Tag Archives: Big Wine

Ask the WC 21: Mulderbosch rose, older vintages, Big Wine

This edition of Ask the WC: What happened to the Mulderbosch rose? Plus, why are there so many older vintages on store shelves and what’s going on with Big Wine?

Because the customers always have questions, and the Wine Curmudgeon has answers in this irregular feature. You can Ask the Wine Curmudgeon a wine-related question by clicking here.

Hey Wine Curmudgeon:
Did you know the Mulderbosch rose, one of your well-reviewed $10 roses, went away a year or so ago? It doesn’t seem to be coming back anytime soon. Do you have any information? I’m sure many of your followers would like to know also. Thanks.
Where’s the Mulderbosch?

Dear Mulderbosch:
The past couple of years have not been kind to Mulderbosch — the South African winery was sold and it lost its U.S. importer. Plus, says Bob Guinn, the vice president of sales for the winery’s new owner, “the brand had been ‘footballed around’ for the past few years so we have spent the majority of this year cleaning up older inventory and pricing.” But there is good news: There is a new importer, and there are still distributors in 47 states. So we should be seeing the wine return to store shelves sooner rather than later.

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Dear Wine Curmudgeon:
I’m seeing a lot of old vintages for wine that costs $10 and $15 on store shelves, some as old as 10 years. They can’t be any good, can they?
Older vintages

Dear Older:
Oddly, I’m seeing more of that, too, even in supermarkets where they tend to pay more attention to inventory rotation. The standard rule is two years for white wine and three years for reds. That means nothing much older than the 2015 or 2016 vintages for white wine and nothing much older than 2014 or 2015 for reds. The exception, of course, is for wine made to age, but most wines aren’t. In addition, we may be seeing more older wines as wine sales remain flat and more older wine remain unsold and stays on shelves.

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Dear WC:
Why is Big Wine dumping all its cheap wine brands? I even heard a rumor Yellow Tail was for sale.
Call me curious

Dear Curious:
Yellow Tail may well be for sale, as Big Wine seems to be trying to be less about wine and more about legal weed, craft beer, and spirits. A couple of weeks ago, a second-tier whisky brand sold for $266 million. That makes it more valuable than most of the cheap wine brands Constellation sold to E&J Gallo in its fire sale this spring. Says Rob McMillan of Silicon Valley Bank, one of the smartest people in the wine business: “The overall growth rate in spirits is better than wine today, so even a second-tier whisky brand is more valuable. We are losing the young customer because of a bogus negative cumulative health messaging, like the ‘One bottle of wine is the same as smoking 10 cigarettes’ and because young consumers are more frugal.”

Photo: “Rose” by aliciagriffin is licensed under CC BY-NC-ND 2.0 

More Ask the Wine Curmudgeon:
• Ask the WC 20: White Bordeaux, crossing state lines, lower alcohol
• Ask the WC 19: Supermarket wine, plastic wine bottles, corked wine
• Ask the WC 18: Sweet red wine, varietal character, wine fraud

Wine business history: The more things change, the more they stay the same

wine business historyIn the wine business, history repeats itself – and we know what premiumization, overpriced wine, and consolidation mean for consumers

Premiumization, overpriced wine, and consolidation are nothing new in the wine business. Go back 80 years, and wine business history is eerily familiar. In this, some of the earliest and most influential wine critics, including Leon Adams and Frank Schoonmaker, warned the industry about the mistakes it was making.

And I would be remiss if I didn’t quote Winston Churchill here: “Those who do not learn from history are doomed to repeat it.”

Premiumization

Schoonmaker was a wine importer and wine writer whose 1930s’ “The Complete Wine Book” might have been the first attempt to explain wine to the U.S. consumer. In 1947, in a piece for Gourmet magazine, Schoonmaker lamented what sounds a lot like what we’re seeing now:

And in the past five years we have hardly seen any real vin ordinaire (by which I mean a common, inexpensive table wine) sold in America. The humble gallon jug virtually disappeared in 1943 from our wine merchants’ shelves; instead, the undistinguished reds and whites from the mass production areas of California appeared in fancy dress at a fancy price, and elaborate advertising campaigns were launched to convince us that bottles which we used to buy reluctantly for 60 cents were suddenly worth $1.50 and were being sold us as a special favor.

