"Premium Wine"

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"Premium Wine"

Postby Alan Uchrinscko » Sat Jul 08, 2006 2:28 am

I know this has been discussed here or maybe in a TSWA, but a "Premium Wine" is defined as what? Isn't it $7 a bottle or something?

Couldn't find it here or at the lovely TTB site that has a list of appellations a few mm from some sort of BioTerrorism Act.
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Re: "Premium Wine"

Postby Jeff Grossman/NYC » Sat Jul 08, 2006 4:23 am

Wow, is this a hard one to Google for! (Thanks, I like a challenge.) Here's what I've been able to find that seems relevant:

Wikipedia -- They distinguish premium wine from bulk wine
http://en.wikipedia.org/wiki/Wine#By_quality

Kym Anderson, at the Adelaide Center for International Economic Studies -- The distinction is bottled versus bulk. See p.9.
http://www.adelaide.edu.au/cies/papers/0125.pdf

University of Southern Australia's library information on Wine Marketing -- In the one-paragraph descriptions of Evans & Tate and of Peter Lehmann wineries, they base the distinction on bottled or not.
http://www.library.unisa.edu.au/resources/subject/wine.asp

Finally, something like what you were looking for originally:

Rianne Sammy-Sacquitne master's thesis in Policy Studies at the University of Washington (about wine subsidies) -- S/He declares the value of a bottle of premium wine to be $6. Page 72.
Long URL hidden

Whew!

(Edited by Robin to hide a long link that broke formatting)
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Re: "Premium Wine"

Postby Jenise » Sat Jul 08, 2006 8:35 am

Interesting question. Didn't realize there was a formal definition of premium. I casually use the term all the time to distinguish serious producers from the Gallos and Kendall Jacksons of this world, but I guess I've been wrong in that.
Last edited by Jenise on Sat Jul 08, 2006 8:56 am, edited 1 time in total.
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Re: "Premium Wine"

Postby Robin Garr » Sat Jul 08, 2006 8:48 am

Jenise wrote:I casually use the phrase all the time to distinguish serious producers from the Gallos and Kendall Jacksons of this world, but I guess I've been wrong in that.


It's even worse than you think! A lot of the industrial wines qualify as "super-premium" in the formal hierarchy of the trade.

I'm not sure if the levels have changed, but it used to be that "super-premium" was something like $9 and up (which easily incorporates K-J Chardonnay - isn't it up to $12 now?) while "premium" was reserved for Turning Leaf and other mass-made wines in cork-finished wine labels. The lower category (forget what its name is) was used for Carlo Rossi and the like.

Maybe Hoke or someone can fill us in about current definitions on all this. Or wait, let me try a more detailed Google ...
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Re: "Premium Wine"

Postby Robin Garr » Sat Jul 08, 2006 9:06 am

Okay, I had to do a lot of Googling, but here's the definitive word from Wine Institute in a report published this year on U.S. wine sales in 2005:
Wine Institute report

Combined with other older stats, it's clear that these price points are the industry standard, and that the numbers have not changed since (at least) 1990:

Ultra-premium: Over $14
Super-premium: $7-$14
Premium: $3-$7
Extreme value: $2-$3
Jug wines: Below $3

(I assume the last two overlapping categories depend on what kind of container the wine comes in - Carlo Rossi jug, Two Buck Chuck extreme.)

Anyway, bottom line, as a term of art in the wine business, "premium" doesn't mean what you or I think it does ... and this terminology appears to cut across all categories in wine and liquor - "premium" has a similar sense for Scotch, tequila or bourbon.
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Re: "Premium Wine"

Postby Bob Ross » Sat Jul 08, 2006 10:44 am

Wine Institute is a good source. In their most recent breakdown, they used:

Over $14 -- Ultra Premium

$7 up to $14 -- Super Premium

Subtotal -- Premium -- $7 and over

$3 up to $7 -- Popular Premium

$2 to $3 -- Extreme Value Wines

Below $3 -- Jug Wines

Up to $7 -- Every day wines

http://www.wineinstitute.org/industry/s ... _sales.php

It's worth mentioning that the definition can vary depending on the market research experts cutting the data. Constellation published a study last year defining "Premium" as any wine over $5, and then segmented within that group.

