Ray Isle: “Producers are doing anything they can to keep prices from going up.”
“It’s a complicated time for sure, and especially complicated for small producers. … It’s not a time I’d want to be starting a winery.”
Ray Isle, the executive wine editor of Food & Wine, has a unique perspective on wine during the pandemic. He not only writes about wine for one of the country’s leading food magazines, but he brings a practical sense to the job that many of his colleagues don’t bother with. Or, as he said during our chat: “I got into wine as a poor graduate student, and my budget for wine was about $14.99 a month, and I’ve never abandoned that. You have to write about the affordable stuff. That’s what people like to drink.”
We talked about that, and Ray offered a variety of value wine suggestions, including the Sokol Blosser Evolution No.9 white blend (in a 1.5 liter box, no less, which I also liked); a South African red and white; and an $11 Chianti. We also touched on:
• Wine prices and availability during the pandemic — both seem to be better for domestic wines than for imports because of the tariff.
• The future of the tariff; he, too, is cautiously optimistic about getting rid of the 25 percent levy regardless of what happens in November.
• The state of restaurant wine, and why we should be worried about the future of the U.S. restaurant business because trouble there means trouble for or wine.
No, NPR, most Americans haven’t been passed out on the the sofa during the pandemic, despite what your story says.
This time, it’s NPR that doesn’t do the reporting and accepts the neo-Prohibitionist arguments that drinking will kill us sooner rather than later
Yes, I understand about budget cuts and the changing landscape for traditional media. But that’s still not an excuse for the sloppy reporting in this story, which ran on Friday. It recounted the arguments – most not necessarily true – that the neo-Prohibitionists use in their attempt to once again outlaw alcohol in the U.S.
Hence, I will reiterate my offer to serve as a sounding board the next time something like this comes up. Because, frankly, you missed a lot:
• You also took at face value the claim that we’re drinking staggering sums of booze during the pandemic. Which isn’t true. Yes, the story in the link is a bit jargony, but the point is that overall wine sales are down because of restaurant closures. So, in fact, we’re drinking less wine during the pandemic (also borne out here).
• The story said more people die from alcohol-related diseases each year than from drug overdoses, which is damned scary – save for one thing. Drinking is legal and booze is easy to get. Drugs, if you need enough to overdose, usually aren’t legal or easy to get. It’s a lot more convenient to kill yourself with alcohol, since you don’t have to meet a guy in a parking lot to buy heroin or coke, or to forge an Oxycontin prescription and hope the pharmacist doesn’t notice.
• The story ignores the astonishing statistic that one-third of us don’t drink, which is among the highest abstention rates in the industrialized world. I’ll bet you didn’t know that. So, next time, you need to ask: How can we be drinking ourselves to death if so many of us don’t drink?
Finally, a few words about one of my favorite neo-Prohibitionist flummoxes, something called “alcohol use disorder,” and which figures prominently in the story. Health officials claim that 15 million of us suffer from this, but the definition is so broad that it includes me, the Big Guy, and almost anyone who takes wine seriously. After all, don’t we spend a “great deal of time… in activities necessary to obtain, to use, or to recover from the effects of drinking”?
None of this is written to denigrate the serious problems caused by alcohol abuse. It’s something that I’ve been writing about for decades. Rather, it’s to give you the background you need the next time you have to write a story about how we’re drinking ourselves to death.
But that’s the case with this effort from Australia’s Brokenwood Cellars, which does everything but call on the shade of Orson Welles to chant, “We will sell no one wine before its time.” Does the narration really say (around 0:30) that Brokenwood makes wine “to be drunk and enjoyed, savored and admired?” What else are we supposed to do with it? Spit it out?
Brokenwood wines aren’t readily available in the U.S., but appear to be critically respected. Which makes the ad that much more difficult to figure out — if you’re already well thought of, why bother with this? It’s the kind of faux image building that less respected brands do to puff up their reputation. If you make quality wine, why gild the lily with a shot of someone’s gnarled hands?
