Why Supermarket Wine is Boring

supermarket wineThree reasons stand out:

1. Most people want to purchase wines for under $10. The cost of production for a $10 bottle of wine is about 2.40 according to this article. (I’ve seen $3-$5 mentioned as a ballpark figure as well) The rest is marketing, transportation, distributor and retail markup. By contrast, the cost of production for a $100 bottle of Cabernet Sauvignon from Napa is around $30 according to this post. These numbers will fluctuate according to the unique circumstances of each winery but I think they are roughly correct. The cost figures for the $10 wine don’t allow for much focus on quality.

2. Supermarkets must purchase wines from distributors who have little incentive to sell interesting wines. Sales people prefer to focus on their best sellers because it makes the logistics of their job easier. They prefer to deal with wineries large enough to supply all their accounts and who enjoy an established reputation so the wines sell themselves. There are exceptions. Some smaller distributors and many, many importers work very hard to find interesting wines. But supermarkets have little incentive to make space on their shelves for these smaller distributors because it requires more communication, more paperwork, more attention, and more hassles. Again, there are exceptions. But not many.

3. Big wineries, the only ones most distributors will work with (see #2), do market research before they produce a wine. Their market research tells them people want smooth, lush red wines with a bit of residual sugar. So that’s what they make. Those large wineries make about 90% of the wine sold in the U.S. Producing wines of difference and distinction makes little sense because casual consumers lack the training and experience to recognize those differences.

The supermarket is where you buy wine to wash down food. If you’re interested in learning about wine you can get your feet wet there by beginning to learn about the most popular varietals. (Some Whole Foods outlets are good, Trader Joe’s tries harder than most, and Costco takes some pride in their wine program.)

But at most supermarkets you very quickly run out of interesting options.

 

2 comments

  1. There are a few other considerations that apply, Dwight.

    Supermarkets want consistency of supply, both in terms of quality and quantity. There are many small producers in Europe at the local level that make excellent wines that fall outside the norms of “supermarket” style wines in the same price range. But they don’t produce 5,00o or 10,000 cases of a single. They can’t guarantee continued supply, because they simply don’t make that much wine. They may not have the $5M USD liabili5ty policy that supermarkets require. I remember all too well my first sales call on the buyer of a major supermarket chain. As I began my explanation of the wines I had to sell, he cut me off. “Just tell me how much wine you have, total, and how big a discount I would get if I bought it all…”

    And finally, supermarkets wants wines that sell themselves without further explanation. They don’t want to invest in additional staff or materials to explain why any wines they carry don’t taste like all the other wines other supermarkets carry. They don’t see their job as expanding the world of wine, they see themselves as supplying what the main body of consumers wants to buy.

    Something similar happens on many cruise ships. I clearly remember a conversation I had with the F&B director of a major cruise ship off the coast of Italy. I complained that his ship carried primarily well-know California wines, instead of offering wines that would more effectively deliver an authentic local experience.

    He agreed with me wholeheartedly, but also explained that he had tried to offer those wines, and most of his customers were American tourists who complained too much and didn’t buy enough wine. So he did what any good shopkeeper should do–he gave his customers what they wanted to buy! And now he sells lots of wines to his customers.

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