Vol. 4 No. 2 when should you join a wine club?

***Update: this article based on Silicon Valley  Bank’s observations, they the big lender to the wine industry, drives home what this article is all about. High priced wines are not selling…could mean a big shakeout. https://www.wine-searcher.com/m/2018/01/us-wine-growth-slows-as-clouds-gather

Over the years I have joined (and eventually left) several wine clubs. I didn’t leave them due to dissatisfaction, on the contrary I had way too much wine piling up that I wasn’t drinking fast enough. From what I hear from others it is a common problem, and an expensive one.

At the big wineries you sign up for two to four shipments a year, sometimes with only a choice of white or red. You may not like some of them or even see them much cheaper at a discount store or as in the previous post, an online purveyor.

So here is my advice: first, skip the big wineries because you can find most of their wines in shops. Second, even with some of the smaller wineries, they may not be able to sell all off mailing lists, especially the larger their production is. This can lead to discounting.

Of course, if you just ‘gotta have’ a wine and it is hard to find, then go for it. Then there are the ’boutique’ cult wineries that don’t command the three digit prices, but for them it is a two-way street: a loyal following, availability for the buyer, and much better prices for the seller which can make the difference between making a profit or taking a loss.

As shown in my last post, and I didn’t even use the example of a $100+ wine selling for $29, but the more common one. Just did a search of my trash emails and found what I was looking for:

 

Notre Vin Howell Mountain Cabernet Sauvignon 2012
94 rating and 67% off!

Free Shipping on 2 or more


Comparable Price*: $150.00
Yesterday’s Best Web Price (With Shipping): $N/A
Our Price:

$49.99

Buy Now

wine bottle Description
Appellation Howell Mountain
Unit Size 750 ml
Varietal/Grapes Cabernet Sauvignon
Vintage 2012
Country United States
Region Napa Valley
Alcohol Content 13.80
67% OFF!

This is a perfect example: Howell Mountain is not only the first AVA subdivision in Napa Valley, but has volcanic soil, which is rich and imparts incredible flavors and body. Among the famous producers are Dunn, CADE, Black Sears, Duckhorn, Outpost (formerly part of Lamborn, which is still active and going strong. Members of the Howell Mountain Vintners & Growers Assn. now total 35.  When I first started going up there to see Bob and Mike Lamborn in the late 1980’s (two different vineyards on opposite sides of Summit Lake Drive), you could count all of them on two hands and still have fingers to spare.  At the base of Howell Mountain, along the Silverado Trail are Beringer, Heitz, and Joseph Phelps, which also benefit from the rich soil.

Notre Vin is also ranked as one of the top Howell Mountain wineries. Even so, they can’t sell all their wine and thus it appeared on WTSO. But more interestingly, this was the second time in about a month that the offering appeared. Now imagine if you were a member of that wine club, how would you feel.

On the other hand there are many small producers (relatively), where if you want the wine you have to join (not talking about the BIG name cult wines and note even they have problems moving their wines). More power to those who can make the transition, they deserve it for the hard work and of course, passion. You will also be able to offer wine to friends that have never seen it before and that should make you feel good.

Forget wine clubs at retail outlets and especially online sellers. Remember that by joining a wine club at a boutique winery you are making a difference and rewarding the ones who do the work, instead of middlemen (made possible by our antiquated post-Prohibition laws.

I just received a blog email that is worth looking at http://blog.merchant23.com/why-2018-will-be-the-year-of-blind-price-wines and ties indirectly into this article. If you like wine, buy it at a local wine shop that has knowledgeable people and fewer, but carefully selected wines. You may pay a little more but at least you will be insuring that they will still be in business, a plus for you! What I am opposed to is the big box stores, especially Total Wine which is destroying competition here in Minnesota that started with a feud with a local store that dared to open one in Florida. To me, it looks like a vendetta but it is the other stores that are being hurt. Some tell me of losing 30% of their sales…that can be the difference between making a decent living and breaking even or worse. While it is true that the big box stores can sell cheaper, they are also marking up the lesser known names by buying all of the wine (i.e. Vino 2015 Cabernet Sauvignon), and selling it for a fraction of the retail price AND they buy it deeply discounted then market it up 35% or more and you thought you were getting a bargain. It also hurts the winery because from then on when they see their similar wine they think it is too expensive. So tell me: who is the winner and who are the losers?

