that is a valid point, however those people are not likely to be the current market participants driving and sustaining prices.
1 Like
You are getting correlation and causation wrong. A Veblen good is an item that is valuable to the consumer because it is expensive. Burgundy is becoming more expensive because more and more people want to drink it and the supply is limited.
There is a belief among some people that everyone who spends a lot of money on “trophy” wines is doing it because they’re either Veblen consumers/ignorant show offs or because they’re “flippers”. And sure, there are some people like that. But the vast majority just want to drink the wines and have the money to buy them. By the standards of luxury goods, wine isn’t that expensive.
I just got my Barthod allocation pricing. The Cras is now very expensive on the secondary market compared to 5 years ago. But the notion that Barthod Cras is a Veblen good (I.e that people are buying it because it’s gone up in price) is laughable.
1 Like
Charles isn’t the first to do this, but his success depends on a large number of factors, including the limited amount of the wines. He couldn’t sell large quantities of the aligote at that price; it’s a limited project by nature. I agree he has been very smart in how he has gone about it.
3 Likes
Looking at recent reviews in Vinous and Burghound, I’m easily seeing 100+ Burgundy producers that are selling wines that hit the markets at very high prices, have vast excess demand, and are almost certainly leaving money on the table.
My guess is that a very large number (all) could direct sell every bottle they make in the EU and the US and increase revenue dramatically. They would also have direct relationships with customers. With a third party handling sale and fulfillment it wouldn’t even be a burden.
But it would mean massive disruption of existing channels and relationships. Some care a lot about that. Others like Lachaux doesn’t. But enough California wineries are doing this that a clear path in this direction exists.
1 Like
i would like to see this list of 100 producers in burgundy which have very high prices and vast excess demand. but even if that were the case, burgundy has over 4,000 domaines. it is still a small proportion on the supply side capturing a certain majority on the demand side.
I think that would be very easy to compile. I’ll start, here’s 25.
DRC
Leroy
Arnoux-Lachaux
Rousseau
Roumier
JF Mugnier
Mugneret-Gibourg
Bizot
Hudelot Noellat
Jean Grivot
Liger-Belair
D’Auvenay
Coche
Leflaive
Ramonet
D’Angerville
Lafarge
Bouley
Lignier
Lamy
Lamy Caillat
Trapet
AF Gros
Anne Gros
PYCM
2 Likes
let’s try!
go ham on this sheet frens.
https://docs.google.com/spreadsheets/d/1GqUS4G2TuhCT-xJR2HWTjo_hF7E8jwquqfVgYrUVuhQ/edit?usp=sharing
Someone can copy and paste the 25 I put in my post.
You can’t hand waive away a lot of the difficult work.
2 Likes
correct. you outsource it. they’ve already done this, but to firms that aren’t necessarily aligned with their interests and incentives.
DTC isn’t new. it’s new-ish to burgundy is all.
2 Likes
But…aren’t they? Someone the wines we all beg, borrow, and steal for singles bottles of do show up at auction in case quantities all the time! (Ok maybe not all the time, but they do!).
2 Likes
not all of these are in the same league tho. i am referring to those producers with market dynamics like bizot, not grivot. out of the 25 you mentioned i would only agree with about 14 of those named +/- 1.
2 Likes
It’s true; my comment was oversimplified. This seems to happen more outside the US where 3 and 6 pack case sales are common.
3 Likes
Yes, but there’s a lot more friction to it than saying “it won’t even be a burden if you outsource it”. The California wineries that people refer to deal with customers. Christophe Roumier isn’t picking up the phone if someone receives a case with the wrong bottles (or if the Musigny broke in transit).
DTC require infrastructure that isn’t that easy to outsource.
The model isn’t quite DTC. It’s finding a single source to deal with selling in such a way as to maximize profit. It doesn’t require any new infrastructure to ask Crurated to handle 100% of your sales. Or to hire a single agent a la Fourrier.
there are many companies that do this for domestic wineries already,
if there’s a new/added level of service that’s required (there likely will be), i’m not sure how that’s worse than the current model of trying to return a corked bottle, replace a wrong item, etc. Currently, the end user (us) have little / no recourse for such things and if we do, it’s an awful system for all tiered participants. All of this goes into the value proposition for the participants - and instead of many that are each removed from the transaction, you have more transparency and control.
correct - i see these as the testing grounds. the dam has been broken.
Sure, but in both cases those are smaller sidelines to what those producers do, which is standard. And the Fourrier case is more like Lachaux, it that’s a different story.
1 Like
I’m not saying it won’t change - it slowly is changing as the world is becoming more connected in some respects (and less in others). But currently, the producer is basically absolved of any responsibility beyond making wines and selling them to the importer. That’s the business they’re in. Asking them to also effectively be a retailer is a different proposition.
I understand your argument, that it’s worse for us. But we’re not the people it needs to be sold to. Also, transparency may be good for you, the customer - is it necessarily good for the producer? Depends on what the consumer wants.
There’s a lot of friction here.
it sure is. thankfully, i haven’t proposed that nor has anyone else.
my proposal has always been a version of DTC that gives 100% control to the domaine. that can take many forms. for example, a software platform that handles the sales logistics operated by a company that can move the wines and/or partner with firms that handle. these are tried and true methods and because the nature is inherently fungible, the costs are a fraction of the current tiered systems. if a domaine today is allocating 10% of their production to Crurated, they can increase that to 50% or 100%. (I don’t have specifics on their rev share etc). It can be done in certain markets and not others. Maybe this is just a USA problem and these issues don’t come up in other regions.
Point being, there’s better overall experience and likely efficiencies when the producer can control as much as they want.