Tag Archives: wine trends

What the people who do wine lists still don’t understand about restaurant wine pricing

restaurant wine pricingRestaurant wine pricing is the key to a successful list – why is that so hard to figure out?

The article in the trade magazine was called “Winning the wine game: Experts share advice for building great lists,” and the five people quoted all seemed to be smart, savvy, and knowledgeable. So what the was the one thing that almost none of them mentioned as a way to build a great wine list? Sensible restaurant wine pricing.

Nothing demonstrates the conundrum that is restaurant wine pricing more than the jargony writing in this article. “Thinking of the list as a holistic set of offerings that compliment each other is key.” Does anyone have any idea what that sentence means? How will it help anyone put together a quality wine list? Plus, it should be complement, not compliment.

Hence, the problem we face with restaurant wine pricing. Not enough people who put together wine lists understand that pricing is more important than anything else. It’s not screwcaps vs. corks or treating wholesalers with respect, two pieces of advice in the article. If we can’t buy wine at a fair price, we won’t – and there is almost 10 years of post-recession wine sales data to prove that point.

We’re tired of paying $35 for a $10 bottle of wine, but no one quoted in the piece seems to realize that. The closest anyone came – “A list needs to contain good lower-end bottle prices, along with the well-known higher end [wines]” – still doesn’t address the problem. Most restaurant wine pricing is too high, and there’s no good reason for it.

And if these five experts don’t see pricing as a problem, what does that say about the rest of the restaurant business – who probably aren’t as expert or as successful? Is it any wonder I worry about the future of the wine business?

More about restaurant wine pricing:
• The John Cleese/Fawlty Towers guide to restaurant wine service
• Winecast 28: Bret Thorn, Nation’s Restaurant News
• British restaurants to customers: Sod off

Has the next phase of the wine slowdown started?

wine slowdownToo many grapes, younger people who don’t drink alcohol, and slowing sales among all age groups are signs of a wine slowdown

Call it a tipping point if you don’t mince words or an easing of momentum if you do, but the results are the same. It looks like a major change in U.S. wine consumption is underway. Call it the post-recession wine slowdown.

Know four things:

• California wineries, faced with an oversupply of grapes from yet another bumper harvest and lagging sales, don’t seem to be buying as many grapes this year. In fact, their attempt to get out of grape-buying contracts in some parts of the state is causing controversy and bad blood.

• Wines sales have slowed, so that even an industry cheerleader termed growth for this year at a “sluggish 0.2% projected pace.” These numbers, from the company that publishes the Wine Spectator, confirm what has been reported elsewhere many times – U.S. sales by volume won’t exceed the increase in the drinking age population for the foreseeable future.

• One of the world’s biggest spirits companies expects that the “low-[alcohol] and no alcohol cocktail movement will increasingly shape the bar world” in 2019. The report went on: “What is most notable, though, is the differing consumption habits of the younger demographic, with 46 percent of people under the age of 35 likely to order a mocktail (non-alcoholic cocktail), versus just 16 percent of over-35’s. “

• Rob McMillan of Silicon Valley Bank, one of wine’s leading statistical gurus, says the industry is at that tipping point. McMillan says there will be more grapes than are needed to meet slowing demand, and that the industry must come up with a Plan B to sell its product in this more challenging environment.

In other words, we have too many grapes, younger people who don’t necessarily want to drink alcohol, and slowing sales among all age groups. But the industry is hellbent on selling more expensive wine as if none this was relevant – if it was still the heyday of scores and wine magazines in the 1990s and that post-recession premiumization would go on forever.

Consumers – and that includes most wine drinkers – vote with their debit cards. You can only sell overpriced and lower-quality wine for so long before they put their debit cards away. If that is happening now, and I think it is, then we have a wine industry selling something fewer people want to buy. And that is not a recipe for success.

Silly wine descriptions

The sommelier cheating scandal: Once again, wine reminds us it’s big business

sommelier cheating scandalFirst, fame and fortune, and now a sommelier cheating scandal

Wine’s biggest secret is that it’s a business, just like coal mining or car manufacturing. That’s because it pretends to be something else, this huge family of wine lovers where yes, we have to make money but that’s not the main reason we do it. Which is just more hypocrisy to anyone paying attention, and which the sommelier cheating scandal amply — and sadly — demonstrates.

