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.
• 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.
This week’s wine news: U.S. organic wine may have suffered a serious setback when Frey Vineyards burned, plus customers want top-notch service and more bad news for restaurants
• Organic wine: Frey Vineyards, destroyed in last week’s wine country wildfires, was one of the leading organic producers in the country, one of only two or three with national distribution. Its destruction deals another setback to organic wine, which has never been as popular as other organic food products. It accounts for less than five percent of U.S. wine sales; that compares to the 13 percent market share for organic fruits and vegetables. I’ve written a lot about why organic wine does so badly in the marketplace, but the best explanation is so simple I’m embarrassed I didn’t think of it. Says Tyler Rodrigue, an organic viticulture consultant in northern California. “Consumers assume that wine, by its very nature, is pure and natural to begin with. Ask most consumers, and they don’t equate a vineyard with a factory farm the same way they do for other products. Vineyards are beautiful, and don’t look like a picture of a factory farm.”
• It’s all about customer service: The Wine Curmudgeon is the son and grandson of retailers, so this study from a company that tracks on-line reviews called Trustpilot isn’t surprising. We want better service when we shop on-line, even more than cheap prices. Which is what I heard when the subject came up at the dinner table, which was more often than not. Says the report: “ ‘Price’ only shows up around in 4-5% of 1-star reviews and in 10% of 5-star reviews, significantly behind the top five most common words.” Why does this matter to wine retailers? What’s more confusing than buying wine? What other category requires service to find something to buy that is enjoyable? In other words, fake discounts and shelf talkers blaring 92 points aren’t enough. We want a person to answer our questions knowledgeably and intelligently.
• Restaurant sales continue to slump: How bad has the restaurant sales slump become? So bad that the people who parse the numbers are desperatley looking for silver linings. Throw out the hurricane states from this summer’s sales figures, and the decline in sales from month to month are less than two percent. Not much of a silver lining, is it? Or, as the chart with the story shows, same store sales have declined for 11 of the past 12 months. We’ve written about this on the blog many times, since poor restaurant sales numbers usually mean higher restaurant wine prices, as operators increase wine prices to make up for losing money elsewhere. No doubt this will continue to happen.
So my friends in the restaurant business need to do some soul searching. Why does a 42-year-old video where John Cleese opens a wine bottle by holding it between his knees, and where he doesn’t get all of the cork out on the first try, and where he refuses to acknowledge that the wine – an expensive red Burgundy – is flawed, still matter?
Yes, some of it is because John Cleese is funny. Yes, some it is because this a well-designed website that deftly uses Google’s search algorithm to attract traffic.
But the real reason? Because this stuff still happens – four decades after Cleese made fun of it. And how frustrating is that? Consider that:
• The Big Guy reported last week from Bar Harbor, Maine – hardly a shot and beer kind of town – that the waiter left half of the cork in a bottle of pricey white Burgundy. He had to finish taking the cork out of a bottle of wine, which is inexcusable.
• A regular blog visitor from Texas emailed to say that not only did a waiter try to open the bottle between her knees, but couldn’t do it even then. She had to run to the bar to get it opened. Which is also inexcusable.
• A blog visitor from Califormia emailed that Cleese left out one other restaurant wine service aggravation: “Six people sit down in a restaurant, are given menus and one drinks or wine list. First words out of the server’s mouth, “Would anyone like something to drink?’ ”
We pay three and four times retail in restaurants for what are often crappy wines. What does it say about how little they care about our money that they can’t even give us decent service to go with the overpriced wine?
This week, three of the WC’s favorite topics – cheap wine quality, why nutrition labels matter, and restaurant wine prices
• Bring on the taste test: An English wine shop hosted a blind tasting, and the £5 bottle (about US$6.50) beat four more expensive wines, including a $40 red Bordeaux. This does not surprise to the Wine Curmudgeon, of course, who has been advocating these sorts of blind tastings for years. The winner was a Spanish verdejo, Abadia Mercier, which is not available in this country. But almost any verdejo – a white wine that is fresh, crisp, and lemony – should do the trick if you want to try a similar blind tasting with your friends. Verdejos, like the Blume, have been the wine of the week on the blog for years, and almost all have cost $10 or less.
