Dr. Liz Thach MW is the Distinguished Professor of Wine and Management at Sonoma State University where she teaches on both the undergraduate and Wine MBA programs. An award winning author, she has published over 150 articles and 8 wine books. Thach holds a PhD from Texas A&M and became a Master of Wine in 2011. She also works as a wine judge in various competitions, and has served on many non-profit wine boards. Peter Yeung is a leading wine-business consultant. He was previously VP of Strategy and Business Development at Kosta Browne Winery and Realm Cellars, both in California, where he developed and executed strategic marketing plans, and a senior consultant at McKinsey & Company. He holds an MSc from the London School of Economics and a BA in Economics from the UC, Berkeley.

“A thorough and enjoyable examination of the past, present and future of the global luxury wine business – a somewhat elusive, yet highly sought-after sector, particularly in Asia. With extensive focus on practical approaches and real-life case studies, it is a must-read for those focused on developing successful strategies to compete in the luxury wine space.” - Debra Meiburg MW, Founding Director, Meiburg Wine Media, Hong Kong

• Foreword by Clive Coates, MW ixAcknowledgements xiIntroduction 11. Luxury wine defined 3The luxury wine experience 4Luxury wine: luxuriously defined 5What luxury wine is not 7The vision behind luxury wine 8Vignette: the epitome of luxury wine – Dom Perignon 92. The history of luxury wine and keyplayers to day12The origin of the term “luxury” 13A brief history of luxury wine 13Luxury and the impact of economic growth 16Key players in luxury wine 17Vignette: Screaming Eagle transitions from cult to luxury wine 233. Luxury wine market size and pro fita bility26The luxury wine business model 27Luxury wine: global market size 27Luxury wine profitability in context 29Luxury wine market by region 30Profitability of luxury wine 37Benefits and challenges of the luxury wine business 43Vignette: delivering a vision, the global success of Opus One 464. Luxury wine consumers49Who is the luxury consumer? Motivations and perceptions 50Luxury consumer segmentation 52Global differences in luxury consumers 54Analyzing the luxury wine buyer 55Creation of a luxury wine consumer segmentation 57Vignette: Château Lafite Rothschild taps into consumerdesires 615. How luxury wine strategy works65Standing out from the crowd 66A pyramid approach to strategy 67Vision provides the “North Star” 68Strategy – the where and how to compete 69The 5P+S of luxury wine marketing 69Tactics and initiatives – implementation 70Luxury wine business models 72Measurement is the key to success 73Managing luxury wine and keeping the brand fresh 76Vignette: Guigal – building a luxury wine empire witha long-term view 766. Cra fting the luxury wine pro duct79Eight critical elements of the luxury wine product 80Sacred location for high quality 81Master vigneron and team 82Balance of nature and technology 83Quality craftsmanship to highlight the vintage 85Aging with grace 86Art of the blend 87Authentic luxury service 88Entry level for dreamers 89Vignette: crafting the “product” of Domaine de laRomanée-Conti 907. Setting luxury wine pricing94The importance of pricing luxury wine 95The luxury wine price continuum 96Determining pricing structure 100Price evolution: the implications of changing pricing onluxury wines 108Bordeaux en primeur: a market-based pricing system 113Second labels: a method for luxury wine price reductions 114Vignette: Harlan Estate – creating global scarcity to preservepricing power 1158. Telling the luxury wine story118Defining the “luxury wine brand story” 119Research on the power of brand storytelling 120Key components of the brand story – setting, characters,plot, moral 120A symbol arising from the story 126Crafting a distinctive luxury wine story or adding a newchapter 126Focus on craftsmanshipand authenticity 128Importance of the human element – building relationshipsthrough storytelling 129Communicating consistency, integrity, and humility 130Delivering the story 130Vignette: master storytelling at Tenuta Tignanello, Italy 1319. Luxury wine packaging134The importance of luxury packaging 135Luxury bottles – from historic to futuristic “smart bottles” 136The luxury closure – to cork or not? 138Consumer research on label design 139Luxury boxes and containers – environmentally friendly 140Tracking and shipping considerations 141Dos and don’ts of luxury wine packaging 141Vignette: crystal clear Cristal 14410. Managing scarcity and placement146The importance of managing scarcity and placement 147Overview of DTC and trade placement 147Direct to consumer sales channels 148Trade sales channels 161Vignette: Vega Sicilia – the original allocated offering 16611. Promoting luxury wine168Promoting luxury softly 169How luxury promotion is different from commercial winepromotion 170Luxury wine promotion toolkit 172Launching a new luxury wine product 203Vignette: the Berlin tasting – establishing Chilean wine inthe luxury marketplace 20512. Luxury wine management208It is always about the people 209Sales and marketing convergence 212Building long-term relationships with customers 213Continuous improvement 214Motivating luxury employees 216Succession planning 217Vignette: Artemis Domaines – driving beyond a first growth 21813. Managing the secon dary market andcounter feits221Secondary market overview 223The auction market 224Major auction houses 226Auction buyers 228Retailers in the secondary market 229Managing the secondary market 229Counterfeits 233Preventing counterfeits 234Vignette: Pétrus – the world’s most counterfeited wine 23514. Keeping the luxury brand fresh 238The importance of long-term vision 239Traditional ways of keeping the brand fresh 240Staying relevant in a changing world 241Penfolds: innovation and collaboration to keep the brandfresh 242Managing through an economic downturn 247Vignette: the continual evolution of Gaja 248References 251About the authors 269Index 271

