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Winebits 681: Ed O’Keefe, Internet wine, pandemic wine

ed o'keefeThis week’s wine news: Drink Local pioneer Ed O’Keefe has died, plus a study says consumers may be wary of Internet wine and a French producer addresses the pandemic

Ed O’Keefe has died: Ed O’Keefe Jr., who started Michigan’s Chateau Grand Traverse winery in 1976, has died, aged 89. I was lucky enough to interview O’Keefe several times over the years, and he was featured in a 1995 American Way story featuring U.S. wineries that weren’t in California. It was my first piece ever about regional wine. The story in the link, from the Detroit Free Press, tells O’Keefe’s story, but what impressed me was that he always ignored everyone who said regional wine didn’t matter. And he was right.

Internet wine: Some of us may want to buy wine over the Internet, but a surprising number of aren’t interested. That’s the result of a study by the Wine Intelligence consultancy, which found that only 58 percent of “regular” U.S. wine drinkers would buy wine on-line. The number, given all the time and effort so many of us have made to make Internet wine possible, reminds us how traditional – and resistant to change – that wine drinkers are in this country.

Call it “Vaccs’vin:” A French producer has released a wine called Vaccs’vin– perfect for the pandemic, since its goal is “just to make people laugh” – and it’s sold without a prescription. Sadly, the wine, made with merlot, won’t be available in the U.S. We could use some giggles these days, yes?

Wine trends 2021

wine trends 2021
Will I be able to buy wine over the Internet after 2021 — but not in January, of course?

Look for Dry January, “healthy” wine, the pandemic, and legal maneuvers to mark wine trends 2021

This is the second of two parts looking at wine prices and wine trends in 2021. Today, Part II: Wine trends 2021. Part I: Wine prices 2021.

Anyone in the wine business who says Dry January doesn’t matter must also believe the Trump wine tariff is good for business, young people are flocking to buy $100 wine, and I think scores are the future of wine criticism.

But there it is, as we look at wine trends 2021: Any number of experts who say Dry January and the neo-Prohibitionists don’t matter. Or, as one magazine editor asked me, “What’s Dry January? Why is that in your story?”

I should have pointed him to this story. Or this one. Or this one.

In fact, I spent much of the past couple of years writing trade magazine stories about the growth in no-alcohol, low-alcohol, and “healthy” wines. And I wasn’t talking to one-off startups, but executives at some of the biggest wine companies in the world. So any discussion of wine trends 2021 must start with Dry January and that it’s OK to say you don’t drink – cool, even.

What we don’t know is exactly how Dry January will change the wine world. But it will change wine in 2021, as will these:

• “Healthy” wine. If you haven’t heard of FitVine yet, you will. It markets itself as “less sugar, fewer sulfites, and no flavor additives for a cleaner wine” – all for $15. And it’s not alone. There are products like The Wine Group’s Cupcake Light Hearted; Trinchero’s Mind & Body; and Constellation’s Kim Crawford Illuminate, which promise fewer calories, less sugar, less alcohol, and say they are gluten free and vegan. The idea is to sell wine to younger consumers who supposedly prefer a healthier lifestyle and who may not be drinking wine now. One estimate: this market will grow 34 percent over the next four years.

• Shortages and supply chain problems will continue. The longer the pandemic lasts, the more we’ll see retailers and wholesalers have a difficult time keeping popular wines on shelves. It doesn’t mean the wines will disappear; rather, they’ll be there, sell out, and not return for a week or more.

• Wine tourism on the brink. If the vaccines do their job, and if life returns to normal by the fall, then all should start to improve. But if we go through another year of travel and public place restrictions, then questions must emerge about the future of wine tourism. The 90 percent of U.S. wineries that don’t make 90 percent of the wine survive on wine tourism. How will they survive if there isn’t any?

• Three-tier reform, but slowly and incrementally. That’s because the Supreme Court won’t hear a key three-tier case, so no Internet wine sales anytime soon. Still, we will see alcohol delivery continue to expand, thanks to the pandemic. In Texas, the legislature is expected to make cocktails-to-go permanent this year, a development that is so unprecedented as to be almost indescribable. And Illinois is set to legalize retail booze delivery throughout the state, also difficult to believe.

• The Trump tariff, and how soon we can get rid of it. Change here requires compromise, good will, and good faith from the U.S. and the European Union. Sadly, all have been in short supply.

