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Five things the Wine Curmudgeon learned from last week’s wine premiumization post

wine premiumizationMost importantly: Consumers dislike wine premiumization, no matter what the wine business wants us to believe

Last week’s wine premiumization analysis kicked up more than a little dust in the cyber-ether – it was the most visited post on the blog in almost 2 ½ years. The comments and emails covered the spectrum, from people blaming me for wine’s problems (and that there wouldn’t be any if not for people like me) to those who offered their take on premiumization (pro and con) to those who thought I was spot on.

In all of this, I learned five things after writing the wine premiumization post:

1. Consumers dislike premiumization, no matter how much the industry insists otherwise. I wasn’t sure about this until I saw the reaction to the post, since all the data suggests we’re paying more for wine. So if we’re paying more, then we’re happy, right? But since fewer of us are buying wine, and those of us who still buy wine are buying less, how happy can we be?

2. Talking about wine prices is even more taboo today than it was when I started writing about wine in the late 1990s. There was a sense then that pricing was not to be questioned. Because, wine. I’ve never understood this, and my emphasis on cost vs. value has always annoyed people in the wine business. It annoys them even more today – and some are way past annoyance.

3. The economics of the post-modern wine business stink for almost everyone who isn’t Big Wine. I sympathize with those producers, and have agonized over their plight many times. But overpriced wine is overpriced wine, regardless of the reason why. Is any bottle of wine really worth $80 or $100? Or, as hard as it is to believe, thousands of dollars?

4. I taste thousands of wines a year, at all prices and from all over the world. My friends also taste thousands of wines a year, and we talk about what we taste. So how am I not qualified to say that wine quality is not what it was before the recession? One friend, a well-known wine judge and critic, will start his pinot noir rant without one nudge from me. Yes, technically the wines are OK — not oxidized, not tainted with VA and so forth — but are they interesting to drink? Are they fun to drink? Unfortunately, not nearly as many of them as in the past.

5. Wine writing, even in the second decade of the 21st century, is still expected to be positive and to sell wine. I had hoped the Internet would change that. I was wrong.

Photo courtesy of IWA wine blog using a Creative Commons license

U.S. Open wine competition returns this weekend

U.S. Open wine

Byanca Godwin

Top two teams will represent U.S. in world championships

Byanca Godwin didn’t expect much when she entered the U.S. Open wine tasting championship last year. All she wanted to do, she says, was to get a little blind tasting experience in as she prepared to take the various certification exams she had scheduled.

So how did she end up representing the United States at the 2018 World Wine Tasting Championships in France?

“I tried it just to have some fun blind tasting, instead of practicing like I usually do,” says Godwin, a wine retailer who will compete in this year’s U.S. Open on Sunday in Ventura, Calif. “I thought it might be interesting to compete. And then I finished third, which I didn’t expect.”

The Wine Curmudgeon has always thought blind tasting should be a competitive sport. Blind tasting is difficult enough, but imagine it with the pressure amped up – an audience cheering (or booing) as the contestants sniff, swirl, sip, and spit. Talk about grace under pressure.

The U.S. Open offers all of that. Two-person teams work their way through a dozen wines, getting points for correctly identifying the wine’s producer, its varietal, vintage, and region. And they have just eight minutes until another wine comes along. The top two teams will compete for the U.S. in the world championship in October in France. Belgium won the 2018 competition, followed by Finland and France.

“You really have to approach this like an athlete,” says Godwin. “When you’re competing, you have to stay focused on the wines and pay attention. You have to find the answer in the glass. Being distracted by the audience does not help your performance.”

One addition this year: Event organizer John Vilja says audience members can taste the wines as the contestants taste them in a sort of mini-competition. There’s also a blind tasting app.

No need to worry about U.S. wine sales – convenience store wine will save us

Convenience store wine: Table wine sales increased 20 percent in 2018

Table wine sales in U.S. convenience stores increased 20 percent in dollar terms in 2018, the second year in a row that c-store sales outperformed the overall U.S. market. That 20 percent figure could be as much as five times the growth in the overall U.S, wine market.

And no, I don’t understand why, either.

