Trading Down On Wine
Tuesday, June 3, 2008 at 7:03PM 
"You'll see people who on a regular basis have been drinking Kendall-Jackson at $13 and all of a sudden Blackstone is fine at $10," said Dale Stratton, vice president of strategic insights for Constellation Wines U.S., which owns Blackstone, the popular merlot brand. "Loyalty is very low in our category."
Is moving down to Blackstone from Kendall Jackson really trading down? It seems to me that wines like this are indistinguishable from each other. The real question would be why in the world would anyone pay $3 more for the Kendall Jackson in the first place? Mr. Stratton's comment, "Loyalty is very low in our category" is true for one reason: there is no real difference between California wines in this price range. Considering the fact that they know this fact, I can't imagine that the marketing directors and sales managers of these companies sleep very well at night.
A marketing plan that values conformity and fears personality creates this kind of nightmare for those that practice it. Consumers are loyal to wines with distinctive character, which is something any producer should be able to deliver when a wine is over $10 a bottle. These wines don't.
America's greatest wines are stunning examples of the winemaker's art that rival any wine in the world. Why can't we make a good $10 merlot?
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Reader Comments (12)
To me that's a bastardization of the concept. Trading down (or up) occurs when you buy the absolute cheapest version of a staple/need product so that you can spend the surplus savings on a product that want/desire. No one trades down to cut costs. That's called "cutting back." No need for a fancy term! :-p
While the point about lack of character in 10 dollar Merlot is well taken, we both know why that is so. Character usually means an inconsistent product, which means that moving volume becomes difficult and brand building at a large scale gets onerous. In my opinion, it's equally hard to find mass produced wine from any country that expresses any remarkable character (ie something I'd go out of my way to purchase).
And that's why I buy more expensive wines! That is, when I have the cash. :-)
Long Island is the American region that I imagine might be able to make interesting wines that cost about $10 / bottle. And they're pretty good with Merlot out there, cab franc too, and several white varieties. Right now though, their wines are very expensive, even the entry level wines. And they're not spending much at all on marketing.
I know, this is lame. The reason--lack of planning! I should buy more good wine when I'm at a good wine store...these are wines of desperation and convenience sold at the local quick shop only 5 minutes from home. Believe me, I love picking up the delicious inexpensive wines you mention (and more expensive wine, too), but I need to stock up in advance because all the good wine stores are a bit of a drive.