Tag Archives: sweet red wine

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Winebits 411: Wine prices, Chinese wine, red blends

wine prices ? Expensive wine prices: Or, as S. Irene Virbila wrote in the Los Angeles Times, a look at old Kermit Lynch newsletters finds a “…breathtaking change in wine prices over the years. Over the course of three decades or more, prices go up, of course. But 10 times in some cases?” Lynch is the celebrated importer whose name on a French wine label is reason to buy it regardless of varietal or region, and Virblia has tracked price changes for several of his wines since the early 1980s with depressing results. Given that cheap wine prices have not increased 10 times over 30 years (maybe doubled, at most) and that the cost of wine production has remained remarkably stable over that time, this speaks to the increased demand for high-end wines since then, and especially for wines with pedigrees from experts like Lynch.

? So long, China: Remember when China was going to save the French wine business? Not now, says the Reuters news service. “Now wine is being sold below cost, some is going bad sitting for long periods in poorly maintained warehouses and decent Bordeaux wines are going for 15 yuan [US$2.50] a bottle.” Not that the Wine Curmudgeon warned the French about this, that raising prices to gouge the inexperienced Chinese had dangerous long-term consequences — but what do I know? The Chinese market has been hit by what passes for a recession there as well as the government’s continuing crackdown on corruption, in which wine bribes play a huge part. By the way, those “decent” Bordeaux wines that are selling for $2.50 in China cost 10 times that much in the U.S.

? Red blends take over: The popularity of red blends — which means, in most cases, sweet red wine — continues to rise, reports Nielsen. They accounted for more than 13 percent of the $13 billion that consumers spent on table wine during the 52 weeks ended Sept. 12, 2015, up from 11 percent in 2011. How important is that change? As I have written before, it’s almost unprecedented, with red blends the third biggest seller in the U.S. behind chardonnay and cabernet sauvignon in U.S. grocery and super stores. Interestingly, the Nielsen report doesn’t use the word sweet to describe the red blends, since so many producers don’t identify the wines as such. But we know what’s going on, don’t we?

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Update: Sweet red wine is taking over the U.S.

sweet red wineThe surprising thing about this month’s sweet red wine post is how muted the reaction was. Hardly anyone seemed surprised. Dismayed maybe, or irritated, but not especially surprised. That’s because the people who follow these things had an idea it was going on, and those who don’t — like most of the Winestream Media — don’t consider it important enough to be surprised.

And the wine drinkers buying all that sweet red? They weren’t surprised, dismayed, or irritated. They’re just happy someone is making wine they enjoy. Or, as a 30-something woman told me about her favorite sweet red, Cupcake’s Red Velvet: “It’s really good, and it’s really about the only red wine I like.”

The one thing most everyone agreed on? That the numbers, though imprecise, offered a real sense of how big sweet red has become — the fifth biggest category in U.S. wine sales, behind chardonnay, cabernet sauvignion, pinot noir, and merlot. Given its momentum, I wouldn’t be surprised to see sweet red pass merlot for fourth in the next couple of years.

So it’s not a coincidence that red blends accounted for 40 percent of all new wines over the past two years, compared to just 18 percent for chardonnay and cabernet combined, according to Beverage Media magazine. Yes, not all red blends are sweet, but sweet reds are at least two-thirds of red blends, based on data in the first post. This is another sign of how important sweet red has become.

How sweet is sweet? About 1.0 or 1.2 percent residual sugar, compared to less than .08 residual sugar for dry red wines. Other highlights in the wake of the first story, combined with additional reporting that I did:

? Consumers don’t necessarily see sweet red as sweet, says Christian Miller of Full Glass Research, who has probably studied this subject more than anyone in the country. ” ‘Sweet’ is not an attribute that large numbers of regular consumers use with regards to these wines,” he said. “They are more apt to regard them as flavorful or smooth or interesting. Many consumers jump back and forth between dryer and sweeter versions of these wines.”

? The wine industry remains uneasy about calling a sweet wine sweet, says Miller. “It ?s possible that some of these companies have tested adding the word sweet to the label or description, and found it harmful. On the other hand, based on my experience in the wine industry, the number of decisions based on gut instinct, trade notions, or small unrepresentative samples is surprisingly high, even among large MBA-ish companies.”

