Winter rains washed away 20% of the tourist business at Cambria's Fermentations gourmet food and wine shop this year, along with portions of Highway 1.
When the scenic route finally reopened last month, shop owners Leslie Gainer and Alex Meline were relieved but more determined than ever to find a way around the seasonal swings their stylish store suffers.
Sunny weekends and the summer months bring thousands of tourists to tiny Cambria, located halfway between Los Angeles and San Francisco and next to the rolling hills of the Central Coast wine country. But bad weather can dry up the tourist flow, and the frantic year-end holiday gift season isn't enough to make up for lost sales.
"Our goal is to expand our business way beyond the number of people who walk through our door," said Meline, chief financial officer of the 3 1/2-year-old company.
Fermentations sent out its first catalog last year and put up a Web site in December. Both ventures have paid for themselves, Meline noted, but there haven't been any sales fireworks. The retail shop still accounts for the lion's share of revenue: 89% of $388,000 last year. Mail orders, including those generated by the Web site, make up just 11%.
Gainer, president of the company, would like to see mail order increase to 50% as business continues to build. Corporate business and the entertainment industry are logical sources for new mail-order customers, she said.
Growing the business beyond the walls of the shop, located in a circa 1920s house on a street lined with art galleries, bed-and-breakfasts and some of the county's top restaurants, is key to the owners' goal of remaining in low-key Cambria.
A Southern California native and former public interest lawyer, Gainer considered, then discarded, Santa Monica's trendy Montana Avenue as the shop's location. "I wanted to change my life," Gainer said.
Meline, who was born in England and spent six years in France, had also moved to Cambria in search of a new life, after a stint as a software specialist for Digital Equipment Corp. in the Midwest.
Consultant Karen Gorrell, who made the four-hour trek to Cambria to visit the owners, understands the appeal of the remote but charming coastal town. In fact, she said, Fermentations' customers are buying a bit of that memory when they purchase the shop's local wines and regional gourmet goodies: chutneys, flavored grape-seed oils and vinegars. She encouraged the owners to stir that memory in the catalog and other customer communications.
A wine enthusiast, Gorrell said she was pleased with the quality and display of the champagne gift baskets, handblown goblets and wine-oriented gifts and accessories, as well as the wine-tasting bar in the store.
Food and wine gift shops may seem a dime a dozen--and some are also showing up on the Web--but Fermentations' product mix and the owners' passion for the business are enough to spark the interest of even a jaded gourmand, she said.
"They bring a tremendous knowledge about the wines they are pouring, which adds value to the customer and helps sales because you are romanced into the sale," said Gorrell, who spent 22 years in the food service industry before opening Ideation Foods, her Redondo Beach-based consulting company, in 1995.
To achieve their goals, the owners must tackle a handful of weaknesses, the consultant said. Most important, the company needs to move out of its relatively passive selling mode and upgrade its computer systems and database software to allow it to slice and dice its customer mailing list in much more useful ways, said Gorrell.
She'd also like to see the company raise its profile on the Internet--she had trouble finding the Web site but turned up at least one competitor--and take the design of its catalog and other customer communications to the next step.
Down the line, judicious development of new products will pique continued customer interest, said Gorrell, who spent 13 years in concept and product development and marketing at Sizzler International and Stuart Anderson's Black Angus.
To start, the company needs to develop a target customer profile. Quizzing current and past customers, and even the competition, will give the owners a list of customer characteristics. That profile should be used to screen all potential marketing strategies, customer communications and product choices, the consultant said.
Although the owners are eager to tap the corporate and entertainment worlds for new mail-order customers, Gorrell recommended they start with their existing list: the names of 10,000 customers who have been in the store and signed up to receive more information.
The "current customer list is a huge opportunity for increased sales," she said. Those names should be considered preferred customers and targeted for more than once-a-year catalog mailings, she said.
Gorrell suggested the owners create a series of promotional postcards, each featuring a picture of a different product, and mail one of the series to the preferred list four to six times a year. Valentine's Day, Mother's Day and Father's Day would be obvious times to remind customers of the shop's products, new and old. This strategy will be key to driving the mail-order business in off-peak seasons, the consultant said.
Gorrell also urged the owners to shake the dust off their existing gourmet food and wine club. Currently, a couple of dozen customers pay about $23 each month to receive a bottle of wine and a gourmet food item, along with related recipes and a newsletter from Fermentations. The venture is profitable, but sales aren't going anywhere.
In addition to promoting the club on one of the postcard mailings, Gorrell recommended the owners upgrade the quality of the monthly mailings by using better paper and a higher-quality printer. She also suggested the owners choose local gourmet foods to feature in the club mailings as part of a continual effort to remind customers of their Cambria experiences.
Gorrell suggested Fermentations offer four-month and six-month memberships, in addition to a full year. Members and other preferred customers targeted in the frequent buyer program should be coddled, offered access to new items before the general public and other extras, she said. These customers make up a high-quality mailing list, having already bought from the company and indicated their willingness to receive more information by volunteering their address.
To continue to feed that critical list, the owners might consider offering an incentive to employees for getting customers to sign up or offer incentives to the customers in the form of a weekly drawing for a gift, for example. As with any mailing list, it should be purged of inactive customers at least once a year.
Although the glossy, four-color catalog is filled with pictures of carefully arranged products, and obviously was not cheap to produce, Gorrell offered some suggestions to improve this critical selling tool.
"The catalog is well done, but they need to go a step further with it," Gorrell said. "It's what I call having the look of a leader."
Overall, the catalog doesn't evoke the emotion needed to sell luxury items and there isn't enough variety in the layout and the pictures, she said.
The pictures of the rosewood bottle stoppers, the classic French corkscrew collection and the gift baskets, for example, are too dark. Popular items, including the glassware, are not featured prominently. And although it accurately reflects the packaging, the beautiful bottles of oils and vinegars don't need to be displayed with their plastic stoppers tied on, she said.
If Fermentations re-shoots a few pages for the next catalog, she's convinced sales will reflect the effort. Once the company takes steps to move into a selling mode, the quality of its products will win customers in its target market, she said.
"There [are] a lot of romantic, positive emotions evoked by the lovely wines, the lovely food. It's all very high quality. What's not to like?" Gorrell said.
The owners already have taken some of the suggestions to heart, with good results. "We have been working a little differently with the marketing, and the numbers are starting to creep up," Meline said.
It will take extra effort to change the way they've been doing business, but it's worth the trouble to stay in Cambria, Gainer said.
"We are all capable of working very hard," Gainer said. "If you are going to do that, why not do it in a place you love?"
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
This Week's Company Make-Over
Name: Fermentations Inc.
Headquarters: Cambria, Calif.
Type of business: Gourmet food and wine shop and mail-order business
Status: Private corporation
Co-owners: Leslie Gainer and Alex Meline
Founded: January 1995
Start-up financing: $25,000 in savings
1997 sales: $388,000
Employees: One full-time, four part-time
Customers/clients: Retail customers account for 89% of sales; mail-order, 11%.
Main Business Problem
How to build sales beyond seasonal holiday and tourist business.
Expand mail-order business; attract more corporate and entertainment industry customers.
Develop a target-customer profile.
Move into active selling mode; start a frequent-buyer program.
Upgrade database to enable company to make better use of its mailing list.
Improve the look of catalog and other customer communications.
Boost Internet presence.
Meet the Consultant
Karen Gorrell, owner of Ideation Foods in Redondo Beach, specializes in concept and product development for the food service industry.