Brands are delicate things, and easily damaged

The fine wine market is a strange place: the higher the price goes, the less it is about the wine in the bottle. At a certain point, wine becomes a luxury good designed to impress others, along with fancy watches, designer garments and jewellery. The brand is everything, and the holy grail are brands that become household names: Rolex, Mercedes-Benz, Tiffany’s, Dom Perignon, Penfolds Grange.

Grange is Penfolds’ great icon. Everybody has heard of Grange, even people who know nothing about wine, even people who don’t drink. Years ago UK wine expert Hugh Johnson called it the only true first growth in the southern hemisphere. Other wine writers agree: Grange is as good as it gets.

Grange is collected by wealthy wine buffs and by investors, it’s bought and sold at auctions at reliable prices. The brand is minted gold, and it took 6 decades of great marketing to build – Max Schubert, the visionary, the custodians who followed in his footsteps …

The first way to damage a great brand is greed. Last year, Robert Parker’s influential Wine Advocate magazine scored the 2008 Grange at 100 points (just prior to release). Penfolds’ response was to raise the price by $100 from $685 to $785. It was a really obvious grab for extra profits, probably driven by the needs of Penfolds’ owners Treasury Wine Estates. The old price was already higher than the auction price of most Granges made in the last 4 decades, which means even the old RRP was not sustainable.

The second way Penfolds damaged the Grange brand was by releasing a wine just now priced at $1800 a bottle. What that’s saying is: Grange is not our top wine. We make better, more exclusive wines than Grange. A really dumb marketing move. Penfolds has released special bins before at a slightly higher price: the 2004 Block 42 Cabernet Sauvignon and the 2004 Bin 60A Cabernet Shiraz, both priced at $580 a few years back. 3 years ago the 2008 Bin 620 Cabernet Shiraz followed with a record price tag of $1000.

With the price of Grange close to $800, and the two next wines in its icon collection priced at $350, it would make a lot more marketing sense to slot the special bins in between at $500 – $600. That would give the collectors interesting one-offs to buy, but leave Grange unchallenged as the star of the show.

The third way to damage a great brand is to release substandard product. The just released Grange 2009 is just that, scoring 93-94 points with reviewers. These are good scores, but a $785 wine has to be up there at 97-98 or it falls short. A much smarter marketing move would’ve been to offer no 2009 Grange at all, and say the material went into Penfolds other reds (they’re almost all blends).

Moves like that make brands stronger and more exclusive. They build prestige. A great marketing opportunity missed. Instead, Penfolds had to watch St Henri, the cheapest of its luxury range at $95 RRP, sell out in a few hours. St Henri won rave reviews and 100 point scores, and stole the show. That makes Penfolds look like it has no idea what it’s doing when it comes to marketing its wines.

A final inept move from a marketing team that has clearly run out of ideas was to launch an Imperial (8 bottles) of Penfolds’ special bin 170 in a fancy wooden box for $65,000. Do they actually understand what a rare thing they have in their icon Grange?

Kim

It sure is the fastest selling St Henri ever

As we reported last week, the humble St Henri 2010 stole the show at the Penfolds Icon and Luxury Release 2014. Punters were well prepared because the rave reviews had been published a couple of months earlier when Penfolds released the 2014 bin range. It therefore came as no surprise that they swooped like locusts on retailers’ stocks of St Henri on May 1. It was all gone by the afternoon.

Since then some retailers have managed to find more stock so, if you missed out in the first round, you can still get your hands on some of this wine here:

• Sixty Darling Street – $78 – 02 9818 3077
• Wineonline – $88            
• Winestar – $90
• Nicks / Vintage Direct – $90

For your convenience, we’ve listed the main reviews of the St Henri 2010 below.

Our take on the wine, after sharing a bottle among four of us, is this:

A profound red with loads of red fruit and spices. Everything from the nose to the palate to the finish is bursting with energy and promise, revealing more as you come back for another nose and another sip. Christmas pudding and Schwarzwaelder Kirschtorte, and dark chocolate with rum and raisins thrown in. A tour de force, held perfectly tight by fine acid and firm tannins. Great balance.