But those are the statistics in the 2018 state of the c-store industry report, published by the National Association of Convenience Stores. Convenience store wine sales in 2018, which include sparkling wine, fortified wine, and wine coolers, totaled $1.66 billion. That’s an amazing number. Take out the wine coolers, which the wine industry numbers may not include, and it’s possible that almost 2 percent of the wine sold in the U.S. last year came from a 7-Eleven, RaceTrac, QuikTrip, Speedway, and the like.

Association spokesman Jeff Lenard says there may be several things going on to account for all of that wine:

• About one percent more convenience stores sold wine in 2018. That total is almost half of the 153,000 U.S. locations.

• “More than anything else,” he says, “the increase in wine sales pairs (pardon the pun) with the increase in food service and more upscale foods that more convenience stores are selling.” In other words, fresh sandwiches and salads, which have become a c-store staple over the past couple of years, lend themselves more to wine sales than Big Gulps and those rubbery, orange-ish hot dogs spinning away in a corner.

• Younger consumers (18-34) are the predominant age group for convenience stores. And those of legal drinking age tend to be less fussy about where they buy wine than Baby Boomers, says Lenard. “Younger consumers are the ones who are least likely to think about a specific channel to purchase wine. They think wine or liquor store. Or dollar store. Or online wine club. Or gas station.”

• Women, who buy most of the wine in the U.S., are slightly more likely to buy gas in the evening, he says. “So can they also pick up wine for dinner then? Absolutely.”

Photo courtesy of Monica E using a Creative Commons license

Wine of the week: Vinho verde 2019

vinho verde 2018Vinho verde 2019: Better quality this year than in 2018, including the always dependable Broadbent plus the Gazela and Faisao.

The vinho verde 2019 review is good news — much improved quality from 2018, with prices about the same as last year. How can we do better than that?

Vinho verde is a Portuguese white wine with a greenish tint that rarely costs more than $8. It has a slightly sweet lemon lime flavor, low alcohol, and a little fizz — all of which makes it ideal for hot weather.

Our vinho verde primer is here. Most of the cheaper wines, like Santola, Famega, Casal Garcia, and Gazela, are made by the same couple of companies but sold under different names to different retailers. These vinho verde 2019 suggestions will get you started:

Broadbent Vinho Verde NV ($8, purchased, 9%): Not quite as well done as the 2018 (it’s missing some acidity), and it’s a little sweeter this year. But it remains balanced, rounded, and enjoyable — the vinho verde that sets the standard. Imported by Broadbent Selections

Gazela Vinho Verde NV ($6, purchased, 9%): Stunningly enjoyable, and especially given how wretched it was last year. This bottling is not as complete as the Broadbent, but it’s not stupid, either — lemon lime fruit, pleasant spritiziness, and not too sweet. Much more than $6 worth of wine. Imported by Evaton

Asnella Vinho Verde 2017 ($15, sample, 12.5%): Vintage vinho verde is becoming more common, but you still don’t see much of it. This bottle is more layered and more subtle than the $8 non-vintage labels — mostly dry, a more tropical fruit style, much less fizz, and more crispness. Imported by Ole Imports

Bernador Vinho Verde NV ($5, purchased, 9%): This Aldi private label was perhaps the biggest surprise of vinho verde 2019 — almost dry, the correct amount of fizz, and with refreshing lime fruit. It’s a little thin on the back, but that’s not necessarily a problem.

Aveleda Vinho Verde 2017 ($6.50, purchased, 9.5%):

Faisao Vinho Verde NV ($7/1-liter bottle, purchased, 10%): The Faisao is noticeably sweet, something that I don’t usually like. But there’s enough crackly lemon-lime fruit and the fizziness is so well done that I drank it with dinner (roasted chicken thighs marinated in orange and lime juice, herbs, garlic and olive oil) and enjoyed it. And how can you argue with the price for a 1-liter bottle?. Imported by Winesellers Ltd.

