Deloitte’s sommelier of business services and solutions

This article originally appeared in the Silicon Valley Business Journal.

In the 30 years since that sip of Gattinara (a red wine from Italy’s Piedmont region), Juergens’ wine journey has taken him to vineyards and tasting rooms all over theworld. His mission is to make wine interesting, fun, and accessible.

Over the years he tried many different wines and became—or so he thought—knowledgeable. But in 2012, he realized his understanding of wine was rudimentaryafter watching a documentary about four men’s quests to become master sommeliers.

"I watched it with my girlfriend, and at the end of it, I turned to her and said, ‘I’m doing that," Juergens recalled. "She said, ‘no you’re not,’ and I said `watch me." Thenext day, he signed up for a local sommelier class.

"I got a bunch of books and a whole bunch of wine, and I spent every free minute for the next 30 days studying," he said.

But he wasn’t the typical student sommelier. That first class had about 125 people, and Juergens was the only one not involved in the wine business. He finished thetest before anyone else and assumed he failed.

"I was done, and nobody else was, and they all do this for a living," Juergens said. "I figured that was that. I learned a lot, and I had a really good time, but I guess thissommelier thing is not for me."

Turned out, he had the highest score in the class. The instructor encouraged him to take the second-level exam the next day. He passed that, too.

As a newly minted sommelier, Juergens wanted to go to the next level, but most sommelier training was designed for service in restaurants, which didn’t interest him. That’s when someone recommended the Masters of Wine program. It focuses on a broader view of wine knowledge, including the business of wine, rather than serving and presenting. But Juergens lacked the wine industry work experience that was required for the program.

When he received the application, he didn’t fill it out.

"Instead, I wrote an essay arguing why they should let me in," he said. "What I didn’t know at the time was that the Masters of Wine program expects you to take astand on specific wines, and then argue why you’re right."

He got accepted, and soon found himself in a program with master winemakers, winery owners, wine writers and industry luminaries from around the world.Juergens’ classmates, who had spent years studying wine, didn’t take him seriously — after all, he was taking the class for fun and spent his spare time drumming in apunk rock band. But at the end of the first year, he was the only one in his study group to pass the Stage 1 exam.

By then, he’d realized something about his classmates. They knew wine, but most of them had no background in business.

Juergens joined Deloitte in 1996 and became a principal in 2002, focusing on advising Fortune 500 companies on technology risk. While holding several leadershiproles within the Risk & Financial Advisory business, Juergens came up with an idea to combine Deloitte’s broad service capabilities with his passion for wine. Herealized that if Deloitte consolidated the services it offered to wineries, “we could be the biggest wine consulting business anywhere. This in turn would provide morefocus and critical mass to allow us to serve winery clients even more effectively,” he said. This idea combined his passion and his profession and would go on tocompletely reset his career trajectory.

Deloitte’s Winery Solutions & Services practice is unique. Most large professional services organizations haven’t focused on the industry because it’s not large orgrowing as rapidly as industries such as tech, and there aren’t many billion-dollar wineries. In addition, most wineries are private companies that have few of theregulatory requirements that businesses most often hire consultants for, and some simply prefer to keep most of those business matters in-house.

"The wine industry is pretty insular in the sense that you have to have credibility," Juergens said. "Winery owners and managers want professional advisors whodeeply understand the nuances of the wine industry."

Juergens notes that wine consumers and culture are changing rapidly, spurred in part by the COVID-19 pandemic, thereby creating new challenges for wineriesincluding:

• The rise of Direct to Consumer (DTC). As on-premise channels shut down, the importance of strong DTC channels and systems became more critical. Mostwineries that had robust systems and processes flourished, while many of those that didn’t, floundered or perished.
  
• Changing consumer buying habits. Many leading edge wineries are moving beyond a wine club and creating omnichannel customer experiences, often using technology to link wine clubs, tasting rooms, eCommerce, social media, and digital marketing to meet the demands of evolving customer preferences.
• Technology solutions. Effective DTC requires robust technology solutions. But without strong internal technology solutions for back-office processes, such as enterprise resource planning, vineyard management, winemaking and customer management, wineries may lack the transparency and precision of data needed to effectively support business operations in the new business world, as well as hybrid work environments.
• Environmental, Social and Corporate Governance (ESG). Proposed regulatory disclosures for ESG are certainly on the forefront of most public companies’ minds. Wineries tend to face more practical issues like water utilization, and customer demand for organic farming practices and sustainability, and information on the carbon footprint for shipping glass and liquids.
• Need for innovation. What, where, and how wine is bought is changing in the face of new norms and preferences. Successful wineries should think about new and inclusive innovation to capitalize on this proliferation of tastes.

The wine industry appears to be at a tipping point that could lead to more consolidation and expansion into adjacent industries such as distilleries and flavored malt beverages.

Technology is expected to redefine the relationship between wineries and their customers.

"We’re seeing the rise of what I call, virtual wine," Juergens said. "These are companies that would describe themselves as tech companies, not wine companies. Theyjust happen to be selling wine using technology."

These companies use a variety of business models, from advanced algorithms to curate wine selections, complex technical subscription models, loyalty programs,and outsourced production models.

In addition to new sales models, technology such as QR codes could let buyers see where grapes came from and when they were harvested. And non-fungible tokenscould be used to verify the authenticity and provenance of rare bottles. Customers could even display NFTs for the wines they own on social media pages, creating avirtual wine cellar of sorts. The metaverse is expected to play a role as well, offering virtual tasting rooms, integrated with a customer’s club membership account.

Alignment with evolving social values is becoming more important, with diversity and inclusion playing a larger role, allowing rapid growth for niche-targeted winebrands.

The wine industry is becoming more global, in part because climate change is opening new regions to winemaking, even as it changes the wine that’s produced inexisting areas.

"Climate change could have a big impact on the styles of wine," Juergens said.

Historic wine producing regions, such as Champagne or Bordeaux, face significant headwinds. Some champagne producers are adapting by reaching further afield,purchasing land in cooler regions like England (which creates interesting branding issues). Bordeaux is moving in a different direction, by now allowing new grapevarieties that may adapt better to changing temperatures.¹

"We might see this potential dilution in historic regions and the expansion of emerging regions like England," Juergens said.

Traditional winemaking regions with limited climate diversity may have difficulty adapting. Those with more variation in temperature or elevation could have more options.

As for Juergens, he still enjoys traveling the world tasting and learning about wine. He’s excited about one trip in particular: during the pandemic he received aninvitation from the mayor of Gattinara, Italy, who read the story of how Juergens’ love of wine began with that 1975 bottle in the garage. He told Juergens the townwanted to throw a party in Juergens’ honor and celebrate the town’s winemaking history.

"So, I’ve got a standing offer to go to Gattinara in Italy," he said. This time, he’ll probably drink from a glass.

¹ https://wineindustryadvisor.com/2021/01/26/bordeaux-introduce-six-grape-varieties