Examples Flashcards
What factors contribute to the decline of wine consumption?
Young people drinking less (eg. Spain and gin)
Health concerns
Changes in lifestyle (eg. few long lunches with wine)
Less access to cheap wine (eg. minimum unit pricing in Scotland)
Changing preferences (eg. decrease in Liebfraumilch and Blue Nun styles since the 70s)
Reputation changes (eg. Jancis Robinson reccs now vs then)
Spending Patterns (eg. price sensitive market like UK and Germany)
How would a strong economy effect the sale of premium wines?
The sale would go up, as evidences in the pre-GFC economic boom where champagne sales rocketed
what is the minimum price of alcohol in the UK
4.5GBP. 9 units of 0.5p.
What were the max BACs for NZ and Scotland? What are they now?
prev 80mg/100ml, now 20mg/100ml.
What is an example of taxation affecting demand?
In Ireland, duty on still (3.19 a bottle) and sparkling (6.37/bottle) is very different. The higher price means sparkling wine is not in much demand in the Republic of Ireland
Give an example of how expanding GIs will affect demand for wine?
With an 85% consensus from winemakers in the region, 7 Lieux Dits in Fleurie are being considered for promotion to 1er Cru with INAO. Should this pass, the prestige associated with this title will result in more demand and allow producers to charge higher prices for wine of theoretically higher quality.
what was the ‘wine lake’
a surplus of wine production in the 1980s which led to EU sanctioned vine pull schemes
give an example of vineyard conversion pressures?
In California, the conversion from grape to almond cultivation is more profitable
In Elgin, SA, the same is true for apple orchards.
Did the 2017 vintage in Europe see an increase or decrease in supply?
Decrease, due to terrible hail, frost, and heat waves. Supply was down 14% compared to 2016
What is the purpose of GIs (esp. PDO)?
define style conventions. Align supply and demand to protect prices.
what determines the price of land?
GI reputation eg. prestigous medoc land is up to 100x more expensive than generic Bordeaux land.
Why would a producer choose to invest in labour over machinery?
the vineyards are impossible to mechanism (eg. Mosel) or the cost of labour is cheapers than machinery (eg. Chile)
how does economy of scale work?
The upfront cost of expensive equipment like centrifuges and cross-flow filters will be recuperated through the large volume of wine processed.
Ie. the cost is spread across many products.
what are the costs associated with logistics?
freight
packaging (flexi/ISO tanks, boxes)
labour
insurance
What are the costs at POS?
property (restaurant/online/shop)
labour (specialised/broad)
equipment
storage (on/off premise)
delivery
margin (66.6% in restaurants vs 30-50% in specialist retail)
How do deep discounters keep costs down?
- buying direct from producers
- working with smaller brands
- palettes over shelves
- own-label options
- streamlined range
- lower profit margin
Is the popularity of Deep discounters growing or shrinking?
Growing. In 2012 the UK 23% of buyers used these, growing to 37% in 2018
What is an example of a control state?
Utah, Michigan, Pennsylvania
what is an example of a franchise state?
Connecticut - limited off-premise licences
What is an example of an open state
California
Who are the authors of Luxury Wine Marketing?
Thatch, MW and Yeung
how would a luxury wine brand respond during a recession?
keeping prices stable to avoid looking cheap or implying available excess (eg. not scarcity) through lowered prices.
according to Thatch and Yeung, what should producers consider when raising prices?
wine quality
brand strength
external influences
competition
According to the Thatch and Yeung framework, what four conditions are bad to increase prices in?
low quality vintage
no secondary market
price aligned with peer group
recession
In what years were the en primeur wines more expensive than the released wine?
‘09, ‘10
what were the price of wines for Ducru Beaucaillu in ‘13 and ‘09?
in ‘13 $100
in ‘09 $350
(250% swing in 4 years)
what are the three wines of chateau Latour?
Latour
Les Forts de Latour
Paulliac de Latour
What is the role of ‘third wines’ in Bordeaux?
to offer a discreet entry level to luxury wines without affecting the brands image through discounts
What are the three wines of Harlan Estate?
Harlan Estate
The Maiden
The Mascot
According to Thatch and Yeung, what are the four components of a brand story?
Setting, Characters, Plot, Moral
