Remembering 2011 VPs and scarcity.

[Al B.]

Alex,
I'll speak in reference just for the USA, as it highlights the problem of such a model for most wineries. Keep in mind most wineries are very small operations, with very limited cash flows and few full time employees as a result. I know from speaking to a number of California wine makers it's a huge nightmare to sell direct to consumers. The laws in every state are different, and the laws within each state can vary also. There are permits in each state and or city/county to apply for and pay for each year. Then you have to sort out which states/cities/counties you can and can't ship to. Then you have weather issues and storage issues for months on end when you can't ship to half the states 6-8 months out of the year and you have to sort out that it's ok to ship to Los Angeles today but you can't ship to New York because the truck goes through Nevada which is going to be 115 degrees this week. Then some states/counties require that the producer send them taxes on the shipped products. That is just some of the logistical issues that the UK doesn't face. Imagine if you were a small winery (which makes up most in the world) where it's basically you (the winemaker) and your spouse (customer service) and maybe one or two other workers running the day to day field operations. How are you going to sort all that out?

While I agree in theory it would be nice, it just wouldn't work for most wine producers out there.

I can't talk about the US, but I can talk about the EU which is the biggest market for EU based wine producers. There are a handful of wine producers in the EU which sell purely on the basis of mailing lists, they sell out because they have spent years building a reputation and building direct relationships with consumers. Tourism and welcoming visitors is the way to start as this builds loyalty, and from this loyalty builds the mailing list. It doesn't work for medium or large wineries as easily because of the problems that you highlight, but within the EU all you need to do is to put the bottles in a styro shipper and call DHL. It's not complicated. DHL pick-up, take the box to its destination, deliver to the consumer and at the same time collect any local taxes due. Done. Simple. And following the same sort of model as SFE are using in the Graham Lodge shop. The reward for the winery is that they sell at substantially more than they would through the various layers and intermediaries; the consumer buys at a net cost a little below the normal retail price for wines of similar quality.

And to succeed, this approach doesn't need a winery that produces only top quality and exclusive 100 Parker point wines, it's currently being used by a small start up winery based in London (http://www.londoncru.co.uk) who only sell direct and produce around 100,000 bottles per year, if I recall correctly.

It's also interesting to note that most of the wineries appearing on http://www.winerymailinglists.com/TheFu ... ional.html are based in the US, despite the problems you've highlighted. That surprised me a lot given how complex the alcohol commercial environment is in the US.

[Andy Velebil]

I can't talk about the US, but I can talk about the EU which is the biggest market for EU based wine producers. There are a handful of wine producers in the EU which sell purely on the basis of mailing lists, they sell out because they have spent years building a reputation and building direct relationships with consumers. Tourism and welcoming visitors is the way to start as this builds loyalty, and from this loyalty builds the mailing list. It doesn't work for medium or large wineries as easily because of the problems that you highlight, but within the EU all you need to do is to put the bottles in a styro shipper and call DHL. It's not complicated. DHL pick-up, take the box to its destination, deliver to the consumer and at the same time collect any local taxes due. Done. Simple. And following the same sort of model as SFE are using in the Graham Lodge shop. The reward for the winery is that they sell at substantially more than they would through the various layers and intermediaries; the consumer buys at a net cost a little below the normal retail price for wines of similar quality.

And to succeed, this approach doesn't need a winery that produces only top quality and exclusive 100 Parker point wines, it's currently being used by a small start up winery based in London (http://www.londoncru.co.uk) who only sell direct and produce around 100,000 bottles per year, if I recall correctly.

It's also interesting to note that most of the wineries appearing on http://www.winerymailinglists.com/TheFu ... ional.html are based in the US, despite the problems you've highlighted. That surprised me a lot given how complex the alcohol commercial environment is in the US.

