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December 2, 2005

BOGOF

BOGOF (Buy One Get One Free) is the UK wine industry’s drug of choice these days. The promotional mechanics take various half-price forms, but they revolve around wines sold briefly at prices like 7.99, then “promoted” at what cynics would call their "real" price, of 3.99.

The question that nobody seems to be asking is: Do half-priced features violate the trust of the consumer? Does it undermine the market for premium wine? How is the producer and retailer trade going to end a practice that moves so much volume on what many would consider to be a less than objective practice?

A MAJOR retailer this week was promoting Fetzer, barrel select California Cabernet at £3.99 (regular price £7.99) with a screw cap closure. It was a deal so good that I had to buy a couple. I got it home and unscrewed the cap. The wine was, shall we say, a very nice bottle of 3.99 wine. A fair deal for the price I paid.

But, there was a nagging feeling inside me about this wine. I tasted it again, could I believe given Fetzer’s amazing winemaking prowess (they're a subsidiary of Brown Forman) , that this is a wine that the winery and retailer would have sold at £7.99. Well, the answer is, probably not. More to the point, would a consumer buy the wine at £7.99?

I went to Fetzer’s website, and looked at their positioning for the brand:

At the end of the 1800s, Valley Oaks was a center of livestock production in Northern California. The land was ideally suited for grape production and in 1984, Fetzer took over Valley Oaks to help it realize its full potential. It was then that we committed ourselves to a new winemaking philosophy. A philosophy grounded in a sense of responsibility to the land, our community and our customers.

As you explore, we hope you get a sense of what life at Valley Oaks is like and feel inspired to pay us a visit.

It was all about “place”, history, quality. The sorts of things that make me think, Gosh, this is a winery that is passionate about what they do. There is a lot of very specific information on the site about their commitments to using recyclable materials, import and treatment of cork in the US, etc etc.

I then went back to the wine and took a closer look and saw that the wine was shipped in bulk and bottled in the UK. A practice that seemed rather inconsistent with many of the messages in the site.

Well, Stormhoek are big fans of non-source bottling, although we do not currently do it. There are many, many, good reasons to do it: Cost savings, Better supply chain and packaging, there are people in our business who believe that we could keep our wine fresher if it was bottled closer to the market. However, if your brand message is all about a sense of place and history and promises are being made about the packaging used and its provenance, is non-source bottling a consistent message? I will let you judge for yourself.

Fundamentally, if the industry is going to build brands, then the brands need to be true to their stated objectives and keep the promises that they make to the consumer. If the industry is going to build sales at higher price points, then a good way to do it is to sell wine that is legitimately worth £7.99 at £3.99. I am afraid that the message that is being perpetrated now is: There is NO reason to spend £7.99 on a bottle of wine, because it doesn’t taste any better than a £3.99 bottle.

BOGOF is a drug. Like all intoxicants, too much gets poisonous.

[PS:] A couple of days later, On a visit to another BIG retailer, there was Fetzer Sundial Chardonay and Cabernet on sale. Same mechanic, oddly Cabernet “half priced” at 8.49 down to 3.99 and Chardonnay at 7.99, down to 3.99. California, natural cork filled, I didn’t buy the wine, but it looked like the “normal” stuff i.e like it was acutally bottled at source. I think this retailer has more Christmas cheer in their offer.

Posted by hugh macleod at December 2, 2005 9:20 AM

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Comments

Hugh,

I honestly don't see the disconnect, at least as far as what was IN the bottle. If a winery is touting its sourcing for grapes, makes the wine from those sources, then ships in bulk to the place of bottling,I'm not sure how the transportation process diminishes the touting of the place the grapes were grown.

Without looking at the bottle and looking at the appellation on the bottle, I can't know much about the wine. However, based on the price it's either a "california" appellation or "north coast" or possibly "Mendocino County."

As to the quality v. price, well that's a pretty subjective determination, isn't it.

Cheers,
tom...

Posted by: tom at December 4, 2005 12:14 AM

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