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Kosta Browne Fall Release - Mark Your Calendar, Oct 1! | Sort: |
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Al_ksyrah 
Barrel Sampler
Posts: 2137
 | | 10-24-2008 12:21 PM |
| Yeah, look how disastrous it's been for cab producers. I realize cab grapes cost more, but my point is the market will certainly bear the prices. FWIW, I almost didn't buy KB when I noticed the price increase and, in the end, I bought less than I would have at the prices from a couple years ago. But I doubt they were making much money when folks first discovered them and their popularity (and price on secondary market) soared. I think the market rate for their wine is higher than they've been charging and it seems fair to me for them to get that value rather than leaving it on the table.
If the company up the street would give you a big raise for the same work, what would you do? (All other things being equal.)
-Al | | | |
| JimmyV
Central Connecticut
Wine Connoisseur
Posts: 5251
| | 10-24-2008 02:28 PM |
| It's a tricky formula. I think everyone agrees that they shouldn't have to leave money on the table. But at some point as the waiting list shortens, that strategy will cause the model to collapse on itself. It is an easy decision to risk losing customers when there are plenty more in the wings. But when the waiting list is small enough, then your only other option is retail/restaurants. Wineries take a beating there. The optimal approach is to price yourself so that most of your current customers buy, and if you do have to spill over to the waiting list, you do so in small enough numbers such that the waiting list replenishes itself. In past years, this has been what has happened to KB. In fact, the waiting list has grown. I can absolutely promise you that their waiting list on January 1, 2009 will be smaller than it was on January 1, 2008. If annual price increases result in annual waiting list depletion, eventually you will have to farm wine out to the retail market and lose most of your per bottle profit. I'm guessing that KB has a long way to go before that happens. Especially because they do not appear to be dropping people who buy in small numbers. Their model seems to be one where they move people up off the wait list without actually having to drop active members. If the only people who get dropped are those that pass entirely, their list membership may not drop that much. It will only be the waiting list that shrinks. | | | Beta testing a new signature. | |
| Dave
Wine Connoisseur
Posts: 5831
| | 10-24-2008 07:17 PM |
| I think that JimmyV is correct. For a long time Kosta Browne enjoyed very strong word of mouth support and wildly enthusiastic WS scores. If there is a 15,000 person waiting list, then it largely happened during this period. Now the word of mouth is decidedly mixed (call me cynical, but I noticed a marked increase in negative reviews after Parker slammed the wines). Now we even have the odd occurrence of Robert Parker and Allen Meadows agreeing on a California Pinot (85-86 or so). My guess is that KB will never have trouble selling their SVD wines. The list of Appellation buyers is too long. But they may have trouble selling the Appellation wines soon, particularly if they raise the price. I doubt whether 1/3rd of the people on the waiting list will actually buy the wine if offered. I know a lot of people that are on the waiting list, but now, having had a chance to try the wines, have figured out that they hate them. They won't buy when their turn comes. Fortunes change. David Arthur's several thousand person waiting list in now down to none. That said, I wish them well. They are nice people. | | | |
| R8der
Livermore, CA
Barrel Sampler
Posts: 2186
| | 10-25-2008 03:19 AM |
| We'll see how much sales have reduced due to price increases soon enough. I received notification today that I got the full case of extras I asked for, so that's a sign that they may have more wine to go around this year. We'll see when others chime in about their wish list status. The reason there was an increase in negative reviews was because Parker told them they didn't like the wine. The guy doesn't get California Pinot...whatever. I certainly do. Besides, Parker tried them at a tasting shortly after they were bottled...popped and poured.....I've had a few under those conditions as well.....no way they are going to show well in that scenario. These babies need time....and if he can't see that, it just lends credence to my lack of faith in what he has to say. Chris | | | |
| Dave
Wine Connoisseur
Posts: 5831
| | 10-25-2008 12:30 PM |
| Parker actually tried and rated them on two separate occasions (once informally in the Hedonist Gazette). The scores were in the 85-87 range both times. Not saying that he knows anything about California Pinot though! | | | |
| tgenn
Pleasanton, Ca.
Grape Sorter
Posts: 397
| | 10-25-2008 07:09 PM |
| I received my entire wish list, and I was wish list only. First time getting SVD's. I am thinking the price increase may have helped weed out the flippers. | | | |
| Daniel Bailey
Barrel Racker
Posts: 1534
| | 10-26-2008 12:32 PM |
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Posted By Budman on 10-24-2008 08:45 AM
Posted By Daniel Bailey on 10-22-2008 11:20 AM
I agree prices have increased markedly and I think your allocation getting reduced after buying 50 bottles last year - even though I understand their reasoning completely - was a poor call on their part. However I know I'd much rather have Kosta Browne in the cellar than any of those producers you list by a wide margin.
