Who is planning to increase prices this year or next? Do you expect pushback from distributors and direct customers? Are you making other allowances? How do you plan to handle the significantly reduced quantities of 2008 vintage?
For our part, the plan is to hold prices on our two most well known releases so that those wines will continue to fit in our current demographic’s comfort zone, but we are raising prices on some of our Rhone and zin/Rhone blends this year. For the 2008 vintage, we will have to make less of the SVD releases, but we also plan to make one soprano note blend and charge our highest price ever.
We are also planning on reducing customer discounts. While still generous, they will be more in line with current industry norms. Current members will continue to received their original subscription discounts. And we just raised our tasting fee.
We are very, very comfortable with these decisions–they’re right for us, and they will go pretty much unnoticed by our market segment.
Any one else ready to kick it up, down or sideways? How are you planning to balance the smaller 2008 vintage against demand?
Tough call, but it seems like you balanced the potentially unprofitable year with a realization of the economy. It can be tough-received to raise prices, as we’ve all seen, but reducing discounts and raising tasting fees is a good way to perhaps help the balance sheet a bit while keeping what SHOULD be raised prices where they are.
We haven’t raised our prices since our first release back in 2005. We need to and probably would have this year except for the economy. Certainly the 2008 vintage is going to be a very costly one for us to produce.
The one bright side is for our grape sales, price is based on previous year’s average plus a percentage. Assuming average in 2008 was high, that will help 2009 sales.
Like you, Randy, our initial release was back in 2005, and we too have not increased prices since then. We won’t be making decisions on the 2008 vintage for awhile yet, but we held firm on prices for 2007, and will likely do the same for our 2008 vintage if the economy doesn’t recover on the schedule I would like to enforce.
Up here our 2008 crop was significantly better than 2007, so we don’t have the same issue with lower harvest that it sounds like you do. Still, prices continue to rise in all sectors of our supply line, so time will tell whether we can afford to accomodate that in our pricing or not, given demand.
Though I truly an a newbie here when it comes to having my own wine to sell, I will not be raising prices on my 07 reds and 08 whites (my 08 reds won’t be out for at least another year) . . .
My costs have all increased - I worked with more expensive grapes in 07 and 08 (Larner / Thompson) but there is no way that as a small producer, I can or should raise prices in this economic climate . . . I’m willing to take ‘less’ on my end to ensure I will be around to have wines to sell down the line . . .
We’re fortunate in that we held our initial releases back awhile, so we are currently on '05 Pinots and '06 SB’s. Just bottled '07 Pinot’s yesterday, and no plans to release them for at least 18 months. No price increases for us whatsoever for the next vintage releases. We know what’s going on out there, and are looking at ways to offer more incentives to distributors and their salesreps, as well as more attractive direct pricing during special events.
This is really a time to offer more to the customer, and let them know we feel their pain, but we still want them to enjoy our wines instead of pushing them away. In times like these, you gotta give more in order to get a little, but in the long run, it will pay off with being consistent and fair, and putting out a good product. It’s about building relationships, not running people off with higher pricing just because production is lower for that vintage. Just my .02.