1 Wine Dude

Slumming It: The New (Old) Wine Strategy

Posted on by 1WineDude

Meet the New Boss

Same as the Old Boss

– Pete Townshend, Won’t Get Fooled Again

I get a lot of wine samples (and no, I have not yet properly pimped out my wine storage to accommodate them all).  I know that many of you (because you’ve told me) hate it when I say that, because supposedly this is some sort of wonderful problem to have.  However, that position is based on two assumptions that generally are totally wrong:

  1. The wine samples are primarily for my enjoyment.
  2. The wine samples are primarily very good wine (or, alternatively, the wine samples primary purpose is to keep me intoxicated).

The fact of the matter is that neither are true (the samples are for evaluation and most of them are not ‘knock-yer-socks-off’ good), so I don’t buy the argument that I’m a dick for discussing issues I might have with keeping up with wine samples (I could buy alternative arguments for why I’m a dick, however).  I’m not going to complain if a winery producing limited amounts of excellent wine sends me a sample or two, because I know that most of you (because you told me) want me to write about those wines.  But, in reflection of the wine market in general, those ‘special’ wines reflect maybe 2% of the samples sent to me.

I’m telling you this because, if my sample profile is any indication, the wine market is focusing on budget/value, and targeting the general wine consumer using low price points.  Common sense would suggest that, in this time of economic meltdown challenge, the focus on producing budget wine is a logical new development in the wine market.

Logical conclusion, but wrong…

it’s wrong because it’s not new.

The wine market has been driven by the common-denominator quality level (in terms of being affordable to the ‘working class’) for centuries – it just gets more attention when the chips are down.  The nice thing about the wine industry now vs. 250 years ago is that the quality of the common-denominator level has never been as good, which suggests that the industry will weather this economic storm and be stronger for it in the long run.

There have been few really surprising developments for wine as a result of the global recession, actually.  One of them is that Bordeaux finally realized that it needs promotion and engagement with on-line social networking. But that’s for budget Bordeaux – if the big boys of the Left and Right bank participate in that, I’ll eat my hat.

You can cite numerous examples of wine industry developments in response to the recent economic downturn that seem extreme, but only in comparison to the high-flying `90s; when you compare them to hundreds of years of wine history, your reaction would be less “OMG!” and more “yaaaaaaawwwwwwwwnnnnnnnnnnnn.”

By way of example, let’s take a look at 90+ Cellars.

Here’s the skinny on what 90+ is all about, taken directly from their website:

“We are taking advantage of the current economic conditions and purchasing high quality and highly rated finished wines direct from wineries at a discount and passing the savings on to our customers. Our primary selection criteria for wine opportunities is not just price and availability – the wines we purchase must have a pedigree of 90 or higher ratings, best buy or gold medal accolades from major publications.  Other companies that offer this concept are usually buying the winery’s excess or distressed wine that they cannot sell on their own for pennies on the dollar. We are buying the winery’s best and most highly rated finished wine, which they would normally sell under their own label. Wineries are willing to sell to us because they either produced more than they need or sales may have slowed down. The wineries in return are promised complete anonymity, which we take very seriously.”

In summary: buy juice from wineries that they can’t sell and rebrand it so that those producers don’t lose face (a.k.a., lower prices).

A novel idea? maybe when applied to wine. But what does it tell us about the wine industry? That the producers are greedy and don’t want to lower their prices?  Not really.

It tells us that producers think the issues plaguing the wine industry due to the current economic situation are temporary.

And if you check into your wine history, you’d probably come to the same conclusion.

Cheers!

(images: timeinc.net)

17 thoughts on “Slumming It: The New (Old) Wine Strategy”

  1. Hey Dude, don't forget the hundreds of new brands that suddenly appeared because of the DUMP of bulk wine that has entered the US in the last 9 months. Everyone decided that since quality wine wasn't moving, and everything under $10 was flying off the shelves, that they could make a quick buck by bottling the stuff brought over in giant plastic tanks and putting a friendly label on it. Then they wanted to get some cred behind it, so they send a bottle out to every blogger there is, not to say you aren't really important in my google reader ;-).

    Moral of the story, if you found a bottle you liked under $10, don't switch for something new and shiny.

  2. You had me at your quote from 'The Who' – Usually I only read 1/2 of what most people write, but the first two posts I read of yours have made me an instant fan!

    P.S. if you ever want to send over any of your samples, I'll gladly add them to my rack

    Josh
    http://www.drinknectar.com
    @nectarwine

  3. The 'premium' winery I work at will not lower their prices because they have an image to maintain, they do not want to look desperate (actually they are not desperate, only the 1st quarter earnings were soft). Indeed, our next release is going up $1 per bottle!

  4. res 90+: Parker himself considers wine above 70 drinkable, and in many cases interesting. He is not, as I understand him, a devotee of only drinking wine 90+, let alone 95+, as are a number of his fans. I suspect the strategy of drinking only the highest rated wine is detrimental to the whole concept of good wine. So you are not going to drink from the winery down the road from your house because it only scores an 85? This does not speak well of the neighbor, nor his taste. For myself I feel a certain obligation to pay more attention to my more expensive wine, my everyday stuff I drink while I am reading (like this blog), eating a dinner where what I cooked is more the star than the wine, or zpaying attention to guests and their conversation. And I cannot imagine being so much the boor that one cannot serve the '82' wine that a friend might serve you.

  7. The points message that I've always given is that they don't help unless you already know that your tastes tend towards those of the person scoring the points. Ignoring lower-rated wines is a total mistake.

    But for wineries, those points mean real money and so I suspect that the ability to offload some juice that can't be sold, in a way that protects their brand anonymity, is appealing to them…

  8. Store brands, anyone? I think it's a smart alternative for wineries worried they'll lose their perceived quality in trying to make ends meet.

  9. Yes, you are 100% correct. Wine producers have to think about the issues as well. If the price of wine is too cheap, people would much thought, if the price of wine remains as now. So the shadow of the wine remains a high-class beverages.

  10. um, I got some issues/questions…

    OK, so they're bottling 90+ point juice. I'm not clear on just what they are taking. Is it juice in the barrel that is a wine product that has scored 90+ points in prior vintages? Or is it juice in the barrel from one of those very select few wineries that has been tasted and rated in barrel tastings? If the latter, well then good luck to them. But I suspect it is the former…

    So, they're probably getting juice that is in barrels, and e.g. the cab from that vineyard got 90+ scores before. Who's to say that this particular vintage is up to snuff? And was it really finished to the same standards?

    Also, regarding anonymity… if I were to sell some of my "The Spaniard" Tempranillo blend that has never scored less than 90 points in its history to these folks (which I won't), maintaining anonymity would be a challenge…

    1. I like how you got the high point scoring Spaniard plug in there… ;-)

      In terms of any details about how 90+ Cellars delivers on their business plan promises… you'll have to ask them!

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