When I asked them for a score, my mates played safe with 93 – 94 points. Reg said he’d had better reds. I’m not a lover of big Shiraz from South Australia but I’ll give this 96+. It could be 10 -20 years before it gets to 97 or 98, but I think it’s more forward than St Henris of old. Calling it the best St Henri ever is meaningless, because the 2010 is a very different style from that of the sixties.

Andrew said he wouldn’t pay $80 for it, and I agree. $80 buys a lot of good wine as readers of this website know. Two bottles of Woodlands Margaret Cabernet, almost 3 of Xanadu Cabernet or Mountadam Chardonnay, 4 bottles of Frogmore Creek Riesling and almost 5 of Pepperjack Shiraz. Enough said, over to the experts:

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If you buy no other Penfolds this release, don’t miss St Henri. It’s as if the 2010 season was perfectly orchestrated for this large format, old oak style. A celebration of this great vintage, this is one of the finest under this label of the modern era, perhaps ever. The epitome of the St Henri style, effortless and elegant, with epic purity and definition, deep and full, yet in not way heavy or overbearing.

Wonderfully crunchy and impeccable blackberry, blueberry and plum fruit is accented with notes of liquorice and dark chocolate, presented in a framework of beautifully crafted, finely honed tannins and excellent acid profile. It has space and grace, while lacking nothing in presence and structure, propagating with line and length nothing short of breathtaking. Wow. The price hasn’t moved in three years, and long may it stay this way. 100% shiraz from the Barossa Valley, McLaren Vale, Coonawarra, Adelaide Hills, Wrattonbully and Clare Valley, matured for 12 months in old, large 1460L vats. Drink: 2020-2040. 97 points – Tyson Stelzer

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2010 St Henri is the big story of these 2014 reds. St Henri is the one Penfolds super premium we all should be following. This 2010 release is the best since the 2004. In short, it’s gorgeous. I’m tempted to use the words Beg, Borrow or Steal. Nose, palate, tannin, finish; all are in full, healthy voice. Licorice, leather, plum, clove. Fine-grained tannin. Juicy orange-peel notes. Well stored, under screwcap, it will live for just about ever. 96+ points. Campbell Mattinson, Winefront

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Very deep purple-black in color and showing an attractive nose of warm blackcurrants, blueberries and licorice with a complex undercurrent of mocha, cedar, menthol and grilled meat, the full-bodied 2010 St Henri Shiraz is relatively rich in the mouth, offering tons of fruit structured by firm, fine tannins and refreshing acid. It finishes with great persistence. Drink it 2015 to 2030+ – 97+ points, Lisa Perotti-Brown, Wine Advocate.

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‘For me, this is the finest young [red] I have ever tasted.  It is phenomenal in every way.  I cannot imagine how it could be bettered …  The clarity of message from start to finish is arresting … wistful spice and heavenly floral notes … majestic drive and intensity of fruit.  The tannins are awesome … Dense damson and blueberry notes cavort – the whole experience is almost transcendental. Epic and thrilling I couldn’t spit it out.  I couldn’t whiplash it out of my mouth even if I was crashed into at speed while waiting for a red light to change.  Weirdly it wasn’t swallowed either – it was subsumed into my soul.  20++ (100++).’ Matthew Jukes,

The finest vintage under this label since it was first released during the 1950s.The 2010 St Henri stands as the triumph of this year’s Penfolds luxury release. The wine is amazingly expressive with deep colour, superb fruit complexity, voluminous richness and supple textures.  Dark chocolate, dark cherry, blackberry, mocha, roasted chestnut aromas are followed by a richly concentrated palate full of dark chocolate, paneforte flavours, generous sweet fruit notes and ripe loose-knit chocolaty tannins. It finishes graphite firm, long, and minerally. A gorgeous wine with all the hallmarks of long term ageing potential. Rating: 100 Points; Andrew Caillard MW

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A multi-regional, 100% knockout SA shiraz that excites at every step, the aromas saturating the nose high and low with ripe, vibrant black fruits then carrying forward with wilder, redder fruits hitting top notes as well, the texture engaging and timelessly contemporary. Stunning wine that will delight for decades. 99/100 points. Tony Love

Kim

‘Opening the case is an occasion in itself’

Just when you’ve caught your breath after reading about the $1800 Bin 170 Kalimna Shiraz 2010, here’s the big one. I have no idea what it’s like being the custodian of Grange, and the chief winemaker at Penfolds. I only hope Treasury Wine Estates pay Peter Gago enough to reward him for the tireless spruiking he does, from Sydney to Shanghai, from London to New York and LA.

