Stanford GSB

Stanford GSB

Monday, February 29, 2016

The “De-Parkerization” of the Bordeaux wine

Robert Parker is by far the best-known wine critic in the world, who has announced that he would no longer taste Bordeaux en primeur earlier last year. Mr. Parker said that, after more than three decades of reviewing en primeur, he is not retiring but will hand over en primeur tasting responsibilities to British reviewer Neal Martin, while still covering the region’s wines from bottle. 

Before that, Parker rated both en primeur and bottled wines in Bordeaux. En primeur are marketed in spring following the harvest, 18 months before bottling. For most people, it is difficult to taste these wines and, even if invited to these early tastings, it is difficult to judge these unfinished wines. Thus, there is a huge uncertainty regarding the final quality of each wine. Hence, people heavily rely on the expertise of wine critics to know which wine to purchase en primeur. Parker’s ratings, therefore, have a direct impact on demand and thereby on release prices

Ever since his absolute reputation and powerful influence built by betting on Bordeaux 1982 vintage, which was panned by other wine critics at that time, Parker has covered nearly every vintage from Bordeaux and made undeniable impact on both its supply and demand in market, which is called “Parkerization” by Wikipedia, including the modification of winemaking process, the style preference, the price, etc. His 100-point rating system also challenged the 1855 Appellation system at consumer’s end. (He, and others, have said that it is the obscurity, corruption, and other problems of the appellation system that made his consumer-oriented approach necessary. )

Hence, undoubtedly, Parker’s stepping aside from barrel tasting may have an effect on the style of wines being produced. It is no secret that he favors the riper, fuller, fruitier style of châteaux, as opposed to a more traditional style favoring balance, elegance and finesse. In recent years there has been a move among certain châteaux to produce riper, smoother wines, and this could change if Parker’s influence in the region wanes.
Market wise, as some of the winemakers in Bordeaux may feel uncertain about their reactions; on the other side, we may also see new opportunities as the Parker’s Bordeaux fever calms down. Comparing to the times when châteaux could doubled their price following Parker’s rating, this announcement was good news for the futures system as they will be forced to start pricing conservatively again.

Understanding the Success of Yellow Tail

Following Friday's class, I did some more research into Yellow Tail and how the brand achieved such widespread success in the US markets.  

I learned that Yellow Tail is the brainchild of Deutsch Family Wine and Spirits, which has introduced and marketed a number of successful wine brands in the US. The company enjoyed tremendous success in the US with the French Beaujolais label 'Georges Duboeuf', but the Duboeuf brand became over-exposed in the late '90s and demand began to decline. Looking for the next big thing in the $10 price range, Deutsch Family Wine and Spirits determined that, "at this price level consumers are looking for a wine that was extremely ripe in flavor, fruit forward, with very easy to no tannins and a pleasant finish. We couldn’t generate this kind of wine at the sub $10 price level out of France, so we decided to look to Australia". 

Australia Offers Best Bang For Your Buck (in ~$6 category): According to Deutsch Family Wine and Spirits, sourcing grapes from Australia allows them to create best bottle of wine in the US market for six bucks.

Time was Ripe for Australian Wines in the US: Yellow Tail launched their product in the early 2000s, which was a time when Australia began to develop an international reputation for its Shiraz.  

Flavor Designed for US Palate: Yellow Tail was designed specifically for the US market and caters to Americans through its simple, fruity flavor profile. According to the company, “we wanted to give the US consumers what they wanted". While the company won’t admit it, some claim that Yellow Tail tampers with their wine to remove certain aspects like tannins and acidity that many people can find less appealing.  

Label Designed for US Preferences: Yellow Tail decided to take a risk and go forward with the bright yellow kangaroo label because it was completely different from everything else on American shelves. The label evokes the Aussie stereotype of a carefree, laid back lifestyle, which is appealing to American customers.

Today, Yellow Tail is the second best selling wine brand in the US (it recently lost the first position to Barefoot wines) and sells 8 million cases in the US annually. While Yellow Tail might not be the wine-of-choice for GSBers, it’s still an interesting case study on how to build and market a successful wine brand for the mass US market. 


Sources: http://vinepair.com/wine-blog/how-yellow-tail-gave-america-australian-wine/ , http://www.yellowtailwine.com



Sunday, February 28, 2016

The Oscars, Wine, and Pandora

While watching the Oscars tonight, I began thinking more about the role of the wine critic - as compared to the role of the movie critic. Just as "experts" vote on movies each year, wine critics vote on wine awards each year as well, at various competitions throughout the world. But how meaningful are these awards, if they are based on subjectivity and are bound to be influenced by human error?