For more about vinho verde:
Vinho verde review 2018
Vinho verde review 2017
Vinho verde review 2016

Winebits 601: Coke and wine, canned wine, wine scores

coke and wineThis week’s wine news: Coke and wine – is the soft drinks giant pondering the wine business again? Plus the confusing sizes of canned wine and bias in wine scores

We’d like to teach the world to sing: The Wine Curmudgeon reports this item with a caveat – there has already been one correction made to the story, and there may be another error in it. Still, it comes from the usually reliable drinks business trade magazine: An Australian newspaper reports that the Aussie Coca-Cola bottler, Coca-Cola Amatil, wants to buy the wine brands owned by Pernod Ricard, the luxury French booze house. Its products include Chivas Regal whisky, Absolut vodka, and Beefeater gin. Pernod’s wine holdings include Jacobs Creek in Australia, Brancott Estate in New Zealand, and California’s Kenwood. Know that this isn’t exactly like Coke’s first foray into wine, which was a disaster (and which the story in the link overlooks). The Atlanta-based company lasted six years in California and New York before selling its holdings. Coca-Cola Amatil is partly owned by Coke, and there is no indication that if it buys Pernod’s wine labels that it will be like Coke actually owning wine again. This is something else the story in the link is unclear about.

One size doesn’t fit all: Talk to anyone in the wine business about canned wine, and their first complaint is that there are three sizes for canned wine, as opposed to one for beer and soft drinks, and none of which are 12 ounces. Plus, one size can only be sold in a three- or four-pack. That’s the legacy of federal booze law, which regulates package sizes according to alcohol content. U.S. Senator Charles Schumer (D-NY) wants to change that. He’s asking the federal Tax and Trade Bureau that oversees these regulations to streamline the process and make it possible for wine to be sold in 12-ounce cans.

The inherent bias of wine scores: The Wine Gourd’s David Morrison, who apparently dislikes scores even more than the Wine Curmudgeon does, regularly runs mathematical analyses of wine scores. His current examination, looking at scores form the Wine Advocate and the Wine Spectator : “All three datasets show that variation in wine-quality scores is substantial, and that it arises from several sources. When you combine these sources of variation, it is difficult to attribute any mathematical precision to the use of numbers for wine commentary.” It’s good to know that the math agrees with those of us who see scores as inherently biased, thanks to the flaws that are an integral part of post-modern wine criticism.

Photo courtesy of the Daily Telegraph, using a Creative Commons license

Wine premiumization, wine prices, and quality

Wine premiumization
The Wine Curmudgeon Wine Sample Index and the wine slowdown

Wine premiumization: Prices keep going up, quality keeps going down, and fewer people are drinking wine. Am I the only one who thinks that’s not a coincidence?

This is how deeply premiumization has upended the wine business: A reader emailed me to say I shouldn’t use the prices I paid for wine in my reviews. Instead, I should use the prices on an industry website, which are typically more than what I pay.

What twisted wine universe do we now live in? Is premiumization so deeply ingrained in the system that cheap wine should not exist, even if it actually does?

Premiumization is the idea that consumers are trading up, that we’re willing to pay more money for a better quality bottle. In theory, this makes perfect sense. Of course I will pay $15 for wine if I know it’s going to be appreciably better than a $10 bottle.

But theory, to paraphrase the economist John Maynard Keynes, is for dead people. The wine business, in its dedication to short-term profit at the expense of long-term growth, is selling us more expensive wine that isn’t appreciably better. It just costs more money, and we’re supposed to accept that as the natural order of things.

I got a sample of an Italian white wine this summer, which came in a flowery bottle with an even more flowery name. My tasting note? “Very nicely done $10 blend (chardonnay, pinot bianco) with a little lemon, minerality, and crispness. For some reason, the suggested retail price is $20, making it one of the most overpriced wines I have ever tasted.”

It’s not just me

A friend of mine, who has been selling quality wine at Dallas’ best retailer for more than 30 years, told me he no longer understands how wine is priced. He cited two examples: Spanish albarino, once $10 and $12 and delicious, is now $18 and $20 and not very albarino-like, while French picpoul, “which should cost $8, costs $16.” These are wines that people in Spain and France drink daily; in the U.S., they’re priced for special occasions.

