Trees don’t grow to the sky. There comes a time when, realistically, the exuberance of the market has to face up to economic reality. Sometimes it’s brutal, head-on and violent. It’s what we have seen in the financial markets, and also with fine wines. Since the beginning of 2023 the wine world has sensed it coming: the end of the madness of stratospheric prices for certain wines, and thus a long-awaited moment of calm. Time to sit down and take stock. For some wines whose prices had risen exponentially, this has been a rude awakening to say the least. For others it has offered respite, and time to draw breath.
When we talk about great wines, a high price does not mean “too expensive”. A wine whose price doesn’t live up to your expectations is a wine that is “too expensive”. A wine whose price is completely disconnected from the market? That too is “too expensive”. A high price for a top wine is one that positions it in the premium/ultra-premium/luxury category. This turns out to be quite a wide category. And those who have managed to build strong brands in this world, where prices of fine wines have grown dramatically over the last 20 years, are those who stand to gain the most going forward. Because periods of economic uncertainty, like right now with high inflation, always create favourable growing conditions for businesses that have built strong brands. During such periods, the consumer is really seeking reassurance and returns to the known, the iconic. The time when they may have permitted themselves to pay a high price for an unknown name is over.
So, do we declare the end of high prices for fine wines? No, but those who relied solely on their unique taste (however good it may be) to promote themselves risk finding themselves in serious difficulties. On the other hand, the ones astute enough to dig deeper than the exceptional quality of their wine, building on well-known contemporary history and embodying values in which the consumer strongly believes, have a bright future. They will take advantage of the calmer waters we are now entering to consolidate their positions and continue growing at a time that is rich in opportunities. The trend for certain wines that are “too expensive” will be long gone when these fine wines see the return of more favourable economic conditions. There will then be a new euphoria when new wines will, in their turn, attempt to make a name for themselves. Those who do best will always be the ones who, apart from making extraordinary wines, know how to manage their brand strategy. Because it’s not the price tag on your wine that makes you a great name. It’s because you are a great name in the eyes of the consumer of today and tomorrow that your wines will continue to be admired and consumed, whatever their price. There will always be expensive great wines, everywhere in the world. And they must all tick the boxes of Reputation and Desirability if they wish to maintain their positioning and obtain enduring success in this category.
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