XChateau Wine Podcast

Deputy Editor of The Wine Advocate, William Kelley, who recently took over reviewing Bordeaux, as well as Burgundy and Champagne, amongst others, and former guest on E62 (Evolution of the Wine Critic) and E68 (Burgundy), takes a deep dive into the current state of Bordeaux in this two-part episode.  First, William tackles the history of Bordeaux and how it achieved greatness as one of the top wine regions globally to its recent decline relative to Burgundy.  

Detailed Show Notes: 

Bordeaux was William’s 1st love of wine, part of its charm being its everywhere and always accessible relative to Burgundy’s scarcity

The Rise of Bordeaux

• France’s most successful “commercial” wine - Bordeaux is a trading port city on the Atlantic, commerce is key to its identity
• Wine was mostly an export product vs Burgundy was drank mostly by nobility, was also harder to travel
• Robert Parker was a big supporter of Bordeaux vs. Burgundy, which was less of a focus

Bordeaux’s downfall

• Lost commercial influence over the past 20 years
• Conversation of wine has been around “terroir” and the Burgundian model
• Aggressive pricing (particularly of 2010 en primeur campaign) also drove away many traditional customers - many wines still not worth what they were sold for en primeur from the 2009 and 2010 vintage campaigns
• Worries that 2022 may have a similar fate

Bordeaux strategies

• Some are trying to replicate Bordeaux scarcity (produce less Grand Vin, more 2nd / 3rd wines) - the region/producer may be too big for this strategy to work
• Trying to copy other successful wine region styles (e.g., Napa, Super Tuscans; Int’l Sauvignon Blancs for whites)
• William believes the best path is to keep what’s unique about the region but improve quality to make wines more approachable (e.g., more precise block harvesting, canopy management, etc.)

There’s an overreliance on vintage for Bordeaux; many great wines are made in lesser vintages

Winemaking trends

• Since the 1982 vintage, new prosperity led chateaux to invest in new wineries, the focus was in the cellar
• Recently, the push has been for vineyard improvements, promoting soil health and rooting systems, canopy management, and rootstocks and clones, though these take generations to implement

Sales focus

• Salespeople in Bordeaux are not winemakers vs. Burgundy, where they are vignerons
• Critics often taste at negociants, not at wineries
• William was one of the 1st critics to walk the 1st growth vineyards in decades

La Place de Bordeaux

• Suitable for big chateaux w/ pre-existing reputations, not small ones
• Petite chateaux - struggling and hard to survive

M&A - can increase top chateaux production, especially of 2nd wines, where they can often get 2-3x the price of former wines

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Accidentally filling the big shoes of Michael Broadbent and Steven Spurrier, Jane Anson, wine critic, author of Inside Bordeaux, founder of janeanson.com, and former Bordeaux correspondent for Decanter for nearly 20 years, is one of the world's foremost experts on the wines, history, and region of Bordeaux. Having lived in Bordeaux since 2003, Jane shares her deep insights into how Bordeaux became as famous as it is, how the systems of La Place de Bordeaux and En Primeur work, and the complex terroir of the region. She gives us insight into the content of janeanson.com and how it will be a unique look into Bordeaux, focusing on the drinkability of the wines and many of the unique features to be released. 

Detailed Show Notes: 

Bordeaux Overview

• A port city far enough inland to be a safe port
• 12th century - duchy of the English crown, wines were sold in the London market
• The system of chateaux, merchants, and negociants was built for export
• Terroir is very complex (which may be why it's not talked about much), e.g., of the 61 wines in the 1855 Medoc classification, all of them are on 2 specific gravel terraces (#3 & 4) of the 6 terraces of the Medoc
• Mostly clay underneath with gravel on top
• Lots of micro terroirs
• St Emilion - has pure limestone, clay, and gravel

Issues that have hurt Bordeaux

• Every vintage is not great, though Bordelais often say that
• Frustrate people based on the prices they ask (e.g., 2009/2010 vintages - many people who bought lost money)

