The Auswine Forum

A rare gem of good advice from Mark Squires BB on eRbertParker, directed at wine producers and US oriented, but still relevant here. Link to the thread on the US wine market in the current finacncial situation: http://dat.erobertparker.com/bboard/sho ... ge=3&pp=40

"I have learned a lot in my 3 1/2 years up here. A lot of the naïve romance is gone, but it has been replaced with a respect and caring about the details and ups and downs. The love is the same, but it is more mature and directed in different directions. Success leaves clues and I see the same patterns over and over again. Here is my free advice for any new wine producer out there based simply on watching from up close............

Give the consumer a REASON to buy! That can come in several ways.

1. Make a great wine! When Helen Turley told Don Bryant in the early 1990s that if he made a great wine he would never have to advertise, she was 100% correct. Greatness sells itself and at almost any price. I love to find out about some new great wine that has not become a household name. Most of my wine friends love to tell their friends about a great wine they just had they had never heard of or tried before.

2. Have an edge! This can come in several versions. A good price. A beautiful estate. Free shipping. Being super nice. Showing that you have your grapes foot stomped by virgins. Something! Don't just be a "me too" winery. Always think "Why would someone stop buying XYZ and buy my wine instead?" This is a question that you NEED to answer before you go public.

3. Understand the price to style dynamics of the market. This one is the hardest to get across and least accepted. Yes, you may have a great vineyard and you might be taking extra care in your winemaking. But if you are making a food friendly cab picked at 24 brix with 33% new oak, and you are pricing it like a super-ripe Cab with 100% new oak made in the dominant ripe style that owns the high ground price wise and is loved by critics, you will get clobbered. Governor Spitzer did not pay $5000 to spend an evening with Rosie O'Donnell, he paid for Ashley Dupre....even though I am sure their mothers love them equally.

4. No hostage wines! There is only one reason to attach one wine to the purchase of another; one of the wines is not selling. You must ask "Why?" It is probably the price or perhaps the quality. Instead of using the popular wine to sell the one that is not selling, accept the market's verdict and alter your plan. If you don't, and assume that the market is all wrong, sooner or later there will be a price to pay. I think that people will pay the hostage fee to get their prized wine, but I also think that deep down they begin looking, even HOPING to have a reason to drop that list from that point out.

5. Less is more...in terms of multiple bottlings. I am seeing this more with Pinot and Syrah producers who are limited by the vineyard owners selling fruit to everybody. These wineries are forced to have many bottlings just to be viable. But it is also happening more and more with Cab producers too. I sense that a growing number of people do not want to have to sift through any more than a handful of options. "Which one got a good score this year? How many do I get?" I think more people will simply say "Eh, I don't have time to keep up with all of this" and find less complex offerings. If the long time buyer can't name ALL of your wines off the top of their head, you have too many.

6. If you don't love it, consider other options. If you are cringing because your profit margin in year six is equal to a money market fund, then you are thinking too short term. You might also be making more money than your neighbor! Look 10-20 years out. Wine is a poor business. Period. The term "capital intensive" was actually created in regards to the wine industry. Highly regulated. No revenues for three years after most of your costs. Increasing global competition. And people can tell when they are dealing with someone who loves the industry. Those that are in it for the money only are very easily recognized. I can't think of a more boring place to live than wine country if you don't like wine. On the other hand, people love to buy from good people here. Jennifer and Herb Lamb, Steve Lagier and Carole Meredith....who the hell would want to drop off their lists? No one who has met them!!!

So these are things I recommend one thinks about for anyone who is looking to start a winery at any price point in this new economy.
__________________
King Of Milwaukee"

Thanks Brian interesting read.

please foward the next part to Colin at Kays Amery!!..

Red Bigot wrote:4. No hostage wines! There is only one reason to attach one wine to the purchase of another; one of the wines is not selling. You must ask "Why?" It is probably the price or perhaps the quality. Instead of using the popular wine to sell the one that is not selling, accept the market's verdict and alter your plan. If you don't, and assume that the market is all wrong, sooner or later there will be a price to pay. I think that people will pay the hostage fee to get their prized wine, but I also think that deep down they begin looking, even HOPING to have a reason to drop that list from that point out.

ive stopped buying this year, but im sure they will not miss my purchaes.
c

Christo wrote:Thanks Brian interesting read.

please foward the next part to Colin at Kays Amery!!..