Wine prices 2021

wine prices 2021Wine prices 2021 will defy the law of supply and demand, and we’ll suffer with more overpriced, mass-market wines

This is the first of two parts looking at wine prices and wine trends in 2021. Today, Part I: Wine prices 2021. Monday, Part II: Wine trends 2021.

Anyone who says they know what wine prices 2021 will do is guessing, at best – the Wine Curmudgeon included. How else to explain a wine world which continues to deny the existence of the law of supply and demand?

That’s because we saw demand continue to decline in 2020, supply continue to increase, and prices refuse to follow along. In fact, some prices increased, and that had nothing to do with the tariff, but producers and importers trying to take advantage of the last gasps of premiumization.

Or is this premiumization’s last gasp? I’ve been writing about the end of premiumization for a couple of years (and I’m not the only one), but it’s still with us in all its irritation and aggravation. I’m beginning to think that the oligopoly structure of the post-modern wine business, with a handful of companies controlling production, wholesaling, and retailing means that prices will do what the oligopoly wants, and not what they should do. If the oligopoly wants premiumization, then we’re going to have premiumization, and that means more overpriced, mass-produced, flabby, and boring supermarket-style wines.

And it looks like the oligopoly does. How else do you explain paying $15 for Italian wine, which isn’t included in the tariff, that costs one-third that much in Italy? Or $15 and $20 California labels, where the bulk grapes used to make the wine may have cost as little as $1 per bottle? Or $20 Washington wines when the state is awash in bulk grapes? Or all those French roses that cost two and three times as much as something like this – even though the former have much the same grape cost?

So if I had to make one prediction for wine prices 2021, it’s not to expect any price relief. For one thing, the tariff isn’t going away any time soon. That not only raises the price of most French, Spanish, and German wines, but gives producers elsewhere an excuse to raise their prices. Ironically, I asked several experts about this possibility when the tariff took effect in 2019, and was told no producer would be stupid enough to raise prices to take advantage of the tariff. Once more, the experts were wrong, and the wine business demonstrated yet again why I worry about its future.

So not much good news here – save for the caveat that if I have been as wrong this time as I have been before, then we will have some good news. Just don’t count on it.

More about wine prices:
Wine prices 2020
Wine prices 2019
Wine prices 2018

SVB wine report 2021

svb report
SVB report 2021: The wine business must find a way to reach under-40 consumers.

The good news in SVB wine report 2021: This year should be an improvement over 2020. But don’t get your hopes up for 2022

How about some good news in the SVB wine report 2021, Silicon Valley Bank’s annual state of the wine industry effort? It would be a welcome change from the gloom and doom of the past 10 months, as well as the past couple of years of SVB reports.

So rejoice.

“I think the news will be measured and good,” says Rob McMillan, the report’s author. We exchanged emails in the run-up to the report’s official release and webcast yesterday.

“I think we have a bounce ahead of us,” he says. “And going back to history, I remember having data that showed a massive growth in wine consumption in 1945, then a drop in 1946. I do expect a bounce in 2021 – maybe not like 1945. Call it a rolling celebration that will span 2021 and into 2022 as occasions and delayed celebrations come back.”

The report reinforced that good news – assuming the pandemic gets under control and the wine business doesn’t do anything stupid:

• Expect a bounce in demand if tourism and restaurants come back. The report sees an increase in wine sales gaining momentum in 2021, but it may not be sustainable next year.

• Wine demand this year did not increase, no matter what others are saying. Instead, says McMillan, what happened is what’s called a channel shift — we bought less wine at restaurants and more wine at supermarkets and on-line, but the overall total didn’t change. In this, restaurant wine sales have not recovered and may still be down as much as two-thirds over the same time last year.

• Premiumization is nearing its peak, but will continue this year thanks to that pent up demand and the industry’s efforts to reduce the wine supply. The 2020 California harvest may be the smallest in a decade.

• Retailers who understand on-line sales and e-commerce – even without more loosening of three-tier laws — “will have a strong 2021.” The report says on-line sales could represent 20 percent of an average winery’s sales within five years – an impressive figure, given those are in the mid-single digits now. And e-commerce sales during a three-month period in 2020 increased as much as the previous 10 years.

Not all was good news, of course. What else would we expect after 2020? Wine’s growth rate, even with premiumization, has declined across all price segments for years, and there is no reason to expect a long term change unless the wine business changes tactics in how it sells wine. In addition, as Baby Boomers continue to drink less wine, the industry must find a way to reach under-40 consumers. Which, as we know, it has failed miserably at.

