Wine Clubs: Why Do Newspapers Want to be in the Wine Business?

I remember paging through the Wall Street Journal a couple of years ago and stumbling upon a full-page ad promoting their brand new wine club, called WSJwine. I was vexed because I sell wine for a living and I also subscribe to the Journal, and I thought to myself, “now I have to compete against THEM?!” Geez, that’s a funny way of thanking someone for their patronage. About a year later, the New York Times Wine Club was launched, and the Los Angeles Times Wine Club showed up for the party in 2010. Considering the state of their industry, shouldn’t newspaper publishers concentrate on making their core product more appealing, or are they so nervous about the future, that they have chosen to diversify into other businesses? Of course the demographics of wine consumption match up well with their readership, but that is also one of the the major reasons they are in trouble: their average reader is getting older and older. But instead of revamping their publications and completing the transition to the Internet to attract younger readers, some media companies have chosen to ride into the sunset with their aging supporters.

But why wine? Did they also consider cheese, caviar or chocolates? There are obviously some important synergies here that are driving the newspaper/wine club phenomena. Newspaper advertising revenue has declined for 15 consecutive quarters and publishers are desperate to generate new revenue streams. For the first time, online advertising surpassed print newspaper ads last year, $25.8 billion to $22.8 billion (eMarketer ). Circulation is actually up at the Wall Street Journal, but is down at both the New York Times and Los Angeles TImes (mediadecoder.blogs). Furthermore, newspaper readers tend be be older than the average media consumer and the average age is growing even higher. Wine drinkers also tend to be older than the average alcoholic drink consumer and voilà, we seem to have a nice match here. More and more young people are discovering the pleasures of wine, but that doesn’t necessarily help the newspapers, since those younger wine drinkers, in general, are not reading newspapers.

I’m sure the business plans that launched these operations are a little more detailed than my quick analysis, but I don’t think I’m too far off. Newspaper companies obviously have partners who are running these wine clubs, and the newspapers’ biggest contribution is the advertising, of which they have plenty of inventory. Global Wine Company runs the New York Times program, as well as clubs for Food and Wine Magazine and Williams-Sonoma. The LA Times club is run by Vinesse. There are plenty of clubs that are companies in and of themselves, and many wineries also operate their own clubs. The wine club business is quite a little industry in and of itself. They even have their own trade group called  the International Wine Club Association, and there is a website for reviews of wine clubs: wineclubreviews.net.

Of course, wine producers welcome wine clubs as additional distribution outlets for their products. Wine retailers are probably not as excited about the proliferation of wine clubs, although they have also jumped into the wine club business with their own versions. How about this curious relationship : Sherry-Lehmann Wine & Spirits, one of the top wine retailers in New York (and the country, for that matter) is a substantial, longtime advertiser in the New York Times, who thanked them for their years of patronage by starting a wine club! Sherry-Lehmann, in turn, recently launched their own club: Sherry-Lehmann/Kevin Zraly Wine Club! (I do not have firsthand knowledge of their relationship, but it seems logical that the Times initially gave Sherry-Lehmann the opportunity to run their wine club.)

If newspaper wine clubs help the wine industry grow and expose more people to the pleasures of wine, I’m all for it. At the same time, it would be nice to see newspapers strive to generate better products by concentrating on their core business—and the evolution of that business.

(Disclosure: I sell wine for a California distributor. The views expressed on FoodWineHotels.com are mine alone and do not necessarily reflect the views of my employer. I welcome your comments.)


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~ by Thomas on March 10, 2011.

2 Responses to “Wine Clubs: Why Do Newspapers Want to be in the Wine Business?”

  1. Thanks for the mention! Newspapers have a profit problem and selling wine club subscriptions to their loyal customer lets them expand their margins without taking on any additional overhead. Hotels, airlines, and alumni associations also partake in this particular revenue stream. The Sherry-Lehmann clubs look awesome.

  2. California wine clubs are perfect for both wine connoisseurs and novices. Membership to these clubs entitles you to a selection of dinner wines that fall under six specific classes.

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