Tag Archives: Big Wine

Winebits 686: Orson Welles, 7-Eleven, Treasury

orson welles
“”Well, yes, eventually I’ll make a wine commercial that will become infamous.”

This week’s wine news: Orson Welles’ infamous history as a TV wine pitchman, plus Canadian 7-Elevens want to sell wine and turmoil at Big Wine’s Treasury

An anniversary: Blame it on the pandemic, but the blog missed the 40th anniversary of Orson Welles’ infamous Paul Masson wine commercial. Given the WC’s critical eye for the subject, that’s more than surprising. Fortunately, Inside Hook’s Aaron Goldfarb has all the details — including that Welles had done ads for a variety of other booze companies before Masson. The piece is well worth reading, not only for the details of Welles’ behavior, but because, as Goldfarb notes, Welles’ “work with alcohol brands that endures as part of his towering legacy to this day.” And why not? Masson’s sales increased 30 percent during the Welles campaign.

No wine here: A Canadian 7-Eleven wants to sell wine to drink in the store, and its neighbors aren’t happy about it. The CBC reports that neighboring bars and restaurants aren’t happy with the plan, which they fear will cut into their pandemic-bruised sales. Note, too, that “corner store” alcohol sales remain prohibited in the province of Ontario, where the 61 stores are located. This, of course, makes the WC smile — a 7-Eleven in Canada can sell beer and wine to drink in the store, but not to go? And we thought U.S. liquor laws were odd. The company. meanwhile, says the wine and beer service will “complement our fresh food and hot food programs.” So what goes with a plastic wrapped salad?

Treasury woes: Australia’s Treasury Wine Estates, one of the biggest wine companies in the world, may get rid of some its U.S. brands in response to a horrific sales slump thanks to Chinese tariffs. The Aussie business press has been reporting about possible Treasury moves for a couple of weeks as it tries to cope with the Chinese duties. One of the latest plans calls for selling $300 million of U.S. “assets” (though without mentioning band names) and to make more upscale wines in the U.S. ass part of premiumization. Among the company’s California labels are Blossom Hill, Chateau St. Jean, Beringer, and Provenance.

Photo: “03-08-1952_10329A Orson Welles” by IISG is licensed under CC BY-SA 2.0

Big Wine 2021

big wine 2021Big Wine 2021 growth may have slowed, but the biggest companies still control U.S. wine production

A funny thing happened to Big Wine during the pandemic. It probably didn’t get that much bigger.

That’s one of the most interesting parts in Wine Business Monthly’s 17th annual wine industry survey, which tracks the ups and downs of the U.S. wine business and ranks the 50 biggest producers in this country. In the 2020 report, the top 50 produces of accounted for 90 percent of domestic wine sales, as they have done for years. But the 2021 number is about the same – despite early indications that that the percentage could be higher.

And it could be. Cyril Penn, the magazine’s editor, says the pandemic made it more difficult to gather data, both from producers and from trade groups that track wine sales.

But Big Wine remains dominant, even though there are some 11,000 wineries in the U.S.:

• E&J Gallo is still the behemoth of world wine production, accounting for 88 million cases last year. That’s more than the second and third biggest companies combined. In other words, at least one out of every four bottles of wine sold in the U.S. is a Gallo product (such as Barefoot, Apothic, and Louis Martini), and it could be as many as one out of three.

• The top three producers – Gallo, The Wine Group (Franzia boxes, Cupcake), and Constellation Brands (Mondavi) – totaled 158 million cases, about half of U.S. production. The top 10 accounted for about three-quarters, which is more or less the same as 2020.

• The biggest growth, save for Gallo, likely came in the middle tiers — 15 to 30 or so. A variety of producers in that range have been snapping up smaller companies over the past several years, furthering consolidation in the 1 million case range.

• Box wine soared during the pandemic, led by Bota Box – up almost 50 percent in 2020.

• National brands excelled, since consumers focused on supermarket labels during the panddemic. Josh Cellars’ sales increased 43 percent and Barefoot was up 18 percent. The latter is especially telling, since Barefoot growth has slowed in recent years. And, allowing for the statistical caveat mentioned above, Barefoot could account for as much as five percent of the sales of domestic wine — all by itself.

More about Big Wine:
Big Wine 2020
Big Wine 2019
Big Wine 2018

Winebits 682: Big Wine, wine writing, on-line wine

Big wineThis week’s wine news: The Winestream Media discovers Big Wine, plus a wine writer discovers conflicts of interest and wine drinkers grapple with on-line shopping

Big Wine, indeed: This post did not come from the Wine Curmudgeon or one of the few independent voices in wine writing who pays attention to these things. Rather, this harsh look at Big Wine came from the trade site for the Wine Enthusiast, one of the gatekeepers of traditional wine writing. It laments the “corporatization” of the U.S. wine business and even uses the M word – monopoly. This is news is not new, of course, and regular visitors here have been reading it for years. But that we’re seeing it on a site that is one of the pillars of the current system may speak to a growing sense of unease with the status quo. And a note to the writer: E&J Gallo accounts for almost one out of every four bottles of wine made in the U.S., which should have been at the top of your story.

