2016 wine trends
One differs with Tom Wark and Julie Ann Kodmur with no small amount of trepidation. These two veterans are among the ablest and most effective of California winery publicists. I worked with them both for a great many years, and know for a fact that they have their fingers on the beating pulse of the business. But sometimes, you have to disagree with even the smartest people.
They have a new joint blog out (actually, “joint” blog makes it sound suspiciously herbal. The actual new “joint” publication would be Andy Blue and Meredith May’s “the clever root.” But I digress.) Julie Ann and Tom ran a post yesterday, “Ten 2016 Trends the Wine World Needs to Watch.” Most of their prognostications, I agree with; some, in part; others, not so much. Here’s the story.
“Natural Wine” Is Solidified As A Bonafide “Category” in the Wine World. Tom and Julie Ann may believe it. I don’t. To me, “natural wine,” whatever the heck that means (and it doesn’t mean anything, technically) is the new “biodynamique,” a buzzword for publicists to use to convince greenies to buy their clients’ wine. It sounds trendy and environmental—who wants unnatural wine?–but its meaninglessness limits its shelf life. (“Sustainable” is different. It’s certified by third-party organizations.) Even the people who peddle “natural wine” will soon tire and move onto something else, whatever that is.
Continuing Backlash Against the Wine Industry in Well Developed Wine Regions. Is there a backlash going on that I don’t know about? Well, yes: Julie Ann and Tom refer to demands by locals in wine country “to address problems this minority believes are caused by the wine industry,” e.g. traffic, crime, noise, environmental impacts, etc. This is indeed happening but there’s nothing really new about it. It’s a form of NIMBYism that does need to be addressed, but I have a feeling that where money talks, nobody walks: the wineries will pretty much get what they want, because they are the tax base in most of these regions.
Distributor Consolidation. This too has been going on for years. Yes, the problem is getting worse, from the point of view of smaller wineries that are locked out of the chain. There undoubtedly will be greater consolidation, but the good news is that the Internet and social media, with their DTC promise, are becoming effective counter-weights to the three-tiered system.
Emergence of Younger Wine Writers. It is true that “the older, experienced crew begins to think about retirement.” How could it be otherwise? It also is true that “young writers [have] been toiling at second tier wine publications and websites.” Will there be a simple one-two switch where Blogger Joe is the next Jim Laube? Well, somebody has to be the next Jim Laube so it might as well be Blogger Joe. However, what is missing from this analysis is the sad fact (from the point of view of young writers) that the number of influential writing positions will remain pitifully small. There are simply too many young writers and too few spots for them to work for decent money.
Increase in Use of Media (not Social) Relations in the Wine Industry. Being publicists, Julie Ann and Tom might be expected to predict how important their sphere will become. I’ve been around for a long time, and watching the interplay between wineries and P.R. firms has been fascinating. The theory is that increased competition will drive wineries to P.R. firms for “help reaching the media with their brand message.” Yes…and no. Some wineries will; some won’t, because they (a) can’t afford it, or (b) aren’t convinced external P.R. is worth it, or (c) are turning to their own in-house social media efforts, which they believe can replace traditional P.R. Can it? We’ll see. Traditional P.R. may (accent on “may”) be an endangered species—the streetlamp lighters of the 21st century. Too soon to tell.
Opportunity in Diversity. Will wineries, in an attempt to gain a niche, produce “different types of wines…new beers, ciders and spirits…” and so on? There are two schools of thought. One is that what has worked in the past (Chardonnay, Cabernet Sauvignon, Pinot Noir and so on) will continue to work in the future. The other is that the constant craze for new, trendy and different will enable some wineries to exploit consumer fickleness. Unfortunately, crazes have the lifespan of a gnat—remember Moscato? Personally, I can’t see wineries getting into “distilling or cider-making,” much less beer brewing; it’s not part of their core competency. So I’m not sure how much “opportunity” there really is in this new “diversity.”
More Groups and More Categories to Choose From. The idea here is that “group marketing” is easier/cheaper than individual marketing—a Darwinian herd strategy where the “pack” can better fend off the wolves than the lone individual. Julie Ann and Tom cite IPOB and ZAP as examples. There is truth here, but in a larger sense, wineries always have been torn between joining groups (which spread the benefits thinly but broadly over everyone) and going it alone, where they stand to gain a greater share of the glory and money. This is an inherently existential question each winery must ask itself. I, myself, can’t see any more groups, such as IPOB, successfully emerging. IPOB has been a pheenom, and will be hard to replicate. What I do see is more and more tourism opportunities for wineries: sponsored tastings at resorts and cruise ships, Uber rides from the hotel to the winery, that sort of thing. But this isn’t quite what Julie Ann and Tom are talking about.
