Oregon Wine Clubs

WINE TALK
1

Curious as to why so many (seemingly all) Oregon wineries have opted to establish wine clubs where club members receive a fixed number of shipments per year with the individual wines selected by the winery.

I never sign-up for wine clubs as I’d rather have the freedom of determining how much of any particular wine I’d like to buy – as such, the only wineries I purchase directly from employ allocation systems (i.e. based on your purchase history and/or list seniority, the winery will allow you to purchase up to a specific number per wine with sometimes the opportunity to wish-list wines for which you’d like to purchase more than your allocation).

I suppose the advantage of the wine club system is that the wineries can more easily manage their inventory, but this seems to come at the expense of the consumer’s choice.

So, why are wine clubs so pervasive in Oregon? Do you tend to avoid wine clubs in general or are indifferent about them?

2

The one and only Oregon wine club I’ve ever joined is Roco. You’re not required to take the wines and they also sell single bottles on their website (club shipments receive discount).

3

I’d be interested to know more about how wineries (from Oregon or elsewhere) make the decision which direction to go.

Broadly speaking, it seems as though your more sought-after and collector type wines and your more wine-geek type wines are more likely to have mailing lists (Sea Smoke, Kosta Browne, Rhys, Carlisle, Harlan, Quilceda, Rochioli, Williams Selyem, etc.) and most more ordinary/commercial type wineries have wine clubs. But of course there are loads of exceptions.

Particularly to the first category, where I think maybe wines in that category that don’t have particularly strong and steady demand (could this be true of more of the Oregon ones?) may not be able to sustain the mailing list model.

4

I have been a member of WillaKenzie for about a decade and have been meaning to cancel for over a year. They send a quarterly shipment of good, better and not quite the best to expose members to what they have. 3 bottles for $100 or so. When buying Pinot from then, I got a good discount. Now I would rather have other Pinots that fit my tastes for the same money. OK, will cancel and buy Cameron and Patti Green. [snort.gif]

5

I’ve been in the Cristom club for years. Good discount for reliably shitty wines.
A no-brainer for me (although the whites can be hit or miss)
Each year
The 4 “Ladies” single vineyard PNs
1 Mt Jefferson PN
1 Sommers Reserve PN
1 Pinot Gris
1 Viognier
1 Chardonnay “Germaine”
1 Syrah (when they make it)

One shipment in the fall and one in the spring. Plus I can order more when I want and sometimes get library stuff.

6

The only Oregon wine club I have joined is for Crowley, and I do that primarily to directly support a small producer whose wines I love in exchange for a 15% discount on purchases. The tax and shipping make it a wash from other retail outlets and I would like the occasional exclusive or library wine, but all my money goes to the winery.

7

Y’all can delete this if this is too sales-y/data mining-y but I am trying to get a feel for this whole thing so here it goes.

We don’t currently have a wine club. We run the winery like I buy wine and that may be kind of dumb. I’ve been thinking about the following as a possibility. The vast majority of the wine we sell direct, not surprisingly, is the upper tier, single vineyard stuff that doesn’t really go into distribution. We make a lot, by our standards, of our little Resevre bottling. It’s quite solid and not too expensive. Thinking about a club where if you bought a case of Reserve we would offer free shipping on that and up to 2 more cases. I think it pencils out, gives people out so state a deal and shows off a particular bottling that I think is under-utilized by our mailing list while not creating some standardized shipment club. Any feedback would be appreciated.

Again, if this sounds like a pitch feel free to dump it.

8

Y’all can delete this if this is too sales-y/data mining-y but I am trying to get a feel for this whole thing so here it goes.

We don’t currently have a wine club. We run the winery like I buy wine and that may be kind of dumb. I’ve been thinking about the following as a possibility. The vast majority of the wine we sell direct, not surprisingly, is the upper tier, single vineyard stuff that doesn’t really go into distribution. We make a lot, by our standards, of our little Resevre bottling. It’s quite solid and not too expensive. Thinking about a club where if you bought a case of Reserve we would offer free shipping on that and up to 2 more cases. I think it pencils out, gives people out so state a deal and shows off a particular bottling that I think is under-utilized by our mailing list while not creating some standardized shipment club. Any feedback would be appreciated.