If winemaking, like movie making, is viewed as an art, then maybe we should view the role of the critic as interesting but not authoritative or completely accurate. Critics, just like artists, are subjective to some degree. In thinking about whether or not a personal preference equation could be created for wine based on the combined reviews of these critics (as well as personal data), I wonder about other goods for which a personal preference equation could be created - food, music, movies, books. Can the Pandora model be extended successfully to other areas or industries?

Possibly - I think the idea has potential. But music is generally less expensive than some of these other goods - and Pandora actually provides the good (music itself) at zero, or very low, cost. People who want to treat wine as a CPG may not want the complexity - and thus the implied variety - that such a personal preference equation might offer. For these individuals, they may simply want to go to the store and pick out from a choice of 6 wines from each category - reds, whites, roses, sparkling - in 5 to 10 minutes. As long as the price point is reasonable and the wines are drinkable, this may be "good enough" to fill their needs. And for people who love to learn about and explore wine, the idea of a personal preference equation might be limiting - they may want to challenge their palates, to continue to reach beyond the range to which they are accustomed, and to allow for organic and even unexpected growth and changes in those personal taste preferences. But I do think such a quantitative analysis could be useful for a group in the middle of the spectrum, who don't fall on either end; the question is how many consumers fall into this category, and are they interested enough to spend the time - and the money - crafting their own personal preference map?

Friday, February 26, 2016

How History Explains the Present

From the past two classes, we've seen the reliance on how ratings and "the clown Parker" according to Peter have literally formed a massive movement and trend around wine sales in the past several decades. People are now "teaching to the test" creating a homogenizing effect for wine and not innovating, because they simply want to sell the retail score as part of the story; "A 90 point wine by Robert Parker" sells! And when a customer goes to the store to choose from a wide selection, they feel there is a lacking objective judgement and the point score is a great way to be able to decide!

Even before Parker emerged in the 70s, the Department of Viticulture and Enology at UCDAVIS established a 20 point system, noting that points would be awarded or subtracted based on having specific flaws; Harry Waugh would say this is a "16 point wine" and people would listen! However, everyone's sensitivities are very different and based on character, varietal blend, elegance, breed, and finesse, wines should not be categorized, but rather have flexibility to understand why an 80 to someone is a 95 to someone else. While there is no evidence, there is an interesting viewpoint that those that wish to be evaluated or rated, have an incentive to do everything they can to inflate their status, taste, and likability factor. How they do so is ambiguous, but maybe this is good after all because the consumer is the ultimate benefactor. 

Critics as Entertainers

The way that the class on Monday was divided into two sections neatly reflected dual (and sometimes opposing) roles of critics. Professor Malter provided an excellent history of wine ratings and outlined the role modern critics such as Robert Parker play in providing objective metrics for subjective qualities such as taste. The panel of Mark Oldman and Alder Yarrow provided a very engaging example of critics as entertainers and populists. I would argue that critics as entertainers are becoming more important than critics as judges.

As Malter noted, the modern ratings systems were created to instill discipline in the wine industry; the traditional "Crus Bordeauxs" rating classifications were outdated and provided no incentives for winemakers to produce high quality wines. They have served their purpose, and raised the quality bar across the board. However, as he also noted, differences in ratings at the top (87+) no longer provide us with much objective information about quality of the wine; rather, they reflect subjective differences in taste as determined by the critic, which are unlikely to correspond with your own. Since these differences in ratings at the top (87+) have real effects on price, winemakers must constantly adapt to the tastes of respected arbiters such as Parker to survive.

With the internet, blogs and social media, we can access curated or crowdsourced reviews about wine that may not be able to distinguish between best in class and very good wines, but can surely identify when quality is too low. Since this problem of identifying quality was the reason for modern wine ratings in the first place, I believe today's consumers will identify more with entertaining critics who can tell a story about the winemaker, produce entertaining video blogs, or write books with chapters on "bon mots to describe the effects of alcohol." Further, I would argue that these types of critics are doing the modern wine industry more good by popularizing wine and reaching new consumers.



Kalin Wine and when wine is ready

When I was up in Oregon a few weeks ago, I went to a cool tasting at a winery called Antica Terra. The tasting was unique in the fact that the winemaker gave us 9 wines, 3 of which she made and 6 of which she didn't. When was the last time you went to a winery and a winemaker tried to sell you someone else's wine? She shares wines not made by her to show customers what wines inspire her. Some of them were absolutely astounding and some of them were simply controversial. Of the controversial sort was a Sauvignon Blanc made by a producer called Kalin Cellars that looked like this...



As you can tell by the color, it's not your typical sauvignon blanc. It's a 2001 wine that was just released this year. It flies in the face of all common wine wisdom that sauvignon blanc should be consumed within the first few years of vintage. That's because Kalin Cellars is known for producing wine and then holding it until it is "optimal" to drink. This approach came out of the owners point of view that Americans are drinking wine too young and losing out. Kalin Cellars believes that by only selling wine when it's ready, the owners are stopping "people from committing infanticide." The man and his wines are clearly colorful characters.

