subscribe: Posts | Comments      Facebook      Email Steve

Winemaker’s choice: When marketing and the perception of exclusivity collide

52 comments

 

I had coffee yesterday with a winemaker from Napa Valley who works for a high-end winery: triple-digit Cabernet and all that. We were taking about marketing, when she said something about Napa wineries that intrigued me enough to write it down: “Do you want to sell wine,” she asked, “or do you want to be ultra-exclusive?”

Great question, especially in the context of Napa Valley Cabernet. She was referring to all these Cabs that cost an arm and a leg. In our conversation, we mentioned specific wineries, which I will not. What she meant, of course, is that these wineries seem to have a choice: they can get out there and market (in all its multi-faceted dimensions), or they can rest on their laurels and assume that their wines will be in demand for a long time to come.

Wineries that choose the latter—on the assumption that their cult status, high critical scores and in-demand waiting lists will always provide them with more customers than they can supply—somehow seem to think that marketing is a dirty word. There’s something grubby about it, they feel. Only pedestrian little wineries have to actually sell themselves; a great, grand winery does not. Does the Domaine de la Romanée-Conti have to get out there and hustle? Of course not, or so the argument goes.

Well, I don’t know if Romanée-Conti has to market or not, but I would think so. Wilson-Daniels, who distributes them in the U.S., used to invite me up to their St. Helena chateau once a year, along with a few other writers and critics, to taste through the entire range of seven new DRC releases of the vintage (La Tache, Romanée-St-Vivant, Romanée-Conti, Richebourg, Echézeaux, Grands-Echézeaux and Montrachet). It was terrific fun, but I think you’d have to view that as marketing, although I don’t know if Wilson-Daniels does it anymore. Anyhow, the lesson for me was “Even the Domaine de la Romanée-Conti has to market.”

And yet, quite a few Napa Cabernet houses don’t seem to think that they do. The apparently feel that what has worked for them in the past will work for them into the future. Marketing would dull the perception of exclusivity that they currently benefit from, and their fear is that, once a super-expensive wine is no longer perceived as exclusive, it may no longer be in demand from wealthy customers who don’t want to drink what everyone else is.

The thing to consider here is inventory. Now, you and I will never know how many unsold cases of (fill-in-the-blank winery) are piling up in some temperature-controlled warehouse. It may very well be that the winery everybody thinks is selling out every vintage actually has back vintages piled up to the ceiling. (This would be one of the winery’s closest-held secrets.) But I think this is the case far more than you’d think, and certainly, one hears rumors to that effect. Of course, a rumor is just that, but like they say, where there’s smoke, there’s fire.

When there were only a handful of Napa Valley Cabs that cost $100 or more, this was not a problem. But nowadays there are scores of them. I’ve long believed that it’s impossible for all of them to be selling everything, every year. There just aren’t enough people out there to buy it all up, even when you roll in China. Thing is, many of these proprietors are so wealthy that they’re not really concerned about selling everything. They can afford to sit on inventory for a long time, and besides, the wine may actually be getting more valuable as it ages. I knew someone who once bought out the entire production of a well-known Napa Valley Reserve Cabernet for an entire vintage, and then warehoused for resale it for ten years. They made a lot of money on that one.

Lest you think I’m suggesting that fostering the perception of exclusivity is somehow tainted or wrong, rest assured I am not. Rarity and desirability are integral to marketing anything, be it artwork, writing pens or wines. More than two thousand years ago, certain Roman and Greek vintners figured out how to do it (where do you think the concept of “the Comet vintage” came from?). The Bordelais proved masterful at it four hundred and more years ago, and they’re still pretty good at it. All that the Napans have done is to learn at the feet of the masters.

Bordeaux is Bordeaux; it probably will never go out of demand, even though that demand waxes and wanes throughout the centuries. But one cannot say the same of Napa Valley Cabernet Sauvignon, or so it seems to me. It has certainly solidified its hold on the imagination of wine lovers, but Napa does suffer from certain potential problems: it’s under attack from the low-alcohol crowd, prices are ridiculous, competition from elsewhere (including Bordeaux) is increasing, and younger consumers don’t seem to have the infatuation with Napa that their parents had. These things aren’t deal-killers, quite yet. But any one of them could prove hurtful to Napa, and a combination of them all might be the straw that breaks the camel’s back.

  1. Bob Henry says:

    Anthology . . . with CAPITALIZATION used for emphasis. — Bob

    Excerpts from the Los Angeles Times “Food” Section
    (April 14, 2011, Page E1ff):

    “$15 Wine the New Normal”

    Link: http://articles.latimes.com/2011/apr/14/food/la-fo-economical-wines-20110414

    By Patrick Comiskey
    Times Staff Writer

    There are signs the American economy is improving, at least as far as wine shops are concerned. But if you think that means a return to the glory days of $150 cult Cabernets . . . well, not so fast.

    Instead, most wine store owners . . . are describing a new normal, one in which the high-margin sales of wines in the $50 to $150 range are difficult — indeed, some would say they’re almost a thing of the past.

    . . .

    Excerpts from the Los Angeles Times “Food” Section
    (February 4, 2010, Page Unknown):

    “Dark days for Cult Cabs;
    Makers of high-end Napa Valley Cabernets are feeling the pain
    of the economy as demand for their wine plummets.”

