Category:A Featured Post

Wine terms: Problematic pricing

Problematic pricingYou may see the wine term problematic pricing or pricing is problematic in a review, and especially in one of the mini-reviews that runs on the final Friday of each month. It’s mostly what it seems: If it’s problematic, the wine’s price is a problem, and the problem is that it that doesn’t offer enough value for its price.

Still, this hasn’t been clear to enough people, and so the need for this post. One PR woman in particular wasn’t quite sure what it meant. Either I liked her wine or I didn’t, and what did price have to do with it?

Price, of course, has everything to do with it. It’s not enough that a wine is cheap (or expensive, for that matter). Does it offer more value than it costs? Or is it just cheap, like most of the $5 wine the big retail chains sell? Or is it marketing driven, where you’re paying for what’s on the label as much as for what’s in the bottle?

I asked the great Lynne Kleinpeter about this, because I trust her palate, in many ways, even more than I trust my own. If nothing else, she can be objective when she tastes the kind of wine that makes me want to write horrible, misanthropic reviews. Her answer: “When I would buy this wine at this price? If it was the only wine in the store, and I didn’t have a choice.”

Wine pricing doesn’t get more problematic than that.

Big Wine tightened its grip on the U.S. market in 2013

Big Wine tightened its grip on the U.S. market

So how many smaller wine companies should we buy this year?

Big Wine tightened its grip on the U.S market in 2013, with new figures showing that three companies accounted for more than half of all the wine produced during those 12 months. E&J Gallo, The Wine Group, and Constellation Wines totalled some 187.5 million cases of the 370 million produced.

Throw in the next three biggest companies — Bronco, home of Two-buck Chuck; Trinchero Family Estates; and Treasury — and that total rises to 241.4 million cases — about two-thirds of the wine made in the U.S. The top 30 by themselves account for some 90 percent; in other words, all the wine that those of us who write about wine love to write about? Hardly anyone drinks it. No wonder availability is such an issue.

The report, Wine Business Monthly’s annual ranking of the 30 biggest U.S. wine companies (requires free subscription), follows up on last year’s Michigan State study that found that Big Wine controlled about 60 percent of the U.S market. The two studies didn’t use the same methodology (Wine Business Monthly doesn’t include imports like Yellow Tail, but apparently does include foreign brands owned by U.S companies), but the trend is obvious. The big are getting bigger.

A few thoughts about the results:

? There is big, and then there is really big. No. 1 Gallo, with 80 million cases, sold more wine than the bottom 26 companies combined. That’s a staggering statistic, and speaks to Gallo’s understanding of the post-modern wine business — marketing, certainly, but also how to leverage the three-tier system and how to develop products, like sweet red wine, that elude other wine companies.

? Adding brands. “One of the things that surprised me was the number of big wineries that are not introducing new brands,” said Wine Business News editor Cyril Penn. “It’s mostly just the Gallo’s and Constellations of the world are doing a lot of that this year.” These so-called line extensions are another sign that the biggest companies see wine the same way Proctor & Gamble sees cleaning supplies and Campbell’s sees soup.

? Consolidation is all. Wine Business Monthly included its 2003 top 30 list, and 12 companies on that list are gone, sold or merged into bigger companies. In addition, five companies are on the 2014 list because they bought other companies to get big enough to make the list.

? Big isn’t as big as it used to be. One million cases used to be the hallmark of a big wine company. These days, it will only get you 18th on the list.

Is all this bigness good? For prices, almost certainly. The biggest companies can afford to sell wine for less and make up the difference on volume (to say nothing of their lower costs of production, thanks to economies of scale). Wine quality, at least technically, should also benefit, so now flawed or unripe wine. What’s less clear is what bigness means for value. Big Wine focuses on price and technical quality, and whether the wine is interesting is an afterthought. Hence all those $10 California merlots that taste the same.

The fear for those of us who love cheap wine is that, as the big get bigger, it will be more difficult to find interesting cheap wine. I’m seeing some of that this year, with producers sacrificing interest in favor of cheaper grapes to keep prices down. The last thing any of us want is for wine to turn into beer, where cheap means Budweiser and Miller Lite, and where it’s almost impossible to find the $10 values that exist in wine.

Wine of the week: Le Coq Rouge 2012

Le Coq Rouge The Le Coq Rouge is a perfect example of why you shouldn’t judge wine before you taste it. Because it offers plenty of reasons to do just that:

? Cutesy label. How many chickens, birds, and assorted fowl have we endured over the years?

? Odd Rolling Stones referece in marketing material, because Coq Rouge means Red Rooster in French, and the Stones covered Howlin’ Wolf’s “Little Red Rooster.”

? Descriptors that bear no relationship to the wine, including “a lovely mix of chocolate and vanilla” and “wooded notes” — whatever that is.

