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Labels, visceral responses and disruptive business models

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At dinner the other night a senior executive for a major wine company told me that labels are becoming one of the most important reasons why people make a spontaneous purchase of wine.

I’d always known that labels are important, but this executive stressed their importance even beyond what I’d thought. It’s difficult for me to put myself in the shoes of an uneducated shopper as she browses the wine aisle looking for something special to drink with the pesto pasta and fresh garden peas she’s making tonight. I would already have an idea in my head of what type of wine to drink with it–maybe a sprightly white wine, with good acidity and some sweetness; Gewurztraminer? From there, it would be a matter of selecting a trusted producer, at the right price. I might also be influenced by geographic origin. Alsace? Sure.

But our shopper doesn’t know anything about any of that. Instead, she has to rely on one of our oldest, most primitive forms of human sensibility: vision. What we see is immediate and powerful: it can do only one of three things: repel us, attract us, or leave us indifferent. Label designers know this, and design accordingly.

But this isn’t a posting about labels, it’s about buying wine based on “more visceral responses [of which] aesthetics is key.” Those are the words of a gentleman named Phil Hurst, who is board chairman of a newish company, H.D.D., which is described in this press release as “one of California’s newest and fastest growing wine companies,” with brands including Healdsburg Ranches, Stonegate, VML and Bradford Mountain. (I’ve reviewed all these wines in recent years. The results have been mixed.) What interests me about H.D.D. is their practice of what one of their angel investors, a San Franciscan named Daniel A. Carroll, calls “a truly disruptive wine business model.” Come again? “A Disruptive Business Model focuses on improving products and services in ways that the industry does not expect while designing for an evolving set of consumers in a new market environment,” explains the press release.

That’s a mouthful that I didn’t quite get, so I asked my friend, Mr. Google, about it. Here’s one definition: “The word ‘disruptive’ is bandied about when referring to surprising new entrants into an industry, new players with new technology, and sudden competition coming from unlikely sources.” Here’s another: “A disruptive innovation is an innovation that helps create a new market and value network, and eventually goes on to disrupt an existing market and value network (over a few years or decades), displacing an earlier technology.” And a third: “Disruptive business models focus on creating, disintermediating, refining, reengineering or optimizing a product/service, role/function/practice, category, market, sector, or industry. The most successful companies incorporate disruptive thinking into all of their business and management practices to gain distinctive competitive value propositions.”

Okay, I’m beginning to get it. The opposite of a disruptive business is a me-too business, one that uses stale, non-performing old models instead of revolutionary innovations.

Back to H.D.D. What are their disruptive models? One is direct to consumer. The other is that “visceral response” thing. “Decisions are made at point of purchase based on mood or occasion,” the press release says. That’s our pasta-cooking shopper. Perhaps she’ll buy H.D.D.’s Dearly Beloved Forever Red wine because the label’s so cool (especially if she’s a Deadhead).

Well, all right, this all sounds good, until you begin to think about it. What is really new about “a purchase based on mood or occasion”? Gallo understood that 60 years ago. Retailers have been trying to influence the shopper’s mood forever. So I’m not seeing what’s so disruptive about H.D.D., and it was even more surprising to see no mention at all of social media in the press release. I did an (admittedly quick) Google search to see if I could find any mention of H.D.D.’s online practices, and I couldn’t. I would think that a disruptive business hoping to upset apple carts would have social media as part of its practices. However, H.D.D.’s founding partners include Bill Hambrecht (he’s the H.) and Paul Dolan (he’s one of the D.s). Smart guys, industry vets. I’d put my money of them, if I had any.


It’s not blogs vs. print. Never was. Still isn’t.

26 comments

I don’t know why it’s controversial anymore that some of the better wine blogs can be effective in driving sales. Didn’t we have that conversation in, like, 2010, and decide the answer is Yes? I thought it was over. But then somebody writes something that gets the whole issue percolating again, and we find ourselves knee-deep into another faux controversy.

That’s my considered reaction to reading this Vintank posting that purports to tell the “wine industry” that they’re “looking at wine bloggers all wrong.”

