Brand expansion

In economic times like we are currently experiencing that feature an oversupply of wine and with the exception of the 2010 and 2011 harvests an oversupply of grapes, is when we typically see an expansion in the number of brands even if we do not see an expansion in the number of wineries. It was the huge harvest of 1997 after all that launched the "2 buck chuck" brand and the subsequent craze over the wine.

Most times this can result in some really good wine at compelling prices as wineries most times price these secondary offerings at prices below their standard bottles. There is a long list of primary and secondary labels that both contain great wines that fill different niches in the marketplace to the satisfaction of wine consumers, and economic stability for the wineries. Some of the wineries that present this welcome one-two punch include Dusted Valley/Boomtown, Skylark/Alondra, Bunnell/River Aerie, Coppola/Votre Sante, Terra Blanca/Arche Terrace, Signarello/Edge, to name only a few and the list could go on and on.

In some of the cases listed above the second label actually involves negotiant wine which is wine that is already fully made and purchased in bulk, then bottled under the new label. While still presenting great quality for the dollar it is yet another way for the current wine glut to be disposed of to the benefit of all.

Recently though we have seen a trend that is less helpful for consumers as some wineries are starting a second label that they prefer to call a "separate project." These wineries are attempting to expand their existing brands by making another wine using the same winery facility, the same winemaker and at times even the same vineyard sources with a different brand name and label. As a wine professional and talking to others in our industry it seems to us to be a difference without a distinction. The unfortunate punch line for consumers is there is not even a price break on the "separate project," as many times the newly labeled wine is priced at the same level or at times is even more expensive. This trend which has yet to fully play out seems to be focused on the higher end of the wine market in the ultra super premium category.

The other issue for wineries attempting these initiatives is it puts pressure on their existing bottlings which in many cases are very, very good. Simple rules of supply and demand apply to the wine industry just as they do to any economic endeavor. When there is an upper echelon brand that is produced in tiny quantities using all of the best raw materials from fruit to cooperage, that then receives great reviews, and the wine is found to be delicious and difficult to get, price tags in the hundreds of dollars can be rationalized and supported in the market.

When we say tiny quantities we mean just that some of the most sought after and expensive wines are making 1,000 or less cases annually. The problem for the winery though is when they take a production level like 1,000 cases and through their primary label or as is happening now their "separate project" label and ramp production to 10,000 or more cases per year. The perception in the wine market changes as the wine is no longer so tough to attain, and the quality is perceived to suffer, as many times it does as the winemaker struggles to maintain the same level of quality fruit and hence quality wine.

So the question then is what to do as a wine consumer? If you have brands and sub-brands like some of those listed early in the article I would encourage you to continue enjoying them and the price breaks that go along with them. For the more expensive brands that have started to make more wine as always I encourage you to consult your favorite wine professional about which wineries are increasing production in their primary and secondary labels. Then be diligent in trying their new releases prior to buying them in quantity. If you perceive the quality slipping it likely is and it may be time to move away from those brands. There are many choices in wine once you reach these price levels so it makes little sense to continue paying super premium prices for wine produced in huge quantities.

If there is a topic you would like to read about or questions on wine you can email George@thedinnerpartyshop.com or make suggestions by contacting the Healthy Community section at the Coeur d'Alene Press.

George Balling is co-owner with his wife Mary Lancaster of the dinner party - a wine and table top decor shop in Coeur d'Alene by Costco. George is also the managing judge of The North Idaho Wine Rodeo and writes frequently for the online version of Coeur d'Alene Magazine at www.cdamagazine.com. His articles can also be found on the blog at www.thedinnerpartyshop.com.