Thursday, January 27, 2011

Costco: the world's largest wine retailer - Part I of II



MadisonWineScene (MWS) recently interviewed Merrell Tomlin, wine steward at Costco in Middleton (2150 Deming Way) about their local wine business. 


More details about Costco's worldwide wine, beer and spirits operations can be found at http://bit.ly/lWqPLS. Chain-wide, Costco's alcohol business is 50% wine, 25% spirits and 25% beer. 


MWS: How was 2010 for Costco Madison?
Merrell: 2010 was a fantastic year; we were up 40% over 2009.  As more people in Madison realize that we sell wine (we have not been open that long), we are on pace to do that again this year.


MWS:  What is the balance of white wines vs. red wines at Costco Madison?
Merrell:  In the summer we sell more whites - lighter whites like Pinot Grigio and Chenin Blanc, and in fall we switch over more to reds, and for the holidays we bring in more expensive wines.  Our biggest selling varietal is undoubtedly Chardonnay, and overall we are probably 55%/45% in favor of whites.


MWS:  How many wine labels does Costco Madison carry?
Merrell:  At any given time I will have between 150 and 175.  We are much smaller than Woodman's because we have a smaller space.  What we carry we have to move.  I don't carry anything less than an 85 rating among our rated wines.


MWS:  What is the range of wine prices at Costco Madison?
Merrell:  $5 to $200, with the average around $20.  Most of the wines we sell are below that, and we are quite successful with wines up to $60.  When it gets over $60 it slows down very quickly - people buy those for special events.  That might be more of a Madison phenomenon than a Costco phenomenon: most Costco stores just knock it down in the $40 - $100 range, especially in cities like Chicago.


MWS:  How does the Madison Costco store compare in wine sales to other Costco stores?
Merrell:  Midway out of the 500-odd Costco stores in the country; we are probably in the top 20 of the 50-plus Midwest stores.  However, the Madison wine scene is always changing with more wine store openings, wine tastings, charity wine events, wine pairing dinners at restaurants which all help to make more people interested in wine.


MWS:  What are your most popular wines at Costco Madison?
Merrell:  In reds, without a doubt it is Menage a Trois (www.menageatroiswines.com) at $7.99.  In whites it is Wollersheim Prairie Fume (www.wollersheim.com) also at $7.99.


MWS:  How many bottles on average does a wine customer buy in a trip to Costco Madison?
Merrell:  We sell a lot of mixed cases, but on average it is usually 4 - 6 bottles at a time.


MWS:  Any disappointments in any wines not selling at Costco Madison?
Merrell:  Not really.  We have gotten better at understanding the Madison wine consumer and seasonal patterns.  For example, for Christmas we brought in three extra Champagnes that we would not normally carry during the year and we hit different price points.


MWS:  What is your biggest constraint in selling wines at Costco Madison?
Merrell:  Space.


MWS:  How do you get new wine labels into the Costco Madison store?
Merrell:  We have thousands of approved wines on the Costco list and I try to tailor our selection to the Madison wine clientele.  For example, we just brought in three outstanding Willamette Pinots - I had thought that was a big gap in our offerings and we now have them from $15 to $40.


MWS:  What wines would you like to have more of at Costco Madison?
Merrell:  Australian Syrahs, as well as Malbec and Carmenere - wines from Argentina and Chile.  I think they would sell well in Madison because they are relatively inexpensive.


MWS:  Any hidden gems in the Costco Madison store?
Merrell:  Right now it would be the Willamette Valley Pinot Noir (www.willamettevalleyvineyards.com) at around $20 and the Drouhin Pinot Noir (www.domainedrouhin.com) at around $40.


MWS:  Costco Madison does very little conventional advertising.  How do Madison wine buyers find out about these deals?
Merrell:  People need to come into the store at least once a week -- not just with wine -- we try to turn everything in the store very quickly.


