The Five Pillars of a Consumer-Driven Wine Market

PillarsIn a recent post concerning New Jersey and the State of Direct Shipping, I concluded by writing, "There is a great deal to do across the country to make consumer interests paramount in the alcohol regulatory world."

This kind of vague pronouncement doesn't actually layout the conditions that would result in a consumer-centric wine marketplace. I should have been much more clear. There are in fact a set of specific conditions that would reflect a consumer driven wine marketplace. What's more, a consumer driven regulatory and legal landscape also happens to meet the needs of policymakers seeking to assure that alcohol use does not create significant social problems.

The 5 Pillars of a Consumer Driven Wine Marketplace

1. Interstate Product Access
This means allowing consumers to source and gather their desired wine products from anywhere in the country. It primarily means giving consumers the option to buy from local wineries and retailers as well as buying from remote wineries and retailers via direct shipment. In fact, allowing consumers to purchase from out-of-state wineries and retailers is the only way to implement a wine marketplace for consumers that gives them access to the true diversity of wine products. Without access to direct shipment from wineries, consumers will not be able to find the most exciting domestic artisan wine producers. And without access to direct shipment from out-of-state wine stores, consumers will have only paltry access to the explosion of imported wines in the American marketplace, as well as the most highly coveted collectible wines that are most easily found in the best wine shops across the country.

2. Creation of a Free Market in Wine
More than anything this means getting states out of the business of selling or distributing wine. There is no evidence that a state gains any significant protections for its citizens by monopolizing the sale and distribution of wine through state-run entities. More importantly, state bureaucracies are notoriously bad at responding to marketplace demand and at innovating, the great benefits of a free marketplace driven by the easy and relatively seamless interaction of consumer and seller, otherwise known as supply and demand. Getting those few states that still keep a hand in wine sales and distribution, out of the business of selling and distributing wine would result in far greater access to products and services that make wine consumers smile.

3. Putting Wine Next To Food
After bans on direct shipment of wine from wine stores and wineries to consumers, it is the ban of the sale of wine in grocery stores that ranks as the most anti-consumer laws in the country. States like New York, Tennessee, Delaware, Oklahoma and other continue to force consumers to buy their meat, chicken, pasta and staples in one store, while travelling to another store to pick up the bottle of wine to serve with whatever they decide to concoct with grocery store-bought ingredients. The only remaining justification for keeping in place the separation of food and wine is that there is a separation of food and wine and to upset the ancient apple cart would upset those who benefit from the separation. Not particularly compelling. And not particularly pro-consumer.

4. Allowing Sunday Sales of Alcohol
That some states keep in place their state-wide bans on the sale of alcohol on Sunday is testament to the nation's long and intimate connection to the Christian religion. It is a hold over from those days when adherence to what was believed to make a God happy held some sway over public policy. These laws are profoundly illogical and anti-consumer and should be overturned.

5. Allowing Corkage in Restaurants
There are states that ban the practice of bringing one's own wine into a restaurant. Put another way, these laws ban restaurants from allowing patrons from bringing in a special bottle of wine and paying a corkage fee for doing so. Restaurants should have the right to either allow the practice or deny it. Those remaining states that ban this practice demonstrate a profound disregard for the free market by banning a harmless practice that could help restaurants and that would be truly consumer friendly. The only remaining argument in favor of statewide bans on corkage is that it would hurt those restaurants that would choose not to allow patrons to bring in their own bottles of wine and pay a fee for doing so. Again, very uncompelling.

Every state has the right to and should consider laws that protect citizens from the dangers of over consumption as well as the danger that results from minors drinking alcohol. Every state has a right to tax alcohol. Every state has the right to regulate particular alcohol sales and distribution activities that are predatory and harmful. Yet the types of laws outlined above do nothing to advance these goals, but instead simply harm the consumer, diminish a legitimate marketplace for wine and punish the consumer. In almost every case the types of bans listed above are still in place not because they have popular support among citizens of a state, but because they protect special interests. They should all be removed in order to address consumer interests and stimulate the legitimate wine marketplace.

4 Responses

  1. wineorl - January 11, 2012

    I take a different approach to defining pillars of a customer-centric wine market. In my approach, a key pillar of a consumer-driven market is an understanding of the market segments; a second pillar is then understanding the needs of the varying segments; a third pillar is devising strategies to meet the individual market segments. For example, a significant portion of consumers are non-wine-drinkers. By understanding that fact, we can attempt to address this market segment through a set of relevant strategies.. Please see the following for my take on retailer strategies and here for potential strategies for exploiting the occasional/non-wine drinker.

  2. Tom Wark - January 11, 2012

    Your marketing approach toward a customer centric market makes great sense to me.

  3. StemGrip™ - January 11, 2012

    Excellent piece Tom, bravo! Now, how do we get through to the states? Wineorl, yes, we all tend to market to the low hanging fruit, in this case the 20% drinking 90% of the wine. We could be well served to target the 80% to increase the 20% in the long run. A winning strategy in the making, cheers!

  4. Steve Heimoff - January 11, 2012

    Agree with you 100%! I’m glad you didn’t include “Kill all the wine critics.”

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