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How are local wineries dealing with a ‘reeling’ luxury wine market?

by TrevR on July 14, 2009

The week is off to a flying start, which is in stark contrast to the Napa Valley luxury wine market if the Wall Street Journal is to be believed.

Alpha Omega wood

We’re a few days late in posting about this, but last week the Wall Street Journal published an article on the current state of the luxury wine market, which is loosely defined as wine that sells for over $25 per bottle.

Overall, it’s a decent article, but nothing you wouldn’t expect. Here’s the synopsis: As the economy has worsened, sales of high-end wine have dropped pretty dramatically. Shocker, huh?

For us, the interesting tidbits lie in the contrasting strategies being employed by local wineries who find themselves having to cope with a far more cost conscious consumer. Here’s an excerpt with details on what a couple of our local wineries are doing:

Duckhorn Wine Co. in St. Helena has increased the “winemaker dinners” it puts on to woo restaurants and other top buyers. Cain Vineyard and Winery in St. Helena has increased the amount of wine it sells to restaurants to sell by the glass, instead of the more common practice of selling the wine at a higher rate per bottle. Restaurants that get wine at the per-glass discount do so because they generally need to buy more bottles of wine because more people order by the glass. “Restaurants put up a virtual buying freeze a few months ago, so we had to do something,” says Christopher Howell, Cain’s winemaker.

And the article goes on to say:

Some of the newer operations are using new marketing techniques to cope. Alpha Omega, a boutique winery in Rutherford, Calif., has begun using online services Facebook and Twitter to reach out to its customers. The winery three years ago began targeting consumers directly, and the strategy is now paying off; revenue is up 40% so far this year, compared with a year ago, in part because it doesn’t have to share many revenues with a distributor, says co-owner Robin Baggett.

Interesting stuff. While we’re not surprised to see the smaller, more up-start wineries out there pushing the envelope on new marketing techniques, it’s also good to see some of the more established brands doing the same.

As they say, ‘only time will tell’ in terms of who got it right and who didn’t…

[techtags: Napa, Napa Valley, wine, winery, luxury wine market, Alpha Omega Winery, Duckhorn, Rutherford, Cain Vineyard and Winery, St. Supery]

About the Author

has written 716 posts on The Cork Board. He was born and aged in the Napa Valley and has a passion for wine, writing and social media, which led him to co-found this blog in early 2007. Follow him on Twitter @TrevR.

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