Month: November 2016

There is a popular website, Wine Till Sold Out (wtso.com), mentioned in post 24. I have used it and recommend it but with a caveat: every wine they offer has at least a 90 point rating. They are offered at deep discounts to the ‘retail price’. I am not challenging them on it being accurate, I am saying that when a wine gets a 90+ rating (and if you can’t get at least one from the dozens of raters out there – some with self-serving interests – you shouldn’t be in the business!), the winery ‘creates’ a suggested retail price that ‘they’ cannot sell below which is why you shouldn’t buy wine when visiting a winery unless it is hard to get. If you really like the wine then join their wine club. One reason I do like buying direct is that the haircut is huge due to our three-level marketing system which serves no one well, least of all the producer and the consumer.

A couple of years ago, a friend with a highly respected, but small winery, noted that when the high ratings, especially by Robert Parker, come out, the price of the wine is no longer surging. It may be at the winery which is trying to capitalize on the rating but not like before. Furthermore, just because it is priced at $50-100 doesn’t mean it will be bought there. That is a function of so many wines receiving ratings of 90 or above.

Just in the past year or so the fastest growing segment of the wine market in the U.S. finally moved up from the under $10 range, to the $10-20 range, which is good, although that isn’t hurting Two Buck Chuck much. In post 25, my Ten Commandments of Wine, I suggested moving up a notch and seeing if you can notice an appreciable difference. I also suggested that very few except true enophiles can find differences above the $30-40 range, and fewer still above $50.

This bring me back to WTSO: the savings are incredible – from the winery-set price – but most of the wines I see there I have never heard of before, meaning many are buyers of fruit, make the wine, using time-tested formulas for 90 point ratings (again, let me emphasize my dislike of the 100 point system, and preference for the UC Davis 20 point system). Most of those ratings are achieved by following Robert Parker’s taste buds.

Don’t misunderstand, prior to Parker, there was no quantification (except in tastings at fairs, etc. or the famous Judgment of Paris tasting which brought California wines to the fore. What he did was to set a standard of quality. Originally, many wines received ratings of 86-90, fewer 90-95, and only a handful above that with only a couple of 100 point ratings. Now, a winemaker who can’t expect a 90 rating wouldn’t think of submitting her wines for close scrutiny, because as one store owner quipped, “I can’t sell any wines with an 89 point rating, but I can sell all the wines with a 90 point rating, but I can’t get them.”

So, as TB has been fond of saying: globally, good wine is chasing out bad (TBC excepted). But it has now reached absurdity since most couldn’t discern the difference between an 87 point wine and a 90 pointer.

Think of a ’90’ as being the initiation fee at a club. Those achieving it either ‘jack up’ the price immediately, or in the case of a well-known brand like Lafite-Rothschild, the demand from the Chinese does it for them. Bordeaux producers making large volumes of wine set their price and sell all of it (albeit no longer in the U.S. and U.K., the former principal purchasers), but the ability for other producers to do that has dissipated due to the huge number of competitors. Remember too, that a rating is on the ‘type’ of wine or the varietal, which you may or may not like. A good friend, cannot stand and recognizes any Pinot Noir and won’t/can’t drink it. I know, we have tried repeatedly to fool him and it almost makes him sick…must be some chemical inherent in the wine (?).

So now you have millions of gallons of wine in warehouses (expensive), in the producers cellars (taking up valuable space), and on retailers shelves. What’s a winemaker to do? Enter WTSO, which from what I can determine is one of the few that is approved of by the producers (based on limited questions).

Imagine you are a producer with a big inventory overhang. You could offer them to a distributor at a low price (provided the wine is not being offered publicly, such as an older vintage), for a pallet (roughly 50 cases or 600 bottles), and get immediate cashflow – the mothers milk of a winery. WTSO, unlike Trader Joe’s or other retailers, will offer it on their site, but they are generally up for an hour or less before being ‘sold out’.

The offering looks like this:

93 Pt. La Mannella Brunello di Montalcino 2011 93 rating and 65% off! Free Shipping on 3 or more Comparable Price*: $85.00 Yesterday’s Best Web Price (With Shipping): $N/A Our Price: $29.99 Buy Now Description Appellation Brunello di Montalcino Unit Size 750 ml Varietal/Grapes Sangiovese Vintage 2011 Country Italy Region Tuscany Alcohol Content 14.50

65% OFF!

Here are the key points:

1.Comparable Price – nebulous because most have no ‘comparable’. Do they mean what it would cost in a wine shop? Winery (they used to say ‘retail price’ which was the one set by the winery per law).

2.Yesterday’s Best Web Price – lately they are like this one with a strikeout through the price, so it is useless.

3. Their price and discount to the ‘comparable price’. Also the number of bottles you need to purchase to get free shipping – a very good deal! the number of bottles required for this is inversely proportional to the price (i.e. $100= 1 bottle; $20 = 3 bottles, etc.)

4. The point rating can come from any number of critics, WTSO members (?), Wine Spectator, Wine Advocate, etc., so you have to know which ones are reliable and which have their own interests at heart.

Before you think this is a scam consider, that it is an offering price, you have all the information you need (and some you don’t) to make an informed decision. That is all that business ethics require. I have purchased wine from them and found contacting customer service easy and responsive. I purchased some wine that was delivered in extremely hot weather. When I checked the bottle temp it was 90 degrees! They replaced it for me at no cost and held it until I felt it was safe to deliver and pointed out that they will hold the wine for you for up to a year (they ship quickly so if you are going to be away for a few days have them hold it, since a signature is required).

The point is that they try to serve their clients needs (both buyers and sellers), and judging from the volume of transactions, do both well. You, the buyer get the wine at a reasonable price, while the producer helps cashflow without damaging the value of future offerings.

But if they have a dozen or more offerings each and every day, what does this tell you about the retail price? It is too high…that’s Econ 101!

That translates to value for you, but note that ‘cult wines’ don’t face this problem: they have member lists, usually full and not taking names, small production, perhaps 250 cases, and if you want that, and can afford it, go for it. Personally, I would rather see the winery get 100% of the retail price, rather than distributors (some of whom are less than reputable and some downright lazy). The problem with wine club membership is this: shipping adds greatly to the cost, but in many areas like Minnesota, where TB lives, you ae not going to be able to get many of the best wines without joining.

As the popular phrase goes, “it’s complicated”.

Hope you found this useful and remember to support wineries you like, local wine shops that provide information and tastings, and keep trying new wines and ‘inching’ up your prices, that goes for restaurants where the biggest markup is on the cheapest wines.

Best,

Trader Bill ©traderbillonwine.com 2016