Unless you’re a wine connoisseur, finding the right bottle can be tricky. It’s generally accepted that the more expensive a bottle of wine, the better it is.However, Ryan O’Connell fromNakedwines.com says belief is prompting winemakers to up their prices, sometimes unreasonably so.
Nakedwines.com is a customer-funded winery that helps independent winemakers set up a business.
O’Connel, a marketing manager-turned winemaker says that the day he entered the production side of wine, he began spotting patterns — ways that winemakers could potentially take advantage of consumers.
Here are three main indicators he gave us to tell whether or not you’re paying too much for a bottle of wine.
1. Award competitions
It doesn’t take much to convince the average wine buyer that a medal means high-quality.
“In the industry, we all know that medals and competitions of that sort, especially in the U.S., are pretty much luck-based. So many competitions award medals to 80 percent of the entrants, that it’s just kind of a money machine for the people running the competition,” O’Connell says. “Those medals are worth about as much as the blue ribbon on a PBR.”
He says that large production wines can pay a lot of fees to rack up awards in easy competitions. Good indicators of a trustworthy wine competition include locality, a diverse panel of judges and a low percentage of awards. Several good competitions O’Connell mentioned were the North Coast Wine Challenge and the International Wine Challenge.
2. Bottle packaging
Like most products, winemakers can get away with higher pricing just by spending more on the packaging. To tell if you’re paying for the packaging or the wine, O’Connell recommends feeling the weight of the bottle first. He says some companies use heavier bottles to make people subconsciously spend more.
Another embellishment winemakers add is the punt, or the indent on the bottom of the bottle. Luxury wine punts usually measure about 1.5 inches, which means more money spent on design. Although larger punts make for more stable shipping, O’Connell says it’s a pretty good indicator of how much effort was put into the packaging.
Even things opacity and color of the glass can cost extra. O’Connell says once you’ve noticed the differences once, it becomes easier to pick them out in the store.
“If you’re buying wine for $10-15 and it’s got expensive packaging, you’re probably putting more money into the packaging than the grapes. If you spend $100, then there’s a fair chance that the winemaker just spent a ton of money on the fruit, AND a ton of money on the packaging,” he says.
3. Regional acclaim
When buying wine from a famous region, you’re paying for the region’s brand just as you’re paying for the bottle.
“If a region is really world-famous, then it’s probably spent a lot of money achieving that world fame,” O’Connell says. “Then everything gets more expensive as a result of that marketing expense.”
Not that those regions don’t deserve their reputation. But O’Connell believes that it’s hard to extricate the costs of the marketing from the costs of actual wine production.
As a work around, O’Connell suggests finding a region nearby that makes a similar style of wine. You may end up paying a quarter of the price you’d find for a celebrity region.
For beginners, find some local wine stores. Talk one-on-one to winemakers who can open up some bottles and let you taste their wines. Once you familiarize yourself with the different regions and their tastes and prices, you’ll be able to better understand what you’re getting with your money.
Ryan is in Napa. Muse filled in and helped Joe and I entertain our Visitors! She takes them for long walks around the vineyard. We always knew she had the potential to do more! and here she is!.. doing a wine tasting … and lunch… “Raclette and Charcuterie” with a bottle of Naked100 2011!
Joe raised his glass to our Naked 100 Share Owners! I do to!…but someone has to take the pictures! Cheers!
“Some Naked people came to pick up their wine last week, and we all had a blast!”
I admit it was somewhat alarming to hear these words coming from Liz during my first few days at O’Vineyards. I was going to have to live with these people for several weeks, so I needed an explanation. Luckily Ryan had previously posted about the Naked Wines Angels, who are the main actors in O’Vineyards’ new vineyard share program. One hundred “Angels” rented some of O’Vineyards vines and are paying Naked Winemakers Ryan and Joe O’Connell to see these vines through wine fruition. Now, the Naked Wines Angels are streaming in one by one to pick up their wine. If you are still confused, they are perfectly normal people–properly clothed and everything–they just went that extra mile because they really like our wine.