Regards, Bob
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Re: "Premium Wine"

Postby Bob Ross » Sat Jul 08, 2006 10:48 am

Oops, sorry, didn't mean to step on your lines, Robin. Left my post up because of the Constellation report, where premium was defined as $5 or more.

"One out of four people who drink premium wines is overwhelmed," says Leslie Joseph, Constellation's vice president of consumer research and consumer affairs, one of the leaders of the study. In addition to the "Overwhelmed" category, Project Genome identified five primary subgroups: Enthusiasts, 12 percent; Image Seekers, 20 percent; Savvy Shoppers, 15 percent; Traditionalists, 16 percent; and Satisfied Sippers, 14 percent."

See http://www.pittsburghlive.com/x/pittsbu ... 03612.html for one analysis of the Constellation report.

It's worth mentioning that the definition points are hard to change -- one of the key reasons for having them is to show growth, positive or negative, over time - and rejiggering the categories can be difficult or even impossible.

Regards, Bob
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Re: "Premium Wine"

Postby Bob Ross » Sat Jul 08, 2006 10:51 am

Incidentally, the time posted times are very odd. I'm sure your post wasn't there when I signed on, and I went to the wine institute within a couple of minutes, so must have posted within five or six minutes. There seems to be an hour difference between our posts according to the times on my browser.

Does that depend on the time we set respectively for WLDG in Profile?

Regards, Bob
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Re: "Premium Wine"

Postby Ian Sutton » Sat Jul 08, 2006 11:30 am

Premium is a completely abused marketing term. In the past the word "premium" had high quality associations. However after being abused by marketing people over the years I now tend to view any product marked "premium" as overmarketed and of generally shoddy quality.
Watch out, as I'm sure the term "fine" (as in fine wine) is well on the way down the same track.

I recognise that the industry has now decided to adopt the scales of premium mentioned, but don't feel I have to buy into it. I'll buy the wine I want.

regards

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Re: "Premium Wine"

Postby Robin Garr » Sat Jul 08, 2006 11:40 am

Ian Sutton wrote:Premium is a completely abused marketing term. In the past the word "premium" had high quality associations. However after being abused by marketing people over the years I now tend to view any product marked "premium" as overmarketed and of generally shoddy quality.
Watch out, as I'm sure the term "fine" (as in fine wine) is well on the way down the same track.

I recognise that the industry has now decided to adopt the scales of premium mentioned, but don't feel I have to buy into it. I'll buy the wine I want.


Ian, while I don't disagree with you at all in principle, I would note that <i>in the narrow definitions under discussion</i>, those aren't really marketing terms so much as inside jargon in the drinks industry, used for sales statistics and comparison. The industry doesn't really use them, in this specific sense, for advertising or marketing to consumers.
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Re: "Premium Wine"

Postby Robin Garr » Sat Jul 08, 2006 11:43 am

Bob Ross wrote:It's worth mentioning that the definition can vary depending on the market research experts cutting the data. Constellation published a study last year defining "Premium" as any wine over $5, and then segmented within that group.


I'm not sure that's a strong exception, Bob. It makes sense for Constellation to use its own terminology internally, better to segment its low-end portfolio. But the standard terminology has been surprisingly enduring throughout the industry for a long time - since 1990 or before - and as you pointed out in another thread, it's difficult to change the price points even in the light of inflation because there's so much long-term data based on the standard definitions.

Again, as I pointed out to Ian, not much of this is relevant to consumers other than perhaps detail-curious wine geeks who enjoy seeing how the industry works.
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Re: "Premium Wine"

Postby Robin Garr » Sat Jul 08, 2006 11:46 am

Bob Ross wrote:Incidentally, the time posted times are very odd. I'm sure your post wasn't there when I signed on, and I went to the wine institute within a couple of minutes, so must have posted within five or six minutes. There seems to be an hour difference between our posts according to the times on my browser.

