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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.


Monday special! Two for the price of one! (We take major credit cards)

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Another celebration of stupid

So there’s this D.C.-based guy, Charlie Adler, a wine and food educator, who has a new book out called I Drink on the Job, that seems to be the latest expression of the “you can be stupid and still like wine” movement that is so reminiscent of the teabaggers. [Confession: I haven’t read the book and know its contents only from published material on the web, including the author’s website.] The book, according to this review, “is a series of vignettes illustrating why wine should be enjoyed organically, rather than studied and dissected.” On his book’s website, Adler writes: “’I Drink on the Job’ takes an anecdotal and often humorous look at wine from a slightly different perspective than your average wine book and draws an immediate conclusion – it’s better to ‘drink first and ask questions later’.”

This “wine is humorous” thing (you know who you are, bloggers) is really starting to get annoying. It’s like saying, “Hey, if you don’t feel like taking the time to understand something, just make fun of it, and tease people who do try to understand it.” It’s demeaning and insulting to suggest that wine drinkers aren’t intelligent enough to enjoy wine and study it at the same time. That’s like saying a person can’t like going to the movies unless he also is a film buff. I don’t know any wine writers who ever made that claim. If anything, America’s best wine writers have stressed exactly the opposite. It’s not Adler’s message, it’s the way he says it, by inferentially putting down knowledge in favor of some kind of blue-collar ignorance. “[H]e just wants Americans to consume wine with their meals – everyday!” Adler writes, third-person, on his website. Well, so do we all. But this anti-elitist stance (which is really a dumbed-down form of elitism) doesn’t help advance that goal.

Speaking of new books

We come now to The Wine Trials 2010, which was co-authored by Robin Goldstein, who many of you will remember was the prankster behind that hilarious phony Italian restaurant that won a Wine Spectator award. The new book “recommends 150 wines under $15 that outscored $50-$150 wines in brown-bag blind tastings.”

This time, the book is for real, and fine, as far as it goes; I myself frequently come across relatively inexpensive wines that out-score expensive ones, and I love pointing that out to Wine Enthusiast readers. What I find interesting is the discussion going on behind the scenes of Robin’s book. For example, in this review, Joe Briand, a wine buyer for a major restaurant group, digs into the concept of blind tasting and declares “I believe blind tastings tend to leave the subtle wines that I prefer at a distinct disadvantage to bigger bolder wines which ‘stick out’ more when consumed blind.” That remark, plus others, prompted Wine Spectator’s executive editor, Tom Matthews, always first out of the gate to defend blind tasting, to clarify [in the Comments section] his earlier assurances that Wine Spectator reviewers always taste blind. “I agree with you that we can learn more from a wine the more we know about it,” Tom wrote, and then immediately added, “But in order to evaluate a wine without biases (conscious or not), it’s important to taste blind.”

Do you see the inherent contradiction here? How can both statements be true? If you can learn more about a wine by knowing more about it, then why is it more important to taste it blind, instead of in some sort of context? Well, the answer, of course, is that context is vital for a proper tasting, as Tom knows. There are not simply two ways to taste, blind and open. There are gradations. But the blogosphere has created this impression than it’s an either/or proposition, and Tom, I think, is replying out of intimidation from the Woodward/Bernstein gotcha! crowd.

(By the way, Tom’s job now seems to be damage control: to peruse the wine blogosphere and reply immediately to anything that could possibly be negative.)

Goldstein himself points out the complexities of tasting in this Feb. 13 blog posting, in which he laments that certain luxury producers (he names LVMH [Yquem, Dom Perignon] in particular) “are overpriced,” and he indicts “the mainstream wine media” for not taking “brands to task for this.”

Well, as a representative of that mainstream wine media, here’s my reply. Anybody who reads my reviews knows that I’m not a slave to prices. I give crummy scores to expensive wines all the time. I don’t have to overtly accuse a wine company of taking advantage of image; my scores are the ultimate accusation. But in general, I agree with Goldstein. He’s on the mark when he writes, “My sense is that, especially when it comes to hazy markets like wine, real human beings—within certain constraints — generally anchor themselves to market prices that are imposed upon them, and generally pay for things what they’re told those things are worth.” That’s true; always has been in the luxury department, and always will be. But it’s also good to let people know that, if they’re serious about not wanting to get ripped off, they need to take the time to educate themselves. A stupid consumer will be taken advantage of every time; an informed one is far more impervious to manipulation.


