Hochtaler box wine uses a “Cabaret” knockoff ad to sell its sweet white wine, which probably isn’t what the film had in mind
Film buffs know the social, cultural, and political significance of “Cabaret,” the 1972 musical starring Liza Minelli, Michael York, and Joel Grey. So why did Canada’s Hochtaler box wine use a “Cabaret”-themed ad to sell its products in the early 1980s?
Hochtaler, writes the blog’s official Canadian correspondent, has long been famous in Canada – call it the Franzia of the Great White North, boxed wine for cat ladies who say “eh.” In this, Hochtaler is local, made with Canadian grapes by a Canadian producer.
“It’s very sweet,” writes our correspondent. “I’m guessing it was a hit with young people new to wine and older wine drinkers who like the name, which sounds European, and how sweet it is.”
Nevertheless, the ad features a nightclub scene with a chanteuse doing her best Liza Minnelli, complete with German accent, top hat, and tails. It hardly seems appropriate for this kind of wine, but the ads were apparently quite popular.
New data shows neo-Prohibitionists campaign against drinking may be making headway
Are the neo-Prohibitionists winning the debate about drinking? New data, including a study about world alcohol consumption, shows fewer of us are drinking. Does this mean more people believe their argument that all booze is evil?
Worldwide alcohol consumption declined 1.6 percent in 2018, according to a report from IWSR, a London consultancy. And wine, which had increased in consumption globally the past several years, also declined 1.6 percent in 2018. That included leading markets like China, Italy, France, Germany and Spain; the U.S. market was flat.
In addition, reported IWSR, “Low- and no-alcohol brands are showing significant growth in key markets as consumers increasingly seek better-for-you products, and explore ways to reduce their alcohol intake.” Growth of no-alcohol wine is forecast at 13.5 percent, with low-alcohol wine at 5.6 percent. Those are impressive numbers to begin with, even acknowledging the small base, and it’s even more impressive given how few no- and low-alcohol wine products exist today.
Meanwhile, Australians – usually regarded as some of the world’s great drinkers – have cut their alcohol consumption significantly since 2014. No one was more surprised than the CEO of the research institute that did the study, who noted that booze is seen as having “a central role” in Australian life. But no more?
What’s going on here? Know that the IWSR study includes a variety of caveats about why consumption declined, and that it expects drinking to return to growth over the next several years. But when the study identifies Ethiopia as one of the top 10 growth markets in the world, something is much different than we’re used to.
In this, it’s almost certainly the idea that any kind of drinking is bad for us. The IWSR study hints at this, with the growth in no- and low-alcohol products, but so does something else. In the U.S. we’ve always faced a religious backlash against drinking, and it’s the main reason why so much of the country was dry until the 1990s.
But that backlash seems to have ended. A May 2019 Gallup poll found that 79 percent of Americans found drinking morally acceptable; only 19 percent said it was a sin. That makes booze as acceptable as divorce and more acceptable than non-marital sex, says Gallup.
So if more of us are drinking less, and that seems to be the case, then the neo-Prohibitionists’ scare tactics seem to be working. Hopefully, the wine business will eventually take notice and offer a compelling argument in favor of moderation. Its current hear no evil, see no evil, premiumization is the answer to everything policy might work in the short run, but doesn’t offer much for the future of wine drinking in the U.S.
If wine doesn’t have nutrition labels, how will younger consumers know it’s not going to kill them?
Every time the Wine Curmudgeon writes about wine nutrition and ingredient labels, people cancel their email subscriptions to the blog. So get ready to press the cancel button, because you’re really not going to like this post: How nutrition and ingredient labels save us from making stupid food decisions, and what wine can learn from a package of onion rings.
Consider two packages of frozen onion rings – one traditional and one made with onions, cauliflower, and beans. Which do you think is the healthiest choice?
And you’d be wrong.