Advantages of La Place de Bordeaux

• Business to business, sell to merchants that sell to consumers
• Virtual marketplace - enables access to 10,000 clients globally
• Includes chateaux, brokers, and negociants
• Sells wine into every level of the food chain - has specialists for on-trade, off-trade, hotels, corner shops, supermarkets, etc.
• It doesn't build your brand but makes sure it gets everywhere
• Good at giving the illusion of scarcity
• Can use La Place for specific markets - La Place has expertise in the Asian markets (e.g., China, Vietnam, Japan)

Disadvantages of La Place de Bordeaux

• Creates a very competitive environment - low-end wines compete with each other
• It protects Bordeaux well, and merchants need to buy in bad years to get allocations in good years
• No direct contact with consumers for wineries
• Less effective for small guys that aren't established brands

Non-Bordeaux wines selling on La Place

• Gone from nothing to 60 wines 5 years ago to 90 wines in 2021
• Provides access to global markets - shows wines next to the great wines of Bordeaux
• Opus One - the 2nd non-Bordeaux wine on La Place (after Almaviva), has sold wines since 2004 and opened an office in Bordeaux.
• Barriers to joining La Place - need enough volume to get everywhere, need to do your own brand-building work, and meet customers
• The increase in overseas wines has hurt smaller Bordeaux estates -> negociants have limited budgets and drop them

En Primeur

• From the early 1980s, Parker injected excitement into the En Primeur system
• People used to make money, but now they are often better off waiting until wines are in bottle with certain exceptions (e.g., tiny production Pomerols)
• No longer has the same sense of urgency
• Tranche system - release a small amount of wine at one price, then release more later at higher prices
• non-Bordeaux wines price more consistently than Bordeaux wines
• Latour dropping out of en primeur, they wanted to store wines and release them when best for consumers
• Chateau Palmer - sells 50% en primeur, 50% 10 years later

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Checking in on how collectors are weathering current economic conditions, John Jackson (IG: attorneysomm; YouTube: attorneysomm) provides insight into the Dallas, Texas wine market.  From their wine clubs to how collectors learn about new wines and buy them, John delivers deep insight into the Dallas market as of May 2023.  John also details some of his journey on social media with Instagram and YouTube.

Detailed Show Notes: 

John’s background

• Attorneysomm on Instagram (27k followers) and YouTube (7,000+ subscribers)
• Dallas based collector, lawyer, WSET Diploma
• Cellar is ~2,000 bottles

Dallas Wine Clubs

• Like a country club for wine lovers
• Each club has ~100-125 members
• Annual dues (~$1,500-2,500/year) and must meet a minimum wine spend through the club’s retail
• Includes a wine locker (48 bottles), hosts winemaker and distributor tastings, sells wines through distributors and brokers wine collections
• Driven by TX wine laws - restaurants w/ full bars are not allowed to do corkage
• Graileys - more focused on celebrities and athletes now
• Roots and Water - John is a member, currently 2 locations
• 55 Seventy - opened 1-2 years ago

Collector demographics are becoming more female over time from heavily male

Dry January is relevant, but interest in wine is increasing

Regional buying focus

• Top 4 regions - Bordeaux, Champagne, Napa, Burgundy
• In John’s collection - he buys the most Champagne, but California is #1 in the cellar (due to large prior buying), with Bordeaux and Rhone next
• Spain and Italy are relevant but smaller
• Pichon Lalande is popular in Dallas - more expensive in Dallas than in other markets

Introductions to new wineries

• Primarily through club distributor tastings & winemaker visits
• Visits to wine regions (collectors go ~2-3x/year)
• Social media

Wine pricing

• Increases have made people more selective w/ purchasing; some have paused and drinking down cellar, waiting for pricing to come down
• Some prices are double what they were before, especially Burgundy
• Auction house reached out soliciting wine to sell, claiming the market is at all-time highs
• Price increases in bad vintages (e.g., 2017 & 2020 Napa) are negative buying signals

