Tag Archives: wine business

Putting canned wine in perspective

canned wine

Somebody bring the rose. The socca is ready.

No, canned wine is not the end of the universe. So why do we keep hearing that it is?

A recent trade magazine story asked the question, “How seriously should we be taking the rise of wines in a can?” To which my answer was, “Who cares?’

The story was mostly the same winebiz-speak we’ve been seeing for the past couple of years as cans have become more popular. To wit: The wine business is shocked to discover that consumers will drink wine out of something other than a 750-ml bottle with a cork-style closure, so it’s obvious that cans are going to take over the wine business. So we need to do something!!!!!

Is it any wonder I worry about the future of the wine business?

We read the same stuff when Tetrapks were au courant and boxed wine was supposed to be the next big thing. And nothing changed – 75 percent of the world’s wine still comes in a 750-ml bottle with a cork-style closure.

So why the panic now? Yes, the quality of much canned wine is suspect. But why should that bother an industry that turns out vast quantities of plonk in bottles?

Because the wine business, and especially the wine business in the U.S., has so much time and money invested in keeping wine exactly the same way it has been since the end of World War II. So anything that threatens the ancien regime is to be feared. And it’s to be especially feared given the current wine climate of flat sales and increased sobriety. Even if, in the end, canned wine won’t make that much of a difference to flat sales and increased sobriety.

So why can’t we just drink wine – canned or otherwise – and enjoy it instead of rending garments and gnashing teeth about the future of the wine business? I recommend this blog post from food writer David Lebovitz. He is discussing socca, the chickpea flour pancake and or crepe thing famous in southern France, and his point is most welcome (as is his socca, one of my favorite Saturday night appetizers):

And for any wine snobs out there that think it’s folly to serve wine in cups instead of glasses haven’t had the pleasure of standing near a wood-burning oven, eating a blistering-hot wedge of socca with a non-recyclable tumbler of wine. Preferably served over ice, Marseille-style.

Photo: “FR’Nice 11’0925 – 13” by karendelucas is licensed under CC BY-NC 2.0

Winebits 609: Winery values, rose, Indiana wine

winery valuesThis week’s wine news: Have winery values, once seemingly exempt from the laws economics, started to decline? Plus, rose as a lifestyle and Indiana’s Oliver winery.

Declining values? Have California winery values, which seemed to be exempt from the laws of economics, started to decline? Silicon Valley Bank’s Rob McMillan thinks so, citing the changing economics around the wine business. “The short answer to the headline question for today is there are still plenty of buyers but overall they are being a little more selective, and your winery and vineyard are probably not worth more than they were last year,” he writes. “Without going into details on a long topic, we are presently oversupplied on grapes and bulk wine from most regions, and the upside to higher sales is for today more limited than the past. …” If McMillan is correct, and he usually is, then the situation is markedly different from almost anything in the past three decades. Napa Valley land prices, for example, didn’t lose value during the recession, even though the rest of the country saw land prices drop by double digits. There’s a lot of math and financial-speak in the post, but the sense is that we’re in a world no one expected to see.

Rose as a way of life: Who knew that rose instilled a wine culture in the U.S.? That’s the gist of this Forbes blog post, which otherwise seems like a plug for rose from the French region of Provence. Which is not surprising, since the Provence rose trade group has one of wine world’s best marketing programs. It’s a also a plug for high-end rose, including one that costs $190 a bottle. Its producer describes it as “gastronomic rose” — no doubt to differentiate it from the $10 plonk the rest of us drink.

Only in Indiana: Regional wine scores another victory with the Mainstream Media in this feature about Indiana’s Oliver Winery, “the largest winery in the Midwest, it’s perhaps the largest winery east of the Mississippi – or, at least one of the largest – and it’s the 44th largest winery in the United States.” The Wine Curmudgeon is always happy to see regional wine in the news, showing once again how far ahead of the curve we were with Drink Local Wine.

