Questioning the Conventional Wisdom About the Spanish Wine Industry

riscalThe conventional wisdom is that Spain is an Old World wine country (along with France, Italy, Portugal, etc.) and it is easy to see why. First there is geography. Old World = Europe. QED. End of discussion.

Old World Wine

Then there is the matter of wine culture. One of the characteristics of Old World wine countries is that their per capita consumption levels, once very high, have been falling for decades. Spain’s per capita consumption today is less than 20 liters per person, for example, but was more than 100 liters a head in the 1890s and more than 60 liters per capita as recently as the 1980s.

Finally there is the obvious factor of age. Wine has been made in Spain for a very long time. It was hard not to think “Old World” when we were in the Toro region, for example, to visit Pagos del Rey winery. Gnarly goblet-trained Tinto de Toro vines (the local Tempranillo variety) looked as old as centuries and some of them really were since phylloxera never invaded these vineyards. At the winery we were served “young wines” made with grapes from”only” 70 year old vines. Vines as old as 130+ years provided grapes for the senior wines. Amazing.

Confusing the Issue

John Kenneth Galbraith famously argued that the conventional wisdom is always wrong and there is something to be said for that in this case if we think of Spain in terms of its wine industry instead of its location, wine culture or aged vines.

One of most interesting stops on our recent tour of Spanish wine regions, for example, was at Marqués de Riscal in Elciego.  This is one of the oldest wineries in the Rioja region, although you might not realize it as you approach town, your eyes distracted by the post-modern Frank Gehry-designed winery hotel that sits on the hill above the historic cellars. Fantastic.

The winery was founded in 1858, which makes it old, but not much older than the “New World” Charles Krug winery in Napa Valley, which dates from 1861. Wine is much older in Spain than California, but the wine industry perhaps not as much.

Pagos del Rey, for example, is part of the prominent Felix Solis group, one of Spain’s most important wine producers. Their inspiring true story of how a mom and pop wine operation grew to grand dimensions reminded me of the Gallo family in the United States. But Gallo is actually older — starting out in the post-prohibition 1930s — while Felix Solis’ roots date to the 1950s.

It’s a New World After All

The modern Spanish wine industry is relatively young (much  younger than those Toro grape vines). Some might argue it was re-born in 1986, when Spain entered what is now the European Union, and began to compete head-on with wine from France and Italy. Competitive pressures, plus EU wine market reforms and adjustment aid, helped Spain’s wine industry reinvent itself for the 21st century.

The result is in some respects a New World wine industry in the Old World.  Spain is not unique in this, but it is a very good example of the successful transformation of the wine sector.  Bodega Finca Constancia in Otero is a perfect illustration of where this path has led. Founded in 2001 by the Gonzalez Byass group, it features beautiful vineyards (including several experimental blocks developed along with a university research team) and a state of the art winery that hugs the ridge line, blending into the landscape.

The wines at Finca Constacia are impressive, deftly balancing tradition and transformation. We saw several examples of this fusion during our time in Spain.  Bodegas y Viñedos Viña MayorGrupo MatarromeraBodegas Manzanos, Torres, and Campo Viejo were particularly striking, each in its own way. And the wines in all these cases display that special quality that we often call “authenticity” today, although I prefer “integrity.” (Why? Long story — I will save it for another time and place.)

Conventional Wisdom Risks

The conventional wisdom sees the adoption of international styles and techniques as the way forward, or at least one important path, and I think this is correct, which is one reason I am so optimistic about Spain’s wine fortunes. But I think it is possible to go too far in pursuit of wines that will seem familiar to global market consumers — so I urge due caution.

A few years ago I was invited to participate in a seminar on Spanish wines in the U.S. It was a great experience and I learned a lot, but there was one rather shocking thing that happened that is relevant here. At the end of the first day some of the local sommeliers went out to dinner with our seminar leader and a six pack of Spanish wines from various regions and varieties, all made in an international style (stainless steel, a bit of new oak, etc.)

They returned the next morning and were more than a little subdued. It seems that they had played that “blind tasting” guessing game with the wines and, well, they really couldn’t tell them apart, even with a little cheating. The producer of the wines, it seems, had sacrificed integrity for marketability through international style.

