Entrepreneur Report – Henry Olson – 8 Bells Winery

I’ve lived within a literal stones throw from an urban winery for the past three years. Despite my proximity, it took me a good six months to realize it even existed. Eight Bells Urban Winery is based in a cramped little warehouse. It isn’t necessarily small but it certainly feels that way as you stand next to a forklift while barrels of future vintages tower over you. The winery is run by three retired sailors who have been making wine together the last five years but whom hold almost 90 years of combined experience.

The winery is unlike any other I have seen. Their nautical theme is more a collection of personal memories strewn across the walls. The certificates of their passages through the Antarctic or across the equator shine down and grant an air of authenticity. There is no frilliness to this place. They have positioned themselves beautifully by displaying their qualifications and asking the customer to trust them. The odd part is how well it works. Despite this rough sounding exterior, Frank, Tim, and Andy make some amazing and moderately expensive bottles of wine. The cheapest bottles come in at ~$20 while the more expensive will top $50. At the few restaurants they let sell their wine, the prices triple. The authenticity the owners and winery exude keeps their clients coming back for more, forming a valuable brand loyalty in a market saturated with “new and exciting”. It is important to note that this authentic theme works well because of who the owners are. Perhaps the best lesson is that each company can sell best in a particular way and that one of the keys to success is to find your strengths and capitalize on them.

I suppose in some ways their business model is similar to others. They enjoy selling directly to the consumer, forgoing a distributor in favor of remaining small and stable. Their weekly wine tasting is where they do the majority of their business. In the age of rapid growth, I asked them why they wouldn’t want a distributor helping them sell. They have been receiving numerous awards, including USA Todays “Top 10 Urban Wineries”, and top ratings for their individual bottles. Franks answer boiled down to personal and professional positioning. Eight Bells Winery could expand. They could follow Red Hook Breweries example and move out to a larger facility in Woodinville. Frank, Tim, and Andy could hire on help and begin mass producing their wine. And if they moved and changed, both the original community market and positioning would be gone. Every business ties together both human and corporation positioning. The pure business reasons for not expanding are few but the personal reasons are enough to convince the Eight Bells owners to stay. The community business model and authentic positioning are profitable enough and give the owners the freedom to keep experimenting.

As the interview is winding down, and the wine tasting is ramping up, I am about to ask Frank where they got their first customers. The answer becomes fairly obvious as I ask and Franks answer confirms it. By making a consumable, they were able to give free sample to their personal networks. The barrier to experimentation by the consumer is very low and the experience enjoyable. Their first customers are actually part of the exclusive Plank Owners Club. Each member was acquired through a free sample tasting and agreed to fund a portion of the original large batch of grapes for the first commercial vintage. In return, each member was given a substantial lifetime discount and early access to the new wines.

Eight Bells has built itself up in a similar way from its first customer to its most recent. They make a great product. They give some away and sell the rest. Their target market is loyal to their brand and they are happy with their position in the market. They may still decide to grow into a major producer one day and if so they will face the challenges of maintaining their identity while growing their market but for now they seem to have found a great balance.

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