| Making the Case for Organic Wines |
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A Niche Marketing Report by Peter Sagansky
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When consumer
demand started to change dramatically late last year I began to seek
out new niches for our company to fill. Looking for cheap wines with
cutesy labels in reaction to the downturn would run counter to the
focus of our portfolio. I knew that we could not out "big-guy" the
"big-guys", and that our customers expect more from us than average wines
at low prices.
Filling a niche first requires identifying a
void in the marketplace that we serve. As 2009 was approaching I began
to concentrate on Organic Wines as a segment of wines that is being
under-serviced by our industry. I was specifically looking for
popularly priced wines that casual wine drinkers who happen to care
about organic products would want to drink.
"Wine snobs" are
not the target audience for our organic program. They may never seek
out organic wines (other than perhaps Biodynamic wines with big
reviews).
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Our target audience for our organic program is comprised of
people who when given the chance to buy organically-grown products or
conventionally-grown products choose the former. Why not provide these
folks with a selection of very good affordable wines that are certified
and labeled organic?
For our organic wine program to succeed in Massachusetts we need to overcome preconceptions about the quality of organic wines at the retail buyer level. Many of the more seasoned wine buyers remember some truly awful early attempts at organic wine production by small American wineries.
I visited some pioneer organic producers myself in earlier days trying to discover why their wines smelled so dirty. What I found was dirty wineries run by people who could frankly use baths themselves. Spilled wine was left where it landed and molds were running rampant. I had learned more than I wanted to know about Brettanomyces.
I did not conclude that sound, good tasting, and age-worthy Organic Wines could not be made, but that they could not be made in the manner described above. I spoke with a number of talented winemakers who farmed organically when nature’s conditions allowed them to. They did not want to give up the option of spraying when the choice was losing the crop or saving it. They did not want to label their wines organic in one vintage and not in the next.
The organic producers that we are working with today are worlds apart from the winemaking hippies of old (don’t take this the wrong way, I still like hippies. I just don’t want them making my wine.) The proof is in the bottles. We can pull some corks for those of you who have doubts and put those old images to rest.
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| To assemble this program we needed to set some standards for the wines.
1.) "Quality" – the wines would have to be worthy of making it into our portfolio on
their merits alone. I often remind myself that "good enough" is not
good enough for our portfolio. Organic but ordinary was not an
acceptable standard. Our organic selections needed to rise to at least an above-average level of quality.
2.) "The Organic Premium" – any additional cost for the wines being organic had
to be acceptable. There are cost factors involved in making an organic
wine that deserve consideration. Organically-raised grapes (when available) command higher prices than conventionally-raised
grapes on
the open market. Wine is a product judged on "value-added" components, and being made
from organically-grown grapes is a legitimate added value.
With
the help of Paolo Bonetti, President of of Organic Vintners, I
determined that we should set the organic premium at one dollar per
bottle at the retail level. This means that a wine that would sell at
$9.99 per bottle at retail if not organic could sell for up to $10.99
per bottle if it were it organic. That equates to an organic premium of
up to $8.00 per case at the wholesale level.
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| 3.) "Value" – In today’s
economic environment these wines had to represent decent value.
Customers who buy the wines should feel that they are worth what they
pay for them. They also had to fall within the range of prices at which
consumers are shopping these days. The organic wines that we are now
selling can all be sold at between $9.99 and $16.99 at a 50% retail
markup.
4.) "Certification and Labeling" – The wines in our organic program had to be clearly
labeled and certified organic. We have other organic wines not so
labeled, and they are not in the "Certified & Labeled Organic" section in our Price List. The
majority of the wines that are in the section are also labeled as being
“Vegan”.
Massachusetts is a particularly strong market for
organic products. Growing consumer interest has been driving food
sellers to expand their organic selections. Most supermarket chains now
feature natural foods sections and sales of organic products are
strong. The national chains that specialize in organic and natural
products have thrived in our State.
When consumers walk into
food stores the organic products are clearly marked. Those who want
organic products buy products that are labeled organic.
Why hasn’t the
retail wine trade caught on to this trend and made it a simple task for
consumers to shop for organic wines? The same consumers that are buying
organic foods at their local markets do not find clearly marked
sections of certified organic wines at their local wine shop. The
organic wines are most often grouped in the wine shops by grape type or place of origin and mixed
in with wines that are not organic.
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Customers have to ask for help from a worker in the wine department in order to identify the organic wines. That is when the shopping experience may become a bit murky. The customers are shown wines that they are told are "organic" that are not labeled "organic". They see shelf-talkers claiming that the wine being described is "organic", and yet the wine label has no reference to being "organic". When they ask for "organic" wines they are shown wines that they are told are "sustainable." They are told that the winery that produced the wine did not want their wines to be identified as "organic" in fear of being lumped in with wines that they do not consider to be as good as their own wines. They are told that the producer doesn’t want the hassle or the expense involved in labeling the wine "Certified Organic."
Shopping for organic wines is an inferior shopping experience compared to shopping for organic food (often in the very same stores.) Would you buy organic lettuce not labeled organic because a clerk tells you that the grower didn’t want to pay for certification? Why should buying organic wine require this kind of leap of faith? What if someone in the distribution chain got the story wrong, or worse yet, lied to make a sale?
One of my goals for Charles River Wine Company is to be a truly useful supplier to our customers. We can prove our usefulness by showing our customers new ways to produce profits in today’s tough economic times. This involves pointing out opportunities that they are not yet utilizing. One such opportunity is to dedicate a small amount of floor space for a section of “Certified & Labeled Organic Wines.”
Many stores have had to adjust their floor sets since the price points started dropping. Why not free up one wine rack for a clearly marked organic wine section? Allow customers to select from a dozen wines of varying styles and price points that are "Certified & Labeled Organic" (and in many cases labeled "Vegan" as well.)
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While this report has been focused on the retail trade I also urge Restaurant Buyers to consider adding a couple of wines that are labeled as Organic and Vegan to their Wine Lists. It is common today to seat dinner parties that include vegetarians and/or vegans. Restaurants have responded to the growing interest in high quality vegetarian cuisine by adding vegetarian dishes to their menus and running daily vegetarian specials. Some of our State’s top restaurants feature "Vegan Dinners" in their special events calendars.
It makes good sense to offer these customers the option of drinking fine wines that are certified organic. Doing so will be viewed as expressions of good will by these patrons. It may provide them with another reason to return to your restaurant and to recommend your establishment to their like-minded friends.
Creating a "Certified & Labeled Organic Wines" section in a store, or dedicating a couple of slots on a Wine List for "Organic & Vegan" wines are small and affordable steps to take to please a growing group of customers.
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