Wine of the week: Villa Wolf Gewurztraminer 2018

The Villa Wolf gewurztraminer is a sweet German white wine that reminds us that sweet doesn’t have to be overdone

Gewurztraminer is a white grape that is little known any more, but that once used to have a sizeable following for its price, value, and the idea that sweet wine doesn’t have to be sickly sweet. In this, the Villa Wolf gewurztraminer reminds me of what those wines were like.

The Villa Wolf Gewurztraminer 2018 ($13, purchased, 12.6%), a German white, is the kind of supermarket wine I wish we could buy in the U.S. It’s simple but not stupid, with a little bit of that spicy quality that gewurztraminer used to be known for. Riesling was oily and lemony; gewurztraminer was floral and spicy. And the Villa Wolf is, with a touch of orange-ish fruit for good measure.

So how sweet is it? My tasting notes say moderately sweet, so it’s certainly noticeable – but not as sweet as white zinfandel or even some sweet reds. In this, the sweetness is part of the wine and not something tacked on at the end, so it’s not the wine’s reason for being.

The traditional pairing for this is spicy Asian food, but I also think it would match with something fatty and salty – German sausages, perhaps.

Imported by Loosen Bros. USA

 

Winebits 680: Drink Local, pandemic wine, wine tariffs

drink localThis week’s wine news: Supermarkets embracing Drink Local during the pandemic, plus one more study about pandemic drinking and wine tariffs

Drink Local thrives: Supermarket News reports that “Retailers deepened their relationships with local beer brewers and winemakers in 2020 to satisfy customers and support their local economies.” Which, of course, is something those of us who have long believed in local wine are very glad to see. The story looks at one California grocer, where virtual tastings with local wineries have far exceeded expectations.

One more study: The Wine Curmudgeon has been keeping close track of the various pandemic drinking studies, if only because the results show hat we’re drinking less, drinking more, and passing out in front of the TV set – or all three.. The latest study comes from a browser app that offers retail discounts; its findings seem just as reliable as any of the others, which is to say not necessarily reliable at all. There’s no methodology in the release, for one thing, and it claims rice wine sales have increased 37 percent – more than any other kind of wine, more than most spirits, and more than something called “imported craft beer.”

Whoops: About 10 days ago, U.S. trade officials said they would extend and increase tariffs on a variety of French products, including much wine that had not been taxed in October 2019. Then, at the end of last week, they said they wouldn’t up the tariff, after all. And then maybe they did, depending on news reports this week. Don’t worry if you’re confused. So am I, and even the normally reliable BBC seems confused in the story in the link. Just know that the situation remains the seem as it was before the end of the year, awaiting the new administration.

The demographic history of the U.S. alcohol consumer

alcohol demographicsWe don’t drink much (and we never really have), what we prefer to drink constantly changes, and religion, gender, and income still matters in what we drink

Know all that foolishness about booze drinking in the U.S.? Prognosticators pontificating about wine, beer, and spirits consumption without any real numbers? That we’re drinking ourselves to death?

Well, forget that. Here are facts – real, certified, mathematical statistics. It’s a freelance piece I wrote for the December issue of the revived American Demographics magazine, “The Demographics of Drinkers.” It starts on page 8 of the linked site.

Among the highlights:

• U.S. alcohol consumption, per capita, peaked in the years before World War I. In other words, despite all the talk about how we’re passing out in front of our kids and the TV set, we have always been one of the least boozed up industrial countries in the world.

• The 15 or so years between the end of World War II and the early 1960s saw drinking reach a low not seen since Prohibition, less than two gallons per person a year (not even one bottle of wine a month). The reason? No one is quite sure.

• Consumption declined again in the late 1980s, thanks to tougher drunk driving laws, groups like Mothers Against Drunk Driving, and the Just Say No campaign. So today’s drink-free Millennials have nothing on their parents.

• And, perhaps my favorite bit, from a 2019 study by University of California-Davis researchers: People who prefer craft beer are more likely to have voted for Donald Trump in the 2016 presidential election, live in a rural area, drink less expensive or sweet wine if they drink wine, and spend more on alcohol than anyone else. And no one is quite sure why this is, either.

Many thanks to Dane Twining and Tim Simmons, who did the editing on the story, which had more than its share of obstacles on its way to print.