Wine clubs offer convenience, value but may not be for everyone

By Leslie Gevirtz

NEW YORK (Reuters) - Wine clubs that advertise in the Sunday Times of London, The New York Times and other publications offer convenience and choice for consumers, especially those who are pressed for time or who live far from big cities.

But experts said the clubs may not be the right fit for savvy buyers who can shop for wines at stores with large selections and knowledgeable staff.

For newspapers and magazines, the clubs make "good sense," according to Mike Federle, chief operating officer of Forbes magazine, which started a wine club this summer.

"It's basically a subscription, which is a business model we know very well," he said in an interview.

But the publications don't select the wines or deal with shipping, taxes and licenses. They have contracts with companies that provide those services and others, to differentiate themselves and the publications' customers.

"We source wine from around the world and around the country. We take orders from customers and deliver wine to their doors and will curate wine selections," said Kristen Decker of Global Wine Co., which works with The New York Times, Food and Wine magazine, and other publications.

Thomas Woolrych, U.S. wine director for Direct Wines Inc., which competes with Global Wine Co., said despite the benefits, the clubs may not be the best choice for people knowledgeable about wine.

The clubs are "not really for people who are wine savvy or have so many wine shops and choices as someone on the (U.S.) East Coast," he said. "But it can be intimidating for someone, anywhere, to walk into shops that are walls of wines. And then there is the convenience factor."

TASTING KIT

Convenience and value were reasons why Chandravir Ahuja, an analyst for commodities broker Kolmar Americas, joined the U.S. branch of UK-based wine club Laithwaites. He lives in Connecticut, which until last year prohibited wine and liquor sales on Sundays.

Ahuja said the convenience of having the wines shipped to his home and a good deal were what attracted him.

"I signed on because of the good intro offer. (I) think it was $99 for 15 bottles plus bonus airline miles," the 46-year-old said in an email.

Laithwaites, which also operates clubs in the Britain, Australia, New Zealand and Hong Kong, is part of Direct Wines International. In addition to its own independent wine clubs, it

runs clubs for The Sunday Times of London and the Wall Street Journal.

Ed Stillman, 36, who works in fundraising for nonprofits, said the club he joined about a year ago, Lot 18's Tasting Room, was worth it because it gave him a language for wine.

"They sent a tasting kit of wines and you fill out the online evaluation. Turns out, they told me I like big whites and small reds and when I tell that to a sommelier, or the clerk in a store, they know what I like," said Stillman, who lives in New York. "That works well for me."

Despite having four wine shops near his home in Brooklyn, Stillman signed up for the club because "it was cheap."

Lot 18's Tasting Room promises that the more feedback a customer provides on its tasting notes and cards in each shipment, the more customized the selections will become.

Like the music website Pandora, which uses algorithms to guide internet users to music they may prefer, the Tasting Room uses a similar system to find out what their customers prefer.

There is also a website, wineclubreviews.net, that reviews and ranks wine clubs. The site's founder, Jessyca Frederick, said she worked at a wine club before she started blogging about them. Eventually, the hobby became a business.

On the site, she cautions about joining wine clubs through publications because they may be taking a percentage of sales in exchange for offering the wine club to their loyal customers.

"This generally doesn't lead to good value for consumers or any added value above and beyond what you can get by going to the grocery store," according to the website.

(Reporting by Leslie Gevirtz; Editing by David Gregorio)