    Link: http://articles.latimes.com/2010/feb/04/food/la-fo-cultcab4-2010feb04

    By Patrick Comiskey
    Special to The Times

    Is the Cult Cab dead?

    The current economy has created ominous rumblings in the market for Napa Valley wine. Demand for high-end super-premium Cabs, even so-called cult wines, has weakened considerably with the recession. Sales are stagnant, inventories are high, and direct-mail customers — a vital piece of the high-end model — are abandoning once-coveted positions on mailing lists, while those who have waited years for the opportunity to buy in are overwhelmed with offers.

    . . .

    Even wine critic and Cult Cab kingmaker Robert M. Parker has issued warnings: “Wines priced over $300 have encountered considerable resistance, with their mailing list customers dropping off, or taking much smaller allocations,” he wrote in the December issue of his widely read newsletter, the Wine Advocate.

    “Sadly, far too many proprietors of high-end Napa wines are in denial, and have failed to recognize the dramatically changing parameters in the wine world of the consumer.”

    . . .

    Big Spenders Scarce

    At Twenty-Twenty Wine Co. in West Los Angeles, owner Bob Golbahar sees the same trend among former big spenders. THE MARKET, HE SAYS, IS “OVER-CULTED. OUR AVERAGE BOTTLE SALE USED TO BE $100; NOW IT’S $50.. Unless you’re giving it away, they’re not interested.”

    As a case in point, Golbahar cites the posh Napa standard Opus One, which usually sells briskly during the holidays, when it’s frequently employed as a business gift. In past seasons, he’s sold as many as 150 bottles of the wine, which retails for $140 to $170 a bottle. This year he sold six. “It’s a whole different world out there,” he says.

    . . .

    Not all of Napa’s Cult Cabs are dead, of course. Wines still in the good graces of critics like Robert Parker and James Laube of the Wine Spectator are weathering the storm well, including Shrader, Screaming Eagle and Harlan, as well as the more recently anointed, such as Scarecrow, Maybach and Kapcsandy. But many more may be out of luck. “FOR A WINERY WITH NO TRACK RECORD, THIS IS A NIGHTMARE,” [Heidi] Barrett says. “If they came into the market thinking they could start in at a $200 price point, they have no chance.”

    . . .

    Excerpts from the Los Angeles Times “Food” Section
    (March 4, 2009, Page E1ff):

    “Better Wines for Fewer Dollars?;
    The silver lining in today’s down economy is
    more luxury selections for the rest of us, and cheaper.”

    Link: http://www.latimes.com/features/food/la-fo-sommelier4-2009mar04,0,481881.story

    By Patrick Comiskey
    Special to The Times

    . . . As [restaurant] kitchens teeter on closure, as layoffs loom and the economic downturn threatens long-standing establishments and their outstanding wine lists, the market is more frenetic and freewheeling than it has ever been.

    Even as sommeliers are feeling obliged to reduce their inventories, they’re being offered unheard-of deals on rare wines, now suddenly plentiful. Case prices are plunging: Wines that used to be out of reach can now be had for about a third less than a year ago.

    The New Sweet Spot

    . . .

    Most sommeliers report a modest downward shift in what’s known as “the sweet spot” — the price range where most consumers are comfortable spending. Many but not all report that THE SWEET SPOT HAS FALLEN INTO THE $50-TO-$60 RANGE, where it had once been more like $80. But with the deals being offered by distributors, that hasn’t been a difficult adjustment for sommeliers to make.

    . . .

  2. Bob Henry says:

    “. . . Napa does suffer from certain potential problems: . . .”

    One being climate change.

    Will Napa still be a peerless place to grow Cabernet if the temperature rises appreciably?

    Will the scions of Napa vintners be inheriting properties that will be better suited to other grape varieties than Cabernet? Varieties that command a lower selling price in the retail marketplace?

    “Napa Wine Industry Warned of Future Climate Threat”

    Link: http://napavalleyregister.com/news/local/napa-wine-industry-warned-of-future-climate-threat/article_1d721e88-b486-11e2-bbc7-0019bb2963f4.html

  3. Bill Haydon says:

    I’ve been pointing this out in comments here for two years now. I would go even further and argue that Napa may very well be a bubble getting ready to burst….or probably more accurately one that should have burst already were it not for the financial ability of winery owners to park unsold wine.

    Their great hope was always China, but I don’t think that is going to happen. Not only have the noveau riche Chinese failed to put Napa Cabernet on the same plane as Bordeaux, Burgundy or Champagne in terms of social cache, but the great Chinese wine rush appears to be over–a victim of the current anti-corruption/anti-conspicuous consumption campaign combined with a saturated market. After all, how much collectible, premium wine can continue to be sold into a market where 90% of it doesn’t get consumed or collected but merely re-gifted.

    Meanwhile, the most sought after domestic markets continue to be more Eurocentric every day.

    Whether the Lords and Ladies of Napashire want to finally admit that they are a bunch of naked emperors or not, they will need to seriously reevaluate a lot of things: their winemaking style, their pricing, their marketing efforts (or lack thereof) and most of all their hubris.

  4. Bill Haydon says:

    Adding to my comment about the most sought after markets becoming increasingly Eurocentric every day, I’ll add the following recent experience in a secondary market.