They were nice wines — you  wouldn’t hesitate to drink them —  but it was hard to see why you would choose them over other wines on the market. It is important to make wines for today’s consumer, but not to forget the old world qualities that make them special.1982

Old World Revisited

Santiago Salinas made the argument in a different way when we visited him at Bodegas Montecillo, which is part of the Osborne wine group.  Santiago had arranged a tasting of his Gran Reserva Seleción Especial wines from the 1975, 1982, 1999, and 2001 vintages (1982 was a stellar year in Rioja and we tasted it from a magnum, so this was a treat).

He wanted us to see Rioja’s history by tasting wines made when blending of grape varieties was more important than it is at some houses today and before the impact of climate change was so strong. The wines were more subtle and elegant when, after some years in barrel and bottle, they were finally released, Santiago suggested.

The old wines were wonderful the way that old Burgundy can be wonderful and Santiago’s point was clearly made. Hopefully today’s wines will taste this good when they are thirty or forty years old, but maybe they won’t. Maybe we will find that something has been lost along the way and so perhaps we should be working hard to prevent that.

I am not one who thinks the the most important quality of a wine is its ability to age well, but a tasting like this provides valuable context and a warning not to push the conventional wisdom further than is wise.

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Special thanks to Santiago Salinas and Marina Garcia for their hospitality.

Sketches of Spain: Spanish Wine Industry Challenges and Opportunities

davissketc_0809_1_1204852187Sketches of Spain is the title of the 1960 Miles Davis/Gil Evans album that deftly walks the line between classical and jazz genres, with Davis’s virtuosity shining throughout. Scroll down to the bottom of this column if you’ve never heard this great recording.

Sue and I have recently returned from a visit to Spain, where I spoke at the General Assembly of the Spanish Wine Federation (Federación Española del Vino or FEV), so Spain and Spanish wine are on my mind and I have been puzzling over how to write about our experiences and all that we learned. Such a big country! So many impressions! The Miles Davis album solved the puzzle.

Davis and Evans gave us a few powerful sketches of Spain and its music, not a detailed musical portrait, which would be impossible in the context of a ’60s-era 33-rpm vinyl recording. A perfect choice! In this and the next several weekly columns I will try to provide sketches of the Spanish wine industry, which I hope you will find useful, leaving a more detailed portrait for another time and place.

Sketch 1: The Spanish Wine Supertanker

They say that it is not easy to turn around a big ship because of all the momentum it has to continue on its path and this might be a good metaphor for Spain. Spain is certain big when it comes to wine. Spain has the largest area of vineyards of any country in the world and is the third largest wine-producing nation (after Italy and France). Spain produces nearly 70 percent more wine by volume than the United States, which is number four in the global wine table.

The Spanish wine industry has devoted enormous effort to changing wine market direction, investing in more productive vineyards planted to grape varieties like Tempranillo that are more attractive to global wine buyers, and in new or updated production facilities.

The wineries we visited have made the transition and are now sailing in the right direction. As I said to the General Assembly audience, it seems to me that Spain has all the pieces in place to succeed in the new global wine market environment that has emerged, where value matters much more than sheer volume. I am an optimist about Spanish wine. But I am also a realist …

Sketch 2: Breaking the Glass CeilingFEV2

Improving Spanish wine is one thing (a good thing!), but achieving greater success in the global market is another because of reputational momentum.  Spain’s wine reputation has not caught up with its reality in many markets. Citing data from a Nielsen Company survey of U.S. on-premises wine drinkers (thanks to Danny Brager for his help), I noted that Spain was stuck under a “glass ceiling” in terms of consumer perception.

Italy and France — these are the countries that American diners think of first when they consider imported wines. Spain, despite its status as the third largest producer, ranks far below with perception roughly on a par with Australia, Argentina, and Chile and only a bit above tiny New Zealand, which is number 14 on the world wine production table, lodged between Romania and Hungary.

Spanish producers would love to break through the glass ceiling to achieve market status of Italy and France, but — let’s face it — everyone wants to do that.

A more interesting question for Spain, I proposed, is why it does not rank higher above Argentina, Chile, and New Zealand. Do they make more wine than Spain? Better wine? Do they have better generic market promotion programs? The answer is no in each case. What do these much smaller countries have that Spain does not that allows them to punch so far above their weight? This got my audience thinking, which is always my intent.

