The answers: it probably tastes better but its no-where
close in sales, and it does matter to you.
This photo is in a hypermarket
in Florida. Would your wine stand out on this shelf? Would consumers see your
bottle as special? Prices shown here go from $2.97 to $9.99, the magic price
point.
Here is a display of Malbec in the hypermarket, it’s been here for 6 months filled just
as you see it and there is no dust on these bottles – the product is moving and
moving fast. If this is in every
hypermarket, then they are selling millions of liters of this product. A $7.97
Malbec from “Bodega Elena de Mendoza” would sell at an FOB price of around
$2.27 (Click here to see the chart showing how to figure US retail prices here).
The bottle talks of a 19th century history of Bodega Elena, the
website is registered to Gallo wines on 3/26/2010 and the TTB label registration
was 4/26/2010 to Ecco Domani, a Gallo company. All of my time in Mendoza I have
never heard of this Bodega .
I bought a bottle, and it doesn't taste like the Malbecs we drink in Argentina, this wine lacks the depth
and complexity of good Malbecs. It tastes more like grape juice with 13.6%
alcohol, it is better than an entry level wine. This wine is selling in the US
market and educating many Americans that Malbec is a cheap wine with simple flavor. The damage done can be huge, people will buy this product and
decide they don’t like Malbec and will never taste your product.
How does your wine compare? We say “my wine is different, my Wine Maker is better, my vines are older, we
cultivate with more care” etc. All the volume
wine buyers see is price and bottle label unless you plan to stand in the their
stores and tell every customer why your wine is worth more, then there is no
sale; when they want a better wine they are going to buy the best name
recognition in the market. Is that your Winery?
Let’s talk Marketing and Price:
Should you race to the bottom on price and compete with Gallo or tell your
story?
I have heard estimates on
marketing costs of about 2 million dollars per market, or 100 million dollars
for a national launch. One way is for wineries in Argentina to work together
and build the brand. This requires working together for a common goal. The cost
per winery is about $100,000. When compared to the amount of capital invested
in a winery this is minimal, but getting wineries to work together for a common
goal – well that’s a lot harder.
You can create the best image on
your own by being the Winery buyers want to do business, never lose a customer due
to poor service or product. You also
must understand how pricing works in the US, an unrated wine has to sell for
$9.99 or less. In the above photo Alamos by Catena can be seen at $9.99 on the
shelf beside “Bodega Elena”. Compare your brand recognition and name to Catena
and use them as the bench mark for price – you have to be able to compete with
a wine that has international name recognition and a winery that has highly
rated wines at an FOB of less than $3.
Understanding pricing in the
US:
The best selling, unrated wines
in the US are $9.99 or less, and $9.99 has earned the title of the “Magic Price
Point” because it is so important to the retail community.
Wine ratings come from Wine
Spectator, Wine Enthusiast or the Wine Advocate – if your wine isn’t rated it
must sell for $9.99 or less unless you have put substantial marketing/brand recognition
in place.
Common Sense says that your
personal opinion of what your wine is worth has no value in the market, only
the consumer gets to make the decision about your wine's value.
If you need to get your wines
rated or need advice on how to open the US market, feel free to email me
brad@iwinefind.com
twitter follow @bradlarochelle or @iwinefind
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