Michelle and David, Naked Angels
So, meet Michelle and David. They are Naked Angels. Liz and Joe had the pleasure of meeting Michelle and David (I unfortunately was not here yet) when they stayed at the B&B around two weeks ago. They enjoyed a tour of O’Vineyards and shared good times and good food around the Winemakers’ Table. As Michelle very poetically puts it in her TripAdvisor review: “We arrived strangers and left as friends.” They also reportedly arrived as fully clothed and sober angels, and left as…
On the 4th of July, I returned from the UK (a daring reenactment of American Independence Day ;D). I had just completed a massive UK wine tour with my UK importerNaked Wines. Looking back, I can’t believe how much fun it was.
Fun, laid back tastings
One important element of the fun is that Naked Wines doesn’t take itself too seriously. Customers could pour their own glasses of wine. This might seem like a small thing, but it’s really important. All too often, tastings get this artificial feeling where winemakers or professionals stand on one side of the table and tasters stand on the other side. This artificial divide really dampens the mood. Plus I always feel like I’m in a zoo, being stared at. And tasters often feel that they are asking permission for the wine.
I much prefer the free and open tasting where everybody’s equal. Anybody can pour a bottle. And winemakers can switch to the other side of the table if we so desire!
Innovative Formats & Weird locations
We also had fun doing weird tastings. I’ve talked about our guerilla pop up wine tastings before. The general idea is to play with the wine tasting format and spice it up. We try to make wine less scary and more fun while bringing the delicious fruits of our labor to as many new markets as possible.
And we also had some wacky locations like the Royal Arms Museum. I still think it’s a miracle nobody tried to get on a horse or swing a halberd at a winemaker.
Meeting Angels & Vineshare Owners
Another crucial part of the tour was meeting Angels. O’Vineyards couldn’t exist if it weren’t for all the support of the Naked Wines Angels. And we only know a few of them (the more talkative ones). This tour was an opportunity to meet several hundred angels whose contributions allow me to continue making wine!
Some of the angel encounters were especially exciting since we just launched our new vineyard share program. 100 Angels have rented vines near mine and are paying me to take care of the parcel and make their wines. I got to meet about a dozen of these angels in person for the first time. 🙂
There was always this terrifying moment when the investor first tasted my wine. Thankfully, they all loved it! And here’s a video commentary from one of the angels/investors who had just met me for the first time.
Meeting other winemakers
I got to meet a lot of other winemakers during the tour too. I honestly expected more violence and argument between the winemakers. But they’re all really great people to hang out with. It’s clear that Naked Wines hires based on personality as well as quality of wine. And that makes sense because ultimately, we all have to be able to interface with their clients on the website’s social network as well as in tastings like these!
It’s also cool to taste so many of the most popular wines on the site. It gives me real perspective into what angels love. And that helps inform my winemaking decisions at the vineyard.
Being Part of a Movement
Whenever I see something like this photo of some of the dadaists and constructivists in the early twentieth century all meeting together to take goofy photos… I think it must have been crazy to live at that time. To be surrounded by all that talent and energy.
Toward the end of tour, as all the winemakers and naked staff sat around the dinner table, I felt like I was living in one of those special moments. Like I’m part of a really important movement. All I’m doing is making wine, but I belong to this big group of people who might be changing the way the wine and food world work. I don’t know how important it really is, but it sure feels important.
Over 20 independent winemakers, funded by online wine retailer Naked Wines, are flying over to the UK at the end of June to thank and meet their customers. As part of a UK-wide Tasting Tour, covering eight different cities in a week, the winemakers will showcase over 100 wines which were made possible through Naked Angel funding.
So I’ll be meeting a lot of the people who drink my wines! It should be a whole lot of fun.
Another big topic of discussion regarding the Naked Marketplace is how it compares to the Advanced Booking system it replaced.
How Advanced Booking Worked
Naked Wines used to offer one special advanced booking deal at a time. This would be an opportunity similar to wine futures where customers bought wine that hadn’t even been bottled yet. Sometimes, they bought wine before it had even been picked.
By buying very early, customers would receive preferential pricing. The longer they waited, the more the price went up. Sort of like booking RyanAir flights. 😀
The adjacent screenshot shows what a typical offer interface looked like.
Note that the price in the screenshot is identical for the vine, winery and bottle pricing. This just means that the wine had already been bottled when the offer went live on the website, so the earliest you could buy was in bottle. Sorry I couldn’t find a better example in my archives!