Wine buying

• From club - ~33%, mostly at distributor tastings
• Online sources - ~33%, for older bottles, back vintages (e.g., Benchmark wine); collectors drinking mostly ‘90s Bordeaux and earlier
• Winery direct - ~33%, for domestic wines, mostly mailing list/allocation systems, don’t like clubs b/c no control over what they receive; John was in ~15-16 mailing lists, now ~4-5); people culling their lists
• “Cellar Defenders” - wines to drink that protect wines in the cellar; e.g., Willamette Valley, Rioja (Lopez de Heredia), Châteauneuf du Pape (Pegau)
• Harder to get older wines than before (e.g., Champagne, Napa)

Social media

• Instagram - spends less time engaging and more preparing content; posts more high-end wines
• YouTube - active wine community, tends to be more value-focused, took a long time to reach critical mass (1st 3 months - 100 subscribers; +6 months to 1,000; 15 more months to 7,000); people want to know what wines to buy (e.g., Top 10 wines under $50)
• Influencers now need to be more proactive in finding opportunities vs. being actively approached during the pandemic

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Trained in chemistry and born blind, Hoby Wedler, an entrepreneur and sensory expert, has trained his palate to pick up aromas and nuances in wine more acutely than most.  Hoby describes how he does "Tasting in the Dark," which helps wineries connect with buyers and his thoughts on accessibility in the wine industry. 

Detailed Show Notes: 

Hoby's background

• Born blind, studied history and chemistry (Ph.D.)
• Francis Ford Coppola asked him to design a blindfolded wine experience, which became "Tasting in the Dark"
• Went into food & beverage, consulting on product development, comparative set tastings, and aligning wines with wine critics' palates

Tasting in the Dark structure

• Try to make people feel comfortable under blindfold
• Use eye masks to change attention away from sight
• Prime the aromatic vocabulary w/ samples of aromas found in wines
• Create memories through a truly blind tasting
• Most impactful for trade teams, distributors, buyers, and for higher-end wines w/ 3-tier distribution
• E.g., Coppola did tasting for Safeway Group (grocery w/ wine stewards) and saw a significant increase in sales at Safeways for 5+ years afterward

Reasons people buy wine

• Like the label
• Read about the wine
• Like the story, particularly for premium wines ($20+)
• Most consumers don't know what they're looking for
• Blind tasting helps imprint a story with the wine in people

2018 - Thomas Keller used Tasting in the Dark to train front-of-house staff to enable them to describe food and drinks better

Aligning w/critics' palates

• Mostly aligned on aromatics and mouthfeel, abv levels
• Wineries can adjust when to send certain wines to critics

Sometimes helps wineries w/ blending

Wine & accessibility

• Chapoutier is classic example w/ braille labels
• Accessible websites important
• QR Codes put in the same place can help bring people to accessible websites
• This can lead to unexpected benefits; e.g., wheelchair ramps were found to be useful to many more than those in wheelchairs

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Fueled by the pandemic, grocery stores have made significant investments in selling digitally, with wine being an essential growth category for online sales.  With estimates of ~$6B in wine sold through online grocery by 2025, Jessica Kogan, Chief Growth & Experience Officer of Vintage Wine Estates, gets into the trends, key success factors, and the opportunity that online grocery represents.  

Detailed Show Note: 

Vintage Wine Estates (Ticker: VWE)

• 11th largest wine holding company in the US
• 12 wineries, a couple of digitally native businesses, 12-15 lifestyle brands
• Heavy focus on DTC

Online grocery trends

• By 2025 - 22% of Americans will buy groceries online (i.e., anything not in-store and digitally enabled)
• Alcohol is the fastest growing segment for online grocery - by 2025 - $5.97B in wine online from <$1B in 2018 vs. $7.97B DTC from wineries in 2025
• Target saw 4x amount of alcohol when bought online vs. in-store purchases in 2021, most of which was wine
• Digital grocery brings up basket size and provides more flexibility for consumers (e.g., curbside pickup; Target provides lots of flexibility)
• ~50% digital is pickup, ~50% delivery today

Post-pandemic trends

• Wine DTC is seeing slower growth, but online grocery is continuing to grow
• Covid led to increased investment by grocery in online
• Grocery has goals of going beyond grocery into becoming a “lifestyle” store, e.g., leaning into wellness

