Prosecco is not a wine, it's a lifestyle
And that's what people want to pay for. This has implications for everyone when deciding on the price of their wine.
It’s time for a new post from the hugely popular “Wine Marketing Masterclass” - an MBA-style course in wine marketing for people in the business, doing exams, or fascinated in how the wine business works. We’re currently in “Price” in the “4 P’s” of marketing. And soon we’ll move onto “Promotion” or Communications.
I’m a demon I know… I tease you with content and then put the rest behind a paywall. But, there are weekly insights that will transform your business/career/winery here for just 1/300th of the cost of doing an onsite wine MBA
Does your home run on love, laughter, and prosecco?
If it does I have a spoon to sell you. Along with about thirty other people on Etsy. As well as pillows, hats, mugs, T shirts, tote bags (obvs) and even a doormat.
Prosecco is not a wine. It’s a lifestyle. A seductive one too if all your friends are prosecco lovers. Prosecco is a cultural vibe. A movement. An identity. As Tupac Shakur would have been better saying, “I didn’t choose the prosecco life, the prosecco life chose me”.
A lot of people in wine are bemused by the prices “normal” people pay for a bottle of prosecco. Insisting that there’s “better value” elsewhere. That’s because we… well, they… have a flawed understanding of what makes up the price of a bottle of wine. My consultancy clients - and paid subscribers - are different. They know where the value lies in the prosecco life. And other places too.
Vinonomics vs Value
If you have a mental model of the price of a bottle of wine is quite possibly looks a bit like this:
This is the long-running Vinonomics graphic produced by Bibendum in the UK. It’s a UK example, but you could create something just the same for any market in the world. The infographic is produced every year to illustrate the disproportionate impact that government taxes and alcohol duties have on cheaper wines. It shows how Britain’s high level of alcohol duty - as well as the cost of bottles, shipping, and so on - are fixed costs. Meaning if you spend a little more on each bottle, you get a lot more “wine” value in return.
It breaks down the component parts of a bottle of wine into its various costs.
The wine itself
The retailer margins
The distributor margins
Alcohol Duty
Taxes like VAT
Dry goods
Shipping
Add all these together… and hey presto, you have a price.
And many people price their wine in terms like this. And they’re not be wrong. But they’re not right either.
The model isn’t wrong. That’s how we have to price wine. At least to understand how we cover our costs. But it’s not the whole picture. For that, we need another picture.
Ana Andjelic is the author of “The Business of Aspiration” and has a doctorate in Sociology. She’s also a Global Chief Brand Officer and has an excellent Substack. She has this graph:
The graph shows the different ways we assign value to something. But also how value is nothing to do with the accumulated costs we saw in the Vinonomics graph. Value is the things people want to pay for.
It’s a model we can adapt for wine. And in turn, maximise the price we can charge for wine. I use it every day with clients. And it works.
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