Protected: With a Name, First Milestone Reached

This content is password protected. To view it please enter your password below:

Password:

PW: What the Label Says about Your Wine

A dated article I read from Practical Winery & Vineyard on how label design can affect one’s perception of the wine. That labels themselves are important is nothing new – like how cute animal motifs on bottles are hugely popular with the mass market, but can be turnoffs for the more sophisticated wine connoisseur – but was really interesting about the article is the way the author explained the thought process that went into redesigning a winery’s label.

What the Label Says about Your Wine
BY Skye Hallberg & Ron Woloshun
Cogito Creative Works

Designing a new label for Fred Scherrer is no easy task. He is a very particular man. At Scherrer Winery (Sebastopol, CA), he fine tunes the bottling machines himself; has four people on the sorting table at harvest when two would probably do perfectly; he conducts multiple blending trials on press fractions during day-long pressing; and he produces some of the best wines in California using his “I pay attention to every detail” style.

Early in 2006, I was at Scherrer Winery picking up a case of wine that a mutual friend had left for me when I pulled Scherrer aside. “Fred,” I began, breathing in a big gulp of air, “your wines are sumptuous, but they don’t taste quite as good as they could.” He paused and looked down at me (it’s a long way down — Fred is 6’2″), waiting for my critique. “Your label makes your wine taste just a tad … uh … generic.”

“Hmm, people like this label,” replied Scherrer. “Besides, what does my label have to do with how the wine actually tastes?”

This is the story about why and how we changed the Scherrer wine label. It’s also a story about how to create or change your label, so your wine tastes better to people. Yes, you read that right: You can make your wine taste better without touching what’s inside at all.

WBI: The Denise Empire

I like the articles on Wine Business International. Very thought provoking and relevant. Dug up an older article they had on Denise The Wine Shop, a chain of retail wine stores in Singapore and Malaysia. They were the first store I visited when I came back to Singapore last year. I’ve bought quite a few bottles from them here and there, and for several DGS, but I found that they aren’t really suited for our DGS themed tastings – not enough variety. And my other grouse is that they have quite a paltry selection of US wines; not even a single Zinfandel for my Zin tasting. That said, their business model is to be admired – I was looking into the idea of setting up a Wine Styles sort of retail store in Singapore a few years ago when friends told me that Denise was already a big presence here.

The Denise empire
by Jenny Tan
May 10th 2008

The gap between high-end wine boutiques and supermarket wines in the Singapore wine retail scene was suddenly bridged when Malaysian wine retail chain Denise The Wine Shop, entered the market. Meininger’s finds out more.

Singaporeans are drinking more wine, there’s no doubt about it. According to Singapore customs, the import of wines has risen from 4.3m litres in 2003 to 6m litres in 2006, with more entry-level wines entering the market through casual outlets such as petrol kiosks and supermarkets. The Straits Times also recently reported that the well-known supermarket chain, Fairprice, has seen a 30% increase in wines between S$18-$25 ($13/€6-$18/€11).

The increase in demand is in part buoyed by a healthy economy, but another undeniable reason is the ready availability of wine retail stores for consumers on the island.

Leading the pack in the wine retail business is Denise Wine Shop, which has opened 17 shops since it started in 2006. In the past, choices of buying wines from retail stores were limited. There were a few familiar favourites, such as Vinum Fine Wine Merchants, Crystal Wines or Jason’s Supermarket, but the idea of a wine retail chain would have been ludicrous to many back then.

Denise Wine Shop is the brainchild of David Lim, who named the shop after his daughter and the Greek goddess of wine. It started in Malaysia in 2001, in the unlikely neighbourhood of SS2 – a predominantly Chinese area where the residents were better known for drinking brandy than wine. But despite raised eyebrows, this was precisely the crowd that Denise wanted to pursue. Wine shops then were perceived as snooty locations reserved only for the rich, so Lim consciously designed a wine shop that was just the antithesis. Glass doors were replaced with casual air-con curtains, and the shops were open 12 hours a day for the first six months.

WSJ: Luxury Wine Market Reels from Downturn

Think Wine Marketing has several interesting responses to the recent slump in the luxury wine market.

Luxury Wine Market Reels from Downturn (July 8 2009):

ST. HELENA, Calif. — Many of America’s high-end wineries are reeling from the economic downturn, as even wealthy drinkers slash spending on fine wines.

The slump comes as Americans continue to drink more wine overall. Recession-weary consumers, however, are buying more mid- and low-priced wines, causing a sharp falloff in sales of wines priced at $25 a bottle and higher.