Why consumers enjoy buying wine online

• Feel overwhelmed by the selection of in-store
• Like learning about the background and story of brands
• Often use phones in-store to learn more about brands
• Gen Z - born digitally, love stories & authenticity, committed to wellness - makes wine compete w/ RTD cocktails and hard seltzers
• Consumers are more open to taking risks on new brands online

Selling into grocery stores

• Believes in-store demo events are powerful
• Making the story accessible and easy (e.g., QR codes on labels) key

Selling in online grocery

• Uses Salsify (a “PIM” - product information manager) to publish info to grocery stores, allows producers to control data shown to consumers
• 94-95% of searches for wine are by varietal (or basic descriptors like red/white), not by brand
• Digital algorithms - can’t buy ads due to Tied House Laws, but can influence algorithms w/ customer reviews or customers saving products
• Using metadata to show up as recommended product vs. search displays helpful
• Being in the “above the fold” carousel of products where consumers don’t need to scroll down is vital for sales, as big as being on the end-cap in-store

Tips for brands for online grocery

• Have a website w/ e-commerce - helps understand the whole process
• Go w/ distributors to stores w/ digital info for products

Future trends for online grocery

• Virtual tastings will continue
• More information on wellness and wine
• Women to play an essential role in connecting w/ customers since most grocery buyers are women

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Grocery stores are one of the biggest sales channels for wine. Curtis Mann, Group Vice President of Alcohol of the Albertson’s Companies, gives us the inside scoop on buying trends, how to sell into Albertson’s, and the rise of the use of digital. Learn about the dynamics of the grocery wine market and what makes Albertson’s “locally great, nationally strong.”

Detailed Show Notes: 

Grocery as part of the wine market

• Multi-outlet wine market ~$12-13B / year
• Total wine market ~$60-70B / year (multi-outlet ~20% of the total market)

Albertson's Companies' wine overview

• ~25 different grocery brands, ~2,000 stores
• Wine is a key element of business - it drives sales and customer loyalty, some customers come to stores because of the wine selection
• Some stores have up to 3,000 wine SKUs
• Stores with more premium selections are correlated with location (high socio-economic demographics) vs. grocery store brand
• The focus is more on the “premium” price segment ($9+ based on IRI)
• Top brands - Barefoot, Kendall Jackson, up-and-coming brands - Butterl Josh, but wine is very diversified, big brands are still a small part of the market
• Premiumization helping imports, including New Zealand Sauvignon Blanc

Wine buying trends

• Consumers are called to authenticity - they want to know what’s in their wine, the appellation, sustainability, and organic
• Convenience - cans, seltzer, ready to drink 
• Premiumization - $10-20/bottle, $30-50/bottle, up to $100/bottle (e.g., high-end Bordeaux, Napa Cabernet) ranges all doing well, some categories accelerating with potential out-of-stocks

Wine customer demographics

• Gen X & Baby Boomers - still buying a lot (more in bulk and volume), but less than before
• Millennials are the new customers - buying more, less loyal to wine vs. other drinks, and have less expendable income; their preferences are different from Gen X and Baby Boomers
• To meet the changing demographics, Curtis looks forward 3-5 years to develop his shelf set/selections of wine

Promotions/discounting

• Limited brand loyalty in wine, customers often default to price
• Promotions are very important
• Need to work between price and product to optimize sales and not over-rely on price

Wine selection

• What does it mean to customers? Each wine must have a purpose vs. the other ~1,500 SKUs on the shelf
• Tagline - ‘locally great, nationally strong’; try to give local stores more voice (e.g., Portland stores have more Willamette Valley Pinot Noirs)
• Flagship Stores (e.g., Andronico’s, Pavilions) - higher-end, eclectic offerings
• Steps to sell into Alberston’s - have the 4 P’s put together - distribution network, pricing, product, and where you fit on the shelf
• Generally need to place wine 4-6 months in advance
• Needs a UPC code on the bottle