Besides the fact that Kalin wines taste absolutely unique due to the aging, it prompts an interesting question of when are wines ready and how do we know? If you buy a good bottle of wine, you can generally find out how long you're supposed to keep it. It might say "good to drink now but will improve over the next X-Y years". The only way to know that optimal point is to try it every now and then (through Coravin or multiple bottles) to see when you like it most. However, Kalin Cellars takes that to the extreme and holds wine way past the point where most people would say it's good. These wines remain drinkable (but highly polarizing...you can ask Katie McGee, I forced her to drink one), even though most wineries would have written them off already. This only makes me further question the value of the critic. If we can't agree on when wines are good for drinking (now, 5 years, 20 years) and what good wines taste like, how do we ever know the quality of a wine?

Blogging about Blogs

As the title suggests, this is a wine blog post about wine blogs.

There are plenty of other ones out there besides Vinography.com. I’ve flipped through a few dozen of them and assembled a list of the best ones, so that you don’t have to! These might serve as good resources as everyone works on final projects.

General resources
·         EnoBytes -- http://enobytes.com/
o   Massive website with everything from ratings to meal pairings to general articles
·         Wine Pages -- http://www.wine-pages.com/
o   Venerable website for the masses, with quizzes, tasting notes, dictionary, educational content, and discussion forum
·         Oenologic -- http://www.thoriverson.com/
o   Longer-read pieces about goings-on in the business. Worth posting here because he also writes about other blogs

The serious stuff: wine business, economics, politics
·         Dr. Vino's Wine Blog DrVino.com
o   Explores the intersection of wine, politics and business, including commentary on current court cases
·         Academic Winohttp://www.academicwino.com/
o   Shares the latest research and advances in wine-making and comments on general industry themes
·         The Wine Blog -- http://www.wine-blog.org/
o   Posts about everything from the importance of wine competitions to rankings of the best wine businesses
·         The Wine Economist -- http://wineeconomist.com/
o   All about the culture, history, and human behavior around wine

Region-specific Blogs
·         Wine Tasting, Vineyards, in France WineTerroirs.com
o   Run by a photographer, with insights on everything from corks to the best Paris wine bars­
·         Grape Wall of China -- http://www.grapewallofchina.com/
o   About Chinese consumption and sales more than production, though there is some of that as well. Not exclusively China-focused, but with plenty of Asian content. Yao Ming has a wine brand?
·         On The Wine Trail in Italy -- http://acevola.blogspot.com/
o   Not just Italy (also California and Texas)
·         The New York Cork Report -- http://www.newyorkcorkreport.com/
o   Not just NY, mainly looking at Midwestern wines, and even some beers, liquors, and food. Supports local growers.

Other tasting and general wine blogs
·         Veritas in Vino AliceFeiring.com
·         Travelling wine chick -- http://travelingwinechick.com/
·         Wine Curmudgeon -- http://winecurmudgeon.com/ (check out the post about the Shark Tank pitch of flavored wines and single-serve bottles!)
·         The Wine Harlots -- http://wineharlots.com/
·         The Morning Claret -- http://www.themorningclaret.com/
·         Affairs of the Vine -- http://www.affairsofthevine.com/
·         The Frugal Wine Snob -- http://www.thefrugalwinesnob.com/  


I’m sure I’m missing at least a few essentials. Share your favorites with us in the comments!

Revival of Extinct/Outdated Wines -- Falanghina

Drilling a little further on the recent themes of consumer tastes and trend-driven production, I thought it would be interesting to look at the case of falanghina grapes from Italy. The varietals are some of the oldest in Italian history and formed the base of major Roman winemaking, but fell out of favor for most of the 20th century amid critiques that they produced flat, uninteresting and otherwise mediocre wine. Nowadays, there's been a resurgence in interest in cultivating the grapes (primarily in Campania) as advances on both the vineyard and winery ends have begun to "tease out" some of the floral/citrus notes that previously lay dormant. Falanghina is by no means challenging any of the established whites, but there may be potential here to follow the much-documented success of rose. You could argue that the rise of rose is due in no small part to the increasing pairing of wine with casual meals, the preference of consumers for simpler, less complex vintages and the emergence of a consumption-focused market (given that rose generally ages poorly). Once those trends take root in an appreciable segment of the market, the previous stigma attached to bringing a bottle of rose to a social event is nullified--or even arguably reversed these days. Similarly, if falanghina is representative of a class of "easily drinkable" wines that are characterized by relatively little complexity, a mid-tier price point but an appellation (Italy) that connotes at least a base level of quality, one could imagine a campaign that carves a space out for it as a "casual white" (much as rose has become the "picnic wine").

