Vinfolio.com

Last week, Vinfolio issued a press release announcing our new Personal cellar manager service which enables you to hire a one of our wine experts to manage your wine collection on a "fractional" basis (a fixed number of days per month).

Why we launched the service

This service is a logical extension of our inventorying services and VinCellar software to enable busy wine collectors get the most out of their collection.  Many people with larger wine collections don't have the time to manage them properly.  Your personal cellar manager is at your disposal to perform whatever wine-related task you desire, for example:

• Visiting your home anywhere in the country to reorganize your cellar
• Creating reports on your cellar holdings
  
• Generating recommendations on which wines to cull for sale or to buy from new releases
• Providing pairings and recommendations for entertaining

We're running an introductory special on pricing through March 31, 2008.  Check out the fee schedule and call to learn more.

P.S.    Image above is a Paul Wyatt-designed cellar.

The risk of shipping wine in warm weather just got eliminated with what may be a perfect wine shipper solution.  Here are my three tests for defining "perfect" for a wine shipper:

1. Does it keep wine at optimal temperatures during shipping (even for an extended period of time such as when shipping ground)?
2. Is it cost-effective?
3. Is it eco-friendly?
   

WineAssure from New Vine Logistics

The product which scores "yes" answers on all questions is called WineAssure, which was developed at the initiative of New Vine Logistics (NVL), the leading company in fulfillment of direct-to-consumer wine shipments.  I spoke to NVL's CEO today, Katie Hoertkorn, to ask her a few questions about the product which was announced in a press release last week.

How it works

1. Wine is packed in a regular wine shipper including pulp insert and box.
2. This regular shipper is then placed inside a larger box and is surrounded on all sides by frozen WineAssure packs and a layer of further insulation (see photo above).
   

The WineAssure web site states:

"WineAssure guarantees that the wine does not exceed 70 degrees Fahrenheit or fall below refrigeration level (35 degrees Fahrenheit) over a five day period, regardless of exterior temperatures." 

The chart below illustrates the relationship between external temperature and bottle temperature (note the initial decline in temperature is due to the frozen packs).  External temperatures vary because of the typical handling of a case of wine by common carriers as it is moved through their logistics system and different geographies.

NVL spent several years trying various solutions and this is the first to meet their design specification. This particular effort has been in the works for 9 months.  NVL's desire for a solution was stimulated by the growing volume of NVL's wine shipments for wineries that have to be put on weather hold in the summer months (36,756 orders in 2007 alone).  NVL will launch the use of the product (initially a 2-bottle shipper only) on March 1, 2008 and is introducing 4, 6, 12, and magnum-bottle packages within another few months.

Costs and the larger picture

The cost of WineAssure packs for a two-bottle box is currently $15.  To this, one must add the cost of the shipper with pulp insert.  However, pricing for 12-bottle packs is not expected to be significantly higher.  Moreover, prices are expected to come down as volume ramps. There's also the possibility of lower average costs because the WineAssure packs are reusable.  According to NVL's CEO, the WineAssure packs should last at least 5-6 shipments.  That's why NVL is offering to pay for the return shipping.

But evaluating WineAssure solely on the packaging costs would be a mistake.  Consider your savings by shipping ground versus overnight A.M. delivery for a case of wine from San Francisco to the Northeast.  The difference is almost $75 using our highly discounted Fedex rate schedule (although this spread would be marginally lower given the greater weight added by the WineAssure packs).  From the consumer point of view, you also protect the value of what may be an expensive wine purchase and obtain your purchase without delay.

Eco-Friendly

As the WineAssure site states:

"The packs contain a water and salt-based solution that is completely non-toxic, non-caustic, and degradable.  The insulation is mineral-based and breaks down to is original materials within hours of being composted or buried." 

It sure beats Styrofoam! 

Availability and implications for wine collectors

Initially, NVL is offering the WineAssure packaging only to its own winery customers.  No doubt it will help NVL gain market share in the winery fulfillment business.  But my selfish reason for being excited is that we've been exploring such a solution ourselves at Vinfolio for our retail wine shipments.  NVL's CEO indicated that making this packaging solution available to retailers was under discussion but their clear priority is ramping up their own use first.  I suspect many retailers will be interested but others may find it cumbersome to deal with freezing packs and the extra labor costs involved in packing shipments.

Still a skeptic?

As this has been a difficult problem to solve and has frustrated many wine collectors for years, many of you will want more proof in the form of additional test shipment data such as the chart above.  For example, what if the external temperature were at a sustained high level for 5 days?  I'm sure more such data will be made available as more of NVL's customers evaluate using WineAssure.