Sketch 3: Spain at the Crossroads

Hard thinking is necessary because Spain’s wine industry is at a cross roads of sorts. A graph of domestic vs export sales of Spanish wine shows that an important line has been crossed. Domestic wine consumption continues to fall in Spain as in other Old World producer countries. The opponent is not so much France and Italy as spirits and beer and changing consumer habits generally.

Wine exports are rising and now exceed domestic sales. This is important since the industry would be in crisis if exports did not replace lost domestic purchases, but that doesn’t mean that slowly losing your most biggest market is not a cause for concern. It was rare for us to meet a wine producer in Spain who had as much as 50 percent domestic sales.

Global markets are congested and competition for high value sales will only increase when Brexit’s full impacts are finally felt.  Reversing the decline of the domestic wine market is Spain’s next big challenge.

Fortunately, I think there is an realistic opportunity for domestic wine sales growth. Spain was hit very hard by global financial crisis and the austerity policies that followed in Europe. Only now, ten years after the crisis, is Spain’s gross domestic product approaching its pre-crisis level. A lost decade! No wonder exports have been the focus.

But growth has picked up in the Spanish economy and optimism is in the air, something Sue and I could feel on the streets of big cities and small towns alike. Beer is a tough opponent, but perhaps this is Spanish wine’s moment at home as well as abroad! More to follow in the weeks ahead.

Thank You Notes

Sue and I would like to send out big “thank you” notes to Pau, Susana, José Luis and Eduardo and everyone else at FEV and to all the people we met at the General Assembly in Valladolid.

FEV organized a series of winery visits for us in the two weeks following the General Assembly (I will report on this fieldwork in future columns) and we would like to thank everyone who took the time to meet with us and share their stories. Here is a list of the wineries we visited:

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The Wine Economist will pause next week so that we can travel to Cyprus where I am giving a seminar on regional wine reputation and we are visiting wineries, and attending the annual Cyprus wine competition. Come back in two weeks for more sketches of the Spanish wine industry. In the mean time, here’s the original recording of Sketches of Spain. Enjoy!

Refreshing On-Premise Wine Market Strategies (without Jumping the Shark)

shark-week-000How does a traditional craft product innovate to be competitive and relevant in today’s marketplace, but do so without losing its soul? I think about this a lot both in my job as an economist studying the wine industry and, in my other life, as the trustee of a liberal arts college.  Both wine and college need to change with the times while staying firmly rooted to those timeless qualities that make them so valuable. Not an easy task!

Sharking Jumping Risk

Sometimes I am jealous of those folks over in the beer space. They seem to find ways to innovate without “jumping the shark” with ridiculous over-the-top ideas too often. (See shark jumping video below.) Lots of new products and variations on classic brews.

The rapid proliferation of craft breweries and brew pubs here in the United States and around the world means that while beer is clearly a global industry, it often has an intensely local feel and flavor.

I can’t even count the number of on-premise craft beer operations here in Western Washington, each different to fit into a specific neighborhood niche. When a German-themed craft beer hall opened recently in Tacoma it literally had lines out the door. It might be just good beer, but I believe that it is the total experience and that strong beer sales are as much affect as cause.

Wouldn’t it be great if wine could innovate like that, I have sometimes thought, somehow connecting global and local, tradition and new, casual and elegant. I’ve recently learned about two very promising but completely different innovative initiatives tat give a sense of what might be possible without “jumping the shark.”

An Urban Winery in La Jolla

There actually are sharks in South Africa — the Great Whites that you see on TV during the Discovery Channel’s Shark Week. I first met Lowell Jooste in South Africa — his family owned the historic Klein Constantia winery for twenty years before moving to La Jolla, California in 2012.

Jooste’s wine is made up north in Napa and Sonoma, but as the video above shows, he trucks the barrels down south to beautiful La Jolla where he operates L.J. Crafted Wine, a kind of cross between a brew pub and an urban winery. The wines are drawn straight from the barrels and tanks using a propriety technology that keeps them fresh and clean. Customers can drink hand crafted single-vineyard wine by the glass, fill the elegant wine “growlers” or take away cork-sealed bottles.

Barrel tasting on La Jolla Avenue. Who could resist the opportunity to drink fine wine in an elegant yet casual atmosphere like this? Add in cheese and meat platters and finish off with a glass of 2009 Vin de Constance from Klein Constantia (of course). Perfect.

