Category:Wine trends

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?

The growth of ultra-expensive wine

expensive wineDoes the increasing popularity of ultra-expensive wine mean wine has become a collectible and not something to drink?

The Big Guy, who hangs out with a better class of wine drinker than I do, forwarded me the auction company email: “Can you believe the prices of these wines?” he wrote. The list was expensive wine run amok – impressive labels, certainly, but prices that even I had trouble comprehending:

• $8,500 for a bottle of red Burgundy.

• $1,000 for two bottles of an 1872 Madeira.

• $40,000 for a case of 2000 Petrus, perhaps the Holy Grail of wine collecting.

• $4,750 for a magnun of another red Burgundy.

Which raises a host of questions: Who buys these wines? Do they actually drink them? And, of course, the one that has always fascinated me – how does one justify paying thousands of dollars for a bottle of wine?

Because spending that kind of money happens all of the time. It’s just not auctions, but includes trading on Liv-Ex, a stock exchange for wine. In this, the growth of ultra-expensive wine sales and expensive wine becoming more expensive have been hallmarks of the 21st century wine business. Two decades ago, people bought wine to drink it. Today, more and more people buy wine not to drink it.

This matters for two reasons. First, as these ultra-expensive wines grow in popularity, more resources will be devoted to them. If more resources are devoted to these wines, will less be available for the wine that most of us drink? Second, how healthy can the wine business be when its most prized products are kept in locked vaults? How can the evolution of wine — from something to drink with dinner to a version of coin collecting — be a good thing?

Yes, the sale of ultra-expensive wine remains a small part of the wine business. Those 10 million cases of Barefoot that are sold annually dwarf ultra-expensive wine sales. But how much attention does all that Barefoot get? The hype for ultra-expensive wine dwarfs Barefoot, as well as the rest of the wines that most of us drink. That even I’m writing about it says something – and it’s probably not good.

More about ultra-expensive wine:
Wine as a collectible, and not something we drink
Expensive wine prices in the real world
More about wine prices 2018

Winecast 33: Andrew Stover, Siema Wines

andrew stoverAndrew Stover has been fighting the good fight for Drink Local from inside the wine business, “importing” regional wine to the Washington, D.C., area

Andrew Stover has been one of the good guys for regional wine for a decade, “importing” local wine to the Washington, D.C., area. This is especially impressive since Andrew is a distributor, a part of the wine business that has not always been kind to drink local. He brings wine in from more than a dozen states and distributes it to some of the most prestigious restaurants and retailers in the D.C. area. Jose Andres, anyone?

I’ve known Andrew since the early days of Drink Local Wine, and he has always been passionate about local wine and supportive of the cause. We talked about how he got started with local wine, why it has suddenly become the darling of the Winestream Media, and what comes next.

Click here to download or stream the podcast, which is about 14 1/2 minutes long and takes up 11 megabytes. The sound quality is excellent; we recorded it with the Wine Curmudgeon’s Linux-compatible Fifine K669 microphone.

Putting all that scientific doom and gloom about wine into perspective

alcoholismThey’re telling us it’s about drinking. But it’s really about the social cost of alcoholism, which isn’t the same thing

The surprise about the recent study equating drinking alcohol with death is not that it gathered headlines. Of course it gathered headlines. The surprise is that so many reputable researchers said the headlines were overblown. Or, as University of Cambridge statistician David Spiegelhalter wrote after parsing the study’s numbers: “Come to think of it, there is no safe level of living, but nobody would recommend abstention.”

Aaron E. Carroll, who teaches at the Indiana University School of Medicine, wrote a reasoned critique in the New York Times. For one thing, he said, studies that amass numbers from other studies have inherent problems. For another, “just because something is unhealthy in large amounts doesn’t mean that we must completely abstain. … Consider that 15 desserts a day would be bad for you. This could lead to assertions that ‘there’s no safe amount of dessert.’ But it doesn’t mean you should never, ever eat dessert.”

What’s going on is a well-meaning attempt to cut the social cost of drinking, which is enormous. Alcoholism, in both dollars and misery, has been a scourge throughout recorded history. The federal Centers for Disease Control estimates that excessive drinking costs $250 billion annually and kills almost 90,000 people each year. There is also ample evidence that alcoholism devastates particular communities, be it native American reservations or blighted urban neighborhoods. The CDC, in fact, has proposed tighter alcohol retail regulation to help those communities. Do enough research, and you can even find suggestions that alcoholism played a role in the collapse of the Soviet Union.

