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Todd Sheppard

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Can wine premiumization succeed at the bottom of the market? (Yes.)

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As we see in the graph above (courtesy of Silicon Valley Bank’s Rob McMillan) there can be premiumization opportunities even at the bottom of wine’s pricing segments.

In this case, Constellation took theĀ  opportunity to premiumize the low end with its Black Box wines as did Delicato with Bota Box.


However, without the granularity seen in the SVB graph above, this chart …


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… offers no clues for that price segment, just that it managed to eke out a small, 0.6% gain.


The same could be said of the graphic, below, which had even less granularity at the bottom.


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This one has more granularity at the top and could lead to the conclusion that there is no hope at the bottom, only at the top.


However, this is perfectly okay if you have no intention ever to use bags, boxes, cans or kegs for wine.


If that’s the case, then filtering all the data to include only glass bottles is a totally valid method of looking at the data.


There is no question that the lowest price segments are struggling, but that does not mean that there are no opportunities.


In “Premiumization Part 1: How to take an up-close look before you leap into the race” we looked at the concept of granularity and how the view looks very different from 10,000 feet versus standing on the ground. Understanding that is key to making good decisions from data.


What this means is that data isn’t just data. It’s vital to look at all of the ways the data has been collected, sliced, diced and presented.


While not everybody can be a data wonk, anyone can make sure to look beyond a single data source.


Compare observations and conclusions from different sources. Final answers will vary and can be different for very solid reasons. Ask questions if you don’t understand.