New book dives into how wines become a luxury wine brand
WHAT IS THE RITZ-CARLTON OF WINE? The Park Place? The crème de la crème?
The brand is known as 'Luxury Wine,' and a new book on the market gives insights to collectors wondering if their liquid investment is on the rise.
'Luxury Wine Marketing: The Art and Science of Luxury Wine Branding,' (Infinite Ideas, 2019, $69.95) is by Peter Yeung, a strategic marketing expert, and Liz Thach, Master of Wine and professor of wine & management at Sonoma State University.
The authors give this definition of luxury wine in the book: 'It's of the highest quality, coming from a special place on earth, has an element of scarcity, an elevated price, and produces a sense of privilege and pleasure to the owner.'
In a short Q&A, the authors collaborated to answer the following questions:
Q When does a cult wine like Screaming Eagle become a luxury brand? Why is it a great brand to illustrate this crossover?
A It takes time and it doesn't happen all at once. It's not like one year it's 'cult' and another it's 'luxury.' And many cult wines are also part of the category of luxury wines, as described in our first chapter. Mostly it's from consistently high quality and constantly building reputation over at least 20 years that gradually moves a wine brand from only cult to part of the luxury set. This comes with increasing secondary market activity (with a secondary market premium) and more investment demand from collectors as proof that it is a luxury brand.
Q How will it benefit collectors most? How can they make sure cult cabs and other brands have luxury brand status? What's the benefit of having luxury brands in your cellar rather than just cult cabs?
A. The book gives collectors a sense of the scope and size of what's out there in terms of fine wine. (Note: for consumers, the wine industry should describe it as 'fine wine' whereas from a business perspective, the term 'luxury wine' is more appropriate). Which regions are important and how much wine do they produce? Who are the most important players in each region? Seeing how existing top fine wine brands have succeeded can also help collectors get a sense if their current wine investments are moving in the right direction for the long haul.
Cult cabs can come and go. True collectors also have an investment element to their collection, which requires 'luxury wines' that stand the test of time and retain their value. Have you heard of the top-end electric vehicle 'Fisker'? It was a cult brand that even was featured on TV shows but didn't make it in the end.
Q What do you think collectors will find most intriguing about this book?
A. Depending on the level of knowledge of the collector, this could be different:
Moderate level of knowledge –– the market size by region of fine wines, the lists of luxury and emerging luxury wine brands, and the lists of the most expensive wines.
Deep level of knowledge –– the differences in cost, price and profitability of fine wines vs. commercial wines; the tradeoffs wine brands assess when they allocate wines between customers; how wine brands think about pricing; and gaining knowledge about the wine auction and counterfeit markets.
Q What did you find most surprising in your research when it comes to luxury brands?
A. The size of the market was certainly a surprise. It was much bigger than we thought it would be. The diversity of business strategies and experiences across the many luxury wine brands featured in the book was also surprising. It's not a one-size-fits-all type of solution or experience, but is often a product of the different personalities of the wineries' founders.