The shift is pinching the profits of luxury vintners in Napa and Sonoma counties and forcing many to cut prices and seek new distribution channels. Some hard-hit wineries have quietly put themselves up for sale. There is likely to be “a lot of M&A activity in the short-term,” says Mike Jaeger, president of Wilson Daniels Ltd., which helps luxury winemakers market their products.

The slump follows a long boom period for high-end wines fueled by Americans’ rising wealth and interest in wine. In previous recessions, the high end — less developed than it is now — was relatively unaffected. “Nobody in the world has seen something like this,” says Claude Blankiet, a maker of fine wines. Revenue at his Yountville, Calif., company, Blankiet Estate, has slipped 40% this year, he says.

Total U.S. wine sales rose about 5% in terms of volume in the first quarter from a year earlier, but wines priced at $25 a bottle and up fell about 12%, estimates Jon Fredrikson, an industry consultant with Gomberg, Frederikson & Associates in Woodside, Calif.

One sign of the times: Auction Napa Valley — the premier charity and social event of the year — raised just $5.7 million last month, down sharply from the $10.4 million raised last year.

The change in consumers’ buying habits, which became pronounced last fall as the recession deepened, has prompted many retailers and distributors to cut orders of luxury wines. And when they do order the higher-end wines, they are often asking for steep discounts, which are being passed to consumers.

At a Dominick’s supermarket in Lincolnwood, Ill., a 2005 bottle of Gundlach Bundschu Merlot from Sonoma recently was marked down 30% to $23.09.

“Your ability to take advantage of the marketplace is as evident as ever,” says Daniel M. Taub, a real-estate executive in Rye Brook, N.Y. He recently has been snapping up upscale wines at discounts of 10% to 25%.

But such price cuts are taking a heavy toll on wineries’ cash flows, and could make it difficult for them to raise prices in the future. “If you’re a $90 wine and all of a sudden you’re on the Internet at $50, how do you ever become a $90 wine again?” says Elliot Stern, chief operating officer of the Sorting Table, a Napa Valley-based wine distributor.

One of the main markets for high-end wineries is luxury restaurants, and they have been hurt as Americans dine out less. Morton’s the Steakhouse, an upscale restaurant chain, has revised its menu to offer more bottles in the $60 to $70 range. “A lot of our guests don’t want to pay for $200 or $300 wine,” says Tylor Field, vice president of wine and spirits for the Chicago-based chain.

That has forced some vintners to shift their sales tactics. Duckhorn Wine Co. in St. Helena has increased the “winemaker dinners” it puts on to woo restaurants and other top buyers. Cain Vineyard and Winery in St. Helena has increased the amount of wine it sells to restaurants to sell by the glass, instead of the more common practice of selling the wine at a higher rate per bottle. Restaurants that get wine at the per-glass discount do so because they generally need to buy more bottles of wine because more people order by the glass. “Restaurants put up a virtual buying freeze a few months ago, so we had to do something,” says Christopher Howell, Cain’s winemaker.

Distributors are pulling back, too. Henry Wine Group, a distributor in Benicia, Calif., has cut its number of wine products to 3,000 from 3,600 a year ago. Fred Reno, chairman of the company, said many of the discontinued wines include high-end California labels.

The companies most vulnerable to the downturn, and which may not survive, are mom-and-pop vintners that began operations in the past three to five years and lack established brands, analysts say.

Some of the newer operations are using new marketing techniques to cope. Alpha Omega, a boutique winery in Rutherford, Calif., has begun using online services Facebook and Twitter to reach out to its customers. The winery three years ago began targeting consumers directly, and the strategy is now paying off; revenue is up 40% so far this year, compared with a year ago, in part because it doesn’t have to share many revenues with a distributor, says co-owner Robin Baggett.

The good news for high-end vintners is they are coming off an extraordinary run of near constant increases in sales over the past 15 years. Meanwhile, experts say the downturn has been mitigated by California’s relatively lean grape crops in recent years, which have kept supply from outstripping demand.

Few industry observers expect many vintners to go under during this slump. But four wineries have consulted with Global Wine Partners, a Napa wine-industry investment bank, about needing to raise money, says Vic Motto, the bank’s chief executive officer. And International Wine Associates Inc. is representing about 10 companies seeking to sell wineries or vineyards, an increase in activity from last year, says Robert M. Nicholson, a principal at the firm.

Industry layoffs, so far, have been milder than in many sectors because most Napa and Sonoma winemakers are small operations and often need what little staffs they have to run tasting rooms and keep vineyards in order. But there have been some notable cuts among some of the larger players. For example, Jackson Family Enterprises, a Santa Rosa, Calif., company that owns labels including Kendall-Jackson, laid off 12% of its staff in January. Last month, Foster’s Group Ltd.’s U.S. unit, the maker of Beringer, St. Clement and other wines, said it would eliminate 120 jobs.