Lowell Jooste’s La Jolla winery raises the wine bar bar, if you know what I mean, giving wine consumers the sort of intimate experience that beer lovers sometimes find at their favorite local brew pubs. The concept and design are innovative and so is the clever barrel thief device that makes it all work. Tests show that the last glass from a barrel is as fresh as the first, which is quite an achievement.

If the goal is to draw upon wine traditions to make meeting with friends for a glass of wine as appealing as hanging out at a brew pub, this is might be an answer. It is certainly going to be on my itinerary the next time we are in La Jolla!

And Now for Something Completely Different

London’s Pall Mall is pretty much the opposite end of the spectrum from La Jolla Avenue. This is an area you might associate with stuffy private clubs — the sort of places that are the home to what I have called (with apologies to Thorstein Veblen) “conspicuous non-consumption.” The wines here are the very best, but they exist to be collected, not enjoyed in the glass. Drinking them — that would be revolutionary! I overstate the case, but you know what I mean.

I was delighted, therefore, when my globe-trotting friend Ken sent a report about a private club called 67 Pall Mall. This club looks as elegant as I imagine the others are — and the sample menus make it sound like a nice place to dine. But the point of the club isn’t to eat or to, well, club. The point is to actually drink great wine, choosing from a quite large number offered by the glass and many more by the bottle.
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Ken gave his visit to the club with a member friend high marks. Richard Hemming MW‘s account of his drinking experience at 67 Pall Mall makes thirsty reading:
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None of it is cheap, with 125 ml glasses starting at around £7, but this is precisely the point of the place. The most expensive glass is £426 for Screaming Eagle (I missed the vintage), then £425 for Ch Latour 1961. We drank a glass each of Condrieu, Montlouis, Réné Rostaing Côte Blonde 2003 Côte Rôtie, Mountford Hommage à l’Alsace 2011 Waipara, a 1991 Vin Santo from Santorini and Quinta do Noval 2007 port. All excellent, and cost a total of £98. For an illustration of value, the Rostaing is currently being retailed for £110 a bottle, making 125 ml worth £18; at 67PM this was £23.
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 Both these innovative initiatives change the wine experience in a good way for their clients, I think. Different as they are both have at their core technological innovations that allow these wines to be served and preserved.

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Here is the “jumping the shark” scene from Happy Days. Enjoy.

Around the World in Eighty Wines: Racing to the Finish Line

51ppzy7bwzl-_sx332_bo1204203200_Sue and I spend so much time travelling to visit the world’s wine regions and speaking to wine industry groups that we sometimes feel a bit like Phileas Fogg and Passepartout, the characters in Jules Verne’s novel Around the World in Eighty Days.

That feeling and the experiences that go with it are one of the inspirations for my next book, Around the World in Eighty Wines, which will be released on November 1, 2017. (You can already pre-order it on Amazon.com!).

Although our travels continue (we are off to Spain next week and then to Cyprus in May), at some point it is necessary to draw a line and declare the book itself finished. And that’s what I did today, when I finished proofing the copy-edited manuscript and sent it in to my production editor at Rowman & Littlefield right on deadline.

The Wine Economist will take a break for a few weeks while we are in Spain for the FEV General Assembly meetings and visits with winemakers there. Circle back in a few weeks to see what’s new at The Wine Economist. Cheers!

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I asked a few friends to read the manuscript and write brief “blurbs” for the book cover. Here is what we have so far. Enjoy!

This captivating book is about more than just wine—it’s about human nature, travel, and enjoyment. As the Rick Steves of the wine world, Mike’s talents as a writer and storyteller transport the reader to a new territory to explore as each of the eighty wines are opened.
Howard Soon, Master Winemaker, Sandhill Wines

Mike Veseth takes the reader on a Phileas Fogg–inspired odyssey in search of the answer to the question: why wine? The solution is a true global adventure—a mosaic of stories that illuminate wine beyond the glass to embody the enduring human spirit through controversy, love, endurance, loss, and hope. I was packing my bags to join the journey before the end of part one. A must-read for all who love wine and life.
Michelle Williams, freelance writer and author of the Rockin Red Blog

Like a master blender, Mike Veseth stimulates the mind’s appetite with a wonderful balance of illusion and substance, as complex as a fine wine.Structured with cultural nuance and imagination, this delightful book is a must-read for serious wine enthusiasts and neophytes alike. Circumnavigating the world in eighty wines should be enjoyed with a glass of your favorite origin in hand.
George Sandeman, Sogrape Vinhos, Portugal

Mike Veseth has deftly captured the magical worldwide journey of wine. This is a great rollicking educational roller coaster of a ride that the global fraternity of wine enthusiasts will embrace.
Robert Hill-Smith, vigneron, Yalumba, Australia

Wine Economist World Tour Update: Valladolid, Spain and Paphos, Cyprus

fev

The “Wine Economist World Tour” is on the road again and I thought you might want to know about the upcoming stops.

