This week’s wine news: Will the pandemic finish off premiumization? Plus, turmoil in Pennsylvania’s state wine stores and the favorite DTC grapes
• Is premiumization over? A top wine business analyst has told the industry that its drink less, but drink “better” mantra – premiumization – could be ending thanks to the coronavirus pandemic. Spiros Malandrakis, industry manager for alcoholic drinks at Euromonitor International, told the Harpers UK trade magazine that premiumization is at a crossroads: “What we saw in the recession of 2008 was that even if people that could afford more expensive wines or niche varietals, they didn’t buy them because it looked crass. The context has changed. I’m not saying the industry is over. What we know from history is that people will always continue drinking. It’s not the end of the world but it will be a different world to the one we’re used to.” In this, he’s not the first to predict premiumization’s end. But it is one more voice suggesting that the new normal in the new future could be $10 wine.
• More fun in Pennsylvania: Pennsylvania’s state liquor store system has come in for much fun on the blog. And why not, given wine vending machines? But the decision to close the state stores during the pandemic has met with serious opposition, not the least of which is the loss of state tax revenue. Even in New York, the center of the U.S pandemic, liquor stores have remained open. Apparently, the state is reconsidering its decision, and may allow limited Internet alcohol sales. April 2 update: The state did reopen its online liquor sales system, but the system will be quite limited.
• Favorite DTC grapes: This is a contradiction that seems difficult to explain: Why is chardonnay the best selling wine grape at retail, but cabernet sauvignon is the best seller when consumers buy directly from the winery? That’s the result from a recent SOVOS/Ship Compliant study (via Wine Industry Insight), where cabernet was the best seller with 17 percent of volume, almost twice as much as chardonnay. Typically, chardonnay accounts for about 20 percent of retail sales. Any thoughts would be much appreciated.
This week’s wine news: Barefoot wine sells some 18 million cases a year, which is no doubt why Google likes it so much. Plus, a look at on-line wine sales and more news about artificial wine
• Big, big Barefoot: How much wine does Barefoot sell each year? How about 18 million cases? That would make it the fifth biggest producer in the country if it wasn’t owned by E&J Gallo, which is the biggest. In this, the various Barefoot brands could account for as much as 2 ½ percent of all the wine sold in the U.S. each year. Is it any wonder, then, that Google sends so many people who are searching for Barefoot to the blog? Or that three Barefoot items were in the top four of the most read blog posts in 2019? That Barefoot is thriving while the rest of the wine business is heading downhill speaks volumes – if anyone in wine is willing to listen.
• If Amazon can’t. … : One of the great puzzles in the wine business is Internet sales. Supermarkets in particular would love to do it, but three-tier makes it much more difficult than selling razors and mattresses, two categories that have been able to embrace e-commerce. Notes consultant Zac Brandenberg: “But neither market presents anywhere near the opportunity that beverage alcohol does. Wine alone is a $70 billion market with less than one percent commerce penetration — signaling an enormous untapped opportunity for retailers and wineries.” But how do supermarkets do that, when Amazon failed three times? Brandenberg suggests using the Internet for local delivery, just like the local Kroger, Wegman’s, and Albertson’s do for food. The cost could be enormous, but he says he expects retailers to do what needs to be done because the profits would be so immense.
• Hold the grapes: The company has a new name, but it says it’s ready to give the world wine made without grapes. Hence, an Italian-style sparkling wine made with a combination of ethanol (the alcohol bit), assorted flavors, and caramel color and beta carotene for color. Interestingly, the latter can oxidize, which would mean fake wine can go off just like real wine. We covered the story on the blog almost three years ago when the company was called Ava, but the questions remain. Why does the world need this?
This week’s wine news: Texas goes after direct to consumer wine shipping, plus has wine become a luxury and the wine glass chair
• Not so fast: The Texas Alcoholic Beverage Commission is cracking down on shipments to Texas from out of state wineries. The state agency will apparently review all of the roughly 1,600 license holders permitted to ship wine to Texas customers. And that will include a request for a voluminous amount of paperwork, including licenses, label approvals, and customer invoices, reports the ShipCompliant consultancy. Why does what Texas does matter to the rest of the country? Because the TABC often sets the example for alcohol cops in the rest of the U.S., and if they’re gong to this much trouble, other states may see the need to do the same thing. And if Texas is cracking down, the next question is why?
• Hard to believe: One of the wine critics who helped create the high-end wine world is asking: “Have you noticed how expensive wine is getting?” Yes, actually. But that Jancis Robinson, perhaps the most important European wine critic, is saying so complements the Wine Curmudgeon’s usual rants. That’s because her analysis is spot on – slowing demand yet rising prices. “Not so long ago, it seemed that prices were relatively modest initially, until reputations and/or high scores were won. But now, from where I sit, more and more wine producers dive in at the deep end, asking really quite ambitious prices from the get go.”
• Just for sitting: A Spanish interior and product designer has created a chair based on a wine glass – “The Merlot.” In one respect it doesn’t look all that different from what those of us of a certain age know as a Felix Unger chair. But the designer, Marta Del Valle, acknowledges they “aren’t ideal for tedious and work-oriented actions such as studying, working or consuming long meals. But for all you fun-loving design enthusiasts, and not to mention wine lovers out there, such a piece would only liven up any space it is placed in.”
Photo from Yanko Design, using a Creative Commons license