Category:Wine rants

Has the next phase of the wine slowdown started?

wine slowdownToo many grapes, younger people who don’t drink alcohol, and slowing sales among all age groups are signs of a wine slowdown

Call it a tipping point if you don’t mince words or an easing of momentum if you do, but the results are the same. It looks like a major change in U.S. wine consumption is underway. Call it the post-recession wine slowdown.

Know four things:

• California wineries, faced with an oversupply of grapes from yet another bumper harvest and lagging sales, don’t seem to be buying as many grapes this year. In fact, their attempt to get out of grape-buying contracts in some parts of the state is causing controversy and bad blood.

Wines sales have slowed, so that even an industry cheerleader termed growth for this year at a “sluggish 0.2% projected pace.” These numbers, from the company that publishes the Wine Spectator, confirm what has been reported elsewhere many times – U.S. sales by volume won’t exceed the increase in the drinking age population for the foreseeable future.

• One of the world’s biggest spirits companies expects that the “low-[alcohol] and no alcohol cocktail movement will increasingly shape the bar world” in 2019. The report went on: “What is most notable, though, is the differing consumption habits of the younger demographic, with 46 percent of people under the age of 35 likely to order a mocktail (non-alcoholic cocktail), versus just 16 percent of over-35’s. “

Rob McMillan of Silicon Valley Bank, one of wine’s leading statistical gurus, says the industry is at that tipping point. McMillan says there will be more grapes than are needed to meet slowing demand, and that the industry must come up with a Plan B to sell its product in this more challenging environment.

In other words, we have too many grapes, younger people who don’t necessarily want to drink alcohol, and slowing sales among all age groups. But the industry is hellbent on selling more expensive wine as if none this was relevant – if it was still the heyday of scores and wine magazines in the 1990s and that post-recession premiumization would go on forever.

Consumers – and that includes most wine drinkers – vote with their debit cards. You can only sell overpriced and lower-quality wine for so long before they put their debit cards away. If that is happening now, and I think it is, then we have a wine industry selling something fewer people want to buy. And that is not a recipe for success.

The sommelier cheating scandal: Once again, wine reminds us it’s big business

 sommelier cheating scandalFirst, fame and fortune, and now a sommelier cheating scandal

Wine’s biggest secret is that it’s a business, just like coal mining or car manufacturing. That’s because it pretends to be something else, this huge family of wine lovers where yes, we have to make money but that’s not the main reason we do it. Which is just more hypocrisy to anyone paying attention, and which the sommelier cheating scandal amply — and sadly — demonstrates.

Know that I’m not tarring the innocent with this brush. The cheating scandal, revealed last week by Esther Mobley in the San Francisco Chronicle, involved a master sommelier giving a list of the wines to be used for the blind tasting portion of the 2018 exam to one of the candidates. The accused has apparently been struck off the Court of Master Sommeliers, and everyone who took the test will have to take it again. No one has said that the cheating goes past that, though Mobley noted that 24 people passed the 2018 exam, compared to 274 in its almost 50-year history. Still, the organization that runs the certification has seemingly been  open and transparent about what happened.

Sommelier-ing has become an industry in and of itself – movies, even. Sommeliers are the current rock stars of the wine business, perhaps even more quoted and revered than the celebrity winemakers who used to dominate the discussion. Or, as this story amply demonstrates – “curated by a master sommelier for taste” – why not cheating if those are the results? Talk about pedestals; only someone with initials after their name can decide if wine is worth drinking.

Consider that someone who earns an MS can make twice as much money – high six figures, in fact – than someone without the distinction. Which, regardless of anything else, is all the incentive one needs to cheat in 21st century America. Because, as a good ol’ Texan famously told me at the bar at Louie’s, “If you have to ask how much money is enough, you don’t understand the question.”

The best perspective on the sommelier cheating scandal came from someone who must take the exam again. The person, who asked not to be named, told the SevenFifty Daily website: “I will probably be one of the candidates who will not retake the exam. I know this is not the intent, but I feel like a martyr. I am embarrassed, though I did nothing wrong. I want to find a different industry to work in. I want this to be over.”

How sad is that? Isn’t wine supposed to be fun?

Wine value 2018: Where we’re at today and what could happen next year

wine value 2018Six things to know about wine value 2018

Wine value 2018 has become perilously close to an oxymoron – a contradiction in terms with little real meaning. Even the Australians, who are famous in most of the world for their cheap exports, are lamenting premiumization and the disappearance of value.

Why this is happening has been well documented, here and elsewhere. Whether it will continue is a point of much contention. The wine business is betting its future that premiumization is here to stay, and that consumers will happily pay $20 for wine that used to cost $10. Others, meanwhile, who are looking at data instead of wishfully thinking, see a wine world with an unsustainable pricing model.

Know the following six things about wine value 2018, where value is defined as wine that is well-made and fairly priced and usually costing less than $15:

• Yes, value still exists – in Spain, parts of Italy, and some of southern France. Many of these wines are still made to reflect terroir and treat their grapes accordingly. Use the category menu to the lower right to search for wines from these countries.