Dr. Liz Thach MW is the Distinguished Professor of Wine and Management at Sonoma State University where she teaches on both the undergraduate and Wine MBA programs. An award winning author, she has published over 150 articles and 8 wine books. Thach holds a PhD from Texas A&M and became a Master of Wine in 2011. She also works as a wine judge in various competitions, and has served on many non-profit wine boards. Peter Yeung is a leading wine-business consultant. He was previously VP of Strategy and Business Development at Kosta Browne Winery and Realm Cellars, both in California, where he developed and executed strategic marketing plans, and a senior consultant at McKinsey & Company. He holds an MSc from the London School of Economics and a BA in Economics from the UC, Berkeley.

“A thorough and enjoyable examination of the past, present and future of the global luxury wine business – a somewhat elusive, yet highly sought-after sector, particularly in Asia. With extensive focus on practical approaches and real-life case studies, it is a must-read for those focused on developing successful strategies to compete in the luxury wine space.” - Debra Meiburg MW, Founding Director, Meiburg Wine Media, Hong Kong

• Foreword by Clive Coates, MW ixAcknowledgements xiIntroduction 11. Luxury wine defined 3The luxury wine experience 4Luxury wine: luxuriously defined 5What luxury wine is not 7The vision behind luxury wine 8Vignette: the epitome of luxury wine – Dom Perignon 92. The history of luxury wine and keyplayers to day12The origin of the term “luxury” 13A brief history of luxury wine 13Luxury and the impact of economic growth 16Key players in luxury wine 17Vignette: Screaming Eagle transitions from cult to luxury wine 233. Luxury wine market size and pro fita bility26The luxury wine business model 27Luxury wine: global market size 27Luxury wine profitability in context 29Luxury wine market by region 30Profitability of luxury wine 37Benefits and challenges of the luxury wine business 43Vignette: delivering a vision, the global success of Opus One 464. Luxury wine consumers49Who is the luxury consumer? Motivations and perceptions 50Luxury consumer segmentation 52Global differences in luxury consumers 54Analyzing the luxury wine buyer 55Creation of a luxury wine consumer segmentation 57Vignette: Château Lafite Rothschild taps into consumerdesires 615. How luxury wine strategy works65Standing out from the crowd 66A pyramid approach to strategy 67Vision provides the “North Star” 68Strategy – the where and how to compete 69The 5P+S of luxury wine marketing 69Tactics and initiatives – implementation 70Luxury wine business models 72Measurement is the key to success 73Managing luxury wine and keeping the brand fresh 76Vignette: Guigal – building a luxury wine empire witha long-term view 766. Cra fting the luxury wine pro duct79Eight critical elements of the luxury wine product 80Sacred location for high quality 81Master vigneron and team 82Balance of nature and technology 83Quality craftsmanship to highlight the vintage 85Aging with grace 86Art of the blend 87Authentic luxury service 88Entry level for dreamers 89Vignette: crafting the “product” of Domaine de laRomanée-Conti 907. Setting luxury wine pricing94The importance of pricing luxury wine 95The luxury wine price continuum 96Determining pricing structure 100Price evolution: the implications of changing pricing onluxury wines 108Bordeaux en primeur: a market-based pricing system 113Second labels: a method for luxury wine price reductions 114Vignette: Harlan Estate – creating global scarcity to preservepricing power 1158. Telling the luxury