Private Label/“Own Brand” wines

• The goal is to provide the best price to value for customers
• The intent is to drive loyalty
• Not a dominant part of the business
• Trying to create wines that are a draw and get good scores
• Selection is built around education, the desire to learn about the wine category through own brands
• Suppliers have connections to maintain supply, which can help Own Brands overcome supply challenges (e.g., 2020 Napa, 2021 New Zealand)

Core elements of success for the grocery channel

• The selection keeps people in the store
• Relating the wine to the food in the store (food-wine pairing)
• E-commerce
• Convenience (e.g., ready to drinks)

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Being a celebrity helps and hinders the launch and selling elements of a wine venture. Kyle MacLachlan, an actor with a broad base of work from Twin Peaks to Sex & the City to The Flintstones, details his journey of starting Pursued by Bear (“PBB”) in Walla Walla, Washington and how he thinks about imbuing his personal brand with the wine brand. From getting approval for the brand name from Steve Martin to designing his newly launched tasting room, Kyle weaves his stories around how branding has worked for PBB. 

Detailed Show Notes: 

Kyle’s background - an actor, including Cooper from Twin Peaks, Sex & the City, Desperate Housewives, How I Met Your Mother, and one of his favorites is The Flintstones

• He just wrapped filming of Fallout for Amazon, based on the video game
• He grew up in Eastern Washington, always been a wine drinker over beer & spirits
• Met Ann Colgin & Doug Shafer in Napa and wanted to start a Napa brand in the late 1990s, but it was too expensive
• His wife pointed him to WA wine, met Eric Dunham looking for a WA Syrah for his wedding, and partnered in 2005 to launch Pursued by Bear

PBB

• ~3,000 cases, 5 wines
• PBB Cab Sauv (launched ‘05; ~500 cases) - was Cab, Syrah, Merlot blend, now Bordeaux blend
• Baby Bear Syrah (launched ‘08, ~300 cases)
• Rose (launched ‘15)
• Bear Cub (launched ‘16, ~1,000 cases) - an entry-level red blend
• Twin Bear - “prestige wine,” 100% Cabernet

Winery name

• He wanted it to speak to his ‘day job’ of acting and bring it back to the theater, a Shakespeare reference
• Refers to a stage direction in Winter’s Tale - “Exit, pursued by a bear”
• Steve Martin approved of the name, which solidified it

Kyle’s role at PBB

• Took over 100% ownership of the brand in 2016
• Very involved in the business, hands-on with operations (e.g., copywriting for labels) and parts of winemaking (e.g., blending trials)
• Dan Wampfler winemaker since 2008

Leveraging celebrity

• Has helped bring attention to wine (e.g., using personal social media), but most fans aren’t wine people
• Gotten more press than otherwise
• Some product placement (has been in the background of Desperate Housewives and How I Met Your Mother - like an “easter egg”)
• Tries to be an ambassador for WA State wines
• Made short videos during the pandemic - “Beary Tales”
• It is a hindrance at times as people think wines aren’t good
• Hollywood connections have not helped much - many aren’t big wine drinkers or collectors

Customer acquisition

• Most effective has been 1:1 hand selling
• Opening a tasting room in Walla Walla - April 2023
• Zoom tastings were effective at selling wine during the pandemic
• He wants people to feel they are on a journey w/ Kyle around PBB

Tasting room

• Designed to be comfortable - cork floors, oak tables, big bronze bear
• Located in Walla Walla downtown - a wine-tasting destination, mostly from WA, ID, OR, and Canada
• Very little acting memorabilia - a Twin Peaks bobblehead & mug
• Spring Release 2023 - will have 3 musicians playing music, walking around town
• Likes surprise and delight elements, has had discussions w/ an AR company about embedding elements, but hasn’t figured it out yet

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Educating students about wine is more about the “psychic paycheck” than the monetary one for Peter Marks, MW, partner and Vice President of the Napa Valley Wine Academy (“NVWA”), the leading provider of Wine & Spirit Education Trust (“WSET”) courses globally. Peter tells us about the different levels of the WSET (from Level 1 to Diploma), the full costs of wine education, and the benefits. He also discusses the innovations happening with online learning, including sending wine kits out with their courses and best practices for virtual seminars.

