Comments on: Is the Wine Market Saturated?

By: nathan rogan

nathan rogan — Sun, 11 Nov 2012 15:58:41 +0000

I see your point, Jason. But this also happens to depend on the wine/vintage you happen to be selecting. For instance, while you show prices for the ’82 Lafite going up, at the same time it seems that prices for the ’90 Mouton have been going down.
https://truebottle.com/index.html?searchterms=1990+Mouton+Rothschild&action=search&bottlesize=3&region=0&timeframe=6

By: Jason

Jason — Thu, 01 Nov 2012 18:06:59 +0000

Very interesting article. Is the wine market saturated? Well, it can depend wholly on who you are or what region your winery happens to be located. I mean when bottles of 1982 Chateau Lafite Rothschild are going for 2-3K per bottle as recently as a few days ago ( https://truebottle.com/index.html?searchterms=1982+Chateau+Lafite&action=search&bottlesize=3&region=0&timeframe=6 ) then a differentiation should be made between who in the market your wines have been designed to appeal to. It is as almost if some vineyards are selling wine, but then again something completely different.

By: dammsugare svensson

dammsugare svensson — Sun, 07 Oct 2012 15:52:59 +0000

I am as outrages as you on the cost of wine at restaurants. That is true in Sweden as well. And here it is not even allowed to do BYO. Personally I therefore often drink beer….

By: RobLL

RobLL — Fri, 21 Sep 2012 00:40:59 +0000

I have often wondered about small wineries marketing, and my recurring solution obviously is not working at the present. I find restaurant wine prices silly, to say the least. Why would it not work for small wineries to contract with just a few, even one larger restaurant and be the featured house wine. I could see a restaurant offering 5-6 oz glasses of wine from $4-7 a glass. It would encourage a whole lot more (moderate) wine drinking and selling. Were this done, pricing and quality would likely settle into standard sorts of ranges. And I would often order wine with meals – as I do on the rare occasions I am in a town with an Olive Garden. They sell a great house/featured wine, as I learned from you.

By: Mike Veseth

Mike Veseth — Thu, 20 Sep 2012 18:11:04 +0000

Thanks for this, Roxanne. Although I wrote about nakedwines.com a couple of weeks ago, I haven’t done anything with the virtual wine wall. Very interesting … gotta think about this!
Mike

By: Roxanne Kenison

Roxanne Kenison — Thu, 20 Sep 2012 17:52:09 +0000

Speaking of niche markets, what do you think of online retailers like nakedwines.com (just got a Groupon offer, “$69 for $160 worth of wine”!). Their site says they “support independent winemakers across the world.” I’m nearly done with Wine Wars… Made me think of the globalization / terroir dynamics. What about the advent of a virtual wine wall, where you click instead of reaching up or down? (pardon, if you’ve already blogged about this — just point me there).

-Roxanne Kenison (UPS ’80)

By: Charles Broming

Charles Broming — Thu, 20 Sep 2012 02:40:52 +0000

My pleasure. I like your blog; it’s informative and what you say matters to me.

By: Mike Veseth

Mike Veseth — Tue, 18 Sep 2012 15:14:24 +0000

Thanks for the very thoughtful comment!

By: Guillermo Banfi

Guillermo Banfi — Tue, 18 Sep 2012 14:30:07 +0000

nice article….we see a similar pattern in Argentina with new wineries/brands every month..however, the market is huge and there is always a niche for small wineries making diferentiated wines…more and more consumers are looking for boutique wineries with unique wines rather than the Coca Cola type wineries…however, competition is tough everywhere..you need good products, well priced and small operational structure…

By: Charles Broming

Charles Broming — Tue, 18 Sep 2012 14:18:31 +0000

An excellent post, it characterizes the market (and many other consumer markets) quite effectively, with one important exception. I take issue with one aspect of this post. Markets are not “literally living creatures because they are made up of smart, incentive-driven human beings,” as you claim. This characterization commits the fallacy of composition, i. e., the whole is not simply the aggregate of its parts”. A car is not merely the collection of its parts, a grape is not simply the aggregation of its molecules (or subatomic particles, to go further down the reductionist road). Grape molecules are neither sweet nor sour, yet, grapes are sweet or sour or somewhere on the sweet-sour flavor spectrum. Whereas, markets are complex and dynamic as are people, they are not “smart” or “incentive-driven” agents. Why is this point important?

If you treat markets as intelligent agents, your explanations of outcomes will differ materially from explanations that are rooted in a characterization of markets as, say, complex systems or as random “walks”. Then, your predictions and descriptions, as well as the tools you use to reach them, of the mechanics of the market will differ, too. Economist Thomas Schelling made this point succinctly, tellingly and differently in his seminal 1978 work, “Micromotives and Macrobehavior”, with which I’m sure you are familiar. His point, after his investigations into the nature of segregation in civil society (racial, income, etc.), is that the aggregated outcomes of individual agents (people, corporations, associations, nations, clubs, teams, etc.) acting independently with independent motives or purposes (not always the same) will differ from the intended individual outcomes. Hence, cities are segregated racially or by wealth not because of individual racism or economic status (“wealthism”?…-:)), but, for other reasons (more closely associated with the desire to live or work near others with similar values, behavioral norms and life outcomes) based on thresholds that each of us chooses (or, at least, employs in the decision process).

By ascribing intelligence to markets, we encourage ourselves and others to ascribe capabilities to them that they do not have, and we encourage subtle forms of magical thinking. For example, markets do not “solve” problems in the way that engineers solve construction problems that derive from site irregularities, or as scientists solve the problem of repairing an orbiting telescope or educators solve the problems of illiteracy or innumeracy. More examples abound, but, I’m sure you get the point. This claim that “markets solve problems” pervades political, social and economic discourse and drives suboptimal (I’m being charitable, here) decisions about critical issues. As a writer and researcher, I’m sure you appreciate the importance of using language precisely to craft a fruitful narrative that will encourage productive thinking. As a subject-matter expert, I’m sure you appreciate the impact of your comments on a fairly wide audience. I encourage you to re-characterize the wine market in a more fruitful manner.