    Last month, I took part in a distributor’s rolling portfolio show that visited the three major cities in Ohio. Out of 25 tables, there were only 5-6 domestic and NOBODY from Napa. This distributor is exceptionally well run, considered the best fine wine distributor in its market, pays its bills on time and has an outstanding domestic portfolio including Napa Valley. There were no peripheral reasons for a winery not to take part, yet only a handful of domestic wineries could be bothered with none from Napa. I guess standing behind a table in Columbus was just to shameful for a proud Lord or Lady of Napashire to contemplate. When, however, Columbus or Cincinnati or Cleveland go the way of Chicago, I’m sure that the Lords and Ladies will sit in their bucolic little bubble and piss and moan and whine about those damned Ohio gatekeepers.

  5. Interesting, if you read “Zero to One” about Silicon Valley startups, you find that engineers hate sales people because, “they don’t add anything.”

    Same goes for winemakers. most are totally clueless about marketing their product.

  6. Bill Haydon says:

    They add customers. The brightest engineers in the world will create failing companies if they can’t find customers for their products. Charles Kettering was one of the most brilliant engineers in American history, yet it was the partnership with Alfred P. Sloan that made it all work. Even the sainted Steven Jobs was far more a salesman than he ever was a designer/engineer. Wozniak was the creative genius behind Apple.

    If a winery rep is clueless about the product then that is the direct fault of that winery’s senior management/ownership. It’s a little murkier when we’re talking about distributor sales reps, but the best suppliers make sure that they have an ongoing presence at the distributor’s sales meetings and portfolio shows and one-on-one ride withs to ensure that sales reps are as up to speed as possible. That is the crux of Steve’s argument. Napa feels that it is sooooo very, very special that it no longer needs to dirty its linen suits by doing the down and dirty selling and brand building necessary to build and maintain a business. And perhaps a little time out in the market might be just the splash of cold water they need to understand how they’re really viewed outside of the bubble.

  7. Is this a Steve Heimoff Blog or a platform for the ever negative- sour –grape Bill Hayden?
    There might be parts of this piece that ring true with a small number of producers but the ‘Sky is falling” scenario is off base, sorry Steve. Consider the relative size of your two examples – Bordeaux is Bordeaux – with 70k acres of Cabernet Sauvignon – 170k acres of Merlot and 33K Cabernet Franc [273K acres of just 3 varieties]- Napa Valley is Napa Valley – 45K acres all in! The market is pretty big and consumer research confirms that consumers have a good feeling about the wines from Napa Valley, despite journalistic naysayers!
    Thus, no matter how many of the Low AlC, IPOB & Natural wine producers are spawned, Napa will succeed because for every one ‘snooty’ winery there are ten wineries that are genuine hard working, motivated people who make wines that people like and drink; far from the silly and insulting characterization that Bill Hayden always espouses.
    For over thirty five years of supply side experience, I still travel more than one week per month to promote and sell Napa Valley wines that, thankfully, now are my own wines. While on these trips it is often the only time I get to visit and commiserate with many friends and winery colleagues from the Napa Valley [often when we are taking care of our dirty linen]. In fact I will be attending [as I have for the last 12 years] one of the best distributor portfolio tastings when I visit Columbus Ohio late in July[just before Midwestern dogdays]. I will be joined by likely 15 or 20 Napa Valley wineries along with many other great wines from around the world. It might be an event that Bill Hayden has missed, likely because of his view from inside his foggy bubble!

  8. Bill, does Napa not pay YOU the attention that YOU are so deserving of? It this the source of your inane vitriol? Give it a break.

  9. “Is this” not It this.

  10. A winery’s status is the result of marketing. A winery attempting to become a cult winery is just trying a different approach to marketing. It may be the toughest of all because the perch at the top is very small.

    It’s actually part of their marketing to imply other approaches are beneath them. How could Screaming Eagle ever possibly benefit from entering a wine competition or a trade pouring in Columbus, OH?

  11. Bill Haydon says:

    Actually, Hans very few weeks go by that I don’t get a call from Napa seeking representation in the market where I self-distribute. I politely tell them that we are not looking to add a domestic portfolio for the foreseeable future and wish them luck in their search. Hell, if I wanted to represent Napa wineries, I could pick them up off the back of a truck like day laborers. I’d honestly like less attention from Napa.

    But the crux of your problem is that I didn’t hijack this comment section. I’m directly commenting on and expanding upon Steve’s article. Is Steve an inane hater? Because I’ve always viewed him as an unabashed proponent of California wine. If he’s writing about the problems perhaps you should take your heads out of the sand and pay attention because there just might be some lurking problems out there in the Oaksters Paradise.

  12. Bill Haydon says:

    Geez, I don’t know where I get these inane and false ideas that Napa (Russian River, I know, but it’s a prominent Napa winery) might be having trouble selling wine. Just vitriol I guess. BTW, this isn’t even in a chain wine store. It’s in a chain grocery store!

    http://i14.photobucket.com/albums/a323/JT_Production/IMG_20141112_200407_zpsof0zrymy.jpg

  13. My head is not in the sand – you are just plain and simple a napa hater – it is clear in every thing you write where those four letters show up in your posts. Steve is the real deal for which I have the highest regard, on today’s point we do not agree – that is discourse – your course it always vitriolic. You are always the smartest box in the room, or so you must thing so. Go hate on someone/somplace else for awhile!

