Ferreting Out Wine Gems Has Never Been Easier – and More Difficult
Today’s wine market is unlike any in the history of the retail wine trade. Never has there been more wine available at such high-quality levels and at such reasonable quality and price thresholds.
Think about it. When was the last time you opened a bottle of wine, poured it, tasted the first sip and complained about the quality? When was the last time you experimented with an inexpensive bottle and were so disappointed you poured the remaining wine down the drain? Or, when was the last time you splurged on a bottle and were disappointed in the quality of the wine?
This abundance of quality wines represents the epitome of the worldwide wine market in today’s economy. The improving global financial markets are aiding in increased sales as well.
As with all markets, much of success is perception. A perception of the source of wine, a perception of the price of wine and a perception of the expansiveness of wine supply chains. While the reality of the wine market is as I’ve described, there are multiple factors that cloud the state of the industry today.
First, while the proliferation of wines is at an all-time high, the wines being produced are in the tight control of a small number of mega producers. Consider a statistic I’ve quoted on numerous occasions: 84 pecentr of the wine produced in the United States is from 2 percent of the wineries. Now that’s economy of scale – and significant savings to consumers. But it makes for a rather homogeneous selection. There’s not much diversity in a wine that is produced in annual quantities measured in millions of cases. Yet this is the 21st century business model.
Second, the other 98 percent of the wineries are smaller scale, the majority producing less than 5,000 cases per year. There are more than 9,000 wineries in the United States, nearly half in California. Yet these wines are not well-represented on retail shelves. Why? The top 10 distributors in the United States control over 50 percent of the retail market – and by extension, shelf space. As big businesses their priority is repeat sales. Wineries producing less than 5,000 cases cannot sustain long-term retail popularity. Brand loyalty is the ever-elusive goal of distributors and winemakers. If they are unable to consistently offer the consumer what he or she wants, the fickle consumer moves on to the next brand. Today, there are excellent wines that are can’t gain traction through the current retail model.
Third, wines offerings in the mass media continue to grow. While representing a small portion of annual wine sales in the United States, private label clubs have attracted a loyal following. Have you ever been seduced by an introductory offer of 12 bottles for $69.95? Have you ever attempted to repurchase the same wine? These private clubs, many of which are promoted under the banners of national newspapers, are enticing but rarely satiate long-term appetites.
Fourth, direct winery sales are beginning to gain popularity. Whether via a club structure, such as the mass media type above, or mailing list subscriptions, this is an excellent means to find small production wines made by passionate winemakers. I am a subscriber to the mailing lists of several California wineries. Periodically I receive email offerings of new releases. Several wineries require an annual commitment; others are of the pick-and-choose, no obligation nature.
Yet, for all these choices and perception-quashing opportunities, there remain a significant number of wines that fly under the radar. These winemakers are faced with multiple challenges in selling their excellent wines. These include small production, smaller marketing budgets and even smaller capital resources. At times the only means to become aware of their existence is through local word-of-mouth. This requires a trek down dusty, winding country roads. I have undertaken multiple expeditions to several wine regions, notably California, in search of little-known jewels. I have rarely been disappointed. But the challenge is formidable.
I recently embarked on one of these expeditions. I’ll regale you with my recent exploits, beginning next week.
Nick Antonaccio is a 40-year Pleasantville resident. For over 20 years he has conducted wine tastings and lectures. Nick is a member of the Wine Media Guild of wine writers. He also offers personalized wine tastings and wine travel services. Nick’s credo: continuous experimenting results in instinctive behavior. You can reach him at nantonaccio@theexaminernews.com or on Twitter @sharingwine.