Chalk it up to French marketing envy, under the mistaken impression that American consumers need that kind of foolishness. What does matter is the wine’s pedigree and what’s in the bottle, and both are impressive.

The Le Coq Rouge ($10, sample, 13.5%) is from the company run by Sacha Lichine, whose father was the legendary Alexis Lichine, one of the men who gets credit for introducing Americans to wine. The wine is mostly grenache, with enough red fruit to be pleasant but not so much as to confuse it with other, more over the top critter wines. It also has a bit of a back and soft tannins; in this, it’s a more modern version of another red blend from southern France, La Vielle Ferme, but more consistent and better made.

A tip ‘o the Curmudgeon’s fedora to Chris Keel at Put a Cork in It, who did a tasting with this wine when I did a cheap wine book signing at his store last month and put me on to the Coq Rouge. Because, otherwise, I wouldn’t have bothered, despite my best intentions.

 

Winebits 324: WC favorites edition

Winebits 324: WC favorites edition

Will empty tables force restaurants to change the way they approach wine?

Because the things that fascinate me about wine and that consumers need to know — and which rarely include toasty and oaky — keep making news:

? Distributor clout, once again: When in doubt, they get out the checkbooks, reports an Ohio newspaper group. The state’s beer and wine wholesalers donated $146,000 to Buckeye state lawmakers around the time the Ohio legislature passed a bill — apparently, without anyone knowing — that made it illegal for the world’s biggest brewer to buy more distributorships in the state. In addition, said the story, “both Republicans and Democrats benefited from the wholesalers’ cash. And donations sometimes rose noticeably around the time a key vote was scheduled.” My favorite part of the article is the quote that says the distributors, who have a constitutionally-protected monopoly that all but guarantees them profits, were saving Ohioans from the nefarious actions of an evil multi-national beer company. Talk about the pot calling the kettle black.

? Restaurant sales still slow: The restaurant business continues to struggle, says this story from Nation’s Restaurant News, and no one is quite sure why. Is it the result of the worst winter in 40 years? Is it a hangover from the recession, which never really ended for all but the most high-end restaurants? Is it a fundamental shift in the way Americans eat? The restaurant business matters in wine, as regular visitors here know, because restaurants go out of their way to hurt wine. And the slump in restaurant sales, which has lasted more than five years, may force changes in the way restaurants deal with wine, which means better quality and lower prices. Or so some very smart analysts have told me.

? The biggest wine companies: Mike Veseth at the Wine Economist looks at disintermediation, an economic term that refers to the specialization of labor. In this case, it’s about the number of employees needed to to make a case of wine. Not surprisingly, the formula is not as simple as it sounds, and speaks to the way post-modern business works — outsourcing, contractors, and the like. Many of the biggest wine companies don’t own vineyards or even wineries; one company, Castle Rock, produced 550,000 cases with just nine employees. “With product chain disintermediation, the number of people actually employed by a winery can be surprisingly small with that tiny workforce specializing in coordinating the various firms and contractors that make up the links in the chain,” wrote Veseth. What this means for consumers? Less expensive wine, of course, since disintermediation lowers the cost of production.

Image courtesy of Berenika, via stock.xchng, using a Creative Commons license

Francis Ford Coppola, wine, and family

Francis Ford Coppola, wine, and family

“I like to drink wine.”

Francis Ford Coppola spoke for 2 1/2 hours in Dallas last week, a monologue that covered his Academy Award-winning film career, his very successful wine business, and his grandchildren. But perhaps the most impressive thing was his modesty.

“I like to drink wine, but I don’t make wine,” he told the audience of 150 or so. “I don’t know how to do it. I suppose I’ve learned how it’s done, but that’s not why I do this. I like to drink wine.”

Which, in my 20-plus years of talking to celebrity winery owners, was the first time anyone has been that forthright. Talk to the entrepreneurs, actors, and musicians who get into the wine business, and they throw winespeak around like heart-shaped cards on Valentine’s Day. Maybe they figure that’s how they can make their bones. But Coppola didn’t say brix or clones, never mentioned scores or critics, and spent more time showing pictures of his family — and singing about them — than almost anything else.

There were literally dozens of wines available to taste at the event, but I’ll hold off writing about them. Conditions were not conducive to tasting, with so many people crammed into the lobby of a 1930s movie theater, and the more expensive wines were mixed in with the cheaper ones so it was hard to tell which was which. My general impression: the grocery store-style wines were solid, if a little ordinary.

And they weren’t the biggest attraction anyway. That was Coppola, not only the man who has made some of the greatest films in the history of the movie business, but someone who seems just as happy sharing snaps of his grandchildren as talking camera angles and gross vs. net. A few highlights:

? Coppola got into the wine business by accident, mostly because he liked the swing that was hanging from a tree when he and wife Eleanor wanted to buy a house in Napa Valley in 1975. The tree was in the front of the historic Niebaum mansion, and Coppola said he could see his 4-year-old daughter Sofia (yes, that Sofia) swinging on it. But the mansion included some of the best vineyards in California, and one thing led to another.