Again, if this sounds like a pitch feel free to dump it.

9

I only belong to one wine club. I have dropped all other clubs as I object to being forced to take specific wines. I think wine clubs are a decent alternative to beginning wine drinkers to expose them to a wider array of wines, but as their experience level grows it becomes too limiting. The club concept is obviously better for the vintner as it makes it easier to balance their stock of wines. All the rest of my wine purchases are from lists where I may not be offered the number of bottles I want nor the premium cuvees that I want but I can still limit my purchases to the wines I have an interest in buying.

10

Jim,
Ultimately the math has to work out on the entire purchase. Free shipping is great but if the retail price at the winery is so far above what distributors charge for your wines it doesn’t pencil out for the consumer, even with free shipping. I may be wrong but it seems that since your margin is so low on distributed wine, wineries often sell wine directly at a “super premium” to make up the difference on those units. I’d rather see a model where it’s cost equivalent to buy from the winery direct but we know more money flows back to you. It always killed me that I paid more as a wine club member to buy Chateau Ste. Michelle wines (purple drank btw) than to buy them from Costco.

11

I don’t do a club either and for similar reasons as Jim. People buy what they like, and it is always top shelf. Maybe a pink from time to time. I’ve looked into it, but the pervasiveness of having to actively recruit new members (as after 18-24 months people drop out) seemed overly yucky.

12

Since I strayed away from the actual issue of wine clubs, I guess I’d say that I believe people aren’t typically going to lock in for everything unless the wine is allocated, or the winemaker is one of their favorites. We get bombarded with so many offers each day that I think the a la cart menu perspective is pervasive, kind of like with iTunes song downloads versus the album

13

I like this discussion. (Though I am new here, so I realize people might not care what I say :wink:)

Here is my rather winded perspective on clubs as I mostly rely on lists/clubs for my wine. And though I don’t have any from Oregon, I have several from Walla Walla right over the border.

First off, if I lived on the west coast or in a wine-making area, I might feel differently about clubs, but I live in Minnesota and will never be able to purchase most of the wines locally that I buy through clubs/lists/a la carte etc. I have to buy almost all of my wine directly. And even though I could forgo clubs, the reality of managing wine purchases (even from allocation lists) is somewhat unrealistic. To keep my daily ‘drip’ going, I belong to 30+ lists/clubs all with different release times, yearly shipments, shipping charges, rules, etc.

But which is better for me – club or allocation list? Just as an example, I love Torrin wines out of Paso and Rasa from Walla Walla, but I almost missed both of their allocations this year because I didn’t see their list e-mail and almost responded too late (I had a distracting child born). But I would fully have trusted them to ship me wine via a traditional club – with an additional allocation if possible. And there are actually a handful of wineries that I completely support and want them to send me their club selection without my intervention. Just off the top of my head: Booker, Denner, Tensely, and Efeste. The number of times any of those wines has failed me could be counted on one hand, and I simply don’t have the information to choose their wines exactly to my preference vintage after vintage. An information asymmetry exists when you get farther from the area of production – and I live there.

Other clubs I simply try for a while. Maybe I get a free tasting and a discount on some bottles I want, and if they don’t consistently send me interesting and very good wines, I drop the club shortly afterwards. It’s easy, and harmless to be a member. But it served a purpose.

But from my perspective (a consumer) there are two types of clubs. (1) The amazing winemaker who sells everything mostly through members (list/club) and produces consistently high-quality wines and (2) those winemakers who have reserve wine to sell and whether they admit it or not – are unloading some mediocre wine. They are almost never good clubs – and this is probably 90% of them unfortunately. They also tend to offer gimmicks (free shipping, lock-in lower pricing, a free bottle with each shipment etc.) A gimmick almost always means you should not join the club IMO.

Of course there are those super exclusive clubs like Cayuse which are a completely different monster yet. I’m on the waiting list and will be for years, but I doubt I would even join when they contacted me. And the new wineries are also in a different situation. I joined Tero out of Walla Walla when no one knew them (and still don’t) but I like them and think they will be a rising star. So I keep them for now.