Bottom line:  WineAssure may be the Holy Grail of wine shipper solutions for wine collectors.  Kudos to New Vine Logistics for pioneering this solution.

We've all noticed.  The prices of top wines have been going through the roof.  The most recent issue of The World of Fine Wine, #18, includes an excellent article titled The Changing Nature of Wine Collecting by Claude Kolm which assembles the trends which have led to the current situation.

Among his observations as driving factors are: 

• Globalization of demand and the advent of the Internet for wine marketing
• "Winner take all" economies leading to large wealth accumulation
• The emergence of wine as a status symbol or luxury good
• Wine as an asset class for investment purposes
  
• The very wealthy seeking the scarcest wines to obtain a degree of exclusivity or "trophies"

Unfortunately, he concludes that current trends will continue for top wines and that prices may stay out of the reach of ordinary wine lovers.  I agree with him.  See my post from September titled Why fine wine prices will keep rising.

What can you do?

Diversify.  Have the confidence in your own palate to try wine from new producers and "less famous" regions.  Ask your wine retailer or wine friends for recommendations.  Part of the fun of wine collecting is discovering new wines whose quality has yet to be recognized by the world.  Lead the way -- don't follow.

P.S.    Thank you to Sara at The World of Fine Wine for posting the article on their site for free download so I could link to it in this post.   Also, see my prior post titled The magazine for wine collectors in case you need any further persuasion to subscribe.  Special deal: The editors at The World of Fine Wine were so "chuffed" (as they say in England) at my mention of their magazine that they are offering a 15% discount on their subscription price to the readers of this blog.  Just follow this link.

1. Determine target cellar size - How much do you consume annually?  How much do you entertain? Are you going to buy for investment purposes? What wines do your drink and how long would you expect to hold each category before drinking them?  Consider your budget constraints and even your current age.
2. Plan storage requirements - Whether you're installing a home cellar, cave, standalone wine refrigeration units, or expect to store your wine at a professional storage facility, figure it out in advance.  There's no point creating a wine collection if you're not going to store it properly.  And don't forget to insure your wine; read Wine insurance 101.
3. Define your depth vs. diversity preference - How many bottles of a collectible wine should you buy if you are taking the long term view?  For guidance in how to think about this topic, read my prior post, Collecting goals: Depth vs. diversity.
4. Define wine buying criteria - Keep in mind that not all wine improves with age.  Focus on quality producers in good vintages.  Set goals in the following areas:
• By region, wine category, varietal, color, wine type, quality level, score
  
• By likely aging period (or remaining period for mature vintages)
• Timing of when you would like to start consumption
• Cost - min and max per 750ml?  What's your comfort zone?
• Bottle size?  Are you interested in smaller and larger format bottles?
• Favorite years to target (birth years, anniversaries, etc.)?
5. Develop a few strong retailer relationships - Focusing your purchases builds your personal clout for obtaining allocated wines and better service.  Good retailers should also provide advice and recommendations.  See Buying smartly from wine retailers and Criteria for selecting a good wine retailer. You might also read Buying wine on sale: when it's a deal and when it's not.
6. Taste before you buy - You may not like all of the professional critics' high scoring wines.  Read How to use wine ratings successfully. Trust your own palate.  Be willing to experiment with wine from other regions of the world for more affordable, but still amazing taste experiences.  If you're buying futures and pre-arrivals, you may have no tasting option but read Why buying pre-arrival wine makes sense.
7. Pace your purchases - Your taste preferences will almost certainly change over time.  Don't try to fill your cellar in six months.  Ideally, you would buy new releases annually and lay them down.  While most people will want to "backfill" their cellar to some degree with mature wine or prior releases, buying too quickly may increase your risk of being overcharged or buying poor condition wine (or even fakes).
8. Pay for provenance - If you're buying older vintages, be wary of "deals" which may reflect the fact that the wine is damaged or worthless based on poor storage or handling in its past.  There's nothing worse than storing a wine for 10 years only to open it and discover it was "cooked" the day you bought it.  See The wine authenticity premium.
9. Perform an annual evaluation - Measure your progress and revisit your goals at least annually.  Use it as an opportunity to consider wines to sell that no longer fit your preferred taste profile.  Monitor wines whose recommended drink dates are getting too old to ensure you drink or sell them before it's too late.
10. Sell wines regularly - Most wine collectors start out thinking they'll never sell anything they've bought.  However, as your tasting experience grows, your preferences evolve and some wines will no longer appeal.  Selling helps maintain your cellar's focus and also helps you finance the purchase of more wine.  See Common reasons to sell wine.

P.S.   Photo courtesy of Artistic wine Cellars in San Rafael, CA.

