The biggest myth in the wine industry

The biggest myth in the wine business is that you get what you pay for.

The truth is that the more you spend on wine, the more you get ripped off.

Think about the places you buy wine…

  • Restaurants — you definitely don’t get what you pay for
  • Wine shops — you pay hefty markups here too
  • In supermarkets — you get what you pay for, but you have to compromise on other things like quality.

For years this problem has baffled me. Why are the absolute best wines out there inaccessible and unaffordable to most people?

Especially when the ceiling on what a great wine actually costs to make is $30 per bottle?

Let me explain.

I spent 10 years at my previous company, Naked Wines, setting up hundreds of independent winemakers in business.

It gave me a unique insight into the commercials of producing wine across the world.

So take Napa Valley, the most expensive place on earth to make wine…

  • Buy A+ grade Oakville Cabernet Sauvignon fruit — $15,000 a ton
  • Give it the Rolls Royce treatment in a state-of-the-art winery — $3,000 a ton
  • Age it in the finest oak barrels known to mankind — $1,500 a barrel
  • Bottle it in obnoxiously heavyweight packaging — $3 all in

…and you land up with $30 cost of production per bottle.

Yet these wines sell for hundreds, sometimes thousands.

So why does premium wine sell for so much?

There’s lots of reasons (spoiler alert: duty/taxes isn’t really one of them).

But the bottom line is — the industry has tricked us into believing that the more you spend on wine, the better quality you’re going to get.

This is just wrong!

I waded through hundreds of cost prices for wine available in Irish retail (I know people…)

A few things jumped out:

  • A typical €25 wine in the shop costs on average €7 from the producer
  • A typical €50 wine in the shop costs €17
  • A typical €100 wine in the shop costs €35

Which proves my point… the more you spend on a bottle, the less value you actually get. Crazy huh?

The bottom line is as a customer, the wine industry doesn’t reward you for your loyalty.

They have to maximise every last cent of profit out of you for each order, because they don’t know if you’ll ever come back again. Even if you do.

I’ve turned this on its head, starting with the assumption that if I give you amazing quality and service, then you’ll stay loyal.

It’s putting the cart before the horse.

I’ve created a new business called WineSpark.

As a member, you pay a small membership fee (€10) per month. I make my margin from this, instead of the bottle price.

That allows the €25 wine in the shop to become €15, and the €100 wine to become €50.

The price you see is an exact calculation — the cost of the wine plus shipping, duty and taxes to your door. No markup or anything else hidden in there.

Each wine also has a traditional price — so you can see what it would cost in other retail, based on its cost price.

Most of my wines are exclusive to Ireland. But there are a few exceptions, if you want proof of the model. Like here and here. Feel free to Google these wines and see how much they cost elsewhere.

It’s all designed to get you better quality and value for your money.

In other words — you finally get what you pay for. An industry first.

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