Examples

Question 1

What factors contribute to the decline of wine consumption?

Answer 1

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)

Question 2

How would a strong economy effect the sale of premium wines?

Answer 2

The sale would go up, as evidences in the pre-GFC economic boom where champagne sales rocketed

Question 3

what is the minimum price of alcohol in the UK

Answer 3

4.5GBP. 9 units of 0.5p.

Question 4

What were the max BACs for NZ and Scotland? What are they now?

Answer 4

prev 80mg/100ml, now 20mg/100ml.

Question 5

What is an example of taxation affecting demand?

Answer 5

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

Question 6

Give an example of how expanding GIs will affect demand for wine?

Answer 6

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.

Question 7

what was the ‘wine lake’

Answer 7

a surplus of wine production in the 1980s which led to EU sanctioned vine pull schemes

Question 8

give an example of vineyard conversion pressures?

Answer 8

In California, the conversion from grape to almond cultivation is more profitable

In Elgin, SA, the same is true for apple orchards.

Question 9

Did the 2017 vintage in Europe see an increase or decrease in supply?

Answer 9

Decrease, due to terrible hail, frost, and heat waves. Supply was down 14% compared to 2016

Question 10

What is the purpose of GIs (esp. PDO)?

Answer 10

define style conventions. Align supply and demand to protect prices.

Question 11

what determines the price of land?

Answer 11

GI reputation eg. prestigous medoc land is up to 100x more expensive than generic Bordeaux land.

Question 12

Why would a producer choose to invest in labour over machinery?

Answer 12

the vineyards are impossible to mechanism (eg. Mosel) or the cost of labour is cheapers than machinery (eg. Chile)

Question 13

how does economy of scale work?

Answer 13

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.

Question 14

what are the costs associated with logistics?

Answer 14

freight
packaging (flexi/ISO tanks, boxes)
labour
insurance

Question 15

What are the costs at POS?

Answer 15

property (restaurant/online/shop)
labour (specialised/broad)
equipment
storage (on/off premise)
delivery
margin (66.6% in restaurants vs 30-50% in specialist retail)

Question 16

How do deep discounters keep costs down?

Answer 16

• buying direct from producers
• working with smaller brands
• palettes over shelves
• own-label options
• streamlined range
• lower profit margin

Question 17

Is the popularity of Deep discounters growing or shrinking?

Answer 17

Growing. In 2012 the UK 23% of buyers used these, growing to 37% in 2018

Question 18

What is an example of a control state?

Answer 18

Utah, Michigan, Pennsylvania

Question 19

what is an example of a franchise state?

Answer 19

Connecticut - limited off-premise licences

Question 20

What is an example of an open state

Answer 20

California

Question 21

Who are the authors of Luxury Wine Marketing?

Answer 21

Thatch, MW and Yeung

Question 22

how would a luxury wine brand respond during a recession?

Answer 22

keeping prices stable to avoid looking cheap or implying available excess (eg. not scarcity) through lowered prices.

Question 23

according to Thatch and Yeung, what should producers consider when raising prices?

Answer 23

wine quality
brand strength
external influences
competition

Question 24

According to the Thatch and Yeung framework, what four conditions are bad to increase prices in?

Answer 24

low quality vintage
no secondary market
price aligned with peer group
recession

Question 25

In what years were the en primeur wines more expensive than the released wine?

Answer 25

‘09, ‘10

Question 26

what were the price of wines for Ducru Beaucaillu in ‘13 and ‘09?

Answer 26

in ‘13 $100
in ‘09 $350

(250% swing in 4 years)

Question 27

what are the three wines of chateau Latour?

Answer 27

Latour
Les Forts de Latour
Paulliac de Latour

Question 28

What is the role of ‘third wines’ in Bordeaux?

Answer 28

to offer a discreet entry level to luxury wines without affecting the brands image through discounts

Question 29

What are the three wines of Harlan Estate?

Answer 29

Harlan Estate
The Maiden
The Mascot

Question 30

According to Thatch and Yeung, what are the four components of a brand story?

Answer 30

Setting, Characters, Plot, Moral