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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | AUGUST 8, 2000 TRENDS Carrying Hard-to-Find Wines from Napa to the Net Winetasting.com offers exclusive bottles from some of the valley's top vineyards
The 1997 Whitehall Lane merlot is almost impossible to find. You can't get it in stores or even at the winery's tasting room in St. Helena, Calif., anymore. A small number of bottles were produced, and those that remain are available only online from a new Internet wine-selling site called Winetasting.com, which is where I nabbed it for $24, plus shipping. If you're a wine connoisseur, this is a site worth checking out. It's a sort of virtual cooperative of small California vineyards whose wines you'd normally find only in expensive restaurants and a few high-end shops. Until now, the only other way to buy many of these wines was to travel to Napa Valley and buy them directly from a winery's tasting room. This generally involves paying high shipping and handling costs, or schlepping it home yourself. TONY SELECTION. Winetasting.com is up and running, but only in a test phase, with some 30 wineries participating. By the time it's officially launched in October, it expects to have 75 wineries selling and 100 by yearend. But it already has a tony selection from such well-regarded small wineries as Far Niente, J Wine Co., Folie a Deux, Stag's Leap, Saintsbury, and Chateau Montelena, as well as Whitehall Lane. Says Lesley Berglund, Winetasting.com's CEO, "Many of the wineries are posting their most exclusive vintages on the site. "We want it to be a place known for wines you can't get anywhere else." For example, Chateau Montelena, a family-owned winery that only produces 35,000 to 40,000 bottles a year, already has its entire "library" of older vintages up for sale. I found a 1994 Chateau Montelena Zinfandel at $30 per bottle -- rare enough that orders are limited to two bottles per customer. There are also four-bottle packages -- two whites and two reds -- to serve with the different courses of a special meal. "What we've really done is put our tasting room up online," says Greg Ralston, Chateau Montelena's managing director. "For the consumer this is a real boon. You simply can't get [some of these wines] anywhere else in the country." The big downside of Winetasting.com is that it only ships to the 19 states that allow interstate liquor deliveries. If you live in one of the other 31 states, stop reading now -- or call your elected representatives and demand that they loosen your state's archaic Prohibition-era laws. You can quickly find out if you can buy from Winetasting.com by going to the site and entering your state of residence. (You also have to be 21 or older to buy wine.) Even if you live in one of the 19 states to which Winetasting.com ships, it probably pays to shop around on other sites. Only about 25% of Winetasting.com's wines are offered there exclusively, so you may be able to find the other 75% -- or similar wines -- at higher-volume sites with lower shipping charges, such as Wine.com and evineyard.com. (They also ship to more states.) At Wine.com, I found a magnum of Chateau Montelena 1997 Chardonnay for $65, vs. $36 for a regular-size bottle of 1995 Montelena Chardonnay at Winetasting.com. I also found a 1987 Montelena Cabernet for $149.95 at Wine.com. TOP SITE? Still, Winetasting.com has the potential to be the premier site for serious wine drinkers. It's the brainchild of Berglund, a Harvard MBA from a family with deep roots in the Napa Valley wine industry. She is also CEO of Ambrosia, a high-end mail-order and online wine retailer (www.ambrosiawine.com) she helped found in 1991. Ambrosia will continue to operate its site and catalog, but it will become a unit of Winetasting.com, which will use Ambrosia's order-fulfillment system. The other main backer of Winetasting.com is legendary venture capitalist Bill Hambrecht, co-founder of the San Francisco investment banking firm Hambrecht & Quist, which he sold in 1998. Hambrecht is a wine lover who has invested in a number of wineries, as well as Winetasting.com. My guess is that many of the best small California wineries may end up selling online only via Winetasting.com. The big draw for the wineries is that they can control their product's pricing and marketing, because when you search for details about a wine at the site, you're actually entering the individual winery's site. "With Winetasting.com, we can control the promotion of our wines and develop a more intimate relationship with our customers," says Mike McLoughlin, Whitehall Lane Winery's general manager. That's important to McLoughlin, who was horrified earlier this year to find his wines featured in a special Valentine's Day promotion on Wine.com -- packaged with a pair of silk boxer shorts. "It was clever, but everybody was calling us up and laughing at us," McLoughlin recalls. "It's not the image we want to convey." Winetasting.com ought to be able to cut shipping and handling costs by selling in greater volume than any small winery could on its own. Chateau Montelena's Ralston notes that if you buy a case of his wine at the vineyard, the winery charges $51 to ship it via two-day Federal Express delivery. "That's our cost. We break even on the shipping," he says. By contrast, Winetasting.com, with its higher volumes, will charge $29 to ship a case. Whether the price of the wine itself will come down is unclear. In theory, it should, Hambrecht says, because retailers and wholesalers keep 35% to 40% of the price of a bottle of good wine. He won't say how much Winetasting.com takes, though he says it's far less. But then again, these are hard-to-get wines that appeal to wealthy wine snobs. "There's a funny dynamic in the wine business," Hambrecht notes. "The more expensive the wine, the less price pressure there is. The implication is always that the higher-priced wine is a better wine." ONLINE TASTINGS. If you're no great wine expert yourself, not to worry. As with other dot-com wine merchants, Winetasting.com has some nifty wine clubs that will send you a selection of wines on a regular basis. Another fun feature is online wine tastings. You're shipped, say, six bottles of wine chosen around a theme, such as Chardonnays grown in warm climates, vs. those grown in colder climates. You get bottle bags so you can do blind tastings, tasting sheets to record you impressions, and all the other accoutrements of a real wine tasting. You do the tasting at home, then share your impressions online. Berglund says Winetasting.com also will replace bad or broken bottles, no questions asked. A couple of general caveats about buying wine online, no matter which site you use: It's best to buy in larger quantities to lower the per-bottle shipping cost. It's also best to order a week or more in advance as shipments often take longer to arrive than advertised. I ordered two bottles of wine from Whitehall Lane on July 13 and paid $22 for next-day FedEx delivery. But there was a delay at the winery, and they weren't shipped until July 17 and didn't arrive until July 18. All else being equal, however, wait until fall to place any significant orders with Winetasting.com might not be a bad idea. By then, the site should be fully operational and free of such glitches as a search function that doesn't work. Many of Winetasting.com's offerings, however, are well worth the wait, and serious wine lovers are swirling their glasses in anticipation.  By Thane Peterson in Evanston, Ill. Edited by Beth Belton  | | |
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