? Since sweet red doesn’t depend on appellation or specific grapes, it can be made with fruit from anywhere in California, Or, as wine economist and author Mike Vesteth told me, sweet red can be made with all the merlot and syrah that wouldn’t be sold otherwise, and which costs less to use. Hence higher profit margins than more traditional wines.

Finally, no one — not even anyone at E&J Gallo, whose Apothic started all of this — expected sweet red to do this well. Gallo, I have been told, developed Apothic to appeal to Millennials, to compete with the Menage a Trois red, and to earn supermarket shelf space. That it might change U.S. wine never really occurred to anyone.

For more on sweet red wine:
? The ultimate Internet guide to sweet red wine
? What’s next for sweet red wine?
? Wine terms: Sweet vs. fruity

 

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Has sweet red wine taken over the U.S. wine market?

sweet red wineIs it possible that sweet red wine sales totaled one-third of all the chardonnay sold in the U.S. over the past year? And did slightly better against cabernet sauvignon? Or that sweet red wine outsold syrah, zinfandel, and malbec over that time period, and almost overtook merlot?

Hard to believe, but apparently true. A leading wine industry analyst, working with proprietary data, has estimated sweet red wine sales in the 52 weeks ending April 25 were about $534 million. That means, besides outselling syrah, zinfandel, and malbec, sweet red also did better than moscato — the current next big thing — and missed sauvignon blanc by just a couple of percentage points.

The analyst — call him Smart Wine Guy — asked not to be identified because his figures are based on that proprietary data, and legal problems could ensue if I used his name. But he has worked in the wine business for most of his life, including stints in retail and for Big Wine.

Smart Wine Guy used sales figures for red blends that cost between $7.50 and $15.49 a bottle and are sold in grocery and liquor stores. That includes most of the wine we think of as sweet red — those blends, like Apothic and Menage a Trois Red, that have more residual sugar than traditional dry red wine. It also includes red blends like 14 Hands Hot to Trot that aren’t identified as sweet red in most sales surveys, even though they’re as sweet as Apothic. Hence Smart Wine Guy’s total is three times bigger than Nielsen’s sweet red total, which is the accepted sales number but which probably undercounts sweet red sales.

The other things to know about these figures?

? Some 80 percent of sweet red wine is sold in grocery stores. By comparison, about two-thirds of cabernet sauvignon in the U.S. is sold in supermarkets. This should scare the hell out of liquor stores that assume sweet red drinkers don’t matter.

? Sweet red’s success is just five or six years old, dating to Apothic’s debut. There has always been sweet red, of course, but Apothic was the first brand to treat it like real wine, with a proper bottle, better quality, and well-designed label. In those five years, sweet red has become the one of the top six categories in U.S. wine.

? Sweet red sales increased about 20 percent last year, even though the overall wine market was flat, chardonnay declined almost one percent, and cabernet grew just four percent.

? Apothic, Menage a Trois Red, and Cupcake Red Velvet account for about half of the sweet red wine sold in the U.S. Not coincidentally, all are Big Wine products. If anyone who doubts the power of Big Wine still needs to be convinced, this is it.

? The best-selling sweet reds are just slightly sweet, and aren’t the over the top sweet bombs that many people expected when the sweet red market was developing. This says something about U.S. wine drinkers, who want wine, even if sweet, but not a soft drink.

? Sweet red wine has done all of this without any help from the Winestream Media, which speaks to how little most of us who write about wine understand about what Americans drink.

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Sweet red wine to merlot: Drop dead

sweet red wineGrocery store merlot’s reason for being is that consumers like its fruity taste and that it seems sweet even though it’s dry. That combination, plus the fact that these wines have little in the way of tannins, translates to “smooth,” the ordinary wine drinker’s favorite descriptor.

So what are we to make of the news that grocery store merlot sales tanked in 2014, while those for sweet red wine went in the opposite direction?

Call it a sign that we may be seeing the beginning of a seminal change in the U.S. wine business.