  14. Bill Haydon says:

    John, in all fairness, I rarely thing I’m the smartest box in the room.

  15. Yes Bill, your admission is duly qualified by you placing David Ramey as a Napa Valley winery. His winery is located in Healdsburg (not yet annexed by the napa Death Star) He does source some of his wines from Napa Vineyards but the bargain was clearly one finely defined Sonoma Appellation! He did make wine for a number of producers, in Napa – Dominus & Rudd for example! While at Simi before his Napa gigs, did humble himself by exclaiming that the Oakville & Rutherford bench were marginal soils for Cabernet Sauvignon!

  16. Bob Henry says:

    Bill,

    There must be some Napa Valley producers (past or present) who appeal to you.

    Enlighten us with a “short list” of meritorious wines and their house styles.

    Bob

  17. I see several topics in this one article.

    The first topic is that of Marketing and Sales; often used interchangeably (as in this post) which is a dis-service to each function. The grass-roots of “Selling” is Bud Fox played by Charlie Sheen in the movie Wall Street. He’s a salesman, pure and simple, close business, burn up the phones, sell to anyone who will listen. Take no prisoners.

    Hard selling Screaming Eagle or Harlan like Bud Fox won’t work. Enter the marketing department. Enter the “message”, talk of brand, vision, lifestyle and the word CULT. Cult brands want what any religion wants, true believers, converts, evangelists, NEVER pedestrian sales people.

    The whisper of the latest cult brand IS the sell. It’s mentioned, casually, by trend makers, or Instagramed in the background of a Hollywood star on the set of Entourage. It’s marketing, not sales. It’s placement, not placing 200 calls a day to your email list.

    Another topic in the article is that of Scarcity, Resource Allocation and Goal. If that cult brand is well funded, the goal of the owner may not be profits, rather the goal may be bragging rights and “the perfect score”. Resource allocation doesn’t matter, only scarcity and point scores. On scarcity, one only has to look at the DeBeers model of diamond scarcity to understand how a cult Cab can benefit by withholding inventory. The Perfect Score for a well funded cult wine owner is not much different than funding a ship in the America’s Cup Race or circumnavigating the globe in a solar plane. Few can do it and that IS the point.

    The last topic I see is the last paragraph and the subject of competition and outside forces knocking Napa Cabernet down a notch or two. This is where I would look to history and no further than when Mondavi went public back in 1993 and sold to Constellation in 2004. It’s a microcosm of Napa Cab, taking 10 years to fall, but never disappeared only to be reborn again and again.

    Two Buck Chuck was eating up market share in the low-end in the late 90’s. Mondavi didn’t get the scores from Parker or Laube on the high end. The Dot Com Bubble Burst and things weren’t going well in the world of expensive Napa Cab. There was drama. So Mondavi sold to Constellation. The sons (and their kids) are all doing their own thing today, 11 years after the sale. The brand survives. Opus One survives. Sure, the market is more competitive, but Mondavi survives in many ways. Cab survives.

    So too will Napa Cab. It will adapt, change, brands will fail and start anew.

  18. @Bill Haydon – Which is it? Napa wineries not showing up to tastings as some indicator of bad behavior or Napa wineries calling up for representation and getting turned down due to their lack of European accent?

    @Steve – What would be reasonable pricing for an excellent Napa Cabernet?

  19. Adam Lee says:

    From the Wine Institute, “California wine shipments in the U.S. were 225 million cases in 2014, up 4.4% from the previous year, with an estimated retail value of $24.6 billion, up 6.7%. California wine sales to all markets, both domestic and international, increased 3.7% by volume to 269 million cases in 2014.”

    Bill, I only wish you would follow acceptable online protocol and list where you work with your posts. That’s the proper thing to do.

    Adam Lee
    Siduri Wines

  20. Bill Haydon says:

    Brad, the two are not mutually exclusive. Napa Valley wineries consider NYC and Chicago (and the trendy wine bars and Michelin starred restaurants within) to be their pre-ordained birthright. They certainly want to sell wine there. What they don’t want to do is actually work at it because of their self-defeating Napatude and need to convince their neighbors and themselves that their precious juice sells itself. The Napa Valley Vintners have not done a road show in NYC since 08 or 09, and I believe it’s been longer in Chicago. Nobody is expecting Screaming Eagle to stand behind a table in Columbus O. That still leaves a huge number of wineries that should be out standing behind tables in markets like Ohio much less NYC, DC, Boston and Chicago. At the same time, those markets (NYC and Chicago in particular) are flooded with large scale tastings from every prominent wine region in Europe. Even Sonoma is out beating the bushes every year. Napa? Nope, they just think a phone call informing me that I might have a chance to associate myself with their nectar of the gods will open the gates.

    Here’s a thought. Several times a year I attend tastings organized by a gentleman for European wineries seeking importation. About half the room is represented by winery representatives. He does roadshows through several major markets. I’ve also attended similar but more focused tastings organized by various consulates where the tables are always staffed by someone from the winery.. Why doesn’t some enterprising young Napan create a company to take small Napa producers looking for distribution out on the road and do tastings with prospective distributors in NYC, Chicago and DC? You want to know why nobody will do this? Because it will fail! No Napa wineries would ever lower themselves in the eyes of their neighbors to go out on the road grubbing for distribution. That is clearly beneath the land where the wine sells itself.