As I said, in some areas it's a lot easier. In other areas it's a nightmare. Mailing lists, wine clubs, etc are a double edge sword for most producers. The customer loyalties are nice but the logistics and customer service issues that arise are a headache. And look at the headache that is the TFP shipping label room. If you haven't seen it, it's a huge room that has all the different labels for wines going to different countries that those countries require they have. That's easy when doing a pallet or two or 10 of the same wine. Imagine doing that for single bottles, or at best one case. Dealing with importers/distributors that are getting pallets at a time are far easier to deal with. That doesn't mean that wineries will stop selling from the winery as they can sell it for max retail (to not upset their importers/distributors) and the customers who are drinking it at the winery get wine to take home or have delivered.

I'm just saying there is a lot more work behind the scene than what most people think.

[John Danza]

+1 I haven't seen prices go up at auction for the majority of 2011's. If anything they are at the same price or less, on average. So in that respect I don't think the strategy worked out as was originally hoped by the trade (less to sell causing prices to go up faster than in the past). While a few blue chips will eventually go up some, Port still has an image issue to deal with. That being, most serious wine drinkers don't drink and thus don't buy much Port. If they do they don't want to sit on them for 30 years to mature. Which brings up another interesting issue. By and large, times are changing and more and more people aren't into cellaring large amounts of Vintage Port for decades while it matures. The cost of housing has gone way up, with more population, thus smaller houses without room for a proper cellar, VP isn't in vogue with most of the younger crowd, and it still has that old man cigar after dinner drink for the English upper class negative image. Until a serious and coordinated marketing campaign is done to counter those perceptions I don't see much changing anytime soon.

I've been reading through this topic and found it a pretty interesting discussion. The last number of posts have been good ones around Tom's original thoughts. Tom's thoughts are good ones in the abstract and make economic sense for many consumer products. However, they don't in this case and I'm sorry to say some of the follow up point made by others aren't going to help at all. That's because none of them address the primary problem, which Andy noted in his original post (quoted above). The problem with port is simple: nobody wants to buy it.

OK, I know that's not true. But what is true is that supply outstrips demand annually, and there's no end of that in sight. Dropping the price by 75% might get some people to try it who wouldn't otherwise do so at the current price levels in the stores, but I'm not sure they'll be won over by trying a new VP that frankly isn't very drinkable in its current form. It might just scare them off. They would probably be more won over by a ready-to-drink VP, but those don't exist in places the average wine drinker goes to acquire wine.

I'm not saying I have the answers here, but I do know without a doubt that the answer isn't to increase production even with lower prices. Port has an image problem that needs to be cracked, and it has a flavor style problem that is out of vogue with what most people are drinking today. Don't get me wrong, I love port. I also love traditions and honor them wherever I can. But sometimes, things just die out. 150 years ago, 95% of the wines of Champagne were still wines. When was the last time you saw one?

[Roy Hersh]

John, we disagree fundamentally in this way:

Since around 2005, the young Vintage Ports are generally speaking made in a far more approachable way. Part of that is rounder aguardente, but more so, tannin management and the will of winemakers who see that it is not that difficult to make Vintage Ports easier to enjoy early on. So there is a disconnect for me, when I read your middle paragraph above. I have tasted every vintage when young now for a very long time and noticed when things changed. I am not talking about the secondary wines where they are intentionally made in a softer style ... and of course there are some producers that have not changed what they do. But even the behemoth Taylor Vintage Port has now become one that can be enjoyed in its youth. A decade or more ago, that was never the case, with their monumental firm structure.

[John Danza]

John, we disagree fundamentally in this way:

Since around 2005, the young Vintage Ports are generally speaking made in a far more approachable way. Part of that is rounder aguardente, but more so, tannin management and the will of winemakers who see that it is not that difficult to make Vintage Ports easier to enjoy early on. So there is a disconnect for me, when I read your middle paragraph above. I have tasted every vintage when young now for a very long time and noticed when things changed. I am not talking about the secondary wines where they are intentionally made in a softer style ... and of course there are some producers that have not changed what they do. But even the behemoth Taylor Vintage Port has now become one that can be enjoyed in its youth. A decade or more ago, that was never the case, with their monumental firm structure.

Roy, you can disagree with my comments, but that's because you're a port lover and somewhat invested in the wine emotionally. But the facts are the facts and the wine marketing is speaking loud and clear. I'm sure you've seen the various Wineberserker threads where people generally say they are lucky to drink a handful of ports a year, and it's just not something they pursue. And the Wineberserkers crowd is made up of the biggest wine geeks there is (myself included). If they're not drinking port, what makes you think the average casual wine drinker will all of a sudden get on board?