(http://www.nytimes.com/2015/06/17/dining/wine-review-falanghina.html; http://www.italiantribune.com/the-resurgence-of-falanghina/)

Jeff

Thursday, February 25, 2016

Escape from Parkertraz

As Mike Mester pointed out in his post and as I briefly commented on, the whole Robert Parker phenomenon felt all too familiar coming from another luxury industry with highly educated consumers, where commercial success and prestige are goals and motivators that are entwined and tangled together in complex and sometimes baffling ways.  Indeed, the game seems to begin in earnest at the high end -- as Daniel Malter pointed out in his presentation, the inflection point where score starts to matter is 87.

I think people in the inner circle of this sort of world have inflated notions of what prestige means.  Theater is indeed a good analogy here -- there is one critic at The New York Times who is the go-to for all the most prominent shows to come out on Broadway and even worldwide each year:  Ben Brantley.  He has his own eccentric tastes, championing shows like Honeymoon in Vegas that pretty much evereyone else hated, but his own theatrically phrased praises are plastered below the marquees in Manhattan with an exhilirated sense that his opinion is the fuel of success.  And in the era of social networking, his reviews actually don't hold a lot of weight with the consumers, who our industry research shows are more concerned with recommendations from friends and other considerations.  But for producers and creatives in the industry, Brantley's review is the single most important reaction they are waiting for, because prestige is most important to them, and in their cloistered offices prestige must be equivalent to box office success, even when it's not.

Escaping Robert Parker was a pretty depressing mosey down a parallel lane, and if anything, a magnification of the critic-as-ultimate-arbiter pageant.  The film begins with a network-TV interview that aggrandizes him further with a sense of magnificence that this fellow would very likely have seen none of if he had stuck to his career origins as a lawyer.  Maybe being a lawyer helped him in knowing how to tangle and escape unscathed, since the estate bans that he's elicited from disdainful wine proprietors indicate that he has cut at their central occupations in ways that have left more than mere bitterness.  I can't say I'm an expert in where the lines between criticism, libel, and conflict of interest lie, though I certainly remark that the hefty regulation that suffocates so many stakeholders in the wine industry does not extend to the critics, who are free to champion and to trash as they please.  So it's all the more disturbing when at the beginning of the documentary a mainstream source is asking if he's the "most important critic of anything."  Well, drama sells in journalism, too.  Maybe the impetus to be a lawyer is also that same impulse to "hold people accountable" (especially for things you can't do yourself).  

Mike and I were talking about the film and both found it could have used some editing, though I reflected later and thought, giving the filmmaker the benefit of the doubt, some of it may have been intentional.  They were picking on a relative nobody in choosing downcast, perpetually single Julian to chronicle his misadventures in France, the US, and China, and part of the point may have been the relative boredom and ignominy -- Parker is inaccessible, not interviewed in the film, and barely able to be grabbed for a little chat about his lack of attention to rosé.  It stuck with me when Jules remarked that selling was actually harder than making wine -- would that be the case if there were really an efficiently sorted marketplace out there?  Or is Jules just trying to excuse his failure to create a superior wine?  Harder to know without a tasting.  And there is some hope after all, as he finally gains some recognition for quality from a French guidebook towards the end of the movie.  However, the prevailing atmosphere of his story is pretty mundane or downbeat: making notes in books, handling details with potential customers, laboring on and on for a cause that hasn't brought him real money and that seems to preclude him from having a family or even a lasting romantic relationship.  The drink may be a symbol of romance, but the life of the average winemaker is far from romantic.

Amusingly, Angelo Gaja appears in the film as well, a familiar persona from earlier in our class, remarking that everyone in Italy believes himself/herself to be Robert Parker.  I wondered if part of the dynamic here and with the resistance of French wineries to Parker might be Europeans resenting the idea of taking aesthetic direction from a New World critic.  The French and the Italians here would both prefer an older world where relationships are made more directly and people are more connected with a region and a culture.  The American seems to have reduced an ornate and rich market to a false Darwinian contest that no one knows how to win, unless of course they hire a professional Parker consultant.  Jules asks for advice from a guy attached to the big man, but the immediate response is, would you like to hire him as a consultant?

Let me be more cynical than I mean, to make a central point about Parker.  He is an entertainer, too, one too lofty to style himself as such, but for the New Yorker-reading set that peers down the nose at the sight of explicit commerce, but that simultaneously pays elevated prices for refined pleasures.  And for refinement, you at least need to pretend you're looking at something other than money, else you let on you're déclassé.   Parker offers simplicity of choice wrapped in high manners and layered phrasing -- as simple as a number, and a number that isn't the price.

I don't mean to be too snide.  Critics can serve a valuable purpose, and I consult them plenty for my favorite arts.  Still, a critic should be fair game for pointed criticism from others.

Wednesday, February 24, 2016

How Much is too Much?