    In my own case, I don’t distribute anything that I don’t import. It’s as simple as that and given the market conditions that I work in I have ZERO need for a domestic portfolio. It brings nothing to the table and opens not a single door. The only real market for it is steakhouses and country clubs, and they are generally controlled by the big guys. In fact, to sell that $600 case of Napa Cabernet, sales reps are going to have to work twice as hard and open twice as many samples as they are selling a $600 case of Brunello or Chablis. I’m going to sit on inventory longer while making a smaller margin. For me, Napa is bad business.

  21. Bill Haydon says:

    Bob, very few in Napa proper over the last fifteen years or so. You can’t deny that most of that valley gladly followed the Pied Piper of Monkton down the path to oblivion. I tasted through all four (5?) Perry-Moore wines about a year ago. Good god, talk about cookie-cutter oak and jam bombs–all priced around $150/bottle. That winery is a poster child for what Napa became, and the precise reason that people have turned their back on Napa. And don’t get me started on the current procession of $30 fruitbomb Sauvignon Blancs.

    On the other hand, Corison is great. The old Havens wines were solid but also seemingly a lesson in what happened when one didn’t pander to the Parker Leviathan. Some California wines (old and new) that I’d be happy to drink: Au Bon Climat, Hanzell, Abrente Albarino (but value rears its ugly head when I’m paying a 50% premium over the best coastal, old-vine Albarino from Galicia), Chanin, Ridge, Edmunds St John, Dunn (with some bottle age). There are others, but they are still a small band of outsiders swimming against a tide of cookie-cutter, overpriced mediocrity.

  22. Larry Kantrowitz says:

    I met with a person at a well known mega-winery in Napa recently and she told me they sell 70% of their wine at the tasting room and I was surprised by that comment because a few weeks earlier I witnessed 100 cases going to the local Costco at a lower FOB than broad market. If they are selling so much wine why do they need Costco to dump it?

  23. Very insightful perspective from Dave!…Particularly the truth about the difference between sales & marketing.

    I cannot say the same from ‘and don’t get me started’ Hayden who once again has high-jacked Steve’s Blog with HIS overpriced mediocrity; and who swims to the ‘New California’ mantra!

  24. Bill Haydon says:

    Larry, never underestimate a Napan’s ability to bullsh%t his neighbors. Image is EVERYTHING to these people!

    During my brief time consulting for some of these guys, I witnessed one bragging to a colleague at a bar in St. Helena that he sold 85% of his production DTC. Reality? This guy had both seen his distribution shrink from 14 states to 5 in the wake of 2008 and was sitting on three released vintages stacked up in the warehouse with a fourth barreling down the pipeline. I actually dealt with Winery A calling me up because he had a conversation with Winery B in which Winery B bragged about how great things were going. The reality was that Winery B was dead in the water because the distributor had dumped his wines (all Parker 93-97) when the owner demanded that they maintain an on-premise only policy in the wake of 2008 and closed out their remaining stock with a “buy one/get one free” deal. When I suggested to Winery C that he needed to broaden his distribution, he furiously protested that “I got no wine, man” and “I’ve got a waiting list for my mailing list, man.” So, I signed up for said mailing list under an assumed name and quickly received an offering for full cases of everything with a vague hint that there was more available if I wanted to take it. As Steve alluded to, the illusion of scarcity and the image that it projects within the bubble are more important than running a sound business to many of these clowns.

  25. I agree with Adam, Bill. You often refer to your industry experience, but your unwillingness to actually state who you are and what your affiliation is really undercuts your arguments.

  26. Exclusivity is a marketing strategy, just one that relies heavily on word of mouth and loyalty. So the question isn’t whether wineries should choose between exclusivity and marketing, but whether that marketing can and should rely solely on the privileged and chic veneer of the brand or whether more active branding and communications tactics are required to optimize sales in today’s environment.

    Steve is dead-on about the sustainability of exclusivity alone as a marketing strategy over time. Wine buyers have more choices from more channels and produced in more locations than ever before and younger wine buyers are proving to care more about adventure and experience than prestige. That doesn’t mean that all wineries will need to jump into full-blown shilling to consumers, but it will require an evolution of the exclusivity approach that is less about price and prestige and more about meaning and connecting. Bridging that gap will require a change in tactics that do include more active levels of branding, connecting and communications, which many would equate with “more marketing.”

  27. Bill Haydon says:

    Quite honestly, you get anunvarnished opinion of how many industry people have come to view Napa Valley this way. Were I to use my real name and state my company, I would feel constrained by professionalism and basic tact to tone things down, to pull punches and keep stories confidential (not that I ever name names). You’d like me to be akin to the sommelier who tells the Napa Valley winemaker how much she and her friends still love California wine but in reality never actually buys it and professes a completely opposite view among other somms. I’m assuming this is precisely what you want. A veneer of false politeness with the unpleasant realities left untouched and the 800lb gorilla in the room wished away. What’s going on in the valley will stay in the valley with only the public relations b.s. regurgitated in public. That’s Napa. When the legend and the reality diverge, print the legend.

