Tag Archives: Big Wine

Wine trends 2018

wine trends 2018

Who needs wine? We have legal weed.

Wine trends 2018: The wine business prepares for a future where fewer of us drink wine, focusing on “authenticity” and making us believe smooth is good

Wine trends 2018 will revolve around the wine business preparing for a future where fewer of us drink wine. Meanwhile, the news for wine prices in 2018 isn’t good. And my 2017 trends are here.

• The search for authenticity, or, Can we scam the wine drinker? As Big Wine owns more brands, they’ll try to convince us these wines aren’t like other mass-produced consumer goods. Instead, they’ll insist that their plonk is “authentic,” part of a post-modern corporate effort to persuade us that “everyday consumerist choices — from organic heirloom tomatoes to eco-tourist yoga retreats to small-batch whiskey” will make the world a better place. So mass-produced grocery store brands that use every winemaking trick and tool possible will be described as artisan and boutique and hand-crafted – adjectives that are the opposite of what the wines are. Wine analyst Paul Mabray has written extensively about this, and we’re trying to arrange a podcast to talk about it.

• We’re stuck with smooth. The worst descriptor in the history of wine is smooth; first, because it means nothing – water is smooth – and second, because wine isn’t supposed to be smooth. It is supposed to have texture and structure and body. Nevertheless, we’ll see wine marketed as “a sumptuous, almost magical outcome of the growing season and winemaking process.” Or, even worse, have smooth in its name. Or, even worse still, cost $20 or more and be boring, alcohol-infused fruit juice that only a handpicked focus group could love.

• The continuing death spiral of restaurant wine. We’ve talked about this many times over the past 18 months, and it’s just going to get worse. One study says almost three-quarters of adults will make dinner at home at least four nights a week this year. Where does this leave restaurant wine? Getting pricier, less interesting, and in the hands of aging Baby Boomers, the only ones who can afford to buy it. I saw this at a tres chic Dallas restaurant in December. We were the only table with a bottle of wine, and I had to navigate a sad and overpriced wine list to find something drinkable. Meanwhile, there was only one glass of wine at the table of eight Millennials next to us, and one of the men was drinking Basil Hayden with dinner.

• Big Wine branches out. The biggest wine companies have been hedging their bets with craft beer and spirits for years, and will continue to do so. But they will also expand into legal weed; witness Constellation Brands’ $191 million investment in a Canadian medical marijuana company. And why not, given that U.S. wine consumption is flat? It’s worth knowing that Constellation’s most profitable business, even though it owns Meomi, Mondavi, and Kim Crawford, is beer and craft spirits.

• Winery consolidation continues, mostly among medium-sized companies. This means that your $20 California brand, once owned by a family or a small group, will become part of a larger company that owns a lot of $20 brands. These companies, like Precept Wine, Foley Family Wines, and the Crimson Wine Group, have been active for a decade or more and own some of the best-known names in U.S. wine. This is happening for two reasons: first, the original owners are ready to retire and no one in the family wants the business; and second, the U.S. wine business has evolved into a business just like anything else – becoming what one analyst has called corporatized. Which then leads to smooth and the authenticity scam.

Winebits 517: Big Distributor, Big Wine, Wine.com

Big DisributorThis week’s wine news: Two of the biggest distributors in the country merge, plus Coke considers the wine business and Wine.com adds pick-up

The big get bigger: This spring, the 10 biggest distributors in the U.S. controlled almost three-quarters of the second tier of the U.S. wine business. That means that a handful of companies touched three-quarters of every bottle of wine we drank, adding another layer of bureaucracy and cost to a system that exists nowhere else in the world. Last week, the big got bigger, when No.2 RNDC announced it would merge with No. 3 Breakthru Beverage. That means, since Breakthru bought a smaller company in July, that the top eight companies will control 73.3 percent of the second tier. And, if that’s not enough concentration, the two biggest – Southern Glazer’s and the combined RNDC – will control 55.4 percent of the U.S. wholesale market. How anyone can claim this is beneficial to anyone but the distributors is beyond me. It will reduce competition, never good for consumers, and limit choice. That’s because fewer distributors mean the ones remaining will distribute fewer wines; can someone explain to me how that helps wine drinkers?

Is Coke returning to wine? One of the most famous failures in the wine business is Coca-Cola’s effort in the 1970s. Its brands included Sterling, but the company had little success and got out in 1984. So is Coke ready to try again? The company’s CEO said probably not, but that “Philosophically, I never say never about most things. …” Intriguingly, that company that bottles Coke in Australia is partners with the company that owns Yellow Tail, the best selling imported wine to the U.S., in the beer business.

Let me pick it up: Wine.com, the biggest on-line wine retailer in the U.S., has tripled the number of pickup locations to more than 10,000 across the country. This includes nearly 1,000 in California and more than 500 in New York. If you order from Wine.com, you don’t have to wait for it arrive at your house; you can get it FedEx Office locations, selected Walgreens and Duane Reades, plus some Safeway, Shaws, Jewel-Osco, Albertsons, and Fred Meyer grocery stores.