More Virtual Wineries as Cost of Entry Continues to Increase. Obviously.
The Call For Expertise. I’m glad that Julie Ann and Tom agree with what I’ve been saying for years: “Many consumers [will] more actively seek out vetted experience in their pursuit of wine advice…in contrast to the Everyman Wine Critic and the Crowd as the source of knowledge…”. Amen, brother Tom and sister Julie Ann! I said it in 2008 and I’ll say it again: just because somebody runs a wine blog doesn’t mean that they have experience or credibility. At last, the consumer is beginning to realize that vetting counts. Despite predictions, widespread in the blogosphere, of the imminent demise of the major wine pubs, their “continued success…is evidence that consumers are looking for real expertise.”
Purposeful Authenticity Will Be More Important Than Ever. The message is that “wine companies that can provide…real, heart to heart, meaningful, authentic content will capture hearts, minds and possibly wallets.” Agree. The question is, how do you know if the “heart to heart” is real, or just a clever simulation of authenticity (like those oil companies that tout their commitment to the environment while actually wrecking it)? This is very hard; it requires consumers to put on their B.S. detectors. Ultimately, this issue of “authenticity” is the stickiest wicket of all, because nobody knows what it really means, and “the crowd” will always be divided as to who’s really authentic and who isn’t. One thing for sure: you can smell inauthenticity a mile away.
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I’m driving to Oregon today for more research into my Jackson Family Wines project. To think that just 72 hours ago I was on a warm, sunny beach on the Riviera Maya and now I’m headed up to the cold, rainy north country. I’m bringing my flannel shirts.
I am reminded of Joe Heitz’s quip (paraphrased here) that “Mother Nature is a mean old bitch who, if she had her way, would turn all wine into vinegar.”
There’s your “natural” wine . . .
Steve,
In regards to “Opportunity in Diversity” – I don’t see it, either. We have seen an ever-increasing percentage of our vineyard land planted to the core varieties, while many minor varieties have disappeared from California. In Napa, for instance, Cabernet Sauvignon took up 30% or so of total, bearing acreage in 1991. Despite a much higher number of total acres, King Cab now accounts for over 40% of bearing acreage. I’m hearing of people who are planting 50-100 acres in Sonoma County deciding to put it all down to Pinot Noir – not even diversifying with Chardonnay. There will always be small, niche markets for interesting varieties, especially sold DTC. And Tom and Julie may be right that there will be opportunities in such wines. But the big picture for this industry seems to be consolidation around core competencies and simplified sales models – and that means Cab, not Counoise or Carignane and I would really doubt that it includes cider and beer.
I’m not sure how to say this, but here goes.
Steve, you were a beginner once. And all “emerging wine writers” need not be young.
I find it intriguing that right below a quick one-liner about the cost of entry into the wine business is a paragraph which, deliberate or otherwise, speaks to the “cost of entry” into the wine-education-and-writing business. At the ripe old-vine age of 57 I’ve discovered I have a knack for communicating and educating the wine-buying public about their drink of choice. Yes, yes, I work for a liquor retailer, albeit my eyes were opened to the possibility of parlaying my abilities and interests into a vocation I find immensely fulfilling.
That being said, I understand the message of your comment: persons with very limited exposure to the wine world are presuming themselves to be qualified for making pronouncements which fail to add up. I don’t count myself among such, because despite working at the former Mondavi organization and Cakebread Cellars (both of which were in accounting, but I learned much about winemaking and wine business), and a lot of reading on the subject, I still have much to absorb ere I independently hold myself out as a wine educator, let alone a substantive writer.
Nonetheless, and correct me if I’m wrong, I detect a discouraging note of “don’t-call-us-we’ll-call-you” from the comments of Mr. Wark and Ms. Kodmur and in your agreement therewith. We all come to this from different directions (like “Blogger Joe”) and must work with what we have. It’s never too late to follow a new dream.
I hope some of this made sense.
Dear Rick Steele, my only discouragement is based on the reality that there are very, very few paying jobs for wine writers. Having said that, I encourage people to write about wine, if they want, and if they want a job doing it, they should target a specific magazine, website, newsletter, etc.
Dear Gabriel F., I agree. It’s kind of sad, but that’s what it is. Anyway, France consolidated around core varieties in each of their wine regions, and things worked out pretty well for them!
A lot of this, of course, is continuation of current trends. A couple of other trends that I think will mark 2016=-17 and weren’t mentioned, plus a worry of mine:
Innovation and reinvention of distribution channels is upon us and may balloon soon. Three-tier still has life, but it didn’t do as well on its last routine physical. (This, then, raises questions about what the push-back will be as it erodes, since money is heavily invested in three-tier. I expect more direct sales avenues.)
