Archive for the ‘Wine Sales and Pricing’ Category

Why most wine is in heavy bottles with corks

Monday, February 3rd, 2014

jeff-smby Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)

I came across the following post by the Wine Curmudgeon:

Why don’t these wines have screwcaps? which can be found at http://winecurmudgeon.com/why-dont-these-wines-have-screwcaps/

The gist of the post is that there’s no good reason why wine isn’t bottled  in lightweight glass  and closed with a screwcap.

I’m going to answer this question  in a kind of roundabout way. I was having lunch a while back with one of our distributors. We got to talking about what it takes for a wine brand to be a success. This is how he ranked the most important factors:

1. Marketing budget

2. Packaging

3 (and a distant third at that). The quality of the wine in the bottle.

Closures and bottle style fall under the second, “packaging”, category.

The primary benefit of a screwcap  fits into category three, because it  pretty much eliminates corked wines.

Bottle weight also falls under the “packaging” category. Does a heavier bottle make the wine any better? Clearly not. In fact, does the heavier bottle have any benefit other than consumer appeal? Again the answer is no.

But if you’re a wine producer, it doesn’t make any difference how good your wine is if you can’t sell  it. And when it comes to selling wine, consumers don’t like screw caps and they don’t like lightweight bottles. You can talk about the environment all you want, or how great screwcaps are at finishing a bottle of wine. A lightweight bottle with a screwcap benefits you not at all unless somebody is willing to plunk down some cash for it.

I’ve been at this wine thing now for quite a while, and I have to admit that my view about what makes for a successful wine brand  has undertaken a 180° shift. I started off thinking that if you produced really good wine, as with the proverbial mousetrap, consumers would  beat a path to your door. I now realize that this was naïve in the extreme.

I don’t know if  our distributor is 100% correct in his view, but he might well be. He certainly far more  closer to the truth than I was starting out.

And, when you think about it for a minute, you can certainly see his point. If I’m out buying a bottle of wine in the supermarket or wine store, the chances are very good that most of the wine I pick up I’ve never tasted before. So that’s a strike against quality counting for a whole lot. Now that’s not totally fair, because I do tend to pick up  wines from producers that I’ve had good experiences with in the past. But I think I’m a lot more cognizant of producers than most consumers are. Many of my friends will comment that they tasted a  wine last week that they really liked, but  they’ve forgotten what it was. So lots of good putting a quality product in the bottle did for that producer.

I suspect the place where quality counts the most is on direct to consumer sales. At least if you’re selling to a local clientele (as opposed to tourists), I do think your repeat business is going to depend upon your buyers being happy with what they bought.  Not to mention that if the buyers are coming into your tasting room, if they don’t like what they’re tasting,  you are not going to make a sale. But when it comes to any sort of regional to national distribution, I think the quality of what’s in the bottle definitely takes a backseat to other factors.

If you doubt this, maybe you should take a good look at the products available the next time you’re in the wine section  of your super market. And ask yourself,  “By and large, is what I’m seeing in front of me reflective more of the quality of the producer or its marketing power?”

The decline of Bordeaux

Monday, January 27th, 2014

jeff-smby Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)

While going through my weekly reading of posts, I came across this one from Steve Heimoff:

For Bordeaux, selling to Millennials will be harder than it seems, which can be found at http://www.steveheimoff.com/index.php/2014/01/23/depends/

The gist of the post is that  Bordeaux is doing really well among the elder set, and not so well among the young.  Like the business model for any industry (with the possible exception of tobacco), it’s not so good when your main customer base is dying off. So Bordeaux finds itself in the sobering situation of being the premier wine in the world, but in decline.

So why is Bordeaux having such a hard time with the younger set? I have little doubt that, at least in part, it is, as Heimoff claims, that the elitist and pricey image of Bordeaux doesn’t  jive so well with the trendy and cutting edge.

But I have a simpler explanation which, I think, accounts for even more of the problem. Bordeaux just isn’t that good. By that, I don’t necessarily mean to say that Bordeaux is a bad wine, or, more accurately, most Bordeaux’s are bad  wines. Because most of them are not. And probably most of them are “good”  wines.

But most consumers factor in not just the quality of the wine but its price. Viewed in this way, Bordeaux doesn’t stack up that well.

Because, truth be told, there are tons of good wines in this world. Now those of you who are regular readers of this blog are probably aware that Bordeaux is not my favorite wine. But, I have to acknowledge, that like all assessments of wine, that’s my personal and very subjective opinion. I may find them, by and large, to be fruit challenged,  and endowed more with the tight green tannins  than the soft round ones that I prefer.

Bordeaux has done an excellent marketing job. It has taken what should be a negative, the need to put the  wines down for extended periods before they are drinkable, into a positive, making “being age worthy” a big plus.