wine story118Defining the “luxury wine brand story” 119Research on the power of brand storytelling 120Key components of the brand story – setting, characters,plot, moral 120A symbol arising from the story 126Crafting a distinctive luxury wine story or adding a newchapter 126Focus on craftsmanshipand authenticity 128Importance of the human element – building relationshipsthrough storytelling 129Communicating consistency, integrity, and humility 130Delivering the story 130Vignette: master storytelling at Tenuta Tignanello, Italy 1319. Luxury wine packaging134The importance of luxury packaging 135Luxury bottles – from historic to futuristic “smart bottles” 136The luxury closure – to cork or not? 138Consumer research on label design 139Luxury boxes and containers – environmentally friendly 140Tracking and shipping considerations 141Dos and don’ts of luxury wine packaging 141Vignette: crystal clear Cristal 14410. Managing scarcity and placement146The importance of managing scarcity and placement 147Overview of DTC and trade placement 147Direct to consumer sales channels 148Trade sales channels 161Vignette: Vega Sicilia – the original allocated offering 16611. Promoting luxury wine168Promoting luxury softly 169How luxury promotion is different from commercial winepromotion 170Luxury wine promotion toolkit 172Launching a new luxury wine product 203Vignette: the Berlin tasting – establishing Chilean wine inthe luxury marketplace 20512. Luxury wine management208It is always about the people 209Sales and marketing convergence 212Building long-term relationships with customers 213Continuous improvement 214Motivating luxury employees 216Succession planning 217Vignette: Artemis Domaines – driving beyond a first growth 21813. Managing the secon dary market andcounter feits221Secondary market overview 223The auction market 224Major auction houses 226Auction buyers 228Retailers in the secondary market 229Managing the secondary market 229Counterfeits 233Preventing counterfeits 234Vignette: Pétrus – the world’s most counterfeited wine 23514. Keeping the luxury brand fresh 238The importance of long-term vision 239Traditional ways of keeping the brand fresh 240Staying relevant in a changing world 241Penfolds: innovation and collaboration to keep the brandfresh 242Managing through an economic downturn 247Vignette: the continual evolution of Gaja 248References 251About the authors 269Index 271

Dr. Liz Thach MW is the Distinguished Professor of Wine and Management at Sonoma State University where she teaches on both the undergraduate and Wine MBA programs. An award winning author, she has published over 150 articles and 8 wine books. Thach holds a PhD from Texas A&M and became a Master of Wine in 2011. She also works as a wine judge in various competitions, and has served on many non-profit wine boards. Peter Yeung is a leading wine-business consultant. He was previously VP of Strategy and Business Development at Kosta Browne Winery and Realm Cellars, both in California, where he developed and executed strategic marketing plans, and a senior consultant at McKinsey & Company. He holds an MSc from the London School of Economics and a BA in Economics from the UC, Berkeley.

“A thorough and enjoyable examination of the past, present and future of the global luxury wine business – a somewhat elusive, yet highly sought-after sector, particularly in Asia. With extensive focus on practical approaches and real-life case studies, it is a must-read for those focused on developing successful strategies to compete in the luxury wine space.” - Debra Meiburg MW, Founding Director, Meiburg Wine Media, Hong Kong

