Bargain Pinot Noir?

Birth of a Wine Blogger has been in hibernation for a while, a bit like our dormant vines. 

Recently I was woken from my slumber by a colleague in the industry sending me a link to a Facebook post he had published. He was making the point that a certain Pinot Noir (see link) is on promotion in supermarkets for just $10 a bottle. He went on to say that it must be made from wine at the lower end of the spectrum, sourced from the countries featured on the label, to retail at that price.  He asked, in a world of commoditised, characterless wines, is this something we really need?

Check out: http://tinyurl.com/nesvbh2

What concerns me about this, as a dedicated Pinot producer, is that Kiwi consumers will buy this wine thinking it is a bargain, try it, may not have a great experience, think all Pinot Noir is the same, and be turned off the variety forever. 

Why did he conclude that the wine must come from the "lower end of the spectrum"? 

Let's dissect the $10 and see where he is coming from. Of the ten dollars, the government collects $3.66 (the ALAC levy of about 3 cents, plus $2.13 excise duty and $1.50 GST); pretty good return for the government! 

Then, assuming the retailer takes a 30% margin ($3) and the distributor a 20% margin ($2), that leaves $1.34 for the winemaking! Let's be conservative though and say the winery sells direct to the retailer, so no fee for the distributor. In that case the remaining sum is $3.34. Let's see where we end up if we consider that.

What's left to cover the wine component after allowing for bottling costs, freight and distribution, warehousing, marketing and other related expenses? Say these add up to $1.80 per bottle. That leaves $1.54 for the wine. Say my analysis is too tough. Add another $1 back to cover that. That leaves me to ponder the quality of wine you might buy at $2.54 per bottle? 

Contrast that with the cost per litre of our 2015 Pinot Noir. That was over $13 per litre, before bottling, taxes, etc. So even if my costs are high, we can safely assume it is not top quality, hand-picked Martinborough Pinot Noir in the wine we are discussing. 

Disclaimer: I have not yet tasted this wine. I will as soon as I can get a bottle though, then I'll report back. If I have wronged a good product I will admit that. However, my comments above are based on experience and general principles. I can say with confidence is that I have learned in my 30 years in the wine industry is that it would be an absolutely amazing achievement to deliver a 'Premium Pinot Noir' (which is what the label claims) for $10, let alone $2.54. 

Lab Work

I sometimes think a lot of folk get the impression that wine is all about growing the grapes in the vineyard and then converting them to wine in the winery. That is true to a large extent, as is the reality that the making of a great wine comes down to the creative talents of the winemaker. There are no formulas to follow slavishly, unless you are one of the big producers who are looking for the same basic wine year after year.

But there are a lot of technical things small wineries can do to help ensure we make a good wine and avoid risks. At Murdoch James Estate we have a small laboratory where we test sample from the vineyard before harvest to check sugar levels, and during ferments to track the conversion of those sugars to alcohol. We also test for things like acidity. This technical detail is then paired with winemaker Carl's judgement and palate to deliver the final wine.


For the vintage Maria, our Administration Assistant, worked with Carl in the winery over vintage to help with processing, plunging and pressing. But she also did most of the lab work; a very important task she completed with skill.






This year's grapes are now in, and nearly all the ferments are complete. It has been a lovely harvest and the Pinot Noir should be excellent this year. Fine weather made harvest a breeze, and the teamwork was terrific. Now the vineyard looks a treat as the autumn colours are coming out. In fact, when I was driving into work this morning, the poplars at the gate were stunning and I had to take a photo - not a bad place to work is it!!??
                                                        

Murdoch James Estate in Vietnam - Part 2

Have been in Hong Kong a few days now promoting Murdoch James Estate wines, after leaving Hanoi on Wednesday last.

