Retailing « James the Wine Guy

Wine’s Shelf Space: A Cavalcade of Wine – James Meléndez / James the Wine Guy

There is not enough shelf space for wine yet there are so many who retail wine…. an interesting conundrum. There were 120,000 applications for wine labels this year (2011) and that is such a telling number unto itself. US TTB is flooded with so many applications and many are approved so where do all of these bottles flow to? And this number will continue to climb and in just a half a decade from now that will climb to 190,000 to 200,000.

No one retailer or chain could carry enough of these wine labels and it does mean that the specialty wine retailer is very important and perhaps now more than ever. While there are big box wine retailers / mass wine retailers–they have limited shelf space and not all of the 120,000 will necessary see a wine retail shelf–perhaps it will be on-premise only. Or perhaps the label never makes it into production—and just because a wine label is presented doesn’t mean it is approved.

But many of the 120,000 presented label do get approved. Wine unlike any other consumer category and by any stretch is so different from beer or spirits. In fact, wine is vastly different and the only other category might be similar is music or books—and yet wine is still quite different. Books and music can be reproduced at will and especially in our electronic world. Wine is different because of limited selection for many labels and vintage is a curious and outstandingly different feature. Perhaps books can have editions but most books are not editioned yearly. It would be as if each music track purchased would be different every year–and of course that is not the case.

Though there is not enough shelf space at most and many wine retailers–not all wine retailers will survive let alone thrive. The speciality wine retailer will survive because they have relationships with their customers and have a desire to be in the business. Larger size wine retailer will also be in the business for their overwhelming large footprint and also desire to be in the business. Those that will not survive are those that do not want to be in the wine business– I call these tweeness wine retailers –those may not be as obvious–these retailers are in the wine business just because it is another product category–but have no deep roots or passion for being in the wine business. This year (2011) I observed a particular tweeness wine retailer had one SKU (one individual wine) on sale for a limited period of hours. But this strategy is interesting because very few people have time to participate in this ‘show stopper’ strategy and if their other product categories are not related hence a non-compelling reason to stop everything. If you want to be in the off-premise wine business you have to have that absolute desire.

The online wine shelf could potentially be very large but not all encompassing. At least in the US–the world’s largest wine market there are simply too many obstacles–the many thousands of alcohol beverage control laws and restricted market places. Also, there are some consumers who will be willing to spend shipping dollars and many more that won’t (if the many thousands of barriers were eliminated) also potential online sites would find out the many change outs to be very difficult to manage. After all in many instances wine is a very limited supply product (in many examples). Hence wine is not going the way of the book or music categories (retail settings)—the product behaviours are different and after all that is so matching in this complex subject that at heart is simple to enjoy.

¡Salud!

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