Whatever Happened to Bargain Wine?

“Every time I open a bottle of wine, I thank my lucky stars that I am living in the golden age of wine. … There is a wine for every taste, from sweet to dry, and every wallet, from fat to lean.”

This is how George M. Taber (author of The Judgement of Paris) began his 2011 book, A Toast to Bargain Wines. Taber thought the bargain wines of that not-so-long-ago time were important for more than just their affordable prices. Indeed, the book’s subtitle promises to explain “how innovators, iconoclasts, and winemaking revolutionaries are changing the way the world drinks.” I’ll paste my 2011 review of A Toast to Bargain Wine below so you can see what it’s all about.

As you can tell from the title, A Toast to Bargain Wine is an uplifting tale although the economic environment in which it was written was more “glass half empty” for many people. The global financial crisis had knocked the air out of many parts of the economy and caused wine buyers to “trade down” to cheaper products. The consequences of vineyard over-planting were still being felt.

The book was written at a time when, much like today, grapes were in excess supply and tanks were full with harvest on the horizon. Too much wine chasing too few glasses. No wonder prices fell. As I note in the review below, Taber had no trouble finding good wines at good prices to fill his buying guide. His price limit for a bargain wine was $10, which would be about $14.50 today.

The result was what you might call the Bargain Wine Phenomenon (in my 2011 book Wine Wars I named it The Miracle of Two Buck Chuck). Lower prices for good quality wine drew buyers into the market who might otherwise have stayed on the sidelines or only purchased wine on special occasions. To a certain extent, the extravagant wine selection you will find at upscale supermarkets and specialized stores today owes something to the popularity of the bargain wines of a few years ago.

Taber is a great storyteller and his account of the Bargain Wine Phenomenon unfolds through a series of biographical sketches. We see the wine surplus situation, for example, through the eyes of legendary wine market analyst  Jon Fredrikson and iconic wine executive Fred Franzia (a.k.a. Mr. Two Buck Chuck). It was fascinating reading when Taber’s book first appeared and maybe even more interesting now, given our current situation.

Taber quotes Fredrikson defining the Bargain Wine Phenomenon.

“Intense competition from thousands of wineries both in America and around the world has created a dream market for American wine consumers at all price levels. Most Americans consume wine priced under $10, and today that huge segment, making up about four-fifths of wine sales, delivers better-quality wine than ever before. The widespread availability of good wines at reasonable prices bodes well for American consumers.”

A lot’s happened since 2011 and we find ourselves once again facing a surplus of wine and an overabundance of vineyards. The mood is different now, don’t you think? I don’t hear many people saying that we are in a golden age for wine consumers. And I guess I don’t understand whatever happened to that optimistic Bargain Wine Phenomenon?

Yes, I know there are lots of inexpensive wines on the market, and some good bargain wines, too. But the numbers tell us that bargain wines are no longer hot. There isn’t the interest, the buzz, the eenthusiasm, that motivated Taber to write his book.

NIQ data reported in the most recent issue of Wine Business Monthly tell a shocking story. Measured by value, total U.S. wine sales declined by 4.4  percent in the most recent 52 week period. There were losses at every price range of bottled wine, but lower price tiers were the biggest losers. Total value of measured sales fell for the 0-$3.99 category (-7.3 percent), the $4-$7.99 category (-6.5 percent), and the  $8-$10.99 category (-9.1 percent).

Should wineries invest more in the value segment of the market to try to recapture something of the Bargain Wine Phenomenon? I am not the only one to think it would be a good idea. But the largest wine companies, which are best equipped to take on this challenge, seem to be more interested in Mexican beer or RTD cocktails.

I thought the Bargain Wine Phenomenon was important, that it would help power the wine market for many years. One of the early test-readers of my Wine Wars draft manuscript told me I wasn’t paying enough attention to Two Buck Chuck and I have always been grateful for his advice.

But now I don’t know. Do you think it was all a dream?

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Bottoms Up: The Bargain Wine Revolution

Wine Economist / November 22, 2011

George M Taber, A Toast to Bargain Wines: How innovators, iconoclasts, and winemaking revolutionaries are changing the way the world drinks. Scribner, 2011.

George Taber knows something about how seemingly small events can sometimes turn the world of wine upside down. He was the Time magazine reporter who covered the famous 1976 “Judgment of Paris” tasting where top French wines were matched against California Cabs and Chardonnays in blind tastings evaluated by famous French critics. The New World wines held their own and even took the top prizes in both red and white categories. Thus was a fermenting revolution recognized and encouraged.

Now the issue isn’t so much Old versus New as it is Expensive versus Cheap and Elites versus Masses. Taber sides with a democratic vision of wine and this book is a celebration of the fact that there are more drinkable bargain (less than $10) wines in the world now than ever before. The glass is more than half full. Drink up!

What to Drink (for $10 or Less)

Taber’s celebration comes in two parts. The second half of the book is a bargain wine buyer’s guide. Taber provides top 10 lists of his favorite “$10 and less” wines and wine brands sorted by grape variety and region. He also recommends a couple of splurge wines in each category for good measure.

