Vetting the Wine Industry

Gary Vaynerchuck of Wine Library TV has no problem dishing out dirt on the wine industry. He tells Big Think the most overrated regions, the best wine marketers, and explains why Australian winemakers can’t blame Yellowtail for their troubles.
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TRANSCRIPT

Question: What are the most overrated winemakers and regions?

Gary Vaynerchuk: I think Napa Valley. You know, I hate being so anti-USA, right? I think Napa is massively overvalued. I think Priorat in Spain is over priced. The wines there tend to get into the $60 to $80 range. I think that there’s parts of Bordeaux that are overrated. I think the Left Bank overshadowing the Right Bank, meaning, PUAC and you know, the Medoc, those kind of wines – San Steff, those kind of wines tend to get more reputation than maybe a San de Milon and Pomerol. I think it’s a mistake. I think there’s a lot of places that get a – Barossa Valley, I mean, I like it, but it’s not insane. So, I think there’s a substantial – I should have started with Italy. I think Super Tuscans in Tuscany can get very overrated. I mean, so many of those wines start at $60-$70 a bottle and I think that’s insanity. So, I think there’s a lot. I think there’s a lot, especially when there are so many underrated places like the Provence, and Languedoc and McLaren Valley, or Clare Valley in Australia. I think it’s crazy. Okanogan and Kenda. Baja, California-Mexico. So, it’s interesting.

Question: What has been Yellowtail’s influence on Australian wine?

Gary Vaynerchuk: I think Yellowtail gets blamed for something that was happening also with Robert Parker and Jay Miller’s impact on Australia. Let me explain what I mean by that. Robert Parker is the gorilla in the room, very important wine critic, and he started rating a lot of Australian wines that were under $20; 92, 93, 94 points, the Marques Phillips stuff, Ball Buster from Tait, and those wines were getting big scores under 20 bucks. And so consumers started saying, “Well, am I going to spend $50 when I could spend $20.” And I think Yellow Tail came out at the same time, had this big marketing push and became this huge brand and created a scenario where people blamed Yellow Tail for everybody thinking Australia was a $10 price range category. So, all the premium Australian producers really got hurt in that period. But it was really because of the Parker scores and the economy was starting to soften, and Spain and Portugal were coming on strong with $8 wines. I think it was a perfect storm that Yellow Tail gets blamed for.

So, Yellow Tail has executed on something that’s always worked in the U.S., which is good marketing, and a little bit of sweetness. They have a little bit more sugar levels in those Aussie wines, and so people like that. And it’s easy to drink and kudos to them because they were very aggressively marketing and they really got a lot of support from some big retailers around the country like Sam’s and Total Wine. I thought they played that very smart and there was a lot of smartness to what Deutsch did there and I have a lot of respect for the way they built the brand. I think the goodness proves that wine can be cut – you know, you can still build big brands and leveraging marketing and pop culture.

I think the bad thing is, is that people fall in love with it and just drink that. I’m not as mad about – I don’t feel bad for the Australian business people, they’re the ones who relied on Parker and Spectator and never built a real business in the first place. So, I’m not so worried about them. I’m more worried about the consumer that drinks a magnum of Yellow Tail Shiraz every night and I want them to try different things.

Question: What wine-makers are doing the best at marketing?

Gary Vaynerchuk: Well, I think Tony Terlato did—[bringing] Santa Margarita into this country, that’s quite a feat. Kendall Jackson, Jess Jackson was one of the first pioneers of building a real big brand. What he did with KJ is monumental. But there’s not a lot of innovation on the retail side – on the producer side. Everybody ripped up their plants to plant Pinot Noir; it’s a lot of chasing, and not a lot of innovating. It’s kind of shocking. It’s probably why I was able to do so well in that world. Not because I was so good, but more because of lack of competition.

Recorded on:  September 15, 2009