Detailed Show Notes: 

Being in wine education is more about the “psychic paycheck” - getting feedback from your customers and students

Napa Valley Wine Academy

• Founded in 2011, offering WSETbprograms
• Now the largest WSET provider in the world
• An Approved Program Provider (“APP”) for WSET - it’s like a franchise; NVWA buys materials, study packs, and exams from WSET; grading is done by WSET in London
• 65% of business in WSET, 35% in other wine programs
• Develop proprietary courses - e.g., Wine 101, Wine 201, Napa Valley Wine Expert, Oregon Wine Expert, and the Business of Wine (with Tim Hanni, MW)

WSET

• 4 levels, 1 through 4 (4 is called the Diploma)
• Levels 3 & 4 provide more understanding of the subjects
• The diploma includes the business of wine and is a precursor for the Master of Wine program
• Geared towards all aspects of the wine industry, very broad view vs. other programs (e.g., Court of Master Sommeliers is focused on restaurants/service, and Society of Wine Educators is focused on education)

Wine industry (or “trade”) participation in courses

• Level 1 - ~90% consumer, 10% trade
• Level 2 - ~75% consumer, 25% trade
• Level 3 - ~40% consumer, 60% trade
• Level 4 - ~10% consumer, 90% trade
• More consumers are coming into the program

The benefits of a wine education, the 3 C’s of the WSET

• Credential - showing your accomplishment
• Confidence - knowing the facts about wine, speaking with confidence
• Culture - participating in the culture of wine...the pay may be low, but being a part of the friendship and social aspects of the wine industry

~100,000 WSET students/year - now the “go to” wine education organization - it covers the entire industry and is global

Recent changes to the program - giving students what they want

• Launched a Sake program
• Split spirits from Wine for the Diploma
• Introducing Beer soon

Virtual classes

• Has always been an option - was called “self-study” and had to go in person to take exams
• Exams for L1 and L2 are now offered online; L3 and Diploma cannot be because they include tastings
• NVWA launched wine kits (wine samples re-bottled into small vials) for virtual classes - do virtual tastings with them; the wines are disguised to be blind
• Had to learn how to better engage students online - using breakout rooms, polls/quizzes, reducing seminar times to 1-2 hours, best practice is to engage with students every 3-5 minutes
• Do live webinars that are recorded
• Pricing is the same as in-person, but no travel costs

The cost of wine education

• Course fees, wine (for Diploma ~200-220 wines are recommended to know; wine can cost $500-2,000 for samples), travel
• Wine kits are included in course costs

Scholarships - NVWA has several partners for scholarships

• Wine Unify for L1-3
• Wine Access
• The Roots Fund
• John Hart (former NBA star) - for the BIPOC community

The return on wine education

• Constellation Brands paid bonuses for employees who passed WSET qualifications and also offered tuition reimbursement

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The hardest wine exam in the world, an elite community of >400 wine professionals, and learning how to engage with wine more. All those elements describe the Institute of Masters of Wine and the Master of Wine (“MW”) exam. MW Mark DeVere tells us how becoming an MW landed him a full-time job in Napa to all the rigors required to pass the MW exam. This a must-listen episode for those considering applying for the MW program or those who love learning about challenging wine exams.  

Detailed Show Notes: 

Institute of Masters of Wine (“IMW”) background

• Currently, 418 Masters of Wine, >490 have passed the exam over time
• It started in 1953 in London as London was the most globally focused wine trading hub in the world
• ~20 people sat the exam in 1953, with 6 passing; it was only open in the UK at that time
• The purpose was to measure who was a master of the overall wine trade
• 1st non-UK residents were Australians and Americans who went to the UK to work and sit the exams

Now a global institution - MWs in 30 countries, exams offered around the world (London, California, Australia), head office is still in London

