Friday, April 23, 2010

A splurge is cheaper than we think

The folks at [yellow tail] helpfully conducted an [online survey] of American wine drinkers recently, and the findings are depressing for wine producers -- unless you're [yellow tail].

The purpose was to position Yellow Tail Reserve as a special occasion wine, so you have to consider the results in that light. However, I don't see any reason to doubt these numbers; they seem right.

The most interesting answer came to this question: "If you are are entertaining at home to celebrate 'Life's Little Special Occasions,' how much would you spend on a bottle of wine?" (That's their wording, not mine. Reminds me of The Simpsons' dog.)

Survey said:
$3 - $5.99 3%
$6 - $9.99 15%
$10 - $14.99 43%
$15 - $19.99 25%
$20 and up 14%

Wow, Americans are cheap! I feel sorry for the fully 18% of Americans who think a special occasion wine is something under $10. Sure, there are decent wines in that price range (Vinho Verde!), but splurge wines?

More significant is that a plurality of folks think going up into 4 digits marks a special occasion. That just makes me sad, because to me the sweet spot for good value and interesting wines of terroir is about $15 - $25.

What this poll explains is why so many cheap wines have pretentious subtitles: "Vintners Reserve" or "Private Selection." They're selling an illusion. It's like a funeral in a trailer park, with everyone in shiny suits and clip-on ties.

It also means that every winery in Napa Valley and Oregon and Burgundy and other regions that don't really make cheap wines are competing for just 14% of wine drinkers. I suppose that's not surprising.

But it does make me reflect on writing about wine. I'm doing a piece on Burgundy for Wine Review Online right now, and I didn't know what the wines cost when I tasted them. So I look them up and discover that even an Auxey-Duresses, not a fancy region, that I loved costs $44. And that Batard-Montrachet that was so nice? $235. I don't think anybody would spend that kind of money on my recommendation alone.

Yet I'm not unusual. The great majority of stories about wine are about wines over $20, because they're usually the wines with the most interesting tales to tell -- plus they're more likely to be good. As a group, wine writers are writing 86% of our stories about wines that only 14% of Americans will ever drink.



King Krak, I Drink the Wine said...

I feel sorry for the spouse's of the 86% who think splurging on wine is spending less than $20. Holy cheapskate, Batman!

Dan said...

I don't think the wording of the question is clear enough about this being a "splurge" purchase. The reference to "entertaining at home" probably throws things off quite a bit.

I am a pretty big wine buff, but when I am entertaining more than a few visitors at home, I usually don't put out bottles that cost more than $10-15/bottle. They are good wines, but not expensive.

Anonymous said...

Any fool with more money than sense can go out and spend a lot of money on a bottle of wine - special occasion or not. The hard and fun part is to find great value wines that will be great accompaniments to whatever is being served - and won't break the bank. There are many out there in the $10-15 category and, given the current global wine glut, a goodly number below that level as well. One more wine counselor that tries to spin the "snob's yarn" that anything below $15 is cheap is one too many! For the record, this little missive has been written by a wine professional. Barry

Anonymous said...

I get most of my wines about the 20 buck mark after their (huge) discount and make my big margins on the one, two bottle retail clients and it's working quite well. I call it the "distributor discount" and give my members the deep discount (35% off cases) AND retain high% of my 1,500 member wine club while positioning myself in a great price point.

Those who had charged $40 and above before the second great depression are going to scream bloody murder... if they aren't already.

Gorden Gecko from Wall Street, "greed is good, greed is right"... Unless times are bad and the wanna bee rich people making $40 and above purchase disappear like the Bush Administration with all our money... Greedy people get what they deserve.

Todd Trzaskos said...

Although this little bit of data does support the fact that we are still a cheap wine culture, this is a good example of how the data set can skew perceptions of the results. Since this was a Yellow Tail survey, we have to assume that the participant demographic is likely to be one in line with the YT's quite possible that some survey participants have never had $20+ bottle of wine, and so would not have any experience that might draw a "splurge" to the more expensive end.