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January 2017 WINES&VINES 111 PACKAGING Retail reaction Raley's Family of Fine Stores, a retail chain based in Sacramento, Calif., recently was named Retailer of the Year by Wine Enthusiast magazine. Curtis Mann, director of wine and spirits for Raley's, shared his perspective about wine brand tiers. Mann said that Raley's data shows most cus- tomers who buy in the $12 to $25 per bottle segment will also buy $50-plus wines, while many who buy from the lower end (less than $12 per bottle) do not trade up. "I think the higher end wines have a completely different customer than more moderately priced wines," Mann said. Large-scale retailers also maintain tiers among different outlets in different locations, he pointed out, so every store may not carry all the tiers of a given brand, based on con- sumer demographics. Mann outlined packaging elements that are often changed within brands to differentiate among their tiers. Bottle weight: Higher tier wines from Duck- horn, for example, are much heavier than wines from the company's lower priced brand Decoy. Labeling: Duckhorn's labels employ softer coloring than those of Decoy. Additional packaging elements: Higher end Penfolds wines are often wrapped in gift paper, and retailers say such premium wines generally arrive in six-packs or three-packs rather than the 12-pack cases seen in lower tiers. Closures may change: In some cases, screwcaps on the lower end cede to corks and capsules at the higher end, especially for white wines. Unmarked for transit: Wine shippers for the higher tiers tend to be more subtle, with limited exterior marketing messages than those common at the lower end. To Mann's seasoned eye, only a certain type of customer will be willing to spend $15 on a bottle most of the time before they will spend $40 per bottle. It happens more often, as customers are still trading up, but Mann feels the trade-up is more specific to tasting rooms than in retail. "In retail, the mid-tier brand is often not placed next to the high tier, and since customers are not brand loyal, we see less crossover than you would expect. We require that high-end or mid-tier wines stand on their own in regard to packaging and wine quality," Mann said. Family winery values Steven Kent Winery in California's Livermore Valley is an example of a small producer that provides several tiers of wine. Winemaker/presi- dent Steven Kent Mirassou and vice president of operations Jennifer Fazio make the packaging decisions for the 5,000-case winery. Some 2,000 cases are sold through the wholesale channel, the remainder predominantly through the wine clubs. Prices range from $24 to $175 per bottle, and many individual SKUS are exclusive to wine club members. Pricing remains consistent be- tween DtC and wholesale sales. Mirassou described some of his wine club exclusives for Wines & Vines. The Collector's Circle offers six labels per year, each named for the original artwork on its label rather than a varietal. Bottle shapes vary only as far as Bur- KEY POINTS The good-better-best principle acknowl- edges that customers are not equal: They seek different product attributes and re- spond to different price points. Many customers in the $12 to $25 segment will also buy $50-plus wines. Even small producers benefit from packag- ing distinctions among tiers of wines sold direct-to-consumer and through distribution. Every packaging element may change, from bottles to labels to closures and even shippers, depending on price point and sales channel. Natural Corks Champagne Corks Twinline Corks Bartops VISION Synthetic Corks G-Cap® Screw Caps Sales Representatives: Chris & Liz Stamp info@lakewoodcork.com lakewoodcork.com 4024 State Route 14 Watkins Glen, NY 14891 607-535-9252 607-535-6656 Fax PIONEER INNOVATOR PARTNER