Or, as a review of a $24 wine on Wine Industry Insight put it recently: “Thin, acidic, and lacking fruit.” How far has wine fallen when $24, which used to be enough to buy something fabulous, now only pays for thin and acidic?

I write all of this in the shadow of the end of the wine boom: Flat sales, more young people who see wine as something for their parents and grandparents, and experts who say drinking will kill us as surely as cigarettes. It’s what Rob McMillan of Silicon Valley Bank calls the new normal – that wine consumption won’t return to what the industry wants. Instead, he writes, “don’t be surprised if young consumers drink less alcohol tomorrow, and those who do drink continue to embrace craft spirits and beer instead of wine.”

Given all of this, shouldn’t it be time for the industry to put an end to the premiumization that gives us $8 worth of wine for $15? If wine is in a fight for its future, shouldn’t it focus on selling well-made and affordable products in response to the competition from craft beer and spirits?

That makes perfect sense

But I long ago stopped expecting that sort of wisdom from wine. In this, I thought I saw the end to wine premiumization several times over the past couple of years, and I’m not the only one who did. But just when you think it has run its course and this foolishness can’t go on forever, it does a Freddy Kreuger. How else to explain when the man who runs Jackson Family Wines wants the federal government to eliminate his competition with a tariff wall?

All of which leads me to wonder how far we are from something that wine economist Mike Veseth has predicted for several years: That wine will become like opera, which was once mass entertainment but is now reserved for a wealthy elite.

That’s a new normal that won’t make anyone happy.

Photo “tokyoWeek1 047” by nate_uri is licensed under CC BY-NC-SA 2.0 

More about wine premiumization:
“Reasonably priced at $40:” Wine premiumization is out of control
The premiumization backlash
Has premiumization damaged wine’s popularity?

Wine Curmudgeon Wine Sample Index: Heavy weather ahead for the wine business?

wine sample indexPremiumization’s role in the wine slowdown

It’s not scientific, but the Wine Curmudgeon Wine Sample Index indicates that the wine slowdown is here

The wine slowdown, much written about and much discussed, has officially arrived. How do I know this? The Wine Curmudgeon Wine Sample Index.

The wine sample index is my highly anecdotal and decidedly un-mathematical system for gauging the health of the wine business. When business is good, and no one needs a cranky ex-newspaperman to review their wines, I get fewer samples. When business isn’t good, then I get more samples – including bottles from high-end producers who usually dismiss me as not worth their time.

And this spring and early summer, I have received more samples than I’ve gotten since the recession, maybe three or four times the usual amount.

As noted, this is highly anecdotal and decidedly un-mathematical, and I’m not sure the blog’s official statistician would approve. But the pattern has been there since the blog started in 2007. During the recession, I got more wine than I could drink, including $100 bottles. But the samples dried up in the couple of years after the recession ended, when wine sales recovered and premiumization took hold. I don’t write about the kind of wine that has dominated the market since then, so why send me something to review?

But now, apparently, they need me. I’m getting samples from producers who haven’t contacted me in years, and they’re sending wines that cost $25 and more.  Just the other day, in fact, an email me offered a case of wine, only one of which cost less than $24 and five of which cost more than $30. Hasn’t the marketer ever read the blog?

Also intriguing

More samples are coming from people who want me to write about their wines in the hope that my review will generate retailer interest as opposed to sales. They want to use a good review to place the wines in more stores in more parts of the country. That also happens more often when wines sales are slow.

In other words, any port in a storm, and this storm is beginning to look particularly intense. Know that samples are an expensive form of marketing – not just the cost of the bottles, but the cost of shipping, which can run as high as $100 a package. But wine sales are so flat and so many people are so worried that spending all that money to send me samples looks like a better investment than letting the bottles languish on a warehouse shelf.

Will this storm turn into a category 5, Hurricane Wine Recession? The sample index can’t tell me that. One sign of optimism: I still don’t get asked to attend trade tastings, where producers and distributors show off their wines for writers, retailers, and the like. Those invitations ended after the recession, too. So if trade tasting emails start to arrive, then maybe it is time to batten down the hatches.