Naked Marketplace Similarities
The new MarketPlace system works on a similar concept since winemakers are pitching their wines before the bottles even enter the UK (or before Naked has committed to buying the bottles for that matter). There’s a similar sense of delayed gratification. If you commit your money a few weeks ahead of time, you get the wine at a discounted price. And this is rooted in the similar basis of commiting to buying a wine early on to let the winemaker save on the cost of production, bottling, storage and shipping.
There are also smaller technical similarities that will only make sense to people who are used to the NW interface (eg no cashback on advanced bookings, only one case per customer, advanced booking cases can’t be grouped with other orders)
Naked Marketplace Differences
There are a host of differences in the innovative new system too. Otherwise it wouldn’t be very innovative! 😀
The biggest source of conversation I’ve seen has been this notion that the Marketplace deals don’t always succeed. In the old Advanced Booking system, if you made a bid, you knew you’d get your case at the price you bid. Because even if hardly anybody bought the advanced booking, Naked would be able to sell the wine at full price once the shipment arrived. On the marketplace, if people don’t buy enough wine to hit the winemaker’s minimum quantity, then the deal is cancelled and bids are refunded. Some people find this is disappointing or frustrating compared to the old system where a bid meant you were getting your wine.
There’s a reason for the system to work this way though. Customers are dealing directly with winemakers to try to broker a deal. If the winemaker and angels fail to drive enough support for a wine, that’s life.
And honestly, the results speak for themselves. Despite the fact that some people are resisting the change, a look at the list of successful purchases on the MarketPlace shows they’ve sold 8916 bottles since the marketplace launched its first deals on the 17th of May (30 days ago).
In the old advanced booking system you had one deal at a time. And those deals often lasted three weeks on the site. Often deals were just for a couple hundred cases (as they are on marketplace as well). That means the advanced booking system would often take two or three weeks to move just 600-1200 bottles. The marketplace clearly offers more selection.
I personally love the idea of a wine importer stepping back and giving the market a chance to decide to bring in new wines.
There are hundreds of gatekeepers in the wine business. Critics, importers, and so on. But there are virtually no opportunities like this one that are a truly open platform anybody can use to promote their wines in the country.
Sure the site mechanics are a little more sophisticated and therefore complicated. And auctions are more complicated than retail shops, but there are benefits to auctions that make the model attractive for a lot of people. Since the wine business is entirely too legislated and closed, it can benefit tremendously from this kind of open platform system.
And the usual suspects at naked wines (winemakers who have already established a fan base) no longer have to wait and hope that their wines go up on advanced booking. We can choose to offer a special discount whenever we want. And maybe I’m getting ahead of myself, but customers could start reclaiming certain winemakers or wines too. If enough people posted on my wall asking for a certain wine to come back, I would definitely pitch it on the marketplace.
Innovation is a bumpy road
I know the new system is ruffling some feathers, but I think the sales show that a lot of people are enjoying the new system! It might be useful to remember that the advanced booking system launched just one year before the marketplace. It seemed weird and new back then too. But now we’re used to it. And I bet that in 12 months, Naked will have discovered some new way to innovate the wine business and we’ll be talking about how we really got used to and love the marketplace! ;D
Another key aspect of the Naked MarketPlace is the timeframe in which winemakers have to sell their wine.
What is the timeframe?
By timeframe, I just mean the amount of time that a pitch remains on the site before it is determined to be successful or unsuccessful. The timeframe is clearly displayed on the Marketplace site with countdown clocks that tell you how many days, hours and minutes are left. And during the last day it goes down to hours minutes and seconds (see the photo above).
Timeframe simultaneously reflects the true economic urgency of wine sales and engenders a sense of urgnecy in the buyers. I’ll talk about this in more detail below.
Who controls timeframe?
The thing that might be surprising is that Naked Wines controls the timeframe. Every winemaker is given the same timeframe. At the application launch, winemakers were given seven days. As this seemed very short, it was raised to 21 days. The marketplace is still in beta, so it’s normal for tweaks like this and I do think that 21 days is an amelioration. As a sidenote, 3 weeks more closely resembles the “advanced booking” sysem which Naked employed before launching the marketplace.
Why have a timeframe?
