Tag Archives: wine business

podcast

Winecast 46: Richard Hemming, MW, and why wine writing isn’t necessarily objective

richard hemming

Richard Hemming, MW

“Why should [consumers] trust us? They shouldn’t, necessarily,” says Singapore-based wine writer

Richard Hemming, MW, a Singapore-based wine writer, wrote one of the most amazing blog posts I’ve ever read: Wine writers can’t be objective given the incestuous nature of the wine business, and consumers need to know that this prevents us from always being objective.

It’s one thing for me to write that, which I’ve been doing as long as there has been a blog. But if Hemming, firmly part of the Winestream Media — initials after his name, consulting work, and articles for important magazines and websites — writes this, it speaks to how messed up wine writing is.

Hemming doesn’t disagree. But he also doesn’t see a solution, since it’s difficult to make a living as a wine writer. So we have to depend on the kindness of strangers, with all of the compromises that entails. In this, Hemming notes, there’s a difference between a compromise, like not writing something that would offend a source, and corruption, such as taking money for a positive review.

Needless to say, I don’t agree. But Hemming’s point is well taken, and he hits on one of the key questions facing post-modern journalism, wine or otherwise: What’s going to replace the ad-supported model that paid for newspaper and magazine reporting in the second half of the 20th century? Because, so far, it isn’t the Internet.

The other thing worth noting? The post was easily the best read on Hemming’s blog, and most of the comments — from wine writers, of course — agreed with him.

Click here to download or stream the podcast, which is about 15 1/2 minutes long and takes up 9 megabytes. Quality is good to very good; I still haven’t figured out how to get the most out of Zoom.

podcast

Winecast 45: DCanter’s Michael Warner and wine retail trends during the duration

Michael Warner

Michael Warner of DCanter

Our wine purchases during the duration? Cheap and cheerful, says this Washington, D.C. retailer

Michael Warner, the co-founder of DCanter, a neighborhood wine shop in Washington, D.C.’s Capitol Hill neighborhood, has seen all the reports about wine buying during the duration: More expensive wine to treat ourselves, lots of this and some of that, and even boxed wine. But he thinks he has seen something significant at this shop, which has more affluent demographics than most.

“Cheap and cheerful,” says Warner, whose store is seven years old. “People are buying less expensive wine. They’re not entertaining, which is when they would buy more expensive wine.”

In this, he says, his customers are buying more vinho verde, the cheap Portuguese fizzy wine, as well as half bottles. That’s because those who live alone want wine for dinner, but don’t want to waste it, and that’s what half bottles are for.

We also talked about:

• That wine delivery and Internet sales have become as important as the studies suggest. Dcanter sold more wine on-line in the first two days of D.C.’s stay at home order than it did in the previous three years.

• The need to update delivery and on-line ordering regulations to reflect the 21st century. DCanter’s customers who live in Maryland,  just a couple of miles away, can’t get delivery. But those in Virginia, also a couple of miles away, can. How much sense does that make?

• The obstructions in the wine supply chain thanks to the pandemic, and that it is becoming more difficult to find imported wine.

• Wine retail websites, and how too many of them look and work like they were put up during GeoCities’ heyday.

Click here to download or stream the podcast, which is about 11 minutes long and takes up 4 1/2 megabytes and was recorded on Skype, the blog’s unofficial podcast software.

Winebits 643: Wine archaeology, consolidation, periods and spaces

wine archaelogyThis week’s (mostly) wine news: Archaeologists recover centuries-old wine bottles, plus impending wine industry consolidation and whether a period at the end of a sentence gets two spaces or one

• Old wine bottles: Regular visitors here know how excited the Wine Curmudgeon gets about wine archaeology. So there’s this: Scottish researchers have uncovered a massive mid-18th century glass factory whose cone furnaces once towered over the port district of Leith and supplied wine and whisky bottles to all corners of the British Empire. The Wine Spectator reports that the factory, near Edinburgh, may have produced as many as 1 million bottles a week. The factory’s downfall? The American Revolution, which cost the factory most of its business with the newly-independent United States.

