10-buck luck: Costco selling Rogue Red
Mark Wisnovsky regularly checks out Costco wine sections in his travels.
A few years go, he routinely found domestic and European wines for under $10 in the large warehouse stores. What the president of Valley View Winery didn't find was wine under $10 from Oregon.
It occurred to Wisnovsky that Valley View's long-standing Rogue Red blend could fill the void.
"I came back two years ago from one of our trips to Seattle," Wisnovsky said. "It just bugged me that there were pallets and pallets of $8.99 and $9.99, and none of it was from Oregon. There were 60 cases of each of these wines, and people would come by and grab two bottles, put them in the cart and walk on by. It hit me: 'Why can't it be our wine or an Oregon wine?'"
It was also a time when the nation was gripped by the Great Recession.
"It wasn't our first recession, and we saw it coming relatively early," Wisnovsky said. "Our wine club sign-ups were slowing down — or people were dropping off. When you're looking for ways to save money every month, one of the first things to reduce is going to a less-expensive wine and buying less wine."
Valley View still had grapes and a payroll. The family decided to drop its distributors and sell directly.
"We had salespeople handling virtually every wine sales account in Southern Oregon," Wisnovsky said. "But it's hard to sell to every small account in the state."
So, nearly five years ago, Valley View struck a deal with Costco, providing $10 red wine for its Oregon stores. The Ruch winery began stocking in-state Trader Joe's stores with Rogue Red two years ago.
"They both really look to buy direct and eliminate as many middle people as possible," Wisnovsky said. "We do sell to others besides those two, but they handle the vast amount."
As a result, Wisnovsky and his brother Mike spend a lot of weekends on Costco floors talking up their wine.
"We can't pour, but we can sign our bottles and talk about the wine," Mark Wisnovsky said.
Valley View has produced a red blend with seven varieties of local grapes since 1984. The winery bottled 2,500 cases in October, enough to normally last through six months, but by mid-December the product was sold out. This week, Valley View is bottling another 5,000 12-bottle cases with an eye on the Washington market, which opened late last year.
Rogue Red, Wisnovsky said, is designed backward from its usual wines.
"Normally, our winemaker John Guerrero makes wines and decides the quality level later on," Wisnovsky said. "But this wine is especially designed to sell for around $10 in Oregon. We want to make the best $10 red wine and be able to compete with everyone else's $10 wine from Washington and California."
Back in the 1980s, Rogue Red retailed for $3.99 or $4.99 a bottle. Inflation has doubled the price, but if it was sold through a distributor, the price would be close to $15, he said. Before the deal with Costco, Valley View was selling between 500 and 1,000 cases annually. This year, it anticipates selling between 4,000 and 6,000 cases.
Reach reporter Greg Stiles at 541-776-4463 or firstname.lastname@example.org. Follow him on Twitter @GregMTBusiness, friend him on Facebook and read his blog at www.mailtribune.com/EconomicEdge.