Wine is more expensive at the Vineyard?
All told, our group took home several hundred dollars of wine from our pre-marathon wine tasting. We definitely enjoyed ourselves, but couldn’t shake the feeling that the prices were high.
I looked up prices online for one of our favorite wines - the St Clement 2004 Oroppas. At the vineyard, prices were $55 a bottle. Prices were $10 to $15 less online (1, 2, 3).
When you go to the factory, you expect a better deal. You don’t expect to pay 35% above retail. After lugging our suitcase full of wine around, I feel entirely ripped off. I have no desire to purchase from St. Clement ever. I don’t think this was the experience they wanted to provide at the vineyard.
Understand your customer’s expectations and meet - no exceed them. If you can’t meet them, do everything in your power to reset their expectations. If you elect to under deliver, you will embitter your customers and they will become someone else’s customers.
Next time I go wine tasting in Napa, I’m price checking with a mobile browser and going to harass every tasting guide that tries to sell me overpriced wine.
BTW - thanks Rahul the post idea.
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It seems strang to pay more at the winery, doesn’t it? But that’s universal; don’t blame St. Clement.
The winery charges suggested retail price — the price they believe their product is worth. Stores, however, buy from a distributor at much lower cost. They can then set whatever price they want, typically between their purchase price and SRP.
St. Clement’s problem is that it CAN’T charge less than SRP as a regular practice. To do so would undercut the retailers who carry their products. Your instinct is to expect St. Clement to compete with the retailers on price, but in fact the retailers are vital partners of theirs. If St. Clement undercut them, the retailers would refuse St. Clement products when the distributor offered them, and then the distributor would destroy St. Clement. That’s the way the wine business works, because the laws are set up in a way that gives distributors HUGE power.
So don’t blame St. Clement.
Pete,
Great point. The winery does face channel conflict issues, and this could explain why most discounts at the winery are associated with membership in their ‘wine club’.
However, I don’t think that the vineyards represent competition for the retail channel. There are barriers to buying direct from the vineyard that segment it fairly well from true retail channels.
Dave