• More consolidation on the way? The Wine Economist tells us to expect consolidation among wineries and wholesalers sooner rather than later, thanks to the coronavirus pandemic. Writes Mike Veseth: “Although much is lost in generalization, there is a tendency for larger distributors to focus their value chain on bigger retailers and larger wine producers.  Scale matches scale matches scale. This pattern magnifies an on-going movement to a two-speed wine market with those in the middle range (both domestic and imports) squeezed in the process.” This is not good news for consumers in wine business, which is already top heavy: the five biggest wineries make more than three-quarters of the wine sold in the U.S., while the three biggest distributors control more than half of the market. Fewer and bigger companies will restrict our choices even more.

• Periods and spaces: This item, courtesy of Lifehacker, has nothing to do with wine. But it’s a welcome respite from wine and the coronavirus – a discussion dealing with a significant post-modern writerly conundrum: How many spaces follow a period at the end of a sentence? The answer, of course, is one. The confusion comes from typewriter days, when we used two spaces – period, space bar, space bar – to set the new sentence off from the old. But post-modern word processors don’t need our help to set the new off from the old. Still, the argument comes up every once in a while, and the Wine Curmudgeon is always happy to remind younger consumers how much silliness their elders get into.

Photo: “Wine” by CyberMacs is licensed under CC BY-NC-SA 2.0 

podcast

Winecast 44: Clara Klein, Sunday Vinyl

Clara Klein

Clara Klein, Sunday Vinyl

Stuck at home? Then there’s nothing wrong with $12 white Bordeaux, fast food, and pantry staples, says Clara Klein

Clara Klein, the lead sommelier at Sunday Vinyl in Denver, bought a house in October. Six months later, she was unemployed, courtesy of the coronavirus pandemic.

Hence, the reason for this podcast — Clara offers smart, insightful perspective on wine and the restaurant business during the duration. I’ve known Clara for a couple of years from judging the Colorado Governor’s Cup, and she understands that not all wine costs $100 or needs to be Napa Valley cabernet sauvignon. How many people in her line of work are willing to admit that?

Clara is also a passionate supporter of local restaurants, local jobs, and local food. And her plea for federal aid to help save local is one of the best I have read or heard. If four out of five restaurants close because of the pandemic, do we really want the one restaurant left to be a national chain?

The good news is that she has plenty of inexpensive wine at home, and she and husband Ian Palazzola (laid off from Denver’s Acorn) have been able to cook, drink wine, and spend time together. Which, she says, doesn’t happen much. Finally, a mea culpa: Sunday Vinyl is in Denver, despite my saying it was in Boulder twice.

Click here to download or stream the podcast, which is almost 11 minutes long and takes up 4 megabytes. The sound quality is very good; we’re back with  Skype, the blog’s unofficial podcast software.

Photo courtesy of 5280, using a Creative Commons license

Winebits 642: Coronavirus wine roundup

coronavirus wine This week’s wine news: Coronavirus wine sales trends, more Pennsylvania legal foolishness, and virtual wine tasting samples

• What comes next? Noted wine business analyst Christian Miller, a long-time friend of the blog, tells Forbes’ Liza Zimmerman that the coronavirus pandemic could finally slow wine sales later this spring, and the slowdown could last through 2021. The good news, he says, is that “Demand for wine is not going to dry up, or even diminish much, once the initial shocks are ridden out.” He also sees significant changes in the three-tier system as it struggles to cope with the pandemic. The former is pretty much what SVB’s Rob McMillan told the blog a couple of weeks ago, and the latter is something I wrote about last week.

• More fun in Pennsylvania: Remember Pennsylvania closing its state-owned liquor stores? Remember state residents being asked to leave neighboring New Jersey and Delaware when they came in search of booze? Well, now the state is being sued by two wholesalers, who say the state is violating its own laws by refusing to let the wholesalers sell directly to retailers and restaurants. The details, not surprisingly since it’s Pennsylvania, are quite confusing. But it’s enough to know that the state’s liquor control board says it doesn’t have to obey that particular law because it is still studying it.

• Bring on the samples! The Wine Curmudgeon knows that many of you in the cyber-ether have been worried that I would not be able to receive wine samples for virtual tastings during the duration. But have no fear. The federal agency that oversees that sort of thing said last week that not only wine writers, but consumers would be able to receive “small containers of wine” for virtual tasting. There’s lots of fine print, depending on which state you live in, but this is one more example of the pandemic pushing the three-tier system to the side.