There’s something really retro when the pro-blogging community (of which I obviously count myself as one) gets all defensive about themselves. Go on, read the Vintank post. It’s entirely correct in its claims that some blogs drive sales, that wineries should reach out to them, etc. No argument there. What sets me off about these kinds of articles, though, is the underlying sense that it’s bloggers versus people like me: mainstream wine critics, as if I were in the mixed martial arts octagon with Joe Roberts, battling it out for supremecy. See the old guy get his ass whipped by the hot young blogger! See print journalism go down for the count! Oh, my word, the blogger just gave a mawashi geri to the print guy’s head, then followed it up with a driving punch to the chudan! [Sound track: riotous cheers and applause from the blog fans, boos and moans from the few print people still alive.]

No, no, no! The pro-bloggers have got to get over this bruised sense of having been hurt or disrespected by the print critics. Can’t we all get along? Yes, I’ll take the author’s word (which Alder Yarrow modestly confirms in the comments section) that a good Vinography review moves product. That’s great. I’ll accept the author’s claim that a good Joe Roberts review sells wine. That’s good, too. But so does a good Steve Heimoff review in Wine Enthusiast, and I would wager that a high score from me, printed in the magazine’s Buying Guide, and reproduced as a shelf talker at Costco, sells a heck of a lot more wine than a good 1WineDude or Vinography score.

The Vintank post argues that “WE [i.e. wineries] FAIL if we don’t use [bloggers’] tasting notes, scores, badges, or whatever, not only on our sites, through social media, and in email and other communications with our customers, but also distributed to our retail partners on our sell sheets.” I couldn’t agree more with this (although if I were a winery I wouldn’t be sure which bloggers to send samples to).

The Vintank posting makes a number of statements I don’t agree with, though, because I think they’re based on false premises:

1. It’s “unfair” to hold bloggers to the same traffic standards as “mainstream critics” like me. Why? If I reach 1,000 times as many eyeballs through the magazine than a wine blogger can, why disregard that fact? Wine sales people understand that eyeballs is the correct measurement for a wine writer, be she a blogger or a print person. And wait until Wine Enthusiast hits the China market, in June. Our little local wine bloggers will be as dust in the wind.

2. Print writers are declining in power because “the decades of stories that have already been written about wineries, regions, and varieties make it a struggle [for them] to generate new and interesting content.” Well, I don’t think there’s anyone better than me to reply to that! Let me assure you that generating “new and interesting content” is no harder (or easier) for me today than it was 20 years ago. And even if you think it is hard for me, why would it be easier for a blogger?

Before the hate mail starts coming in from the blogging crowd, let me repeat that I firmly believe blogging is an integral part of the wine writing community. At the same time, the pro-blogging people really have got to stop complaining about “the mainstream media.” Honestly, they’re starting to sound like Sarah Palin.

And with all due respect to Alder Yarrow, let me answer the question he asked in the comments section:

Q: “What are all your new customers over the next five years more likely to do when they hear about your brand or one of your wines and want to know whether it’s any good or not: a) Go to the store and buy a copy of the Wine Spectator or b) type the wine name into Google?”

A: Yes, of course they’re going to Google it. But what does that have to do with the continued popularity of Spectator, Enthusiast or other wine magazines? This is a straw-man issue: Alder poses two hypothetical behaviors, the first obviously absurd, the second having little to do with the premise that wine bloggers will “win” some kind of Google search contest over “mainstream” writers. If you Google a winery brand looking for reviews, chances are the first several hits will take you to the winery’s website and to their “Reviews” link, if they have one (which they should). And which critics will most wineries publicize first? What Vintank calls “the power critics.” Would it hurt for the winery to also link to 1WineDude? Of course not; I hope they do; I hope Joe Roberts is making a ton of money by the time he’s 50.

Meanwhile, the mainstream media isn’t going anywhere. Look, we’re all one wine writing community, whether it’s print, blogging or whatever. We all should respect that fact, and quit the subtle and sometimes not-so-subtle trashing and resentment of print.


“Natural wine” — the latest trend

23 comments

What is “natural wine”?

Well, if you Google the term (with quote marks) you get 307,000 results, and I’m not about to go through them all the find out. Instead, I’ll quote from Wikipedia, which is the first result: “Natural wine is wine made with minimal chemical and technological intervention in growing grapes and making them into wine.”

That sounds pretty good. Who wants wine that’s been degraded by chemicals and technological interventions?