Here’s a quote from Decanter:  ‘Abundant supplies of wine from a 2010 vintage described as “legendary” by Penfolds’ chief winemaker Peter Gago has enabled the estate to release a rare batch of luxury wines to mark its 170th anniversary.’ Alas, it turns out that this A$ 65,000 bottle is nothing more than an Imperial of the same old Bin 170 Kalimna Shiraz Block 3C 2010.

LINLEY for Penfolds

Wait a minute, you say: an Imperial is 8 750ml bottles, so why don’t we buy 8 of those and save ourselves a cool $50,000? Not so fast! You’d miss out on the wonderful Linley case the Imperial comes in. Just seven Linley cases have been made to commemorate Penfold’s 170th anniversary.

’Opening the case is an occasion in itself,’ declares Penfolds’ press release. ‘It features a bespoke compass marked with intricate detail and precision engraving. To open each imperial case one must turn the precious jade inset dial to the longitude and latitude coordinates of Magill Estate (-34, 138), Penfolds’ spiritual home. Only then can the case be opened, to reveal the magnificent imperial bottle within.’

Other features of the case include a synthetic hygrometer combined with a bimetal thermometer to measure the perfect room climate, a barrel inspired interior and a bespoke wine pourer. You also get a detailed Penfolds marquetry inlay crest on the box exterior and a secret drawer built into the box which contains a stunning photographic journey of Kalimna Block 3C as well as a Certificate of Authenticity. Needless to say, LINLEY will customize the drawer lid of each box with the purchaser’s name and bottle number.

I only have one question: Why on earth is Penfolds offering punters an Imperial in a ghastly wooden box with some kitschy accoutrements, when it had the perfect 170^th birthday special 2 years ago?

More here: Penfolds launches $168,000 wine – Gago gone Gaga?

In 2012, Penfolds had released its 2004 Block 42 Kalimna Cabernet in a limited edition, hand-blown glass ampoule and a bespoke glass plumb-bob that suspends the ampoule within a wooden Jarrah cabinet. Only twelve ampoules will be made, individually numbered as you’d expect for such ‘a beautiful, thoughtful, unique objet d’art, designed to store wine in an ideal environment.’

The tantalising extra on that occasion was not a secret drawer, but the promise that a senior Penfolds winemaker would open the ampoule whenever and wherever the owner wanted – anywhere in the world. The ampoule would be ‘ceremoniously removed from its glass plumb-bob casing and opened using a specially designed, tungsten-tipped, sterling silver scribe-snap. The winemaker will then prepare the wine using a beautifully crafted sterling silver tastevin.’

What could’ve been more perfect for the occasion of Penfolds 170^th birthday?

Gago spins the bottle

At the launch event in London last week, Peter Gago told Decanter that ‘Linley for Penfolds’ was the fruit of an excellent 2010 vintage. ‘We were spoilt,’ he said. ‘We always tick the box for [flagship wine] Penfolds Grange first, and 2010 will be one of the best Granges ever made. But we had this pool of wine, and it was too good to be blended away. We were going to release it last year, but then someone said we should wait for the anniversary.’

The bin 170 forms part of the 2014 Penfolds Icon and Luxury collection, which also includes a Grange 2009 vintage that received a relatively lukewarm response from reviewers. ‘2009 Grange is in a hard place strategically,’ said Gago. ‘The 2008 vintage did so well and 2009 is wedged between the 2008 and legendary 2010.’ He says he’s expecting much greater excitement around the 2010. ‘When the 2010 is released [next year], I’m going on holiday,’ he told Decanter.  ‘It’s going to be crazy.’