    Sorry, Hans. I guess that I’m just a fly in the ointment.

  28. I’m with Adam Lee and Clay Gantz her;
    Will the real Bill Haydon please stand-up?

    I’m a casual reader of this blog but whenever I do read Steve’s article and the comments that follow it seems that Bill never fails to put his 2-cents (or 2 thousand cents) into a topic. HIs opinions are typically anti-Napa and/or anti-California and his arguments offer only vague anecdotes, heavy sarcasm, and MAYBE some all-too-perfect statistic or image that looks like it was googled in the last 30 seconds.

    Bill, I’m not even saying you’re wrong, but you’re have no standing until you produce some substance to backup your claims and opinions.

    Alex Kanzler
    Winemaker
    Kanzler Vineyards

  29. Bill Haydon says:

    Sorry, not going to happen. That toothpaste is out of the tube, and for the very reason that I chose not to link my professional life to these comments in the beginning, I’m not going to turn around and do it now.

    What is happening is that you can’t refute my arguments, so you attack the messenger and attempt to marginalize the message. Adam’s statistic was a macro number for the entire Cali wine industry. Premium wine, and premium Napa Cabernet above all, is but a fraction of that. The ability of Gallo to force through millions of cases of Barefoot Moscato has no bearing on how $100 Napa Cab is doing.

    NVV have not been to NYC or Chicago in almost a decade. That’s a FACT, and it speaks directly to a view that having to “sell” their wine is almost viewed with disdain. Hell, when’s the last time they deemed a market like Nashville or Minneapolis worthy? In contrast, imports (and even your domestic competition) are out working the market constantly and not sitting home smelling their own farts and telling themselves how wonderful they are and bragging to their neighbors about some illusory DTC number. You rant and rave about Asimov and Jon Bonne and IPOB and “New California” and those insidious “gatekeepers” while believing that a return to the good old days is just around the corner…..a longed for time where no problem was too big that it couldn’t be solved with a phone call to Michel Rolland, a couple extra weeks of hang time, a tub of megapurple and a Parker score. Hell, even Steve Heimoff is now writing about wineries stacking wine in warehouses rather than admitting that they don’t sell out or–god forbid–lowering prices so they could sell out. You don’t want to address the reality yet because you don’t have to….not quite yet, but that day is coming. I dare you–I double dog dare you–to spend a couple of days visiting wine bars and Michelin starred restaurants in NYC and Chicago and count the size of the Cali sections and the number of domestic wines being glass poured (and how many of them are Northwest or regional!). And what has happened there invariably filters down to Nashville and Minneapolis. There’s only so long that a business can ignore unpleasant realities before they rise up and smack you down. Only so long before sniffing those farts in the bubble starts to smell a little rancid.

    Don’t look now, but Goldman-Sachs just pegged their long range Euro forecast at 80 cents! The beast slouches towards Gomorrah, and the center will not hold.

  30. @Bill Haydon – Your thesis seems jumbled to me. Napa wineries are calling you up day and night, but that isn’t putting in the effort. Instead, they need to put on a tasting in NYC and/or some more obscure location to demonstrate that they’re putting in the effort. Come on.

    You sell the mystique of Europe. Wine quality is secondary to the fantasy. We can all project the idyllic setting where the wine was made using centuries old technique with no monetary concern. Just pop a cork and you can almost feel you are there.

    I see no productive point in your comments. All of your comments in regards to domestic wines are from a distance. You don’t need to sell domestic wines. You don’t like domestic wines. You don’t like how the wines are marketed. So what.

  31. Bill Haydon says:

    There’s that California Uber Alles hubris that I love so much. European wine quality is secondary. It’s all built on romance and fantasy, and as soon as those damned kids grow up, they’ll put down that mystery in a bottle from St. Joseph and grab a bottle of superior 15.2% California Syrah that’s half oak and half volatile acidity at twice the price.

    Hate to break it to you, but I’m not selling mystique or romance. I’m selling wines. Wines grown in soil that wasn’t once a prune orchard. Wines made in modern facilities that still manage to respect their tradition and terroir. Wines that aren’t crafted to appeal to one or two prominent scorers (the real gatekeepers). They are simply better balanced, more authentic, more food friendly and better values than their California competition. And that, my droogie, is why they are winning–even in your own backyard of SF! The American consumer is increasingly taking off the training wheels. They are no longer wowed by cocktail wines that (to quote one of Parker’s more grotesque tasting notes) “possess a sledgehammer effect on the palate.” They want something a little more subtle and a little more thoughtful, and if California can’t–or won’t–supply that, they’ll look elsewhere.

  32. @Bill Haydon – I couldn’t care less what your real name is. I don’t see any useful content in your comments.

    Like Porno, I know an argument when I see one.

    Your argument regarding the NVV is just plain lame. The NVV has a budget. They need to make choices where they spend it. Perhaps, they’ve decided to promote their brand in Chin instead of NYC. Would that amount to disdain for selling? The answer is no.

    Your wine bar is also lame. Do you understand the economics of a wine bar? They generally have to pour cheaper wine. They’ve got a price point they need to pour at and they need to pay the distributor. They don’t pour first growth Bordeaux. They don’t pour Grand Cru Burgundy. Are these wines on the way out, Mr. Europhile? Won’t that filter down to Nashville and Minneapolis? The answer is no.