As an Australian, I love Penfolds.  Penfolds was founded in 1844, and is Australia's most reputable winemaker.  In 2012, Penfolds introduced the 2004 Kalimna Block 42 Cabernet Sauvignon - it's best and most expensive wine (priced at $168,000).

The wine was presented in a limited-edition crafted vessel, which they called the Penfolds Ampoule (see picture below) and the Ampoule contained Cabernet Sauvignon produced from apparently the oldest continuously producing Cabernet Sauvignon vines in the world (planted in the 1880's).  The wine had repeatedly been awarded 100 points (by James Suckling and the Wine Spectator).

I don't doubt that this wine must have been pretty pretty amazing, but surely $168,000 is too much for a bottle of wine.  How much benefit can one really get from drinking a bottle of wine.

Penfolds focussed their marketing efforts in Asia and were successfully able to justify the price due to the quality of the wine, its exclusivity (only 12 Ampoule's were made) and due to the quality of the crafted vessel that it was contained in.  In order to sweeten the deal, Penfolds also offered to send one of their senior winemakers anywhere in the world to prepare the wine by cracking open the Ampoule with a tungsten-tipped sterling-silver scribe-snap to ensure that the wine was experienced in the best possible way.




Monday, February 22, 2016

Peter Mondavi Passes Away



http://www.wsj.com/articles/pioneering-winemaker-peter-mondavi-dies-at-101-1456168822

Per the above article, Peter Mondavi passed away. The article mentions that he spurred innovations in Napa Valley including the use of French oak barrels in the wine-aging process. The article also touches on the family quarrel. 

Let's Talk about Luxery Branding

From the last class, what we learned is that when it comes to wine, most producers have to build credibility surrounding authenticity, a beautiful story, and only a reasonable business plan. However, I think this only lasts in the short term; I think to build a wine brand that is ultimately successful-- from what we've seen over brands that last greater than a single generation- you must think in the long; the very long term.

Look no further than Giulio Ferrari who brought Chardonnay from France and never did the Ferrarri family name, but grew Chardonnay and positioned in the market as a grape of flavor that was far unique from any of its introduced predecessors.

And it's really not about the story, nor about the wine either-- what it is about is what consumers want to engage with. Richard Quandt, said, "I think the wine trade is intrinsically bullshit." This is true perhaps only in the trial phase, when we do not know what we are buying, but buy solely based on brand recognition, label appeal, and word of mouth.

So while brand development and package design are important in execution, they are not truly effective, unless the consumer loves exceptional design and packaging and will continue to purchase solely on this merit. Visually appealing packaging invites peak interest and trial; but once trial period is over; clients must repeat the entire process and at this point- taste would reign supreme. So even if brand essence and the story and packaging and the design deliverables are emphasize- they are only emphasized for the trial period; but moreso, the taste carries ultimate weight for a repurchase and a recurrence in experience. Especially, if they want to sell more than one bottle per customer.

Strategic Shift for Yao Ming Wines

During a recent visit to CostCo, I stumbled upon a bottle of  Yao Ming Napa Crest Blend ($85). I was intrigued that the NBA star has joined the mounting list of celebrities in the wine business.  When I got home, I was curious to learn more about the positioning and strategy of Yao's wine venture.

Founded in 2011, Yao Ming Family Wines produces three wines, with the Napa Crest Blend I encountered as the entry level product. The Napa Valley Cab (1500RMB /  $238) and the Reserve (6000 RMB / $~950) round out the portfolio.

From the onset, the company was well positioned to capitalize upon Yao's celebrity status in his home Chinese market.  During the first few years, all sales came from China (distributed via Pernod Ricard China subsidiary). The ultra-premium price points puts the products out of the price range of the mass consumer.

As we had learned the class presentations, the anti-corruption crackdown in China has dampened the demand for luxury wines. Yao Ming's wines were similarly impacted, and in response the company has pivoted its strategy to attack U.S. markets, which now comprise 15% of the company's total revenue.

It will be interesting to see how Yao Ming Winery fares in the U.S. in the long-term. Thus far, all three wines have garnered 90+ pt wine critic ratings (with Robert Parker scoring the Reserve at 95pts / 98 pt wine enthusiast).  Despite the critic acclaim, given Yao's wines play in an ultra-premium segment catering, I wonder whether his identity as a widely popular celebrity familiar to the masses might actually detract from the demand for the wine by consumers.  In addition, despite being based in Napa, I am curious whether the association with the Chinese athlete might lead customers to incorrectly identify the wine as being produced in China, which has a less than perfect reputation in food and safety.