Price point… With the gush in wine interest in recent years, all the price-point pools are filling. There’s a bigger market for low-end wines (and Trader Joe has several recent can’t-fail vintages to pull from for sub-$10 wines). OTOH the $25-$30 pp is owning big turf as a “best value.” I don’t think the higher-pp pool will expand much – about the same people will keep buying there. (We have $300 wines and $25 wines, and the quality difference is evident… but, of course, we move far more under-$30 bottles than all the rest. Do you want a case of really good $25 bubbly for New Year’s Eve, or one staggering $300 bottle, hmm?)
If we get the rain we’re expecting, we’re hitting a spot that I’ve worried about for a while – a place where demand will be hard to meet. During the years of the fastest surging wine interest, we’ve had awesome, sunny, dry years with fabulous product that has been rolled to market a year or two faster – wines historically held for two years have rolled out in 1, etc. This is great while you can do it. What happens when we get a couple of super wet years that warrant holding back an extra year or two, and wine-makers don’t have the reserve stock? But demand keeps increasing… I haven’t seen a good analysis of this by people with numbers and sense. Wine makers will have to sell what they have, even if it isn’t ready. Will this lead to more chemical fiddling, more blending to mask unready grapes, more foreign imports? (It could be a great year or two for Italian and Southern Hemisphere wines in the U.S.) I don’t know the answer, but I think it’s an important question. We’ve had rain cycle fluctuations before, but not in the same kind of market climate.
Regrettably, the smallest wineries will be hurt the most by this, because they often have to sell whatever they have to keep the roof on the house. We need these small wineries to push back against corporate homogeneity, in my opinion.
Opportunity in Diversity… and backing up Eshelman’s comments regarding quicker product cycles, look no further than Meiomi’s 2015 Pinot Noir Nouveau at $20. Cash flow is king in this business and what could be better than taking a premium grape variety and turning out a product in 3 months. Gold! This may be more difficult with a Cabernet Sauvignon, but certain varietals and markets might really like a young, fresh, bright, fruity wine made from Pinot, Sangiovese, or lesser known varietal.
More Groups/More Categories: I tend to agree with Steve on IPOB and its meteoric rise. ZAP has been around for years and the tastings in the Fort Mason Center were wrap-around-the-block fun afternoons in SF, but ZAP and IPOB are very different in mission. ZAP is all about exposure similar to the Chamber of Commerce for a wine region, IPOB is all about evangelizing the unwashed and ignorant masses.
“Natural Wine”: the fact that it was the lead in the story referenced makes it look like the headline trend. It’s a small sub-set of the market for particular consumers. Why it has such legs as a story is strange, but perhaps the characters behind the natural wine category are more gifted at promotion than your average winemaker. Natural wine has a place as an outlier and underdog, so it’s interesting to writers/bloggers/publications.
“Purposeful Authenticity”: Tom’s Shoes? Hedley and Bennett? Dirty & Rowdy? Mast Brothers Chocolate? A recent article regarding Mast http://www.grubstreet.com/2015/12/mast-brothers-chocolate-attacks.html digs deeper into their authenticity. PR firms, claims of re-writing history, long email chains with return receipts, scandalous fodder for the food world. Unless you’re on the crush pad or in the vineyard, how does one really know what’s happening in “natural wine” or “minimal intervention” wines? You don’t.
David Scheidt: “…what could be better than taking a premium grape variety and turning out a product in 3 months. Gold! …certain varietals and markets might really like a young, fresh, bright, fruity wine made from Pinot, Sangiovese, or lesser known varietal.”
Stolpman in Ballard Canyon has been doing a carbonic Sangiovese at about $20 the last couple of years. Made from the same stuff as their well-received aged Sangio, but rolled out in a couple of months. Why not more “American Beaujolais”? It surely is in the works somewhere.
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And therein lies the root of domestic wines’ failure. Twenty freakin’ dollars? I could see paying $8 for that. But $20? For $20 (retail!), I import a 5K production, single commune, estate grown Chianti Classico that’s aged for 14 months in 20HL Slavonian (a traditionalist estate where even the prized hillside cuvees see no barrique). Please tell me why a restaurant is going to choose to pour the domestic gimmick wine over an authentic, traditionalist Chianti Classico from a renowned small producer?
As Steve put it, people may not be able to define authenticity, but they know inauthentic when they see it.
The costs of grapes/custom crush/mobile bottling, Bill Haydon, for a Sonoma County Sangiovese from a producer under 10,000 cases to produce an $8 retail wine and be profitable does not exist in reality. It is not a failure of the domestic market, it is simply a market reality. Our costs of production/input/materials are higher.
