Repackaged, Repriced: Trickster Branding in the 21st Century

In the February edition of Wine Business Monthly, Kevin O’Brien penned a noteworthy article filled with curious nooks and crannies.

Good news! Wine sales continue to grow, especially in the $10-$25 category. Sales of $6-$10 wines have meanwhile declined. This has resulted in the “premiumization” of the wine business. Even better, wine drinkers are lusting for honest wines. “. . . consumers are continuing to demand premium products across all beverage alcohol categories as they seek an authentic, high-quality experience.”

Of course, corporate wineries want in on this action, but only have a few options (beer drinkers, this should sound familiar):

  1. Increase price of existing wines
  2. Create new labels and reprice
  3. Buy premium brands*

As a consumer, beware of number two and a flip side of three. Thankfully you aren’t being duped by numero uno.

In the face of falling cheap wine sales, corporate wineries with substantial vineyard holdings have the need to put that fruit to better use. Quick, put the marketing department to work! Slap a new, shnazzy label on the identical bottle of vino (or nearly identical), get the PR machine buzzing, and out of the corporate sphincter comes a glimmering new bottle for the new and improved price of $15 (formerly $8).

Beware.

Massive producers have also used a related though sneakier tactic. “It should be noted that these large transactions, as well as several other completed during the year, were primarily focused on the brand rather than underlying vineyard or production facilities. A leading driver behind ‘asset light’ transactions is the flexibility in grape sourcing and resulting scalability of the brand.”

Decode: Corporate wineries gobble up a sexy, premium brand name, leave the vineyards and production facilities behind, and then put their less costly, already held vineyards to work under the newly acquired brand label.

Clever, clever, and harder to detect. The answer, the same tried and true answer, can be found in the following:

“The recent wave of wine industry transactions has been notable for its size and breadth. These acquisitions have been driven by suppliers’ desire not only to improve profitability through increased scale but also to remain relevant to their wholesaler and retailer partners. The past few years have seen several significant mergers between some of the country’s largest wholesalers and retailers. As the distribution funnel continues to narrow, wineries are finding access to the market increasingly difficult. . . . In general, larger retailers prefer to work with larger wholesalers in order to better integrate and simplify their supply chain and forecast demand.”

Corporate wineries need one of the big three distributors to move their product into the large retailers. It’s that simple.

Gallo     Constellation Brands    The Wine Group    Bronco Wine Company

Breakthru Beverage     Southern Glazer’s     Republic National

Safeway     Total Wine     Costco     Whole Foods*

The answer, my friends, remains the same. Shop your locally owned wine retailer, get to know your steward, and you will bring home bottles with authenticity, character, and value. You will also support three authentic tiers rather than the behemoths above.

 

  • *Premium brands = wineries producing $20+ wines
  • *Whole Foods has historically worked hard to diversify shelf space with large and small wineries. However, results at any given store vary by state, and market pressures continue to push retailers of this size to consolidate and simplify i.e. work with fewer distributors and reduce options on the shelf.

Sources:

2014 Wy’east Vineyards Pinot Gris

2014 Wy'east Pinot Gris Estate Grown

87 points

Pale lemon with subtle, youthful aromas of green apple, Bartlett pear, and slate. Dry leaning in to off-dry with noteworthy, well-integrated acidity. Length lacked luster, perhaps due to age. (MW, February 2017)

Price $20

Varietal: Pinot Gris

Region: Columbia Gorge AVA

Alcohol: 13.1%

Producer: Wy’east Vineyards

2014 Cinder Tempranillo

2014 Cinder Tempranillo, Snake River Valley AVA, Idaho

89 points

Medium ruby with purple undertones. Toasty oak leads with deep aromas of spiced plum and cherry pie following neatly behind. A well tuned wine with tannins, acid, and body all providing punctual counterpoints. Tart cherry makes its way into the mid-palate, and the finish proves satisfying. Think cabin in the winter woods with log fire cracklin’. (MW, February 2017)