Winebits 495: Imported wine prices, Justin Beiber wine, Big Wine brands

imported wine pricesThis week’s wine news: Why a strong dollar doesn’t cut imported wine prices as much as it should, plus a rant about too commercial wine and Big Wine’s fastest growing labels

Not so cheap: The strong dollar has finally cut the price of imported wine, but it took surprisingly long and import prices don’t seem to be as falling the way they should be. A working paper in the Journal of Wine Economics may explain why: Laura Werner of Germany’s FernUniversitat writes that as the dollar gets stronger, other pricing pressures and how the supply chain works may slow price cuts. For example, the price of wine already in the U.S. or on its way here won’t fall, so that means a delay in cheaper wine until it’s sold at the higher price. The paper is incredibly complicated for those of us who don’t speak math, but my interpreter, Suneal Chaudhary, explained it to me. In the end, he said, a 25 percent drop in the euro may only result in a 10 to 15 percent drop in retail prices here.

Take that, crappy wine: A top Italian wine type has lashed out at wines that are too commercial, saying that “Winemakers need to gain more confidence and feel more comfortable in doing their own thing and making authentic wines that are true to themselves. Oherwise, you end up with the wine equivalent of Britney Spears and Justin Bieber – commercially focused wines made to suit the market.” That’s not the WC ranting, but Italian winemaker and consultant Alberto Antonini speaking to thedrinksbusiness magazine website. “I don’t like to make wine for the market,” he told the magazine. “I like to go out and make wine that is true to a place and then find a market for it.” Antonini was also scathing about winemakers who make what he called boring and ineffective Bordeaux knockoffs, because they don’t know what else to do.

The big get bigger: We’ve written many times on the blog about how much of the market is controlled by Big Wine, and this chart from the Wine Industry Insight website reminds us of that once again. It lists the 10 fastest growing brands in the U.S. from 2015 to 2016 – five of which are owned by Big Wine, including the top four. How about 1,600 percent growth for Constellation’s Ravage, which seems to be something the WC would write long diatribes about, and 400 percent for E&J Gallo’s Vin Vault boxed wine?

Winebits 487: Big Wine and Meomi, terroir, blue wine

meomiThis week’s wine news: Big Wine scores with Meomi, plus the terroir debate and – shudder– blue wine

Meomi success: Many of my colleagues continue to wonder what the fuss is about with Big Wine, since they don’t drink any of its products. So perhaps this item, from the Shanken News Service (subscription required) will help them understand. Sales of Meomi, which is the pinot noir that they love to hate, grew almost 40 percent last year to 1.1 million cases. Not coincidentally, Constellation Brands, the second-biggest wine company in the country, bought Meomi in 2015. Since then, sales have almost doubled, attesting to Big Wine’s clout in the marketplace and why we need to know what it does and how it does it. Because its brands are the ones that may displace the brands that we’re drinking.

.• Whither terroir? Bianca Bosker in Food & Wine offers an intelligent, balanced view of whether terroir – the idea that wine depends on a sense of place – exists. This debate has been going on for as long as I have been writing about wine, and each side is more entrenched than ever. The Wine Curmudgeon believes in terroir, because wine from Rioja in Spain should taste like it comes from there, just as wine from Napa Valley should taste like it comes from Napa. But technology has made the anti-terroir argument more tenable – no one pretends that Meomi, for instance, is terroir driven. It’s made to taste a certain way, using the most advanced winemaking techniques, and to appeal to the broadest swath of the marketplace. All I ask is that we know the difference, and judge the wines accordingly.

Orange wine wasn’t enough: How about blue wine, from Spain’s Gik? It’s supposed to be a combination of red and white grapes, “sweeter and easier to drink.” The Wine Curmudgeon hates to rain on Gik’s parade, but we already have something like that. It’s called white zinfandel, and save for the shade of blue, it’s sweeter and easier to drink — and sales are from what they used to be. But what do I know? I just drink wine; I don’t market it.

Big Wine takes over

Big WineHow big is Big Wine? 30 wineries sell 90 percent of U.S. domestic wine

How dominant has Big Wine’s position become in the United States? Consider that:

• The top 30 wineries on the 2017 Wine Business Monthly rankings represent more than 90 percent of domestic wine sold by volume. Which means that the other 9,000 U.S. wineries account for less than 10 percent. That’s the the chart on the left; click it to make it bigger.

• The top three brands – E&J Gallo, The Wine Group, and Constellation Brands – account for more than half of the domestic wine sold. That’s consistent with what has been happening over the past several years.

• The only independent among the 20 best selling U.S. wine brands in 2016, according to Nielsen’s survey of wine retailers, was Bogle. The only other sort of independent was Yellow Tail. Everything else came from one of the handful of Big Wine companies that dominate the business. (This is proprietary data, given to me by my source in Big Wine. Since I’m not supposed to have it, I can’t link to it.)

• From the same Nielsen numbers: One of every six “bottles” of wine sold in the U.S. in 2016 was either Barefoot, from Gallo, or Franzia, from The Wine Group.