• It’s almost impossible to find value in U.S. wine for $15 or less, save for a brave few brands that are almost single-handedly holding out (and even they have occasionally wavered).

• Producer consolidation, which I once thought would keep prices in line, hasn’t. We’re this much closer to an oligopoly pricing model, where a handful of large companies decide what to charge and everyone else is happy to follow along. Remember, three out of five bottles on the grocery store Great Wall of Wine likely come from just three mega-wineries.

• Pricing is starting to devolve into three tiers. First, cheap and poorly made wine, costing $12 or less, marked by cute labels and gushy winespeak. Second, gimmick wine, often red blends with manly names that are sweet but are passed off as dry, costing from $12 to $18. Third, “collector wine” at $20 and more, labeled as better than anything else and priced that way – even if neither is true.

• Most of the Winestream Media don’t care about any of this, and so don’t write about it. Instead, we get point scores – all remarkably in the high 80s or low 90s – for what seems to be every wine, regardless of quality or price.

• Producers will intensify their focus on premiumization next year, which means two things: First, new, higher-priced brands, and two, price increases for established brands. There has been much more of the former than the latter since the end of the recession, and it could mark as sea change in the wine business if producers can make price increases stick.

More about wine prices and wine value:
Has all the value gone out of California wine
Restaurant wine prices 2018
What is value in wine?

American Airlines wine – is it really worth $9 a glass?

Add American Airlines wine to the joys of post-modern airline service

american airlines wine

I don’t much care for the new logo, either.

Dear American Airlines:

Charging $30 to check a bag requires chutzpah. Making your seats smaller to cram in more people so they can pay $30 to check a bag is chutzpah taken to the next level of chutzpah. But you know what may be worse? Paying $9 a glass for American Airlines wine.

It’s one thing to pay $9 for a glass of wine in a restaurant, even if it’s marked up four times and it wasn’t that much of a wine to begin with. At least it’s in a restaurant, where there’s food and a table and someone waiting on you and a glass for the wine and maybe even a comfortable chair. Which, of course, is the exact opposite of post-modern airline service.

Your three $9 wines – a red blend, a rose, and a sauvignon blanc – are apparently private label. I couldn’t find the wines listed for sale anywhere, including Wine-searcher and CellarTracker. Hence, the wine likely costs you about $2 a glass – a markup to delight even the most markup-conscious restaurateur.

And none of this takes into account the quality of American Airlines wine. There were a scattering of reviews on Vivino; the rose write-up (3 stars out of 5, which translates to a 60- to 70-point wine for those who care about that sort of thing) didn’t fill me with confidence: “However, the finish has a lot of steel/metallic elements … quite abrasive.” Yummy, huh?

The other thing that’s annoying? You serve real beer, including Fat Tire and Goose Island. What did the beer drinkers do to deserve that? Do you think they’re better than wine drinkers? Or smarter in some way?

And yes, I understand you can do this. In our “unregulated, nuts to the customer because we’re an oligopoly and there’s nothing you can do about it post-modern airline world,” you can charge as much as you want, be it for baggage, fares, meals, or wine. But that doesn’t mean I have to like it or drink it. Bring me a Fat Tire, please.

So understand my job is to tell my readers about overpriced wine.  I can’t do anything about $30 to check a bag, but I can do something about this.

Yours in the battle against overpriced wine,
The Wine Curmudgeon

Four things to know about the rose boom (and that don’t have anything to do with Instagram or memes)

rose boomThe rose boom isn’t about Instagram and memes; it’s about quality wine at a fair price

Listen to the wine wise guys, and the rose boom is about “rose all day” and Instagram posts. Of course, these are the same people who didn’t catch on to pink wine until it was already a hit. Given that, why should we believe anything they say?

So here are are four things to know about the rose boom that don’t have anything to do with Instagram or memes – but show that wine drinkers know value when they see one. Which explains rose’s continuing popularity more than all the hype and the glitter in the Hampton’s.

Consider:

• There’s so much demand for rose that some retailers and distributors are trying to sell old, worn out junk, figuring we’re not smart enough to know the difference. I’m seeing more and more of this, with pink wines as old as 2013 and 2014 finding their way to store shelves. Remember, if a rose is more than 18 months old, it’s probably not worth drinking.

We’re buying $10 rose, no matter that our betters are telling us we’re supposed to spend more. In the 52 weeks between April 2017 and April 2018, we bought five times as much $10 rose as we did $20 rose. In fact, rose costing $10 or less accounted for almost 60 percent of sales over that period. Suck on that, premiumization.

• Overall, reports the same study, U.S. wine sales remain flat. But rose sales increased 53 percent from 2017 to 2018. So consumers, given the choice between buying quality $10 rose or overpriced $18 wine, are buying quality $10 rose. Why isn’t anyone noticing this?