One year’s sales figures do not necessarily make it panic time for merlot. But it is worth noting that sales of sweet red, which is grocery store merlot without the hypocrisy — truly sweet, very fruity, and no pretense of tannins — rose seven percent last year, according to Nielsen, while merlot (from a much larger base) fell six percent. Zinfandel, meanwhile, which mimics merlot’s sweet fruitiness, also suffered last year, with sales falling two percent.

This should give the wine wise guys something to ponder, no?

A couple of caveats: Sweet red is included in the red blend category, so some dry wines are part of that seven percent growth. But most of the analysts I’ve talked to say it’s safe to say that sweet red is behind the increase. Second, though supermarkets account for 42 percent of all the wine sold in the U.S., it doesn’t include two key states, New York and Pennsylvania, where grocery stores aren’t allowed to sell wine.

Third, people have been predicting the end of merlot since “Sideways” in 2004, and merlot has always proved them wrong. The difference this time is that sweet red offers much that pinot noir, the “Sideways” merlot-killer, didn’t. It’s less expensive and it’s much easier to make, since it’s a blend and the grapes in it don’t matter to most wine drinkers. Plus, it’s easier to market and sell; witness the success of E&J Gallo’s Apothic Red and The Wine Group’s Cupcake Red Velvet, which didn’t exist until a couple of years ago and today are brands that everyone else seems to be copying.

My guess? This may well be the beginning of the end of merlot, at least as it’s sold as a varietal in supermarkets. Merlot certainly isn’t going away, and will certainly be used to make sweet red. And, as the wine business continues to evolve into two parts — a huge, Big Wine-dominated mass market, and a smaller, independent retailer-driven market — merlot will remain important to the latter. But at some point in grocery stores, there may be little difference between a wine like Apothic and Charles Smith’s Velvet Devil merlot, which is sweet red in everything but name.

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Winebits 376: Apothic, restaurant wine, wine consumption

apothic ? A revolutionary product? Gallo’s Apothic, which revolutionized sweet red wine when it was introduced in 2007, may be doing it again. The company has released Apothic Crush, a slightly sweet red wine with 14.5 percent alcohol. In this, it appears to be the first sweet high alcohol wine that actually admits to being sweet and high in alcohol. For most of wine’s history, sweet table wines had less alcohol than dry wines not only because that’s how fermentation worked, but because no one thought consumers would drink a high alcohol sweet wine. But that has changed, first with the trend toward riper, more alcoholic wines, and second, with improvements in winemaking technology. In this, who knew Robert Parker, who has championed riper, higher alcohol wines, would pave the way for a Gallo product? Or, as the noted philosopher Mick Jagger has said more than once, “You can’t always get what you want/But if you try sometime you find/You get what you need.”

? Less hope for wine lists? Is the end coming for the independent restaurant? That may be one of the conclusions from a recent study, which found that the number of independents fell by two percent in the U.S. in 2014, and that the number of full-service independents dropped three percent. Chains, meanwhile, continued to grow in the low single digits. Why does this matter to wine drinkers? Because those independents, and especially the full-serves, are the last best hope for improved restaurant wine lists. Chains usually don’t care about wine and make decisions in a corporate office based on price, which means they have the crummiest and most overpriced wine lists. Independents, for all their problems with wine, generally do a better job than chains. So any drop in the number of chains should be worrisome for wine drinkers who want choices that aren’t from Big Wine.

? Beer, wine, or spirits? This chart, from Ghost in the Data, should answer all questions about whether the U.S. (or any other country in the world) is a wine drinking country. We’re not — it’s still beer. In fact, save for part of western Europe, the world is mostly indifferent to wine. This is something my colleagues in the Winestream Media should pay more attention to, instead of patting themselves on the back because we drink more wine than any other country in because we have more people than France and Italy.

