Our class discussion last week on the DBR case left me
thinking about how unlike other industries that have very well know luxury brands
(cars, fashion, etc.), the wine industry is unique because the products and
signals of status/wealth are not as visible. For obvious reasons, people can signal
something about themselves to others more easily/more frequently through the
clothes and jewelry they wear or the car(s) they drive than they can about the
wine they drink. This difference could have a huge impact on consumer behavior
and incentives. Even though we likened the DBR brand to those of high fashion
and luxury cars, I am starting to wonder if there is indeed a notable difference
that pushes DBR and other fine wines into a different group of goods. The
reason I pose this question is because many people are willing to buy luxury cars
and fashion so that these brands add (or define) to their identities and send
messages to those around them about who they are/the wealth/status they have. This
desire acts as an incentive for those people to continue to buy and pay a high
price for those items. However, there may be a difference in what incentivizes
people to buy really nice, expensive wine. Clearly, people are not carrying
around fancy bottles of wine in their daily lives, so this product does not
fall into the high fashion / luxury car category as neatly. Fine wine is unlike
fine art in that these fine wines can be purchased as long as the product is
available, year after year and the wine is (hopefully) consumed at some point
to where there is only the empty bottle as a souvenir. One could argue that
fine wine is similar to fine art in that it is usually something that ends up
being in one’s home and is shared in more intimate settings (dinner parties, gatherings,
etc.) than are high fashion clothes that an individual might wear. The nuances
among fine wine, fine art, high fashion, and other luxury goods may cause the
answer to how do you build a brand in fine wine that is sustainable / extremely
profitable / recognizable to be a very difficult one to answer.
Monday, January 22, 2018
Limited Wine and Cheese
From a young age, ski Vacation in Switzerland made me excited for one thing: Apres Ski Raclette. For any of you uninitiated, Raclette is the cheese that you see nowadays on Facebook and Instagram, being scraped onto anything from Potatoes (traditional) to hot dogs (no comment).
Something else that I should mention, offer a traditional Swiss a glass of water with their Raclette and they will give you an emphatic "NO". The only things that are traditionally drunk with Raclette are Fendant (a white wine from Valais made from Chasselas) or tea. As a bonus, Fendant is also the classic pairing for Fondue.
But why have most of you probably never heard of this quintessential pairing for the cheese that you have probably consumed at some point? That's because Switzerland keeps 95% of it for domestic consumption, and there are only 9,900 acres of land devoted to Chasselas in the small country, most of it on the slopes of Lake Geneva). For reference, Portugal keeps 64% of its wines domestically.
It is well priced, (think Riva Ranch price point), dry, delicate, with lots of minerality and floral notes. Difficult to get your hands on though. I bought a case last year in SF, and am now down to the late bottle :(. Very difficult to find. The solution? Take more trips to Switzerland and have some of this for Apres :)
Something else that I should mention, offer a traditional Swiss a glass of water with their Raclette and they will give you an emphatic "NO". The only things that are traditionally drunk with Raclette are Fendant (a white wine from Valais made from Chasselas) or tea. As a bonus, Fendant is also the classic pairing for Fondue.
But why have most of you probably never heard of this quintessential pairing for the cheese that you have probably consumed at some point? That's because Switzerland keeps 95% of it for domestic consumption, and there are only 9,900 acres of land devoted to Chasselas in the small country, most of it on the slopes of Lake Geneva). For reference, Portugal keeps 64% of its wines domestically.
It is well priced, (think Riva Ranch price point), dry, delicate, with lots of minerality and floral notes. Difficult to get your hands on though. I bought a case last year in SF, and am now down to the late bottle :(. Very difficult to find. The solution? Take more trips to Switzerland and have some of this for Apres :)
Bourbon Capital of the World
I spent last week traveling about Kentucky for a policy trek on the rural economy. Given that Kentucky is the "Bourbon Capitol of the World," our group couldn't help but spend an hour at Buffalo Trace Distillery in Frankfort to learn about how it's made. (Especially since Kentucky produces 95% of the world's bourbon.)
