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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

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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.


What’s happening to producer-retailer relationships?

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The conventional wisdom — and it was taken very seriously all the years I was coming up in wine — always was that a winery’s suggested retail price (SRP), which was determined by the producer, was going to be higher than the price consumers could find it at retail. That was because wineries did not want to compete with their own retail accounts by undercutting them on price. That rule was ironclad: thou shalt not undercut your own retail accounts!

I thought that still was the case until yesterday, when I ran into Marcus Graziano. He’s the owner of Capitol Cellars, a retail establishment in Roseville (Placer County). Marcus not only sells wine from his store, one of the best in the Sierra Foothills, he also supplies private buyers throughout the country with ultrapremium wine. And according to him, ever since the Recession, wineries are “destroying retail relationship” by undercutting prices on their websites, usually to their club members, by as much as 50% off SRP.

This really pisses Marcus off. The first thing he told me is that “The wine business is all about relationships.” That traditionally meant that wineries understood the role of retailers, which was not only to sell their wines, but to help promote them, and thus form over time a solid friendship based on mutual interest. The merchant hand-sold the wine, and made a little profit on it, while the winery was able to deplete merchandise through the store.

“But now, they’re screwing me!” Marcus says, passionately. “When Nickel & Nickel is giving more off on their website than I reasonably can, it makes me look like the bad guy.” Same with Rosenblum and Bighorn. “Grgich Hills’ sales guy stopped by to make an appointment to taste,” Marcus says. “I pulled up their website and saw a huge discount, so I told the guy, ‘I have no interest in working with you. I think you guys don’t care about my business.’” The same thing had happened with the Nickel & Nickel account. “I called them and talked to their hospitality person, and explained my situation. She completely understood — but she said she doesn’t write policy.”

Marcus estimates that up to 40% of wineries are massively discounting on their websites.

Marcus is frustrated. His business is still doing okay, because for every winery that he longer does business with, there are others “who still support us.” He mentions Ghost Block and Pahlmeyer, in particular, as producers “who get it. They don’t want to screw me or any of their producers by discounting their wine.”

Still, Marcus seems a little spooked by the times. Direct-to-consumer is the Holy Grail among producers these days, what with the distribution system impossibly choked and dominated by a few giant companies, consumers in a stingy mood, and the future bleakly uncertain for many. The light at the end of tunnel, wineries feel, is direct-to-consumer, especially club sales.

But Marcus warns that that light may be “a disaster.” Wineries need retailers and will for a long time, he asserts. Proprietors who think otherwise — who don’t want to take the time and energy to form and maintain retailer relationships — “are lazy. They don’t want to work with us. They’d make more money charging full retail to their clubs, instead of ruining us.”

Marcus sees his own light at the end of the tunnel. “At the higher end, which is where we work, consumers are returning to speciality wine shops, who appeal to their needs and tastes.”

I’ve tried to penetrate the conundrums on this one. One the one hand, I can understand why wineries would look to DTC as a way out. If you can heavily discount to stimulate your club sales, that must look awfully attractive to beleaguered owners. On the other hand, this discounting has to be hurting merchants, and merchants are a winery’s friend. Like Marcus says, it is all about relationships. So I’m not sure what the solution is. This seems to be just one more example of how topsy-turvy everything is in the wine industry these days. The old paradigms are disappearing, and what will replace them, nobody knows.


Is wine quality objective or subjective in nature?

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Is quality in wine inherent, or is it something we impute to wine? I’ve wondered about this for years. Before I took an active interest in wine and educating myself about it, I would happily slurp down anything you offered me, from Champagne to Ripple, and if you’d asked me which was better, I would have had to reply, in all honesty, I don’t know. Now, of course, I fancy I can tell the difference between quality and plonk, but is that really true, or is it just something I tell my ego in order to make it feel better?

I’ve been planning on giving a wine tasting to a group of young (mostly 20-something) people. It hasn’t happened yet, because of logistical problems — oh, scratch that, because of laziness on my part — but I’ve been thinking about how I might structure it. When you do tastings, there’s no template that works for everyone. A group at the Bacchus Society obviously has to be treated differently from my young tattoo and skateboard friends. For them, I came up with a couple different ideas to keep the tasting loosey-goosey so that we could all have fun, while still learning something.

One part of the tasting will be “Which is the more expensive wine?” I figure we’ll taste two wines: One costing around  $200, the other $15. It’ll be interesting to see which wine the people prefer. I wouldn’t be surprised if they were split right down the middle, which would lead to an interesting conversation about why two consumer products that are roughly identical are so disparate in value. But I also wouldn’t be surprised if a majority favors the more expensive wine, since, in general, you get what you pay for. On the third hand, I’d be stunned if the majority preferred the cheaper wine — stunned, but not entirely surprised, since on many occasions, in blind tastings I’ve given higher scores to the inexpensive bottle.

Another session, I figure, is “Which is the real red wine and which is the white wine with food coloring?” I went out and bought some food coloring and found that a precise mixture of red and black will turn a Sauvignon Blanc the color of Cabernet Sauvignon. I decided to do this after reading a study that showed that, if people couldn’t see the wine’s color, they couldn’t tell if it was red or white. Isn’t that strange? We like to think it would be obvious, but apparently it’s not. (First, I’m going to try the experiment on myself.)

A third session is going to be really sneaky: I’ll give them the same wine twice, and ask them which they prefer. That’s pretty under-handed, but I’ll do it, not to embarrass anyone, but to show them how slippery perception is. They’ll automatically assume that, if I’m giving them 2 glasses of wine to compare, the two must be different. They’ll then proceed to find differences in the wines — differences that are not really there, but which their minds impute to the wines, based on their assumptions.

