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Buying wine on pre-arrival often gets a bad rap as in a June 5, 2007 article appearing on Wine Spectator Online titled "Pre-arrival wine purchases are only for patient people."

Definition of Pre-arrival

"Pre-arrival" is a term used to describe wine offered for sale prior to its arrival at your retailer.  Why would your retailer do this?  Because faster sellthrough of inventory creates a better return on capital which in turn keeps consumer prices lower.

Pre-arrivals can be created when a retailer buys wine from any source if the retailer chooses to begin selling before the wine has arrived.  Sourcing from a local distributor or directly from a producer (e.g., a Napa winery) simply means a shorter wait (a few days to a few weeks) than if the retailer sourced the wine directly in Europe (which could take 3-6 months or longer).

Reasons to buy pre-arrivals

1. Snooze, you lose - It's common industry practice for highly sought-after wines to be sold as pre-arrivals.  If you wait, you may not be able to buy the wine later at similar price levels (or at all).
2. Lower prices - There are various reasons contributing to lower prices such as (a) better retailer capital utilization and (b) the fact that there are often fewer parties (and mark-ups) involved in the supply chain.
3. If you're cellaring the wine anyway - For most collectors, much of what they buy on pre-arrival is not for immediate consumption and will be cellared.  Therefore, whether the wine arrives in one week or six months is generally less important than securing the wine at a good price.
   

Areas of confusion

1. Futures vs. Pre-arrivals - The term "futures" is analogous to "pre-arrival" but is normally associated only with new releases.  See a prior post (Wine futures and pre-arrivals: what's the difference?) for a full explanation.
2. Type of wine - Pre-arrivals may apply equally to newly released wine or a 20-year old vintage.  For example, Vinfolio routinely sources both newly released and older vintage wine in Europe and sells all of them on a pre-arrival basis.
3. Free retailer use of your money - Most people I speak to about pre-arrivals bring this point up.  There is no such retailer benefit (at least for a reputable retailer).  Speaking for Vinfolio, our standard is to pay all international sources within 15 days of making our purchase commitment (and sometimes we do so immediately to secure a parcel others are competing to buy).  Payment is clearly required before foreign sources will release wine to our logistics partners.  The sooner it is released the sooner our customers get it.  Receiving their wine, in turn, tends to generate further orders.

Questions to ask your retailer

1. When is the pre-arrival expected?  How often are the retailer's estimates wrong?  Vinfolio provides timing estimates for every pre-arrival wine in our online wine store.  There are some factors the retailer cannot completely control which is why they're only estimates.  If you absolutely need wine by a fixed date, either avoid a pre-arrival purchase or ask your retailer when the wine is arriving before your buy (and give yourself some extra room for delays).
2. Does the retailer have a written invoice confirming its own purchase from the supplier?  There are retailers who broker wine they don't own (and don't have on reserve with a supplier) on the theory they can backfill the supply based on orders received.  When they can't, your order tends to get cancelled.
3. Are you notified proactively by the retailer upon the wine's arrival or is the responsibility yours to remember to chase them?  Vinfolio emails customers automatically when wine is received in our warehouse.  Customers may also check order status online or call/email our Customer Service department any time.  For many other retailers, the onus is on the consumer to manage their records and remember to chase the retailer until their wine is delivered.  Note: Vinfolio's free online VinCellar software is designed to handle tracking pre-arrivals from any retailer as part of its capabilities.
4. What's the retailer's history of failing to deliver and what are you offered as compensation in such a circumstance?  If the market value of a wine has appreciated since you ordered it, getting your money back is an inadequate remedy for the retailer's failure to deliver.  While we have not had to invoke it, Vinfolio has a published policy described in our terms (listed on our site) which includes a 125% refund.  

Conclusions

Pre-arrivals generally serve the collector well but understanding how they work helps set appropriate expectations.  As the Wine Spectator Online reporter discovered, where you buy your pre-arrival also makes a big difference to your experience.  For advice in that realm read my prior post, "Criteria for selecting a good wine retailer".

Yesterday's article, "Are ratings pointless?", in the San Francisco Chronicle provided an in-depth analysis of the 100-point wine rating scale.  The short answer to their rhetorical question is "no" but let me explain how I think about the use of ratings and the key underlying factor driving consumer interest in them.

Why wine consumers want ratings - Reviewer "triage" is a proxy for their own effort

The sheer volume of fine wine produced annually overwhelms the individual consumer's ability to determine what to buy based on his or her personal preferences.  By leveraging the time of reviewers with respected credentials, the resulting ratings and wine descriptions provide an invaluable service by helping prioritize buying decisions within a finite budget.  The consumer's goal is spend his or her money wisely and to achieve maximum drinking pleasure while avoiding outright buying "mistakes."

