Tag Archives: premiumization

Wine premiumization and the Winestream Media

wine premiumization
“Reportin’? We don’t need no stinkin’ reportin’.”

Wine premiumization may be ending, but you wouldn’t know it by reading the Winestream Media

By most measures, the end of premiumization is underway. Wine drinkers have been opting for less expensive wine over the past six months, and, depending on which expert is talking, the trend will continue and perhaps even accelerate. In other words, lower wine prices and better quality cheap wine.

But it would be difficult to know this from reading the Winestream Media.

I don’t write this to be snarky (well, maybe, just a little), but to point out how difficult it is to tell what’s going on in wine from its most important media outlets. Wine-searcher.com somehow managed to run these two stories almost at the same time – “Premium wine falls victim to the coronavirus” and “Wine sales defy doom and gloom.” And this doesn’t include the site’s regular roundup of all things high priced – “Bordeaux’s most expensive wine,” “Napa’s most expensive wine,” and (my favorite), “Brunello 2015: Another perfect vintage.”

At the Wine Enthusiast, meanwhile, one writer was salivating over $40 California gamay, which is about as premiumized as wine gets that isn’t cabernet sauvignon. And the Wine Spectator has reassured us that it will continue to cover the 2019 Bordeaux futures market, despite what the magazine’s Bordeaux reviewer called the pandemic’s “rude interruption.”

So, why?

Why is the Winestream Media treating this almost unprecedented moment in world history – and with all of the changes it looks like it will bring to wine – as just another minor sales blip?

• Because that’s what it does, and to expect more of it is expecting more than it is capable of. Yes, it may well be fiddling while Rome burns, but it doesn’t understand that Rome can burn. Rome is eternal, just like wine scores and $300 Napa cabernet.

Because it doesn’t want to see what’s going on, as Richard Hemming, MW, explained to us last week. If wine writers write things the wine business doesn’t want written, there’s a good chance the wine writers will find themselves persona non grata. As Hemming said, there’s no reason consumers should necessarily trust wine writers.

• Because there aren’t really any good numbers to describe what’s going on, even if a wine writer wanted to write about it. We’ve noted this on the blog many times, and another example came up last week. David Morrison at the Wine Gourd has made a specialty of parsing wine industry statistics, whether sales or scores, and noted last week about one sales study: “The conclusions seem to vary from quite accurate to wildly exaggerated.”

So what’s a consumer to do? Buy wine you like, be willing to try something else, and wait to see what prices will do. We’ll almost certainly see prices drop before the Winestream Media discovers most of us aren’t all that interested in $40 California gamay.

Winebits 639: Premiumization, Pennsylvania state stores, direct to consumer

cheap wine
“Premiumization never really bothered me.”

This week’s wine news: Will the pandemic finish off premiumization? Plus, turmoil in Pennsylvania’s state wine stores and the favorite DTC grapes

Is premiumization over? A top wine business analyst has told the industry that its drink less, but drink “better” mantra – premiumization – could be ending thanks to the coronavirus pandemic. Spiros Malandrakis, industry manager for alcoholic drinks at Euromonitor International, told the Harpers UK trade magazine that premiumization is at a crossroads: “What we saw in the recession of 2008 was that even if people that could afford more expensive wines or niche varietals, they didn’t buy them because it looked crass. The context has changed. I’m not saying the industry is over. What we know from history is that people will always continue drinking. It’s not the end of the world but it will be a different world to the one we’re used to.” In this, he’s not the first to predict premiumization’s end. But it is one more voice suggesting that the new normal in the new future could be $10 wine.

More fun in Pennsylvania: Pennsylvania’s state liquor store system has come in for much fun on the blog. And why not, given wine vending machines? But the decision to close the state stores during the pandemic has met with serious opposition, not the least of which is the loss of state tax revenue. Even in New York, the center of the U.S pandemic, liquor stores have remained open. Apparently, the state is reconsidering its decision, and may allow limited Internet alcohol sales. April 2 update: The state did reopen its online liquor sales system, but the system will be quite limited.

Favorite DTC grapes: This is a contradiction that seems difficult to explain: Why is chardonnay the best selling wine grape at retail, but cabernet sauvignon is the best seller when consumers buy directly from the winery? That’s the result from a recent SOVOS/Ship Compliant study (via Wine Industry Insight), where cabernet was the best seller with 17 percent of volume, almost twice as much as chardonnay. Typically, chardonnay accounts for about 20 percent of retail sales. Any thoughts would be much appreciated.