Photo: “vineyards” by mal.entropy is licensed under CC BY-NC-SA 2.0 

Wine business history: The more things change, the more they stay the same

wine business historyIn the wine business, history repeats itself – and we know what premiumization, overpriced wine, and consolidation mean for consumers

Premiumization, overpriced wine, and consolidation are nothing new in the wine business. Go back 80 years, and wine business history is eerily familiar. In this, some of the earliest and most influential wine critics, including Leon Adams and Frank Schoonmaker, warned the industry about the mistakes it was making.

And I would be remiss if I didn’t quote Winston Churchill here: “Those who do not learn from history are doomed to repeat it.”

Premiumization

Schoonmaker was a wine importer and wine writer whose 1930s’ “The Complete Wine Book” might have been the first attempt to explain wine to the U.S. consumer. In 1947, in a piece for Gourmet magazine, Schoonmaker lamented what sounds a lot like what we’re seeing now:

And in the past five years we have hardly seen any real vin ordinaire (by which I mean a common, inexpensive table wine) sold in America. The humble gallon jug virtually disappeared in 1943 from our wine merchants’ shelves; instead, the undistinguished reds and whites from the mass production areas of California appeared in fancy dress at a fancy price, and elaborate advertising campaigns were launched to convince us that bottles which we used to buy reluctantly for 60 cents were suddenly worth $1.50 and were being sold us as a special favor.

In other words, $15 wine is the new $8 wine.

Overpriced wine

Adams was perhaps even more influential in his time (the end of Prohibition to the 1960s or so) than Robert Parker was in his heyday. He is usually given credit for pushing the California wine business into the 20th century; he advocated for regional wine long before there was much of it; he helped start the Wine Institute; and he wrote several of the most important wine books in U.S. history.

He also had no use for over-priced wine, and regularly urged California producers to make wine that most of us could afford:

They should be as cheap as milk. High price wines are not for daily consumption with meals. Real wine drinkers know this; most Americans still don’t.

How spooky is that quote, that it’s still so relevant today?

Consolidation

Adams also saw the dangers of too few wineries producing too much of the country’s wine, something he first warned about shortly after World War II. He explained this in a 1974 interview:

The point was mine, and I think it has stuck to this day, that the little wineries should be encouraged to exist. The larger the number of small wineries that operate in the United States, the safer the big wineries are from attack, legislative attack in particular. If the wine industry ever fell into the hands of only a few major factors, the wine industry and the whole cause of wine would be in trouble. It would be endangered. … The big wineries have never agreed with me about the need to foster the small wineries. … My purpose is to encourage the use of wine, to introduce the use of table wine, which local wineries can do. Moreover, it’s especially to the advantage of California to thus expand the wine market, because with the ideal grape-growing climate of this state, California wines will always be the best buys.”

I wonder: How many of the biggest California producers have ever read that?

Photo courtesy of Sedimentality blog using a Creative Commons license

Wine Curmudgeon Wine Sample Index: Heavy weather ahead for the wine business?

wine sample indexPremiumization’s role in the wine slowdown

It’s not scientific, but the Wine Curmudgeon Wine Sample Index indicates that the wine slowdown is here

The wine slowdown, much written about and much discussed, has officially arrived. How do I know this? The Wine Curmudgeon Wine Sample Index.

The wine sample index is my highly anecdotal and decidedly un-mathematical system for gauging the health of the wine business. When business is good, and no one needs a cranky ex-newspaperman to review their wines, I get fewer samples. When business isn’t good, then I get more samples – including bottles from high-end producers who usually dismiss me as not worth their time.

And this spring and early summer, I have received more samples than I’ve gotten since the recession, maybe three or four times the usual amount.

As noted, this is highly anecdotal and decidedly un-mathematical, and I’m not sure the blog’s official statistician would approve. But the pattern has been there since the blog started in 2007. During the recession, I got more wine than I could drink, including $100 bottles. But the samples dried up in the couple of years after the recession ended, when wine sales recovered and premiumization took hold. I don’t write about the kind of wine that has dominated the market since then, so why send me something to review?