And nice find on the carbonic Sangiovese Jim.
Hmmm . . . is this where I opportunistically jump in with my pet project: encouraging not “skin contact” white wines, but rather carbonic maceration white wines when fermenting grapes with skin tannins (e.g., Pinot Gris, Gewurztraminer)?
(No, April Fools’ Day has not come late this year. There are serious white wine producers around the world — albeit few in number — who have taken up the challenge and embraced this red wine technique.)
From Jamie Goode’s wine blog (published September 22nd, 2013):
“Skin Contact Whites, the Next Big Thing”
Link: http://www.wineanorak.com/wineblog/uncategorized/skin-contact-whites-the-next-big-thing
With regard to “natural wine” — I am watching an FDA docket that is currently receiving comments on using the term “natural” on human food products. It doesn’t apply to wine, but nonetheless, I think the results could be fascinating and set a standard going forward. You can find more information on it here: http://www.regulations.gov/#!documentDetail;D=FDA-2014-N-1207-0001
Adam Lee
Siduri Wines
It is a failure of the domestic producers. A failure to offer interesting wines made neither in a factory tank-farm or the result of buying bulk juice at decent prices relative to every other wine producing country on earth.
I’m sorry, David. I just don’t buy the argument that it’s soooo much more expensive to produce wine in California than Europe. I can see that relative to South Africa certainly and, to a lesser extent, Argentina and Chile but not Europe. I’d venture that the average European cellar or vineyard worker has a higher salary (certainly relative to the local living wage) more paid time off and certainly better and cheaper health care than his California counterpart. Tell me how the cost of barrels, glass or bottling lines are soooo exponentially more expensive in California?
No, Calijuice prices–particularly when one wanders into the upper reaches of Sonoma and Napa–by ego, image and PT Barnumism.
As this report shows, California certainly isn’t plowing that “high cost of production” into their vineyard workers.
http://www.wine-searcher.com/m/2015/11/sonoma-not-all-sunshine-for-vineyard-workers
“Please tell me why a restaurant is going to choose to pour the domestic gimmick wine over an authentic, traditionalist Chianti Classico from a renowned small producer”
Bill,
I’d guess because they think the Stoplman wine tastes better. That would be the reason. Not that difficult to figure out.
Adam Lee
Siduri Wines
Domestic Nouveau has been happening in Oregon for the past half-decade. The tough part is that you’ve got about a month to sell it before it becomes unsaleable. While I am glad that it’s happening, I can’t really see it growing beyond a local phenomenon
Using averages and generally acceptable numbers…
$2000/Ton Sangiovese Sonoma County (picked and delivered) I can cite USDA Stats here, but this is an average and may not be reflective of actual costs from a specific grower.
$1000/ton Custom Crush cost. This number could easily be $1500, but unlikely to be $500.
Yields 150 gallons of usable juice.
No barrel aging, only stainless tanks imbedded in price of Custom Crush
No mechanical bottling line (minimum charge for mobile line roughly $2000)
50 cases of wine at $10/case for glass only = $500. I could find odd lots for cheap, maybe $4/case
3 people to hand bottle at $15/hour for an 8 hour period $360 (I’ve hand bottled…so things don’t go this smoothly)
600 corks at 0.10/cork $60 (cheap, 1+1 cork) Usually we have to buy a minimum of 1000 corks at a time, but we will let that one slide
600 labels at 0.50/label = $300 (assuming no art charges or minimum cost in label charge, which exist)
No capsule, because that would add cost
I will have to put the finished case goods in inventory, which will cost something, but heck, we will waive that too.
And I’m assuming that I have a GREAT relationship with my custom crush provider to allow this wine to sit in a tank for the time it took to bottle, considering Sangiovese is picked early in the harvest cycle. Chances are, I’m going to be charged for holding wine in a tank, but we will overlook that charge as well.
Basic hard costs =$4220 (if everything goes to plan)
Total bottles = 600
Cost per bottle = $7.03
This allows for no Operational Costs for the winery producing the bottle. After all, it takes time to get TTB label approval, make calls to customers, art work changes, wine club shipments and actually pay the winemaker to make this wine. This assumption includes storage and transportation costs to hold inventory. As a custom crush customer, inventory must be moved to an off-site location and logged into inventory. I have also not listed Federal taxes on the wine. There are other costs, not itemized here.
Bill Haydon, respectfully, your $8/bottle retail or wholesale is just not possible in Sonoma County and allow us as winemakers and owners to stay in business. $20 retail, if we assume an FOB price of $10/bottle for wholesale distribution is basically cash flow replacement, not highly profitable.