But even  if you grant that the quality of Bordeaux is, by and large, pretty good, it’s hard to make the argument that a $100 bottle of Bordeaux is twice as good as a $50 bottle of wine from many other wine regions throughout the world. In fact, I think if you  pitted those $50 bottles of wine against $100 bottles of Bordeaux in a blind tasting, you would find the Bordeaux doesn’t rate any higher. I wouldn’t be surprised if in fact the Bordeaux rated  lower. After all, when you’re buying Bordeaux, in large measure your paying for the name, and not what’s in the  bottle.

There is no doubt that many name brands  have managed to survive and charge what, by all objective standards, is a price higher than their products warrant. Think Tiffany, Mercedes-Benz, Louis Vuitton. You get the idea. But there are  always newer competitors coming to market (think Lexus), which can provide a product of equivalent quality for less. The name brands survive, but market share suffers. At least Bordeaux does not have that problem, since its market share is pretty much set and pretty small.  But, then again, it’s customer base is pretty small as well.

But to a certain extent it’s fighting an uphill battle in a marketplace where consumers that are not impressed by its brand (i.e. younger consumers) are simply not going to be willing to pay the premium that Bordeaux seeks (and maybe even needs) to extract.

Cheap Pinot revisited

Monday, December 30th, 2013

jeff-smby Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)

I’ve often complained how difficult it was to get a decent Pinot Noir at a reasonable price. If you willing to plunk down $30-40 (which to my way of thinking is an unreasonable price) you could get a pretty good Pinot, but anything less and you were getting mediocrity.

I’ve been in Southern California for the last few weeks for the holidays, lodging with relatives in Palos Verdes. It’s kind of a clan, diverse in many ways, but not when it comes to wine. Pinot Noir is it. Maybe start off with a white in the late afternoon, but quickly move on to Pinot Noir. We guzzle it down from late afternoon to the wee hours of the morning (though I’m usually not around for the finale).

And I would have to say, based upon my recent experience, the days when you had to pay a pretty penny for a decent Pinot Noir are over.

And I’m going to name names. The first reasonably priced Pinot was a Trader Joe’s house brand Reserve Carneros 2012 for $12.99. I thought this was as good as most $30 Pinots. For what it’s worth, my wife didn’t agree with me on that one, thought she did agree that for $12.99 it was pretty good.

The Trader Joe’s Reserve Russian River Valley 2012 also came highly recommended by the staff, but I wasn’t nearly as impressed by this one. But, as they say, “individual results may vary”.

Last night we opened up a Bridlewood Pinot Noir (don’t remember the year) that we picked up at the local Ralph’s. Ralph’s is running a 30% off for 6 bottles or more, and that brought the price down to about $10. This Pinot Noir was excellent, if anything better than the Trader Joe’s. The Trader Joe’s was a little heftier, without being at all out of balance (as many bigger Pinot Noirs are these days). The Bridlewood was lighter in style, but well endowed with acid, a must as far as I’m concerned with Pinot Noir.

We did have several other more expensive Pinot Noirs which provided a good frame of reference. One was a 2011 Fess Parker Bien Nacido. I tried to find a price online but didn’t succeed, though I am sure it was more in the $30-50 range. I would have to grant that this was the best of the Pinot Noirs we’ve tasted. Was it head and shoulders better than the cheaper competition? I would have to say yes to the shoulders part, but not to the head part. It was noticeably better, but not miles apart either.

And I should also give an honorable mention to a Mirassou Pinot Noir, though I don’t remember the vintage. It’s primary duty was to marinade a Beef Burgundy, but I did taste it and it was really quite good. Not in the same category as the Trader Joe’s or the Bridlewood, but certainly something I could’ve drunk with pleasure without batting an eye. And it was the cheapest of the bunch as well–I want to say it was in the $7-$8 range.

We had two other Pinots whose names I won’t mention. They were in the ethereal realm price-wise, and they were seriously wanting. One had some strange off scent that I couldn’t figure out what it was but it made it for me undrinkable. The other was in the newer Pinot Noir on steroids style that for some reason has become popular. Pinot Noir with prunes and raisins. I find that bad enough in a Zinfandel—in a Pinot Noir it is outright heresy, not to mention outright gross.

So based upon this very limited sample, on average I think the cheaper Pinots outperformed the more expensive ones, thought the standout, the Fess Parker, was in the more expensive category.  But while the best of the bunch fell in the more expensive realm, so did the worst.

I have to admit I’ve always wondered about Pinot Noir pricing. Pinot Noir requires cooler temperatures and therefore lower yields to be varietally appropriate. Vinification is also somewhat more difficult. But when you crunch the numbers, neither factor would justify the huge difference in price between a perfectly good Merlot and an equally good Pinot Noir that has thus far prevailed. So it always seemed like you should be able to acquire perfectly enjoyable Pinot Noirs for $10-15, and it now seems that that day has finally arrived.

Beauty is in the eye of the beholder

Monday, June 10th, 2013

by Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)

jeff-sm A few weeks ago I was a judge at a blind tasting of 89 rosés from California, a subject of a recent post.