MWS:  What is your personal wine choice in the Costco Madison store?
Merrell:  Sequoia Grove - a Napa Cab (www.sequoiagrove.com).  A well-kept secret.


MWS:  What is the most common question that you get asked?
Merrell:  I do not know anything about wine, and I am having this dinner party.  What wine should I serve?


MWS:  And the answer is?
Merrell:  What are you serving?


The next post will discuss Costco's Kirkland label.

Friday, January 21, 2011

The War on Terroir

In Judgment of Paris: California vs. France and the Historic 1976 Paris Tasting That Revolutionized Wine ($9.90 paperback at Amazon.com), George Taber gives the following description (page 3):



So these guys (sorry, experts) were off by a few thousand miles, with a large continental landmass and an ocean between their assessments and reality.

Now, in Secrets of the Sommeliers: How to Think and Drink Like the World's Top Wine Professionals ($20.59 hardcover at Amazon.com), Rajat Parr is described as doing the following (page 3):

"Ach," Rajat cried, suddenly animated. " I was going to say Lafarge!" Not that it was necessary. The couple was more than impressed. Through congested nasal passages and with a dulled palate, Rajat had identified the grape variety, the country of origin, and the region precisely to a village of only eight hundred people in eastern France, as well as the wine's designation (Premier Cru) and the year in which it was made - a volume of information divined by the briefest interaction between nose, mouth, and wine. Had he been more on his game, he might have mentioned the name of the thirty-eight acre plot where the grapes were grown - Clos de Chenes - and the producer, Frederic Lafarge, whose hands worked that soil.

So Rajat (@RN74 on Twitter, web at www.RN74.com) can identify a wine down to the individual producer (when he doesn't have a cold).

Which scenario is more realistic?

You may also enjoy Roald Dahl's "Taste" in the Collected Short Stories of Roald Dahl ($35.37 hardcover at Amazon.com)

Monday, January 10, 2011

What explains Bordeaux wine prices?

What are the best predictors of Bordeaux wine prices?

According to the best academic research these are:

1.  Whether the wine maker rides a bicycle to work or drives a car.
2.  Whether his first name is Andre or Henri.
3.  Whether the vineyard faces SSE or NSE.

Just kidding!

According to Orley Ashenfelter at the American Association of Wine Economists, http://www.wine-economics.org/ (yes, Virginia, there is such a group - imagine their conventions!) and http://www.liquidasset.com/, Professor of Economics at Princeton University (yes, the very same Princeton University that once had Ben Bernanke as the Chair of its Economics Department, http://www.princeton.edu/economics/ and which still boasts of Paul Krugman (fellow blogger - albeit on weightier, less liquid issues, http://krugman.blogs.nytimes.com/ and 2008 winner of the Nobel Memorial Prize in Economic Science (never, ever to be confused with a real Nobel Prize)) the major variables that matter in predicting future prices of a toddling young Bordeaux are:

1.  The average temperature over the growing season (April - September) - the higher the better
2.  The amount of rain in August and September of the growing season - the less the better
3.  The amount of rain in the October to March preceding the vintage - the more the better

For readers who like pictures, here is one taken from AAWE Working Paper No. 4, Predicting the Quality and Prices of Bordeaux Wines, Orley Ashenfelter, April 2007:

So if you happen to find yourself holding a bottling of the 2010 Bordeaux, and the almanac tells you  it was rainy in Winter 2009 - 2010, and dry and hot during the Summer and early Fall of 2010, go ahead and empty out your IRAs and 401(k)s and put all those dollars into really liquid investments.

Meteorology is wine destiny.

Thursday, January 6, 2011

What this is about.

A blog dedicated to news and reviews of:
  • Wines from around the world available in Madison and the region
  • Wine stores and other outlets
  • Wine importers and distributors
  • Wineries
  • Wine lists at leading restaurants
  • Wines, wine sommeliers and wine stewards
  • Winery tours
  • Wine tastings
  • Wine clubs 
  • Wine books
  • Wines and consumer trends
  • Wine and food pairings