Winecast 66: Tim McNally and the airline-ization of the wine business

Tim McNally: Wine has copied the airline business — it’s not about selling the most seats, but raising prices and selling fewer seats to make more money

New Orleans’ Tim McNally is a radio host, a wine judge, and an award-winning author. As such, he has followed the wine business closely — and his analysis seems to be spot on. Wine, which once used to sell its product at all prices, is increasingly focused on selling its most expensive products to the detriment of everything else. In this, it has copied the airline business, which once tried to sell as many seats as possible at the lowest prices. Today, it sells fewer seats, but at higher prices and makes record profits when there isn’t a pandemic.

In other words, premiumization.

Tim and I have known each other for almost as long as I have been doing this, and I highly respect his opinion. We talked a lot about the airline comparison in the podcast, which is about 15 1/2 minutes long and takes up 12 megabytes — download or stream it here. Included in the discussion:

• The parallels between wine and the airlines are obvious, once you make the connection — both have focused on consolidation and cost cutting.

• The difference is that the airlines offer a more or less indispensable service. We can do without wine, and that seems to be the consumer reaction to premiumization

• Tim doesn’t see a solution to this, given the short-term profitability that premiumization offers.

• He is also pessimistic about finding a way to attract younger consumers to wine, noting that wine can be difficult to figure out and that the wine business, which has never much cared about educating its customers, isn’t much interested these days, either.

• And, of course, the first Mardi Gras in New Orleans in two years.