So the young VPs may be more approachable to you or me based on what we've experienced in a wine we know and love, but that may not be the conclusion from the market at large. I have no dog in the fight, I'm just accurately relating what the market is saying about port.

[Andy Velebil]

John, we disagree fundamentally in this way:

Since around 2005, the young Vintage Ports are generally speaking made in a far more approachable way. Part of that is rounder aguardente, but more so, tannin management and the will of winemakers who see that it is not that difficult to make Vintage Ports easier to enjoy early on. So there is a disconnect for me, when I read your middle paragraph above. I have tasted every vintage when young now for a very long time and noticed when things changed. I am not talking about the secondary wines where they are intentionally made in a softer style ... and of course there are some producers that have not changed what they do. But even the behemoth Taylor Vintage Port has now become one that can be enjoyed in its youth. A decade or more ago, that was never the case, with their monumental firm structure.

Roy, you can disagree with my comments, but that's because you're a port lover and somewhat invested in the wine emotionally. But the facts are the facts and the wine marketing is speaking loud and clear. I'm sure you've seen the various Wineberserker threads where people generally say they are lucky to drink a handful of ports a year, and it's just not something they pursue. And the Wineberserkers crowd is made up of the biggest wine geeks there is (myself included). If they're not drinking port, what makes you think the average casual wine drinker will all of a sudden get on board?

So the young VPs may be more approachable to you or me based on what we've experienced in a wine we know and love, but that may not be the conclusion from the market at large. I have no dog in the fight, I'm just accurately relating what the market is saying about port.

John is spot on. We are the minority, the rest of wine drinking world doesn't think like we do. The other issue with making VP's in a more approachable way (which really isn't true, see below) is why would a non-serious Port person spend the money on a VP that is more ready to drink young instead of spending far less on a good LBV that is 1/3 the price? Most people would save that extra $50 (USD) and buy a bottle of LBV or even a good Ruby Reserve and get basically a similar effect. That is an issue, among many, that face Port producers at the moment.

--- I really don't think they are made in a more approachable style, it's just that wine making has progressed to the point they just taste better for that short phase right after release. But give them 3-4 years later and that brash harsh tannic profile starts coming out and for most people they aren't all that pleasurable.

[Roy Hersh]

John,

I am NOT disagreeing that Port is still far from a common drink amongst the top wine connoisseurs in America (which for the most part, is what WB represents .... NOT the common non-geek that may drink it once in a while). I would be foolish to even consider that Port consumption in America even rivals the per capita of a place like Denmark.

What I was reacting to was this phrase of yours:

but I'm not sure they'll be won over by trying a new VP that frankly isn't very drinkable in its current form.

I'll stand by my words and still disagree with this.

[Roy Hersh]

Funny thing Andy, I've seen you say the same thing in the past, about the approachability of Port nowadays. While they are more fun to drink young, than ever before (IMO) ... they still have the ability to go the full distance and cellar for decades.

[Andy Velebil]

Funny thing Andy, I've seen you say the same thing in the past, about the approachability of Port nowadays. While they are more fun to drink young, than ever before (IMO) ... they still have the ability to go the full distance and cellar for decades.

Oh, I do think that they are more approachable now...for a short time. Then they revert back to that not so pleasant phase. That isn't a bad thing mind you, but can be for some who happen to pull a cork after it's left that approachable phase. In which case it can be a real turn off, unless they are experienced and know to expect that. Most people don't fall into that category.

[John Danza]

John,

I am NOT disagreeing that Port is still far from a common drink amongst the top wine connoisseurs in America (which for the most part, is what WB represents .... NOT the common non-geek that may drink it once in a while). I would be foolish to even consider that Port consumption in America even rivals the per capita of a place like Denmark.

What I was reacting to was this phrase of yours:

but I'm not sure they'll be won over by trying a new VP that frankly isn't very drinkable in its current form.

I'll stand by my words and still disagree with this.

