Stay ConnectedA podcast delivering wine perspectives ex-chateau. Insights, analysis, and perspectives on news and trends in the wine industry beyond winemaking, such as marketing, finance, and consumer trends. From noted wine blogger Robert Vernick (@wineterroir) and leading wine business consultant and author of Luxury Wine Marketing Peter Yeung (@winebizguy), this podcast navigates the business of wine with unique perspectives and insights.
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Copyright: © 2020 - 2021 XChateau
This Library Release was selected in conjunction with the next episode discussing pricing and was initially released on December 2nd, 2020.
Robert and Peter discuss how luxury wines are priced, delving into the core insights from the Pricing Chapter of Peter’s book, Luxury Wine Marketing. They discuss the luxury wine price segments, the types of luxury wine buyers, and how you need everything to be working right to build a luxury wine brand. “You can’t just stick a label on two-buck-chuck and price it at $1,000.”
Detailed Show Notes:
Luxury Wine Marketing (“LWM”) was published in late 2019
Wine pricing segments
Luxury wine consumer segments
Brand impact on price
Strategies to launch luxury wines
Luxury wine demand
Tricks and tips for buying luxury wines
Winery pricing strategy has four major determinants
How do some Napa wines come out of the gate pricing $250+?
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With a lot of economic uncertainty in early 2023, the fine and luxury wine space has remained relatively robust. Charlie Fu, an LA-based lawyer, wine collector, Wine Berserkers moderator, and caviar purveyor, gives us his thoughts on the state of the wine-collecting market. From Dry January, how they find new wines, navigating price increases, and Berserker Day, Charlie provides a good overview of wine collecting from his group's point of view.
Detailed Show Notes:
Charlie's background - LA-based collector, lawyer, caviar purveyor, and @clayfu.wine on Instagram
Wine collecting group
Dry January has become more common
Finding new wines
Wine pricing
"Everyone's always looking for alternatives to Burgundy"
Where people buy wine
Mailing list/allocation systems
Collecting groups has not shown interest in wine investment
Wine Berserkers
Collecting trends
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Jackson Family Wines is at the forefront of many sustainability efforts as one of the world’s largest wine companies, with >40 wineries. Though they have made significant efforts in renewable energy, climate change, and social impact; they have also done a lot with waste prevention and green purchasing. Katie Jackson, a 2nd generation family member, leads these efforts to become more sustainable and describes some of the major programs they’ve undertaken.
Detailed Show Notes:
Intro from Anna Brittain of Napa Green
Katie’s background - 2nd generation, worked in multiple departments but joined the sustainability team in 2011 after it was founded in 2008
JFW background
Broad sustainability programs with four current focus areas:
2015 - publicly released a comprehensive plan w/ 11 different focus areas, including Zero Waste and getting more growers to be sustainable
Sustainability investments and ROI
Sustainability team
Green purchasing - developed preferred purchasing plan, looking at more environmentally friendly materials
Waste prevention - critical for climate change goals, focused more on wineries currently
Water conservation - since 2008, reduced water intensity/bottle by 43%
Spreading sustainability practices
Consumers showing interest and support for sustainable certifications
Luxury brands benefit from higher margins for investment
Mass market brands have the scale to innovate
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Now known as Bonterra Organic Estates, Bonterra has long been associated with organics. But, they have pushed well beyond that with sustainability processes and certifications such as Climate Neutral, True Zero Waste, and now focusing on Regenerative Organics. Joseph Brinkley, Director of Regenerative Farming, describes the history and communication processes that have led Bonterra to become a leader in the sustainability space in consumers' minds.
Detailed Show Notes:
Joseph's background - started in biodynamic farms, became a vineyard manager, joined Bonterra in 2013, a role now as a spokesperson for education and advocacy of farming and sustainable practices
Bonterra Overview
Product lines:
An early adopter of solar, recycling, and tracking & reporting of GHG emissions
Changed company name to Bonterra Organic Estates from Fetzer Vineyards in 2022
Certifications
Farming certs:
Some certs are brand specific and intersect w/ brand price points:
Bonterra does not charge a premium for organic certification
When a winery does a non-organic spray, they get de-certified for at least three years
Certification benefits include increased consumer loyalty and brand value, witnessed by Bonterra growing from 200k -> 500k in the last decade
Campaign: "Delicious Taste of Saving the Planet"
New Campaign: "Cultivate the Future" - focused on Reg Org wines
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As a lifelong hunter, David Duncan, CEO & Proprietor of Silver Oak in Napa Valley, has a keen appreciation for nature. This has driven David and Silver Oak to pursue many sustainability investments, including being the 1st existing winery and new build winery to be LEED Platinum certified and be at the forefront of energy efficiency for the last 20 years. From solar panels to using waste heat to get water up to sanitization temperatures, David dives into the details of Silver Oak’s sustainability efforts and how they think about them in terms of long-term return on investment.
Detailed Show Notes:
Silver Oak’s background - founded in 1972
Sustainability efforts began in the vineyards in the late 90s, and early 2000s
Oakville winery
Alexander Valley winery
Working towards LEED certification for other wineries
Vineyards - moving towards electric tractors, but haven’t bought one yet
Cooperage - burns scrap wood to bend barrels instead of natural gas
ROI for sustainability
Highest payback investments - solar panels and water use to treat barrels using recycled water
Sustainability also improves quality - e.g., minimizing water use in vineyards
Barriers to making sustainability investments are often due to 1 chance a year to make changes; Silver Oak does small trials on 1-2 acres to evaluate
Shares learnings w/ the industry - gives many tours of winery and vineyards, interviews, seminars and conferences, works w/ UC Davis
Also improving packaging
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Sustainability is as much about people as it is about the land. That’s how Maryam Ahmed, founder of Maryam + Company and the Diversity in Wine Leadership Forum, connects Diversity, Equity, & Inclusion (“DEI”) to sustainability. Maryam shares how DEI creates access and relevance to new customers and markets for wine and how “doing the work” creates significant ROI for businesses.
