Free DipWSET D2: Wine Business Flashcards (Deck 6)

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[h] DipWSET D2 SET 6

[i] DipWSET D2 – Wine Business Flashcards

SET 6

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[start]

[q unit=”2″ topic=”6″] SUPERMARKETS (characteristics)

[a] 1- IN USA / UK / FRANCE = LARGEST MARKET SHARE
2- ATTRACT CUSTOMERS WITH LITTLE WINE KNOWLEDGE
3- STOCK WINES FROM WELL KNOWN BRANDS / GRAPE VARIETIES / REGIONS
4- WINE STYLE THAT APPEAL TO A WIDE RANGE OF CUSTOMERS
5- CUSTOMERS CAN COMPARE PRICES

[q unit=”2″ topic=”6″] SUPERMARKETS EXCLUSIVE WINES

[a] 1- SUPERMARKETS LIKE TO STOCK WINES THAT ARE EXCLUSIVE TO THEM

2- CAN CREATE THEIR OWN BRANDS & NAMES

3- SOME HAVE THEIR OWN BRAND RANGE OF WINES (e.g. Sainsbury’s Taste)

[q unit=”2″ topic=”6″] WHY SUPERMARKETS LIKE EXCLUSIVE WINES

[a] 1- BECAUSE THEY CAN ATTRACT CUSTOMERS

2- BECAUSE THEY PROMOTE CUSTOMERS’ LOYALTY

3- USUALLY BETTER MARGINS

4- NO DIRECT PRICE COMPARISON

5- REDUCES DIRECT COMPETITION
(alternatives less clear)

[q unit=”2″ topic=”6″] PRIVATE WINE LABELS
(definition)

[a] WINES THAT ARE MADE BY PRODUCERS IN ORDER TO BE EXCLUSIVE TO DISTRIBUTORS & RETAILERS
(usually through different & exclusive brandings)

[q unit=”2″ topic=”6″] PRIVATE WINE LABELS
(main characteristics)

[a] 1- EXCLUSIVE TO THE SELLER

2- NEED TO BE AVAILABLE IN LARGE VOLUMES

3- ATTRACTIVE OPPORTUNITY TO SELL LARGE VOLUMES OF WINE

4- OFTER NO INTERMEDIARIES
(buy directly to producers)

5- USUALLY SHIPPED IN BULK
(to retain low price points & high margins)

6- SUPERMARKETS CAN EMPLOY WINEMARKERS
TO WORK CLOSELY WITH PRODUCERS FOR SUPERVISION
& QUALITY CONTROL

[q unit=”2″ topic=”6″] PRIVATE WINE LABELS
(producers risks)

[a] 1- SUPERMARKETS’ WINE BUYERS HAVE ENORMOUS NEGOTIATING POWER

2- PAY FEES FOR SUPERMARKETS TO STOCK THEIR WINES

3- PAY FOR ANY ADDITIONAL PROMOTION
– product placement
– ads on supermarkets’ magazines
– pay for supermarket price promotion

4- SUPERMARKETS IMPOSE STRICT CONDITIONS
– quality control
– time & manner of delivery
– packaging
-labelling

5- WINES MAY BE DELISTED IF DO NOT ACHIEVE EXPECTED SALES
(volume or margin)

[q unit=”2″ topic=”6″] DEEP DISCOUNTERS
(9 main characteristics)

[a] 1- OFFER PERMANENTLY LOW PRICES

2- KEEP THEIR COSTS DOWN

3- LOWER MARGIN THAN SUPERMARKETS
(rely on volume)

4- SHOPS ARE BASIC

5- LIMITED PRODUCT RANGE
(cheaper to maintain)

6- WINES, OFTEN PRIVATE LABELS

7- MAJOR BRANDS ARE TOO EXPENSIVE

8- BUY DIRECTLY FROM PRODUCERS
(no intermediaries)

9- DON’T CHARGE SUPPLIERS
FOR STOCKING THEIR WINES

[q unit=”2″ topic=”6″] CONVENIENCE RETAILERS

[a] 1- CLOSER TO WHERE PEOPLE LIVE

2- OPEN FOR LONGER

3- SMALLER RANGE THAN SUPERMARKETS

4- DOMINATED BY MAJOR BRANDS

5- SOME HAVE THEIR OWN BRANDS
(exclusive)

6- HIGHER PRICES THAN SUPERMARKETS
(people pay for convenience)