FEV General Assembly / Valladolid, Spain

Sue and I will be in historic Valladolid, Spain on the 28th of March. I’m giving a keynote address on the dynamics of the global wine market and how they apply to Spain at  the Federación Española Del Vino General Assembly.

I am honored to be invited to address this important group and am looking forward to meeting everyone and learning more about Spain and its wines during our visit. Sue and I have immersed ourselves in Spanish wine research, revisiting old friends and seeing what is new on the market here. Can’t wait to continue this work in Spain!

Cyprus Wine Competition / Paphos, Cyprus

We will attend the 10th Cyprus Wine Competition in Paphos, Cyprus on May 2-6. I will give a seminar on “Secrets of the World’s Most Respected Wine Regions” with lessons that might be useful to the Cyprus wine industry.

Many people think of Cyprus as a great place for a sunny holiday — and it is — but it has a rich culture, an amazing wine history, and a bright wine future, too. Its distinctive dessert wine, Commandaria, was once one of the most prized wines in the world. It just might be the particular wine with the longest history of continuous production.

Cyprus today is making the transition from an industry dominated by  bulk wine exports to a focus on high quality bottled wine and we will be interested to learn more about the industry, meet the wine industry leaders, and taste the progress they have made.

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There are several more World Tour stops on the horizon, including Napa Valley, Romania, Colorado, and I few more I can’t talk about yet. Watch this space for details.

Eight Flavors of American Wine? Reflections on Sarah Lohman’s New Book

51svceuoerl-_ac_us160_Sarah Lohman, Eight Flavors: The Untold Story of American Cuisine. Simon & Schuster, 2016.

Sue and I have been reading Eight Flavors, a fascinating new book by Sarah Lohman about food products that have transformed the American palate. Once exotic, now they are ubiquitous. Can’t imagine American cuisine without them.

This Changes Everything?

Lohman passes on coffee, chocolate and a few other “usual suspects,” she says, because they have been examined in great depth by other authors. Fair enough. So what are her eight flavors?  They are: Black Pepper, Vanilla (which replaced rose water as a flavoring), Chili Powder, Curry Powder, Soy Sauce, Garlic, MSG (the umami flavor), and the most recent addition, Sriracha

Each chapter presents the history of the flavor along with elements of Lohman’s  personal investigation and a handful of recipes, too. In its approach and deft writing syle Eight Flavors reminds me of another of my favorite food books, Lizzie Collingham’s Curry: A Tale of Cooks and Conquerors. rogue_sriracha_stout__32156-1423592442-451-416High praise!

The story of Sriracha is particularly interesting to me because I have watched as this product and its intense flavor have moved from “ethnic” to mainstream right before my eyes. Once upon a time I found Sriracha mainly at Vietnamese restaurants, but now it is everywhere: in ketchup, potato chips and popcorn, jerky, candy canes, lip balm, cans of baked beans, a special Big Mac sauce, and even craft beer (the Rogue brewery makes a Sriracha hot stout beer). Amazing.

Readers are treated to a personal tour of the huge California factory where Sriracha is made, which is also amazing. What’s the next big flavor? There are several possibilities, but Lohman thinks that pumpkin spice might become flavor number nine.

I haven’t seen Sriracha wine yet, but I suppose it is only a matter of time.There is a version of Sriracha from Colorado that is flavored with Ravenswood Zinfandel! Searching the web I discovered someone who added Sriracha to a glass of red wine (not a total success) and an innovative wine-Sriracha pairing event (looks like it sold out).

What About Wine?

Eight Flavors got me thinking (which usually means trouble) about wine. Are there eight flavors that have entered the world of wine and transformed it the way that chili powder and soy sauce have changed food in America? Not particular wines or wine brands (although it is difficult not to think that way), but flavors associated with the wines?

Here are a few half-baked ideas that I have come up with to get things started. I invite you to comment on my choices and to suggest wine flavors of  your own.