All three of these sessions are designed to show my young friends just how much subjectivity there is in wine tasting, and in our perceptions of wine. I think that’s the main thing a professional taster learns after doing this for a long enough time. Beginners start out with great certitude: they believe in classification systems, in reputations, in a price-quality relationship. As they proceed through life, they discovered that there can be important exceptions to every rule; but they discover, also, that, in general, the rules as commonly understood are more correct than not. Then they realize that the rules may not be as objective, as engraved in the DNA of the universe, as previously thought. What we collectively identify as “quality” may be only a majority preference, based on habit, reinforced by peer groups, and enshrined by tastemakers.

We seem to be living in an era of post-truth politics, in which nothing is real, nothing can be proved or disproved, all claims are to be taken as equally valid, and you can believe in anything you want — not necessarily because it makes sense, but because it appeals to you emotionally and viscerally. In a way, there’s nothing new about this: humankind has always made aesthetic distinctions. For example, is Klimt’s “The Kiss”

gustav-klimt-the-kiss

better than Picasso’s “The Kiss”?

picasso-the-kiss

But that’s art, you argue; there’s a big difference between art, which is subjective, and “true” reality. But is there? We see today in America that not even issues formerly thought to be scientifically objective — such as climate change, the economic impact of a healthcare law, or even where a President was born — are capable of being resolved to everyone’s satisfaction. The same thing seems to be happening in wine, where quality (or what we long perceived as quality) is on a slippery slope toward redefinition.


Gourmet mag back? Maybe

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Little noticed outside of New York media circles last week was this nugget in Women’s Wear Daily online that Condé Nast has hired a new publisher to oversee, not just Bon Appetit, but also Gourmet magazine, which you’ll remember was suddenly and shockingly shut down by Condé Nast last October.

So is Gourmet coming back? The WWD interview with the new publisher, Carol Smith, paraphrased her as saying “she hopes to breathe life back into Gourmet,” although the precise manner of doing so remains very much open. The reason Gourmet closed in the first place was because advertising fell off the cliff during the Recession. So how to resuscitate the magazine unless advertising returns?

Smith, who in the interview sounded like she was thinking out loud, tossed around a few possibilities, all of which sound theoretically plausible, and all of which are plagued with huge problems. This topic is of interest, of course, not only to Condé Nast and Gourmet, but to the entire world of paper-based publications. That shrieking sound that ricocheted through the publishing world last October — and especially the food and wine sectors — was the nightmare fear of publishers: “If it could happen to Gourmet, it could happen to me.”

One possibility raised by Smith was that Gourmet might become “a custom magazine.” The article described that as “whereby an advertiser such as Kraft or Target would produce a newsstand Gourmet magazine and own every ad.” So it wouldn’t really be a “pure” Gourmet magazine any longer, it would be “Gourmet by Kraft.” Could we expect to see recipes based on Oscar Mayer bologna, Oreo cookies and Philadelphia Cream Cheese? I’m obviously being facetious, but you get the point. One of the distinctions, or I should say prima facie conditions for the credibility of a print publication is a firewall between editorial and advertising. Would such a firewall exist in “Gourmet by Kraft”?

Other scenarios floated by Smith included “working with retailers on Gourmet-branded items, as well as television projects and events for both titles” [i.e. including Bon Appetit]. The WWD interview tossed those ideas out without explaining what any of them meant, but we can do some inferring. Smith goes to Condé Nast from Elle magazine, where she worked successfully to steer Elle into a relationship with the hugely popular “Project Runway.”

Anyone familiar with that show (and I happily admit it’s one of my favorites) knows that Project Runway has pioneered entire new swathes of territory in which the line between advertising and content is hopelessly, deliriously blurred. Think of it as product placement on steroids. So what would a Gourmet magazine that modeled itself after Project Runway look like? God only knows, but gay cuisine might be the Next Big Thing. Anyhow, people seem to enjoy this merging of reporting, entertainment, sex, information and gossip. You don’t think so? Media Daily News just reported the biggest winners and losers for magazine advertising, and the biggest winners included People Style Watch, Entertainment Weekly, Rachel Ray, People, and Lucky.

Rachel Ray? America may be doomed, but by gosh we’ll be noshing on the way down. (Memo from Charlie Townsend, Condé Nast CEO, to Smith: Develop a recipe for a Ray-style Tex-Mex Burger using Miracle Whip. Can you get your friend Heidi Klum to pitch? How much does she cost? But forget about it if she’s pregnant.)

heidi-klum

Finally, “Smith indicated…there is the potential of the Web.” Well, yes, the Web has had “potential” forever, but that gets us back to the (increasingly tiresome) problem of monetizing an online publishing site, whether it’s a blog, The New York Times or Gourmet Magazine. Would you subscribe to an online Gourmet? Will advertisers plonk down big bucks to support it? I think the answers are No, and no.

Maybe I’m wrong. Smith is said, on the New York blogs that pay attention to the fashion and style world, to be savvy and creative (although the b-word also has been applied to her). She certainly has a good track record. I think this step by Condé Nast is another example of publishers, freaked out and puzzled by the revolutionary changes occurring all around them, hiring brilliant young things (or, at least, people who are supposed to be brilliant young things), who know (or claim to know) where media is going, since publishers themselves clearly don’t. We see the same thing when a winery hires a social media director when nothing else seems to be working. It’s a little like re-arranging the deck chairs on the Titanic, but you can’t blame Condé Nast for hoping that Gourmet isn’t really at the bottom of the sea, but merely wandered off course.


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