Like barrels. Like sulfur. Like fining agents. Like commercial yeast. Like acidity. If you’re in France, like sugar. Yes, sugar is a chemical, last time I checked. Here’s the formula for sucrose: C12H22O11

That’s a lot of yucky carbon, hydrogen and oxygen atoms. I don’t want no feelthy atoms messing up my wine!

I started thinking along these lines when I read this article in our local free paper, the Bay Guardian, about “the high priestess of natural wines,” Alice Feiring. Now, I don’t know Alice and I haven’t read her new book (Naked Wine) and so this is not a commentary on her but rather just my (somewhat disorganized) thoughts on reading this particular article, and putting it together with other stuff I’ve been hearing and reading about concerning natural wine.

In the wine biz, if you stick around long enough you’ll come to recognize when a new trend pops out of nowhere. Natural wine is a new trend–or, let me rephrase that. Natural wine–the actual beverage–is not a new trend, but talking up natural wine is the new trend. Actually, that’s what makes a trend: suddenly people are talking about it. Organic was a trend a while back (“natural wine” has little to do with organic wine). Then came biodynamic. There are equivalents in food. Locovore is a big trend, and possibly an important one, but there also have been silly food trends, like “beds” of this or that, and foam, and elaborate constructions that look more like museum pieces than something you’re supposed to eat. Possibly, “meat” cocktails are a new trend. Hot young mixologists as our new rock stars may be a trend, although it’s not necessarily one I oppose. So you see that trends can span the gamut from the vital to the vacuous; the one thing they have going for them is buzz, which is why God invented publicists.

But I digress. The topic is natural wine. Let us gently dispose of the concept that no chemicals or technologies should ever be allowed to tarnish a wine. Under that definition, the only natural wines are those which are created when birds puncture grapeskins on the vine, and then the juice inside ferments with wild yeasts to produce wine that those same birds sometimes get drunk on. That’s natural wine. Any wine that comes in a bottle is not “natural” because a human made it and did what he or she had to to make it taste good. And you and I won’t necessarily know what that entailed, because the winemaker isn’t necessarily going to tell us. If the winemaker says the wine is “natural” you’re free to believe whatever you want. Sometimes what winemakers say is true. Sometimes it isn’t. It’s not that they’re liars. They just human beings, and occasionally a small sin of omission just can’t be resisted.

Besides, some wine that’s made “naturally” isn’t very good. There are a few so-called “natural” wineries listed in the article. I’ve reviewed some of them; they vary from undrinkable to pretty good. But here’s the context you need to understand about this natural wine trendy thing: the reason this article is in the Bay Guardian is because anything with the word “natural” stuck to it is going to be popular with the greenie Whole Foods crowd (just as anything with the word “chemicals” attached to it will arouse their ire). If there’s a trend happening anywhere on the political/environmental left, it’s going to find its way into the Bay Guardian, whose editors like such things, and are happy to pay reporters to write about glowingly.


Giving props to the broad market

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We wine writers, and the popular wine media in general (I include the major blogs), frequently suffer from a rare myopia: while we’re obsessed with cult wines, collectibles, the Big Names and expensive boutique bottles, meanwhile the everyday work of producing and selling inexpensive wine to the majority of drinking people continues around the clock. The labors of the people behind lower-priced wines from California’s 5 largest wineries–Gallo, The Wine Group, Constellation, Trinchero Family and Bronco (according to Gomberg Fredrikson)–are largely invisible to the average consumer. But their vast sales forces are out on the sidewalks every day, meeting with buyers from the nation’s leading chains, negotiating deals, driving from venue to venue, flying from city to city, market to market, battling it out for shelf space in a never-ending grind that’s almost gladiatorial.

It’s easy for wine lovers of a certain cultural milieu to turn up their noses at boxed wines, wines with no vintage in big bottles at the bottom of the supermarket shelf, or indeed even vintaged, varietal wines that cost only $10, give or take a few bucks. But these are the wines that fuel America–more importantly, they are the entry-level wines that, for many consumers, will lead up the price-point ladder to more expensive ones. And let there be no doubt that Americans are drinking inexpensive wines in droves. We justifiably celebrate the cool-climate coast as the soul of California wine, but the truth is that the vast, inland Central Valley is California wine’s heart and lungs, the circulatory system that pumps out vast quantities of sound, everyday wine across the country and, increasingly, abroad, from Scandanavia to China. So great is the appetite for inexpensive Central Valley wine that, to quote the Ciatti Company’s May 2011 report, “Bulk inventories continue to be depleted, driven by large wineries, negociant brands and the re-awakening of mid-sized wineries expanding into the $8-$15 a bottle category. The majority of San Joaquin Valley grapes now have commitments…”.

