The Smartest Way To Sell Wine
When you stop and think about it, it’s really quite brilliant. I have some wine I want to sell. Instead of going through a three-tiered distribution channel, I’ll cut out the middleman, and develop a list of clients I’ll sell to directly. Eager consumers sign up with hopes of one day getting on the exclusive list. What seems like an eternity passes, then 3 months later they are greeted with a letter/ email stating that they have now moved up on the list and have the privilege of owning my wine. These consumers are willing to purchase wine every year, regardless of vintage variation, because they know if they don’t, they are cut from the list. Obviously, a mailing list is a very attractive way to distribute wine, but is it really worth it for the consumer?
This isn’t to say that their aren’t some lists worth being on. Certain wineries consistently make high quality wine year after year and sell exclusively through this channel, think Kistler, Harlan, Arauo, Colgin, etc. But, their mailing lists are so backed up, if you didn’t have the foresight to sign up 5 years ago, you probably won’t ever make it on the list. You’ll be stuck paying insanely high prices for the wine at online auctions or at select restaurants. If you are already on these lists, people are standing in line, patiently waiting for you to fall on hard times, lose your letter in the mail, etc., so that a spot might one day open up, allowing them to finally be a part of the club.
Here are a couple mailing list scenarios that I have run into.
1. The Desperate New Winery: Sign-up, a short time later you are moved up the list and allowed to purchase wine. You decide not to purchase, and are bombarded by mailings for the next year, stating that if you don’t act soon, you’ll lose your place. You don’t respond and your place is lost. They finally stop sending you letters. C’est la vie.
2. The I Missed Out On That One List: Sign-up, a longer period of time goes by (over a year), you receive an order form, but by this time you’ve signed up on a dozen other lists, so you can’t remember why you wanted this one. You forget about it, the deadline to place your order passes. A few days later you find out Robert Parker barrel tasted this release at 98-100 points, you fax in an order, plea mail fraud, but you are now off the exclusive list. You’re bummed.
3. The Faithful Follower: Sign-up and wait. You get a chance to order so you do and you receive your wine soon thereafter. Repeat.
Obviously, scenario # 3 is ideal, especially if you have a sugar daddy / momma at your disposal. If you don’t, it can get really expensive really fast. Most wineries bottle / release their wine at around the same time, so all of a sudden you find yourself bombarded by numerous order forms, that if you don’t order from, well, that brings us back to scenario #1 and #2.
So how good of a distribution method is this for your average wine? The answer is, it isn’t good for average consumers. This business model works for wineries that appeal to the higher end market, core wine consumers who are sometimes obsessed with having trophy wines. So if you find yourself to be a consumer in the latter category, perhaps you should ask yourself if you are a wine drinker, or if you have merely become a wine collector. You may find that when you reach for a bottle in your cellar in 5 to 10 years, you have a lot of mediocre wine that you paid to much for.
May 7th, 2006 at 8:42 pm
Another scenario that I have encountered, and which happens to be on a mailing list you mentioned as being worthwhile (Kistler), is: you sign up and are immediately (i.e. on the next release) admitted, but with a relatively large minimum order and an allotment skewed towards their least desireable wines. I don’t remember exactly, but I had to order something like 9 bottles of $50-70 Kistler Chard which I had no interest in to get 3 bottles of the least desirable Kistler Pinot that they allotted me (to make the 12 bottle minimum), just to stay on the list in hopes of my Pinot allotment going up. I passed.
May 8th, 2006 at 8:57 am
Corey,
You’re right, I have seen this scenario before as well. Why should anyone be forced into buying wine they have no interest in? Of course, Chardonnay is what Kistler is known for. Were you uninterested in the Chardonnay they offered you because it didn’t have a high score attached to it?
May 8th, 2006 at 12:15 pm
Wineries routinely hold the proverbial “gun” to our (retail wine merchant) head and tell us we are required to buy so much of Wine X to be able to be rewarded with Wine Y.
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Many vintners are delighted with the notion of selling directly to consumers and by-passing wine merchants such as our little shop. Some wineries view us as “competitors” rather than as “ambassadors.” This is short-sighted marketing.
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A winery makes a lot of money if it can sell all its products directly to consumers.
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We recently received a copy of a letter from a famous producer whose wines we have carried since their first vintages (1988 or 1989 I think) saying they will now only sell to selected “premier” restaurants and through the winery mailing list. No more wine for wine shops!
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We have been loyal customers for many years. Many of the “top” restaurant accounts are rather new. Further, a number of restaurants listed on their web site as carrying their wines are out of business. The life span of a resataurant is often far less than the life span of a bottle of Cabernet Sauvignon!
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It’s funny how most wine marketing people all want their wines in a dining establishment, where it’s far less visible than in a “fine wine shop.” People dining out will typically order SOMETHING from the wine list. People coming into my shop are committed to finding a particular wine. If we don’t have what they want, they depart empty-handed. In a restaurant, nobody walks out after learning a particular wine is sold out or the place doesn’t have an extensive selection of South African Cabernets. (The patrons still find a wine to put on the dinner table).
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Wine drinkers don’t simply fall out of bed one day and say “You know, I think I’ll go spend fifty bucks on a bottle of wine!” They need to cultivate their taste for wine and a good wine merchant can be exceptionally helpful in fertilizing this field. These people might become a customer of these high-priced winemakers one day.
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If consumers had to contact twelve different farmers to be able to build an interesting salad, probably only a few farmers would be contacted. A number would be left by the wayside. It’s only the most hardcore wine drinkers who take the time to deal with individual wineries. And, as is being pointed out here, customers are often asked to buy more wine than they can drink (or afford). If you buy even one case of wine annually from a winery, that means you’re soon on the hook to drink a bottle a month of the same old thing. Not everybody cares to be in this rut.
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Our shop doesn’t “need” the courtesy case of wine from a single winery to be successful. We like carrying those wines because they are of good quality and customers request them regularly, even if we don’t have enough to satisfy each and every request.
The same European wineries many California vintners seek to emulate are willing to put their wines into “distribution” and do not sell directly to private clients.
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It’s a shame many vintners are both disloyal and greedy. (Look not only at how much many charge for a bottle of wine, but look also at the cost of visiting a winery and tastings its wares! Tasting rooms used to be an informal method of attracting new customers and “planting seeds” for future sales. Today, many wineries view their tasting facilities as a major profit center.)
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The world is awash in good, sensibly-priced wines. Support those vintners whose efforts are worthy of your support!
May 9th, 2006 at 9:52 am
Gerald,
Very well put. Consumers do themselves a disfavor by not going into retail shops such as yours. I’ve had numerous wines I normally wouldn’t have thanks to a retailers recommendation. Those wines are now some of my favorites.