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. 

Murdoch James Estate in Vietnam

I have now been in Ho Chi Minh City, Vietnam for 5 days and it is both exciting and overwhelming; exciting because of the potential here for our wines, and also because of the dynamism of the city, and overwhelming because of complexity and rapid rate of growth of industry.

My first day was a break to get over the long flight from New Zealand, so I thought I would just take a walk and unwind. 

That was my first mistake - one cannot walk and unwind in Ho Chi Minh City. The traffic is crazy, motorbikes everywhere and it seemed to me that traffic lights and pedestrian crossings were indicative only.

It took me a while to build up courage to cross roads. Have a look at these images and you will get a feel for what I am talking about, but they don't do justice to the real life experience!

Next day was to set up the first Trade tasting which was organised by the New Zealand Trade & Enterprise team here. It was an excellent event with great turnout and an ideal showcase for New Zealand Food and Wine. From this event I was able to make appointments with several potential distributors and have since had follow up meetings, with positive outcomes.

Again, the accompanying photographs don't do justice to the quality of the event, nor the venue (Park Hyatt, Saigon). I was very impressed with the interest of both consumers and the wine trade in New Zealand wines, however we do face a challenge in achieving sales in a market which has been dominated to date by French and Chilean wine producers. They have got a big start on us and we have a lot of ground to make up. But, as in all markets the people who are prepared to do the hard yards, pounding the streets and building relationships, will be the ones who succeed in Vietnam.

Friday and Saturday I spend following upon sales leads, and then our stay in Ho Chi Minh City finished Saturday night at the 14th Annual NZ Wine & Food Festival in Vietnam.

Another great wine and food event showcasing NZ wines.




Today, Sunday I fly up to Hanoi to do it all again!