[q unit=”2″ topic=”6″] SPECIALIST WINE RETAILERS
(definition)

[a] SPECIALIZE IN WINE
(sometimes with spirits & beers)

SOME SPECIALIZE ON TYPES OF WINE
– organic
– biodynamic
– natural

[q unit=”2″ topic=”6″] 2 EXAMPLES OF SPECIALIST WINE RETAILERS WHO FOCUS ON 
PREMIUM & SUPER PREMIUM WINES

[a] 1- MILLESIMA (France, Bordeaux)

2- HEDONISM (UK)

PROCUREMENT = OFTEN ENGAGE IN “EN PRIMEUR” OFFERINGS

[q unit=”2″ topic=”6″] SPECIALIST WINE RETAILERS
(2 main characteristics)

[a] 1- LOWER PURCHASING POWER THAN LARGE RETAILERS

2- FOCUS ON WINES FROM 
– smaller producers
– lesser known wine region
– lesser known grape varieties

[q unit=”2″ topic=”6″] SPECIALIST WINE RETAILERS
(interests for producers)

[a] 1- HIGHER AVERAGE RETAIL PRICES

2- CONSUMERS WILLING TO SPEND MORE (per bottle)
(because attract high involement customers)

3- BETTER MARGIN FOR PRODUCERS

4- BROADER RANGE OF WINES

5- MORE PERSONAL ADVICE

6- KNOWLEDGEABLE & WELL-TRAINED STAFF
(can hand-sell wines)

7- BUILD RELATIONSHIP WITH CUSTOMERS

8- CAN HOLD SPECIAL EVENTS
– tastings
– wine education classes

[q unit=”2″ topic=”6″] HYBRIDS
(definition)

[a] SPECIALIST WINE RETAILERS WHO ALSO HAVE A BAR AREA
– sell foods
– sell tapas, dishes, cheese…

OFFER CHANGING SELECTION OF WINE-BY-THE-GLASS
– showcase new wines
– wines from lesser known regions/grapes

[q unit=”2″ topic=”6″] HYBRIDS
(downsides)

[a] 1- STAY OPEN LATER

2- NEED ADDITIONAL STAFF

3- ADDITIONAL BUREAUCRACY ON OPENING PERMISES

[q unit=”2″ topic=”6″] ONLINE RETAILING
(4 main characteristics)

[a] 1- MANY RETAILERS OFFER ONLINE RETAILING IN PARALLEL
WITH SALES THROUGH SHOPS

2- INCREASING NUMBER OF ONLINE ONLY RETAILERS

3- ONLINE WINE CLUBS SET BY NEWSPAPERS
– New York Times Wine Club
– Sunday Times Wine Club

4- SOME GENERALIST ONLINE ONLY RETAILERS ALSO SELL WINES
(example: Amazon)

[q unit=”2″ topic=”6″] ADVANTAGES OF ONLINE RETAILING

[a] 1- NO NEED FOR EXPENSIVE RETAIL SHOPS

2- WAREHOUSE LOCATED IN CHEAPER AREAS

3- CAN STOCK LARGER & MORE VARIED RANGES OF PRODUCTS

4- LARGER CONSUMER BASE
(not limited to locals)

[q unit=”2″ topic=”6″] DISADVANTAGES OF ONLINE RETAILING

[a] 1- STILL NEED STAFF TO DEAL WITH CUSTOMERS’ QUERIES,
ORDERS, DISPATCHING…

2- SOME OFFER CUSTOMER ADVISORS (costs)

3- DELIVERY IS EXPENSIVE

4- RETAIN THE RISK OF LOSS, SPOILAGE, DAMAGE

5- CONSUMERS EXPECT QUICK DELIVERY

6- ENSURE SECURE, USER-FRIENDLY, RELIABLE WEBSITE

7- CUSTOMERS QUICKLY OFFSET BY SLOW
& NON-FRIENDLY WEBSITES

8- WEBSITE CONVEYS BRAND IMAGE

9- NEED ONGOING TECHNICAL SUPPORT

10- NEED  WELL-PRESENTED, HELPFUL & DETAILED CONTENT

11- CUSTOMERS CAN LEAVE OWN REVIEWS & COMMENTS
(need moderation)

12- UP-TO-DATE CONTENT & STOCKS

[q unit=”2″ topic=”6″] ONLINE RETAILERS
(additional services to offer)

