As more of the big players in the New World introduce higher priced wines to their range, JOHN STIMPFIG asks whether these wines are worth the extra money .
How times change. A few years ago, who would have imagined that you could walk into Harrods, hand over £34 and leave clutching a Cabernet with the name Gallo on the label? In those not so dim and distant days, the Gallo boys were known for one thing – bulk, branded wines piled high and sold cheap.They still are, mind you, as they occupy two positions (including top spot) on the list of biggest selling wine brands in the UK. But now Gallo have gone way beyond these entry point wines and are plugging a number of price gaps further up the line.
Of course, they’re not the only ones trying to have their cake and eat it. The big Aussie producers such as the Southcorp stable (Penfolds, Lindemans, Rosemount), BRL Hardy and even little old Yalumba have also been working on this strategy for a good few years. So too are the Chileans, Kiwis and South Africans. Only the Europeans, it seems – Torres and Mouton Rothschild apart – are incapable of meeting the quality and quantity ends of the market at one and the same time. The theory behind this is that brand-loyal consumers can now plot a steady course all the way from a Rawson’s Retreat up to the great Grange Hermitage, without ever having to deviate from the Penfolds path. Naturally, some wine purists argue that this one-way traffic stifles experimentation and risk. But as one wine marketer once said: ‘Brands are a little like rock climbing with a harness. It’s fun to climb mountains, but no one likes to fall off.’ It’s all about building the confidence to trade up in total safety.
But how do the people who make and sell these wines account for the price differential either side of the £7.50 mark? According to Brett Fleming at BRL Hardy, there are obviously big differences between, say, its Nottage Hill, Leasingham Estate and flagship wine, Eileen Hardy. ‘It’s a bit like comparing a Ford to a Saab and a Rolls Royce.’ All are very well-made products but each has completely different designs, components and markets.
By definition, most sub-£7.50 branded wines can offer little, if anything, in the way of regionality or vintage variation. With the more expensive wines, that is exactly what you are paying for. Take the Rosemount range. Its Balmoral Syrah from the McLaren Vale is sourced exclusively from 50–100-year-old vines and matured for two years in American oak. In comparison, the Rosemount Shiraz is a multi-regional blend from the McLaren Vale, Langhorne Creek, the Hunter Valley and Mudgee, and sees just eight months in American barrels. According to Rosemount’s Lisa McGovern: ‘Stylistically the wines are very different in terms of palate weight. While the Rosemount Diamond Label Shiraz offers immediate drinkability, the Balmoral Syrah has the tannin structure and complexity to reward consumers who choose to lay down the wine.’ Most winemakers acknowledge that the toughest wines to make are the million-case brands. And as often as not, it is the same winemaker making both wines. According to Stephen Pannell, winemaker at BRL Hardy, ‘the big challenge for me has been the sub-Aus$10 market. This is the most exciting aspect, turning average quality grapes into good quality table wine, and being proud of the results.’
Apart from quality, another thing you are paying for further up the price ladder is rarity. It’s all part of the supply-and-demand equation, where smaller and smaller quantities drive up demand and prices. This is more or less how the icon or cult wines justify a large part of their pricing strategies. For instance, the UK allocation of Gallo’s Estate wine is probably a paltry few hundred cases. In contrast its Turning Leaf sells millions.
We can expect to see even more activity by the ‘big boys’ in the over-£7.50 market. Not least because branded New World wines seem set to dominate the market for the foreseeable future. According to research company AC Nielsen, growth over the last few years has been relentless. Last year, Gallo, Penfolds and Jacob’s Creek recorded 20% sales increases while Banrock Station and Blossom Hill upped their sales 52% and 78% respectively. It’s no wonder they’re turning their attention to the finer end of the wine market. But, as with everything when it comes to wine, it’s what’s in the bottle that counts.
John Stimpfig is a wine writer and Decanter contributing editor.
Written by JOHN STIMPFIG