What is a luxury wine?


A recent explosion of emails from a PR firm touted their client’s first “luxury wine“. This inspired this question: what exactly does this mean? Can a wine be defined as “luxury” without affirmation by independent critics, market success and time? In recent times, luxury has been mentioned so often in the marketing lexicon that the word seems to have lost its meaning.

“Luxury as we know it is something more than a pricing strategy,” says Dan Petroski, who arguably makes a luxury cabernet for Larkmead in Napa. “It’s something unique and singular in its efforts to provide quality and consistency over time, to provide an authentic, handcrafted product that comes from a recognized source, and which is often in short supply.”

“Using that as a definition, I’d say wine definitely falls into that category, whether it’s a Napa Valley Cabernet or a Burgundian Pinot Noir.”

Marketing aside, what justifies a luxury wine? It’s used to define price categories, and the range can vary by source, but how does a wine earn a luxury price position when first introduced to the market? There are several traditional components that make up a luxury product.

Pricing. The “luxury wine” in the explosion of emails was released by a duo of new winemakers with fruit from an unremarkable site, albeit lavished, the text explains, with new oak. Producers used its $75 price as a positioning strategy. But there should be natural barriers to presenting a product as a luxury item. Consumers cannot taste a bottle of luxury wine outside of the tasting room until they have signed up. Thus, they must use cues like price to infer quality and make purchase decisions.

The wine industry categorizes by retail price, but these have changed over time. Today, the nuanced price ranges might look like this: value ($4 to $10), popular ($10 to $15), premium ($15 to $20), super premium ($20 to $30) , ultra premium ($30 to $50), luxury ($50 to $100), super luxury ($100 to $200), and icon ($200 or more).

However, these categories lack proper context. A $50 luxury wine is often the entry point to a Napa Valley Cabernet. Are all Napa Valley Cabernets luxuries? Price alone cannot confer luxury status. Marketing a product in the luxury price segment is not the same as producing a luxury wine.

Quality. Quality is intrinsic to fine or luxury wine. It can come from the raw materials that make a vineyard famous. But at some famous shared vineyards, the size and range of producers often results in uneven quality. Quality also relates to winemaking inputs and practices, such as oak chips versus French oak barrels from Taransaud.

A winemaker’s reputation can also influence the positioning of luxury. Consider Michelle Rolland: ambitious wineries around the world employ her to lend prestige to their projects. However, does his involvement in dozens of wines confer quality on each of them?

How about advanced technology? Optical sorters improve quality, but they are also often used for lower-tier wines, not just luxury fruit.

Quality is a result, a determination driven by taste, texture and structure. The team behind Fine Minds for Fine Wine (FM4FW), a think tank exploring the notion of “fine wine”, meets every year to try to define this complex concept. This year, the discussions revolved around sensory research through statistics. Although not a conclusion, in-depth interviews with trade and consumers revealed an overlap in the perception of what makes a wine “good”. Considerations: the wine must be able to age, be balanced, harmonious and complex. These are characteristics that a quality – and luxury – wine should also have.

But Pauline Vicard, executive director of FM4FW, says fine wine and luxury wine are not synonymous. “The definitions of fine wine and luxury can mean different things to different cultures, countries and stakeholders…[they] share a lot in common: they’re mostly at the more expensive end of the price scale, they’re not an everyday need, they’re considered “amazing”, something special, they can all two being linked to know-how and the importance given to time and to every detail. But luxury wines are mostly associated with consumption, exclusivity, indulgence and asserting your position in society whereas Fine Wine is even more associated with art and genuine need to express beauty, and as such very different from luxury. In this regard, Vicard et al recently published the third edition of “Define Fine Wine”.

Scarcity. Rarity is a typical pillar of luxury. Tiny quantities of Domaine de la Romanée-Conti from Burgundy priced at $1,000 and above are heavily allocated. The 25,000 boxes produced by Opus One per year are not particularly rare compared to the 5,000 boxes of competitor Dominus. Yet the iconic Napa Valley Vineyard’s global allocation for fine-dining restaurants is driving demand to extraordinary prices of around $300. The Prisoner, although with a more modest cost of $48, is borderline luxury priced. Its annual production of more than 180,000 cases represents one-third of all wine production on Long Island in New York, which is home to more than 50 wineries. The Prisoner’s upward trajectory in price and production, boosted by Constellation after its acquisition in 2016, underscores how strong branding can bolster luxury positioning.

Inheritance. Reputation over time often underpins the luxury category. Opus One was created in 1978 by Baron Philippe de Rothschild, of Château Mouton Rothschild, and renowned Napa Valley wine producer Robert Mondavi. Each house brought their heritage to the collaboration, which gave the new brand instant credibility. Heritage also applies to regions that have demonstrated longevity and constant demand, such as listed properties in Bordeaux, Grands Crus sites in Burgundy or Champagne. Napa’s strong regional brand equity comes from its concentration of large producers.

Agricultural practices: sustainable, organic, biodynamic. If you’ve met a biodynamic farmer in France, you probably wouldn’t interpret his natural vineyard, poorly maintained with cover crops, as a luxury outfit. And yet, the common American perception is that wine grapes grown without chemicals or with reduced inputs are a luxury of time or money. Yet for the producer, avoiding chemicals can be less of an affordable luxury than a cornerstone of winemaking. Organic and sustainable wines often cannot charge more per bottle, despite their labor-intensive methods. In support of this phenomenon, FN4FW research found that despite climate change, “the global consumer does not appear to value sustainability as a key component of Fine Wine”.

An exception is Littorai Pinot Noir from Sonoma, California. The brand is gaining ground by integrating biodynamics into its history. Ted Lemon, the owner and winemaker of Littorai, is an American pioneer of the category. He brought the French concept of terroir to Sonoma, a harmonious concept with sustainable practices, and ultimately complementary to the positioning of luxury.

Prestige. Luxury products often convey a sense of privilege. Compared to beer, wine drinkers can be perceived as snobby. They are served by sophisticated sommeliers who sniff and swirl through specialized glassware. Of course, this is only one facet of the world of wine. Still, those on a budget may find the beer prices more accessible. However, many Europeans see wine not as a luxury, but as part of everyday life. They see wine as an accompaniment to a meal, a daily pleasure. But they also see wine as necessary. What is life without these ritual pleasures?

In the search for the answer, “what is a luxury wine”, it is easy to rely on a checklist filled with details and examples, even if this formula imposes too much structure and proves to be too limiting to grasp the concept. Luxury defies precise definition because it changes over time. What emerges from accounting for these factors, however, is that they are earned, not claimed. It requires third-party imprimatur, expert approval (whether de facto like retailers or reputable like industry insiders) before the market delivers the final verdict.

To achieve this status, marketing and public relations regularly co-opt the term to lend credibility to their clients. Is it overused? Petroski elaborated. “No, luxury is not overused. Not yet. But it’s misused. However, I think one of the anti-laws of luxury marketing noted in the famous book The Luxury Strategy is not to market, sell or flatter customers.

The luxury of producing a luxury is to let the product speak for itself. It takes time. To rush the process is to reverse the concept. Let those who know wine taste. Let those who love wine drink. When a wine meets the favors of these two parties, the producer will know at the same time as the market if he has grown a luxury wine or the harvest of the day.

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Jean H. Vannatta