Image: “wine” by Chas Redmond is licensed under CC BY 2.0 

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Winecast 43: Rob McMillan and what happens when all this is over

rob mcmillan

Rob McMillan: There are going be better quality grapes in cheap wine, even as wine prices decline.

“What’s going to happen to demand? People are still going to drink”

The good news? Rob McMillan of Silicon Valley Bank, perhaps the foremost financial analyst in the wine business, says wine can survive the coronavirus pandemic. The bad news? It’s not going to be a lot of fun during the duration.

The highlights of our conversation:

• Expect to see weaker wineries fail, as well as some grape growers who don’t have producers to buy their grapes. In this, there probably won’t be bankruptcies or foreclosures as much as there will distress sales. There are always people wiling to buy wineries, says McMillan, even in a recession, and prime vineyard prices probably won’t decline all that much.

• Wine prices were expected to fall before the pandemic hit the U.S., and the stay at home orders and layoffs will only hasten the process. In this, though, since there are too many grapes, expect to see better quality grapes going into cheap wine. One rumor? That a major $3 producer snapped up Napa Valley cabernet sauvignon at bargain prices.

• Look for more producers to try to sell their wines at mass retailers and supermarkets. The loss of tasting room business needs to be made up somehow, and retail wine sales haven’t slumped as much as some thought.

Click here to download or stream the podcast, which is about 18 minutes long and takes up 11 megabytes. The sound quality is very good; it’s my first podcast with Zoom.

Big Wine 2020

Big wine

Big Wine isn’t enough for a healthy U.S. wine business these days.

Big Wine 2020: Just being big doesn’t seem to be enough to reinvigorate wine in the U.S.

We need some sexy brands at $7 or $8 per bottle, and I’m not sure how many people in the industry want to try and do sexy things with $7 or $8 a bottle.
— Wine analyst Jon Moramarco

That quote tells you pretty much everything you need to know about the 16th annual Wine Business News magazine survey, which tracks the yearly ups and downs of the U.S. wine business and ranks the 50 biggest producers in this country. In this, it’s the second consecutive year that the trade magazine has painted a Wine Curmudgeonly-future of wine in the U.S.

How big is Big Wine 2020? There are more than 10,000 wineries in the U.S., and the top 50 account for some 90 percent of production. But that’s just the beginning of how top-heavy the U.S. wine business is. Almost one out of every four bottles of wine made in the U.S. comes from E&J Gallo, the world’s biggest producer. The top 3 companies account for 52 percent, and the top 5 account for 77 percent.

So if we need someone to ask about what’s gone wrong, we know who, don’t we?

Among the highlights

• Sales by volume may actually have declined last year, depending on whose numbers you believe. Nielsen said sales dropped 1 percent as 2019 drew to a close, but Gomberg, Fredrikson & Associates estimated that volume could end 2019 up one-half to one percent. Regardless, it’s a far cry from the 3.5 percent annual growth rate during the wine boom, and it’s not enough to keep pace with the increase in the U.S. drinking age population.

• Even premiumization slowed. Sales by dollar volume were up just 1.7 percent in 2019; that compares to a 5 percent increase last year. Interestingly, several industry types quoted in the story insisted that cheaper wine was not the answer, since consumers don’t want to pay less.

• The average price of a bottle of wine sold at retail in 2019 was about $11. That’s more or less what it has been for the past several years, taking into account the various statistics used to calculate the cost.

• Gallo’s share of the U.S. wine market increased from 17 percent last year, even though its sales remained flat. Go figure.

• The share of the three biggest producers – Gallo, The Wine Group, and Constellation Brands – fell three points from last year and eight points from in 2017. In addition, the share of the top 10 companies declined for the fourth year in a row, from 84 percent in 2016 to 81 percent in 2017 to 78 percent in 2018 to 77 percent in 2019. That sounds awfully damn ominous, doesn’t it?

More about Big Wine:
• Big Wine 2019
• Big Wine 2018
• Big Wine 2017