Is bigger really better?

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

jeff-smDo bigger wineries make better wines than smaller ones?  In a post on Fermentation, “With Wine, Bigger May Be Better—Or Preferable” (http://fermentationwineblog.com/2012/11/with-wine-bigger-may-be-better-or-preferable/), the CEO of one of the largest wine companies makes the case that they do.

Certainly, there’s a case there to be made.  Bigger wineries can invest in more equipment, have access to more grapes, etc. etc.  They can spend hundreds of thousands of dollars on one piece of equipment, more than a small winery’s entire equipment budget.

And I certainly wouldn’t claim that big wineries can’t make good wine, as many certainly do.  J. Lohr and Beringer jump to mind.

But despite all that, my overall impression is that smaller wineries do make better wine, on average, despite the more limited resources they have available to them.

Why that is is difficult to pin down, but I do have some thoughts (maybe just speculations?) on the subject.

First and foremost, I think it’s important to recognize what makes a wine brand successful.  Lots of things go into the equation, and the quality of what’s in the bottle is just one of them.  Marketing and packaging count at least as much, and probably more.  Muscle in the distribution network certainly counts for a huge amount of what makes a winery successful, and big wineries have that, and small wineries don’t.  When Gallo releases a new product, they don’t have to beg for shelf space–they simply demand and get it.

So if you’re a big winery, it may be, as a simply business proposition, that your efforts are more profitably directed at aspects of your brand other than the quality of what’s in the bottle.

No doubt, small wineries want to make money (or at least break even).  But I do think that small wineries have a real commitment to trying to turn out a really good product.  They don’t always succeed, but by and large they try.  And, as they saying, “showing up” is a big part of what counts.

Another factor that I think gives smaller wineries an advantage is that its really hard to maintain a high level of quality when you’re churning out really large quantities of wine.  A small winery can pick and choose where it sources its grapes.  A large winery can’t cherry pick to the same extent.

I also think that the consumer has a lot to do with it.  There’s a lot of wine out there that’s really kind of a commodity product—relatively nondescript, very price sensitive.  This is a part of the market that the big winery is going to go after—in fact, it’s its bread and butter.  For this market, a consistent, inoffensive wine is critical. A wine that’s crystal clear, consistent, and without anything anyone could possible be put off by, is the key to success.  Mediocrity, in short, is more important than complex and exciting.

Certainly, the factors that, at a small winery, can cause the quality to be higher, are not by definition absent at a large winery.  A larger winery can aspire to the same things as a smaller winery can.  And, if it does, it certainly has the resources to do the job well, even in light of the limitations that size imposes.

But if, as a large winery, you’re successful at the bottom line, your motivation may be to do more of the same old same old, rather than aspire to doing something special.  I do believe that most large wineries just don’t see investing in making a more interesting, complex product as being a good economic decision.  And they might be right.

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One Response to “Is bigger really better?”

  1. Jeff, agree to your point, that bigger is not always better. But in your large para you mention that they need to try and experiment, the problem here is they cant risk their brand equity. One bad press can affect their image and current sales. For example if a wine has been getting 90 and above points on shiraz, its very hard for them to make shiraz cab merlot (a blend) of the same label and go our aggressively to market if it gets 80 points. So most of the times, they prefer a new label or a concept. Its the same winery but they innovate with other labels for different juice. And yes bottom line still has to be watched as all your moves can affect that. Normally I would say if a brand has created an image (a good one) - it should seek growth by new markets and penetration. But if a wine is still new and their main brand is not a big hit, they need to experiment and launch more skus to get more shelf space to grow.

    Some times, it goes beyond making a good wine - the problem is retailers don’t want to hand sell…they want to sell whats selling.

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