I’m not sure how it can get much crazier, but we’ll see.

Kim

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Penfolds launches $1800 Bin 170 Kalimna Shiraz

‘For me, this is the finest young [red] I have ever tasted.  It is phenomenal in every way.  I cannot imagine how it could be bettered …  The clarity of message from start to finish is arresting … wistful spice and heavenly floral notes … majestic drive and intensity of fruit.  The tannins are awesome … Dense damson and blueberry notes cavort – the whole experience is almost transcendental. Epic and thrilling I couldn’t spit it out.  I couldn’t whiplash it out of my mouth even if I was crashed into at speed while waiting for a red light to change.  Weirdly it wasn’t swallowed either – it was subsumed into my soul.  20++ (100++).’

Matthew Jukes, writing about Penfolds St Henri 2010.

$80 St Henri steals the show

I wanted to start this post with a bang, and Matthew Jukes was kind enough to provide the superlatives, the explosives, the car crash and the transcendental experience. The real story is that good old St Henri has stolen the show. It gets raves and 100 points from most everyone, while the super special Bin 170 has to make do with 97 and 98 (even the ever-generous James Halliday won’t budge beyond that).

The annual Penfolds release of its top wines comprises 2 levels, Premiums and Icons. The Premiums were released on March 6, and the Icon & Luxury wines on May 1.We wrote about the Premiums here Penfolds Bin Reds Release 2014 – Quality Down, Prices Up, so now we can get stuck into the upper crust of the Penfolds pie. The Icons start at about $100 RRP:

• Reserve Bin A Chardonnay 2010 – $100
• Yattarna 2011 – $150
• St Henri 2010 – $95
• Magill Estate Shiraz 2011 – $130
• RWT Shiraz 2011 – $175
• Grange 2009 – $785

There was no Bin 707 or Bin 169 made in 2011

After pushing the prices for these wines up hard in the last few years, TWE has decided to leave them alone this year. That decision may reflect the difficult 2011 vintage, or it may signal that TWE has worked out that it can only push prices so far before buyers turn their backs on these icons in droves.  As we showed in Penfolds Grange – rich wine, poor investment, TWE has pushed the price of Grange so high that investors will never get their money back.

What could be more special than Grange?

To make up for the shortfall in additional profit this year, Penfolds has released a very special bin at the very special price of $1800: Bin 170 Kalimna Vineyard Block 3C Barossa Valley Shiraz 2010.The bin number is a reflection of Penfolds’ 170th birthday. We can only wonder if TWE will ever give Max Schubert credit for saving a company that was in dire straights.

Penfolds tends to release these special bins at a higher price than Grange, a serious marketing mistake that can only diminish the prestige of the brand’s biggest icon. Anyone with the faintest idea of marketing will tell you that you don’t de-throne an icon like Grange that has taken 50 years to perfect, unless you’re willing to devalue it.

Huon Hooke doesn’t see a problem with this in this Sydney Morning  Herald piece, writing that ‘Grange is no longer the greatest Penfolds wine, and hasn’t been for some years. It’s the sporadic ”Special Bin” red wines that lead the way today … the Special Bin reds are a cut above.’ He adds that ‘several Special Bin reds have been released this century at prices above Grange.’

The special bins HH talks about were the 2004 Block 42 Cabernet Sauvignon and the 2004 Bin 60A Cabernet Shiraz, both priced at $580 a few years back. They were a little dearer than Grange at the time. 3 years ago, Penfolds released the 2008 Bin 620 Cabernet Shiraz with a record price tag of $1000; now the company expects punters to cough up almost twice as much for this year’s special bin. Who are these punters? Chinese aspirants?

Worth $1800?

We wouldn’t invest in these special bins, and here’s why: you can buy the fabulous ‘cut above’ 2004 Bin 60A Cabernet Shiraz for $700 retail at Winestar, for $600 on eBay, and for less than $500 at auction. That’s despite the tiny quantity made: just 1,000 cases. Once again it turns out that Penfolds – or its greedy master TWE – has screwed the prices too high for the auction market to sustain.