  33. I have no attitude. I struggle in the marketplace to get attention. There’s absolutely no hubris in understanding that people buy based on how a product makes them feel.

    You think European wines are better by some objective measure. What measure is that? You think Bordeaux was above being affected by Mr. Parker? You think Mr. Rolland never consulted in his home of Bordeaux?

    You think Europeans are more sincere than Americans. That’s ridiculous.

  34. Adam Lee says:

    Bill,

    You are simply wrong on a few things. I wasn’t trying to refute your arguments because you have every right to make your points. Some of them are valid. Others I disagree with. But I do take issue about you not revealing your identity and associations. That is proper protocol for most wine boards, it is something that the rest of us around here manage to follow, and that allows all of us to judge each other’s post through a more accurate lens.

    Certainly my statistics were on the macro-California wine business. Between your posts and mine, those are the only statistics (rather than heresy) that have been brought forth. If you look at the macro California business you will also see that Dollar Sales grew faster than volume (ie. people are buying higher dollar wine). You will also see that wine over 14% alcohol grew at a faster rate in the United States between 2013 and 2014 (and wine below 14% actually slightly shrank in sales). That’s a one year thing, not necessarily a longer term thing.

    A few other things to consider. If Bill is correct and fewer domestic wines are selling in the United States and more imported wines are selling here, the good longer term news is that means that wine consumption is still going up in this country. Unfortunately, the same cannot be said of much of Europe where per capita consumption continues to fall.

    Adam Lee
    Siduri Wines

  35. BTW – Bordeaux was a swamp.

  36. Just an anecdote from a wine retailer in Memphis – we see vignerons and winemakers on a very regular basis from Tuscany, Burgundy, Bordeaux, Walla Walla, Wachau, Rioja, Paso Robles, Willamette. Who do we see from Napa? Nada.

    I’m not sayin’, I’m just sayin’.

  37. Who is Bill Haydon?
    Does he really exist?
    Is he Manti Te’o ‘s girlfriend ?

    Alex Kanzler
    Kanzler Vineyards

  38. Bill – Speaking of Uber Alles hubris or humus or horse-sh@t – this is your finest comment in your attempt to high-jack Steve’s Blog!
    “They are simply better balanced, more authentic, more food friendly and better values than their California competition. And that, my droogie, is why they are winning–even in your own backyard of SF”

    I liked the ‘more authentic’ and later ‘not prune orchards’ analogies – very clever – you should be a marketing copywriter! I wish the hose-master or unicorn somm could have a half a day with you in whatever cell you are living in! Your whole discourse here, the past day or two is typically pathetic, you seem like a very angry person.

  39. @Alex – Bill Haydon was the mole in Tinker Tailor Soldier Spy. Quite the smarmy character.

  40. Bill Haydon says:

    As I sit here next to this magnificent inland freshwater sea that you can’t have, it just dawned upon me that I made a significant error. I should never have commented on this post. And despite the assertions made above, I comment on maybe one out of every fifteen of Steve’s blog posts. This is one on which I never should have commented. I gave you an easy out. I let you focus all your attention on the “hater” in your midst rather than actually having to come to grips with the content of Steve’s post which is quite accurate and quite relevant to the future of Napa Valley…..albeit an issue that would rather be ignored.

    So, I’m going to bow out. I’ll take a figurative Jim Prideaux judo chop to the neck and go silent. I eagerly await your dialogue with Steve as to the validity and merits of his post.

  41. Bob Henry says:

    I used to work for the ad agency hired by NBC television — a General Electric operating unit.

    Over the years, I studied the public pronouncements of its chairman and chief executive officer, Jack Welch.

    Years later, I was blessed with a sit-down meeting with him.

    So let me invoke his BusinessWeek column on the invaluable role of dissenters and naysayers and cranks.

    Bill Haydon, stick around for the debate.

    From BusinessWeek “Opinion” Section
    (May 27, 2009, Page Unknown):

    “The Power of Pushback”

    Link: http://www.bloomberg.com/bw/magazine/content/09_23/b4134000151305.htm

    By Jack and Suzy Welch
    “The Welch Way” Column

    . . . Everyone knows ideas get better when they’re energetically inspected, batted around by skeptics, and poked and probed from all angles. This is as true in business as in government. Everyone has been in a meeting where a solution was improved not just by discussion but by dissension. Everyone has seen a project exceed expectations because somewhere along the way a NAYSAYER interjected: “Hold on a minute. Is this the best we can do?”

    . . .

    Encourage Real Debate

    The lesson for business? Create an inclusive culture that encourages real debate. The fact is, as a leader, it can be tempting to shut out all the “noise.” Back-and-forth slows things. DISSENTERS often come in very annoying packages. Who hasn’t met a company gadfly who makes everyone insane with his or her persnicketiness?

    But you can’t give in to the lure of head-nodding. Whether you’re running a team or a business empire, press yourself to reward the best ideas, no matter whose they are. Make heroes of the people who put forth unpopular views. And endure the CRANKS; indeed, force yourself to hear them out. Their opposition to the status quo is often a form of passion and caring for the company.

    . . . Every enterprise benefits when ideas get their full and vigorous due.

    Pushback invariably increases payback.

  42. Bob Henry says:

    Postscript.