[a] 1- CLICK & COLLECT OPTIONS

2- MOBILE APPS
-general
-specialized

MOBILE APPS, MUST BE QUICK, EASY TO USE,
PROVIDE HIGH LEVEL OF SERVICES

[q unit=”2″ topic=”6″] GLOBAL TRAVEL RETAIL
(possible locations)

[a] AIRPORTS
SEAPORTS
INTERNATIONAL RAILWAY STATIONS
ONBOARD SHIPS

[q unit=”2″ topic=”6″] GLOBAL TRAVEL RETAIL
(characteristics)

[a] 1- HISTORICALLY KNOWN AS DUTY-FREE
(customers were looking for lower prices)

2- WITH FREE TRADE ZONES (such as the E.U.)
– prices less important
– look for high quality & high priced goods
that cannot be found at home

[q unit=”2″ topic=”6″] DISADVANTAGE OF GLOBAL TRAVEL RETAIL

[a] SELLING THROUGH GLOBAL TRAVEL RETAIL IS EXPENSIVE
– cost of retail spaces
– % of costs charged to suppliers

= LOWER MARGINS

[q unit=”2″ topic=”6″] WINE INVESTMENT COMPANIES
(definition)

[a] SPECIALIZE IN SOURCING & SELLING WINES FOR INVESTMENT

[q unit=”2″ topic=”6″] INVESTMENT GRADE WINES

[a] – THE MORE SOUGHT AFTER
& EXPENSIVE WINES IN THE WORLD

– RARITY VALUE

[q unit=”2″ topic=”6″] WINE INVESTMENT COMPANIES
(procurement process)

[a] USUALLY SMALL YEARLY ALLOCATION OF RARE WINES THROUGH:
– producers (direct)
– merchants (indirect)

[q unit=”2″ topic=”6″] WINE INVESTMENT COMPANIES
(other activities)

[a] CAN ACT AS A BROKER

(CUSTOMERS TELL THEM WHAT WINE THEY ARE LOOKING FOR AND THEY PUT THEM IN TOUCH WITH SELLERS + CHARGE FEES WHEN DEAL IS DONE)

[q unit=”2″ topic=”6″] WINE INVESTMENT
(historic perspective)

[a] HAS BEEN SAFER HISTORICALLY THAN INVESTMENT IN STOCKS
& SHARES IN TIMES OF FINANCIAL TROUBLES

[q unit=”2″ topic=”6″] RISK OF WINE INVESTMENT

[a] EVEN THE MOST PRESTIGIOUS WINES’ PRICES CAN FALL

[q unit=”2″ topic=”6″] MAIN WINES ON SECONDARY MARKET
(wine investment)

[a] BORDEAUX
BURGUNDY
CHAMPAGNE
PIEMONTE
TUSCANY
CALIFORNIA

+2 PRODUCERS IN AUSTRALIA (Penfold’s Grange, Hill of Grace)

[q unit=”2″ topic=”6″] HOW INVESTORS BUY WINES FOR WINE INVESTMENTS

[a] 1- EN PRIMEUR
– from producers
– through retailers
– on release

2- THROUGH A BROKER
– e.g. Cult Wines (uk)

3- ON SECONDARY MARKETS
– wine exchanges

4- THROUGH MANAGED WINE PORTFOLIOS

5- THROUGH WINE INVESTMENT FUNDS
– Sommelier Capital Investors

[q unit=”2″ topic=”6″] MOST IMPORTANT WINE EXCHANGE IN THE WORLD

[a] LIV-EX
(London)

[q unit=”2″ topic=”6″] MAIN WINE INVESTMENT PLACES

[a] 1- LONDON 
(traditional wine investment hub)

2- HONG-KONG
(government abolished excise duty to become 
wine trading hub of eastern asia)

[q unit=”2″ topic=”6″] AUCTION HOUSES
(main companies)

[a] SOTHEBY’S & CHRISTIES SPECIALIZE IN SELLING
HIGH-PRICED INVESTMENT GRADE WINES 

[q unit=”2″ topic=”6″] RISK OF AUCTION HOUSES

[a] 1- RISK OF SPOILAGE

2- STORAGE CONDITIONS

3- FRAUDS

[q unit=”2″ topic=”6″] THE 2 MOST FAMOUS WINE AUCTION FRAUDSTERS

[a] 1- Hardy RODENSTOCK
(selling Thomas Jefferson wine collection)