With that said, I do highly prefer list allocations with no obligation, but if a maker is supply is restricted to club members, I have no problem belonging to a club in whatever form it comes in. I have around 5 clubs that I really like and trust and will continue. I would probably trust another 5 or so winemakers to ship me wines via a club if they ever chose to do so. And that number will grow and change as my preferences and their winemaking changes.

I mean let’s face it, people get burned on wine futures all the time. There are many instruments to buy bad or mediocre wine – clubs are just one of them.

k.

14

No, it wouldn’t be like that at all. We don’t undercut retailers (although on the Reserve it does happen out of state where distributor and retailer markups often end up driving the price over what we well it at) but we certainly don’t charge more for our wines!

15

Jim – I should have pointed out that I wasn’t talking about your winery in particular. I was just saying that in many cases buying wine directly from a winery, possibly through a club, can cost more per bottle than elsewhere.

16

My feedback is that that sounds like a very big commitment. I’ve never bought a case of a single wine, much less a case year after year. Love your wines and would probably sign up for something like I currently have at Copain (which is one case a year, I choose the wines, no forced lower level wines). I’ll probably end up with 3-4 of the 2011 Reserve, so a club that got me free shipping on a case total with that much reserve I’d go for, but not more than that.

Michael

17

My wife has gone from a “wine club” system, to an “allocation” system, and now back to a “wine club” system at Archery Summit over the course of the last 5 years. Here are the pros/cons of each from the winery’s perspective:

Allocation:
Pro: Customers can buy what they want, potentially more than what the wine club shipment would be.
Con: Customers forget to buy, miss the email, don’t have the funds, etc. They also expect benefits of being a club member even if they don’t buy wine.

Wine Club:
Pro: Predictable revenue stream for each shipment. Ease of organizing shipments (you only end up with a couple different options). If customers don’t take a shipment, they no longer get the benefits.
Con: Lack of flexibility for customers. Customers don’t pay attention to emails and so get upset when they get charged automatically and “without notice”, even though emails were sent.

Generally speaking, allocation systems only work well for wineries with huge pent up demand, have a waiting list of people who want to buy the wines, and that sell out during the allocation period. If the winery doesn’t have that pent up demand, or if the wine doesn’t sell out during the allocation, customers will tend to ignore the allocation emails because they feel like they can buy the wine whenever they want to.

18

Hey Jim, here are my questions/concerns for the model you propose:

What would the benefit for locals who can pick up the wine? Would you give them some other discount? If free shipping is the only benefit for committing to an entire case of one wine, I wouldn’t expect locals to sign up or join.

Are you looking at this model simply because customers tend to forget about the Reserve bottling? If so, would it make sense to discount the Reserve for people who buy a certain level of SVD bottlings? Say, if someone buys a case of SVDs, they get an additional 10% off the Reserve?

Is the direct price of the Reserve at or below what people can buy at wine shops? I agree with other comments, that it doesn’t make sense from a customer standpoint to buy direct when you can find it cheaper in distribution. At the same time, I try and support the winery directly, so if the price is the same either way, I’d rather my $$ go into the pocket of the winemaker, not a reseller (or 3).

I agree that requiring a full case purchase may be too much for many people. I think how you structure your “club” all depends on what you are looking to achieve with it.

19

That sounds correct to me from my experience. And, back to the original post/question, I don’t think there are very few Oregon wineries that fit that category – huge pent up demand, waiting list, wines get regularly snapped up by allocation system.

I’m still a bit stunned by Karring Moan’s beloning to over 30 wine clubs. That must be the new Wine Berzerker record. But Karring seems to be in it with eyes open, and for the proper reasons.

20

The only winery that I think would fit this characterization would be Thomas. Everything else is available one way or another outside of the initial release.

The interesting tidbit surrounding pent up demand is the scores garnered to the winery. Generally speaking, to get a high amount of pent up demand, a winery needs to either get huge scores, or have a huge “buzz”, like what Rhys had here on WB. There is definitely a level of “trophy hunting” that goes along with having the pent up demand, which is very score driven. How that relates to OR Pinot and allocation systems? Think about how many OR Pinots have scored higher than 95. Two from Advocate, three from Spectator. I would submit that you need scores in the 97-99 range to really get those trophy hunters and the associated pent up demand.

(I also realize how my above point doesn’t relate to Thomas since the wines have not been scored)