Dan, I agree with you. I've been a big Kosta Browne fan since you wrote up their 2002 (I think) vintage in Oenofile.
I also didn't make the point I wanted to. While I agree that Kosta Browne is a step up, most of the producers I mentioned source fruit from some ofthe same vineyards that KB does (Keefer, Kanzler, Garys', Rosella's for example). I'm assuming that they pay about the same price for the fruit that Kosta Browne does. In addition, their production is a fraction of what KB now produces (close to 10000 cases). Yet, these other producers have managed to hold the line on prices over the past 3 vintages while KB has increased theirs by 40% since the 2003 offering. For people like me, who are watching their retirement savings go down the toilet (I had hoped to retire in about 4 years), it's difficult to be able to support that kind of an increase. My spendable income hasn't increased at all!!! If I had bottomless pockets, I would have bought my whole allocation, but I don't... so I didn't. In addition, ALL of the people who bought bottles from my 2005 SVD allocation passed this year. My one case purchase will apparently result in a major reduction in next year's 'guaranteed' allocation. I can live with that. What hurts the most is that we tasted 3 of the 06s with Michael in August, and they are indeed excellent. The 07 components tasted out of barrel were off the charts!!!
I agree that pricing is increasing because of supply and demand not increases in grape prices. Anyone who is familiar with the costs associated with wine production realizes (unless a winery uses Paul Hobbs' pricing methodology) that wines priced in these ranges are generally not because of costs but because of demand and marketing/product placement.
I really liked the 2002s. I had reviewed 2000/1 prior to that and had been lukewarm on those wines.
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| Daniel Bailey
Barrel Racker
Posts: 1534
| | 10-26-2008 12:43 PM |
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Posted By Al_ksyrah on 10-24-2008 12:21 PM
Yeah, look how disastrous it's been for cab producers. I realize cab grapes cost more, but my point is the market will certainly bear the prices. FWIW, I almost didn't buy KB when I noticed the price increase and, in the end, I bought less than I would have at the prices from a couple years ago. But I doubt they were making much money when folks first discovered them and their popularity (and price on secondary market) soared. I think the market rate for their wine is higher than they've been charging and it seems fair to me for them to get that value rather than leaving it on the table.
If the company up the street would give you a big raise for the same work, what would you do? (All other things being equal.)
-Al
Comparing these wines to Cab producers is somewhat inapt imo. For the most part Cab producers are not following the negociant model adopted by Pinot producers such as Kosta Browne. As such, a consumer can't go - "I'm not buying Harlan at $500 a bottle because I can buy BV's Cabernet "Harlan Estate Vineyard" SVD for $125". If you want Harlan Estate on the table you need to buy Harlan. However as Budman has very credibly pointed out there are plenty of Pinot Noirs sourced from the same vineyards (yes blocks within vineyards (assuming winery is buying by the block and grower is willing to sell by the block) can and do provide different quality levels but for most consumers that fact is overlooked) for substantially less money. The presence of these (at the minimum) rough substitutes hamper a producers' pricing power. | | | |
| Daniel Bailey
Barrel Racker
Posts: 1534
| | 10-26-2008 12:46 PM |
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Posted By tgenn on 10-25-2008 07:09 PM
I received my entire wish list, and I was wish list only. First time getting SVD's. I am thinking the price increase may have helped weed out the flippers.
Flippers are the bogeyman of mailing list dynamics. In many instances flippers are helpful to a winery not harmful. | | | |
| Al_ksyrah
Barrel Sampler
Posts: 2137
| | 10-26-2008 01:26 PM |
| The margin on flipping K-B has been dropping for a while, partly score-driven and partly driven by increase in production numbers. BTW, I've never flipped, but I follow some of the auction sites.
I agree that K-B price dynamics are different from estate wines (whether cab or pinot). But K-B has it's own style and another winery's Keefer pinot isn't really a substitute for fans of that style.
The question that drew my response was whether the K-B price increase would cause them problems down the road. I don't think it will, and I also think they are entitled to reap higher rewards for their success. But the market will be the ultimate arbiter.
-Al | | | |
| CellarKeeper
Sarasota, FL
Grape Puncher
Posts: 880
| | 10-28-2008 12:22 AM |
| FWIW, I received the extras that I requested. Although it was only two. | | | |
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