Saturday was the public event that followed on to the tasting, and it took place somewhat as scheduled at the Meritage Resort in Napa.  I think the plan had been to have it outside in the courtyard, but it was moved indoors, wisely in my view, since it was a real scorcher of a day.

I’m always curious whether my reaction to the winning wines will be pretty much the same as when I picked them.  And I’m happy to say that they were.  All of the gold award winners at the event were truly excellent wines, at least in my opinion.

That said, it was hard not to be impressed with the spectrum of reactions of others to the wines.  My wife loved one of the wines, one that I wasn’t that blown away by.  It was a very good wine, to be sure, but clearly inferior to others at the tasting, at least in my view.

I clearly preferred one of the wines over all the others.  My wife dismissed it out of hand.  Too acidic.

What about the racy perfumed nose?  What about the purity of the fruit?  Didn’t matter.  Too acidic.

I have to admit that my tastes when it comes to acidity aren’t middle of the road.  I like acidity.  I like a whole bunch of acidity.  So what many (including my wife) find to be just too much, too over the top, doesn’t faze me in the least.  That wine did win the overall competition, so it obviously didn’t faze the other judges either.  But it clearly fazed my wife and, I’m sure, many others.

I’d like to say that I’m right, and those who disagree with me are wrong.  But that just isn’t the case.  No one would insist that their preference of apples over oranges is the “right” preference, and that those who prefer oranges have it all screwed up.  But when it comes to wine there’s still this belief that wines can be judged objectively.  Except for flaws (and even this is the subject of a lot of disagreement), there is nothing approaching objective assessment of quality.  It’s all in the eye of the beholder (or more accurately the nose of the beholder).

Which, of course, means that my favorite of the tasting is not necessarily going to be yours.  In fact, it’s pretty unlikely that it will be.  So what is the value to you of my assessment?

The simple answer is “not much”.  There’s a complex answer, but it’s really just BS.    But millions of dollars in sales turn on some judge’s assessment of a wine as being a little better or a little worse.  Never mind that that judge’s assessment may (and probably is) irrelevant to how much you’ll like the wine.

This strikes me as a pretty dumb state of affairs.  But it is the state of affairs, dumb or not.  And I don’t see any reason to think it’s going to change.

More red tape (but maybe not that much more)

Monday, April 1st, 2013

by Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)

jeff-smAs we try to open our winery and tasting room, I think (maybe) we are heading into the home stretch, at least as far as getting the necessary applications in is concerned.

I spend a decent amount of time dealing with real estate investment, and I’m always blown away how for every transaction you seem to end up with something between Moby Dick and War and Peace once you have added up all the documents that you need to sign to buy or sell a property.

But the real estate business can’t hold a candle to the wine business. If buying a property means having to deal with a Moby Dick of paperwork, trying to start a winery seems like something equivalent to the entire corpus of 19th-century American literature. I used to consider myself a winemaker. Now I think of myself as a professional paper pusher.

But maybe it’s coming to an end. Then again, maybe I’m just fantasizing that because if I truly believe that this paper pushing frenzy was going to go on and on, I think I might shoot myself.

I am not, by nature, anti regulation. I think there are lots of things that you can’t just allow people to do willy-nilly without any supervision.

But as I’ve worked my way through this process, I can’t help but feel that things have gotten out of hand. Each requirement makes sense when you look at it narrowly; however, when you add them all together, it becomes an overwhelming challenge to comply with every one of them. So the exercise becomes one of dotting i’s and crossing t’s.

What increases the problem exponentially is the fact that you’re dealing with a number of jurisdictions. There’s no one place you can go, fulfill their requirements, and walk out with the right to open winery. Have you complied with the federal requirements? That’s good, but don’t forget the state. Covered that too? Well, don’t forget the county. But it’s not just the “County”. It’s planning, it’s building and safety, it’s health.

The latest form I had to fill out required that I designate the location and size of the various functions of the winery. Where are we going to crush? Press? Store barrels? Store finished wine? For each of those, how large is the area going to be.

I have a ready answer to each of those: how the hell should I know? When we get in, we’ll try putting the tanks one place, and if that doesn’t work, we’ll put them someplace else. I think I know where we’ll put the crusher, but maybe it’ll turn out that that’s too far from the electrical outlet, or something.

Of course, putting: “how the hell should I know?” on the form doesn’t cut the mustard. So I made my best stab at it, and hopefully I’ll end up not being too wrong.

I guess the saving grace to all this is that while they are big on requirements, enforcement is virtually nonexistent. I am quite sure that if enforcement were even half assed, the wine business, as we know it, would cease to exist.

At any rate, it looks like we will be ready to submit to the Feds, the state of California, and Solano County all within the next week. I have to admit I’m keeping my fingers crossed on that, though.

After that, I am sure everything will just sale through, and we’ll be up and running shortly. Maybe that’s a fantasy, but it keeps me going.