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Appellation strategies

Thursday, January 18, 2007

Underlining the fact that our different points of view influence our interpretation of "market research", here's my take:

I can see a building consensus between Bill Turrentine's article, Glenn Proctor's comment, and Karen Ross' editorial. What's more, strategically speaking, I like the challenge that it implies for non-US wine producers, and, speaking as a consumer, the effects it will have on the wine that I'll have access to in the future.

Of course, a "California Wine" movement would attempt to limit the use of imported wine, which, in many cases, will drive up the price of a bottle (by excluding foreign "juice" that helps keep down the cost) - I don't think (I have no research on hand to support my assertion) that the faster growing segments of the wine consumer market will tolerate this increase in price unless the marketing campaign supporting CA Wine is incredibly effective - a challenge for the CA wine growers and producers. The other option for a 100% CA Wine label to hold current price points is to drive production costs down without affecting quality - this bodes well for wine value all around, even those bottles not labeled with this new appellation.

I also applaud the suggestion that labels should name all the terroirs included in a bottle, as it will give those regions a foothold in the world's fastest-growing wine market, especially those that produce the "rare" Pinot's and Rieslings. Actually, herein lies a slight strategic contradiction: the attempt to limit the use of non-US wines forces those growers and producers to up-the-ante and counter with a campaign of their own. Given the stakes, I don't see more than short-term gains as the marketing efforts of other appellations ramp up. This, in turn, will increase the pressure to achieve and hold the competitive advantage of cost...

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