Last week I promised that I would explain how we structure our range of 45 wines to compete with major multiple grocers and their ranges of typically 700 wines and still manage to provide a satisfactory offer to our customers.
Firstly we have to start with price. Many people in the world of wine believe that too much emphasis is placed on price and that customers are always happy to pay more for better quality. This is simply not true. In simple terms, the cheaper a product is, the more of it you will sell. This concept works for baked beans. It works for sliced bread. And it works for wine!
I am fully aware that people don’t need to drink wine. It is a treat, and thanks to the level of tax (£1.29 per bottle plus VAT), a relatively expensive one. Usually a customer has a good idea of how much they are willing to spend for a bottle. This may be £2, £3, £5 or even very rarely £10 or more. My job is to give the customer the best quality I can at the price they are willing to pay. Secondly I need to get a representation of the most popular styles of wine into the range. What do I mean by this? At the most basic level this means Red Wine or White Wine. The next stage may be grape variety e.g. Chardonnay or Pinot Grigio, the next, country of origin e.g. Australia or France then perhaps superior quality levels e.g. Reserve or Oak Aged.
Every time we add a layer of complexity to the description I try to add complexity to the wine. This of course adds to the cost price and is reflected in the retail price. Before you know it you have built a range of styles of wine at different price levels. A close inspection of the range will show that most of the wines sit between £2.79 and £3.49. The reason for this is simple, there are barriers at £2.99, £3.49, £3.99 and £4.99 and once you cross these there are fewer people willing or able to pay the extra price.
What is very important to me is that every wine in the range is distinctive. Each one should be different in style from anything else in the range and therefore maximise the customer’s choice. Here we are very different from our competitors. How many Australian Chardonnays can you see in a typical supermarket and, apart from the packaging, how different are they? In reality there is less choice than you think on that shelf and it often makes choosing wine unnecessarily confusing.
I believe our tight range works to the customer’s advantage by simplifying the choices they need to make. Of course this in turn puts pressure on me to ensure that each wine offers great value for money and is consistently good value.
Two of the wines that I am most proud of are the “Barons”. Baron St Jean Blanc our entry level white wine and Baron St Jean Rouge our entry level red both sell at £2.59. When you consider that £1.29 goes to the Government on duty and a further 38p on VAT, you can see that it is hard work to get good wines for that price. Yet they are both good wines, fruity, bright and very consistent. Baron Blanc has won awards at the prestigious IWSC for three years in a row, which is incredible for a wine sold at this price. The Baron Rouge has been our no. 1 selling wine for the last 10 years with nearly 20 million bottles sold in that time. That many people can’t be wrong! Recently the red received a face lift with the cork being replaced with a screw cap. This is a considerable investment by the supplier and ourselves but will seal the fruit flavours in the wine better than cork. Hopefully customers will taste the benefit and it will keep the “Baron” as our no.1 wine for a few more years to come.