Conflicts of interest: Spanish wine writer Miguel Hudin asks the “massive” question that we don’t ask enough in this business: “How objective can you actually be when you’ve been flown somewhere and put up on someone else’s dime who is expecting coverage which should in theory be positive coverage?” His descriptions of the way the wine writing world works these days is past depressing, including the admonition he got for complaining about food he paid for. It’s good to see the subject brought up by someone who isn’t a cranky ex-newspaperman, and that Hudin understands the uphill road he travels in writing about this: “Oh Miquel, relax and enjoy the freebies! You’re being too critical and difficult!” No, Miquel, you’re not.

Going on-line: We’ve had several mentions on the blog recently of wine drinkers’ reluctance to shop on-line. But, apparently, the wine drinking demographic isn’t worried about buying other stuff over the Internet, reports the Washington Post: “… one of the most significant and unexpected shifts, experts say, was the almost immediate embrace of online shopping by people in their 60s, 70s and 80s.” Which, of course, is the same age group that still dominates U.S. wine purchases. The next question: How soon until this group feel as comfortable buying wine over the Internet as it does toilet paper?

Winebits 643: Wine archaeology, consolidation, periods and spaces

wine archaelogyThis week’s (mostly) wine news: Archaeologists recover centuries-old wine bottles, plus impending wine industry consolidation and whether a period at the end of a sentence gets two spaces or one

Old wine bottles: Regular visitors here know how excited the Wine Curmudgeon gets about wine archaeology. So there’s this: Scottish researchers have uncovered a massive mid-18th century glass factory whose cone furnaces once towered over the port district of Leith and supplied wine and whisky bottles to all corners of the British Empire. The Wine Spectator reports that the factory, near Edinburgh, may have produced as many as 1 million bottles a week. The factory’s downfall? The American Revolution, which cost the factory most of its business with the newly-independent United States.

More consolidation on the way? The Wine Economist tells us to expect consolidation among wineries and wholesalers sooner rather than later, thanks to the coronavirus pandemic. Writes Mike Veseth: “Although much is lost in generalization, there is a tendency for larger distributors to focus their value chain on bigger retailers and larger wine producers.  Scale matches scale matches scale. This pattern magnifies an on-going movement to a two-speed wine market with those in the middle range (both domestic and imports) squeezed in the process.” This is not good news for consumers in wine business, which is already top heavy: the five biggest wineries make more than three-quarters of the wine sold in the U.S., while the three biggest distributors control more than half of the market. Fewer and bigger companies will restrict our choices even more.

Periods and spaces: This item, courtesy of Lifehacker, has nothing to do with wine. But it’s a welcome respite from wine and the coronavirus – a discussion dealing with a significant post-modern writerly conundrum: How many spaces follow a period at the end of a sentence? The answer, of course, is one. The confusion comes from typewriter days, when we used two spaces – period, space bar, space bar – to set the new sentence off from the old. But post-modern word processors don’t need our help to set the new off from the old. Still, the argument comes up every once in a while, and the Wine Curmudgeon is always happy to remind younger consumers how much silliness their elders get into.

Photo: “Wine” by CyberMacs is licensed under CC BY-NC-SA 2.0 

Winebits 641: The “Big Wine makes mega-deals” edition

international styleThis week’s wine news: Constellation Brands and E&J Gallo finalize their cheap wine blockbuster, plus Geyser Peak is sold again and Treasury wants to set Penfolds free

Finally done? Constellation Brands’ $1.1 billion sale of its low-price wine labels to E. & J. Gallo is expected to close by the end of June, despite the coronavirus pandemic, reports the Press-Democrat website. The deal will send almost all of Constellation’s $10 wines to Gallo, including Black Box, Ravenswood, Clos du Bois, and Mark West, as well as vineyards and wineries in California and New York. The original April 2019 deal, worth $1.7 billion, had to be revised after U.S. regulators objected.

Poor Geyser Peak: When I started writing the blog, Geyser Peak’s $10 sauvigngon blanc was one of the most dependable cheap wines on the market. But that was also several owners ago, and quality has never been the same. So it’s not necessarily bad news that the brand has been sold once again. The current owner, Australia’s Accolade Wines, will sell Geyser Peak, Atlas Peak, XYZin and Outlot to something called 2 Bears LLC. No word on who is behind 2 Bears.