To fuel the expansion in the U.S., the company launched a $3 million Crowdfunder campaign aiming to use proceeds to build a visit center in Napa Valley.

http://blogs.wsj.com/chinarealtime/2015/03/04/yao-ming-turns-to-crowdfunding-for-raise-profile-of-napa-winery/

Robert Parker as consumer advocate


I was struck by the amount of criticism Robert Parker receives from many in the wine industry, particularly given his popularity among readers. While the complaints about Parker pushing his own tastes on the wine industry are apt, I wonder if there isn’t something else behind the complaints. Wineries and Parker stand in something of an adversarial relationship—he is, after all, a critic. If a lot of consumers like Robert Parker and many wineries don’t, maybe part of the reason is that Robert Parker advocates for consumers against the wine industry. Admittedly, this is a pretty stark departure from the typical characterization of Parker as the dean of the wine establishment.

But there’s some evidence to support this idea. First of all, Parker himself cites famous consumer activist Ralph Nader as one of his inspirations for becoming a wine critic in the first place. And Parker claims that Nader’s philosophy of objectivity informs the standards that The Wine Advocate uses to rate wines (although Parker holds other contributors to his publication to somewhat lower standards).

This point of view is apparent in Parker’s reviews as well. A rhetorical analysis of Parker’s writings described The Wine Advocate’s tone as a “manifesto of ardent consumer activism.” Anecdotally, that seems to be what the consumers in Escaping Robert Parker sought his advice out for as well. They don’t want to be “taken advantage of,” and they trust Parker to protect them from wineries looking to do just that.

If Parker were really helping consumers to pick out the wheat from the chaff, we would expect a relatively weak relationship between price and his ratings. If Parker’s reviews were predictable based on the price of the wine, they would provide little value to the consumer looking for deals. And quantitative analysis found a correlation of only 0.3 between price and review score, which is relatively low especially given wine’s role as a status good.

Potentially, then, Parker and other critics are providing valuable information to consumers that the market price signal misses. But given the Weil study showing that consumers on average get no sensory information from qualitative wine reviews, it’s not clear what that information might be.

The Passing of Peter Mondavi Sr.

Sorry to double post but I just saw in the news that Peter Mondavi Sr. passed away. The Napa Valley Register published a really nice obit that I wanted to share: http://napavalleyregister.com/news/local/charles-krug-winery-s-peter-mondavi-sr-passes-away-at/article_25917c6a-a2ea-582c-b33e-20352052d0b0.html

The article discusses many of the ways that Mondavi pushed Napa's wine industry and his own winery forward so I thought I would post a few below. He really was an innovator.


  • He was one of the first to bring cold fermentation to the production of California white and rose wines
  • He was the first to import French oak barrels for Napa winemaking
  • He stewarded his family's winery for the next generation when other family-owned wineries were being consolidated. This meant constant investment in innovation and improvement

Sunday, February 21, 2016

Feeling conflicted over the Middle Sister

Last week the NYTimes published an article entitled A Savvy Breed of Winemaker Takes Business Sense to the Winery (http://www.nytimes.com/2016/02/14/your-money/a-savvy-breed-of-winemaker-takes-business-sense-to-the-winery.html?_r=1). It talks about the recent trends of business people entering the wine business after successful careers in other industries. These people know how to run businesses. They've been successful running businesses. Their wineries are treated as businesses. These are not soul-less businesses. They are wineries that people love like Vineyard 29 (VC), Frank Family (Walt Disney Studios), and Kistler (Private Equity). 

In theory, I love that wineries are being run more like businesses. From a personal perspective, it means that good wineries can last longer, because they are no longer at the whims of an unstable balance sheet. From a professional perspective, I can totally relate to the business professionals mentioned in that article. The wine industry is a complex, fascinating industry that would keep anyone on their toes. Its complexities are what made my internship so interesting and what makes this class possible! 

However, when faced with Terry Wheatley, I felt conflicted. I applaud her ability to grow a wine business as rapidly as she did. She is clearly smart, capable, and savvy. But I had a negative reaction to the Middle Sister wines because so much of what those wines are selling are the graphics and the brand personality, rather than what's in the bottle. According to Terry, what's in the bottle is simply table stakes. I recognize that my reaction is hypocritical, because when I fall in love with a winery, it is often because I visit the place, I get to know the people, and I like the wine. I'll be the first to acknowledge that I have passed on many great bottles of wine after a bad experience and probably purchased many mediocre bottles because the experience is so stellar. This comes back to the idea of authenticity and what every person's definition is. Our class with Terry led me to realize that for me authenticity means that everything from the wine, the story, the place, the emotion, and the people is coherent. It's not enough for me to just connect with the story being told. However, given the runaway success for the Middle Sister wines, it appears that many people think about authenticity differently. I wonder if you could run some kind of segmentation to identify these different definitions. By doing so, a winery could more easily target their ideal customers.

What's Your Wine Personality?

Friday’s class with Terry Wheatley got me thinking about my wine personalities. I found the Middle Sister brand to be incredibly innovative and fun and it made me wonder why we don’t use more human personality traits when marketing wine? 

