Are they serious?

[Andy]

There is an article in today's Age that discusses retailers linking up to cross sell food with beer/wine, as part of a feature on alcohol consumption in Australia.

The author writes the following:

"But the biggest change in the past decade has been Australian consumers' switch to wine, a product that yields higher profits than beer. Why? Because many consumers simply cannot discern what constitutes a good wine.
Most customers select a wine purely for its price. Retailers know that and take advantage of it. As people's tastes mature they graduate to higher-priced wine, in the sometimes mistaken belief that they are getting a better wine.
In the higher price brackets, there can be huge price variations from store to store with the same wine selling for a few dollars more or less just down the road.
When customers feel wealthy - as they do in this consumer boom - they spend more without knowing the quality of their purchase."

I thought this was interesting, particularly given recent discussion on this board and TORB's article "The Big Squeeze".

Now I know they are talking about your average punter, rather than more passionate wine people, but is it valid to say many wine consumers cannot discern what constitutes a good wine? Surely consumers buy products they like, comparable to others products of comparable price. Am I missing somehing here?

Is it not slightly bizaar to say that as consumers tastes mature and they move on to higher priced wines that they are mistaken in thinking they are buying a better wine? If people's tastes have "matured" that is effectively saying they prefer higher quality wine than previously.

While there are definite exceptions, I would have thought it's a pretty clear rule of thumb that the higher the cost of wine, the higher the quality. The article does bring out the point of significant price variations between retailers - as we all know this happens all the time. And while it is true that people spend more in a consumer boom, it just doesn't make sense that they spend more without knowing the quality of their pruchase.

It may be true that wine is more profitable than beer, from a retailers perspective. But isn't that partly due to it selling for significantly more based on volume. (i.e. retail price of two stubbies of beer is say $3-4, same volume of wine might start at $5-6 with average bottle price sold by supermarket chain say $12). Also, there are significantly more producers in the wine market - which the supermarkets can squeeze hard - whereas there are only two/three big brewers. I assume it is harder to squeeze them.

Enough of my ranting. What do others think and what does it mean for wine producers?

Cheers

Andy

The full article can be seen here http://www.theage.com.au/news/National/ ... 39129.html

[JamieBahrain]

Andy

Am I up late or you up early?

Anyway, here I sit with a glass of Maglieri shiraz 02 and ponder what was a decade ago- sometimes clumsy but always intersting shiraz.

Now, this contemporay version is like drinking Foster's made in Vietnam-contrieved and without soul!

Support the little guys! Wineries and retailers where possible.

[707]

Interesting article.

One of the advantages of being a Blacktongue (I am in fact the blackest tongue of them all!) is seeing line ups of ten themed wines tasted blind.

It's amazing how diverse a large group of experienced palates can be when it comes to best and least preferred wines. As we all know quality is subjective.

That in mind, again these line ups show that the better cheaper wines really do stack up against wines twice their price.

Have a look at some of n4sir's Blacktongues tasting notes, particularly the latest ones where some much cheaper wines rated highly (look at the group scores rather than Ian's personal scoring) against $55 types.

As for the grocers in wine retailing, well I only buy from independents like Auswine etc and when it comes to wine I rarely buy corporate stuff, mainly small producers - they DO make the best and most interesting wines!

[darby]

The quoted article falls into the old trap that many casual observers of markets are enmeshed. That is the fallacy that price is the sole input into consumer choice.

Wine consumers are becoming more educated and discerning, but they are not all moving on to higher priced wines. There is a greater sense of experimentation and exploration, hence the growing success of alternative varietals.

The obsession with price and its assumed close correlation with quality is a phase that most consumers go thru as they mature. (hence the success of Parker and others who reduce wine quality to a unidimensional score)

The wine market is one of the most complex of all markets. On the supply side there are more producers and brand names than there is for any other product . On the demand side there is a diverse range of consumers at diverse points on the learning curve, some of us maturing more alarmingly than others. Wine is inherently a fashion industry.

Thus there is a place for supermarket style marketing along with specialist retailers; wine is sold at cellar door, thru mailing lists, wine clubs, bars and restaurants. Let's be grateful for the intoxicating range of choice that we have.