Know that I’m not tarring the innocent with this brush. The cheating scandal, revealed last week by Esther Mobley in the San Francisco Chronicle, involved a master sommelier giving a list of the wines to be used for the blind tasting portion of the 2018 exam to one of the candidates. The accused has apparently been struck off the Court of Master Sommeliers, and everyone who took the test will have to take it again. No one has said that the cheating goes past that, though Mobley noted that 24 people passed the 2018 exam, compared to 274 in its almost 50-year history. Still, the organization that runs the certification has seemingly been  open and transparent about what happened.

Sommelier-ing has become an industry in and of itself – movies, even. Sommeliers are the current rock stars of the wine business, perhaps even more quoted and revered than the celebrity winemakers who used to dominate the discussion. Or, as this story amply demonstrates – “curated by a master sommelier for taste” – why not cheating if those are the results? Talk about pedestals; only someone with initials after their name can decide if wine is worth drinking.

Consider that someone who earns an MS can make twice as much money – high six figures, in fact – than someone without the distinction. Which, regardless of anything else, is all the incentive one needs to cheat in 21st century America. Because, as a good ol’ Texan famously told me at the bar at Louie’s, “If you have to ask how much money is enough, you don’t understand the question.”

The best perspective on the sommelier cheating scandal came from someone who must take the exam again. The person, who asked not to be named, told the SevenFifty Daily website: “I will probably be one of the candidates who will not retake the exam. I know this is not the intent, but I feel like a martyr. I am embarrassed, though I did nothing wrong. I want to find a different industry to work in. I want this to be over.”

How sad is that? Isn’t wine supposed to be fun?

Wine value 2018: Where we’re at today and what could happen next year

wine value 2018Six things to know about wine value 2018

Wine value 2018 has become perilously close to an oxymoron – a contradiction in terms with little real meaning. Even the Australians, who are famous in most of the world for their cheap exports, are lamenting premiumization and the disappearance of value.

Why this is happening has been well documented, here and elsewhere. Whether it will continue is a point of much contention. The wine business is betting its future that premiumization is here to stay, and that consumers will happily pay $20 for wine that used to cost $10. Others, meanwhile, who are looking at data instead of wishfully thinking, see a wine world with an unsustainable pricing model.

Know the following six things about wine value 2018, where value is defined as wine that is well-made and fairly priced and usually costing less than $15:

• Yes, value still exists – in Spain, parts of Italy, and some of southern France. Many of these wines are still made to reflect terroir and treat their grapes accordingly. Use the category menu to the lower right to search for wines from these countries.

• It’s almost impossible to find value in U.S. wine for $15 or less, save for a brave few brands that are almost single-handedly holding out (and even they have occasionally wavered).

• Producer consolidation, which I once thought would keep prices in line, hasn’t. We’re this much closer to an oligopoly pricing model, where a handful of large companies decide what to charge and everyone else is happy to follow along. Remember, three out of five bottles on the grocery store Great Wall of Wine likely come from just three mega-wineries.

• Pricing is starting to devolve into three tiers. First, cheap and poorly made wine, costing $12 or less, marked by cute labels and gushy winespeak. Second, gimmick wine, often red blends with manly names that are sweet but are passed off as dry, costing from $12 to $18. Third, “collector wine” at $20 and more, labeled as better than anything else and priced that way – even if neither is true.

• Most of the Winestream Media don’t care about any of this, and so don’t write about it. Instead, we get point scores – all remarkably in the high 80s or low 90s – for what seems to be every wine, regardless of quality or price.

• Producers will intensify their focus on premiumization next year, which means two things: First, new, higher-priced brands, and two, price increases for established brands. There has been much more of the former than the latter since the end of the recession, and it could mark as sea change in the wine business if producers can make price increases stick.

More about wine prices and wine value:
• Has all the value gone out of California wine
• Restaurant wine prices 2018
• What is value in wine?

Winebits 560: Wine trends, Wine Spectator lawsuit, Coke and weed

wine trendsThis week’s wine news: The Italian Wine Guy notes several disturbing wine trends, plus the Wine Spectator sues another magazine, and Coke wants in the weed business

• Making money: Apparently, I’m not the only one worried about the future of the wine business. The Italian Wine Guy, who spent the last three months visiting retailers and restaurants around the country, writes that price “seems to be one of the biggest factors. It’s the economy, stupid. The wine trade has often been a race to the bottom, and these days, there is a significant concern for revenue and profit.” Consumers, he was told, are showing “high anxiety over a buying decision.” In other words, not everything is peachy-keen in the era of premiumization. And his take on the three-tier system? Intriguing and insightful for someone who used to work for the biggest distributor in the world.