? The wine business has exceeded expectations, becoming one of the 30 biggest in the U.S. The 1.25-million case Francis Ford Coppola Winery includes the grocery store brands like Diamond, Rosso, and Bianco, while the high-end wine, including Rubicon, is part of the new Inglenook company, part of his effort to restore one of California’s first great wineries.

? “The biggest change in the wine business since I started? The number of wineries, and not just in Napa, where it’s gone through the roof. I traveled across the country once making a picture, and once we got past Virginia, there was no food and no wine. That’s all changed, and all for the positive. People are so much more knowledgeable, and have learned the more you know about wine, the more you enjoy it.”

? The best explanation ever for the mess that is “Godfather III:” “I didn’t want to make it. Whoever heard of ‘Hamlet III?’ But I had to pay off the bank.”

? Making “Apocalypse Now” taught him that past success never guarantees anything, and he told how he became so angry he threw his Oscars out the window and broke them. That’s because, given the piles of money the first two Godfather pictures made, he said, he assumed he wouldn’t have any trouble getting studio money for “Apocalypse.” Which is exactly the opposite of what happened, and he had to finance it himself.

? And That Movie? Coppola discussed it briefly, noting that it was both a financial and critical failure, and that he wasn’t too happy with it, either. I felt better.

Photo credits: Lisa Stewart

Take heart: Charles & Charles has three great cheap wines

Take heart: Charles & Charles has three great cheap winesTake heart, everyone who loves cheap wine. Charles & Charles has not only released its new, always excellent, rose, but a white and red as well.

“We try to have fun with the labels, and we want people to have fun drinking our wines, but that doesn’t mean we don’t pay attention when we make them,” says Charles Bieler, who was in Dallas this week to promote the inexpensive Washington state wines he makes with Charles Smith. “We couldn’t be more serious.”

In this, Bieler is as passionate as the labels are unconventional — think 30-something winemakers as urban music superstars. Our discussion covered the costly winemaking techniques not usually used for cheap wine but found in Charles & Charles wines; high alcohol, and why the Charleses don’t like them; the changing face of the wine business and the need to attract new wine drinkers; and that rose is quickly becoming an acceptable wine to drink in a way that I never thought it would be (and for which Bieler didn’t treat me like a cranky old man).

Most importantly, we tasted the wines, which are priced at $13 but can be found for as little as $10 (and all were samples):

? Charles & Charles Rose 2013 (12.6%): This is consistently one of the best roses in the world, fresh and crisp with red fruit, and the 2013 is no exception. The best news is that production almost doubled for this vintage, so there should be plenty of wine to go around.

? Charles & Charles Chardonnay 2012 (13.3%): Bieler emphasized the wine’s French style, but I saw more Washington state, with a touch of oak, rich fruit, and a subtle balance. It’s practically subversive, given what most cheap chardonnays taste like.

? Charles & Charles Post No. 35 2012 (13.6%): This red blend, cabernet sauvignon and syrah, was my favorite of the three. It’s a stunning wine for the price, dark and interesting but with telltale Washington state black fruit and amazing tannins. The catch? The 50,000 cases are almost gone, thanks to a 90-point review in the Wine Spectator. How dare it deprive us of such a wonderful wine.

Finally, consider this irony: We met at a restaurant where there was only one wine on the list that cost less than $30, and most were overpriced and quite ordinary. Maybe I should have mentioned the Charles & Charles to someone there?

Wine of the week: Lungarotti Torre di Giano 2011

Wine of the week:  Lungarotti Torre di Giano 2011The Wine Curmudgeon tries desperately not to let the wine geek inside him get out, but sometimes it’s very, very difficult. I know I need to taste more cabernet sauvingon and merlot, but, as my pal the Italian Wine Guy says, “If it’s got two grapes no one has ever heard of, you’re going to like it.”

Which bring us to the Lungarotti ($15, purchased, 12%), a white blend from Italy made with three grapes that mostly fall into that category — vermentino, trebbiano, and grechetto. Wine drinkers might know one of them (vermentino isn’t all that rare), but all three? The wine geek in me was salivating. Trebbiano, of course, is the Italian name for my beloved ugni blanc, star of so many fabulous Gascon wines. And the grechetto may be the geekiest of all, a grape that has shown up in only one reveiw here in seven-plus years.

Best yet, the wine did not disappoint, even for $15. It’s a funky and fun blend that tastes more sophisticated than it should, a sign that someone took pride when they put it together. It’s clean and fruity (a little bit of lime zest?) and almost floral, but also crisp and refreshing. Floral wines, typically, aren’t that, another sign of quality. Highly recommended, either with seafood or on its own, and even for those who don’t have a wine geek hiding inside.