That’s my take on wine clubs and big box stores, use them wisely.

TB

(c) traderbillonwine.com 2018

Published by

traderbill

How did Trader Bill originate? It was conceived by me as a way of providing information summaries of global financial markets so that friends and associates could bring themselves up to speed on events and changing market conditions upon their arrival at work. In addition, it provides information on speakers and economic releases that day with consensus estimates and level of last release so that the reader is prepared to react, or knows how the market might react upon the release of information. Who is Trader Bill? Initially any reference to me was as ‘i’. This is to remove the aura of ego and to suggest that i am but a humble reporter, albeit with 35 years of investment experience. Investments are demanding of ego, however, or one would not feel that he was qualified to manage someone else’s money in the first instance. Therefore i needed an ‘alter-ego’. Like Winchell and Mahoney, Edgar Bergen and Charlie McCarthy and especially Trader Vic and Mai Tai’s! Why Trader Vic? Because he was a likeable man who delivered pleasure to his customers and knew exactly what their desires were. The reason for the alter ego became obvious once I introduced Trader Bill into my commentaries: people started asking what Trader Bill thought. They had never asked me what I thought before, but suddenly they wanted to know what TB thought! Now mind you they KNEW that I was Trader Bill but for some reason he became bigger than life. Maybe it was the small ‘I’? What does Trader Bill try to do?His goal is to educate from his years of experience. Consider that most of the traders and people managing investments weren’t even around in 1987 for the crash! Consider that Graham and Dodd, and even Warren Buffet are not relevant to them, too old hat. Their historical perceptions of markets and fundamentals (earnings, price/earnings ratios, bonds, debt service coverage) are irrelevant in this fast moving world. This is the NEW ECONOMY, or is it? How did your style originate?Years ago i found that i had a knack and talent for writing. In addition, i developed an ability to analyze market news about 15 years ago. It took the Crash of ‘87. Prior to that i was just listening to what others said about the economy. But bond yields had been soaring in ‘87 yet the stock market just kept hitting new highs. That was when i began to learn about markets. i have both a dry and witty sense of humor (some call it inane!). Therefore i attempt to make even the worst news somewhat amusing: whether it is the absurdity of an economic release, or the comments of a CEO. This is trading desk humor (or gallows humor). It isn’t politically correct but it does ease tension. Ironically, it is seeing the light at the end of the tunnel (in the Navy they say: it’s always darkest before it’s pitch black!), that allows you to be more objective in your analysis, as bad as a situation is there will still be a tomorrow! You will see that i practice three-dot journalism, a style made famous by San Francisco reporter Herb Caen, whom i idolized. At least to me it is effective. What is so special about your analysis?Frankly, i don’t know that it is special, but at least it beats “the market closed down today on profit taking.” What i do know is that most of what you read is spat out without considering whether or not it is rational, like the above statement. Is it right? Sometimes yes and sometimes no, and that is the key to what is different about my analysis: it is meant to make you think. Is Dan Rather right or is Trader Bill right? If it causes you to stop and think about it, regardless of whether you agree, i win! Because THAT is my goal…not to have you think i am a guru, got that? Bet you never heard that ANYWHERE before in my business! Instead they want you to think just how smart they are but remember in this business if you are right 60% of the time you ARE a genius! Another thing that is different is when i am wrong on an analysis i will tell you, not hope you forget what i said. So now you have the tools to do what the speculators and hedge funds do: challenge authority, and if you make money it is because YOU did it not me. i was just a tool, your flunky to do the grunt work and let you decide…course you could be wrong too but at least you looked at the big picture. But the goal is also to have fun! This shouldn’t be a business of hushed tones and grim faces. It is a living, breathing thing and nowhere else in the world do you have the odds as much in your favor as here. Just beware of the guy who wants to put his arm around you and tell you he is your friend. So there you have it. I hope you select me as one of your sources for market information. If you do I promise to work my best for your financial success. Trader Bill

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s