Red Bigot wrote:4. No hostage wines! There is only one reason to attach one wine to the purchase of another; one of the wines is not selling. You must ask "Why?" It is probably the price or perhaps the quality. Instead of using the popular wine to sell the one that is not selling, accept the market's verdict and alter your plan. If you don't, and assume that the market is all wrong, sooner or later there will be a price to pay. I think that people will pay the hostage fee to get their prized wine, but I also think that deep down they begin looking, even HOPING to have a reason to drop that list from that point out.

ive stopped buying this year, but im sure they will not miss my purchaes.
c

Yeah, I have been thinking of emailing Kays to ask about their marketing strategy - 2 bottles of Block 6 (with 4 other wines) for long-time mailing list customers then it's available in 6-packs at retail.

Good read, many relevant points.

The "Less is more...in terms of multiple bottlings really does apply to my wine buying. It first happened with Wolf Blass when, in Canada, they went from the Yellow and Black Labels to add the Red, Blue Green, Brown and Grey. I quickly lost interest and have never bought another Wolf Blass wine.

Generally I don't mind a producer who makes two tiers of wine but any more than that I start to lose interest. I have bought Peter Lehmann's Mentor but the Shiraz gets fuzzy what with their Stonewell, Eight Songs, Futures, Barossa, and Weighbridge.

Cheers......Mahmoud.

Red Bigot wrote:

Christo wrote:Thanks Brian interesting read.

please foward the next part to Colin at Kays Amery!!..

Red Bigot wrote:4. No hostage wines! There is only one reason to attach one wine to the purchase of another; one of the wines is not selling. You must ask "Why?" It is probably the price or perhaps the quality. Instead of using the popular wine to sell the one that is not selling, accept the market's verdict and alter your plan. If you don't, and assume that the market is all wrong, sooner or later there will be a price to pay. I think that people will pay the hostage fee to get their prized wine, but I also think that deep down they begin looking, even HOPING to have a reason to drop that list from that point out.

ive stopped buying this year, but im sure they will not miss my purchaes.
c

Yeah, I have been thinking of emailing Kays to ask about their marketing strategy - 2 bottles of Block 6 (with 4 other wines) for long-time mailing list customers then it's available in 6-packs at retail.

TBF you could only get your four bottle allocation of Clonakilla Shiraz Viognier this year as part of a minimum half case order. And I'm not crying myself to sleep at having to take $50 worth of Hilltops Shiraz as well...

Mahmoud Ali wrote:Good read, many relevant points.

The "Less is more...in terms of multiple bottlings really does apply to my wine buying. It first happened with Wolf Blass when, in Canada, they went from the Yellow and Black Labels to add the Red, Blue Green, Brown and Grey. I quickly lost interest and have never bought another Wolf Blass wine.

Generally I don't mind a producer who makes two tiers of wine but any more than that I start to lose interest. I have bought Peter Lehmann's Mentor but the Shiraz gets fuzzy what with their Stonewell, Eight Songs, Futures, Barossa, and Weighbridge.

Cheers......Mahmoud.

A good post Mahmoud. I loathe the word 'portfolio', especially when it's used in wine. There are some good producers that are have products for varying markets, but as my old mum used to say, you can't please all the people all of the time.

I think that she was referring to her children, but i hope not.

Christo wrote:Thanks Brian interesting read.

please foward the next part to Colin at Kays Amery!!..

Red Bigot wrote:4. No hostage wines! There is only one reason to attach one wine to the purchase of another; one of the wines is not selling. You must ask "Why?" It is probably the price or perhaps the quality. Instead of using the popular wine to sell the one that is not selling, accept the market's verdict and alter your plan. If you don't, and assume that the market is all wrong, sooner or later there will be a price to pay. I think that people will pay the hostage fee to get their prized wine, but I also think that deep down they begin looking, even HOPING to have a reason to drop that list from that point out.

ive stopped buying this year, but im sure they will not miss my purchaes.
c

You can include me in the list. After buying all of their wines every year direct from them (in some years, 4-5 cases of their other wines besides Old Block 6 Shiraz) I stopped buying from them immediately after they started wine hostaging. Basically I never bought from any winery that does this and will never buy in the future either.

Lets hope Al-Qa'ida never hear about wine hostaging!

Loztralia wrote: TBF you could only get your four bottle allocation of Clonakilla Shiraz Viognier this year as part of a minimum half case order. And I'm not crying myself to sleep at having to take $50 worth of Hilltops Shiraz as well...

Yeah but that was do to vintage restrictions, not just weird marketing.
c

Christo wrote:

Loztralia wrote: TBF you could only get your four bottle allocation of Clonakilla Shiraz Viognier this year as part of a minimum half case order. And I'm not crying myself to sleep at having to take $50 worth of Hilltops Shiraz as well...