My, what a lot of inexpensive wine George Taber must consumed to write these recommendations. Bottoms up, indeed!

Here’s what I mean. The section on blush wines highlights 10 wines including a $3 Oak Leaf White Zinfandel (from Wal-Mart) and a $6 Riunite Strawberry White Merlot. I assume that Taber tasted the big selling Sutter Home White Zin and found it wanting since it does not appear on the list, but he doesn’t list all the wines he tried in each category, only the best ones, nor (and this would be particularly useful) the really really bad ones to steer clear of.

Revolution from Below

The first half of the book makes the case that maybe you should take bargain wines more seriously (and not just because of the current economic situation). Taber sets out to undermine the conventional wisdom about wine. Maybe wine judges are as confused as the rest of us. Maybe taste is so subjective that your opinion really is all that matters. Maybe (gasp!) bottles and corks are a pointless anachronism when it comes to everyday wines and you should reconsider your prejudice against “box wines,” which have changed a lot since you tried them in college.

My favorite chapters are the profiles of the iconoclasts who are leading the wine revolution. Taber’s reporting skills are put to good use in telling the tales of Fred Franzia (the godfather of Two Buck Chuck) and John Casella (the father of Yellow Tail wine).  Both wines changed the world in important ways and it is interesting to have their stories told so effectively and to be able to see these two phenomena side-by-side.

The final chapter (before the buyer’s guide) examines China. Will it too change the wine world? Maybe – that’s the answer here. China is still a work in progress and perhaps it is too soon to draw many conclusions. Taber does a good job pulling together different trends and facts.

What’s a Bargain?

One of the ironies of this book comes from the fact that Taber needs to define what he means by “bargain wine” and value (like taste) is pretty subjective. He draws the line at $10, which is a good thing I believe since this allows him room to include a lot of pretty good wines in his lists and not just focus on extreme values. Ironically, however, a $10 wine is classified as “premium” and sometimes “super-premium” here in America. The majority of American wine drinkers think of a $10 wine as a splurge.

I have friends who are afraid to try a $10 wine because they fear that they will be able to taste the difference and be forced to turn their backs on the $6 wines they’ve been enjoying for years.

I wonder if wine snobs will be annoyed by George Taber’s book? After all, with this book Taber seems to suggest that democratic wines deserve the same respect as those Judgment of Paris aristocrats. Me? I’m just grateful that he’s done the dirty work of tasting and sorting all those really inexpensive wines so that I don’t have to! Bottoms up!

3 responses

  1. Good questions Mike. In the “not so distant past,” to use your terms, the on-ramp for wine consumers was lower-price wine. That not the case anymore.

    We are in the middle of a classic CPG category correction and the jury is still out on how this eventually recalibrates, but the supply of grapes and wine is there to produce lower-priced, better-quality wine. That can bring in new consumers to our category. That is happening all over, most obviously with private label which we estimate is growing in the lower teens as a percent. This is part of the solution.

    As an industry, we see our headwinds clearly now, albeit late. Understanding the problem.is the start of change. Now if you look around, you do see companies working to make up for lost time, creating experiences and brands for multicultural communities, and reinforcing occasions.

    But it’s.going to take more than product and price to solve this problem and find the next golden age as George Tabor described. The quicker we get to the other Ps and promote the category, the faster we will be through this.

    I appreciate your ponderings, as always.

  2. Mike, The wine industry needs to not only find a way to explain to consumers that Bargain wine is good, but also needs to market to retailers and restaurants how bargain wine can help them make more money. Once we can make that sales pitch to them then it might be easier to get the wines featured so consumers could buy them.
    Steve

  3. Insightful article and questions, as always, Mike – thanks! Wholeheartedly agree with Rob as well.
    My two cents is the same as I’ve exclaimed for years – the wine industry (esp. retail/shelf) needs to (re)learn Luxury Marketing101, which includes how to position, present, and price wine to consumers. CA wine has sales-driven for years on end, fronted by the likes of Gallo and KJ and Franzia and supported by the ever-declining number of distributors. Many wine marketers go for the low-hanging fruit – “Let’s redesign the label” while missing the core fundamentals. I love to share the macro-story about Joe Wagner’s Meiomi, the largest non-asset wine sale ever @$315M in 2015…no assets other than the brand. And Constellation took it much further still…all without vineyards or vats. Why was Meiomi worth such $$? It was simply the value of the brand itself – a sub-$20 Pinot for the masses (tbh, not my fav, but…). The closest brand these days might be John Truchard’s Butter chard, with classy and fun positioning as the #2 Chard on the market (ala BottleRock vibes and fun women enjoying their vino). After that – not much else. Yeah, some 19Crimes creative packaging, perhaps a few others. Compare that to RTD or liquor strategy, advertising and spend, and the wine aisle is positively anemic. And of course, most wineries say they can’t afford it, thus becoming a self-fulfilling prophecy.
    I will grant all that focusing more on marketing alone isn’t the answer – but it is a piece of the puzzle.
    (Self disclosure – I’m not a marketer nor profit from such spend, but I did grow up in P&G and learned about branding from some of the best).

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