Detailed Show Notes:
Maryam’s background - worked in Finger Lakes, distribution in NYC, moved to Walla Walla, then Napa, was on Somm TV show Sparklers
Maryam + Company - educational program & strategic initiatives for food & wine companies, further sustainability and diversity
Works w/ associations, portfolios, or specific wine businesses & non-profits
DEI benefits
Diversity in Wine Leadership Forum (“DIWLF”)
Sustainability needs to be not just for the land, but also the people, making DEI critical
DEI “B” - belonging also important, working in supportive spaces
Doing the work is both personal and professional; common barriers for people:
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Sustainability is just good business practice, according to Drew Bledsoe, former New England Patriots Quarterback and now founder and proprietor of Bledsoe Wine Estates, comprising three wineries in Washington and Oregon. Josh McDaniels, CEO, and Drew discuss their biodiversity initiatives in detail, as well as their people and packaging efforts, as part of their sustainability ethos. From improving quality to increasing customer loyalty, they believe taking a long-term view on sustainability proves it is a good investment.
Detailed Show Notes:
Drew’s background - grew up in Walla Walla, WA; NFL quarterback for 14 years; started Doubleback winery and now has 3
Josh’s background - also grew up in Walla Walla, worked at Leonetti for 10+ years, and worked with Paul Hobbs in Argentina
Sustainability is critical for wine because of the long-term, generational nature of the wine business
Biodiversity initiatives
Easier to make investments in estate vineyards vs. contracted ones
Benefits
Consumers expect luxury wine to be environmentally responsible
An early leader of people sustainability - focused on vineyard crew five years ago w/ higher pay, year-round employment, and full benefits, leading to benefits of not having to rehire and retrain crew
Other sustainability initiatives
Sustainability for the wine industry - with a long-term view, sustainability is a good investment and good business practice
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With a goal of 46% carbon reduction by 2030 and 6,000 companies to wrangle, Marie-Catherine Dufour, Technical Director of the Bordeaux Wine Council, has a big job to undertake. With an action plan that covers five key climate change strategies, Bordeaux can become carbon neutral by 2050. Some of those strategies include promoting bats to combat grape moths, reducing the weight of bottles, and capturing CO2 from fermentation to make baking soda.
Detailed Show Notes:
Marie-Catherine’s background - daughter of winegrowers in Bordeaux, studied agronomy
Mission as Technical Director of Bordeaux Wine Council - think of innovation needs for the sector to be more competitive
Defines sustainability as the linkage between environmental, social, and economic issues
Climate has a direct impact on the environment, but it also impacts the health and well-being of people
Bordeaux Climate Action
Five key strategies
Action plan for each strategy developed
A collective regional strategy helps when working with suppliers to have more influence
ROI is difficult to define
High-end wineries can do more
Driving action
Recommendation for wineries - start w/ carbon assessment, as every company is different, then develop a winery-specific plan and leverage tools available on the Bordeaux Wine Council website
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Known for its world-class art collection and Pinot Noirs, Donum Estate is also serious about sustainability, investing heavily in integrated pest management and biodiversity. Dan Fishman, the winemaker, discusses the benefits and tradeoffs of moving to organic and regenerative farming with an IPM framework. From sheep, ducks, and chickens to mealybug destroyers, it’s creating a diverse ecosystem that is improving the soil, vines, and wines for Donum.
Detailed Show Notes:
Dan’s background - Donum winemaker since 2012, took over farming in 2019
Donum
Integrated pest management (“IPM”) is a critical 1st step for sustainability; it changes philosophy from exploiting resources to maximize cash crops (conventional) to looking at the system holistically and thinking about the entire ecosystem (IPM)
Examples of IPM
Committed to organics in 2019
Benefits of IPM
Costs of IPM
The highest impact process was getting rid of herbicides
Other elements used
Biodiversity
Next for IPM and biodiversity at Donum - more chickens & ducks, may own a small flock of sheep, and set up a truffle grove
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Building an entire ecosystem in the desert requires water at its core. With a 3,000-ha property that includes 2,000ha of vineyards, a winery, and a town to support it, Raimat, part of the Cordorniu Group, has been at the forefront of sustainability, particularly with water efficiency. Joan Esteve, General Manager, explains how >€5M of investment has substantially reduced water usage and made the property more sustainable, which in his mind, is leaving it a better place for future generations.
Detailed Show Notes:
Raimat overview
Sustainability definition - “leaving a better world than how we found it”
Founder of Wineries for Climate Protection in Spain - requires 5% average annual water and energy savings
Water efficiency projects:
Built ~€4M water pipe to replace the channel that supplies Raimat water
Irrigation optimization
Partial Root Drying
Total vineyard water savings of ~30%
Cellar water optimization
Total water efficiency investments ~€5.1M (~€4M pipe, ~€1M vineyards, ~€100k cellar)
Future efficiency - believes Raimat may need to use more water to offset the impacts of global warming
Water from the Pyrenees is not at risk as the region primarily produces corn and alfalfa, which use significantly more water than grapes (~800mm water/year vs. ~150mm for grapes)
ROI challenging for sustainability investments
Advice for the industry
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