Price $29

Varietal: Tempranillo

Region: Snake River Valley AVA, Idaho

Alcohol: 14.1%

Producer: Cinder

2015 Laissez Faire Red

2015 Laissez Faire Red Table Wine by Cinder

88 points

Medium ruby with youthful red fruits and Red Vine aromas giving way to a pinch of cardamom. The soft, mid-light palate has but a trace of tannin followed by moderate acidity. A no fuss, no frills wine. (MW, February 2017)

Price $16

Varietal: Red Blend

Region: Snake River Valley AVA

Alcohol: 14.1%

Producer: Cinder

Get Schooled

Perhaps you’ve recently had an “Aha!” wine—the swirl, sniff, and sip that paused the spinning world. Maybe you’ve long ago fallen down the wine rabbit hole, and then started following the wine event calendars at your local wine shops. Or maybe you have ten years of wine geekery under your belt, and have participated in a monthly wine tasting group for a few years, where you endeavor to explore a specific varietal or region each gathering.

Regardless of your experience level, take another step. Curiosity desires knowledge and experience. Below you’ll find a collection of next steps, starting with the simple and moving toward the advanced.

Book shelf of the obsessed

Read

The sheer number of wine regions and styles overwhelms many new to wine. Now is the time to get your hands on one excellent wine book, ideally a thorough and approachable romp through the core regions and styles. Importantly, reading this solid primer provides enough information to make the next steps more comfortable and pleasurable.

Recommendations:

  • Windows on the World by Kevin Zraly
  • The Wine Bible by Karen MacNeil — Don’t let the title mislead. I find MacNeil’s writing creative and buoyant. Read all materials prefacing the wine regions, and then read a handful of core regions to whet your appetite. Move on to the next step before finishing the book.
Flight of Syncline wines

Flight of Syncline wines

Flights

Start seeking opportunities to taste 3-8 wines at a time. Tasting wines in isolation provides little insight. The connective and comparative judgments fall short when three weeks have passed between your two most recent glasses of Loire Sauvignon Blanc. Subscribe to a handful of local specialty wine shops’ newsletters. Most of them, at least the ones worth knowing, hold tastings either weekly or monthly. Whether it’s a flight of wines from around the world, or a comparative tasting of five Washington Syrahs, the experience will elevate your understanding of and pleasure with wine.

Wine School

I can hear the moans. “Really?” Yes, really. Sitting down at a table with other wine curious individuals and a reputable teacher will take your understanding and appreciation to new heights. Depending upon the course provider, the costs need not be prohibitive.

Recommended Courses:

  • Wine and Spirits Education Trust (WSET) — provides 4 levels of study. Level 2 is a great place to start for anybody who has already endeavored in steps one and two above.
  • Research “wine schools” or “wine classes” in your area. Many cities have unique institutions serving their communities, some of which partner with broader institutions like WSET.

Wine Tasting Group

This step can arguably be placed anywhere in the process. However, I have found most who participate in wine tasting groups have at least participated in two of the three steps above, if not all. Having a grounding in winemaking, regions, and styles greatly enhances a groups ability to dig in to thoughtfully procured flights. Plus, where else do you meet a group of 8+ wine lovers who want to gather weekly or monthly to focus on the wines at hand?

Fin

Take another step forward. The beguiling bottles that await will not disappoint. It is often a rabbit hole experience, and a wholly more pleasurable one than what we’ve started experiencing since January 20th.

Tasting a vertical flight of Apolloni Ruby Vineyard Pinot Noir

Ruby Vineyard vertical at Apolloni Vineyard

2013 Château Buisson-Redon Bordeaux

2013 Château Buisson-Redon

83 points

Medium ruby with Old World charm in the form of slate, dried herbs, fresh raspberry, and an echo of leather. With moderate alcohol, the medium-minus body gives way to firm, underripe tannins and a tart finish. (MW, January 2017)

Price $10

Varietal: Red Blend

Region: Bordeaux

Alcohol: 12.5%

2014 Owen Roe Abbot’s Table

88 points

Juicy and plush with plum and spiced blueberry. Fine, ripe tannins contain a gentle string of acidity through the chewy core. A dusting of cocoa powder adds to the palate. A crowd pleaser, though falling short on dimensionality. Drink now—2020. (MW, January 2017)