But now, apparently, they need me. I’m getting samples from producers who haven’t contacted me in years, and they’re sending wines that cost $25 and more.  Just the other day, in fact, an email me offered a case of wine, only one of which cost less than $24 and five of which cost more than $30. Hasn’t the marketer ever read the blog?

Also intriguing

More samples are coming from people who want me to write about their wines in the hope that my review will generate retailer interest as opposed to sales. They want to use a good review to place the wines in more stores in more parts of the country. That also happens more often when wines sales are slow.

In other words, any port in a storm, and this storm is beginning to look particularly intense. Know that samples are an expensive form of marketing – not just the cost of the bottles, but the cost of shipping, which can run as high as $100 a package. But wine sales are so flat and so many people are so worried that spending all that money to send me samples looks like a better investment than letting the bottles languish on a warehouse shelf.

Will this storm turn into a category 5, Hurricane Wine Recession? The sample index can’t tell me that. One sign of optimism: I still don’t get asked to attend trade tastings, where producers and distributors show off their wines for writers, retailers, and the like. Those invitations ended after the recession, too. So if trade tasting emails start to arrive, then maybe it is time to batten down the hatches.

Winebits 600: The Wine Curmudgeon has ulterior motives and is trying to destroy the wine business edition

Wine Curmudgeon

“Dude, you’re so not good for the wine business. Why are you trying to destroy it?”

This week’s wine news: The cyber-ether is ablaze in criticism of those of us, including the Wine Curmudgeon, who want people to enjoy drinking wine they can afford to buy. Because, of course, we’re up to no good.

July 3 update: Thank you for the kind words in the comments and your emails. Frankly, I was surprised, though I shouldn’t have been. The blog’s readers have always supported what I do and are the reason I keep doing it even when too many in the wine business wants me to sign off on selling $12 wine for $25.

Take that, Curmudgeon: Dwight Furrow, writing on the Food and Wine Aesthetics website, wants to know where people like me get off offering wine advice. After all, all we want to do is destroy wine and make money in the process. He links to the Jamie Goode post I wrote about earlier this year, and agrees with Goode that people like me are part of some vast conspiracy that has it in for “wine experts.” We’ll ignore for a moment that I am incapable of evil mustache twirling and that the only conspiracy I believe in is that Microsoft tried to destroy Linux. What Furrow misses, as Goode did, is that wine criticism is seriously flawed, and that responsible, legitimate critics who aren’t so-called cheap wine slime like me (Eric Asimov, for one) think so. So let’s figure out a way to fix the problem instead of pronouncing judgment on everyone else.

And this, too: I’ve been writing about wine and the three-tier system for more than 20 years, but I’ve never seen anything like a recent post in something called Alcohol Law Review. Apparently, those of us who oppose the three-tier system are lying scum who want to make money off the deaths of others. As near as I can tell, if we change the three-tier system in any way, we’ll end up with tourists dying after drinking tainted booze, as happened recently in the Dominican Republic. The enemy here is the same one as in Furrow’s post: “Various economic interests” who want to overthrow the system so they can get fat and rich. Who knew? I thought I just wanted to buy cheap wine more easily.

And don’t forget this one, either: Jamie Goode is back at it, reminding those of us who like cheap that we’re not only wrecking the environment, but that our greed ruins the wine business: “The race to the bottom in terms of price points sucks life out of the wine category. It also sucks out all the profit.” I would argue that the £5 wines he’s talking about are Barefoot and their ilk in the U.S., and the last time I checked, Barefoot owner E&J Gallo was one of the richest and most profitable companies in wine. But what do I know? I’m trying to ruin the wine business and feather my already fat and corrupt nest.