• It’s time for the lawyers: The Wine Spectator is suing a new marijuana magazine called the Weed Spectator for infringing its trademarks and copying its familiar 100-point rating scale for wine to rate cannabis. Reuters reports that the filing says Wine Spectator owner M. Shanken has no interest in associating Wine Spectator and the Wine Spectator marks with cannabis, a largely illegal drug. Any association of this type is likely to tarnish the reputation and goodwill that has been built up in the Wine Spectator marks and business for decades, resulting in dilution of the brand.” I’m most fascinated by the charge the weed magazine is copying the 100-point scoring system. I’d love to watch that unfold in court, given how many people use it and that the Wine Spectator didn’t invent it.

• One more time: Those of us with long memories still laugh about Coca-Cola’s failure in the wine business in the late 1970s. So its foray into marijuana beverages elicits a similar chuckle. Nevertheless, reports the BBC, “the drinks giant is in talks with [Canadian] producer Aurora Cannabis about developing marijuana-infused beverages. These would not aim to intoxicate consumers but to relieve pain.” Apparently, it would be a “recovery drink,” aimed at the same market as Gatorade and Powerade. I’ll leave that straight line alone – it’s almost too easy.

The growth of ultra-expensive wine

expensive wineDoes the increasing popularity of ultra-expensive wine mean wine has become a collectible and not something to drink?

The Big Guy, who hangs out with a better class of wine drinker than I do, forwarded me the auction company email: “Can you believe the prices of these wines?” he wrote. The list was expensive wine run amok – impressive labels, certainly, but prices that even I had trouble comprehending:

• $8,500 for a bottle of red Burgundy.

• $1,000 for two bottles of an 1872 Madeira.

• $40,000 for a case of 2000 Petrus, perhaps the Holy Grail of wine collecting.

• $4,750 for a magnun of another red Burgundy.

Which raises a host of questions: Who buys these wines? Do they actually drink them? And, of course, the one that has always fascinated me – how does one justify paying thousands of dollars for a bottle of wine?

Because spending that kind of money happens all of the time. It’s just not auctions, but includes trading on Liv-Ex, a stock exchange for wine. In this, the growth of ultra-expensive wine sales and expensive wine becoming more expensive have been hallmarks of the 21st century wine business. Two decades ago, people bought wine to drink it. Today, more and more people buy wine not to drink it.

This matters for two reasons. First, as these ultra-expensive wines grow in popularity, more resources will be devoted to them. If more resources are devoted to these wines, will less be available for the wine that most of us drink? Second, how healthy can the wine business be when its most prized products are kept in locked vaults? How can the evolution of wine — from something to drink with dinner to a version of coin collecting — be a good thing?

Yes, the sale of ultra-expensive wine remains a small part of the wine business. Those 10 million cases of Barefoot that are sold annually dwarf ultra-expensive wine sales. But how much attention does all that Barefoot get? The hype for ultra-expensive wine dwarfs Barefoot, as well as the rest of the wines that most of us drink. That even I’m writing about it says something – and it’s probably not good.

More about ultra-expensive wine:
• Wine as a collectible, and not something we drink
• Expensive wine prices in the real world
• More about wine prices 2018

podcast

Winecast 33: Andrew Stover, Siema Wines

andrew stoverAndrew Stover has been fighting the good fight for Drink Local from inside the wine business, “importing” regional wine to the Washington, D.C., area

Andrew Stover has been one of the good guys for regional wine for a decade, “importing” local wine to the Washington, D.C., area. This is especially impressive since Andrew is a distributor, a part of the wine business that has not always been kind to drink local. He brings wine in from more than a dozen states and distributes it to some of the most prestigious restaurants and retailers in the D.C. area. Jose Andres, anyone?

I’ve known Andrew since the early days of Drink Local Wine, and he has always been passionate about local wine and supportive of the cause. We talked about how he got started with local wine, why it has suddenly become the darling of the Winestream Media, and what comes next.

Click here to download or stream the podcast, which is about 14 1/2 minutes long and takes up 11 megabytes. The sound quality is excellent; we recorded it with the Wine Curmudgeon’s Linux-compatible Fifine K669 microphone.