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Winebits 369: Cheap wine, sweet red wine, wine lawsuits

wine lawsuits ? Almost correct: The Wine Curmudgeon is always happy to see other wine sites hop on the cheap wine bandwagon, and this recent piece from Wine Folly. a qualiity site, offers several fine pointers: Beware the back label, watch out for private label brands, and double check pricing. My concern is its passive-aggressive style, which comes out in the headline. “Good cheap wine is lying to you.” The piece makes it seem as if only cheap wine does these things, when the entire wine business is full of half-truths, misconceptions, and obfuscations. Which is my reason for being, after all. I was also confused by the post’s fixation on U.S. wine — what’s wrong with buying cheap wine from Spain, France, and Italy?

? Bring on the sweet stuff: You know sweet red wine is firmly established in the market when one of the wine trade newsletters talks about its popularity without one nasty comment. “While ‘sweet’ drinkers may be gravitating toward certain blends and varietals, and ‘dry’ drinkers supporting others, consumers clearly are exploring a variety of options.” That’s quite shocking, that Shanken News Daily (owned by the same company that owns the Wine Spectator), suggests that wine drinkers have minds of their own. But the numbers make believers: sweet red wine is growing at 4 1/2 percent a year, ahead of wine’s overall growth, says the report. And this is where I mention that I was writing about this stuff when the Winestream Media was dismissing it.

? One more lawsuit: Regular visitors know that the Wine Curmudgeon loves lawsuits, when wine companies throw money at their attorneys for no other reason than they can. Though, this suit, about two wines with the same name, does seem to have some merit (with the caveat that I’m not a lawyer and could be completely wrong). I also thought I’d throw this in, two companies named Cipriani suing each other. I mention it for two reasons — first, that it shows wine doesn’t have a monopoly on this sort of thing, and second, that the smaller company, based ion a Chicago suburb, makes some of the best noodles I’ve ever had, and I hope it wins. Update: The two wineries settled out of court a couple of days after this posted. Chalk it up to common sense

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Five things that make me crazy when I buy wine

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Which price am I going to pay for this wine? And why are there so many prices anyway? It makes me crazy.

Negotiating the Great Wall of Wine at the grocery store (or any retailer, for that matter) is difficult enough. But why is it that so many in the wine business go out of their way to make it even more difficult? Hence, the five things that make me crazy when I buy wine:

1. Wine shelved incorrectly, where Chilean wine is in the Spanish section, French wine is in the Italian section, and so forth. Some of my irritation is because I’m the son and grandson of retailers, and they taught me the need to stock inventory correctly. But most of it is because that kind of mistake makes it more difficult for people to buy the wine they want. If you’re looking for malbec, and it’s not in the Argentine section, you’re more likely to forgo wine or buy beer.

2. Sweet red wines that don’t say they’re sweet on the label. If I have trouble figuring out whether it’s sweet or dry, and I do, how much trouble does the average consumer have? Using the adjective smooth, which seems to be the winespeak of the moment for sweet, isn’t enough. You’re making sweet red wine because people want sweet red wine, so what’s wrong with telling them it’s sweet?

3. The boxed wine ghetto, where all the boxed wine — regardless of quality — is stuck on a dusty shelf in the back of the store or wine section. One reason that Yellow + Blue, a great cheap wine, isn’t better known is that it comes in a 1-liter box. That means you’ll find it with the Almaden and Franzia 5-liter boxes, and about the only thing the Yellow + Blue has in common with those is the box. It’s like putting Italian-made shoes next to flip-flops, and who does that?

4. Three — or four or even five — prices for the same bottle of wine. There’s the regular retail price. And the club price. And the sale price. And the “buy six, get a discount” price. And the “buy 12 and get a discount” price. The consumer isn’t sure what the price is, and ends up paying more than they thought they would. Which, sadly, may be the point.

5. That every winery in New Zealand seems to have a bay in its name — Oyster Bay, Monkey Bay, Destiny Bay, Cable Bay, Brick Bay, Pegasus Bay, Clifford Bay, Picton Bay, and so on and so forth. It’s one thing when the winery, like the respected and well-known Cloudy Bay, is actually located on a bay. But when the winery doesn’t exist, and the name is made up to sell private label wine or by Big Wine to establish a New Zealand brand, enough is enough.

Slider image courtesy of Houston Press food blog, using a Creative Commons license