This week’s wine news: We’re going crazy for Aldi and Lidl, plus a high-end wine theft and wine is missing from the country’s political divide
• Discount grocers: A report from a leading consultancy says discounters Aldi and Lidl “are here to stay. People are very happy with this format.” The Bain & Co. study says the two European chains have as much as 30 percent of the market in some parts of the country, an amazing number given how new each are to the U.S. The thing that matters to wine drinkers? That the two chains are investing heavily in high quality private-label products: “They’re not just filling shelves with something cheaper.” That’s what Aldi and Lidl do in Europe with wine, and if we haven’t seen that yet in the U.S., the report is one more reason to hope the chains will upgrade their U.S. wine inventory to its European level.
• No lock can stop them: A Chicago wine collector says the men he rented his condo to stole almost $50,000 worth of wine, including what he called an $8,000 bottle of Napa Valley cabernet sauvignon. The story, from a Chicago TV station, is rife with errors, including the name of the Napa winery. But the story is worth noting several reasons. First, I once lived in the same neighborhood, near Wrigley Field, and there were no condos with $8,000 wine then. Second, because the TV station has a long and proud history, and shouldn’t screw up like that. Third, because the story doesn’t explain why the condo owner was so lax about security for what was termed a “short-term rental.”
• No wine, please: A study outlining the booze preferences for Republicans and Democrats includes lights of light beer and bourbon, but wine is mostly missing from the results. And no, I have no idea what that means. Wine does seem to skew Democratic, save for cabernet and riesling, but the preferences are not nearly as striking as those for bourbon – decidedly GOP – and tequila and vodka, much more Democratic.
This week’s wine news: Do GOP tax cuts mean more alcohol in wine? Plus, restaurant will cut menu prices, but not wine prices, and a new Lidl means lower grocery costs
• Higher alcohol levels? The GOP tax plan changed the way the federal government taxes wine, and Blake Gray reports on Wine-searcher.com that the changes could lead to higher alcohol levels. The explanation is incredibly convoluted, taking into account that wines up to 16 percent alcohol will be taxed at a lower rate, about the same as 14 percent wines had been taxed at. The result, writes Gray, is that “your certainty of getting a lower-alcohol wine might be about to go away” since producers won’t make wines at a lower alcohol level just to qualify for the lower tax rate.
• Not with my list, you don’t: Buried at the bottom of this Bloomberg story, which heralds a potentially revolutionary restaurant pricing model aimed at the decline in people eating out, is this: “Sadly, [there are] no immediate plans to introduce flexible pricing on the wine list.” Which just goes to show, no matter how many times we complain about it, the restaurant business doesn’t understand wine, doesn’t care to understand wine, and won’t do anything about ridiculously high prices.
• Lower wine prices? Retailers near one of the new Lidl grocery stores on the East Coast set prices for key staples up to 55 percent less than in markets without the discount retailer, according to a study by the University of North Carolina. The numbers are astonishing, with Lidl’s prices 25 percent lower on average than traditional supermarkets. The study did not include wine in its results, but we can only hope that the same effect exists, given Lidl’s emphasis on including wine in its cost-cutting efforts. Because I’m tired of fake grocery store wine pricing.
This week’s wine news: Cheap beer and wine, but not in the U.S., plus college athletes think they can use a wine class to stay eligible
• But cheap if you have the three-tier system: The BBC reports that beer in the most expensive city in Britain costs £4.40 for a pint, or less than US$6. Which is damn cheap, considering what we pay for beer in this country. And which made me wonder: Why do I pay the same price for a 12-ounce bottle of mass-produced Big Beer at many Mexican restaurants in Dallas? Note, too, that 12 ounces is three-quarters of a pint. The only reason I can think of (and it isn’t real estate, since London is one of the most expensive cities in the world)? The British don’t have the three-tier system adding its percentage to the price of a cold one. And yes, the Wine Curmudgeon understands that items like this on the blog are the reason why I don’t get invited to trade tastings any more.
• Running out of wine: I can only hope this happens in the U.S. after Lidl, the discount grocer, has stores near me. British shoppers who didn’t show up when the stores opened didn’t get a chance to buy six bottles of Prosecco for £20, about US$4 a bottle. The best-selling Prosecco in the U.S., E&J Gallo’s La Marca, costs about $12. The English Lidl stores ran out of the Italian sparkling wine, sparking an outrage that careened throughout the English cyber-ether. As the BBC put it, “It seems that the country has now effectively divided into two camps — those who arrived at Lidl early enough to purchase cheap Prosecco, and everyone else.”
• Not in my class, you don’t: The New York Times, discussing college football’s academic and criminal morass, reports that football players enrolled in a wine class at Florida State University may not have done work required to pass, and cheated as well. And when the instructor told school officials that she felt pressured to give special breaks to the athletes, she was ignored. This item, which combines two of the Wine Curmudugeon’s careers, shows how sad sports has become and reminds me why I got out of sportswriting. And no student in any of my El Centro wine classes would get away with that crap. The instructor has my sympathy and condolences.
