Hat Trick

What’s the right price for wine?

It’s easier to figure the launch angle of a ball off a moving baseball bat than it is to price wine.

Wine pricing is a theosophical complexity fit more for quantum physics formulas describing the space-time continuum than for pretend farmers like winery owners. Most wineries never figure it out.

That’s because most wineries don’t have a calculus major focusing on imaginary number theory. Believe me, most wine prices are imaginary.

The identifiable, tangible elements that lend themselves to a massive calculator and multiple spreadsheets would drive most people into used car sales for a living as it is.

And, then there is this.

Why it is impossible to get the right price for wine

Once upon a time I was a founder, partner and President of Ariel Vineyards, a non-alcoholic winery that was, and still is, the only non alcoholic wine in history to win a gold medal against wines with alcohol.

One of the issues with marketing that wine was that we weren’t sure it was even wine. It started out as real wine, but we filtered out the alcohol. Then, what was it? Well, it could have been sold as dozens of products.

Fortune 100 companies like Monsanto and General Foods talked to us about selling it as line of liquid seasonings, a dry (not sweet) carrot juice that was going to be called “Bunny Juice,” and as a cure for hoarseness.

OK, that last one’s not true. But strangely, the first two are.

So, we had this problem, what was this stuff? And what would people pay for it? There are many ways to find out what people feel about a product but none of them work.

At the time we thought, “No problem. We’ll just do a focus group.” We figured all we had to do was find people who would taste the thing and we’d watch how they reacted. Easy.

Of course, you can’t watch people who know you’re watching them because they will act entirely differently than they do when they think they are not being watched.

I once had an acting class where we sat in a theater where the audience would normally sit and worked on scenes on the stage in front of us.

One time before class started, the teacher asked us to take all the folding chairs down from the audience and put them on the stage.

No problem.

Then, as soon as we sat back down in the audience, he told us to go back and pick up the chairs on the stage and put them back where they were.

Oh my goodness.

The people who were putting the chairs on the stage were relaxed, joking with each other, and practicing lines as usual. The same people, taking the same chairs, off the same stage, 30 seconds later were clearly infected with a terrible disease that turned them into aliens just escaped from Captain Arcturus in the Delta Quadrant.

Everybody was suddenly helplessly self conscious. Nobody could even walk normally once they just thought about being watched. Remember, we were being watched before. Nothing had changed. We just didn’t think about it the first time.

The act of being watched changes you. Even if you are an actor. Especially, if you are an actor.

So, if you want to see how people really react to your product you’ve got to figure out a way to watch people when they don’t know they are being watched.

It is at this point that the line between marketing and stalking begins to blur. I was very confused. Wine marketing and stalking looked the same to me. I was afraid it might look the same to other people too. The police for instance.

Curiously, the way marketing people get around being arrested is to call it a focus group. For some reason, I don’t completely comprehend if you stare at people on the sidewalk you get arrested and if you stare at the same people behind a two-way mirror you get a raise. Life is confusing.

The theory of a focus group is that from studying the specimens’ very amusing reactions to the product, you can find out why people do those weird things they do.

Spy on people when they don’t know they are being spied on they say, and you will unlock the cosmic secret of what they really, really want.

I think not.

Another issue with focus groups is that putting the people that you’re stalking in a small room and staring at them for hours is convenient, but not terribly realistic.

On the whole, people don’t much care to crowd into a small room with a two-way mirror and discourse on the meaning of life. It’s like trying to figure out what lions in Africa want by staring at the one in the zoo.

While marketing firms apparently have bought into the church of focus groups there is one fundamental problem that anybody not trained as a marketer would see right off.

The people in this little room are not buying anything.

They are talking about buying things. So, in real life you’re not watching them decide in a store or a restaurant to pick up that swell Aligote from France, or maybe opt in for a nice little Torrontes from Argentina.

That moment of actually picking the product up and taking it to the cash register is sacred to the trained marketer and it is the only moment that matters. And, you can’t do that in an isolated room no matter how many mirrors it has.

After mindlessly staring at strangers for hours you finally decide they are really not going to take their clothes off and you then send somebody into the room to ask the hard questions like, “Do you enjoy wine that tastes like a dead rat?” and “Would you buy Chablis in a hat?”

I will leave it to you to judge the effectiveness of this approach based on an actual focus group we conducted at Ariel Vineyards. We were trying to figure out what people would pay for wine that might or might not have been an actual wine.

The technical filtration process that produced Ariel produced a set of tastes and smells that had never existed before in the history of the human species.

The people on the other side of the mirror had been specially selected to represent the range of people who we thought would buy non-alcoholic wine. That was a trick in itself since no one at all was buying non-alcoholic wine at the time and figuring out who would start buying it in the face of their utter indifference was really more a job for a psychic than a marketing company.

The Theater of Dionysios in Athens, Greece.

Dionysios was the God of wine, and also the god of theatre.

We gathered together several different containers commonly used to hold different liquids. Milk bottles, decanters, wine bottles, water pitchers and all manner of other containers were filled with non-alcoholic wine from the same bottles. Just to be clear this meant all the containers were filled with exactly the same wine.

We just asked them to taste the wine and answer various questions about it.

We didn’t even tell them the alcohol was taken out, and no one noticed anyway. One of the TV reports on Ariel early on said that they passed it out to their production crew without telling them it was non alcoholic and they all starting acting drunk.

You don’t need alcohol to get drunk. You could get the same effect as alcohol for free if you could just convince yourself it was real. Belief is everything.

But that’s not the weird part.

Here’s the weird part. The people in our group tasted the same wine from the same bottles from several different containers. Then, they rated them. Wine in milk cartons was graded lower and given a lower price point than wine in wine bottles. The same wine in a mason jar got nowhere at all.

Every single container got a different quality rating and a different price. That wine in the carton was “light, flabby and not interesting”. The same wine in a wine bottle was “lively, fresh and definitely something I would buy.”

The wine from the water pitcher was, I kid you not, “watery”.

Ha! The joke’s on you. It was the same wine in all of the containers.

The container completely altered their perception of the wine. In theory that should not be possible. Wine should taste like whatever it tastes like, even if you drink it out of a hat.

Even if it is non-alcoholic wine. Can you charge more for orange juice by putting it in certain containers than in others? Well, yes you can. And, some diligent makers of orange juice are already doing that. Not to mention chocolates sold in a wine bottle that sell for a whole lot more than the same chocolates in a plastic bag.

If those musty odors of cedar and cigar box are worth an extra $50/bottle in a great Bordeaux (they are) then they ought to be worth an extra $50/bottle in a hat. But they’re not.

The amount of extra dollars you can charge per bottle depends on the shape of the container they are in, not on the wine. Think Chivas Regal in a crystal bottle. Would it taste different in a Perrier bottle? Yes. It would.

In the end, we sold Ariel in 19 countries and 3 continents. We did not market Chablis in a hat. I, for one, was deeply disappointed.

“Ariel Vineyards Wine without Alcohol” was the new drug people were searching for. Except for the drug part. Here’s Huey Lewis to tell you all about it.

Note from me:

Ariel today is nothing like the Ariel we made. It is filled with grape juice and “natural” flavors which we never used. Sadly, the people who bought the winery did not carry on our original methods or intentions.

I do not recommend it.

Thank you for your great comments and suggestions. I’m always glad to hear from you.