Welcome to the terrors of ultra-premiumization

Is ultra-premiumization – where wine becomes a luxury and not something to drink everyday – the next logical step in the evolution of the wine business?

This is the second of two parts looking at premiumization’s grip on the wine business. Today, Part II: Is ultra-premiumization the next logical – and terrifying – step? Part I: Higher prices are strangling wine to death, so that we may have lost a generation of wine drinkers

My in-basket has been overflowing with the news, updates, and offers: A startup has raised $1 million to compete with Liv Ex, the wine stock exchange. A cellar management app will now offer wine investment advice, since “investment-grade fine wine has performed very strongly against most major asset classes.” A wine consultancy, meanwhile, has formed a limited edition wine club, which will only sell “one of a kind” wines in small numbers. And how about luxury wine glasses, which start at $34 each? Or the $5,000 Napa wine trip?

These days, it seems, hardly anyone sends me a news release about a wine or wine product that most of us can afford.

And why should they? Wine has embraced premiumization for a decade, targeting more expensive wine, more expensive wine products, and the affluent consumers who can afford them. Which raises a most terrifying question: Is ultra-premiumization the next logical step in this process?

I hope not. And I know that my email is a small sample size, with all that means about predicting what’s next for wine. One wine writer’s spam does not a trend make.

But I’m reminded of a couple of predictions that wine economist Mike Veseth has made: First, what he calls juice box wine, in which mega-producers will make cabernet sauvignon not from one region or even one state, but from different countries, just like juice is made. A carton of orange juice often lists two or three or more countries of origin. So why not cabernet from California, Chile, and eastern Europe, in which economies of scale and mass production give us the wine equivalent of juice boxes – both in price and quality?

Second, that wine will become like opera – too expensive and too pretentious for most people to appreciate, even if they wanted to. Opera was popular entertainment in Mozart’s time; today, it’s barely a blip on the cultural register.

These two forecasts offer a glimpse of ultra-premiumization: Juice box wine for those of us who still care about wine, and wine as opera for the one percent, complete with expensive glasses, wine investment advice, and one-of-a-kind wine clubs. Yes, there are still hundreds and hundreds of inexpensive wines, but they’re owned by a handful of companies. And these companies have the technical and supply chain expertise to turn those products into juice box wine while focusing on their most expensive wines. Is it a coincidence that those producers have been investing heavily in brands costing $20 or more over the past several years?

Again, I write this not because I’m certain it will happen, but because it seems ever more possible as the wine business continues to push aside the ordinary wine drinker in favor of the more affluent. My job is to warn those of us love wine about the possibility.

Photo: alevision.co on Unsplash