Monday, August 6, 2007

marketing 101

Last week I went to the Adelaide wine industry expo, which basically consisted of a bunch of little booths, large machinery, and lots of wine industry people gathered to talk shop and sell things. Much of it was centered on the technical side of making and growing grapes, which is all a bit over my head, though there was a neat kit of little chemicals that simulated common wine flaws, which you could add to wine for staff training purposes. There was also a mechanical grape picker, which was easily as high as a small building. Apparently it's designed to be driven over the vines, so the empty space in the middle of the machine is at least 7 feet high, with big wheels and picker-thingies on either side (note my technical language).

Another item on display was the zork. Currently, there are two main ways to stop up a bottle of wine. One is the cork, and the other is the screw cap, or 'stelvin enclosure.' Corks, while traditional, are increasingly expensive and can possibly ruin the wine, either through oxidation (letting in too much air) or cork taint (average cork failure rate is estimated to be around 8%). Screw caps are cheaper and cannot 'fail' like corks, but some people argue that they do their job too well, and don't allow for the wine to 'breath' the way corks do, i.e., don't allow for a low level of oxidation, which many think necessary for a wine to mature. This isn't a big deal if you plan on drinking your wine within a couple of months, but it may make a difference if you plan to cellar your wine for 5-10 years. So, enter the zork. The zork is a resealable plastic closure with a tiny channel that allows for a very low level of oxidation. Its design combines the best of both worlds: it lets the wine mature but won't taint the wine. The down side? It's butt-ugly. It looks like a plastic blob is eating your bottle of wine. It's clunky and recalls a nalgene bottle, not elegance.
The problem is the zork designers forgot to ask themselves the first question in creating a product: is there a market for my product?
The answer is, well, no. According to statistics, 80% of wine is drunk on the day it's purchased, and I imagine that most of the remaining 20% is drunk not much later. Thus for the vast majority of wines, ageing isn't really an issue. And the stelvin, which is cheap, attractive, and environmentally friendly, does just fine. Wines that people want to keep around for a couple of years tend to be at the premium end of the scale (i.e. more than $20 a bottle). Wine makers at that end can afford to pay for high quality cork, which has a much lower failure rate (around 1-2%) than cheaper cork, which really pretty much solves the cork problem. Moreover, when people are paying that much a bottle, they generally want their wine to look sophisticated, not like film cannister died on top of it. If your wine costs $50 but the bottle looks like something people would be embarrassed to order in a nice restaurant, there's a bit of a problem. In fact, people buying a luxury product generally demand that the product doesn't look like the manufacturers cut corners in a rather obvious way. Not to mention wine afficianadoes tend to be into the 'tradition' of wine drinking, for whom popping the cork is an important part of the whole experience.
There may be a market for wealthy, outdoorsy gen-Xers who get into the whole design element, but that's a bit of a niche market.

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