Wine News Playing Favorites with Wine Allocations

Playing Favorites with Wine Allocations

Getting your hands on in-demand wine can be tricky, unless you have a good relationship with a retailer.
© Te Mata | Getting your hands on in-demand wine can be tricky, unless you have a good relationship with a retailer.
Small-production, in-demand wines often end up on allocation, but what does that mean for consumers?
By Vicki Denig | Posted Thursday, 24-Sep-2020

Head to your local wine shop, scour the selection, and snag a few bottles that you love, right? Not always.

In the small yet absurd world of sought-after wine – which doesn't always mean expensive – the concept of allocations has taken the industry by storm, frustrating countless retailers, beverage directors, and consumers along the way. So what's a wine drinker to do when their bottle of choice becomes even too savvy for them?

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In New York, where the demand for "limited availability" wines (state law prohibits the use of the term allocation) is exceedingly high, which forces importers and distributors to ration their sales.

"We have to offer things to everyone accordingly, but it's not possible when we only receive 6-12 bottles of a certain wine and have 600 restaurants that all want it," says Lyle Railsback, national portfolio manager for Kermit Lynch. The solution? Distribute the wines as the growers would see fit.

Unsurprisingly, Burgundy was one of the first regions where the modern-day concept of allocations took off. According to Railsback, many Burgundian vignerons offer wines to markets based on history so, although the US market might have a higher demand for specific wines, vignerons will distribute a large chunk of their bottles to long-standing loyal clients elsewhere to keep things fair.

"Winemakers try to be respectful of relationships and history, therefore, we try to do the same," states Railsback, noting that Kermit Lynch never tells clients that they must buy something to get something else, although some other businesses may operate this way.

Small isn't always expensive

Elsewhere, Harmon Skurnik, president of Skurnik Wines, reveals that his company designates highly sought-after wines as limited, then comes up with a plan for fair distribution, which usually includes limiting the quantity that each existing account gets, offering items to clients based on sales history, establishing a historical record (for new products) to keep track, and allotting a small percent of sought-after wines for new customers, which therefore places the wines in new sets of hands each year.

Strategic selling or a bit of playing favorites? Regardless, the situation isn't new to most buyers.

"The con is always a lack of continuity," says JT Robertson, general manager at Le D?'s Wines in New York City. "Allocated or limited doesn't necessarily mean overtly expensive, so it is not always simple to explain to clients that their new favorite $30 wine is never coming back."

However, Robertson does see pros to the obvious cons. Designating a wine as limited creates a sense of urgency to purchase, as well as reinforces the fact that the wines on his shop's shelves are artisanal, not industrial, products.

"As wine people, we can blabber on about small farms and farmers, but it really hits home to the consumer when they experience how small-batch and rare so many of these bottles are." Most recently, Robertson has received limitations on many wines that he'd previously taken a big stance on, including (but not limited to) cuvées from Francois Chidaine, Denis Bachelet, Yann Bertrand, Patrick Biuze, Paolo Bea, Chateau des Tours and more.

Even well-known names like Raveneau had to earn their reputations the hard way.
© Domaine Raveneau | Even well-known names like Raveneau had to earn their reputations the hard way.

So how do wines and producers reach this holy grail of high demand and limited availability? Great quality, supply and demand, and unsurprisingly, the rise of social media.

"Wines are often naturally very scarce commodities, at least the small estate wines that we typically work with, and an item usually becomes 'limited' when demand greatly exceeds supply," says Skurnik. He notes that high demand for an item can be attributed to a long history of excellence at a winery, an exceedingly loyal customer base, or a recent high score from a prominent critic.

Railsback recalls Raveneau's early days in the US. "Cases would be stacked in our Berkeley store and Kermit would be begging customers to buy them," he says. "He had to do a lot of arm twisting and preaching of the gospel. Over time, the wines became known, and eventually prices went along with it."