Marketing wine is faced with many similar challenges as perfume: the marketer must convey a sensory experience to the prospective customer, who (for the most part) cannot smell the perfume before unwrapping the packaging and opening the bottle. And so they appeal to human emotions, crafting stories to convey the qualities of the woman who embodies the scent in the bottle: alluring, adventurous, tough, mysterious, romantic, and so on.  

When choosing what wine to buy, I tend to think of the context in which I will be drinking it or what I will be feeling/want to feel:
  • Will I be sitting on the sofa on Sunday evening lamenting the end of the weekend (Cabernet Sauvignon)?
  • Will I be getting ready for a night out with my girls (Sauvignon Blanc)?
  • Will I be sitting at the kitchen counter doing homework (Pinot Noir)?

The article for Friday's class (Debunking Critics' Wine Words: Can One Distinguish the Smell of Asphalt from the Taste of Cherries?) would seem to support some kind of change in how wine is marketed to consumers. The author, Roman Weil, finds that:

"Wine consumers cannot match critics’ descriptions of wines with the wines themselves."

This finding calls into question the premise of marketing wine based on these descriptions (e.g. black fruits, new oak, cassis, green apple, etc.). Why use these markers if consumers can't tell them apart? 

And so, rather than these smell and taste descriptors or advice to ‘Drink with chicken/fish/beef’ on the label, I would find it much more helpful if labels carried a ‘Drink when feeling excited/nostalgic/zen.’
This is what I'm actually solving for. Not fruity, not low in tannins, not high in vanilla. 

To end, and just for fun I'll leave you with the question: what is your wine personality?
Try this quiz

Unsurprisingly, given that it's Sunday, I’m a Cab.

Fat Bastards and Sassy B*tches


In an increasingly competitive wine market, brands must find ways to differentiate their products as each year, the Alcohol and Tobacco Tax and Trade Bureau approves over 100,000 applications for new wine labels and brands. While some wineries differentiate through label design or packaging, others have opted to differentiate through brand names. This is understandable as the label is the easiest way to make a wine bottle stand out visually from the pack. Most brand names and labels are traditional using a family name or strong imagery to conjure up visions of a refined wine brand. Others more recently have taken a rather atypical and in some cases, less genteel approach to branding. Whether it’s the Royal Bitch Cabernet Sauvignon from the Hudson Valley or the BallBuster Shiraz from Australia’s Barossa Valley, various wine labels are finding new ways to grab consumer attention.

As we saw with Terry Wheatley on Friday, it is an effective and creative way to develop customer affinity for a brand as new wine consumers are often drawn to the elaborate story behind a wine or its characters. One of the more remarkable instances of effective “risqué branding” is none other than FAT Bastard wine, a collection of French blends produced and distributed through a British and French partnership and brought to the US through Virginia importer Winebow, Inc. FAT bastard has become a fast-growing brand as it sold over 400,000 cases last year in the United States alone. BusinessWeek has referred to the brand as a "marketing phenomenon". John Umbach of Joseph Victori Wines, the distributor of the Royal Bitch Wine brand explains, “The thing is, if you come out with a conservative label it becomes hard to separate yourself from the herd on the shelf. The competition is just brutal”. This competition faced by wine brands becomes particularly intense at the lower end of the market where winemakers are clamoring for a more relatable or lighthearted aesthetic for new wine drinkers. I found it very interesting that an industry rooted in best wine practices has found a niche market for fun and unpretentious brands.

However, while this has worked for the Middle Sister and FAT Bastard wine brands, the same often cannot be said for other wine brands with clever or snarky titles. A number of brands have entered the market, only to find that, as gimmicky/novelty products, their success is short-lived and consumer interest quickly fades. As such, companies with risqué titles and brands must find the optimal balance between quality and pricing in order to ensure that consumers consider the wine as worth of a repeat purchase rather than a one-time gag gift. Shoppers may chuckle at the UK’s “The Dog’s Bollocks” red wine blend or glance twice at New Zealand’s “Cat Pee on a Gooseberry Bush” Sauvignon Blanc, but I imagine that these are not the wines that people share with friends or relax with at the end of a long day. In other words, what happens to these brands when the novelty wears off? In a market where even the most conservatively named brands can fizzle, there is a fine line between branding that compels people to purchase and branding that is either dismissed as a novelty or is outright off-putting. I’m curious the class’ thoughts on the overall perception of distinctive and unique wine brands with unordinary titles. Passing fad or growing niche?

Bonus: below is a page dedicated to the various cheeky wine brands currently in the market. The names range from comical to downright bizarre.
http://www.oddee.com/item_96809.aspx

(Pardon the title)

Saturday, February 20, 2016

Further Thoughts on Terry Wheatley

I noted towards the beginning of the quarter that my interest in this class as a non-drinker was in part related to what I do know well, the entertainment industry, and dealing with storytellers and cultural presentation.  Terry Wheatley was the most evocative speaker yet on this topic, and while she rightly identified storytelling as a key aspect of what she does, I think there's more to be said about how the story is told.