Millennials don’t drink the most rose; it’s still the province of older wine drinkers, according to the Wine Market Council. This makes perfect sense if you look at overall wine consumption, where Millennials are generally at the bottom of the list. But wine industry hype rarely makes perfect sense or any sense at all.

New and easier to use motor oil containers, but same old wine bottles

wine bottles

Something’s wrong here — not a cork or punt in sight.

Even the conservative and old-fashioned motor oil business realizes packaging matters. So why doesn’t the wine business?

Does this quote sound familiar?

“We are far more conservative in the marketing of our products. We are almost apologetic. While other industries focus on creating products that are distinctly different and stand out from the crowd, we do the exact opposite.”

No, it’s not the wine business, which considers screwcaps the spawn of the devil and still thinks chateau wine labels are a big deal. It’s the motor oil business, as described by a long-time senior official at Valvoline.

So when Valvoline comes out with a truly innovative product – a five-quart, easy-open, easy pour, ergonomic motor oil bottle, what does that say about the wine business and its outdated and ridiculously stubborn reliance on the 750-ml bottle and its cork closure?

Not much. Is it any wonder I worry about the future of the wine business?

The genesis for this post came after talking to a friend about wine packaging. He described a trade show seminar where a packaging consultant told the audience that the dizzying array of wine bottles – their shapes, sizes, and closures – were expensive, inefficient, and hurt sales and profits. He couldn’t help them until they decided to get serious about wine packaging.

And then I saw a TV ad for the new Valvoline bottle, and I literally shook my head in despair. Valvoline wanted a new container that would make changing oil easier and less messy, but that fit on store shelves the way the current container does. In other words, it saw a problem and wanted to fix it to sell more product.

By contrast, how many times has anyone in the wine business said opening a wine bottle should be easier? Hardly ever. And how many times has anyone said the wine business should spend money to solve that problem? Even less than hardly ever.

The solution to this exists, by the way. There is a wine equivalent of the new Valvoline bottle – plastic, or PET, bottles. They have a smaller carbon footprint and weigh up to eight times less than glass, are almost unbreakable, use screwcaps, and fit on a shelf like a glass bottle. There was a push to use PET for wine about a decade ago, and you’ll see PET beer bottles, but the wine initiative never got anywhere. Is anyone surprised?

More about wine packaging:
It’s not the quality of the wine — it’s the sound of the cork popping
Will canned wine solve all of the wine business’ problems?
Four wine myths that confuse consumers

One more time: The independent wine retailer is your best friend

independent wine retailer

No, this is not the selection at a quality independent retailer.

Only the independent wine retailer can save us from crappy wine and unfair pricing

The country’s pre-eminent “natural foods” grocer had two wine displays next to each other last month in a Dallas store. One wine was the kind you’d expect it to carry – Jules Taylor New Zealand sauvignon blanc, a terrific wine and especially for the $15 sale price. Next to it was mass produced schlock, a California chardonnay that uses intensive winemaking to taste sweet and buttery. It was also $15, and I saw the same wine for the same price at Target.

If a store that markets itself as carrying only the finest natural, organic, and sustainable products treats wine that way – junk next to excellence, and for the same price — how can we count on any retailer to offer quality and value?

Fortunately, that’s what the best independent wine retailers do. Because, as a wine business friend emailed the other day, “The consumer has a romantic view, with no idea of all the BS behind the curtain to sell the ocean of wine being made. And I feel the consumer is overpaying most of the time.”

The best independent wine retailers don’t do those things. They won’t sell you something like that chardonnay, where the bottle was probably the most expensive part of the product. In fact, most won’t even have it in their stores.

The best independent wine retailers understand that customer service matters, which is why they don’t carry junk. Better to sell you cases and cases of wine over the long term than six bottles of plonk and never see you again. And they price their products fairly, without the come-ons and phony discounts that dominate the marketplace. Right, Cost Plus World Market?

What makes a quality independent wine retailer?

To paraphrase from the cheap wine book:

• Does the retailer ask questions about your preferences, helping you figure out what you want – red or white, sweet or dry?

• Does the retailer let you ask questions? Do you feel comfortable asking those questions? Or do you feel you’re being humored in the way adults humor small children?

• Does the retailer answer your questions? Are the answers understandable or in winespeak? And, when you say you don’t understand what he or she means by leathery or oaky, do they explain so you do understand?

The best retailers do more than sell wine. They help you find wine that you didn’t know you would like. It’s easy to sell someone something that they already know about. What’s more difficult, and a mark of the best retailers, is to find something new – a Spanish albarino or French picpoul for an Italian pinot grigio, for example, or a fruity rose instead of a white zinfandel.

I’m lucky to have two top-notch independents in Dallas, and I have rarely been disappointed. I know if the wine is on their shelves, it’s probably worth buying. And I also know I can ask any question I want, no matter how Wine Curmudgeonly cranky, and I’ll get an intelligent answer. No one will sell me something because it’s on sale or because they get a bonus for selling it. They sell it because they want to make me happy.

And when’s the last time we could count on that in the wine business?