• Bring on the nutrition labels: Millennials, who are supposed to the future of the wine business, like nutrition and ingredient labels – so much so that a recent study of snack foods should be a “wake-up call” for brands. “When you see a majority of that size say, ‘Fewer ingredients means a snack is healthier,’ that’s a pretty massive shift for the age group, said one of the men who did the study. “Being health-conscious is a smart move and it is transcending the generations right now.” Unless, of course, you’re the wine business, where telling us what’s in our wine is heresy.
• Bring on the wine list: A journalist turned wine geek says restaurants charge more for wine that people are more familiar with, like cabernet sauvignon – “a ‘gimme tax’ on glasses of brand-name grapes like chardonnay and malbec. They could charge more because most drinkers see a familiar grape, go on autopilot, and think, ‘Give it to me; I don’t care what it costs.” I’ve never heard this before, though it does seem to explain why some familiar brands are marked up more than wines made with the odd grapes that I like.
British restaurant wine prices are ridiculously high, just like those in the U.S.
British journalist Matthew Bell is even more angry about restaurant wine prices than the Wine Curmudgeon is.
As he writes in London’s Daily Mail newspaper: “But if you think you’re paying a reasonable price for a decent bottle, think again. … restaurants are relying on the fact most of us don’t know much about wine to squeeze the biggest profits out of frugal diners.”
As Bell writes: “Take The Connaught hotel restaurant in London, which has two Michelin stars, and where a meal for two can set you back £300 (about US$381). A small glass of house white (125ml) costs £10 (about US$13). But go on-line and you could buy a whole bottle of the very same wine for just £9.70. That represents a mark-up of a staggering 500 per cent.”
There’s a terrific chart with the story showing the markups at four London restaurants – 300 percent for a couple of simple Italian white wines, 312 percent for a French red posing as a house wine, and 233 percent for another French red.
In other words, British restaurants are doing the same thing to their customers that U.S. restaurants are doing to us, and a London food critic calls it a big problem. Would that food critics in this country noticed the same thing.
And the results? Writes Bell: Those of us who don’t know much about wine are left “with an unenviable choice — either we pick the cheapest, and get ripped off; or go upmarket and spend more money, when all we ever wanted was a simple glass of wine.”
This week’s wine news: Internationalization wine guru Michel Rolland, plus bubbly for the Cubs more bad restaurant news
• The evil genius?: Michel Rolland is the French winemaking consultant who has popularized the International style; that is, he can make wine anywhere in the world so that it will taste like a 94-point Robert Parker wine. This is an incredible skill, even if it makes those of us who want terroir flee in terror. Rolland, in an interview with the Live-Ex wine stock market, is honest about his work — scary, but honest: “Quality is not the same for everyone: there are opinions that you share; others that you don’t share. My personal objectivity is a relative one in some ways. I do not take a wine and say whether it’s good or not: I try to make a wine that will achieve a goal. The goal is the market, the customer – in one or more countries.”
` • A sparkling World Series: This is one part of the Cubs’ World Series victory that I will skip: a Chicago Cubs bubbly. It’s a $25 California sparkling wine that has been sitting in the bottle, apparently waiting to be labeled depending on what happened in November. Plus, the specs don’t sound good — it’s one or two points higher in alcohol than most bubbly, and the dosage — the sugar and wine mixture added to the wine before the second fermentation — seems high for a dry wine. I’ll stick with cava, thank you.
• More bad news: Restaurant sales hit a three-year low in October, and the number of people eating in casual dining restaurants declined for the 19th time in 2o months. This is more bad news for restaurant wine, since it’s being used as to compensate for declining sales. If you have fewer people in your restaurant, you need bigger checks, and those bigger checks are coming from higher wine prices. But consumers, says one analyst, aren’t fooled: “The wide price gap between grocers and restaurants remains a major factor in this year’s depressed same-store sales at restaurant chains.” We’re staying home, watching Netflix, and buying something at the grocery store, and that may include wine with our takeout chicken.