Category Signaling & Kosher Wine

The Kingston Family case highlighted, once again, the extent to which the wine industry is influenced by conventional wisdom (e.g. Chilean wines are "unsophisticated"); indeed, any emerging wine region or category is likely to face some entrenched negative stereotype. To that end, I thought it would be interesting to look at reputation-building strategies that have been successful in the past. Kosher wine, specifically, has seen a remarkable re-branding at the category level.

As recently as 20 years ago, kosher wines were known to be overly sweet and cloying, and were relegated to a (very) niche market. However, in 2015, it was estimated that the market for kosher wines in the US has seen somewhere between 8% and double digit growth in recent years. Furthermore, over three quarters of kosher wine consumers are not Jewish. So what happened?

Category ambassadors
The kosher wine market was helped tremendously by increased sophistication of the kosher consumer in other areas - chicken, meat, cigars. As luxury demand of other experience goods rose, so did the demand for better kosher wine. A few high profile French vineyards - including Chateau Lafite Rothschild - were quick to observe the trend and began producing fine kosher wines to meet demand. Having these taste-setters in the space green lit smaller, less-prestigious companies to offer higher quality kosher wines at a less-than-luxury price point.

Category signaling & Crossover trends
There is no inherent chemical or quality difference between a kosher wine and a standard wine. To qualify as a kosher wine, the process (from grape crushing through bottling) must be supervised by a Rabbinic authority and handled exclusively by Jewish employees. Moreover, kosher products (outside wine) have experienced a sort of renaissance in the US over the last few years - with the category out-performing labels such as "gluten free" and "ethically sourced." Similar to the theory behind biodynamics, regardless of whether or not the kosher requirements themselves are responsible for improved quality, they imply a level of fastidiousness in manufacturing that is, apparently, appealing to a broad market. Kosher wines, in turn, have benefited by being sold alongside increasingly popular kosher packaged foods.

Interestingly, at the very high end, some wine producers will leave off the kosher label (as Grgich Hills does with biodynamism) - indicating that category signals can have different effects in different market segments.