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Sunday, May 2, 2010

The economy and a winery owner that gets it!

 The Sunday, May 2nd, Santa Rosa Press Democrat Business Section has an article about "J" Vineyards, known for higher priced sparkling wine.  Judy Jordan saw the sales of her $50+ wines plummet along with the economy.

 She's not the only one.   Most owners are either riding it out (mostly the smaller producers) or are heavily discounting wholesale so you see great sale prices in the stores while they hold their suggested retail price waiting for better days.   The latter is okay if your sales are all via the retail market.   Most though sell in their tasting rooms plus to wine club and mailing list customers.   It's pretty damn unfair to the folks dumb enough to buy directly from the winery.

 So Judy actually lowered prices and put out a less expensive blend.  At $18 her cuvee is selling like hotcakes because customers see it as a tremendous bargain from a winery that normally sells for fifty bucks.

Press Democrat article

 For some reason because wine is seen as a luxury item you don't see wineries often lowering their suggested retail prices.  A few wineries have the cash to ride it out or are still able to sell out in this economy -- that's great for them.   But for most why do they wish to screw their most loyal customers -- wine club members and others who buy direct?   You would think these would be the folks they are most concerned about.

 Judy's less expensive cuvee is an idea more wineries should follow.   

 Let's say you are a high-end Pinot Noir producer and you make 4,000 cases annually of a $40 Pinot.   Lets also say you'll be lucky to sell half of that so what do you do?   Start by taking at least half of the Pinot that is still in barrels, buy some cheaper Pinot from the same appellation, if possible,  blend them and sell it for $25 or less.   Give it a special name, maybe a slightly different label, or even a different name if you don't like your own name associated with a $25 wine (though I don't know why you wouldn't).   Yes, there is actually extra Pinot Noir available on the open market.  Ever had the $10 Mark West Pinot?   Try it!  Helluva wine and how do they do it for that price?   Of course, if you are a purveyor of $40 Merlot you have even a better chance of putting together a nice $15 one from available grapes.   Time to get creative!