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Tag Archives: wine trends

Big Wine and crowdsourcing

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Big wine crowdsourcingColumbia Crest is owned by Ste. Michelle Wine Estates, part of a one-half billion dollar company. La Crema is part of Jackson Family Wines, also a one-half billion dollar company. So why is each using a form of crowdsourcing, letting its customers make key winemaking decisions for one of its wines?

Because it’s not enough to make piles of money in the wine business anymore. You also have to be seen as local and accessible, and these multi-nationals (the eighth- and ninth-biggest producers in the U.S.) see crowdsourcing as the way to make them cuddly and artisan-like. Ask your customers for their advice about making wine, and how can they — and the rest of the wine world — not love you?

The Wine Curmudgeon can’t decide if this is incredible marketing or one of the most cynical things I’ve ever seen in the wine business, where cynical things are a dime a dozen. On the one hand, it’s a clever use for social media, which big companies have a hard time doing well. There aren’t too many opportunities for cute pet pictures on a multi-national Facebook page. And the crowdsourcing is certainly no scam — the companies have been honest and upfront about what’s going on.

On the other hand, it could be malarkey to make P.T. Barnum proud. Columbia Crest is making 1,000 cases of high-end cabernet sauvignon from its effort, not much when you consider its annual production is almost 2 million cases and it normally does 5,000 of this particular wine. La Crema churns out almost 1 million cases a year; it hasn’t announced how much the project will produce. First its crowd has to decide between chardonnay and pinot noir.

Plus, given the odds that each crowd could decide to make really crappy wine even with the best of intentions, how much input will it really have? Yes, each company says its winemaker will do exactly as instructed, but given how little most of us know about winemaking and how complicated it is, what are the chances of that happening? Because Columbia Crest and La Crema could turn into the wine industry’s version of New Coke if the wine turns out to be undrinkable, and one doesn’t get to be one of the 10 biggest producers in the U.S. by doing a New Coke.

There is one thing I am thankful for, crowdsoucing veteran that I am. At least the companies didn’t ask for cash to help pay for production, which is the most typical use for crowdsourcing — Kickstarter, Indiegogo, and the like. That would have been too much to deal with, even for the Wine Curmudgeon.

Why grocery stores love wine

winetrends

grocery store wine salesBecause they sell so much of it — and a lot more than most of us realize. Hence the reason for the Great Wall of Wine.

Wine was the seventh biggest category by dollar amount for supermarkets in the 52 weeks ending June 15, recording $6.9 billion in sales. That’s up 3.7 percent from the same period a year ago, and works out to an average of $9.27 a bottle. The figures come from a study by the IRI marketing consultancy and published in the Supermarket News trade magazine.

How impressive are those numbers?

• They don’t include wine sales in New York or Pennsylvania, two huge markets that don’t allow supermarkets to sell wine. Yet, even without those two states, grocers account for about 20 percent of U.S. wine sales.

• They don’t include wine sales at Target, Walmart, and Costco. Throw those in, and that 20 percent total should increase by more than a few points.

• Wine was bigger than a host of established items, including cereal, coffee, bottled water, cookies, and soup. Some of that was because wine is more expensive; we bought three times more cans of soup than bottles of wine. Even so, it’s an impressive total, given the restrictions on wine sales. In Texas, for example, we can buy soup as long as the store is open, but we can’t buy wine on Sunday until noon.

• Wine’s growth was bigger than soft drinks, which lost 3.9 percent, as well as cereal (down 4.3 percent), ice cream (down 0.3 percent), frozen pizza (unchanged), and toilet paper (-0.2 percent). I can’t even pretend to make sense of that. Since when did we need wine more than toilet paper?

These numbers, more than anything else, explain why there is so much opposition to supermarket wine sales in the 19 states where it’s still prohibited. We’re not buying jug wine at the grocery store. That $9 average price means we’re buying many of the same wines we’d buy at wine shops and liquor stores, and small retailers don’t want the competition.

The irony is that, as has been noted on the blog, small retailers may prosper competing with grocers, since they offer something supermarkets can’t — someone to answer questions. The Great Wall of Wine has nothing to do with service.

Photo courtesy of Houston Press food blog, using a Creative Commons license

Why wineries change their label design

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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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