Price $24

Varietal: Red Blend (Zinfandel, Sangiovese, Blaufrankisch, and Malbec)

Region: Columbia Valley, WA

Alcohol: 14.1%

Producer: Owen Roe

2012 Luna Beberide Art

92 points

Medium violet with compelling aromas of slate, spiced blueberry, anise, and mint followed by a wisp of smoked jerky, adding allure. With svelte body, a density of flavor persists, followed by unflagging, gravelly tannins. A stimulating experience. Still wound tightly. Drink now—2022+. (MW, December 2016)

Price $55

Varietal: Mencía

Region: Bierzo, Spain

Alcohol: 14%

2012 Avalon Rutherford Cabernet Sauvignon

88 points

Dense purple with glass staining power. Plush plum declaratively takes center-stage, while a hint of raspberry and graphite linger in the background. Medium-plus in body with medium acidity, and firm, fine-grained tannins. Black cherry and barrel spice on the palate give way to a slightly misaligned finish, with alcohol overstaying its welcome. (MW, December 2016)

Price $20

Varietal: Cabernet Sauvignon

Appellation: Napa Valley

Alcohol: 14.5%

The Sandbox

“He walked in, pulled out a roll of hundreds, and flipped me two,” gnarled the no-nonsense owner of a boutique wine shop. He had been paid by the largest distributor in the state for bringing in ten cases of wine.

This is illegal.

In his case, a customer requested the cases for a special event—he had no intention of stacking* them in his store. In fact, he thought the wine was shit. He also didn’t know he’d get the payout. From the perspective of the conglomerate distributor, his purchase had triggered the payoff. Send in the man with the wad of Benjamins. Interestingly, Mr. Heavy Pockets is a separate employee than the distributor’s sales rep who typically services the shop.

Nestled on the edge of a wealthy, Midwest suburb, this one-man wine shop prides itself on small-production and high-quality wines. The owner doesn’t cower to the Powers. He simply received an unexpected, free date night, paid for by a customers large order, and mediocre taste.

Courtesy of Wikipedia Commons

Courtesy of Wikipedia Commons

As I walked out the door with my distributor’s sales rep, he said, “Yeah, I’ve heard it before. I’ve talked to some larger shops that say, “I’d love to stack your wine, but I can’t give up the $140 a month I get for that stack.” Both the winery that employs me and our distributor here can’t play this game. Both small and family-owned with honorable values statements, we wouldn’t dare, nor can we afford to dance this dance.

The words “pay to play” get thrown around frequently in the wine world. In the age of wine distribution mergers, the game keeps getting scarier for the thousands of small to medium-sized wine producers. You want your wines on certain shelves and restaurant wine lists, get ready to pay. While not always Benjamins, money flows to these accounts circuitously. And we’ve only talked about distributors.

Over the past week, Wine Spectator released their “Top 10 Wines of 2016” through a countdown. Seeing the producers on the list from my region, and having tasted hundreds of 2014 Willamette Valley wines, I have a tough time believing these producers landed on the Top 10 by merit of the juice alone. In fact, Wine Spectator doesn’t even deny the non-blind nature of the picks. While most of the industry uses the term “X factor” to describe a thrilling bouquet or texture that carries something unique and sublime, here Wine Spectator directly states something quite different:

“Then when you take the bag off, that’s where the X Factor comes in. Is it a new domain, new producer, great value? What is it about the wine—that’s the back story that adds to the excitement.” Senior Editor James Molesworth, Wine Spectator 

And of course, how did these wines receive their high scores in the first place? Plenty furrow their brows at the correlation between advertising dollars spent and scores received. Here I do not levy my claim at Wine Spectator alone, nor do I levy it at all publications. None the less, plenty of room to wonder.

While none of this news should surprise us in the 21st century, it should still unnerve us. And if you want to settle those nerves, go find that honest suburban shop owner and ask him what he recommends. It is the path to better wine and a better world, locally and globally.

 

*Stacking = to stack multiple cases of the same wine to prominently display it, typically reserved for the $15 and under category in medium to large wine, beer, and liquor stores.

Sources