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Dec. 15, 2020, 9:39 a.m.
Business Models

“All Grapes Considered”: For media brands, wine clubs keep the revenue flowing

Some clubs have seen an increase in signups since the pandemic began in March.

When The Wall Street Journal launched its wine club in September 2008, just days after Lehman Brothers filed for bankruptcy, it was met with ribbing from competitors. “This might sound a bit odd,” Richard Pérez-Peña wrote in The New York Times, “to anyone who has heard conservative commentators lump wine-drinking with arugula-eating and other supposed signs of effete, snobbish, elitist liberalism.” By 2009, the recession had hit newspapers, advertising revenue was shrinking across the industry, and The New York Times started its own wine club. After all, people have long sought advice about wine. Why not get both the recommendations and the booze from a trusted news source?

The first major publication to use its prestige as a platform for vintners was the United Kingdom’s Sunday Times, which debuted its wine club in 1973. Laithwaites, an importer founded a few years prior by a husband-wife team, partnered with wine writer Hugh “Life’s been rosé since I put wine on the map” Johnson, who came on as president of the club. Almost 50 years later, the club is still in existence, Johnson is still president, and Laithwaites is still privately owned and responsible for the majority of mail-order wine in the region. (Its brand name is often licensed in the states, too.)

In the United States, clubs were slower to catch on — not for a lack of interest, but because of the complexity of operating a national operation that had to contend with fifty different liquor laws — “52, if you count D.C. and federal,” says Neil Rhodes, CFO of Direct Wines. Today, companies like his facilitate relationships between brands and retailers operating in a given state, allowing a brand to have a national presence without having to deal with local logistics. When The Wall Street Journal launched its club, it partnered with Direct Wines, a move that pushed the company into the forefront for then-novel publication wine clubs in this country. (Forbes and The Washington Post are among the many media brands that tried to convert readers into club subscribers over the past decade.)

When the NPR Wine Club launched in 2017, it, too, collaborated with Direct Wines, along with Wines That Rock, a private labeling company responsible for the Nina Totenblend Lodi Red and the All Grapes Considered Malbec. (It goes on: It’s Vin a Minute Sauvignon Blanc 2019…)

Jane Scott, head of consumer products at NPR, says that the club has seen a significant increase in signups since the pandemic began in March, a boon to the already strong, high-retention subscriber base. “In the alternative revenue streams that support NPR programming, our efforts are always to extend the reach of the brand, deepen the brand connection, and provide a financial surplus that can feed back into the mission,” she says.

Wine clubs are, of course, not the only alternative revenue stream for publishers — there’s affiliate revenue, software as a service, build-your-own cookbooks, podcasts, events, spinoffs, money management, the list goes on — but despite the wide range of potential revenue sources made possible by digital distribution, wine clubs have endured. Still, the opening fo these clubs initially created by a lack of general knowledge and access has been narrowing in recent years. Many of today’s avid wine consumers are less interested in being told what to drink or what’s the best and are more inclined to learn how to choose for themselves. Punny exclusive bottles may be less important than bona fide expertise. The idea of wine buying as a skill to be developed rather than a service to be off-loaded applies at a certain income level that matches up well with the model wine club subscriber.

That’s where Eater is trying to be different. Most wine clubs fall into white or red binary — it’s usually the first question in a sign-up form. But for consumers accustomed to orange wines, pét-nats, and rosé, there’s the Eater Wine Club. The value proposition here is slightly different from that of other offerings on the market in that the expertise comes from the editorial team. While publications like The New York Times take pains to ensure readers that their wine club is not at all affiliated with what’s printed in the paper, Eater takes the opposite approach. “It’s the only wine club out there that’s actually curated by the editorial team itself,” says Jill Dehnert, general manager at Eater. The wine club, which launched in October, evolved out of small, ticketed community events that were once held in the company’s test kitchen. Dehnert says that aligning the club with the local city network, what she calls the brand’s “differentiator,” is essential to making sure that the first consumer product with the Eater name “feels very Eater-y.”

City editors suggest wine clubs and restaurants that would be a good fit, and then Eater partners with sommeliers who personally curate the selections for the month. The somms also supply tasting notes that jibe with the Eater voice, (“a little bit wonky, a little heady, but also super-accessible and fun”), and write a newsletter with things like recipe pairings and favorite local spots. Eater partnered with Mysa, a wine ecommerce site that specializes in natural wine to ensure access to interesting, “restaurant-quality” bottles.

On top of the revenue stream, the club has the added benefit of making the Eater brand more valuable on both a national and local level. By giving a national profile to local restaurants, Eater supports small businesses. By giving a local spin to a national wine club, Eater reinforces its editorial mission and distinguishes itself as a tastemaker in a new way. The brand relies on the personality-driven appeal of, say, the NPR Wine Club, but it’s able to keep things interesting (and outwardly focused) with a rotating cast of curators.

Price varies widely across clubs. The New York Times Wine Club has two tiers, the “Sampler” ($90.00 for 6 bottles) and the “Reserve” ($210.00 for 6 bottles). That excludes shipping ($9.95) and tax. NPR offers 12 bottles for $149.99, plus tax and shipping. The Eater Wine Club ($110 per month for 4 bottles) seems high, but unlike most offerings, that number is all-inclusive. It comes out to about $27/bottle, ten dollars less than the total cost of a New York Times Reserve bottle. This month is the busy season for wine clubs, but in a year like no other, it seems unlikely that subscriptions will lapse once the new year rolls around.

Rachel del Valle is a writer living in New York. She has previously written for Nieman Lab about quiet, journalism for people who are home all the time, and news for kids who are home all the time.

Photo by Toa Heftiba on Unsplash.

POSTED     Dec. 15, 2020, 9:39 a.m.
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