Fair enough Roy. I have to admit I really don't drink current vintages right now because I don't want to spend that kind of money on a bottle and then drink it long before it's in a place to show its best.

[Tom Archer]

Most people would save that extra $50 (USD) and buy a bottle of LBV or even a good Ruby Reserve and get basically a similar effect. That is an issue, among many, that face Port producers at the moment.

Last night I decanted a 'vintage character' bottled by Vieira de Sousa around 30 years ago - it would easily pass muster as a true VP.

The price graduation of port does seem to be a bit out of kilter, the price leap between Reserves and Crusted to VP seems too great in relation to the difference in quality, especially as VP needs to be laid down for a long time to show its best.

John worries about people going off port - well, fashions come and go, but once people try a good port (and it doesn't have to be mega bucks) they are very easily hooked. If sales slacken, the industry only needs to find ways to get people to try it - it's appeal is much broader than either sherry or madeira..

[Andy Velebil]

Most people would save that extra $50 (USD) and buy a bottle of LBV or even a good Ruby Reserve and get basically a similar effect. That is an issue, among many, that face Port producers at the moment.

Last night I decanted a 'vintage character' bottled by Vieira de Sousa around 30 years ago - it would easily pass muster as a true VP.

The price graduation of port does seem to be a bit out of kilter, the price leap between Reserves and Crusted to VP seems too great in relation to the difference in quality, especially as VP needs to be laid down for a long time to show its best.

John worries about people going off port - well, fashions come and go, but once people try a good port (and it doesn't have to be mega bucks) they are very easily hooked. If sales slacken, the industry only needs to find ways to get people to try it - it's appeal is much broader than either sherry or madeira..

I would say that is where a big issue arises and has done so as a result of better winemaking. The quality of lesser priced stuff, like LBV's and Reserves, has gone way up and isn't that far off from VP's for most non-regular Port drinkers, when it comes to drinking them right after release.

[John Danza]

John worries about people going off port - well, fashions come and go, but once people try a good port (and it doesn't have to be mega bucks) they are very easily hooked. If sales slacken, the industry only needs to find ways to get people to try it - it's appeal is much broader than either sherry or madeira..

Tom, that's the point of the whole thread. What does the industry do to pull people in??

[Tom Archer]

What does the industry do to pull people in?

The IVDP has the promotion of port as part of its remit, but does not seem to deploy many of its resources in that direction.

Sending frequent inspectors on unannounced visits to the producers to fuss and nitpick is another matter though..

The key to getting more people drinking port is simply to get more people to try it, and the best way I can think of doing that is to give away thousands of 10cL bottles (5cL is too small IMO) predominantly of a good ruby reserve, (not a bog standard ruby) along with little pamphlets explaining in very simple terms what port is all about.

These could be dished out by pretty girls at supermarkets, wine stores and perhaps airports, wherever sales volumes are on a downward trend..

[Roger L.]

What does the industry do to pull people in?

The key to getting more people drinking port is simply to get more people to try it, and the best way I can think of doing that is to give away thousands of 10cL bottles (5cL is too small IMO) predominantly of a good ruby reserve, (not a bog standard ruby) along with little pamphlets explaining in very simple terms what port is all about.

These could be dished out by pretty girls at supermarkets, wine stores and perhaps airports, wherever sales volumes are on a downward trend..

(and earlier)...
To that end the producers need to stop running websites that are fancy showcases (and all too often way out of date..) and start running websites that are serious sales outlets..

All of which will, quite possibly, be a complete waste of time an money.
There is no point in creating a demand within a consumer that they're simply going to ignore.

I have, over the last couple of years, sent emails to a number of the "small" port houses with questions - Ventozelo, Casa (sic) de Santa Eufemia, for example - usually in both Portuguese and English and generally received helpful responses.

I have also, over the last couple of years, sent emails to the following somewhat larger companies with questions, sometimes purchasing enquiries - usually in both Portuguese and English...
Graham's (about the bond)
Quinta do Noval (about a Graham Parker review)
João Portugal Ramos (about Duorum)
Taylor's

Below I quote, in their the entirety, the responses from these people ...

(yes, this space entirely blank)