Yeah but that was do to vintage restrictions, not just weird marketing.
c

Theoretically so is the Kays situation, it was a very small vintage, but the strange bit is the Melb distributor was able to supply about 5 dozen Block 6 2006 to one merchant who sold it without any "hostage" arrangement. Another would sell a 6-pack of Block 6 if you bought 6 other Kays wines. Very inconsistent and certain to PO a few mailing list customers.

Red Bigot wrote:

Christo wrote:

Loztralia wrote: TBF you could only get your four bottle allocation of Clonakilla Shiraz Viognier this year as part of a minimum half case order. And I'm not crying myself to sleep at having to take $50 worth of Hilltops Shiraz as well...

Yeah but that was do to vintage restrictions, not just weird marketing.
c

Theoretically so is the Kays situation, it was a very small vintage, but the strange bit is the Melb distributor was able to supply about 5 dozen Block 6 2006 to one merchant who sold it without any "hostage" arrangement. Another would sell a 6-pack of Block 6 if you bought 6 other Kays wines. Very inconsistent and certain to PO a few mailing list customers.

it is very dissapointing to see a winery like Kay Brothers treating its loyal mailing list members like this

ufo wrote:

Red Bigot wrote:

Christo wrote:

Loztralia wrote: TBF you could only get your four bottle allocation of Clonakilla Shiraz Viognier this year as part of a minimum half case order. And I'm not crying myself to sleep at having to take $50 worth of Hilltops Shiraz as well...

Yeah but that was do to vintage restrictions, not just weird marketing.
c

Theoretically so is the Kays situation, it was a very small vintage, but the strange bit is the Melb distributor was able to supply about 5 dozen Block 6 2006 to one merchant who sold it without any "hostage" arrangement. Another would sell a 6-pack of Block 6 if you bought 6 other Kays wines. Very inconsistent and certain to PO a few mailing list customers.

it is very dissapointing to see a winery like Kay Brothers treating its loyal mailing list members like this

When we were tasting at Kay Bros with Colin Kay in November my cousin signed up for the mailing list and that was the first time I heard about the allocation of Block 6; as far as I know its not allocated in the US but it is very hard to get. While we were tasting another customer was being served by other cellar door staff and he wanted a bottle for a gift and was initially resigned to not getting the Block 6 but Colin said that special allowances can be made and the guy walked out with his bottle; as far as I know he was not on the mailing list.

I'd suggest that anyone who has a problem with the allocation of the wine contact Kay Bros and make your feelings known, politely of course. I might be wrong but I think the present economic situation might help make a practice like this obsolete.

Mike

Christo wrote:

Loztralia wrote: TBF you could only get your four bottle allocation of Clonakilla Shiraz Viognier this year as part of a minimum half case order. And I'm not crying myself to sleep at having to take $50 worth of Hilltops Shiraz as well...

Yeah but that was do to vintage restrictions, not just weird marketing.
c

Just being devil's advocate here (I've got no real complaint as I said) but even if there's a four bottle limitation due to tiny vintage there isn't in theory any reason why you shouldn't be allowed to order those four bottles and nothing else. But I'm quibbling about nothing very much here.

Loztralia wrote: But I'm quibbling about nothing very much here.

AGREED!!!

c

In reference to

5. Less is more...in terms of multiple bottlings.

I can see the point here but to be honest I think that Australian producers can make use of multiple bottlings if the approach is smart. For example Wayne Dutschke has several levels of wine from the same vineyard – the St Jakobi, Oscar Semmler, and Single Barrel. These wines represent different levels of quality going from Single Vineyard, to Best of Vintage, to Best barrel. Its a smart approach to marketing because it not only serves different levels of affluence among his customers but its also a way for aficionados to sample different expressions of a single vineyard over multiple vintages.

Other smart approaches are the Regional Series of Shiraz put out by Kilikanoon, and the Terroirs of the Barossa by Chateau Tanunda; the Chateau Tanunda wines were all made the same way and I believe the Kilikanoons as are as well. These sorts of wines showcase the diversity of Shiraz not only between regions but within a region. Wine Australia could do worse than promote these types of wines internationally as tools to showoff the regional diversity of Shiraz in Australia.

Mike

KMP wrote:

ufo wrote:

Red Bigot wrote:

Christo wrote:

Loztralia wrote: TBF you could only get your four bottle allocation of Clonakilla Shiraz Viognier this year as part of a minimum half case order. And I'm not crying myself to sleep at having to take $50 worth of Hilltops Shiraz as well...