Vietnam was a great country to visit, and the contrast between Ho Chi Minh City and Hanoi was dramatic.The former, bustling and growing fast, but with that change a lot of history has gone. Hanoi by contrast still has it's 'Old Town' with narrow streets and leafy avenues, plus it's famous cathedral. It is still growing fast, but in a more controlled manner. The local people we great, very friendly and helpful, while the restaurants served excellent food and were great value for money. One example: two course lunch with two beers for just NZ$12!  The roadside food stalls were even better value and exciting to experment with.

I did have to pay special attention to the currency though. One NZ$ = 13,800 Vietnamese Dong, so not uncommon to get bills for many hundred thousand Dong! One evening meal for 4 of us was Dong 1,300,000. Scary, until you divide by 13,800 and realise that is only NZ$100!

On the business side, the trip has gone well, and we hope to have a distributor for Murdoch James Estate wines in Vietnam in the not too distant future. I was amazed to see how popular red wnes were compared to whites. In a hot climate with a cuisine that is subtle and delicate, drinking red wines seemed odd, yet I am told over 85-90% of all wines consumed are reds. While in Hanoi, we did a tasting for the wine trade at the Hanoi Lakeside Intercontinental; what a stunning hotel! I have put a lot of images of the hotel, on our Facebook page, so log on and view them - I think I'm a reasonable photographer actually, but don't be afraid to tell me otherwise! If you do a search on Facebook for Murdoch James Estate you'll find us.Or copy and paste the shortened URL that follows: http://bit.ly/aTLC4b

Meantime, here's is an image to wet your appetit, it is a world class hotel with an amazing design.

AsI flew out to Hong Kong, I was thinking that there is plenty of room for me to grow Murdoch James Estate wine sales in Vietnam, but it won't be easy. Taxes on wines are over 100%, there is huge competition from Chile and Australia and beverage consumption is only slowing swinging away from whisky and cognac. The big hotels like this will be an important target market, as will the coastal tourist resorts; and I'll certainly need to come back!

Murdoch James off to Vietnam

Well, vintage 2010 has started and I am reminded how I said exactly 12 months ago that I would blog every day on the 2009 vintage! Well, I'm not going to do that again this year - I learnt from bitter experience how challenging it is to publish interesting posts and still do the day job! But I will certainly continue the blog and try and post weekly.

It was easy to write this post as when I did it I was squeezed in a lovely economy seat on a flight to Vietnam. On one side of me fellow passenger is snoring loudly, while in front of me two babies are testing their lung-power. No snoring for me, so I thought "what a great opportunity to blog"......

I flew on Cathay Pacific, and when I read the newspaper on board I was a little concerned by the headlines: "Pilots hailed as hero's" which was reporting on a recent Cathay crash, but we got there safely. In fact, considering how full the flight was, and that I was in economy, I though both the cabin crew and the flight were superb. I strongly recommend them.

This basis of the trip is to go to Vietnam for two weeks to participate in the NZ Wine and Food Fairs in Ho Chi Minh City and Hanoi, and then off to Hong Kong to work with our excellent importer there (Nathan Fine Wines).

There is a very active NZ Trade and Enterprise team in Vietnam and they have organised both consumer and trade tasting events in each city. With the trade, they have invited 10 NZ wineries who have not exported to Vietnam before to participate, and they have invited wine distributors who have an interest in representing NZ wines to the tastings. On top of that, they have set up despatch of samples and promotional materials. I have been really impressed at their organisation and efforts - first class. It should all be synergistic. The NZ T&E Vietnam team are to be commended on this initiative. I will also see a number of other importers that I have set up appointments with individually too. So, it will be a busy week, and I hope to come out of it with with new business. On the personal front, I have not been to Vietnam before, so it is an exciting trip for me.

As I said, after Vietnam I fly to Hong Kong to work with our existing importer there. We have set up some staff training and sales calls, but the thing I look forward to mostly are the dinners our agent has set up with his key customers - tasting wines with food is the very best way to present the wines, so it will be a great opportunity. I saw yesterday one of the menus - a 6 course degustation menu  with each course partnered with one of our wines. I'll copy it into a future blog, just to make you all envious!  

First pick 2010

$%#@*&!