Lemonade. This flavor is suggested by the great success of Gallo’s Thunderbird wine in the 1950s. Thunderbird took flight when a Gallo salesman noticed customers adding lemon drink mix to white port, giving it a fruit flavor that appealed to the American palate of that generation and was so successful that it provided a solid financial foundation for Gallo’s growth. Although Thunderbird fell out of fashion in most areas, the market for fruit-flavored wines has hung around in various forms (Google “fruit-flavored wines” and you will see what I mean). You might think of the many Sangria-style wines as falling into this category, too. Authentic Sangria shows that fruit flavoring done right can be delicious indeed.

Red Coke.  Cola drinks are typically sweet, with balancing acidity, a nice fizz, and served ice cold. Riunite Lambrusco was developed to be “red coke” for the American market — sweetish, fizzy, low in alcohol. It was for many years the best-selling imported wine in America. Riunite on ice, that’s nice — or at least that’s what millions of consumers said. If you are of a certain age you might remember Cold Duck wine, which is still produced under the André California Champagne label. (Canadian readers might recall “Baby Duck” wine.) This cold, soft flavor, or something like it, can be found in a  host of “chill-able” red wines today.

Butterscotch. I am sure you have already guessed that I am talking about a particular style of Chardonnay that partly fueled the Chard boom, then fell out of favor, and is now experiencing a renaissance in some circles. Buttery, slightly sweetish with lashings of oak, this was the taste of the 80s and 90s. That flavor transformed wine more than you might think. It helped introduce Americans to inexpensive Australian wines, for example, and it created a revolution in American vineyards. Fifty years ago there were only a few hundred acres of Chardonnay vines is all of California. Now it is probably the most-planted white wine grape and Chardonnay outsells all other varietal wines, red or white (although Cabernet Sauvignon is catching up).412bv6vgcoxl-_sx258_bo1204203200_

Silver fizz. After reading science editor turned wine writer Jamie Goode’s new book I Taste Red  I have come to understand that taste is complicated — it is hard to separate color, texture, aroma and flavor. They are all mixed together and it is probably impossible (or at least counter-productive) to deconstruct them the way that wine tasting notes often do. With this mind, I want to propose “silver fizz” as a flavor — the flavor of Prosecco and wines like it, which are sweeping through the wine world today much as Siracha has done over in food world. Is the secret the way that Prosecco (or Cava? or Champagne?) tastes, or how it makes you feel? And does it even matter which it is?

Vino Exceptionalism?

Four flavors — it is a start. Somehow I don’t feel like I have captured that transformative dynamic as well as Lohman did with her food flavors. Is it because my choices are poor? In that case, I would appreciate your critique and suggestions.

Or is it because wine is different? Is wine somehow more rooted in traditional methods and flavors and less able to accept or be changed by outside influences? If so, is that a good thing?

See, I told you there would be trouble. Instead of answers I seem to have questions. Typical!

Try It, You’ll Like It: What Can Wine Learn from the Cruise Ship Industry?

cruiseI keep finding cruise brochures folded into the weekend newspapers that arrive here at Wine Economist world headquarters. Ads of various sorts for wine clubs associated with those same papers show up frequently, too. That got me thinking, which is usually a mistake. What do ocean or river cruises and those wine clubs have in common? Intrigued? Read on.

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They come in the mail and stuffed in weekend papers — brochures for ocean and river cruises and barge-and-bike tours. It is hard to resist the temptation to thumb through them and imagine visiting all these far-away places. You’ve done it, haven’t you?

Thousands and thousands of full-color printed brochures — this seems like a pretty expensive way to solicit customers. There must be something about having those pages and pictures in your hands that is especially important. Or maybe it is that the demographic that still reads a physical weekend paper and can afford to pay for it is a juicy target.

Experience Deficit Disorder

Several things about the tours strike me as important and relevant to wine. The first is that tours are “experience goods” — you cannot really know if you will like river touring, for example, until you actually try it. And then, if your experience is a good one, the odds of a second trip go way up (and the cost of customer acquisition way down).

The most important thing in marketing an experience good is to get people to try it the first time. The cruise industry seems to be good at this, so perhaps there is something to be learned by studying their strategies.

Wine is obviously also an experience good. Hard to know if you will enjoy a wine (or how much) before you pay the bill and open the bottle. If you like it, you are likely to come back for more. No wonder winemakers go to so much effort and expense to hold tastings of their wines.