How come the French are trying to lower alcohol in wine while California’s raising it?

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Last month, a seminar was held in Mendoza, Argentina, at a trade fair. The seminar was sponsored by the OIV (International Organization of Vine and Wine), a Paris-based organization that studies scientific issues related to wine and grapes, and the French Institute for Vine and Wine (IFVV), an agency of the French government. One of the most important agenda items discussed at the seminar was dealcoholisation of wine. As OIV’s summary headlined, “Dealcoholisation at the top of the Euroviti 2009 agenda”. It went on to say “…a large part of the seminar was devoted to low alcohol wines.”

Why France is interested in low alcohol wines is complicated. Partly it’s due to rising national awareness of the problems of alcohol abuse. It’s also, one suspects, fueled by French resentment of California wines that are higher in alcohol than theirs, and have for some time been more commercially successful (for that very Parkeresque reason, the French contend). For all these reasons, the French are interested in manufacturing lower alcohol wines, and they’re developing techniques for doing so. To quote from the OIV summary, “…several technological advances have been made. These include partial dealcoholisation techniques for finished wines, a technique for reducing the sugar content of musts, a technique for reducing the fermentation yield using yeast, and a selection of grape varieties with low sugar content at maturity.” The conference didn’t stop at mere technique. “Socio-economic and sensory aspects were also addressed, particularly the impact of lower alcohol levels on the sensory experience of wines, as well as the degree to which consumers appreciate and accept low alcohol wines.”

Then we come to California, where our wines have been going in exactly the opposite direction: up, up and away in alcohol. “[S]ales of so-called ‘hot’ wines — those reaching at least 14 percent alcohol — have tripled in the past decade,” says this article, headlined “State’s wines get extra shot of alcohol,” and which was widely published in several media outlets two days ago. The article quoted Ehren Jordan, one of the hottest California winemakers (no pun intended), as saying, “If you want to make big wines, come to California, because it is hot as blazes here.” [His Turley Wine Cellars Zins are in the 17 percent range.]

I’m not reflexively anti-high alcohol. I rate and review high-alcohol wines almost everyday. Sometimes I love them and sometimes I don’t. It’s a question of balance. High alcohol is not an issue for me, probably because I’ve developed a California palate (not that that prevents me from appreciating a lower-alcohol wine of complexity and elegance). But I do have to say it’s surprising how research into lower-alcohol wines seems to have ground to a halt here in my state. If anybody’s working on it, it’s escaped my attention — and I get paid to know what’s happening.

Sure, we’ve had alcohol-free wines in the past. Sutter Home’s Fre comes to mind. (It’s been many years since I last tasted it, so I can only say I hope it’s better than it used to be). But it doesn’t seem like low- or no-alcohol wine is at the top of anyone’s agenda. How come U.C. Davis and Fresno State aren’t on this bigtime? Where is Wine Institute? How about the big wine companies that account for most of the nation’s sales? Are there garage entrepreneurs out there who are tinkering? I have a feeling a lot more wine could be sold if consumers who aren’t comfortable with alcohol were offered tasty alternatives.

The challenge to low- or no-alcohol wines is, of course, to preserve flavor once you’ve stripped out alcohol. No easy task. But as the French technological advances mentioned above suggest, through a combination of them it might be able to be done. If it’s doable, California can do it, and take the lead in an important new area, as the state does in so many others.

Dept. of Shameless Self-Promotion

Winebusiness.com just published their 2009 Most Visited Blog Postings and this little blog has 5 of the top 14, more than anyone else. All I can say is, it’s hard work coming up with stuff 5 days a week, but I’m glad people seem to like what I write.


The critic of the future? Not on Twitter. Not on Yelp. On-demand on your cell phone.

