecht knows what questions they should be asking themselves right now.
François-Michel Albrecht is an expert in new and innovative business models at wine community and the development of new sales channels. In his personal consultation, he develops step-by-step solutions for recognising and overcoming problems. The "winegrower mentor" also helps to make the current business more successful and profitable.
Known in earlier years as the "battery-powered pruning shears expert", Albrecht has founded two companies in the past two decades and has collected over 7,000 winemaker contacts in German-speaking countries. He gives many lectures, has extensive international trade fair experience and maintains a premium network that extends far beyond the wine industry.
Mr Albrecht, what do you do for a living?
Albrecht: I understand winegrowers.
Can't everyone do that?
Albrecht: You have to know the industry very well. As a consultant to a winery, it's not enough to have a few accounting tips in stock. Viticulture is a complicated mixture of agriculture, business management, marketing, and the winemaker's ego. This becomes particularly difficult when business is not going well.
How do you recognise when a business is in trouble?
Albrecht: The patterns are similar. The winegrower is already overworked in his everyday life due to his excessive workload, but he always does more. Important tasks fall by the wayside, such as bookkeeping and taxes. That is understandable. Winegrowers are craftsmen, decisions about bottling and marketing are often made on instinct. Many don't even know how much they earn from a bottle. But if they fall behind with payments and tax returns, things get tight. But they simply plough on, not least to suppress what they should be tackling.
That sounds like a family winery.
Albrecht: That's the typical constellation. Several generations often work in the business. While the business environment is changing rapidly, the young should learn from the old. Pure bulk wine businesses, for example, will disappear in the medium term. Sad, but true. When the pension is not enough to live on, the old often don't stop working—and make decisions based more on life experience than on business knowledge.
What should the affected winegrower do first?
Albrecht: It's the same as with anything in life: you have to scrutinise everything that has worked. First of all, get out of the trap of thinking: "If I do more, I'll have more." The first step is to develop an awareness for change. Because many people look for the blame outside first. It often falls on the tax advisor. But in the family working environment, people have known each other for a long time...
...and some things are not openly discussed.
Albrecht: That's how it is. With tax advisors, you always think you have a good one—until you find a better one. However, it is currently becoming increasingly difficult to find good tax experts who are still accepting mandates, even in the growing regions. This is taking its toll, especially when it comes to larger expenses. If the expansion of the winery is to be financed with an EU subsidy, but the application contains an error, you don't get money. However, this may only become apparent years later. This is usually when the roof starts to leak and there are not enough reserves for a new one. Now the savings bank clerk is no help either, even though you have known him for many years. He only makes decisions based on figures. In the end, the winegrower has to realise that it's up to him. If you don't know your figures, even the best tax consultant won't help you.
When things stop working: Many winegrowers work even harder to suppress the problems.
123rfHow do winegrowers find you?
Albrecht: First of all, the winegrower wants to know who I am. He will also have to lay his cards on the table in terms of his economic and emotional situation. These personal experiences are painful. Later, we have personal discussions on site. Nothing is left out. The classic scenario: before taking over the business, the daughter or son books our advice. But the senior boss isn't there—and in the evening at the kitchen table he doesn't want to know anything about it. But everyone has to be involved.
Do you sometimes feel like a counsellor?
Albrecht: That's why I call myself a mentor. The winemaker has to open up and decide to make a change. After that, the fundamental question quickly arises: is it all still worth it? Wineries have often been in family hands for generations. This is different from a job change for a bus driver or an accountant. Many people ask themselves: What else can I do when I'm no longer a winemaker?
Can you understand this situation?
Albrecht: Oh yes. I myself come from a family business for agricultural tools. It went well for a long time until the market changed. As joint owners, my brother and I couldn't agree on a new strategy. Typical family behaviour, you see the mistakes of others but not your own. In the end, I gave up. Today I realise that it was the best decision of my life.
What happens after your initial discussions at the winery?
Albrecht: For winegrowers who come to me, digital accounting is often a big step forward. We do an in-depth analysis together, visualising strengths and weaknesses as well as opportunities and risks. We then focus on ideas that will make money. The first problem is often that the product range is too large. It takes time to streamline this, because the grape varieties are in stock. This is where the winegrower has to take action. The business also needs to be restructured, and staff management is an important factor here. I divide the team from A to C. The C employees do what they've always done, don't want to improve and stop the others from doing their work.
That sounds harsh.
Albrecht: But it's the reality. In one case, a winery had opened a hotel next door. An employee from the sales department was supposed to help and made mistakes with the software, which cost a lot of money. But she didn't care. Serious discussions followed. The result was a team in which everyone knew exactly what their tasks were and also had the success of the entire business in mind.
Marketing is still missing.
Albrecht: You can no longer sell bad wines. Winegrowers often think that making good wine is enough to be successful. But nowadays you have to find your customers yourself.
That is becoming increasingly difficult.
Albrecht: For many winegrowers, selling at trade fairs is like travelling to an unknown country. Even renowned wineries set up their stand completely unprepared—and are surprised that everyone walks past. Small winegrowers are also often terrified of price increases and don't know where to place themselves. You have to know your target group. A top winemaker's rosé for 49.90 euros is not questioned. Young winemakers often want to export. Of course, travelling to other countries is tempting. However, this costs far more than just the plane ticket. Room hire, restaurants, sampling and more quickly put the brakes on the initial euphoria. My advice in such cases is to gain experience in your own country first.
Are there companies that you can't help?
Albrecht: Yes. One winegrower simply didn't want us to help him. He knew about his problems, the bank, the dwindling sales. We spoke on the phone again and again. He said he wanted to work with us, but couldn't afford it. I told him: "You can't afford not to do it." He remained paralysed by fear. But that only leads to more suffering. I can't do anything about winegrowers who are already bankrupt. I'm not an insolvency administrator. But for everyone else: it's never too late—but it's always high time.