And none of that even begins to describe that agony that alcoholism wreaks among friends and families. A friend of mine, an alcoholic, was reduced to living in his car at one point, and died surrounded by vodka bottles.

But well-meaning isn’t enough

Cutting alcoholism rates among native American youth, which are among the highest in the country, has absolutely nothing to do with whether I drink wine with dinner. It’s telling that Mothers Against Drunk Driving, perhaps the most high-profile anti-drinking group in the country, doesn’t go that far. MADD says the focus should be on the worst cases – the chronic abusers who drink and drive despite arrests, fines, and jail.

But the CDC and its neo-Prohibitionist allies have decided to target all of us. I’ve asked them why, and the standard response is that drinking is unhealthy. Which, as noted, is difficult to argue with.

My guess is that the neo-Prohibitionists are working off the success that anti-smoking groups have had since the 1964 Surgeon General’s report. Their mistake, of course, is that drinking and smoking are not the same thing. One can drink in moderation; one can’t smoke that way. And smoking’s social cost, as terrible as it is, is not like alcoholism’s. It’s rare anyone dies in their car because they’re addicted to nicotine.

Why anyone thinks that studies scaring social wine drinkers will stop alcoholics from drinking is beyond me; the issue is much more complex than that. Hopefully, the CDC and its allies will eventually figure this out, and we can come up with a reasonable and effective program to reduce alcoholism.

Until then, I’ll keep a wary eye out for those deadly desserts.

More about the CDC and drinking
The federal government’s three-drink limit
What the media didn’t tell you about the CDC alcohol study
Bacon, wine, and what we eat and drink

Bigger wine glasses: Marketing ploy, health risk, or just coincidence?

bigger wine glassesA British study says we use bigger wine glasses than ever before – but do we know why we do?

A friend of mine is convinced that wine bottles hold less than they used to, insisting that she only gets two glasses from a bottle instead of the four or five of years past. It turns out my friend is onto something, though not quite in the way she thinks. It’s not that the bottles hold less, but that we’re using bigger wine glasses. Lots and lots bigger.

That’s the surprising result from a 2017 British study that found that wine glasses were one-sixth smaller in the 1700s and have gotten bigger since then. That means a full-to-the-rim glass 300 years ago was the equivalent of half a pour today – 2 ½ ounces vs. a typical 5-ounce glass of wine (or five glasses to a 750 ml bottle).

The study was conducted by health researchers and appeared in a British medical journal, so it focused on the effects of too much drinking. In this, say the authors, the evolution of bigger wine glasses might be related to alcoholism and binge drinking (the latter a particular problem in Britain). If the glass is bigger, aren’t we going to drink more?

The authors are careful not to go much further, emphasizing that “greater affordability, availability, and marketing of alcohol products, and more liberal licensing. …” has led to increased drinking in the last 75 years. We’d also have to know alcoholism rates starting in the 1700s, plus wine consumption (gin, in fact, was the British drink of choice in the late 17th and early 18th centuries). And then we would still need to figure out a way to correlate that data to begin to understand if there is a relationship between excess drinking and bigger wine glasses.

The missing link

I doubt that link exists, given the often astonishing levels of drinking in the pre-industrial West. What’s more interesting is why glass sizes increased, something else the study doesn’t do much with. One reason was technology – the development of lead crystal n the late 17th century made it possible to produce less fragile and larger glasses, while the discovery of the Pyrex process in the late 19th century made even bigger glasses common.

In addition, what’s the relationship between improved wine quality and larger glasses? Bigger glasses allow us to better appreciate the wine’s flavors and aromas. Who knew that was necessary – or even possible – given the poor quality of most wine until the beginning of the 20th century?

Finally, how could the authors overlook the role of capitalism, which not coincidentally took root in 18th century Britain? Perhaps the reason for bigger wine glasses is as simple as marketing. The rise of capitalism and industrialization meant there were more and more rich people who wanted to show off their new wealth, and what better way to do that than with fancy wines served in fancy glasses? Isn’t that one of the joys of capitalism? That someone will always be around to sell us things we don’t really need, and that especially applies to wine glasses.

Graphic courtesy of The Guardian, using a Creative Commons license