Tag Archives: Big 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?

How desperate is Big Beer?

big beerHow desperate is Big Beer to regain its stranglehold on U.S. beer drinkers? So desperate that it’s not enough to mock craft beer; now, even chardonnay is seen as a threat, and that has never been the case in the history of the United States. Beer consumption has outpaced wine since before we were a country.

Nevertheless, Miller Lite came up with this commercial, which says that women should take its product to a chardonnay event. My guess is that wine is seen as a Millennial drink, and someone found a study that said Millennials are forgoing Big Beer for wine. Perhaps one of our visitors with ad agency experience can explain why chardonnay is a target, given that old white guys drink Miller Lite.

For all of my ranting about Big Wine, it has never done anything this stupid. The commercial is below — what were they thinking?

Winebits 432: Small Wine, wine education, restaurant wine

Small wine

I’d like a bottle of Rhone Rangers, please.

Not so fast, Big Wine: A group of Australian family producers, angered by Big Wine companies who market their “family” roots, have issued a furious denunciation of the practice. “I’m really sick of the latest trend for corporate misuse of the term ‘family’ when promoting wine brands that were sold by the family founders eons ago and conning wine loving consumers and trade alike,” Robert Hill-Smith, the fifth-generation vigneron at Australia’s oldest family-owned winery, Yalumba, told the The Weekend Australian newspaper. Hill-Smith said Big Wine subsidiaries portraying themselves as family companies undermined the validity of family-owned businesses actually owned by families. This is a fascinating story; wineries never air this sort of thing in public, though they say it in private all the time. It also speaks to Big Wine’s need not to be seen as big, something that never seems to bother General Foods or Procter & Gamble. Why that is I’ll leave to the experts.

Score one for the Italians:  The Wine Curmudgeon regularly bemoans the lack of wine education in the U.S., which is why this Italian proposal is so impressive: Children 6 to 13 would spend one hour a week learning about Italy’s wine industry as part of the national education curriculum. “We’re not trying to teach kids to drink – although even if we were it wouldn’t be so bad,” said the sponsor of the legislation. “It’s been shown that knowledge creates responsible drinkers. But this is just an extra subject that will enrich the education of our students. We make children study music in school without expecting them to become musicians.” Hopefully, the various neo-Prohibitionists who are trying to roll back U.S. drinking laws will note this and pause for a moment.

Won’t they ever learn? A website called Elite Daily, with 2.8 million Facebook likes, ran a piece about how to buy wine in a restaurant and impress your date in the process. The story, supposedly written with advice from a top wine retailer, repeats almost every misconception about restaurant wine I have lamented since the blog started. Gruner veltliner! Plus, it recommends buying white wine from France’s Loire, which is a wonderful idea save for the fact that many wine lists, and especially those at mid-priced restaurants, have little, if any, white Loire. Or we should buy cabernet franc from Spain, which hardly exists. Or we should buy a wine called Rhone Rangers, which is not a wine, but a group of producers in California who make wines with Rhone grapes. Maybe we can enroll the people at Elite Daily in the Italian school wine educations classes.

Big Wine

Big Wine to become one company

big wine

“Wait a minute. Isn’t the cabernet down the other aisle? Or is that the red blend?”

Four of the biggest U.S. wine companies, which control almost half of the American market, announced today they will merge to form one company — The GalConTreas Group.

“It seemed really counterproductive to be competing against each other since we already dominate the market, most of our wines taste exactly alike, and consumers don’t know the difference anyway,” said a spokeswoman for the new company, which will close all of its facilities but one and fire all of its employees except those a personnel review deems “absolutely necessary.” In fact, the spokeswoman used the words “synergies” and “cost savings efficiences” 173 times during the news conference that announced the merger.

The new CalConTreas Group will revolutionize wine production by taking advantage of those synergies and cost savings efficiencies, said the spokewoman. For example, instead of the thousands and thousands of tanks and barrels each producer uses, the single The GalConTreas Group winery will have just one, factory sized, with thousands of separate spigots for each brand the new company produces.

Said the spokeswoman: “Red, white, varietal character? Does the average consumer really care? Or understand any of that wine writer foolishness? Of course not. All they want is smooth and fruity wine, and baby, that’s what we’re going to give them. And we’re going to premiumize it!”

Reaction to the announcement:

• The U.S. Justice Department and Federal Trade Commission immediately approved the merger. Their only concern? That it included just four of the biggest companies, instead of the eight biggest and their 60 percent market share. “Because, if you’re going to create a monopoly, what’s the point of not doing it right?” asked a Justice attorney.

• Fred Franzia, whose Bronco Wine is the fifth biggest producer in the country, announced Bronco would merge with itself. “If those people think they can get away with this without taking Fred Franzia into account, they’ve got another thing coming,” he said.

• The Wine Spectator said it would produce a special section in upcoming magazines featuring The CalConTreas Group wines, and that each of the new company’s wines would get 92 points.

•  The eight biggest distributors in the country, which control two-thirds of the market, said they would merge into one company to better serve The GalConTreas Group, and used the words “synergies” and “cost savings efficiencies” 342 times in their announcement.

• Legendary Internet blogger Jeff Siegel, the Wine Curmudgeon, who predicted these developments in a 2015 blog post, declined to comment. However, a person with close ties to Siegel said he was sitting in a dark corner, mumbling something that sounded like “The horror, the horror,” and hoarding cheap Gascon and Sicilian wine.

More April 1 wine news:
• Wine Spectator: If you can’t buy it, we won’t review it
Supreme Court: Regulate wine writing through three-tier system
Gov. Perry to California: Bring your wineries to Texas