I’ve got two good reasons.
Clerical – just to keep clean
Winemakers face time constraints
Customers know it won’t last forever
From a simple clerical point of view, it’s important to set time limits. Without a time frame, the market would be cluttered with too many old unpopular pitches. So from that point of view, it’s good to be able to call it a day and archive pitches at a certain point. (Though I think the current system deletes unsuccessful pitches, another point which will be explored on another day).
Time limits create a sense of urgency. Rather, they reflect the sense of urgency that winemakers already experience. Time limits share that urgency with our clients.
The truth is winemakers dread stockpiling wine. Once wine is bottled, it takes up lots of space. That space has to be temperature and humidity controlled and it has to be somewhat accessible to the large trucks which will eventually pick up the wine for shipping (or at least accessible by a forklift which can then have a paved path to the trucks). Even before bottling, wine takes up a lot of space and keeping wine in bulk (tank or barrel) entails a greater number of lab tests and chances that the wine will encounter problems. And the undercurrent here is that there are bills to pay.
For these reasons, along with many others, most winemakers would rather sell their wine today than in two months. And the timeframe reflects this. If you put a wine on at a certain price (often discounted), you’re entitled to some conditions. Saying “x% off as long as you buy at least 100 cases in the next three weeks” is fair. It’s akin to saying “If you don’t buy this much in the next three weeks, that’s fine but you’ll have to pay the full price like everybody else.”
So that’s the urgency from the winemaker’s perspective. How does it reflect into the client’s perspective? Having a time limit creates a chance that they might miss out on the deal.
You see the big banner that proudly displays “This deal has now finished” and shows how much money customers saved by getting on in this deal. Anybody who missed it will feel regret and will be more likely to buy next time a deal this good comes up on the site.
How else does the time limit affect the marketplace?
As soon as we start talking about risk and reward, chances of missing out, opportunity costs, and so on, we’re entering the realm of game theory. I already alluded to this in a previous post, and I always hesitate to bring up this sort of complicated stuff… ultimately, you should not think this hard about the marketplace or any other website. Realistically, you should just go onto marketplace, see if any wine tickles your fancy, and bid on that wine based on what you actually think it’s worth to you. No games.
That said, there are some fun ways to analyze the system if you like thinking about this sort of thing. 🙂
One angel (that’s a registered member of Naked Wines) had this to say:
From the seller’s perspective, the stated 7 days for a sale creates a jeopardy with regards to volume sold and price point. If the minimum number of bids are not reached at the desired price point, the seller has the decision to lower the price, in response to the market, (which has happened on other sales).
If the sale duration is elastic, then essentially the ability to offer a lower rice is irrelevant, as the seller can extend the sale until they reach the minimum number of bids at at their desired price point. Ultimately this is not in favour of the buyer, and less fun!
I had bid at a lower price, and with a day to go returned to add a case or two more at a lower price, on the basis that if the minimum price order was not reached (it did not look like it would be at the time), the seller may lower the price, or fulfill the lower price orders also – but by adding another 14 days to the sale this aspect of the game dynamics was removed, and the base proposition of the market place was lost.
A shame, as it removes the fun, the opportunity for the buyer, and the gaming dynamics which move the market place beyond a straight volume based discount sale.
?The elastic duration James refers to is that unique change from 7 days to 21 days that I mentioned above. But his post illustrates an important general point. A cemented time limit when the deal expires gives the winemaker an incentive to make the best deal possible in order to increase sales.
Similarly, as a successful deal reaches its expiration, customers who bid low are encouraged to raise their offer. For example, the Reserve did very well. By the end of the bidding period, we hardly had 20 cases left. Logically, there was no reason for me to lower the price significantly in order to sell 100 more cases. And it’s not even feasible since we only had 20 left to sell. So some of the lower offers bid up. And this shows the system works, even in these early days.
You see a similar sort of gamesmanship in the Dragon’s Den, a popular UK television program where entrepreneurs pitch their ideas to a panel of investors and ask for a certain minimum investment. The catch is that they must receive at least the full amount of money they asked for from the investors or they leave with nothing at all. Oftentimes, when a pitch has overestimated the value of the business, the pitcher will give up a more significant percentage of the company just to hit that minimum amount of pounds. On the other hand, when there’s a really good investment on the table, the investors fight over it and will offer more and more to get in on the deal.
