Tag Archives: wine trends

Wine clubs and what their success says about the wine business

image from www.sxc.hu The one thing that has seemingly not slowed, despite the recession in the wine business, is the growth of wine clubs. Everyone, it seems, is offering them: Wineries, of course, but also newspapers and magazines, wine retailers, discounters, and even non-profits and charitable causes. Zagat, the restaurant guide, has a wine club, and a club even advertises on the blog. And, believe it or not, there are sites that rate wine clubs.

The Wine Curmudgeon did a post several years ago about what to look for in wine clubs, and most of that advice still holds. Clubs, by themselves, are neither good nor bad; it's up to the consumer to figure out whether they're getting a deal or not. Are the shipping charges fair? Do the wines seem to offer value? I miss the old Virtual Vineyards wine club, while there are several others that I don't want to even get junk mail from.

Most importantly, read the fine print. That's where you'll learn that the New York Times' wine club is run by another company, and doesn't really have anything to do with the newspaper or its wine critics. Or that the wine club rating site noted above may make recommendations based on whether it is "compensated" by the wine club it reviews.

Having said that, the growth of wine clubs raises a larger question. What's going on, and why is it going on now? More, after the jump:

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Incontrovertible proof that the wine business has changed forever

The Wine Curmudgeon was at World Market yesterday buying Rene Barbier Mediterranean white, which was on sale for $4. And what did I pass next to the checkout counter on my way to the wine department in the back? A locked display case of Dom Perignon Champagne.

Dom, as it’s known in the trade, starts at around $100 a bottle. It’s not unusual for liquor stores (and even grocery stores) to sell both cheap and expensive wine, but World Market’s philosophy has mostly centered around less expensive wines. In Dallas, its prices are usually the lowest; while there will be some $20 or more wine, it’s rarely anything in Dom’s class. More, after the jump:

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Barefoot and the wine magazines

Last week, Barefoot was annointed as the No. 1 wine brand in the country by SymphonyIRI Group, which tracks wine sales. At more or less the same time, the Wine Enthusiast ran a story that said restaurants "are where wine trends are generated and brands are built."

Can any two statements be more contradictory? Barefoot, which costs about $6 a bottle, is the ultimate anti-restaurant wine, a brand that has made its mark in grocery stores and is rarely seen in restaurants — and certainly not the kinds of restaurants that the Enthusiast writes about. This difference in perspective is Kakfka-esque, and it demonstrates once again why the wine industry is at odds with itself, and why wine continues to lag as the drink of choice among Americans.

More, after the jump:

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High alcohol and global warming

Screenshot2 What if a scientific study found that increases in wine alcohol levels were not related to global warming, but were a choice made by winemakers? How would that change the debate about high alcohol?

We're reasonably close to finding out. Julian M. Alston, the director of the Robert Mondavi Institute Center for Wine Economics at the University of California-Davis, is in the middle of research — perhaps seminal research — that could answer that question. Alston agreed to talk to me about his work with two caveats: First, that I emphasize that this is an on-going project, and that he hasn't reached any conclusions yet, and second, that he couldn't be too specific about the project because he has promised an exclusive interview to the Wine Spectator when he is finished.

Still, we had plenty to talk about. More, after the jump:

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The next big thing in wine

Talk to people in the wine business, and the subject always comes up: “What’s going to be the next big thing in wine?”

The catch, of course, is that people in the wine business are usually wrong when making these kinds of predictions. It’s not that they aren’t smart or don’t know their business. It’s that they don’t have enough perspective. Restaurant types usually don’t have a good grasp of the retail market, for example, while winemakers are usually focused on what’s going on in their region and nowhere else.

That lack of perspective is why sommeliers always insist that gruner veltliner, an Austrian wine that hardly anyone has heard of, is going to be the next big thing, and why so few people realized what was happening with livestock wines (cheap brands with cute animals on the label) until the trend was well underway.

