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Tag Archives: wine business

The Wine Curmudgeon does the Grape Collective interview

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Wine Curmudgeon Grape CollectiveJameson Fink of the Grape Collective, an especially popular wine website, asked some terrific questions as part of their regular feature, called SpeakEasy. This gave me a chance to offer several insights into the wine business and wine writing. More than a few people may be annoyed at my answers, but that’s their problem. If we don’t stick up for ourselves as wine drinkers, who will?

The interview is here. A few highlights:

• “I talk to consumers all the time, and they’re scared to death of wine. They apologize for not knowing more or for drinking something that might offend me. In what other consumer good does that happen? Does someone apologize to their dinner guests for serving Maxwell House coffee?”

• Asked what wines offer the best value, I suggested Gascony, Sicily, rose, and cava. Not shocking to regular visitors here, of course, but I never pass up a chance to spread the good news. I have a feeling the Grape Collective’s demographic may not be exactly the same as mine.

• “Winespeak (and I got an email about this other day from a consumer complaining about exactly this) scares everyone else off. What can it possibly mean to someone in a grocery store that a $12 wine has notes of beeswax, other than to make them run in terror?”

My 10 favorite food- and wine- related places in Dallas, which doesn’t include most of the things other people would recommend. Which says a lot about Dallas, actually. And what does it say about me that two of my choices don’t have websites?

• Question: “What’s changed in the world of wine blogging since you started in 2007?” Answer: “Fewer quality blogs, more snarkiness and bitterness among those who did not become rich and famous because they thought they should, and less professionalism. … Wine writing is the best job in the world, and I don’t understand why so many of us, both online and in print, have such chips on our shoulders.”

Treasury Wine Estate’s plan to avoid a hostile takeover

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Treasury hostile takeoverThe Wine Curmudgeon mentions Treasury’s scheme for two reasons. First, and most importantly, it doesn’t seem very sustainable. The troubled Australian multi-national wine company, whose holdings include California’s Beringer, has been losing more millions than most of us have socks.

Yet, despite its problems, Treasury wants to boost business to fend off a hostile takeover from private equity firm Kohlberg Kravis Roberts, which tried to buy Treasury earlier this year and made another offer this week. The second offer was a little higher, but probably won’t scare anyone.

Treasury’s anti-takeover plan features selling heavily discounted wine refrigerators to customers in Australia. The Brisbane Times newspaper reports that the company’s new boss “labelled the wine cabinet promotion the biggest consumer-facing promotion ever undertaken by the company.” Which should tell us all we need to know about Treasury’s lack of marketing ability.

How does it work? Buy six bottles of a Penfolds Bin wine, which cost from AU$30 to AU$80 a bottle, and you can buy a AU$650 wine fridge for AU$200. In other words, buy six bottles of AU$30 Penfolds Bin 51 Eden Valley riesling and the refrigerator and pay AU$380 — just 58 percent of what the refrigerator would cost by itself. Given retail discounting, in fact, you could probably get the fridge for at least 50 percent off. Is it any wonder that Treasury wrote down AU$260 million earlier this year and fired its CEO?

The second reason I mention this? The Wine Curmudgeon, financial genius that he is, bought 100 shares of Treasury stock in hopes KKR (as we high-flying investment types call Kohlberg Kravis Roberts) would make another, much higher offer for Treasury. My retirement to Burgundy never seemed so close.

I paid about what KKR offered the first time, so news that Treasury seems to be throwing away money on the refrigerator promotion is not welcome. The company is reducing inventory and margins to increase cash flow, which will not boost its value or make me rich. KKR’s second, not much higher, offer confirmed this.

In the wine business, the old joke always seems to apply. Or, as one actual real-life financial type told me: “With a little luck, you might get a nice bottle of wine out of this.”

Why wineries change their label design

winetrends

wine label designMostly, because they can. That’s one of the conclusions of an article I wrote for the Beverage Media trade magazine, trying to figure out why so many producers seem to be changing the look and design of their labels. Because, given the changes in the wine business, with more and bigger companies controlling more brands, it’s going to happen more often.

Or, as one retailer told me: “Sometimes I wonder why they need to fix something that isn’t broken.”

And, though the article was written for retailers, it has lessons for consumers as well. Ever go into a store, look for your favorite wine in its regular place with its regular label, and not see it? Chances are it’s still there; it just has a different label. Don’t laugh. Retailers told me this happens all the time.

So what’s going on with all the re-labeling?

• It’s difficult to get a firm grasp on how often this happens. Brands that have changed labels over the past several years include Blackstone, Columbia Crest, La Vieille Ferme, Jacobs Creek, Columbia Winery, Cuvaison, Hahn, Parducci, and Langhe Twins.

• Producers, facing a need to make their product stand out among what may be 15,000 different wines in the U.S., are more willing to change the label than ever before. In addition, they know more about this kind of marketing, and will spend the money to do it where they may have been reluctant before.

• Consumers aren’t always the primary target for label changes. Producers sometimes do it to impress distributors and retailers, to reassure them that they care about the brand and will put marketing dollars behind it. This is completely different from every other consumer packaged good, and we have the three-tier system to thank for it.

• Most label changes aren’t complete makeovers, although that seems to be happening more often. Usually, the changes are tweaks to reinforce the brand’s image, and are only noticeable over time.

• Once-popular wines that aren’t anymore are the most likely to get a new label. Also, producers aren’t shy about changing labels on popular brands, if they see a chance to keep the current audience, which may be older, and attract a new, younger one.

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