Ryan ChartrandSometimes, when we sit down, relax and sip, we overlook all the hard work and resources that went into making that wonderful Pinot Noir or Syrah.
Believe it or not, but the wine business is an industry of mergers, acquisitions and deals, deals, deals made all the time. Wineries are always growing. Some tend to feel growing pains and find that it’s best to chop off a successful label or part of the business from the rest and cash out to make a quick profit.
Buy, buy, buy. Sell, sell, Sell. So why should wine drinkers care? Well, it could save you some money at the cash register whenever you buy wine locally.
It’s important to be aware and stay connected with your favorite wineries and understand their business practices. One example is the sale of all Big House Red, Big House White and Cardinal Zin labels from Boony Doon to The Wine Group LLC of San Francisco.
Randall Grahm, the owner of Bonny Doon, felt that it was an opportunity to downsize and refocus energies to concentrate on his not so esoteric brands. Also, eventually the Pacific Rim Reisling will be phased out to a winery in Washington who will absorb that new label into its own label, sans Bonny Doon.
What does this mean? Well, with the changing of hands, sometimes shipments are liquidated to lower prices.
Take for example, the Rex Goliath brand with that huge 47-pound rooster on the label. This wine was made specifically by a premier winery in Monterey County called Hahn Estates. This award-winning wine is sold from between $12 and $45.
The flagship label Hahn Winery carries that all too familiar red rooster on the label as well. Well, sometime last year the Rex Goliath Brand of Hahn Estates was sold off to Constellation distributors, the largest wine company in the world.
So what does this mean for us sippers? It means, once again, that the wine has changed hands and that prices for the Rex Goliath stayed low because there was no reason to tie Hahn and Rex Goliath together.
At the register, this means you can by a wine made from the same wine maker and estate grapes of Hahn and instead of paying $12 to $45 dollars, you pay merely pennies on the dollar. Rex Goliath is a steal at $5.99 at Albertsons.
Another smart choice consumers can make is to check for liquidation. Sometimes big brand name wineries have too much wine to bottle and may flood the market.
Remember that economics class you took a few quarters back? If you keep supply low, the demand will stay high. This works for business strategies at wineries where their products are purely luxury goods.
So what can a winery do to still make money selling its wine but not representing the premium label? It can bottle its wine under a private label allowing it to liquidate without hurting the winery image.
Castoro Cellars, for example, produced a 2005 Cabernet Sauvignon for exclusively for Trader Joe’s. Castoro Cellar Cabernet Sauvignon normally retails for $12.99. The wine from Trader Joe’s is called Trader Joe’s Coastal and is available for a mere $3.99. What’s more, there is a whole lineup including Syrah and Merlot available to boot.
Take this opportunity to purchase a case and have solace in the fact that you are a keen wine drinker on the Central Coast who knows a good bargain when you see one.
Please enjoy your bargain basement -priced premium wines this week but be responsible. Speaking of responsibilities, please make sure to go and vote in the ASI presidential run-off election this Wednesday. “Ask not, what you can do for your wine, but what your wine can do for you.”
Lauren Jeter is a 2005 wine and viticulture graduate going for a master’s degree in agribusiness.