There’s a good example of this groping in the dark in a post on the Wine Economist blog. Which, come to think of it, was probably the point of the post.) What struck me, and especially in reading the comments, is that the speculation about the next big thing, which included torrontes and moscato, was based on guessing what consumers want. What the speculation didn’t take into account was whether the supply chain existed for the next big thing. Are there lots of those grapes? Do winemakers know how to work with those grapes? Does the pricing math work?

Do not be intimidated by the phrase supply chain. It’s the post-modern term for the process that describes how goods get to market, starting with the raw materials and finishing with the store shelf. In wine’s case, that means the grapes, which are made into wine at the winery (which is sold to an importer if it’s a foreign wine), and which is then sold to a distributor, which then sells it to retailer and restaurant. In other words, it’s mostly our old friend the three-tier system, with cost accounting thrown in.

So the first question to ask about the next big thing: Are there enough grapes to make enough wine to sell to lots of people? Which is why gruner will never be the next big thing. There are only 50,000 acres or so in Austria. By comparison, there are more acres of merlot just in California.

This is part of the reason why livestock wines, led by Yellow Tail, became the next big thing. The Australian government offered cheap land and cheap water to boost the wine business in rural areas. This resulted in lots of cheap grapes, which made it possible for Yellow Tail to sell $7 wine in the U.S. when the French were selling comparable wine for $10. Yes, the label had a lot to do it, as did the wines’ fruit forward style (and both have been copied ad nauseum). But if Australian grape prices had not been so low, and had Yellow Tail had cost $13, do you think it would have been the next big thing?

Which is the second question to ask about the next big thing: Does the price make sense? Remember when pinot noir, after Sideways, was supposed to become the next big thing, replacing merlot? That never really happened, despite what was portrayed in the media. Merlot’s share of the U.S. market by bottles sold has been around 10 percent for years, and though pinot’s share has grown significantly in the past decade, it’s still half of merlot’s. And the reason? There are buckets of decently made $8 merlot, and hardly any drinkable $8 pinot.

So what are the parameters in trying to guess the next big thing? Lots and lots of grapes, which seems to rule out torrontes and moscato. A sensible price. Wine made in a style, both in the way it is marketed and what it tastes like, that is accessible to the market. This paid off for pinot grigio when it was the next big thing 10 years ago.

But even then, it’s just a guess. I was there the day that John Casella, who runs Yellow Tail, said he would have been happy to have become a decent-sized Australian winery when the business started. And no, he didn’t expect the brand to be the one of the biggest in the world. So even the guys who have the next big thing are often surprised by it.

High alcohol: The controversy continues

What kind of a stir would a food magazine cause if it said it was going to list the ingredients in its recipes? None at all.

But the wine business is not the food business. Only in wine would a controversy ensue when the San Francisco Chronicle and Decanter magazine, two of the leading members of the Winestream Media, announced each would start listing alcohol levels for the wines it reviewed. Said the Chronicle's Jon Bonne: ".. [W]e resisted printing them regularly because the act of bringing alcohol into the discussion of a wine is inherently political."

Which says a lot about how screwed up the wine business is. Bonne is right — unfortunately, reporting alcohol levels in an alcoholic beverage has become political, because much of the wine establishment has made high alcohol its cause. Winemakers have pushed alcohol levels to 15, 16 and even 17 percent, even in white wine, and have been rewarded with glowing reviews from Robert Parker and the Wine Spectator. Those of us who object, like the Wine Curmudgeon, are called philistines and told we don't understand the issue.

Most wine drinkers want to know alcohol levels. As one commenter noted in the Chronicle story, "If I wanted to get sh*tfaced, I could do it for a lot less than $50 a bottle." But that's of little concern to the people who make and write about these wines. They know best, and they're going to tell us what to think. More, after the jump.

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Writing for free and the wine business

Writing for free and the wine businessOne of the most common questions that people ask the Wine Curmudgeon (and it came up several times last weekend at DLW 2011: Missouri) is whether I get paid for doing this. And how I get paid. And if there is any money in being a wine blogger.

The answers, which are complicated, say a lot about the direction that wine writing is headed. More, after the jump:

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