March 18 2008
Have you seen the new Dunkin Donuts commercial? It is something of a commentary, in my mind, on the opportunity that is slipping through domestic winery fingertips.
It is embedded below and lampoons the retail coffee culture of mangled half-English words--calling it “Fratalian,” for example. It is a small slice of advertising genius—equal parts funny and memorable and a reminder that says sometimes staying with the tried, true and comfortable is a good thing.
This advertising stuck with me for a couple of reasons. Millenials aside, who drink internationally with a view of the global village, some of the dynamics of the U.S. wine industry COULD help engender the same kind of love and attraction for California, Oregon and Washington wines, the tried, true and comfortable, particularly as consumption increases at an incredible pace. Consumption of domestic wines could increase were it not for a small problem.
Prices.
California and West Coast wineries are going to price themselves out of 95% of the market. Meanwhile, imports, with incredible quality at price, seem to be all too willing to occupy the abandoned areas of the wine market.
I was in Chicago yesterday and stopped in at Binny’s to do some browsing. There on the shelf the news of many domestic wineries going upstream in price was never more evident. The $11 to $15 “super-Premium” price segment has virtually disappeared.
Vanished. Disappeared. A David Copperfield-like trick for our times. Alternatively, perhaps cynically, it is more like D.B. Cooper—a disappearing act while making off with the money.
It was not so long ago that you could find a decent bottle of wine in the “super-premium” category. However, with more wineries going into the ultra-premium category, a notch below the $25 + luxury category, there is a gap big enough to drive a truck through.
It would seem that it might be manifest destiny for a lot of people to trade down instead of trading up. Personally, I am more inclined to take a risk on a cheaper bottle than a more expensive bottle. At the very least, in these economic times, I am not likely to deviate from my buying patterns and move up market, save for the occasional bottle.
Lest you think I am doing too small of a sample, I would point you to the current issue of Wine Spectator—the one that says, “California Values. Best wines to drink now from $8 to $50.”
I do not mean to burst anybody’s bubble here, but a $50 bottle of wine is not exactly a value in my book. This is not a knock on Wine Spectator either, because I am not shooting the messenger, but having 58 out of 189 value wines, or approximately 31% of wines priced at $15 or under is not my definition of value. The balance of the wines, generally, is in the $16 to $35 price range—the ultra-premium and luxury market. Since when did “value” become synonymous with “ultra-premium” and “luxury?”
It is too bad about the disappearing price segment. As entry consumers continue to move through the price spectrums as they become more attuned to wine, they are going to move into the $11 + category pretty shortly, if they are not already there, and see a gigantic huge domestic hole. It may just be that Malbec outpaces Merlot. Perhaps wine lovers won’t be learning more “Fratalian,” but definitely “Argintenglish” or “Chileanglish.”
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