In other words, $15 wine is the new $8 wine.

Overpriced wine

Adams was perhaps even more influential in his time (the end of Prohibition to the 1960s or so) than Robert Parker was in his heyday. He is usually given credit for pushing the California wine business into the 20th century; he advocated for regional wine long before there was much of it; he helped start the Wine Institute; and he wrote several of the most important wine books in U.S. history.

He also had no use for over-priced wine, and regularly urged California producers to make wine that most of us could afford:

They should be as cheap as milk. High price wines are not for daily consumption with meals. Real wine drinkers know this; most Americans still don’t.

How spooky is that quote, that it’s still so relevant today?

Consolidation

Adams also saw the dangers of too few wineries producing too much of the country’s wine, something he first warned about shortly after World War II. He explained this in a 1974 interview:

The point was mine, and I think it has stuck to this day, that the little wineries should be encouraged to exist. The larger the number of small wineries that operate in the United States, the safer the big wineries are from attack, legislative attack in particular. If the wine industry ever fell into the hands of only a few major factors, the wine industry and the whole cause of wine would be in trouble. It would be endangered. … The big wineries have never agreed with me about the need to foster the small wineries. … My purpose is to encourage the use of wine, to introduce the use of table wine, which local wineries can do. Moreover, it’s especially to the advantage of California to thus expand the wine market, because with the ideal grape-growing climate of this state, California wines will always be the best buys.”

I wonder: How many of the biggest California producers have ever read that?

Photo courtesy of Sedimentality blog using a Creative Commons license

Big Wine 2019

Big Wine 2019Big Wine 2019: It still has a stranglehold on what we drink, but the biggest companies aren’t quite as big

A funny thing happened to Big Wine 2019: The three biggest companies didn’t dominate the market in 2018 the way they did in 2017. Neither did the top 10. But the top 50 still sell 90 percent of the wine made in the U.S., according to the 15th annual Wine Business News magazine survey,

In other words, it’s business as usual for Big Wine. They’ve just rearranged the profits.

Still, before you get too depressed, know that the magazine study acknowledged that the wine business is in trouble, citing the usual reasons – aging Baby Boomers, competition from craft beer and spirits, and the neo-Prohibitionists. Or, as the woman who runs the company that makes the ubiquitous Kendall Jackson chardonnay told the magazine: “It seems tougher this year and it probably will be tougher next year. It doesn’t seem like it’s as easy as it was.”

Which, hopefully, is good news for those of us who are tired of higher prices, declining quality, and more plonk on the shelves. If Big Wine sees the problem, maybe they’ll do something to fix it besides putting sugar in dry red wine.

Among the highlights

• Sales by volume were almost flat, from 403 million cases in 2017 to 408 million in 2018. That’s a 1.2 percent increase, far less than the growth in the legal drinking age population. Which means younger drinkers are drinking something else or aren’t drinking at all.

• The average price of a bottle of wine sold in 2018 was $14, which includes restaurant sales. Hence, the number is higher than the average usually cited for retail sales, $9 or $10 a bottle.

• Imports, as a share of U.S. wine sales, were only 23 percent. That’s also much lower than the numbers usually cited, which range from one-third to 40 percent of all the wine sold in the U.S.

• E&J Gallo controls 17 percent of U.S. sales, and its Barefoot brand accounts for almost 5 percent of all the wine sold in this country. Which succinctly describes the power of Big Wine.

• The share of the three biggest producers – Gallo, The Wine Group, and Constellation Brands – fell to 55 percent in 2018 from 60 percent in 2017. The share of the top 10 companies declined for the third year in a row, from 84 percent in 2016 to 81 percent in 2017 to 78 percent in 2018. Was this decline caused by premiumization, since these producers tend to have the least expensive wines? Or was the cause something more ominous, related to the decline in wine’s popularity?

• The magazine said there are 10,047 wineries in the U.S. Take out the top 50, and the other 9,997 sold 31.5 million cases in 2018, or about 3,150 cases each. The average Big Wine company sold almost 6 million cases – making it almost 2,000 times bigger. Which, regardless of any changes in the market share among the 50 producers, shows just how top heavy the U.S. wine business is.