Does that depend on the time we set respectively for WLDG in Profile?


Bob, actually there was more like a 90-minute difference. The Profile setting will change the time-stamps that you see, depending on your location (we should be the same, though, because we're both in EDT).

The time stamp I see on my post shows 8:06 a.m., and that is correct. Beyond that affiant sayeth not. :)
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Re: "Premium Wine"

Postby Bob Ross » Sat Jul 08, 2006 12:00 pm

I see 8:06 on yours too, Robin. FWIW. GMT - 4 hours, right?

In any event, I wouldn't have posted had I seen your response. Sorry.
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Re: "Premium Wine"

Postby Robin Garr » Sat Jul 08, 2006 12:27 pm

Bob Ross wrote:I see 8:06 on yours too, Robin. FWIW. GMT - 4 hours, right?


Perzackly!

In any event, I wouldn't have posted had I seen your response. Sorry.


Don't worry about it, Bob, I don't mind. Your post added a lot of new information anyway!
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Re: "Premium Wine"

Postby Alan Uchrinscko » Sun Jul 09, 2006 1:01 pm

It took more Googling than you thought, huh!?!

I looked for SOME time before I posted.

Anyway, thanks everyone...
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Re: "Premium Wine"

Postby Robin Garr » Mon Jul 10, 2006 11:35 am

A slightly belated follow-up, Alan ... I just ran across an idiosyncratic definition from the Country Vintner, a small importer based in Virginia. This is probably a better real-world hierarchy, but I assume they came up with the categories on their own. They don't match the industry standard.

<I>The wines offered by The Country Vintner fit into four price categories on the retail shelf: Premium ($5.00 to $10.00 per bottle); Super Premium ($10.00 to $20.00 per bottle); Ultra Premium ($20.00 to $50.00 per bottle); and Luxury ($50.00 and higher per bottle). These categories represent the fastest growing categories of the cases sold in the United States.</i>

I assume you've discerned at this point, by the way, that these categories aren't addressed by TTB because they have no legal significance.
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Re: "Premium Wine"

Postby Bob Ross » Mon Jul 10, 2006 12:47 pm

Robin, As we have both mentioned, there are a number of classifications -- the Wine Institute seems to be widely accepted, but a few that I found interesting:



http://www.calwineland.com/landvalues/c ... ation.html

This list classifies wineries from a real estate perspective -- 20 different categories -- with land and grape prices.

Rabobank International

http://www.rabobank.com/Images/rabobank ... 25-156.pdf

This list runs Icon, Ultra-Premium, Super Premium, Popular Premium, Basic. The definitional analysis is particularly well done.

Public drinks companies generally use the Wine Institute categories in their public filings -- the SEC accepts those categories without the need for a defense for doing so.

Regards, Bob
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Re: "Premium Wine"

Postby David Creighton » Mon Jul 10, 2006 5:54 pm

ok, see, i hit reply. all i know about this topic is:

never buy or drink a wine that tells you on the label that it is premium, super premium or any of the others.
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Re: "Premium Wine"

Postby Dave Erickson » Tue Jul 11, 2006 3:27 pm

A point that seems not to have been made (or else I missed it...) is that just like the word "Reserve" in the United States, "Premium" has no legal meaning. As Robin points out, it's a handy term for market segmentation by price. That's all.

Creightond: I'll buy a wine that says "Premium" on the label, as long as it comes with a free ballpoint pen. :mrgreen:
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Re: "Premium Wine"

Postby David Creighton » Tue Jul 11, 2006 4:15 pm

you must mean a Cross pen. ashville is a really cool place. i have friends with a second home in black mtn. and we always get to ashville at least to go to the ashville market for wine.
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Re: "Premium Wine"

Postby James Roscoe » Tue Jul 11, 2006 4:21 pm

I'm going to be in Asheville sometime this summer. Where do you get wine?


Just another inane attempt to reach wine guru status.
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