According to Ciatti (an important broker), while Chardonnay continues to trend upward, so does white Zinfandel and “generic” white wines, while “new products such as Muscato, Sweet Reds and [domestic] Sangria” are increasingly popular with “a new demographic of wine buyers.” Just who these new buyers are is less clear, but several assumptions are safe: (1) they’re value conscious, (2) many are likely new entrants to wine and (3) they may well be precisely the younger (Millennial and Gen X) consumers who are said to be more adventurous and experimental when it comes to wine, looking for things their Dad doesn’t drink.

At any rate, the shipments of inexpensive California wines so far this year are soaring, and when you compare them to the stagnation of expensive (more than $15-$20) California wines, it’s clear that this segment is keeping the market alive. And not just in the Central Valley. So tight has the bulk market there become, says Ciatti, that it’s “pushing buyers into the coastal regions for next year and into the future…”. These coastal growers may not get the prices they’d hoped for or historically have received, but at least they’ll have someplace to sell their grapes and/or wine, and make enough to keep them going until the economy recovers.

What today’s post is, I guess, is a toast to the big wineries and inexpensive wines we so often overlook. They’re the base of the pyramid, the legs under the stool, the “broad market momentum [that] continued to soar” in early 2011, according to Gomberg. Here’s to America’s vins de pays.


Hot off the old Facebook page: hottest trends!

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I asked my FB friends “What’s the hottest trend in wine?” and as usual, they weren’t shy about replying. Here are some of the more interesting comments — with a few observations from myself.

“Sparkling” – I agree, because we’re going into the holidays when everybody drinks a little bubbly. After Jan. 1? Not so sure.

“White Skin Fermentations” — from David Grega, a Napa somm. He explains, “Basically it is the process of fermenting white wine on its skins like you would a red wine…..it’s risky but it creates white wines with amazing texture and complexity ….my [Carlotta 2008] Alder Springs marsanne you rated 89pts was 100% skin fermented ….”

“Blends” — Affirmative on that! Why have we been so fixated on varietal bottlings and the 75% rule? A blend can fill in the divots.

“Great value under $15” — Totally.

“Mulling” — this is from our friend Jeff Stai at Twisted Oak and I have to believe he’s got a big old bucket of something red and heady with cinnamon sticks and cloves floating in it. Helps ward off the Sierra cold.

“Vintage ‘99 Cab” — If you’re lucky enough to have a cellarful, then I guess it’s a trend, for you. I just opened a ‘99 Dominus and it was pretty good. Not great.

“Washington” — This is from somebody named Paul Gregutt. I think he lives someplace up there and is in the industry.

“Concrete eggs” — Lots of buzz about fermenting red wines in concrete, as opposed to steel or wood. Supposedly this gives– what? Not sure, but Charles Thomas, Tim Mondavi, Charlie Wagner, Patrick Sullivan and Alan Viader have given it a try. Tim Mondavi told Wine Business, “I’ve seen them in use at Petrus.”

“marketing wine to the Millennials and Gen X” — from an old buddy, Ricardo (formerly Rich) Kanakaris. Well, of course this is true, and everybody’s trying to do it. Alan Kropf, my new BFF from Mutineer, also nominated Mills, as did a guy named Anthony Carone, who owns a winery up in Quebec.

“MD 20/20 Blue with a necklace that says Bling Bling” — Yes, this is ultra-hot here on the streets of Oakland, where most trends start.

“Drinking it not collecting it!” — Right on, cousin Becs! But remember, you do have some of “ the good stuff” in your mom’s cellar, and it won’t be ready for a while.

“Burying cow horns filled with manure in the vineyard at midnight, then convincing folks the wine tastes better” — No comment.

“weird growing regions? varietals you never heard of?” — From Duane Bowman, and not tongue-in-cheek. These Millennials seem to want new stuff. The question is, will they discover old stuff (Bordeaux, Napa) the way their parents did, or will they stick with the weird, new stuff? It’s enough to drive a marketing manager insane.