More about Big Wine:
• Big Wine 2018
• Big Wine 2017
• Big Wine 2016

Stop hyping cheap wine like Two-buck Chuck rose just because it’s cheap

Two-buck Chuck roseCheap doesn’t mean a wine is worth drinking, and the Two-buck Chuck rose is almost undrinkable

The cyber-ether is agog with praise for the new Two-buck Chuck rose: “Who needs Two-buck Chuck when you can get $4 organic rose from the same brand at Trader Joe’s?” And, “Trader Joe’s Made $4 Organic Rose Just In Time For Memorial Day Weekend.”

Obviously, no one tasted the wine.

The only good thing about the Two-buck Chuck rose ($4, purchased, 11.5%) is the closure. It’s one of the new Helix corks that works like a screwcap. The wine itself is almost undrinkable – thin, bitter, practically no fruit flavor, badly sweet, and devoid of any rose character other than its light pink color.

In this, it’s everything that’s wrong with Big Wine, where more money is spent on the bottle and the marketing than on the wine. The back label actually refers to “the Charles Shaw family,” which doesn’t exist. Call that the height of marketing cynicism. The wine is made for Trader Joe’s by Bronco Wine, the seventh biggest producer in the country with at least $200 million in sales.

But none of this matters to the cyber-ether. The Two-buck Chuck rose is cheap. It comes from Trader Joe’s. What more does anyone need to know?

A lot, actually. Cheap wine is not worth drinking just because it’s cheap. Anyone who thinks that hasn’t been paying attention for the past 25 years. Besides, you’re hurting the cause when you write that. Cheap wine should offer quality and value, just like any other cheap product. Would you praise a broken car or a broken computer just because it’s cheap? Of course not. And the Two-buck Chuck rose is seriously broken.

Hence, this Wine Curmudgeon offer: The next time anyone in the cyber-ether wants to write about wine, send me an email. I’ll help you figure out what’s going on so you don’t recommend a wine most of us will pour down the drain.

Winebits 545: Alcoholism, Big Weed, wine fraud

alcoholismThis week’s wine news: Alcoholism in the restaurant business, plus Big Wine wants to move into weed and more Chinese booze fraud

• Staying sober: Nation’s Restaurant News looks at subject rarely discussed – what it calls “the culture of alcoholism and substance abuse in the restaurant business. “ In this part of the on-going series, Bret Thorne talks to a prominent Atlanta-area chef who had a choice at age 30 – stop drinking or die. “The whole lifestyle — you’re in a place that has alcohol. There’s always alcohol in the kitchen, behind the bar, and after the adrenaline of an awesome service, it was typically followed by chasing that buzz with alcohol, and then usually cocaine.”

• If it’s good enough for wine: Marijuana Business Daily (and no, I’m not making that up) reports that North America’s largest wine distributor will become the the exclusive product distributor for one of Canada’s largest licensed cannabis producers. Great North Distributors, a wholly owned Canadian subsidiary of U.S.-based Southern Glazer’s, will serve as exclusive representative for Aphria’s adult-use cannabis products in Canada. This is yet another foray by U.S. wine-related companies into Canada’s legal weed business, including Big Wine stalwart Constellation Brands..

• $15.6 million worth of fakes: Chinese police arrested 15 people suspected of producing more than 55,000 counterfeit bottles of high-end booze, says Reuters. Police in the southern province of Fujian broke up three gangs running workshops that made fake bottles of several famous brands of baijiu, a fiery Chinese spirit. The gangs bought cheap liquor for about 10 yuan (about US$1.56) a bottle and pour it into the counterfeit bottles, which they would sell for up to 400 yuan (about US$62) each. To give you an idea about what they were doing, this is not unlike filling empty bottles of pricey white Burgundy with Two-buck Chuck chardonnay.

Big Wine 2018: The good, the bad, and the ugly for consumers

Big wineBig Wine’s continuing dominance over what we drink means less interesting wines to buy, as well as fewer places to buy them

This is the second of two parts looking at Big Wine 2018. Today, what Big Wine’s dominance means for wine drinkers. The first part – Big Wine 2018’s stranglehold by the numbers – is here.

My mother took a copy of the blog to a Chicago-area Kroger affiliate recently, looking for a wine that I had bought at a Dallas Kroger. The guy at the Chicago store looked at her as if she was crazy. “Why would we have something that was in Dallas just because we’re Kroger?” he asked her.