    Steve, if Bill bolts from the “arena” of debate, give him my private e-mail address.

    As a wine industry professional, I’d like to stay in touch with him.

    No one has a monopoly on good ideas. They germinate everywhere. I don’t want to be tone deaf or myopic to them.

    Bob

    (Historical footnote. If you think Bill’s comments are snarky, revisit history. National political debate dating back to the era of our Founding Fathers has been marked by character assassination that makes our modern-day politics seem tame. Hence their vigorous defense of free political [not “commercial”] speech enshrined in the First Amendment to the United States Constitution.

    And finally, this thought:

    “Why Is Everyone on the Internet So Angry?”

    Link: http://www.scientificamerican.com/article/why-is-everyone-on-the-internet-so-angry/)

  43. Not sure if in the fray of “expert” commentary this anecdote is relevant.
    But tonight (June 4, 2015) I had dinner in SF with a friend who told me last weekend she was in Dayton, Ohio. And at a Dayton wine shop she visited the past weekend Gina Gallo was hosting a tasting of wine from her portfolio.
    And after my friend made a modest personal connection with Gina Gallo after the tasting “Gina” gifted a bottle of Cab to my friend. Who took it that night to a dinner she was going to, and everyone at her Dayton dinner event loved it, looked it up, figured out that the retail cost of the bottle was about $35, and appreciated the fact that “GINA GALLO” was in Ohio and giving away bottles of wine to promote the winery.

  44. Adam Lee says:

    Bob,

    Jack Welch also said this, “Public hangings are teaching moments. Every company has to do it. A teaching moment is worth a thousand CEO speeches. CEOs can talk and blab each day about culture, but the employees all know who the jerks are. They could name the jerks for you.”

    Adam Lee
    Siduri Wines

  45. Bob Henry, I was waiting for the link from you, but you must have missed this one.

    Steve has been down this road before folks almost a year ago with Haydon.

    http://www.steveheimoff.com/index.php/2014/07/23/a-reader-comment-prompts-me-to-again-address-the-california-bashers/

    I think it is helpful to run through those comments as well, as there are a slightly different cast of characters than this thread.

    Enjoy.

  46. @Bill Haydon – Steve is wrong. Steve is guilty of promoting unsubstantiated conventional wisdom as have you. Bordeaux is a brand and Napa is a brand. They are both subject to the same market forces. If millennials no longer prefer Cabernet Sauvignon, then Bordeaux and Napa will face it. If some idiot states that Cabernet Sauvignon only goes with steak, then that ignorant comment applies to Napa and Bordeaux.

    The question to ask is – is there quality behind those brands? In other words, do these regions produce world class grapes? I believe the answer in both places is an unequivocal yes. Given that, Napa and Bordeaux have a strong future because they have quality to fall back on.

    Of course, like any brand, they will need to adjust to changing market forces. Individual players will go out of business. The wine industry is famous for that – small fortune from a big fortune.

  47. Bob Henry says:

    David,

    I am aware of the posting you cite. Thank you.

    Adam,

    Welch addressed the issue of jerks as employees. Haydon doesn’t fall into that category.

    From BusinessWeek “Ideas” Section
    (November 13, 2006, Page 136):

    “Send the Jerks Packing”

    Link: http://www.bloomberg.com/bw/stories/2006-11-12/send-the-jerks-packing

    By Jack and Suzy Welch
    “The WelchWay” Column

    How do you weed out the bad apples in an organization?

    — David Miclhalek, Bartlett, Ill.

    Start by putting down the pruning shears and picking up a buzz saw.

    Look, nothing hurts a company more than when the bosses ignore, indulge, or otherwise tolerate a jerk — or two or three — in the house. Such latitude undermines organizational trust and morale, and without those, the competitive linchpins of collaboration and speed are just plain harder. Not to mention the fact that jerks take the fun out of work.

    . . .

  48. Errata: An apology to David Ramey for my careless characterization and my misquote. I was just so P-ed-off at Eor Hayden I just sounded off and hit the button with out regard.

    David’s quote was stated wrong as he was referring to heavy alluvial clay-loam soils along the river as being second rate soils growing grapes. I would concur.

    David’s winemaking process and ability is legendary and He is all around great guy. Something to touch upon the themes of this thread is that he has recently launched Sidebar Cellars which address both value in the bottle but with exciting varietals. I was recently in New York with a couple of hundred other Sonoma/Napa/California/world wide producers at Skurnik’s Portfolio tasting and had a chance to taste both the Kerner and the High Valley Sauvingnon blanc… both cracking good wines that fit in the new ethos. Hats of to David.

  49. Bill, before you really bow out, let us know that store or market where the Ramey Chardonnay was such a good buy, I have relatives all over and would be glad to pop for a six pack of his wine. let’s us know!

  50. Bob Henry says:

    In an above comment, I cited the Scientific American article on Internet anger.

    Here’s its complement (likewise cited in an earlier comment):

    From The Wall Street Journal “Op-Ed” Section
    (April 21, 2006, Page A14):

    “When Blogs Rule, We Will All Talk Like —-”

    Link: http://online.wsj.com/article/SB114558585173032092-email.html

    By Daniel Henninger
    “Wonder Land” Columnist

Leave a Reply

*

Recent Comments

Recent Posts

Categories

Archives