It’s a cool buzzword when it comes to businesses of all types. In general, businesses use benchmarking as a way to discover the best performance that’s being achieved.
This week I’d like to focus for a moment on how we’re seeing it used in the wine industry in particular. Naturally, we’re curious about the ways that data can be harnessed in order to measure the best possible performance for wine businesses.
Let’s say your business is a winery. Think about benchmarking your winery in three concentric circles.
Innermost Core: Benchmarking Against Yourself
Here’s where you get your feet wet, both with data and with benchmarking. You want to gather enough data from current and previous years in order to provide the context for what you want to measure. This also establishes the baseline against which you’re measuring for the future. We see this most often in an operational or financial context.
Second Circle Outward: Benchmarking Against Your Peers
The idea here is to gather the same sets of data from a group of peers, or “frame of reference” wineries. That data is de-identified, so that no one’s proprietary information is exposed and no winery suffers a competitive disadvantage.
“Frame of reference” wineries for you may be other cabernet sauvignon producers, say, or it may be other wineries that are also members of your regional trade association. Rather than any one winery trying to go it alone as you determine decisions that range from pricing to the viticultural impact of climate change, benchmarking against your peers in an anonymized way reduces individual risk while also providing measurable standards in relation to your direct peers.
Outermost Circle: Benchmarking in a Global Perspective
By “global” here, we mean zooming out to something more general, like other wines within your price point, say, or other white wines or other wines from your entire state or even your country.
You can see how useful it would be to have the ten thousand foot view of Bordeaux-style blends, for example, in the top ten markets in the past five to seven years; even more useful could be that ten thousand foot view segmented according to the performance of Bordeaux-style blends from California compared to similar wines from France or Chile.
Does that make sense?
Our experience tells us that most wineries have what you need right now for the core concentric circle, to benchmark against yourself and start measuring performance for success.
If that’s something you’re already doing, then first, good for you. And second, consider stepping on to the second circle, or beyond. Managing your business performance with data-backed strategy has a significantly greater chance of success. We’re here to help that happen.
Thank you for reading and I look forward, as always, to your thoughts –