If you're a wine collector, have you ever given any thought to the number of bottles you "need" to be satisfied with your cellar?  Many wine collectors that I meet buy wine without really planning their purchases or balancing them against what they already own.  As a bit of an informal survey, I'd be interested in how large a cellar (measured in bottles) is enough for you and what factors you considered in reaching your answer. Please post a comment.

My own answer 

I downsized my own cellar in the past few years from 7,000+ bottles to 2,500 bottles.  Based on my consumption patterns and average holding periods for various categories of wine, it provides me with a diverse range of options for my needs.  My main reason to consider increasing it would be if I stepped up my personal wine investing activity or started adding more to the "sub-collections" of my three young children to give them a head start on their own cellars.

P.S.    This post was inspired by "A Rich Person's Definition of Rich" in Robert Frank's excellent blog, The Wealth Report, at the Wall Street Journal.  The story discusses the survey results where affluent households were asked how much it takes to be rich.

Also see related prior posts from The Wine Collector:

• Wine cellar "house cleaning"
• Collecting goals: Depth vs. diversity

Tomorrow night, Vinfolio and one or two of our customers will be profiled on the next edition of CNBC's High Net Worth Show.  Check it out or set you DVR to record it.  Here are the showtimes (all EST) and a quick description of the show's contents from the CNBC website.

About the Show

"Hosted by Tyler Mathisen, "High Net Worth" provides avenues for viewers to extend their wealth and get the most out of the assets they have. Simply, there is no other program like this on television. This is a program that speaks to the ultra-affluent. Mathisen and his guests celebrate the very best life has to offer, from exclusive golf resorts and elite boutique hotels to incredible real estate and choice art. Mathisen reports the very latest news on investing trends and opportunities as well as news on taxes, trusts and estates."

Alder Yarrow of the #1 wine blog, Vinography, seems to have kicked off a firestorm with his post of today entitled Wine.com Gives Retailers (and Consumers) the Finger.  This was then picked up on the equally popular Mark Squires Bulletin Board on eRobertParker.com in a post titled Shipping-Related Outrage: Wine.com Goes Ballistic.  At the time of this post, there are over 100 comments between the two threads.  What's going on?

Direct shipping laws are the real problem -- Again!

Once again the central issue revolves around this country's perverted direct shipping laws for wine.  The outrage being expressed stems from the tactics Wine.com employed in its attempt to create "a level playing field for all wine sellers" (in itself, a laudable goal).  However, those tactics were not aimed at changing the laws directly, but instead at encouraging regulators to more rigorously enforce those perverted laws.  In a comment posted to the Vinography thread, Wine.com's CEO states "if we can use our legal standing in a state to get their attention to the issue, maybe we can bring about changes [re: shipping laws] that will benefit the online wine business."  Maybe.  But based on the wine-consuming public's comments on the posts noted above, they seem to disagree vociferously.

What will it take to change wine shipping laws?

The wine retailing community finally started getting organized in late 2005 when it became clearer that the Granholm Supreme Court decision was not going to translate into equal treatment for all wine sellers.  This is when the Specialty Wine Retailers Association (SWRA) was born.

Retailers' self interest ensures they are making an effort with serious time and money to pursue litigation to remedy the current discriminatory situation in most states.

As Tom Wark, Executive Director of the SWRA, points out in his comment (#75) in the Squires thread, the other largely-missing-but-necessary ingredient for success in this effort is consumer involvement.

What sort of consumer involvement is needed?

• Speak up to your state legislators.  If enough people become active, they will listen as you keep them in office.
• Donate directly to the SWRA.  Litigation is expensive and it must be pursued on a state-by-state basis.  Each state's effort typically costs a minimum of six figures and can easily reach $500,000 or more in a protracted legal battle versus better funded wholesalers.  If only 100,000 wine consumers donated $25 each (the cost of one modestly priced bottle of wine), it would make a huge difference to SWRA's resources.  Donate now.
  
• Use your buying power to influence retailers to join the SWRA.  If you buy from out-of-state retailers, find out if they are SWRA members.  If not, buy elsewhere or encourage them to join.
• Stay informed on the issues.  Sign up for the free SWRA newsletter via email.  The SWRA is the only trade association seeking to protect your rights to buy wine from out-of-state retailers.  Keep in mind that the laws have evolved to treat wineries separately from retailers (in my opinion, because wineries were politically organized at a time when retailers were not so retailers were "thrown under the bus").

Bottom line: The wine retailing community needs to act together to right the wrong of the current state of wine shipping laws.  The SWRA is the vehicle to organize the fight and can provide the leadership and a meaningful component of the necessary resources to win.  But, you, the consumer, have a vital role to play.  Make yourself heard!