This week’s wine news: Discount grocer Lidl and its cheap wine plans Texas expansion, plus more expensive wine is sold, and wine importers are your friend
• On to Texas: Lidl, the European discount grocer that will will debut on the East Coast at the end of next year, has said it will make Texas its second destination. This is huge news for wine drinkers, since Lidl is one of the leading wine retailers in Europe, regularly winning awards for its cheap wine. It also means we will have arch-rivals Lidl and Aldi in Dallas, and as a grocery store consultant friend of mine put it: “I wouldn’t want to be in the supermarket business in Dallas and get caught in the middle between Lidl and Aldi when they go at it.”
• Too expensive to drink? How about paying $18,000 bottle for a bottle of red Burgundy? Or this quote, from the owner’s daughter after the wine was sold at auction: “My father would have been so proud and so honored. He bought the right wines at the right price.” Nothing, of course, about drinking the wine, supposedly some of the best in the world. In this, just one more example that more and more high-end wines are made to collect, and not to drink.
• The fine print: Marrisa Ross in Bon Appetit tries too hard to be hip and with it, but her point is spot on – the wine’s importer, listed in tiny type on the back label, speaks volumes about the quality of what’s in the bottle. We’ve said this on the blog for years, and even listed some of the best cheap wine importers. Know, too, as Ross writes: “Shopping by importer helps you buy more strategically, because even if you don’t know the grape, the region or the producer, you know and trust the importer.”
Will German discounters Aldi and Lidl change grocery store wine in the U.S. the way they’ve changed it in Great Britain? That’s the question to answer as Aldi grows to 2,000 stores over the next couple of years and Lidl opens its first stores on the east coast.
Because the chains have significantly changed the way wine is sold in Britain, not only forcing traditional retailers out of business but cutting sales at mainline grocers.
“You wouldn ?t have believed it possible five years ago, but Aldi and Lidl are now setting the pace in the U.K. supermarket wine trade,” writes Finoa Beckett in the Guardian newspaper. “Between them, the pair have 10 percent of the U.K. grocery market, with Aldi alone accounting for one in every 13 bottles of wine we buy.”
By comparison, Costco, considered the biggest wine retailer in this country, has about eight percent of the U.S. market, while Kroger may account for about four percent. In other words, two upstarts in the U.K. have done almost as well in that market as two multi-billion dollar retailers do here. What does that say about the way grocery stores have traditionally seen wine in the U.S.?
What accounts for the Aldi and Lidl success?
? Cut-throat pricing. Each does $10 wine, even allowing for exchange rate foibles, in a way we can only dream of here. Beckett recommends Lidl’s 6.99 (about US$10) Cremant de Limoux, sparkling wine from the Limoux region of France; a similar wine costs $16 here. And she says Aldi does a French red and South African white for 5.49 (about US$8), about two-thirds the price of each in the U.S.
? Supply chain brilliance. A British grocery store consultant told me the companies get such good prices because they make producers an offer the latter can’t refuse. The grocers will buy all of a vintage at one time, so that the producer is happy to sell at a lower price because it has the cash immediately and doesn’t have to wait for the wine to be sold over the course of the year.
? Smaller selection. The same consultant said that smaller selection translates into lower overhead and keeps costs down. “The traditional supermarkets’ massive range makes choosing hard for the 99 percent of consumers who have no idea what most of the wines are,” he explained. “And the discounters have been winning awards and getting plaudits for the quality of their wines, which when combined with their much cheaper prices is a sure fire winner for most consumers.”
That’s the good news. The bad news? So far, Aldi hasn’t shown it wants to do the same thing in the U.S. My local Aldi, as well as the others I’ve visited, has good prices and a small selection, but most of the wines are of indifferent quality — too much Winking Owl and not enough Vina Decana, and I’ve yet to find a white to buy regularly. If Lidl follows the Aldi example, we haven’t gained much.
Still, there is reason for optimism. Most experts ignored Aldi and Lidl when they entered the U.K., and now even ASDA, owned by Walmart, is suffering badly from the discounters’ success. Besides, given the sad state of cheap wine in the U.S., any sign for improved quality and value is welcome.
? Drink local: Our old pal Andrew Stover, one of the world’s leading proponents of local wine, has a message for Thanksgiving: Think less California and more Texas, Missouri, Michigan, and Virginia. Best yet, Stover puts his money where his mouth is, importing local wines as a distributor to the Washington, D.C., area. I’ve known Stover since our first Drink Local Wine conference, and he has never wavered from the cause. He has done such a good job, in fact, that some of my favorite Texas wines sell out in D.C.
? Billions and billions of dollars: It’s actually one bullion, but who’s counting? Constellation Brands, one of the biggest wine companies in the word, paid $1 billion — almost 10 times earnings, a startling number — for the trendy craft beer producer Ballast Point last week. This is incredible on so many levels that I don’t even know where to start, but does speak to how craft beer has become part of the mainstream and makes me wonder: How much longer will it remain crafty?
? Waiting until 2018: Lidl, the other German discount grocer famous for cheap wine, will open its first stores in the U.S. in 2018, with 50 locations in Virginia, North Carolina, South Carolina, Maryland, and Washington D.C. Said the company’s CEO: “The United States are a strategic market for us.” Should I start a countdown clock?