Category:Wine news

What do young people want?

Forget all that media-inspired spin about hot cocktails and a surge in wine drinking by younger consumers. They’re still drinking beer.

That’s the conclusion of a Nielsen study released this week, tracking the drinking habits of what the report calls Millenials — the 70-million 21- to 30-year-olds in the United States.  That’s the second largest demographic group in the U.S. after the Baby Boomers, and larger than Generation X.

Yes, the study shows that Millenials are drinking more wine and that they want to learn more about wine. (Shameless plug: Check out Two Wine Guys, all you Millenials.) But the key numbers: Beer accounts for almost half of all their alcohol purchases by dollar, and it accounts for 83 percent of their purchases by volume.

Which means that 8 out of 10 times a Millenial walks up to the bar or goes into a liquor store, he or she is buying beer. The dollar figure is lower since beer costs less than wine or booze. Which also means that wine producers need to do more than put cute labels and catchy names on their bottles. They need to reach out to these consumers, and explain why beer is more fun to drink than wine.

Merry Edwards and direct shipping

  Merry Edwards, one of the leading pinot nor and sauvignon blanc winemakers in the world, doesn ?t sell her wine to retailers. You can buy it in a restaurant (mostly of the fine dining variety), or you can buy it directly from her, though there is a wait to get on her mailing list. Otherwise, you ?re out of luck.

Edwards has been doing this since her first vintage in 1997, and sees it as something completely logical for small wineries like hers, which make less than 10,000 cases a year. When Edwards was in Dallas, we talked about her distribution model (as the guys in suits call it), which is unusual. Most small wineries still want a distributor, who sells their wine to retailers.

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Consolidation in the wine business

This is one of the Wine Curmudgeon’s favorite topics, but it’s difficult to get people to pay attention. Too many consumers don’t understand that increased consolidation may well reduce their choices and raise the prices they pay.

The latest news? Constellation Brands, a $5.2 billion company, paid $885 million for the wine subsidiary of the company that makes Jim Beam. Constellation will get Clos du Bois, Geyser Peak, Wild Horse, Buena Vista Carneros and Gary Farrell. Constellation, incidentally, is a bigger company than PetSmart and Pizza Hut.

The always erudite Dan Berger has the best take on this: Consolidation will hurt the quality of the wine, unless everyone is paying very close attention.

Peter Mondavi’s perspective

Peter Mondavi Jr. Peter Mondavi Jr., regardless of anything else (and there are a lot of anything elses with the Mondavi family), knows wine. He is the son of Peter and the nephew of Robert, two men who are among the handful who have helped California wine become some of the best in the world.

So when Peter Jr. offers his perspective on the state of the wine business, as he did during a recent visit to Fort Worth, it ?s worth paying attention. Today, Peter runs the Charles Krug Winery in Napa Valley, which one part or another of the Mondavi family has owned since 1943. One of his goals? To make wine drinkers once again associate the family name with quality wine. This is something that hasn ?t happened much given the focus on the Mondavis ? various personal and financial woes ? mostly on uncle Robert ?s side of the family — over the past decade.

?It ?s incumbent upon our half of the family to show the Mondavis in as different a light as possible, ? he says. ?We want to continue the family name and heritage. ?

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Cheap wine and the weak U.S. dollar

$1 Ask foreign winemakers what their biggest problem is, and the answer is almost always the same: the historically weak U.S. dollar. ?We ?re getting absolutely slagged, ? says Hugh Hamilton, an Australian whose brands include Hugh Hamilton and Jim Jim.

How bad is it? The Australian dollar was worth more than 90 cents U.S. in November, its highest level since 1984. The euro, which French, Spanish, and Italian winemakers use, is at a record high of almost $1.50. It was worth $1.17 at the beginning of 2006. Even the Chilean wine industry is noticing the difference, as the peso continues to appreciate against the dollar. It is at levels it hasn ?t seen since 1999.

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