The Olive Garden restaurant chain has a very successful wine program that is built around their practice of offering free tastes (as allowed by local law). One taste makes a customer more often than not.

Those colorful cruise brochures and television videos (think  PBS’s “Masterpiece Theater” sponsorship) try do the same — they give potential customers a “taste” of what cruise life is like. But for the most part neither wine now cruise ships can entirely overcome the obvious experience deficit disorder. So they need a strategy around it to give buyers confidence to take the plunge.

A Little of What You Fancy

Since cruise lines and independent “professionally curated” wine clubs of the sort that are often associated with newspapers and airline mileage programs cannot give all their potential customers actual samples of their products, they both seem to sell the glamour and exotic nature of the experience and hedge their bets in an interesting way.

Cruise tours seldom spend more than a few hours in any single port of call. If you love today’s stop, you can always come return on your own, but if you find you hate Venice (is this even possible?), don’t worry. You’ll be back on the boat and headed for another destination before you know it.

Some of the wine clubs that advertise in the weekend papers seem to work in the same way. Don’t worry about getting a case of even a six-pack of a particular wine you don’t like. Each case has at least six and sometimes twelve different wines. Don’t like this wine — don’t worry, because it is gone just like that. But you can order more of anything you fall in love with.

The fact that the details of the experience — the particular wines, the particular travel route — are made by experts, not the buyer, seems important, too. You buy the package and leave the rest to the experts. The modest commitment comes with relatively modest effort and emotional investment.

The low commitment strategy doesn’t appeal to everyone (see my personal note below) among either tourists or wine buyers, but its persistence in both spaces suggests that there is a market for it. Especially when there is a big discount involved.

Affordable Luxury

Nice wine and ocean and river cruises are luxuries from an economic point of view. No one has to buy them and there are always cheaper alternatives. The trick to getting the weekend newspaper-reading public to try them seems to be to make them simultaneously very luxurious and a tremendous bargain.

Thus the cruise lines advertise stratospheric rack rates for their services, which are then deeply discounted. The “full brochure fare” for the cheapest stateroom on a 10-day Mediterranean cruise in the flyer that arrived a few weeks ago is $9,999 (including economy airfare from certain gateway US airports). Wow, that’s a lot of money. Must be quite a cruise.

But wait, if you act now this wonderful experience can be yours for just $2,999 (airfare included) or $1,999 if you book your own flight. Lifestyles of the rich and famous at a fraction of the list price. Who can resist?

For the record the full brochure price of the most expensive cabin for this 10-day cruise is … wait for it … $33,998! But your price is just $14,999 or $13,999 if you pay your own airfare. Needless to say, this top-of-the-line listing makes the $2,999 of that bottom-tier inside stateroom seem an even better deal than before. Or maybe you would like to upgrade to the $4,599 veranda stateroom?

Wine club ads (and most supermarkets) adopt a similar strategies. Wine club ads seem to stress both the high retail value of the wines and the low low price that you will pay. Sometimes the introductory offer prices are so low that they must be intended solely to entice buyers into the first “experience” purchase, counting on repeat order for profits.

Foot in the Door?

I don’t see anything wrong with how cruise lines and wine clubs market their services. If this low-commitment affordable luxury strategy is successful in introducing people to wine and travel — and if they enjoy themselves — then that’s a plus.

Remember this. Most consumers don’t drink wine (here in the U.S. about 40% of adults don’t consume any alcohol at all). And most of those who do drink wine do it only a couple of times each month. There is much work to be done to introduce these consumers to the pleasures of wine and if thinking about wine as if it were a luxury river cruise can help, I am all for it.

The point of this that sometimes those of us in the wine space think that wine is so special that we fail to see how it relates to other products and experiences. It’s a good idea to pay attention to how other  experience goods present themselves to consumers and to note how those consumers react.

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For the record, Sue and I don’t seem to fit the wine club/cruise ship profile. We signed up for one of those wine clubs years ago and never ordered again. The wines were fine, we just wanted to make the choices ourselves. We’ve taken just one cruise: a Holland America Inside Passage cruise to Alaska. We had a great time and met many nice people, but were never were tempted to repeat.  Chacun a son gôut, I guess.

At least we had good experiences, unlike the diner in this vintage television commercial.