• Foreword by Clive Coates, MW ixAcknowledgements xiIntroduction 11. Luxury wine defined 3The luxury wine experience 4Luxury wine: luxuriously defined 5What luxury wine is not 7The vision behind luxury wine 8Vignette: the epitome of luxury wine – Dom Perignon 92. The history of luxury wine and keyplayers to day12The origin of the term “luxury” 13A brief history of luxury wine 13Luxury and the impact of economic growth 16Key players in luxury wine 17Vignette: Screaming Eagle transitions from cult to luxury wine 233. Luxury wine market size and pro fita bility26The luxury wine business model 27Luxury wine: global market size 27Luxury wine profitability in context 29Luxury wine market by region 30Profitability of luxury wine 37Benefits and challenges of the luxury wine business 43Vignette: delivering a vision, the global success of Opus One 464. Luxury wine consumers49Who is the luxury consumer? Motivations and perceptions 50Luxury consumer segmentation 52Global differences in luxury consumers 54Analyzing the luxury wine buyer 55Creation of a luxury wine consumer segmentation 57Vignette: Château Lafite Rothschild taps into consumerdesires 615. How luxury wine strategy works65Standing out from the crowd 66A pyramid approach to strategy 67Vision provides the “North Star” 68Strategy – the where and how to compete 69The 5P+S of luxury wine marketing 69Tactics and initiatives – implementation 70Luxury wine business models 72Measurement is the key to success 73Managing luxury wine and keeping the brand fresh 76Vignette: Guigal – building a luxury wine empire witha long-term view 766. Cra fting the luxury wine pro duct79Eight critical elements of the luxury wine product 80Sacred location for high quality 81Master vigneron and team 82Balance of nature and technology 83Quality craftsmanship to highlight the vintage 85Aging with grace 86Art of the blend 87Authentic luxury service 88Entry level for dreamers 89Vignette: crafting the “product” of Domaine de laRomanée-Conti 907. Setting luxury wine pricing94The importance of pricing luxury wine 95The luxury wine price continuum 96Determining pricing structure 100Price evolution: the implications of changing pricing onluxury wines 108Bordeaux en primeur: a market-based pricing system 113Second labels: a method for luxury wine price reductions 114Vignette: Harlan Estate – creating global scarcity to preservepricing power 1158. Telling the luxury wine story118Defining the “luxury wine brand story” 119Research on the power of brand storytelling 120Key components of the brand story – setting, characters,plot, moral 120A symbol arising from the story 126Crafting a distinctive luxury wine story or adding a newchapter 126Focus on craftsmanshipand authenticity 128Importance of the human element – building relationshipsthrough storytelling 129Communicating consistency, integrity, and humility 130Delivering the story 130Vignette: master storytelling at Tenuta Tignanello, Italy 1319. Luxury wine packaging134The importance of luxury packaging 135Luxury bottles – from historic to futuristic “smart bottles” 136The luxury closure – to cork or not? 138Consumer research on label design 139Luxury boxes and containers – environmentally friendly 140Tracking and shipping considerations 141Dos and don’ts of luxury wine packaging 141Vignette: crystal clear Cristal 14410. Managing scarcity and placement146The importance of managing scarcity and placement 147Overview of DTC and trade placement 147Direct to consumer sales channels 148Trade sales channels 161Vignette: Vega Sicilia – the original allocated offering 16611. Promoting luxury wine168Promoting luxury softly 169How luxury promotion is different from commercial winepromotion 170Luxury wine promotion toolkit 172Launching a new luxury wine product 203Vignette: the Berlin tasting – establishing Chilean wine inthe luxury marketplace 20512. Luxury wine management208It is always about the people 209Sales and marketing convergence 212Building long-term relationships with customers 213Continuous improvement 214Motivating luxury employees 216Succession planning 217Vignette: Artemis Domaines – driving beyond a first growth 21813. Managing the secon dary market andcounter feits221Secondary market overview 223The auction market 224Major auction houses 226Auction buyers 228Retailers in the secondary market 229Managing the secondary market 229Counterfeits 233Preventing counterfeits 234Vignette: Pétrus – the world’s most counterfeited wine 23514. Keeping the luxury brand fresh 238The importance of long-term vision 239Traditional ways of keeping the brand fresh 240Staying relevant in a changing world 241Penfolds: innovation and collaboration to keep the brandfresh 242Managing through an economic downturn 247Vignette: the continual evolution of Gaja 248References 251About the authors 269Index 271