This wine business is hard work!

We started our 2010 harvest last Thursday (8th April 2010) and, while we expected a smaller crop than last year doue to the bad weather at flowering and the cold weather in January last, as the grapes are coming in, it is much smaller than we thought. In some varieties, particularly the chardonnay, we are down over 50%. Pinot and Syrah is not so bad, but also smaller crops. If you think about it that means for the same inputs, we get less grapes (read that as less wine to sell), and at a higher average cost per tonne. If we have to buy in grapes to plug any demand gaps, that is a double-whammy on the budget and not pleasant to contemplate.

Those of you who know me know that I am nothing if not an optomist! So, yes there is a silver lining to the cloud - small cops, but also great quality. Winemaker Carl thinks this is the best quality Pinot Noir grapes we have harvested ever, so watch out for the 2010 releases.

Now in an ideal world, one would simply charge more per bottle, but the wine world does not work that way. In fact, due to serious oversupply out of Australia and Marlborough, the pressure on price is downwards. Just holding prices flat is pretty good in the current environment. So we have to absorb these costs with their negative impact on profitability. While our wines are very highly regarded, it is not possible to apply price increases at present. And just when we were starting to make a good profit - ah well, no-one told me wine-making was an easy path to riches.........

That brings me back to our new social media strategy, which is designed to to drive sales through non-traditional channels, where costs are not so high. For example, selling on-line direct from Murdoch James means we don't lose margin to middle-men.We are also looking at working with innovative on-line marketers in international markets, and all our communications tools are now in place to underpin that (Blog, Twitter, Face-book, Website, etc) so hopefully the message is getting out there that Murdoch James Estate is determined to make the most of these new technologies to communicate with our potential customers and give them the confidence to try our wines. The more I enter into this medium, the more it reinforces to me how dramatically and quickly the way wines are being purchased is changing. I have an emerging view that one day, apart from on-premise sales, we will be selling all our wines one way or other over the internet.


Now, I'm off to Vietnam and Hong Kong this week to promote our wines, so some interesting posts to follow.

As mentioned in the last posting, while the final 2009 ferments are finishing in the winery, we are preparing to bottle the 2008 reds. That requires ordering cartons, screw-caps, labels and dividers from all our suppliers, then booking time at the busy local bottling plant. After that we finalise any blends, like our ‘2008 Martinborough Cabernets, and bring the wines up to the correct temperature for bottling. Like all liquids wine expands when warm and contracts when cold, so it is important to be in the right band to ensure the volume of wine put into each bottle is correct.

In 3 weeks we will bottle all the 2008 pinot Noirs (the Fraser barrel selection, the Blue Rock single vineyard wines, and the Martinborough regional blend) as well as the 2008 Cabernets. All require different labels, different bar codes, different size cartons and dividers, different colour closures, and different bottles; all of which is a huge logistical and planning exercise. Sometimes I wish we made just one wine like a lot of the Marlborough Sauvignon Blanc producers – bottling time must be much easier for them!

Maria's Birthday!

In the last week of September, we celebrated Maria’s birthday, as you can see from the accompanying image.

In a small company all members of the team need the skills, and willingness, to turn their hand to anything. Maria is no exception to the rule! She successfully runs our office and is the face of the company to the outside world – there is nothing she cannot do – tours, tasting, accounts, reception, and telephones are just a few. And, at vintage, she was responsible for the transport of grapes from the picking team to the press.

In the winery we are just about to blend the 2008 Fraser and Blue Rock Pinot Noirs, as well as the 2008 Cabernets (50:50 Cabernet Franc and Cabernet Sauvignon). These wines will be released about 2 months after bottling, so they can recover from bottle shock. Bottle shock is the term given to wines just after they are bottled – the bottling line is hard on wines. Filters, pumps and vibrations all contribute to shaking the wine up and most take about 2 months to come back to their pre-bottling state.

For those following the saga of the stuck ferment, Carl has it working once more so we all are able to relax again, and look forward to bottling the whites on time!