Winebits 598: RNDC distributor merger, local wine, red vs. white

RNDCThis week’s wine news: The country’s second biggest distributor, RNDC, is going to merge with the fourth biggest, plus Italians stick up for local wine and red wine drinkers are much cooler than white wine drinkers

RNDC tries again: RNDC, the country’s second biggest distributor, will merge with No. 4 Young’s Market. This comes in the wake of RNDC’s failed merger with No. 3 Breakthru Beverage in the spring, which the federal government said would violate anti-trust law. The story in this link calls the merger “a distribution joint venture,” but read it all the way through and it says Young’s will become a division of RNDC. Which sounds like a merger, but I’m not the one RNDC executives have to convince. That would be the Justice Department. Regular visitors here know how I feel about this stuff; it’s a great deal for the distributors, allowing them to cut costs and increase margins, and not so good for the wine drinker and too many wineries that aren’t Big Wine. But it’s all part of the thrill and excitement of the three-tier system.

Local wine means local wine: Farm house bed and breakfasts in the Italian region of Lombardy must serve only local wine to their guests, reports the The Local, an Italian news site. “Under a new amendment to the regional law. … the more than 1,600 agriturismi– farms offering tourist accommodation in Lombardy will have to prioritize local specialties. They will be limited to getting 20 percent of their products from outside the region, and none of their fish or wine (though wines from vineyards directly adjoining Lombard soil are considered acceptable).” The story doesn’t explain why the law was passed – no doubt it was caused by a particularly Italian dispute.

Red vs. white: Red wine drinkers are much cooler than white wine drinkers, according to a recent poll. “Nearly half of red-wine drinkers considered themselves ‘wine aficionados’ compared to 31 percent of white-wine drinkers. And red-wine drinkers also showed they knew slightly more about wine in a series of follow-up questions compared to white-wine lovers.”And who took this poll? None other than Coravin, the $250 wine opener whose target audience, not surprisingly, is expensive red wine drinkers. This is yet another example of someone paying for a study to get certain results, something I have written about many times before. And, to her credit, the woman who wrote the story in this link mostly did just that.

Three reasons to be optimistic about the future of the wine business

wine business futureMaybe there are reasons not to be so doomy and gloomy about the future of the wine business

Mike Dunne, one of the most perceptive people I know in the wine business, left a comment recently that not all is doom and gloom with wine. The Wine Curmudgeon has been especially doomy and gloomy about wine’s future, and with good reason. Just when it seems like the news can’t get any worse, it does.  How does Constellation, one of the smartest companies in the business, overvalue assets it’s selling by a billion dollars?

Still, Mike being Mike, his comment made me ponder. Does he see something that I don’t? In one respect, Mike is completely correct – the wine business isn’t going to vanish tomorrow. And who knows? Maybe young people, who currently seem as interested in wine as I do in the Kardashians, will eventually change their minds. I’m always willing to admit I’m wrong — and hope I am, in this case.

So, given those two conditions, maybe there are three reasons for optimism that I have overlooked:

• The re-emergence of lower alcohol wines. We won the battle against 15 percent chardonnay and 16 percent cabernet sauvigon at the end of the recession, and most wines today are made with more or less normal alcohol levels. If wine drinkers can convince producers we don’t want our rose to kick like tequila, then maybe we can convince them that smooth and sweet isn’t a good idea, either.

• Rose’s success. When I started the blog, rose was a dirty word and difficult to find in shops, stores, and restaurants. The wine business told us to drink white zinfandel and lump it. Today, white zinfandel is an afterthought and even the biggest of Big Wine companies are scurrying to produce what they call dry rose. So we won that one, too.

• Reform in the three-tier system, which limits the wine we can buy and where we can buy it, and decides how much we pay for it. I recently exchanged emails with the blog’s unofficial liquor law attorney, and he was excited about a Connecticut three-tier case that upheld that state’s minimum pricing law. Why excited, since three-tier won the case? Because, said the attorney, the appeals court’s decision was so silly and went against so much precedent that it could be overturned by the Supreme Court. Throw in the Tennessee case currently in front of the Supreme Court, and we have a chance to fire two silver bullets into three-tier’s body.