Changes to Rhys Distribution?

WINE TALK
1

I got an email from K&L, which I’m sure a lot of you did as well advertising the 2014 Rhys Bearwallow. Excerpt:

Rarely Available, Cult-Status Pinot Noir at a Super Sharp Price

Limited Direct Allocation from a Treasured Pinot Producer
2014 Rhys “Bearwallow Vineyard” Pinot Noir ($64.99)

Acquired by Rhys in 2008, the Bearwallow Vineyard is an ideal location for Pinot Noir and Chardonnay. A complex mix of soil types, high elevation, and dramatic temperature shifts all contribute a wine of unparalleled depth and range. The 2014 is a stunning rendition (according to our staff as well as some unanimous mainstream critical acclaim) and we’re more than thrilled to be able to (at last!) open up orders to our clientele. This is one you won’t want to miss.

Rhys has been available at K&L for at least the last several years, but typically at a hefty mark-up from mailing-list pricing, and in small quantities. It seems the source of these bottles has always been private cellars. I always assumed that Rhys wines were only sold direct to consumer, but now it appears that the model has changed. I also saw a bottle of Rhys on a Scottsdale Steakhouse wine list a few weeks ago, and we even had our first sighting coming through standard distribution in Ontario (though as usual pricing makes it prohibitive to buy here at $160 CAD for Horseshoe Chard). Aside: Kevin/Jeff, I’d love to know what Agent you’re with, so I can see the full availability/pricing.

I hadn’t seen this on any other thread yet. Apologies if I missed something.

If you’re willing to answer it here, I’d be curious Kevin/Jeff, on why this change to the business model. Is there no longer a wait list for the mailing list? Increases to production?

I know people get mixed feelings about traditionally mailing list only wines coming through retail, but I think that’s only when retailers undercut mailing list pricing, which doesn’t seem to be happening here. Personally, I prefer retail. My only chance to buy Rhys is when I’m traveling on business and aligning the winery ship dates to business trips can be stressful. Much easier to buy online, have them hold it, and walk over K&L when I’m in SF.

2

Rhys is not small. They make a lot of wine, and keep expanding acreage, so I think having more outlets to sell their wine is not a bad step. I think the Santa Cruz Mountain wines tend to get sold out through mailing list but the other areas (Anderson Valley and the new Aptos one) do not yet.

3

Thanks for bringing this to my attention. While we do have some changes in store regarding our Appellation (not vineyard designated) wines , this is a mistake that we will rectify.

4

Kevin,

Curious what you mean by ‘this is a mistake’. The advertising says ‘limited direct allocation’ which implies that these wines are purchase directly from you, rather than through a third party is then reselling them to K and L. Is this not the case?

And I’m sure you have some retail customers, right? It certainly is not uncommon for producers like you, that are mainly mailing list, to still sell wines to both on and off premise accounts.

Thanks for the further clarification.

Cheers.

5

Larry,
Our focus for distribution is on-premise (restaurants etc) and not retail. Restaurants are a small part of our business but important IMO. As you know there is no way to manage distribution exclusively to restaurants given some state laws and distribution practices but that is a goal we manage toward. Most of our vineyard designated wines that show up at retail are bought on the secondary market and usually offered at a significantly higher price than mailing list customers see from us. Offering Bearwallow here was a mistake and will be fixed today.

6

Kevin,

Thanks for the clarification and I completely understand. I guess my point here is that you are calling it a ‘mistake’ - do you self distribute or have a broker/distributor here in California? I would think that if you have someone that you have pretty good ‘controls’ on them, no? Again, just trying to understand the ‘mistake’ concept.

I know that, on rare occasion, I have seen my wines at retail that are below what my wine club members can purchase for. I have immediately contacted the retailer to discuss the pricing and why it is what it is - but then have also contacted wine club members, letting them know about ‘the deal’, and matching said deal to anyone who wanted that wine.

Thanks for the clarification. Cheers.

7

Larry,
We use a distributor but I do not know exactly where in the chain the mistake (or misunderstanding) occurred. This is $5 more than our price but usually the pricing at retail is $20-$40 above our mailing list price.

8

Thanks for the further clarification. Of course, you and I both know that you can’t ‘legally control’ pricing once it’s sold [snort.gif]

Cheers.

9

The 2014 FF is available at the release price, it is very tempting to get a few more as this is one of the PNs I’ve come to like quite a bit.

10

Peter,
Sounds like you shouldn’t count on any such purchase going through, if you read Kevin’s comments above. It looks like there are a few other potential “mistakes” on offer, as well.

11

Brian,
Yes, I checked. K&L doesn’t have these bottles yet, they are listed as “special order”. So they are presumably still with the distributor.

12

We are working this out with K&L but we would always allow them to honor orders they have taken. Also, I found out the FF they are offering is secondary market and not from us. It’s a long story but we didn’t sell them that wine.

13

K&L sells wine on their site with no indication that its from the secondary market. I once bought a bottle via the website and on delivery it had a “from a private collection” sticker on it AND an auction sticker on it. K&L’s response was literally “but we did not list it as direct from producer”. Needless to say a very disappointing response.

14

Yeah Rama…same thing happened to me as well

I just pass on them for now on.

15

This situation is different, though - it says a ‘Limited Direct Allocation’ . . .

Cheers.

16

Larry, I’m referring to the few Family Farm vintages they are also selling now, for instance: http://www.klwines.com/p/i?i=1263464

17

You can usually tell if it’s direct from the winery based on offering price. And this would pretty much be true of any online retailer that not only gets direct allocations but sells secondary stuff as well. Winex does the same thing as well.

You should therefore assume first if something is that much higher than release and, especially, if there are only a few bottles available, they did not get it directly from the winery.

At least that’s been my experience in the past.

18

I’ve bought library releases from certain retailers in the past. Those bottles command a higher than initial release price yet are not from the secondary market.

While I would prefer explicit provenance on each bottle, my way of thinking is that a bottle coming from a retailer is not from the secondary market unless its an auction. Anything else is false advertising.

To K&L’s credit, they do put a sticker on the bottle saying it came from a private cellar. I just wish they had the equivalent indicator for online sales.

19

There are a whole lot more retailers you should cross off your list Rama. The world does not work the way you want it to.

20

That was my thought too. Where do people think these bottles are coming from?