The conversation took place next to a huge aisle display of E&J Gallo’s Barefoot, which is in every Kroger store in the country. So who was the employee kidding?

Big Wine has changed the wine business in countless ways since I started doing this 20-plus years ago, but the biggest change is the idea of national brands. In the early 1990s, save for Kendall-Jackson chardonnay, there wasn’t a national brand like Tide detergent or Heinz ketchup. And even Kendall-Jackson wasn’t quite national.

Today, though, walk into a retailer anywhere in the U.S. and you’ll find at least a handful of national brands – Barefoot, certainly, as well as Yellow Tail, Woodbridge, and Kendall-Jackson. They may not be in smaller, independent stores, but they are in the supermarkets and chain retailers like Total Wine that are beginning to sell most of the wine we drink.

Big Wine’s dominance is not new, and it has benefited wine in so many ways – more women and minorities and improvements in winemaking standards among them. What’s different now, and what has developed over the past couple of years as Big Wine has gotten bigger, are the national brands — and they are not a benefit. Wine is not laundry detergent or ketchup.

The top 10 companies in this year’s Wine Business News ranking of the the U.S. largest producers account for about 80 percent of the wine made in this country. Almost without exception, they are national brand-style wines – technically competent perhaps, but boring and dull and devoid of varietal character and terroir. They are, says a friend in the wine business, the wine equivalent of a Big Mac – something to eat, but hardly worth eating.

After the jump, what Big Wine dominance means for wine drinkers and especially for those of us who want to drink quality cheap wine. Continue reading →

The power of Big Wine 2018

Big Wine 2018

Three out five bottles on the grocery store Great Wall of Wine could come from just three companies.

Big Wine 2018 accounts for nine out 10 of bottles made in the U.S. How can that be healthy for the long-term growth of wine?

This is the first of two parts looking at Big Wine 2018. Part I, the numbers. Part II, what that dominance means for wine drinkers.

Nothing illustrates the power of Big Wine 2018 more than the half a pallet of Meiomi pinot noir sitting on the floor in the wine department at a Central Market in Dallas. Meiomi, owned by Constellation Brands, is mass market wine, not exactly what you’d expect to see by the case at Central Market, which positions itself as Whole Foods with a Texas twist.

But there it was. And why not? Big Wine is so big, as noted in Wine Business News’ annual ranking of the U.S. largest producers, that it can make almost any retailer an offer that it can’t afford to refuse.

In 2017, Big Wine continued to dominate what we drink, according to the Wine Business numbers. The 10 biggest companies accounted for 81 percent of the wine made in the U.S. In addition:

• The three biggest producers, E&J Gallo, The Wine Group, and Constellation, kept their market share from last year – almost 60 percent. In other words, they make three out of every five bottles of U.S. wine.

• The share of the top 10 companies actually declined from 2016, from 84 percent to 81. That’s not because they’re less powerful, but because the next 20 brands took business away. The Josh Cellars label, owned by Deutsch Family, was little known a couple of years ago. Today, though, it is the 12th biggest “winery” on the list, with 2.2 million cases. Stop and consider what that means: Two years ago, hardly anyone had heard of Josh Cellars. Today, it accounts for close to one percent of all the wine made in the U.S.

• The top 50 companies on the list represent 90 percent of U.S. wine production. Given that there are almost 10,000 wineries in this country, this means the other 9,950 make only 10 percent. Is that healthy for the wine business over the long term?

• In the first Wine Business list in 2003, a winery had to produce 350,000 cases to make the top 30. This year, that threshold had doubled. So yes, the big are getting bigger; given that wine consumption is flat, how long until that starts hurting the other 9,950 wineries?

• The 10 best-selling grocery store wines in the country are owned by Big Wine; Gallo owns No. 1 Barefoot, and No. 10 Apothic. These 10 account for almost one-quarter of sales as measured by dollars. That’s depressing enough, but measuring by dollars probably under-represents their dominance. These are cheap wines, most costing less than $10 a bottle, so they could account for as much as 40 percent if measured by cases sold.

More on Big Wine:
• Big Wine takes over
• Big Wine growth 2016
• Big Wine to become one company