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The question is how we’re going to make our buying decisions (including wine) in the future, when (supposedly) the influence of super-experts will wane in favor of peer recommendations. The conventional wisdom — at least, as expressed by social media advocates and the people who are paid to promote them — is that social media will replace critics in a huge democratization of everything, in which everybody becomes a critic, all the time. The most obvious platform for such a revolution, it is said, is Twitter.

But wait. Is it really? Twitter’s limit (twimit?) is too much democracy too fast. Twitter is as if the ocean were funneled into your kitchen sink, one drop at a time through the faucet, until your entire house is 300 feet underwater. There is no unanimity of opinion (the way there is when a handful of critics raves about a movie). There is no continuity (because what was just expressed is washed away in micro-seconds by what is being said now, and now). There is no time to digest information that arrives in breakneck fashion. Moreover, the information that is incoming does not coincide with the timing of when you need that information in order to make a decision. It is, rather, like not having a hammer when there is a nail you wish to drive in or, conversely, like inconveniently being given a hammer when you neither need nor want one.

It’s for these reasons that I have expressed doubts about the potential of Twitter to transform (twansform?) our consumer culture. But don’t think that the Luddite in me believes that the Internet is incapable of such radical transformation. There is one such technology that shows the potential of driving sales as radically as any social media devotee could ever wish for, and that is Yelp.

What is Yelp? “A web-based community which allows users to share the experiences they’ve had world-wide,” in the words of this slideshow, although “world-wide” exaggerates Yelp’s real focus, which is city-wide (or local). If you’re on a business trip to Duluth and are looking for Thai food, Twitter isn’t likely to help (“the information that is incoming does not necessarily coincide with the timing of when you need that information”) but Yelp can. Yelp can steer you to “businesses within walking distance” no matter where or when you are, which is why Google is in discussions to buy it, according to last Saturday’s New York Times.

Is Yelp “social media”? By the widest definition, certainly. It started in San Francisco as an email recommendation service, so its peer-to-peer nature made it “social” while its email platform made it “media.” Today, of course, Yelp operates out of numerous U.S. cities, and you can browse by 22 categories (nightlife, religious organizations, beauty and spas), of which “wine” is not one; but the search engine lets you find reccos for wine bars, wineries, wine stores, wine clubs and the like, each of them accompanied by user comments that range from snarky to complimentary.

Still, when it comes to wine, there’s one thing Yelp doesn’t yet offer and probably never will, and that’s to give shoppers an overwhelmingly persuasive reason to buy one particular bottle over all the others. Even if Yelp enabled users to sound off on wine, all it would become is another, well, Twitter: a cacophony of dissonant opinion, with Johnny praising that Sauvignon Blanc while Susie accuses it of smelling like cat piss. Then too, Yelp’s revenue stream, which “lets businesses sponsor their search results” thus allowing them “to pay Yelp to display themselves higher on searches,” makes its objectivity suspect, no less so than Zagat’s reccos are similarly suspect (because the restaurant owner’s extended family and employees can say the most glowing things). So there’s no reason for a savvy shopper to believe anything qualitative or subjective on Yelp. He might find directions to that Thai restaurant in Duluth, but it could be the worst meal he ever had.

So what will replace the critics? You’re back in Duluth. You’ve opted out of the Thai restaurant, preferring instead to spring for French (you’re on a per diem from your company). Yelp leads you to Au Contraire, which boasts the town’s best Provençal. You pick up the wine list. It’s indecipherable; you barely recognize the appellations, much less the chateaux. You could ask the sommelier but, this being Duluth, Au Contraire doesn’t have one, just a waitron of doubtful apprehension. Fortunately, there is a solution. You take your iPhone, to which you’ve downloaded wine recommendation apps. (There are several, including the Wine Enthusiast Guide, which has sold 85,000 copies in the last 12 months). Suddenly you feel on surer footing; you no longer have to guess. You have highest of high-tech mobile platforms to make an informed wine-buying decision — where you are, when you need it, from a source you trust. The Death of Print? We can argue about that, but not, obviously, about the death of the critic, who lives on to give advice, with a digital voice over your cell phone.


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