In fact, the faux rings, Farmrise veggie rings, have 220 calories per serving, with 15 percent of the USDA daily allowance of fat and 8 percent of the allowance of sodium. The onion rings, the Kroger house brand, have 180 calories, 10 percent of fat, and 7 percent of sodium. Plus, the real onion rings are about half the price. Click on each link and you’ll see the nutrition label for each product.
The difference in nutrition? The faux rings need the extra fat and salt because cauliflower has no flavor; the fat and salt goose up the Farmrise so it won’t taste like industrially steamed cauliflower. And the difference in price? That’s the healthy option premium, in which we’re supposed to pay more for stuff that’s better for us, even when it isn’t. Check out a can of so-called “healthy” soup, and the only difference between it and Campbell’s may be the price – each has massive amounts of sodium.
What does this have to do with wine? Wine refuses to join the 21st century by making this nutrition information easily available; it has been fighting labels with down to the last bullet determination for more than a decade. But that also means that the same younger consumers who would spot the onion ring contradiction in a second will continue to think wine has something to hide. This is opposed to their parents and grandparents, wine drinkers all, who trust in cauliflower and Big Food.
Jackson Family Estates doesn’t want to make $10 wine, but there it is.
Real estate, not foreign tariffs, determines California wine prices
Consider two wines: Both white Rhone-style blends, both from respected wineries, both speaking to varietal character and terroir, both well-made and enjoyable. One costs $24; the other costs $12. So what’s the difference?
More than anything, that’s why California wine prices are as high as they are. The land – even in the less famous regions like Paso Robles – can be some of the most expensive in the world. Equally as important, a lot of vineyard land in Europe — even quality land — was paid for decades ago, so the price of a bottle may not include the cost of the loan to buy the land. In some parts of California, the cost of the mortgage is the difference between a $50 and $60 bottle of wine.
And the more demand for California wine that there is, the more money people will pay for California vineyards. And higher land prices in California mean more expensive grapes and more expensive grapes mean more expensive wine. It’s that simple.
That’s because all else is mostly equal: The cost of labor, the cost of the bottle, the cost of shipping, and it doesn’t matter whether you’re in Texas, California, or France. In fact, California might have a slight edge in some production costs, since it’s the center of the U.S. wine business. So, in the end, the price of the land in determines California wine prices.
Jackson Family, like other big California producers, likes high land prices. High prices make the company more valuable. So when it says it can’t afford to make $10 wine, it’s being honest – but it’s also crying crocodile tears. It has decided premiumization is the future of wine, and it doesn’t want to make $10 wine. Smaller producers, faced with the same land price constraints, aren’t nearly as sanguine. Many have told me they see their wines being squeezed out of the market by companies like Jackson Family, who can work on smaller profit margins on an $18 bottle and undercut the smaller producers.
In other words, Jackson Family Estates could do what E&J Gallo (Barefoot), The Wine Group (Franzia), and Bronco (Two-buck Chuck) do – use Central Valley grapes to make $10 wine. But it’s easier to ask for a tariff wall and punish U.S. wine drinkers. Which should demonstrate exactly where Jackson’s interests lie, and it’s not with the wine drinkers.
Win four Luminarc wine glasses during the blog’s rose celebration 2019
The blog’s 12th annual rose extravaganza begins on Tuesday — rose celebration 2019. This is the third consecutive year we’ll devote most of the week to celebrate rose, perhaps the last bastion of great cheap wine.
Plus, of course, a giveaway — four Luminarc wine glasses on Thursday when I list the the best roses available this season. Plus, two more days of rose reviews, as well as rose news on Tuesday.
First, Barbara Banke, the chairwoman of Jackson Family Wines, told Wine Business Monthly in February: The wine business “seems tougher this year and it probably will be tougher next year. It doesn’t seem like it’s as easy as it was.”
Second, the suggested retail price for the company’s flagship product, Kendall-Jackson chardonnay, is about $17. But you can find it for $10 or $12 without too much trouble, which no doubt causes much consternation at company headquarters.