Railsback recounts his own early days at the company – a time when Roulot wasn’t allocated at all. "I remember taking out sample bottles to restaurants and pouring the wines, practically begging people to buy them. They'd scratch their heads and say 'I don't know, these wine are kind of expensive'."

In modern times, the way in which buzz around cult wines is created has greatly shifted. "Things really changed with Instagram and this idea of an influencer," says Railsback, citing Raj Parr as a favorite heavily impactful voice. "He takes a picture, says something is great, and overnight, buyers will follow him." He additionally credits Pascaline Lepeltier's influence on buyers' love for Chenin, as well as Patrick Cappiello's strong advocacy for the rise in natural wine's popularity.

As Railsback points out, this can get tricky, as less-experienced buyers often take advice, follow the craze, and therefore assume they need to have these wines in their lineup – and by this point, the stuff is generally already gone. Robertson connects the boom in allocations directly back to restaurants/sommeliers.

"Retail isn't sexy, and there's a perception that by spreading a producer out to different restaurants, you somehow increase the visibility of the brand," he says, stating his firm disagreement with this practice as a long-term strategy. "'Hot' producers will come and go on-premise, whereas dedicated retailers build long-term attachments, but that's neither here nor there." His response? Simply be happy for the producer and go find something else to be excited about.

Keep the customer satisfied

Skurnik notes that, like Lynch, his company also has a long history of working with limited items. "Designating items as 'limited' can easily become a huge headache, as customers can become unhappy if they don't get as much of a high-demand wine as they would like," he says, while also realizing that having these items in his book adds prestige to their portfolio and enhances the company's reputation.

Skurnik affirms that his company will never shy away from working with great wines, even if it adds a few steps along the way. Moreover, he describes that it's much better to have wines that people want and not be able to sell as much as he'd like than to have vast quantities of wines that aren't so easy to move, calling the later a "much worse problem, even if you are freed from the headache of 'limiting distribution'".

"Wines are only so finite, and the amount of great buyers and restaurant accounts is bigger than ever. When everyone wants the same thing, you have to have a conversation," says Railsback, stating that the benefits of market pull inevitably creates an extra level of work. "Many new buyers have wish lists, and they think they simply deserve cases of these wines and that's not the case – even Kermit's store in Berkeley doesn't get the cases they want," says Railsback. His advice to new buyers? Be kind, be patient, and try to seek out the next big thing.

And when the wine just isn't there, Railsback uses his portfolio to back him up. "When clients want high-demand white Burgundy, I offer them Comtesse Bernard de Cherisey. It's still off the radar, and Kermit thinks the future of it will be as sought after and in-demand," he says, partially attributing the whole notion of wanting the big names to simple human nature.

"People want what they can't have," he says, "If someone comes to us and asks what we're excited about, and they start the conversation with that instead of 'here's a list of my demands', they're more likely to be someone I'm going to think of an when I have an extra bottle of Raveneau to sell."

Robertson echoes this point, though for consumers, rare and small-quantity isn't always the be all end all. "Just because something is limited or rare doesn't mean it will sell automatically. I can't tell you how many so-called boutique Napa Cabs I'm offered, which are both extremely limited and very expensive, which absolutely no one wants," he says. Robertson finds that his customers care more about scarcity on the collectible side, not so much the affordable end, and in terms of handling the situation, loyalty yet again remains the theme at hand.

Like Skurnik, Robertson offers sought-after and limited bottles to clients who have bought from the shop in the past, as well as to those who have supported the store in similar categories. "If you want something everyone in the world wants then I'll offer it to you at a fair price, but I'll hope that encourages you to support us beyond limited wines. I don't have a lot of time for cherry pickers," he says.

As with most things in life, the art of negotiation is key in the world of sought-after wines – as well as having a good palate and a pioneering attitude. "The best buyers trust their own palates, not what everyone else is buying," says Railsback. "All of the wine that Kermit imports is good. If they end up buying other stuff, they're going to be at the top of every allocation list."

Despite the headaches, Robertson sums it up best: when small, high-quality producers win, the world is a better place.

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