Yeah but that was do to vintage restrictions, not just weird marketing.
c

Theoretically so is the Kays situation, it was a very small vintage, but the strange bit is the Melb distributor was able to supply about 5 dozen Block 6 2006 to one merchant who sold it without any "hostage" arrangement. Another would sell a 6-pack of Block 6 if you bought 6 other Kays wines. Very inconsistent and certain to PO a few mailing list customers.

it is very dissapointing to see a winery like Kay Brothers treating its loyal mailing list members like this

When we were tasting at Kay Bros with Colin Kay in November my cousin signed up for the mailing list and that was the first time I heard about the allocation of Block 6; as far as I know its not allocated in the US but it is very hard to get. While we were tasting another customer was being served by other cellar door staff and he wanted a bottle for a gift and was initially resigned to not getting the Block 6 but Colin said that special allowances can be made and the guy walked out with his bottle; as far as I know he was not on the mailing list.

I'd suggest that anyone who has a problem with the allocation of the wine contact Kay Bros and make your feelings known, politely of course. I might be wrong but I think the present economic situation might help make a practice like this obsolete.

Mike

Well , Colin must have been in a very good mood on that day. I know him closely and never seen him doing such a thing, mind you it is not that he is not a nice person, he is a lovely chap but very strict on Old Block 6 allowances. He does have an allocation for US market, he has been exporting to US for a few years and it is the major reason why he had to reduce the amount supplied to the members and local market.

Ironically, the consequence of Colin's approach is that the Old Block seems even more desirable.

Therefore, the Old Block offered by retailers unattached will sell very quickly.

Perhaps a bit of reverse psychology would work; tell mailing list customers that if they want the Hillside, they have to buy two bottles of Old Block

Then it would be the Hillside that would sell very quickly through retailers!

While I'm no big fan of hostage-pricing (the term is new to me), I buy a case or two from Kay's every year and have never had a problem mixing up the wines to combine a little of the Block 6 with some of the other wines. In some years, I actually think the Hillside or the basic shiraz (was Amery, now Basket Press) are wines I prefer over the Block 6 (at least at some stages in their development).

From what I recall Gavin saying, at least some of Kay's distribution to retail onsellers uses cellar door price as landed unit cost. You may not have strict allocations on the small volumes at some retailers, but you will be likely paying more than the CD price.

I think if I had to choose, I'd prefer hostage pricing to closed mailing lists.

pstarr wrote:While I'm no big fan of hostage-pricing (the term is new to me), I buy a case or two from Kay's every year and have never had a problem mixing up the wines to combine a little of the Block 6 with some of the other wines. In some years, I actually think the Hillside or the basic shiraz (was Amery, now Basket Press) are wines I prefer over the Block 6 (at least at some stages in their development).

From what I recall Gavin saying, at least some of Kay's distribution to retail onsellers uses cellar door price as landed unit cost. You may not have strict allocations on the small volumes at some retailers, but you will be likely paying more than the CD price.

I think if I had to choose, I'd prefer hostage pricing to closed mailing lists.

Yes, the problem this year, though, is that some online retailers are selling the Old Block for virtually the same price as it is sold through the mailing list.

For that reason, I bought half a dozen bottles online, rather than through the mailing list.

I don't think the "hostage pricing" as such applies in the Kays example.

The small vintage has limited availability of the Block 6 so it has been restricted to ensure all mailing list customers to get an allocation. The requirement to purchase 4 other wines I think is merely for logistical reasons to get customers to make up a 6 pack. This is pretty much a standard minimum order limit on any winery mailing list and clearly much easier for the winery from a packaging perspective

As others have stated, the issue in this case is the fact 6-packs of the wine have been available at less than 5% markup at retail outlets.

awatt wrote:I don't think the "hostage pricing" as such applies in the Kays example.

The small vintage has limited availability of the Block 6 so it has been restricted to ensure all mailing list customers to get an allocation. The requirement to purchase 4 other wines I think is merely for logistical reasons to get customers to make up a 6 pack. This is pretty much a standard minimum order limit on any winery mailing list and clearly much easier for the winery from a packaging perspective

As others have stated, the issue in this case is the fact 6-packs of the wine have been available at less than 5% markup at retail outlets.

Himmm, it looks like everbody is missing one very important point. Kay Bros might have smaller vintage this year or that year or whatever. It is not the main reason for them to revert to the wine hostaging. The main reason is them starting to export to US with ever increasing amounts every year and the second is other lables not selling so well. I myslef have seen so many customers turning down Hillside when it is offered instead of Old Block 6 before wine hostaging started there and not to mention mountains of Amery Shiraz and Cab Sav waiting in their warehouse. Don't get me wrong, I am not putting down their wines. They make great Reds but I think it is their marketing strategy or I should say not having any marketing strategy at all. Colin is a bit old fashioned (minded) guy. Last time when I was there in 2005 they were using an ancient Laptop Windows 3.1 runing on it!!

Just put the Block 6 grapes back into vintage ports. Then there wont be any problem and I will be a happy little camper!


cheers

Carl