Is a pattern emerging here?
The Jackson Family proposal for taxing European wine has nothing to do with free trade, the so-called “level playing field,” or any other political rhetoric. It has to do with profit – Jackson doesn’t want to sell $10 wine, so it doesn’t want anyone else to sell it, either.
Which I completely understand. I don’t agree with it, but I understand it. So why hide the company’s true intentions behind complaints about unfair trade? Because who would agree to tax $10 European wine to protect one company’s profits? Hardly anyone who doesn’t work for that company.
Which brings us to the Wine Curmudgeon’s wine supply and demand primer. California’s role in the world wine market is important certainly, accounting for about 280 million cases a year. But it’s not as important as Californians like to think. The French, Spanish, and Italians combine for almost 1.8 billion cases a year, while the total production of Chile plus Argentina is some 11 percent higher than California’s.
So what makes anyone think that the so-called “level playing field” would change anything? The rest of the world already has plenty of wine of equal quality and that will probably still cost less, even without the offending tariffs and subsidies. Why would a European buy €15 or €20 California wine (assuming anyone in California could sell it for that little, given California’s pricing structure) when they could still buy €8 or €10 European wine in the supermarket?
And this assumes that California can somehow produce enough wine to export. Which, as I mentioned in the first post, it doesn’t. We drink almost all the wine made in the U.S. in the U.S., and that doesn’t look to change anytime soon. They’re pulling out vines in California, not planting new ones to sell cabernet sauvignon to France and sauvignon blanc to Chile.
So there may not be much demand in the rest of the world for California wine, even if there was enough supply to export it, tariffs or no. The Jackson Family proposal ignores those basics, because it doesn’t help their argument.
Fortunately for those of us who care about wine and not wine company profits, I’m here to make sure those basics aren’t ignored.
Rick Tigner, the CEO of Jackson Family Wines (home to the legendary Kendall Jackson chardonnay), told a wine industry meeting last week that California can no longer afford to produce cheap wine. Hence, the federal government should tax wine imports because “we need a better, higher pricing structure.” In other words, $10 European, Australian, New Zealand, and South American wine should cost as much as California wine — because, of course, California wine.
Yes, that was my reaction, too. Wine consumption is flat and young people don’t seem particularly interested in it. So the man who runs one of the most important wine companies in the country wants to make wine even more expensive? That makes tremendous economic sense, doesn’t it? Let’s price wine out of the reach of most consumers, and our business will be even more successful.
The story was so incredulous that I almost called the reporter who wrote it to ask him if something had happened during Tigner’s speech. Was Tigner struck by a bolt of lighting? Was there an invasion of body snatchers? Does he have one of those evil soap opera twins?
I wasn’t the only one who was dumbfounded. A European wine analyst told me she was surprised a leading wine company official would say something like that. A Napa wine marketer said it was just one more example of California arrogance — because, of course, California.
Tigner overlooked two things (besides the most basic laws of supply and demand):
First, 95 percent of U.S. consumers won’t pay more than $20 for a bottle of wine – perhaps my favorite wine statistic, courtesy of the Wine Market Council. So who is going to buy all the expensive wine that tariffs will give us?
Second, Tigner can complain that other countries tax California wine unfairly as much as he wants, but that’s irrelevant. U.S. wine exports measured by cases (mostly from California) are insignificant – barely more than 10 percent of what we produce each year. That’s because we drink almost all the wine made here, so there isn’t much left to sell to the French (assuming they would want it). In fact, U.S. wine exports are so trivial that two of our biggest markets are Nigeria and the Dominican Republic, countries not usually associated with wine culture.
So, no, taxing my $10 Gascon white blends, Spanish cava, and Italian red blends won’t save the California wine industry from itself. The only ones who can do that are part of the California wine industry, which tells us everything we need to know about how that will turn out.