A note to our community on the state of the wine market (Napa and others)

Schooner Tuna had success with a temporary price roll back in 1983.

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If seeking a successful and sustainable business model, look to Roy Piper. He established relationships with his customer base, has provided a wealth of information about his wine for both winemaking and economic perspectives, has kept his price reasonable for the quality of his product, and offered a break on shipping costs. It’s going to take more than sending out an offer, going forward.

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6 pack of AMV Esperance Rose for $120 with free shipping

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oh, cool!! So we should talk about tipping now? What do people think about tipping in Napa tasting rooms ? … :troll:

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If the tax bills passes on tipping, how much should we lower our tips?

Couldn’t agree more. I feel I have a relationship with Roy - we text, email, etc. It makes me want to buy his wines. I agree with several. and I spent $100-300 a bottle typically and buy a lot of Napa, but have been intentionally cutting back. If prices were to not just stabilize but come down, I g’tee I would buy more wine - I actually would probably spend more in aggregate on Napa wine bc I would buy more bottles and from more producers.

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We would considering visiting but I have been hesitant with pricing in Napa being out of control. From Seattle we would rather fly into Santa Barbara or San Luis Obisbo and visiting the wineries there.

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Unfortunately when I think of the majority of my friends (who aren’t serious wine drinkers) taking vacations out to Napa, I feel what we consider exorbitant tasting room fees they consider just part what makes a luxurious vacation. I’d even argue that a $150+ fee even adds to their experience by conveying a feeling of exclusivity and self importance, so they can fly home having felt they indulged in something special. If the same winery charged $25, it would certainly attract more berserkers, but maybe less tourists celebrating birthdays and anniversaries. Not being ITB, I have no clue who each winery is really targeting, but I do think the high fees make good business sense in many cases. Sadly.

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And if you buy a bottle, make sure you tip on that as well.

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From your perspective, is the dire state of wine industry a U.S. issue or a global issue? What do you think are the global macro trends affecting the industry and what are the U.S. specific market nuances holding the U.S. market back? As a casual consumer and new hobbyist, I’m not close enough to the business to have an informed view.

Australia is awash in surplus wine. Over 1 bln liters. Sure most is crap. However I bot a wine list A$450/btl for
A$59 last wk-this was up from A$50/btl last yr-which was also on the website at A$450. These are called
mystery bottles in Oz and there are daily offerings. It appears this is what K&L is getting into. This is not
the CH or DeNoge etc type of offerings. In Oz it is the full label offered at 50-90% off the website price.
This is where I think Ca wine is going to go to raise cash and stay in business-just like we are seeing in Oz.

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It is a global issue. There is a separate thread here about the German industry, for instance, which faces similar, but unique challenges. And many articles have been posted about ripping out vines in France. This is not at all a US issue only.

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My general theory is that Napa producers tried and somewhat succeeded at going towards a direct to consumer model. I’m all for cutting out the middle men. I have no problem with them getting a much bigger cut of the profits by not going through importers and distributors.

However, my opinion is that many Napa wineries got greedy. They want a completely DTC model and then charge their loyal customers on their lists/allocations More than what those customers can find those same wines for on the secondary market or even at local retail stores. And way higher than you can often find those back vintage wines for at legitimate auctions or retail closeouts.

That is completely unsustainable. I believe that loyal list buyers should be rewarded with prices that are closer to wholesale (or at least halfway between wholesale prices and what they could find on low US wine-searcher). The theory is that those people should be able to sell their wines in the future if needed, not for a profit, but at break even at least.

The other issue with moving towards the DTC model is that new customers don’t find your wines in retail stores. A lot of that is free marketing. Then when you combine the high tasting fees these days, you aren’t getting new customers that way either.

I just visited Napa a few weeks ago and I was quite impressed with some newer wineries that are making wine in a more old school style, but with new age technology. However, even at those places that have great vision and mindset, they still have a little of the same problem. But they seem to be mitigating better and the prices are more palatable (in the 50-150 price range)

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I don’t know if this is totally fair, though you make some fair points. Interstate distribution is very hard to get for the vast majority of wineries, for a host of reasons. So, they’re forced to rely mostly/entirely on DTC. It’s not much of a choice.

Plus, what retailer/distributor is going to tolerate a situation where a DTC list subscriber can buy the same wine directly at 1/3-2/3 less than retail? The retailers and distros are going to cut off sales immediately.

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Somewhat fair counterpoints but not enough to move me off of my general thesis.

Wasn’t it the case beforehand where list customers got to purchase below retail? Correct me if I’m wrong but I’m pretty sure that’s how it was in the 2000’s and even early 2010s before the DTC movement in Napa…

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It has been a long time since I saw Napa wineries actually have ā€˜wine clubs’ rather that ā€˜allotment lists’. That’s a big difference - with wine clubs, you expect to get a discount when purchasing for your support of the winery. With ā€˜allocations’, you are ā€˜gifted’ the opportunity to purchase because the wines are ā€˜allocated’ because - well it used to be - demand outstripped supply.

I’m sure there are still pleny of Napa producers who offer a ā€˜traditional’ wine club but most of the Napa wines discussed on here over the past decade or even longer don’t seem to fit that bill.

Cheers

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Really looking forward to the future ā€œDoes XYZ Winery allow corkage?ā€ topic thread. :upside_down_face:

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Joel, based on Larry’s response, I see what you’re saying now. Indeed, there are definitely still Napa wineries that provide discounts to wine club members, maybe 10%-20% off retail for agreeing to receive X bottles per month/quarter. That’s for sure not close to the wholesale price, but it’s a nice incentive.

Larry, in my experience, I’d say a large percentage of Napa (and Sonoma) wineries offer traditional wine club subscriptions. But, yeah, there isn’t as much overlap with that group and the wineries that tend to be discussed here on WB.

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I am in exactly one wine club and it just so happens to be in Napa. I generally prefer to be able to select what I want and not be forced to buy bottles I don’t have an interest in.

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Yep - that’s the ā€˜bubble’ of this board for sure . . .

There certainly are ā€˜traditional’ clubs in Napa - some offer discounts; others offer free shipping; others offer access to small lot wines but no mention of discounts.

Cheers