2- Rudy KURNIAWAN
(caught selling Burgundy Domaine Ponsot
vintages that never existed)

[q unit=”2″ topic=”6″] SOLUTION TO WINE FRAUD

[a] SOPHISTICATED ANTI-COUNTERFEITING TECHNIQUES

[q unit=”2″ topic=”6″] KEY SUB-SECTORS OF THE HOSPITALITY SECTOR

[a] BARS & RESTAURANTS

[q unit=”2″ topic=”6″] AVERAGE PRICE OF A BOTTLE OF WINE SOLD IN THE
HOSPITALITY SECTOR

[a] CONSIDERABLY HIGHER THAN IN RETAIL

[q unit=”2″ topic=”6″] SPECIALIST WINE BARS
(main characteristics)

[a] 1- SPECIALIZE IN SELLING WINE

2- KNOWLEDGEABLE & WELL TRAINED STAFF

3- LESS KNOWN WINE REGIONS

4- LESS KNOWN GRAPE VARIETIES

5- HIGH INVOLVEMENT CONSUMERS

6- PAY ABOVE AVERAGE FOR QUALITY

7- DO NOT OFFER BIG BRAND NAMES

8- CANNOT COMPETE ON PRICES WITH LARGER BAR CHAINS

[q unit=”2″ topic=”6″] LARGE CHAINS OF WINE BARS
(key feature)

[a] ENOUGH VOLUME TO HAVE THEIR OWN LABEL WINES

[q unit=”2″ topic=”6″] COMPANY SPECIALIZED IN WINE BARS
IN AIRPORT LOUNGES

[a] VINO-VOLO
(USA)

[q unit=”2″ topic=”6″] GENERAL BARS
(main characteristics)

[a] 1- LESS WINE FOCUS

2- WINE IS JUST ONE OF THE DRINKS ON OFFER

3- WINES OFFERED
– well known producers/brands
– well known grape varieties
-well known grape varieties

4- MAINLY INEXPENSIVE TO MID-PRICED WINES

5- WINES THAT APPEAL TO WIDE RANGE OF PEOPLE

6- WINES DRINKABLE WITH or WITHOUT FOODS

7- SOME BARS HAVE SPECIFIC THEMES

[q unit=”2″ topic=”6″] BAR PRICES MARK-UP

[a] 1- PRICES ARE HIGHER THAN IN SHOPS

2- TO AVOID PRICE COMPARISONS SOME PRODUCERS
MAKE WINES ONLY SOLD TO THE HOSPITALITY SECTOR

[q unit=”2″ topic=”6″] THE 3 RESTAURANT CATEGORIES

[a] 1- NON DESTINATION RESTAURANTS

2- CASUAL RESTAURANTS

3- FINE DINING RESTAURANTS

[q unit=”2″ topic=”6″] NON-DESTINATION RESTAURANTS
(characteristics)

[a] 1- THE MEAL IS NOT THE MAIN FOCUS
OF THE LUNCHTIME / EVENING

2- WINES NEED TO APPEAL TO THE LARGER BASE POSSIBLE
– well known brands
– well known grape varieties
– well known regions

[q unit=”2″ topic=”6″] CASUAL DINING RESTAURANTS
(main characteristics)

[a] 1- FALL BETWEEN NON-DESTINATION & FINE DINING

2- FROM QUICK MEALS TO LONGER MEALS

3- MID-PRICED TO PREMIUM PRICED

4- WINES OFFERED
– a mix of well known & lesser known regions / grape varieties

[q unit=”2″ topic=”6″] FINE DINING
(main characteristics)

[a] 1- DESTINATION RESTAURANTS

2- MEAL = MAIN FOCUS OF VISIT

3- ONE OR MORE MICHELIN STAR HEAD CHEF

4- FOOD & WINE PAIRING PARTICULARLY IMPORTANT

5- WELL TRAINED & KNOWLEDGEABLE STAFF

6- WINES OFFERED
– super premium wines
– best vintages
– available in small quantities

[q unit=”2″ topic=”6″] FINE DINING STAFF

[a] 1- HEAD SOMMELIER
(prestigious position + expensive)

2- HIGHLY TRAINED & KNWOLEDGEABLE STAFF

[x] GOOD JOB!! [restart] Return to page view

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