I was at a wine dinner years ago (Chevaliers du Tastevin) where a person at the same table was in private equity, and he mentioned pallets as one of the areas where they were investing (not just for wine business, of course).
-Al
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Don’t get me started on the ridiculous pallet charges going on. And that they won’t take them back (like a pallet deposit) even though they (glass companies, mostly) have a constant need for them is nuts. Then we have them stack up and some dude comes along that looks like Peter Frampton from back in the day and we sell them to him for a buck each.
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Everything costs a little more, some a lot more. Its a razor blade death of a thousand cuts with all these cost increases. Sad part is the costs never go back down to what they were. These become the new lows and for us buying wine; we have to make cuts in our spending when other areas are increased.
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My biggest complaint is the “Fuel Surcharge”. Just call it (or add it to) the delivery charge. You know that it doesn’t matter what happens to the price of gas, the fuel surcharge isn’t going away.
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I’ll pay you $5/pallet and grab them.
We store at Red Hills and whenever one of our distributors picks up, they get 10-50 cases on a pallet and typically that comes from Red Hills supply at $10/pallet to us, which is the cheapest pallet charge I’ve seen in a year). Saver wanted $50 for new ones and I stopped ordering glass from them.
It’s a weird little bit of the business…
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It’s bad form to quote oneself, but a winery I follow recently posted about a joint project between them and a “fashion designer/lifestyle brand connoisseur.”
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It is until everyone stops buying wine or other products because they/we can’t justify costs…then suddenly “sales in TRs start falling off a cliff”.
Our sales from the winery are about the same as always, except that Megan and I were gone part if this summer. But that also might be because we’ve tried to hold the line on pricing.
We just got a quote to install a 2” pipe from our compressed air tank to our press. It’s about 30’ of black iron pipe, support for it (so we can clean the floor under it), and connecting it at the tank and press. The quote was over $4000. In 2011 we had a much longer length of pipe put into the facility we were in then. It had several changes in direction and ran to our ceiling and back down. That was $1400.
We’re working it out a different way, as I can’t support that kind of increase.
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Have tasting visits in Willamette Valley changed much in the last decade? Is it having the general trend towards high fees, long visits, needing reservations, etc.?
I don’t mean a single place like Antica Terre, but just kind of broadly among mid to upper level producers.
They’re both vacations which don’t require particularly long travel for most Americans. That alone is enough to put them into direct competitions. Americans aren’t exactly known for having copious vacation time, meaning that most travel consumers are regularly making these either/or choices. I suspect a lot of people consider Napa or Mexico for a vacation. Would they like to do both? Sure, but they may be able to take one trip per year, have competing interests both personally and within a family, and cost may very well be the deciding factor. Of course, not only Mexico, but travel to Mexico and other Latin American countries is much simpler in terms of cost and time commitment than trips to Europe, Asia, etc.
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There’s a good mix, based on my trip in June.
Antica Terra was the most expensive spot I visited, but honestly, for what they were pouring (we finished a bottle of Delamotte ‘14 vintage blanc de blanc in the first course, and that was just one of ten wines served), and the level of food they’re serving, it’s not a bad deal by any stretch, and if anything, they’re not making much on the tastings given their costs.
The small, independent producers were definitely my favorites, and most had a very nominal tasting fee (often around $40), but many just required a reservation and little to no cost to taste. Compared to Napa and Sonoma, I bought a lot more wine in the Willamette Valley, and that’s definitely both a function of the product quality but also feeling like I’m supporting something important and meaningful, not just another corporate winery.
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Kinda. I mean, I agree to a point, but I don’t think there’s as much overlap as you’re suggesting in the Venn Diagram there. I disagree that a beach vacation is really all that comparable to visiting wine country. Maybe for groups of individuals, or couples, to an extent, but not for families.
Also, Asia? Asia isn’t close for anyone in the US.
Correct, Asia is not close, hence my statement that travel to Mexico or Napa is “much simpler than trips to Europe, Asia, etc.”
As to the overlap, I’m not saying that most people are torn between Napa and Mexico, rather that I’m sure there are people who consider both. Obviously, Napa is not particularly appealing as a family vacation destination, but as you mention, for couples or groups of adults both options might come into play. This would also sync with the comments upthread about the increase in international travel detracting from California tasting room numbers. I may be poorly positioned to consider that choice, however, as I have no interest in Napa.
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I can’t spealk to falling off a cliff. I can speak to costs increasing for personal and business uses. Have profit margins dropped due to higher costs? I’m not ITB, but I am in manufacturing and we have seen steady cost increases the past several years. We are forced to increase our prices when we absorb price increases that make our profit margins unsustainable to be in business. Its hard to do so when you want to hold pricing and have to compete for business, but we aren’t in business to lose money.
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Agree 100%.
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“Does it involve you dressing up as Little Bo Peep?” - Fletch
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I do admit to a logarithmic decline in our Napa time, given price trends.
For some wines, I wonder if there are some ‘golden handcuffs’ aspects.
For most products, declining demand generates declining prices. But, with wine, it seems lowering prices is anathema because it would undermine the previous pricing model that worked in the past. It would be hard for Harlan (as an example) to knock prices down 20% because their existing base supported their higher prices and lower prices could be disastrous for their perceived exclusivity, even if it meant higher sales volumes. It’s gotta be a bit of a scary monster for the upper echelon-priced Napa wines.
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I’m hearing it’s a global wine glut. After so many increasing prices quite a bit over the last few years for various reasons, there’s an over-supply of wines at all levels. Lots of denial about that from producers who are also trying to figure out how to strategically get rid of excess inventory. We’ll see, but the speculation is we’ll be seeing deep discounts on a lot of desirable wines 6 months from now.
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Don’t confuse us with facts and data! We’re here for idle, slightly informed speculation!
This is when you start seeing some of those wines at Costco and other retailers below the wine club/mailing list price.
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