Chasing a certain eminent persons blessing

Beringer Blass have just announced two new Super Premium Wines called “Wolf Blass Platinum,” a Shiraz and a Cabernet.

If the wines were being retailed in shops, they would sell for about $100 a bottle, but they are not going to be sold in shops initially they are being restricted to restaurants only. Take a bow Beringer Blass for one of the most incredibly brave moves one could make in today’s market. Lovers of ‘Yes Prime Minister’ will fully understand the context and meaning of “incredibly brave moves.”

Lets examine this a bit more closely to see the truly brilliance of this strategy. Firstly, there will be little argument that Wolf Blass wines (as a label) are known for successfully producing low to mid range wines. Success in the Ultra Premium market however has eluded this range. The Wolf Blass Black Label which retails for a theoretical approximate $130 a bottle and to put it very mildly the wine is not exactly taking the market by storm. If the secondary market is any indication of the wines success, this wine is about as successful as air bakes on a turtle. In fact according to Winestate the 1990 vintage auction value of this wine is $70. By comparison the ‘90 vintage Bin 707 (which retails for a similar initial price) is $240.  The 96 Black Label auction value is a whopping (sic) $55 and in comparison the same vintage Bin 707 is worth $128.

The reason I used Penfolds as a comparison is that Penfolds has a great track record with Ultra Premiums. It’s because of that track record when Penfolds release a new wine like RWT or a special one off like Block 42, the market believes the value of the wine will be there and it sells. 

As readers of this Journal will be aware, recently Wynns dropped the price of John Riddoch and Michael from $90 to $50 because the wine was not selling. Wolf Blass Black Label secondary market prices are generally even lower than comparable vintages of John Riddoch so it looks like the Black Label has not exactly taken the world by storm. (Unless the storm is in a teacup.)

With this track record, one can only wonder what makes Wolf Blass think that they will be able to make a success of these new Platinum Labels. Do they seriously think that the world will beat a path to their door to buy a $100 wine from a label with no history of providing good value at this price point?

The marketing strategy is interesting. Firstly Platinum is generally regarded as the highest value/cost (mineral and is worth more than gold,) so does that mean that the price of the Black Label will be reduced below a $100? Secondly, the wine is destined for Restaurants only at this stage. Add the normal restaurant wine mark up of 100% and diners will be asked to pay not $100 but $200 for an unknown wine.

When asked why they were embarking on this endeavour, the Beringer Blass Rep informed Bert “that they were chasing the Parker Market.”  Sounds like buying a lottery ticket may be a better strategy.

Cheers

Ric