“a less ‘serious’ or less ‘traditional’ attitude in new drinkers, new bars, new publications and new brands” — see comments about Millennials. From the beautiful and charismatic Leah Hennesy.

“Drinking it at lunch?” — Michael Rodeno, is that a question or a statement of your intentions?

“Domestic Tempranillo!” — I’ll have more to say about this toward the end of the month, on Wine Enthusiast’s website.

“Lower alcohols!” — This vintage, everybody’s talking about lower alcohols. Of course, the grapes may not be ripe, but at least you’ll have your 13.9% Cab!

“Meritages under $20 that beat out the $200 Bordeaux Wines” — From Ron Saikowski. Care to name names?

“Music and wine pairing” — Is that new? I’ve been drinking and listening to Dylan since the Sixties.

“Bashing wine’s old-media elite” — Who would bash those nice old dinosaur media elites? Nobody that was properly brought up, I’m sure!


This one’s too easy

28 comments

The metastasization of wine competitions continues! Last January, I spoofed on how these ersatz contests are springing up like mushrooms after a Summer rain. Now there’s another one: the NextGen Wine Competition, billed as “the only competition by and for Millennial Wine Buyers, judged by their superstar peers age 21-35!”

Well, when I announced my “Voice of the People Worldwide Wine Awards Competition” I was obviously pulling your leg. But this time I’m serious: I am announcing the “Baby Boomers Wine Competition.” It will be by and for the Boomers, and only Boomers will be allowed to judge.

No, I’m lying again. There won’t be a Boomers wine competition. I only threw that out there to facetiously point out how silly this is all getting. I mean, if there’s a Millennial wine competition, why not an Octagenarian wine competition? How about one for the handicapped? An Asian-American wine competition? No, wait, I have it: a Gay Wine Competition, complete with rainbow flag awards and tap-dancing pourers. By the way, lest you think I make this stuff up, the Millennial Competition’s webpage has a link for “Sister Competitions” including the National Womens Wine Competition and the Organic and Biodynamic Wine Competition.

How about a Biodynamic Womens Wine Competition? They could get Lynda Carter out of retirement to host it.

wonderwoman

Look, I like Donnie and August Sebastiani, the “Honorary Co-Chairs” of the Millennial Competition, just fine, insofar as I’ve known them over the years. They inherited their entrepreneurial genes from their Dad, Don Sebastiani, one of the most brilliant marketers the California wine industry has ever seen. And the team of judges the competition has assembled seems to be a talented one, including winemakers, P.R. mavens, social media consultants and sommeliers — all Millennials.

But what do the organizers mean when they say “The Millennial Wine Competition is the first competition designed to let Millennials tell wineries and wine marketers what they want.”? Let’s deconstruct that statement. There are 70 million Millennials in this country. Surely, not all of them want the same thing. Surely, they do not speak with one voice. So the statement is false on its face. What it really means is “The Millennial Wine Competition is the first competition designed to let Millennials judge some wines ($95 per wine entry fee, please) and then issue a press release saying which ones got medals.”

With each new competition, the value of all competitions is diminished. I don’t think the organizers see it that way, but that is the end result. Am I going out on a limb when I guess that a 26-year old person is probably not going to buy a wine because it won a medal at the Millennial Wine Competition? What if that 26 year old is a woman, and she sees that another wine won the National Womens Wine Competition? What if she’s a Green person and sees that yet another wine just won the Organic and Biodynamic Wine Competition? What if she then sees that wine #4 got 100 points from Steve Heimoff? What if #5 has a shelf talker from the store saying the wine is terrific? You see my point: these competitions are just muddying the waters, further confusing a population that’s already hopelessly confused about wine.

I also think that wineries are going to be facing a dilemma when it comes to deciding which competitions to enter. They can’t enter them all, can they? Too expensive, especially if you’re a little family winery. That pretty much limits entrants to corporate brands, which severely constricts the credibility of these competitions. So it might sound a little self-serving, but  I think the public’s interest is best served, if they want critical reviews, by sticking with trusted reviewers — regardless of their age or gender — who review everything in their regions.

And this:

UCLA is conducting some research on wine consumer attitudes and perceptions. I encourage readers to go to their website and click through to take the online survey.


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