Buffalo Trace Distillery is an American family-owned company and prides itself on it's over 200 year history of distilling spirits (including bourbon, rye, and vodka), calling itself the oldest continuously operating distillery in the United States. Even during Prohibition it managed to stay open, but only to distill for "medical purposes." It is a National Historic Landmark and is listed on the National Register of Historic Places. Buffalo Trace has also won 17 distillery titles since 2000 and was named "Brand Innovator of the Year" by Whisky Magazine.
While here, I learned about what makes whisky different from bourbon, so I thought I'd share with you all!
1) Bourbon has to be at least 51% corn. Though most distillers use between 65% to 75%. The rest is usually rye, wheat, or barley.
2) It has to be made in the United States. Congress even passed a law in 1964 declaring bourbon "America's Native Spirit" and decreeing that as such, bourbon must be made in the U.S. (Althought if you ask people in Kentucky they say it must be made in Kentucky. Similar to Champagne versus sparkling wine.)
3) Nothing is added to the bourbon except water during the distilling process.
4) Bourbon gets it's flavor from charred oak barrels that are used only once.
5) At a minimum, bourbon is left in the barrels to age for two years. During this time, the bourbon evaporates through the barrels while soaking up the flavor from the oak barrel.
6) Fun fact: Kentucky has more barrels of bourbon than people in Kentucky! Buffalo Trace said that they have enough bourbon for the next 20 years in storage.
7) There are also various requirements for the level of proof the bourbon must be when it's distilled (160 proof), put in the barrel (125 proof), and bottled (80 proof or more.)
What was very interesting on the tour was how distilleries have different product lines to subvert some of the requirements. Most of the above requirements are needed for the classification of "straight" bourbon, but it is possible to use bourbon that has been aged less for other purposes. Like in our tasting we tried Buffalo Trace's new Bourbon Cream. Mix it with root beer or hot chocolate and you've found your new favorite drink!
Before our tasting, we visited the production line and got to see the 15-20 person operation that produced their Blanton's Single Barrel which by hand, was filled, capped, sealed with a wax seal, and packaged. A truly beautiful sight!
Buffalo Trace Distillery is an American family-owned company and prides itself on it's over 200 year history of distilling spirits (including bourbon, rye, and vodka), calling itself the oldest continuously operating distillery in the United States. Even during Prohibition it managed to stay open, but only to distill for "medical purposes." It is a National Historic Landmark and is listed on the National Register of Historic Places. Buffalo Trace has also won 17 distillery titles since 2000 and was named "Brand Innovator of the Year" by Whisky Magazine.
While here, I learned about what makes whisky different from bourbon, so I thought I'd share with you all!
1) Bourbon has to be at least 51% corn. Though most distillers use between 65% to 75%. The rest is usually rye, wheat, or barley.
2) It has to be made in the United States. Congress even passed a law in 1964 declaring bourbon "America's Native Spirit" and decreeing that as such, bourbon must be made in the U.S. (Althought if you ask people in Kentucky they say it must be made in Kentucky. Similar to Champagne versus sparkling wine.)
3) Nothing is added to the bourbon except water during the distilling process.
4) Bourbon gets it's flavor from charred oak barrels that are used only once.
5) At a minimum, bourbon is left in the barrels to age for two years. During this time, the bourbon evaporates through the barrels while soaking up the flavor from the oak barrel.
6) Fun fact: Kentucky has more barrels of bourbon than people in Kentucky! Buffalo Trace said that they have enough bourbon for the next 20 years in storage.
7) There are also various requirements for the level of proof the bourbon must be when it's distilled (160 proof), put in the barrel (125 proof), and bottled (80 proof or more.)
What was very interesting on the tour was how distilleries have different product lines to subvert some of the requirements. Most of the above requirements are needed for the classification of "straight" bourbon, but it is possible to use bourbon that has been aged less for other purposes. Like in our tasting we tried Buffalo Trace's new Bourbon Cream. Mix it with root beer or hot chocolate and you've found your new favorite drink!
Before our tasting, we visited the production line and got to see the 15-20 person operation that produced their Blanton's Single Barrel which by hand, was filled, capped, sealed with a wax seal, and packaged. A truly beautiful sight!
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