Trading Down On Wine

"You'll see people who on a regular basis have been drinking Kendall-Jackson at $13 and all of a sudden Blackstone is fine at $10," said Dale Stratton, vice president of strategic insights for Constellation Wines U.S., which owns Blackstone, the popular merlot brand. "Loyalty is very low in our category."

Trading down on wine | Santa Rosa Press Democrat // News for California's North Bay and Redwood Empire

Is moving down to Blackstone from Kendall Jackson really trading down? It seems to me that wines like this are indistinguishable from each other. The real question would be why in the world would anyone pay $3 more for the Kendall Jackson in the first place? Mr. Stratton's comment, "Loyalty is very low in our category" is true for one reason: there is no real difference between California wines in this price range. Considering the fact that they know this fact, I can't imagine that the marketing directors and sales managers of these companies sleep very well at night.

A marketing plan that values conformity and fears personality creates this kind of nightmare for those that practice it. Consumers are loyal to wines with distinctive character, which is something any producer should be able to deliver when a wine is over $10 a bottle. These wines don't.

America's greatest wines are stunning examples of the winemaker's art that rival any wine in the world. Why can't we make a good $10 merlot?

Technorati Tags: wine,merlot

Comments

[Josh]

Great points. Especially about "trading down" in the premium category.

To me that's a bastardization of the concept. Trading down (or up) occurs when you buy the absolute cheapest version of a staple/need product so that you can spend the surplus savings on a product that want/desire. No one trades down to cut costs. That's called "cutting back." No need for a fancy term! :-p

While the point about lack of character in 10 dollar Merlot is well taken, we both know why that is so. Character usually means an inconsistent product, which means that moving volume becomes difficult and brand building at a large scale gets onerous. In my opinion, it's equally hard to find mass produced wine from any country that expresses any remarkable character (ie something I'd go out of my way to purchase).

And that's why I buy more expensive wines! That is, when I have the cash. :-)

[Craig Camp]

I suppose you can't be interesting without being inconsistent, but does inconsistency have to sacrifice quality? To be different is sometimes just different, but still delicious. Also, with the climate in most of California, how much would these inexpensive wines vary? We're not talking about pinot noir here.

[Marco Romano]

The Spanish do it very well. Sometimes under $10, despite the American peso's demise. California is shooting itself in the foot.

[Craig Camp]

Yes, it continues to be amazing that the best value wines continue to come from Europe considering the exchange rate. My feeling is that the marketing costs for wines like Blackstone and Kendall Jackson are so high that $3 to $4 of the retail cost are because of their sales and marketing costs.

[Diane Letulle]

Great post. These wines are indistinguishable. Which is why I don't even bother going to the store for them myself. When I'm exhausted on a Friday night, I send my dear husband, a wine neophyte, out with these instructions: "Pick me up a $10 Merlot." I know what it will taste like before I open it up. These are my popcorn wines--I gulp them down watching Netflix with the kids. When I want to sit back and fully enjoy the experience of wine drinking, I open a wine with character--never one of these.

[Brooklynguy]

Very well said, Craig. And your comment about marketing and sales costs as up to 33% of the retail cost of the bottle is scary and true. But it makes sense, as the wine isn't selling itself, the marketing is selling the bottle.

Long Island is the American region that I imagine might be able to make interesting wines that cost about $10 / bottle. And they're pretty good with Merlot out there, cab franc too, and several white varieties. Right now though, their wines are very expensive, even the entry level wines. And they're not spending much at all on marketing.

[Craig Camp]

Diane - to be the Devil's Advocate here, why buy them at all? There are great red wine buys from the Côtes du Rhône, Beaujolais, Marche, the rest of Italy, Spain to put up with boring industrial merlot.

[Craig Camp]

Brooklynguy - I would think farming costs on Long Island are too high for $10 wines. They must have to spray like crazy with all that humidity. What kind of yields can they get?

[Kudzu Fire]

Sangria or bust

[KVolk]

When is a connoisseur not a connoisseur...

[Diane Letulle]

Craig,
I know, this is lame. The reason--lack of planning! I should buy more good wine when I'm at a good wine store...these are wines of desperation and convenience sold at the local quick shop only 5 minutes from home. Believe me, I love picking up the delicious inexpensive wines you mention (and more expensive wine, too), but I need to stock up in advance because all the good wine stores are a bit of a drive.

[Craig Camp]

A sin we are all guilty of! I have an hour drive to decent wine shop so I can relate.