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Tag Archives: wine marketing

Winebits 401: Randall Grahm crowdfunding, grape diseases, craft wine

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crowdfunding• Crowdfunding success: Randall Grahm, the Bonny Doon impresario, raised $167,857 in his crowdfunding attempt to develop 10,000 new grape varieties, beating the $150,000 goal. Which isn’t quite the same thing as the Wine Curmudgeon being named editor of the Wine Spectator with a mandate to eliminate scores, but is close enough. Most crowdfunding projects fail, and it’s even more difficult for projects that aren’t tech related (as Grahm and I discussed here) to reach their goal. That he did it speaks to the passion surrounding wine and Grahm’s skill at getting out the vote. And then there is this — how can one not appreciate a Salinger allusion?

The end of Pierce’s Disease? Next to phylloxera, which almost destroyed the French wine industry a century ago, Pierce’s Disease is probably the most dangerous threat to the wine business. It’s spread by insects which inject bacteria into the vine, and the bacteria blocks water from going through the plant, which kills it. There’s no cure or treatment, and the only preventative is pesticide, which brings its own problems. Now, though, Texas researchers may have found a solution, using a combination of viruses injected into the vine to kill the bacteria. Much work still needs to be done, say researchers, but this is among the most promising developments in fighting Pierce’s in decades.

It’s all about the adjective: Our recent discussion about craft wine brings this, from the Harris survey people, about how consumers react to terms like craft and artisan. The survey found that almost six in 10 think handcrafted or handmade “strongly or somewhat communicates that a product is high quality.” Artisan and artisanal and custom are next at 46 percent, while craft is at 44 percent. The most interesting part? That save for handcrafted, most of us recognize these terms for what they are — marketing jargon with no real meaning.

Winebits 388: The world hates expensive wine

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expensive wineThe cyber-ether has been full of vitriol for expensive wine over the past month, so much so that even the Wine Curmudgeon has wondered what’s going on. Some of these posts make me seem like a “bring on the $100 samples” member of the Winestream Media:

Damn you, Napa cabernet: Something called Vox Observatory, which is part of the company that owns the chi-chi Eater food site and the SB Nation sports blogs, posted a video called “Expensive wine is for suckers.” The results? Not only is expensive wine overpriced, but many of the tasters said they liked the way the cheap wine tasted better than they liked the way the expensive wine tasted. One even went so far as to say that she was glad she had cheap wine taste. I wonder: Would Eater have run a similar post, citing the cheap and simple qualities of grocery store tomatoes over $15 organic, heirloom tomatoes? Of course not. This post speaks directly to the cliches the wine business and the Winestream Media reinforce about wine, and how their approach intimidates people who aren’t wine drinkers.

Grocery store cheap wine: The cheapest offers the best value, according to a study done among British supermarkets. Almost two-thirds of the wines sold at Lidl and Aldi, known for their low prices, were called a good value; at least half the wine at six other chains was judged a poor value; and three-quarters of the wine at the bottom grocer was called a poor value. This is an amazing result, and not just because so much wine in grocery stores is so ordinary. It speaks to the concept of premiumization, and that producers and retailers aren’t giving us better wine when we pay more money, but the same wine in better packaging and with more expensive marketing.

The placebo effect: Think your pricey wine tastes better than the cheap wine I drink? That may be because you want it to, says a study in the Journal of Marketing Research. Says the report: “Expectations truly influence neurobiological responses,” and there are even brain scans to prove it. Again, not a surprising result, and especially for those of us who have spent our professional careers trying to educate people on the differences between cheap and expensive wine.

Wine prices in 2015: Stealth increases

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wine prices in 2015Wine prices in 2015 for the wine that most of us drink will do what they’ve done the past decade or so, which isn’t much. The exception will be wine that costs $20 or more, where there could be substantial price increases — as much as one-quarter to one-third, according to one distributor.

That’s because producers remain leery of raising prices for wine that costs less than $15, worried that those of whose drink those wines will switch rather than pay more. That’s the consensus from the experts who follow and work in the wine business that I talked to this week.

Hence the producer strategy for wine prices in 2015: Stealth increases — introducing new brands as well as new varietals and blends within existing brands to get us to trade up to a $15 bottle from $10, or to an $18 bottle from $15. In this, the people I talked to used terms like “sneaky” and “surreptitious” to describe the strategy. Not surprisingly, these new brands will have clever names, cute labels, and demographically-inspired marketing. How does “perfect for the woman who enjoys an active, healthy lifestyle but also seeks time to relax and rejuvenate” sound?

One retailer, who works for a 100-plus store chain, said he is already seeing this, particularly from Big Wine. His concern is that this approach could confuse consumers and ultimately backfire, and “prove damaging to the existing brands from whence they spawned.” In addition, despite the industry’s firm belief that consumers trade up, there has never been any evidence that it happens. We may splurge with a more expensive wine, but we tend to buy the same priced wine more often than not.

In this, you can forget all the foolishness over the past several years about grape shortages. The past three California harvests were the three biggest ever; combined with the on-going grape glut in Australia and a bumper New Zealand harvest, that more than makes up for shortages elsewhere. Plus, reduced demand from a poor economy and changing lifestyles means European producers need to keep prices low to compete in the U.S.

So there are lots of grapes available to do new labels. Said one consultant: “The number of ‘instant successes’ from new brands, concepts, regions. or varieties should make retailers and wholesalers more open to new and unusual wines. It might be easier to introduce a new wine at $10-15 with a good story than to raise an established brand’s price from $10 to $12 these days.”

The one exception for wine prices in 2015 is for wine that costs $20 and more, which is still struggling to regain pre-recession prices and market share.

“The perception is that the economy is doing well, gas prices are down, and there is more disposable income in folk’s pockets,” said the distributor. “The suppliers want to reach into that pocket and get some while the time is ripe. I think there are going to be more price increases than I would have originally thought.”

In all, good news, and it’s remarkable how wine prices are still about where they were a decade — or even two decades — ago. There’s just one caveat: I’m not the only one who has a sneaking suspicion that quality will suffer as producers keep the line on prices, letting their $10 wines suffer in favor of the new brands and new labels. But I’ll be around to call them on that next year.

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