From having worked in Broadway theater, television, and music in recent years, and from my personal knowledge of other media, it's clear that the medium itself is at least a big part of the message, if not the message itself, as you sometimes hear.  Time and time again, a story that works beautifully on stage fails as a movie, or vice versa, even when the same script is used (or perhaps because the same script is used).  So what is the storytelling that works best with wine?

Like with poetry, you have a very limited space to tell the story -- sometimes even just a few words.  While a wine bottle could have a couple paragraphs if desired, generally the story needs to be told in a couple sentences, or even just referred to obliquely.  The story must be evocative and attractive while being unspecific enough to allow the consumer to insert his or her own experiences and imagery.

Like much of entertainment nowadays, Terry in particular seems to value pushing the envelope a little.  So pro-mis-Q-ous wine, for example, airs strongly towards the generalizable; the label reads: "The act of blending multiple, mutually attractive grape varieties in an assortment of unorthodox combinations.  Implies a wanton disregard for convention.  May result in an intense sensory experience.  Practice safe sipping."  Her branding plays into the indulgence and sensuality aspects of wine consumption, but with a winking sense of humor that riffs on drinking as a fun vice.  A red wine in this brand runs at $12, which is probably a good match for the image this story is creating -- inexpensive and casual shenanigans on a weekend.  This story would be very unlikely to work commercially on a $50 bottle, where class and connotation become more refined.

The whole wine sisterhood allows consumers to try out different characters in their own imaginations -- a little akin to the re-branding around Coca-Cola that has become so prominent in the past few years.  Though while Coca-Cola has completely simple and fairly unimaginative identifiers slapped onto its aluminum cans, Wheatley has taken things a step further with more memorable characters, often with alliterative names: Glamour Girl, Rebel Red, Sweet & Sassy, Mischief Maker, Surfer Chick.  A common theme seems to be gleeful defiance: I am who I am, and I'll drink what I'll drink.  It's an interesting match considering what she said about women basically making their consumption choices more substantively than men do, but I suppose it goes to show that women do have a meaningful measure of image-based consumption as well.

Girl & Dragon ups the ante.  The artwork imagery is more elaborate and fanciful, seeming like it's been drawn by an artist who does covers for fantasy books.  The story, while still fairly concise, reads like the back cover of a series of fantasy books: "A shadow slips over the land, as the day turns to night.  Glittering stars turn on, one by one; the dragon has taken flight.  Down below, a girl awakes.  Her heart beating; his wings beating.  He searched the world for her.  And now they soar as one."  Now, while I'm a little scared for this girl cavorting with a dragon, I certainly won't forget this wine next to hundreds of others with complicated foreign names that are difficult to tell apart.  But again, while the story is colorful in the few details it offers, it leaves space for the consumer to insert her own passion.

And that connection will only be genuine if the story and the spirit are genuine ones.

Friday, February 19, 2016

Wine on Tap

Wine on tap. We've discussed it in class and many of us have already tried it.

Wine on tap is sold as a "cheaper, greener and fresher alternative" to wine from a bottle. Restaurants can store it for longer, since no air ever enters the keg and the wine thus doesn't oxidize (the wine is replaced by inert gases as it pours out). A flip side of the same coin is that the restaurant pays fewer shrinkage costs. As a result, replacing conventional bottled wine with wine on tap is great for the bottom line -- even if you charge a little less for it, it's still cheaper to buy, store, and deliver. There are plenty of other ecological and service-related benefits which you can see listed here.

It’s still a pretty nascent market, and as such, there are quite a few young firms out there advertising their specific related technologies – such as, for example, Free Flow Wine .

Reading about this raised the following questions that I’d love to get people’s thoughts on:
1)      In many restaurants, consumers never see the bottle, since glasses are poured behind the bar. But is there a ceiling to the quality and price level where this can go? For higher-end wine, consumers do want to see the label, and displaying the bottle is part of the ritual of restaurant consumption.
2)      Could this ever become a consumer concept? Theoretically, given the lack of oxidization, a wine-drinking family could save money by just subscribing to a twice-yearly delivery of a keg of their favorite wine
3)      Could the expansion of tapped wine bring an ancillary benefit, as the lower price point makes wine more competitive with beer, attracting new drinkers? Especially relevant in middle America, where the tap also removes the "pretentious" label

4)      One benefit of using kegged wine is that it allows for easier on-the-spot blending (again due to the preservative and volume qualities of the system). Might this put more power into sommeliers and local winemakers, as wine becomes more of a raw input and the actual end step of the production chain moves closer to the consumer?