Should the timeframe system change?
Incidentally, we should address James’ questions about whether it’s fair play to change the time limit. Firstly, I should point out that this change was exceptional. The duration won’t jump around willy nilly every time a winemaker fails a pitch. This is a rather unique historical situation where NW changed the duration because it was clear we needed a longer time period in the beta / early-adopter phase of the marketplace.
That said, maybe different deals should be able to have different deadlines. The same way ebay or kickstarter allow sellers or fundraisers to determine their own deadlines, MarketPlace could allow winemakers to set their own deadlines.
It would work because the urgency winemakers have to sell product quickly would motivate us to pick the shortest time possible. And this would be checked in the other direction by the minimum amount of time necessary to drum up support for a wine. Again, ebay and kickstarter are good examples. Very few people put auctions up on ebay that end two years from now. They’re selling stuff and they’d rather sell it this week if possible. All that said, I’d probably pick about 3-4 weeks every time. 😀 So maybe it’s fine with Naked picking the time limit for us.
But then there are some wines on the site that just didn’t work out. The brilliant effort of Disrupt, a wine blended between three different countries, is an example of something brilliant that just couldn’t find enough support within three weeks. These three winemakers basically agreed to ship their wines to a central point for blending on the condition that they sold something like 600 cases. Now, this is a big number for a wine that virtually no members of the site have ever tasted. So it couldn’t rely on existing NW clients. Instead, they needed to spread the word amongst their own UK networks, get UK press talking about it, etc.
Again, the similarities to kickstarter are striking. For those who don’t know, Kickstarter is a fundraising platform. You put up a project that you’d like to have financed and then you send the link around to all your friends and the Internet and you hope enough people share your passion enough to donate and get your project funded. And then Kickstarter grabs a commission. Really, this Disrupt wine could have been a kickstarter project. And a key element of this model is that it takes time to spread the word and get buzz going. Maybe Harpers is willing to write a piece on the Disrupt wine, but they’re not doing it within 21 days of the pitch being announced. They’re monthly and have paper deadlines. So it would have behooved that project to pick a longer time frame like 60 or 90 days (not uncommon on kickstarter).
On the other hand you don’t want deals languishing on the site. And some flash sale businesses online really benefit from much shorter time spans. Weekly sales like woot.com or daily sales like a whole host of American sites.
One last note: even if it is up to Naked Wines to pick the deadline, maybe they should shift over time (and not in the middle of any ongoing bids) to shorter times as the website population grows. Today, we’re basically pitching to the customers who are already registered on Naked. But if this gets a lot of press attention, you might see people joining Naked Wines for the sole purpose of shopping in the marketplace. For example, I have English winemaking friends who complain that they can’t even sell wine to their own family back home. Well now they can clear it through Naked Wines. Just put up a pitch and email the link to your friends and family. If a lot of winemakers start doing things like that, the marketplace population grows and grows. One day, it could dwarf Naked’s conventional import/retail aspect. And in that case, we could drop the deadline significantly.
How to find us
Domaine O’Vineyards, located in the North Arrondissement of Carcassonne, is just minutes from the Carcassonne train station, the Medieval City, and the Carcassonne Airport.
GPS coordinates: 43.259622, 2.340387
Wine, Dine, Relax at our Boutique Vineyard
Unique thing to do in Carcassonne
Wine Cellar. Winery Visits. Wine Tasting.
Wine & Food Pairing
North Arrondissement of Carcassonne
885 Avenue de la Montagne Noire
11620 Villemoustaussou, France
Tel: +33(0) 630 189 910
Best by GPS.
Follow the signs to Mazamet/ Villemoustaussou using the D118. At the end of the last straight part of D118, you will come to a roundabout with the Dyneff gas station.
Take the exit towards Pennautier. Continue 500m to a small roundabout and go straight over.
Look out for the second road on your right, Avenue des Cévennes which curves up hill (about 1km) to Avenue de la Montagne Noire on the left.
At the last juction, bear left. the road sign “Ave de la Montagne Noire” (confusing as it seems to show a right turn)
After another 500m you will see our red brick color building in the middle of the vines.