Determining which rating sources to trust 

Rating sources don't have to be preeminent professional reviewers like Robert Parker, Stephen Tanzer, or Allen Meadows.  As my post of only two days ago highlighted (see What influences your wine purchase decisions?), "wine-knowledgeable" friends are the most frequently mentioned source of influence (72%) followed by wine retail staff members (61%).  The consumer only needs to perceive the rating source as having a good probability of having made an accurate assessment.  This probability assessment or "trust index" is essentially the result of a personal calibration process between the individual consumer's subsequent experiences with wines reviewed by a given source and the level of agreement between the consumer's opinion and the source's.  That's why friends and retail store staff "compete" well against professional reviewers.

Personal taste ultimately trumps professional ratings

The same post I referred to earlier also notes that 87% of consumers agreed with the statement "I trust my own taste more than I do the wine critics."  While there are "score chasers" out there who seem to fall into the other 13% bucket, this extremely high agreement rate indicated that most consumers use wine ratings as a mere input to their purchase decision process.

Use of professional ratings by retailers

Most retailers selectively present only the highest rating, from whatever source they can find, to provide a positive buying rationale to a consumer. This has always irritated me as the source may not be one I "trust" most for the type of wine in question, and even if it were, more information, including divergent opinions from other trusted sources enable me to make a more informed purchase decision. 

That's why Vinfolio shows multiple rating sources whenever we can find them such as the example shown on the right for a $200+ bottle of Kistler pinot noir.  Even if you trust the Wine Advocate, the wine divergence of views on this wine (from Burghound, Tanzer's International Wine Cellar, and the Wine Spectator) will interest you.  Upon reading the text reviews (achieved by clicking on each box when on our site), you may choose to discount selected opinions or not. 

Your opinion

Please feel free to add your own comments on how to use wine ratings successfully.

Wine Opinions, an Internet-based wine research company, published a report last month titled "Tracking wine media usage and the Influence of Critics."  The report, which includes both trade-only and consumer panels, makes fascinating reading but here are some key findings which struck me as particularly interesting (based on consumer-only responses):

• The most influential opinions affecting consumer retail wine purchases over $20 (the highest category) were "wine-knowledgeable friends" (72%) followed by retail staff (61%).  See chart below.
• The Wine Spectator (54%) has more influence than Robert Parker (41%) amongst high price point consumers.
• 24% of consumers in the panel read wine blogs, about double the level which read the Wine Advocate or eRobertparker.com.
• 87% of consumer respondents agreed with the statement "I trust my own taste more than I do the wine critics."  Despite that, 49% agreed that "I try hard to avoid wines with poor ratings."
• Interestingly, most consumers (42%) disagreed with the statement that "There is a big quality difference between a wine related 92 points and one rated 88 points."  Note: another 39% were undecided on this statement. 

My conclusions

• Initiatives to apply social networking to generating wine recommendations should have a receptive audience.
• Internet-based wine opinions contained in blogs or shared tasting notes are already a significant influence factor and growing stronger based on a steady flow of new initiatives.
• The role of expert wine retail staff is valued highly.
• Consumers trust their own opinions more than anyone's and apply their own judgment in terms of how they use third party ratings to make their decisions.
  

The full 32 page report containing charts, analysis, and the original survey questionnaire is available for purchase at the Wine Opinions Store for $195 (it is report CT4-1).

A full case of 1985 DRC - Romanee-Conti sold at Christie's in New York on May 22 for a price of $237,000 (including the buyer's premium) making it the most expensive case of Burgundy wine ever sold at auction (according to Christie's). 

The per-bottle price equates to $19,750 whereas the average auction price in 2007 before this sale was only $8,567 per bottle (based on 10 lots sold so far in 2007), a premium of 131% over the average.  According to the auction catalog, Richard Brierley of Christie's is quoted as saying "never before have I seen such pristine cases of these great wines [1990 was also sold]."  The wine was in its original wooden case and "stored in outstanding conditions."

The only higher prices for this wine occurred in 2006 when the wine was sourced from other impeccable collections: Russell H. Frye's and Park B. Smith's, both sold by Sothebys New York.  Two 2-bottle lots from the Frye collection obtained per-bottle prices of $22,325 and $21,150, respectively, and one 6-bottle lot from the Smith collection obtained a per-bottle price of $19,917.  The 2006 auction average for 32 lots sold (inclusive of these sales) was $8,708 per bottle (very close to the 2007 price level).

In case you're wondering, for wines of vintages 1961 or later, the 1985 Romanee Conti is the most expensive wine ever sold at auction (see Top 20 most expensive 750ml bottles sold at auction from November 15, 2006).  In general, DRC's Romanee-Conti vineyard dominates the top average prices obtained at auction for red Burgundies (see Top 20 red Burgundies at auction in 2006) but the 1985's average price placed it at only #35 on this list (but with higher bottle counts sold).

If you own any DRC Romanee-Conti, please take steps to ensure it is stored in perfect conditions, both to maximize your future drinking pleasure and the option for you to sell it with a "provenance premium."