There are many reasons for this, including the fact that lots and lots of wine is sold by lots and lots of independent retailers who aren’t tracked by companies like Nielsen. So why does this matter now? Because, according to one set of numbers, the wine business is in a pandemic-fueled crisis and things are going to get much worse before they get better. Or, if you believe these numbers, the past six months (as well as the past couple of years) are just a bump in the road and worrying about it is for small-minded people.
The reason for the discrepancies? Most agree that wine sales have declined since U.S. restaurants closed in March and April. What they can’t agree on is whether retail sales have made up most of the difference, so that the decline is insignifcant. Further complicating matters, based on yet more statistics, is that some insist sales are up for the year thanks to lots of foofry about the Internet, e-commerce, and wine delivery.
The WC wine business index
But no one has actually been able to figure out where we are seven months into the pandemic. Which is why the blog is unveiling the WC wine business index, where numbers aren’t the be all and end all. Instead, I’ve talked to retailers, producers, and marketers from around the country to see if I can sketch where the wine business is and what it means for consumers. Hence:
• There’s some desperate marketing going on in an attempt to boost sales. One major Texas wine event, forced to cancel, is trying to sell wine via email solicitations. Shudder. And one trade group wants you to buy its wine for the “iconic, uniquely-designed rose bottles that can be used for crafts and ingenious displays. …” Double shudder.
• Producer after producer, mostly smaller but also some larger, has told me that many of the 9,000 or so wineries that make up 90 percent of the U.S. total may be in danger of closing. The pandemic has shuttered their tasting rooms, and since most of them don’t sell much, if any, at retail, they depend on tasting room sales to stay in business.
• How about an Oregon pinot noir with a suggested retail price of $12.50? That means the street price is $10.99 or $11.99, almost unheard for Oregon pinot. In fact, most Oregon pinots that used to cost that little long ago went to $15 and $18. This points to way too much wine being made in Oregon, as well as slowing sales; the wine in question may be close to being sold at cost.
• The pandemic apparently clobbered the keg wine business, which has been a bright spot over the past couple of years. Wineries were putting their wine in kegs, just like beer, to sell to restaurants. But no restaurants means no need for keg wine. So keg producers are spending time and money to repackage their wines, often in boxes.
• Big Wine, save for a few glitches, seems to be doing better than most. One reason: It sells less wine, proportionally, to restaurants and more to supermarkets, which fits the pandemic consumer profile. In addition, consumers seem to be focusing on brands they know, and that fits the Big Wine product line.
And what about consumers?
Your guess is as good as mine. Most retailers tell me we’re trading down, and that Big Wine supermarket sales are OK speaks to that. And I’ve seen signs that some high-end wines, the $100 and up kind, are clawing for new business in a way they’ve never clawed before. That implies there is some trading down, though trading down from $150 to $75 isn’t exactly the traditional definition.
In this, there is still a lot of money in the hands of aging Baby Boomers, who will continue to buy their overpriced 92-point wine despite what else is going on. And the wine business will be happy to sell it to them to paper over any other problems.
So what’s the overall impression from the WC wine business index? That we’re in a holding pattern, though likely headed down sooner rather than later. Specific parts of the wine business are already suffering, and some are suffering badly, be it smaller producers or independent retailers.
But consolidation among producers and distributors has insulated the biggest companies from the worst of the pandemic. So expect to see two levels of pain over the next year or so: Something akin to an ankle sprain among the biggest companies, compared to a broken leg (or worse) among the smaller. And the consumer will get caught in the middle, which is exactly where the wine business likes us.
“I know I need the computer bag, but why are you making me wear the damn hat?”
“We can pay off our student loans or we can buy wine. What do you think we’re going to do?”
One reason I hired Churro as the blog’s new associate editor was his perspective – he isn’t a Baby Boomer, and brings a younger, more fresh approach to the blog. Which is the topic of this podcast: Why Millennials aren’t as interested in wine as their parents and grandparents. Our conversation included:
• Wine prices, and that wine is too expensive for many younger consumers.
• How to make wine easier by using wine apps like Vivino.