Whither Penfolds? Australia’s Treasury Wine Estates, one of the two or three largest producers in the world, has been feuding with stock analysts for the past year or so, defending what the analysts have been calling the company’s poor performance. So Treasury may spin off Penfolds, one of the world’s great wine brands and home to the legendary Penfolds Grange (which I’ve been lucky enough to taste and so can attest to its greatness). Whether this pleases anyone in the shadow boxing world of financial analysis is anyone’s guess, but it points to the pressures Treasury faces in a world where people drink less wine and Big Wine companies are being urged to shed brands.

Big Wine 2020

Big wine
Big Wine isn’t enough for a healthy U.S. wine business these days.

Big Wine 2020: Just being big doesn’t seem to be enough to reinvigorate wine in the U.S.

We need some sexy brands at $7 or $8 per bottle, and I’m not sure how many people in the industry want to try and do sexy things with $7 or $8 a bottle.
— Wine analyst Jon Moramarco

That quote tells you pretty much everything you need to know about the 16th annual Wine Business News magazine survey, which tracks the yearly ups and downs of the U.S. wine business and ranks the 50 biggest producers in this country. In this, it’s the second consecutive year that the trade magazine has painted a Wine Curmudgeonly-future of wine in the U.S.

How big is Big Wine 2020? There are more than 10,000 wineries in the U.S., and the top 50 account for some 90 percent of production. But that’s just the beginning of how top-heavy the U.S. wine business is. Almost one out of every four bottles of wine made in the U.S. comes from E&J Gallo, the world’s biggest producer. The top 3 companies account for 52 percent, and the top 5 account for 77 percent.

So if we need someone to ask about what’s gone wrong, we know who, don’t we?

Among the highlights

• Sales by volume may actually have declined last year, depending on whose numbers you believe. Nielsen said sales dropped 1 percent as 2019 drew to a close, but Gomberg, Fredrikson & Associates estimated that volume could end 2019 up one-half to one percent. Regardless, it’s a far cry from the 3.5 percent annual growth rate during the wine boom, and it’s not enough to keep pace with the increase in the U.S. drinking age population.

• Even premiumization slowed. Sales by dollar volume were up just 1.7 percent in 2019; that compares to a 5 percent increase last year. Interestingly, several industry types quoted in the story insisted that cheaper wine was not the answer, since consumers don’t want to pay less.

• The average price of a bottle of wine sold at retail in 2019 was about $11. That’s more or less what it has been for the past several years, taking into account the various statistics used to calculate the cost.

• Gallo’s share of the U.S. wine market increased from 17 percent last year, even though its sales remained flat. Go figure.

• The share of the three biggest producers – Gallo, The Wine Group, and Constellation Brands – fell three points from last year and eight points from in 2017. In addition, the share of the top 10 companies declined for the fourth year in a row, from 84 percent in 2016 to 81 percent in 2017 to 78 percent in 2018 to 77 percent in 2019. That sounds awfully damn ominous, doesn’t it?

More about Big Wine:
• Big Wine 2019
• Big Wine 2018
• Big Wine 2017

ancient rome

Ancient Rome and its surprisingly sophisticated wine business

ancient romeAncient Rome, and how its wine business dealt with natural disasters, mass production, and wine critics

Does the following sound familiar?

They refined production by using barrels and cultivation techniques that allowed them to make more for less cost. … experts estimate that a bottle was being consumed each day for every citizen.

No, this isn’t a description of Big Wine and the U.S. wine boom that lasted from the 1980s to the beginning of the 21st century. It’s the role of wine during the Roman Empire, about 1,800 years before any European had ever heard of Napa or Sonoma.

The more things change, right?

In fact, the parallels between Roman culture and 21st century California wine business are more than spooky:

• The Roman Empire’s version of Napa Valley, perhaps in and around Pompeii. The city, near what is now Naples on the Mediterranean, was a key Roman wine center. When it was wiped out in 79 when the Mount Vesuvius volcano erupted, “the vineyards were destroyed, and the cost rose so rapidly that only the rich could afford it.”

• High land values. In 92, Emperor Domitian banned new vineyards in Rome and ordered the uprooting of half of the vineyards in use so grain could be grown. Farmers had been planting vines and taking out grain to replace the vineyards lost in Pompeii. Because, of course, vineyard land had become more valuable.

• Their own Winestream Media. Pliny the Elder, who was killed in Pompeii, was among the most important Roman wine critics, and not just because he wrote: “In vino veritas (in wine there is truth).” Book 14 of his 37-volume Naturalis Historia covered wine, which included a ranking of Rome’s top vineyards. Book 17 discussed viticulture and defended the notion of terroir. And Roman critics, as I discussed in the cheap wine book, were notorious for their disdain for the wine most people could afford to buy.

Slider photo courtesy of Aveine, using a Creative Commons license

More about ancient wine:
Ancient Hebrews: “If there is any wine send it”
A brief history of wine, wine writing, and the wine business