These numbers are staggering enough, but they’re not necessarily new. The 90 percent figure was Big Wine’s percentage in the first couple of Wine Business Monthly surveys in 2003 and 2004. What matters is that the number of U.S. wineries has more than doubled in that time, and Big Wine’s share hasn’t gotten any smaller. How is that possible?

First, the growth in wine sales in grocery stores and chain retailers like Total Wine, which look to Big Wine to fill all that shelf space. Second, consolidation among producers. More than half of the wineries in the original Wine Business Monthly list are either part of another company or they sold most of their wine assets to someone else.

Is all of this good or bad for wine drinkers? My friends on the West Coast, who can get almost any wine they want because they live in California, say it doesn’t matter. That’s because they aren’t strangled by the three-tier system the way those of us in the rest of the country are. For us, big chains and supermarkets are a fact of life, and we’re stuck with what they sell us. In Dallas, the ninth biggest city in the country, there’s only one quality independent retailer left.

A friend of mine, a sophisticated wine drinker, buys his wine at the grocery store. It’s just easier, he says, and that makes up for what he knows is a selection that defines mediocrity.

The other thing to ponder: How does Big Wine mesh with premiumization, in which consumers are buying more expensive wine? The two seem contradictory. Can premiumization continue if Big Wine is making all the wine that we’re paying a premium for?

Winebits 464: Big Wine, wine fraud, Big Weed

Big wineThis week’s wine news: Big Wine goes after women, phony French wine, and legal marijuana elections

Really big: Anyone who doubts Big Wine’s power should read this story from Bloomberg News: Treasury Wine Estates will remarket an all but unknown wine brand and target women drinkers aged 30 to 40. In addition, the Treasury executive who came up with the idea previously worked for Kraft and Coke, where marketing like this is common. And finally, the company expects the brand to be sold around the world in 18 months. Frankly, when I saw this, I was stunned: It’s just so CPG – something Proctor & Gamble would do with one of its products. But then I reminded myself that I’ve been writing for almost a decade about how Big Wine was pushing the wine business in this direction. Think they’ll send me a sample to review?

` • Phony wine: How seriously do the French take wine fraud? A Bordeaux producer will spend two years in jail for selling entry level wine as more expensive Bordeaux to French grocery stores and pay a €7.8 million fine (about US$8.6 million). Eight people were fined or received suspended sentences for their roles in the fraud, including three winemakers who did the blending and the driver who drove the delivery truck. The producer said he will appeal, saying he was shocked at the severity of the sentence. What did he expect?

Legal weed: The wine business is anxiously watching today’s election results, where nine states hold marijuana elections. That’s because wine officials see dope as a direct challenge to their business, based on its amazing success in Colorado – where taxes from grass sales have passed taxes from wine sales in some parts of the state. California, Arizona, Nevada, Massachusetts and Maine, which already allow medical use, could join Oregon, Colorado, Washington and Alaska as states that also permit recreational use. Those nine states account for nearly a quarter of the U.S. population. Can the three-tier system be far behind?

Winebits 461: Stags Leap lawsuit, restaurant wine, wine history

 stags leap lawsuitThis week’s wine news: Big Wine and the new Stags Leap lawsuit, plus buying cheap restaurant wine and wine’s history

One more time: One of the great wine lawsuits was Napa’s Stag’s Leap vs. Napa’s Stags’ Leap, which was settled 30 years when a court ordered the apostrophes you see in this sentence. Now, the two sides, each owned by Big Wine, are suing each other over the stag in their names — the return of the Stags Leap lawsuit. Stag’s Leap, owned by Chateau Ste. Michelle, is suing Stag’s Leap, owned by Australia’s Treasury, claiming that a new Treasury wine called The Stag infringes on its name. Treasury says The Stag has nothing to do with Stag’s Leap or Stags’ Leap, and is actually taken from an Australian winery. Where is Monty Python when we need them?

The cheapest: We’re not the only ones fed up with high restaurant wine prices. British food critic Jay Rayner, reports The Telegraph newspaper, says we “should only buy house wine in restaurants in protest at complex and overpriced wine lists,” and that “expensive wines should only ever be bought in shops and enjoyed at home.” Which sounds like a fine plan, and something I have mostly done for years. Rayner, speaking at a literary festival, said he was eating at one of London’s most chi-chi restaurants: “I asked the waiter if he could find me a bottle of pinot noir for under £50 (US$61). He looked at me as if I was some kind of scum on his heel and he couldn’t so I then called him back and said, ‘there’s one for £49, you didn’t even know your own wine list.’ ”

The oldest? Archaeologists have found a 6,100-year-old winery in a cave in the Armenian mountains, making it perhaps the oldest winery in the world. The researchers found a drinking bowl, a grape press, a cup, and fermentation jars in the republic, which borders Turkey and Iran near the Black Sea. The India Times reported that UCLA’s Gregory Areshian, the co-director of the excavation, said the wine made there may be similar to a modern unfiltered red wine and may have had a similar taste to a merlot. Yes, but Areshian didn’t answer the most important question: How many points did the wine get?