Trading Up or Down Depends on the Occasion

At Kendall-Jackson and at retail, customers tend to vary how much they’ll spend

All wine drinkers are introduced to wine in one manner or another—at home with family, out with friends, or solo. It begins somewhere. But that’s where any similarity ends. Wine drinkers come in all shapes and sizes, and whether they trade up over time to more expensive or more complex wines depends on many factors: how often they drink wine, their personal involvement with wine—is it just a beverage or is it something more?—their personal economics, and whether they include wine at celebrations.  

When it comes to trading up, generally, most people will see the value in basic luxuries: a better car, a better apartment or neighborhood, a better job, better clothes, shoes, and food. But wine is a completely different matter.  People need food, clothes, jobs, and housing, but wine is ancillary to most people—they have it when times are good or there’s a special occasion. But it’s not central to their lifestyles.

One of the biggest factors shaping our buying habits is how often we drink wine. Core drinkers, those who drink it more than once a week, spend the most money on wine and consume the largest quantities. Yet among this population, there are drinkers who come to trade up regularly and those who trade up only for special occasions. The reason we had the Beyond the Best category at Best Cellars, the retail shop where I once worked, was to capture those buyers who wanted to trade up—which they had limited chance to do since our shop topped out at $10 (later $15).  

Or consider a growing trend among British wine drinkers: They tend to trade up when going out but opt for less expensive alcohol at home. Even then, spending more on wine when dining out might also depend on how often you dine out; those who do it frequently might trade up only on a special occasion, while the occasional diner might see the entire night as special and worthy of a special bottle. When I was head sommelier at Tribeca Grill, for instance, we’d see that our regulars normally drank the same thing, or at least the same price level, most nights. But on a special night they would order a special bottle, and perhaps something different from the menu as well; they chose their moments to trade up. The tourists visiting Tribeca Grill as a special event might have a bottle of wine to share instead of ordering by the glass.  

What we might call enthusiasts are also more willing to trade up. They might view a more expensive bottle as a way of enriching their knowledge. Maybe they want a deeper understanding of terroir, a winemaker’s style, or a region’s history. These may be collectors, or they might belong to wine clubs. They want more. And there are endless possibilities for such enthusiasts to trade up, the only limit being imposed by the size of their wallets (and storage space). One new wine enthusiast recently told me that trading up from what she began drinking (an everyday sweet white) to what a friend recommended (a Sonoma County Chardonnay) was like getting front-row seats to a basketball game when you’re used to sitting high in the stands. You just can’t go back to where you were before!

Giving a gift of wine, or bringing a bottle to a dinner party, also provides an opportunity for trading up. Buying a gift follows much the same pattern as having a special occasion—since a gift itself is an occasion and therefore only a “better” bottle will do.  When working retail, I sometimes found that people would come back and buy the same bottle to try themselves.

Economics, of course, is crucial. When cash is in short supply, core drinkers might trade down, or drink wine less frequently, while occasional drinkers might stop drinking altogether. Even though you can buy wine for as little as $2 to $3 per bottle, it might still seem like a luxury when times are lean.

But as wine is becoming more central to Americans’ lives, and we see a rise in the number of core drinkers, we’re likely to see a rise in the number of drinkers trading up. The newer wines in our Kendall-Jackson portfolio, the Jackson Estate Appellation and Vineyard designate wines, were created so that consumers drinking Kendall-Jackson at home can trade up when they go out within the same brand they know and love. We realize that people want an experience when they go out, or when they visit a winery; we created that tier of wines for them. They are intended for higher-end by-the-glass selections or competitive spots on wine lists at restaurants—and they are of high quality, because today’s consumers are demanding high quality when they trade up. They will switch brands if they feel the wine isn’t good enough. Of course, this is not a new practice for producers; many capture the special-occasion drinkers and create a lower-end tier for them to enjoy frequently at home. So the opposite can occur as well.

Mollie Battenhouse, MW, is a wine professional and wannabe farmer living in Brooklyn, New York. She is the Eastern Division Education Director for Jackson Family Wines and is also an educator at the International Wine Center, a wine expert at WineRing, and an advanced sommelier with the Court of Master Sommeliers.