The Bin 170 Kalimna Block 3C Shiraz 2010 is another low volume special: just 500 dozen of this wine have been made, and it says so on the special neck label. HH writes that this ‘places the wine squarely in the territory occupied by elite small chateau and first-growth Bordeaux, and leading domaine grand cru Burgundy. This is undoubtedly where Penfolds today sees its place in the global wine realm, and I would not argue with them.’

Huon might not but I would. TWE keeps doing stupid things and will eventually pay the price. As I wrote in Penfolds Bin Reds Release 2014 – Quality Down, Prices Up, TWE’s goal is optimising profits not wine quality, and the management team seems hell-bent on sacrificing the mighty brand at the altar of greed.

We’ll let Matthew Jukes have the last word on the Bin 170. He says: ‘If it didn’t feel so studied I would like it more.  As it is this is a very, very expensive bottle of inky black Shiraz with a special label.  It is impressive and provocative but it doesn’t move me like it should.  19++ (95 ++).’

Much smarter wines to buy with $1800 dollars

As we said at the beginning, St Henri 2010 is the star of this show, and comes with an almost modest price tag of $95. On May 1, it’s already being offered at $78 by Winelistaustralia while the Bin 170 is being offered at $300 off already.

That aside, if we had $1800 to spend on great wine but had to stay close to our self-imposed maximum of $25 a bottle, this is what we’d spend that kind of money on:

Happy drinking

Kim

Forget samples you can assess at your leisure                                

Gary Walsh from the Winefront recently made the point that Penfolds no longer sent him samples of these wines. Instead you could only taste them on Penfolds’ terms, either over a fancy dinner at Magill Estate, or by invitation at one of their big city release events. Wine writer Andrew Graham went to the one in Sydney, and then wrote about embargogate after he was told by Penfolds’ PR people to pull his tasting notes off his blog until February 28.

Andrew tells us that no one said anything about an embargo at the release event, which was for wine writers and journos. Perhaps Andrew didn’t quite see the big picture. The Manifesto reported that, on February 25 in far-away Hong Kong, Peter Gago and Steve Linert hosted the same event at the Mandarin Oriental in Hong Kong. This was a virtual event that went live across Hong Kong, Shanghai, Taipei, Singapore, and Khon Kaen, Thailand.

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When money trumps all else

We don’t go to wine industry events in order to safeguard our independence, so we didn’t get an invite the Penfolds launch. This isn’t really our territory anyway since TWE has priced even their humblest bin reds above our target range. The first hint we got that this was not Penfolds’ greatest moment was Tyson Stelzer’s sober report, which is much more subdued than his gushing PR piece from last year.

The bad news is that the cheaper 2011 Bin reds are a sorry lot that reflect an awful vintage plagued by too much rain and not enough sunshine. Other makers have turned out decent 2011 reds, but Penfolds has delivered a mixed bag of goods despite its ability to select fruit from all over SA. In fact, there was nothing to stop Penfolds from buying fruit from the Hunter or Margaret River (both enjoyed a perfect 2011 vintage).

In his Take on this release, Tyson scores most of the 2011 reds in the low nineties, while Campbell Mattinson at the Winefront explores the high eighties. At BWU$20, we don’t recommend wines that score 87-89 points unless they’re around $10. With the 2011 Penfolds bin reds, we’re talking $30 to $80.

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The gravy train rides again, with wine writers on board

I don’t go to lavish industry functions, free wine dinners and meet-the-maker PR tours through wineries and fine restaurants. I go to a few simple wine tastings, but mostly I buy my own samples for review. That way, I’m more than an arm’s length away from the people I write about and their products. Miles away, in fact, and I say exactly what I want to.

Here’s what can happen when a wine writer gets too close to a wine company: he begins to sound like its PR agency. Tyson Stelzer is a tireless wine enthusiast and ambassador, but his piece Penfolds Bin and Icon Release 2013 disturbs me deeply. Read on, and you’ll see why. I’ve quoted liberally from his post (in italics) to illustrate the point I’m making here.

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