• Wine’s competition from craft beer and cocktails. As Churro noted, “they’re doing some amazing things with craft beer these days.” And, by omission, not so amazing things with wine.
• That it’s OK to sniff and swirl and spit, as long as you don’t make a production out of it.
The latest Bordeaux wine marketing plan will probably fail, just as the others did, because it doesn’t understand that price is all – and Bordeaux costs too much for most of us to buy
Dear Bordeaux wine business:
I understand your current difficulties, what with the pandemic and the Trump tariff. I also understand how desperately you want to reach younger wine drinkers, since that will help with many of your current difficulties. Hence, once again, I take keyboard in hands to offer advice you don’t seem to be getting elsewhere – why Bordeaux is in such trouble with everyone under 35. Or even 40.
It’s price. Your wine costs too much, and anyone who isn’t a wealthy Baby Boomer probably isn’t going to buy it. There’s less and less quality $10 Bordeaux for sale in the U.S., and no one looks harder for these wines than I do.
And you have no one to blame but yourself. To most wine drinkers, Bordeaux means high prices and exclusivity, and you have been perfectly happy with that for years. Hence, I get offers from retailers pitching $650 bottles – on sale. And emails about academic studies touting your wine as an investment option – hardly what a 20-something wants to drink with takeout Chinese food.
But now that business is bad, you aren’t happy. But the catch is that you still don’t see price as the problem. Your new marketing campaign, aimed at young people, includes $30 wine. I rarely buy $30 wine, and I do this for a living. So why would someone else, who just wants wine because they want a glass of wine, spend $30?
Yes, yes, I know: Bordeaux makes the best wines in the world, gets the highest scores, and so on and so forth ad nauseum. Which is all well and good for wealthy Baby Boomers, but what does any of that have to do with someone who wants a half-bottle of wine for a Tuesday night dinner of leftover pizza? This is the thing you haven’t understood in years. You assume that all wine drinkers drink wine the same way – plan their meal, find the best wine for the meal, get out the corkscrew, pour the wine, and sit down and eat.
How much more Baby Boomer can you get?
Which leads us back to pricing: You already have the perfect entry level wine, the red Chateau Bonnet. It’s well-made, varietally correct, and offers an idea of what red Bordeaux is supposed to taste like. The catch? It costs as much as $18 in the U.S., which is almost twice its price not all that long ago. And the white is still $10 to $12 in this country, something that makes no sense at all. I love the red Bonnet, but it’s not worth $18.
That it costs $18 speaks to how you’ve lost touch with U.S. consumers, and why younger drinkers opt for a $6 Trader Joe private label from California – if they’re drinking wine at all. Figure out how to fix that kind of bloviated pricing, and you don’t need any fancy marketing plans to sell your wine to young people.
Hope this helps; I’m always ready to do more if need be.
The Wine Curmudgeon
Photo: “Bordeaux Wines at Fareham Wine Cellar” by Fareham Wine is licensed under CC BY 2.0
Janie Brooks: “We have to be creative, and we have to go outside the usual winery audience.”
Janie Brooks’ forecast is blunt: Small family wineries aren’t doing well and their plight could get even worse
Janie Brooks doesn’t mince words: The pandemic could force a lot of family producers out of the wine business, and anyone who expects things to get better any time soon is going to be disappointed. She paints a picture of lost sales, consumers trading down, producers skipping vintages because they can’t sell what they’ve already made, and way too many grapes in the supply chain.
In other words, Brooks told me, everyone who isn’t a big producer — which is about 90 percent of the 10,000 wineries in the U.S. — is in big trouble.
“If you’re not at sensible price points, and that’s $25 or less, your wine just isn’t moving,” she says.
We talked about how consumers can help family wineries, as well the wine business’ need to do something other than market to the same old aging Baby Boomers. This is a subject Brooks is smart and passionate about. Her vision includes cross-marketing, something the wine business has mostly ignored for 20 years. In cross marketing, producers reach potential customers by sharing information with companies that make similar products; in this case, beverages like coffee and sustainable and green products.