• The mission of the IMW - is to promote excellence, interaction, and learning in the global wine trade
• Interaction through tastings and the MW symposium (held every 4 years)
• Excellence and learning through setting the MW exam
• Not an educational organization like the WSET

IMW vs. Court of Master Sommeliers (“CMS”)

• MS has a more laddered program (i.e., more levels before the master level)
• MW has no practical service element
• MS exam is oral, MW is all written
• The MW Study Program
• Goal: to help orient people to understand what the end goal is - to gain the depth and breadth of the challenge of the MW exam
• Need to know every step of the wine business, from the vineyard to wine landing on the table
• There are time limits for getting through the program now, ~5 years, with the goal of not getting people stuck in it

3 Stages

• Stage 1 - 1st orientation to the program, has the Stage 1 assessment - proving you can understand the issues, 12 wines blind, 1 set of theory essays
• Stage 2 - preparation for the MW exam, which is 3 x 2.25-hour blind tasting exams with 12 wines each, 5 x timed theory exams
• Stage 3 - research paper, developing something new for the world of wine

Pass Rate of the MW exam

• Used to say ~10% of people that sat the exam
• Hard to calculate a rate due to people who sit multiple times and can pass certain portions of the exam
• IMW is actively trying to increase the pass rate by making it more challenging to get in and sit the exam
• ~15-20% of people who enter the program actually complete it; ~75-100 are admitted to the program each year, and ~10-20 people become MWs each year
• The value of the program, if you don’t complete is learning how to understand the issues around wine better, engaging with wine differently, and building communication skills

More people are applying for the MW program, and it’s becoming a more global program

The IMW and diversity

• The exam is entirely blind, making it unable to discriminate via grading
• Conduct outreach to all parts of the world to generate a diverse pool of candidates
• ~150 female MWs today

Being an MW

• The title does carry some weight within the wine world
• It got Mark a permanent job at Mondavi after being hired for only a seasonal position
• Join a community of MWs, where giving back to the wine world is one of the core tenets

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There’s a lot of data hidden in a price…and a lot to consider by wineries when they set the price. During the Nov 2022 wine2wine conference in Verona, Italy, host Peter Yeung presented the five factors that price communicates for fine wine. Building off his research for Luxury Wine Marketing, Peter dives into the various messages embedded in a winery’s decision to set price. 

Detailed Show Notes: 

Wine2Wine presentation link

Defining fine and luxury wine

• Vs. commercial or mass market wines which are more substitutable
• For fine wine, the brand value is more than just the wine
• It has different consumers than commercial wines
• Different sales channels (e.g., specialty wine stores, higher-end restaurants, direct-to-consumer)

The fine wine consumer

• For mass-market wines - more women, lower price points
• For fine wine - older and male; however, more women buying fine wines

Fine wine pricing drivers

• Costs more to produce (land, labor, packaging)
• Higher willingness to pay from consumers
• Higher brand value makes the wines less substitutable - e.g., entry-level Champagne is ~$50/btl high-quality traditional method sparkling from the US can be ~$25/btl

What price communicates (for fine wine) - i.e., what a winery is communicating to consumers / the market with their price

• Value proposition to consumers - the offering a winery is giving their customers
• Expected quality - higher prices tend to be correlated with higher scores, including in the Luxury Wine Database of prices vs. Wine Spectator scores
• Brand reputation - getting a 100-point score can often make a wine trade for $300/btl; however, the many wines priced above that do so based on their brand value
• Relative quality - showing how a wine stacks w/in a winery’s portfolio or against other peer wines; the most expensive wine implies its the best
• Consumer willingness to pay - e.g., Liber Pater made an “original Bordeaux” wine from own-rooted vines, 500 bottles w/ the 2015 vintage, and ran a Dutch auction to set the price, a record 30,000 euros/btl

Price is more than one number; there are:

• Suggested Retail Price (set by winery)
• Average selling price (retail, restaurants)
• Secondary market

Secondary market price from trading through merchants (e.g., on Liv-Ex) or via auctions

• It gives wineries a sense of consumers’ willingness to pay
• Often small volume - not enough trading for true price discovery

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