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	<title>STEVE HEIMOFF&#124; WINE BLOG &#187; Wine Industry</title>
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	<description>A blog about the world of wine</description>
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		<title>How much info is too much info for consumers?</title>
		<link>http://www.steveheimoff.com/index.php/2010/09/08/how-much-info-is-too-much-info-for-consumers/</link>
		<comments>http://www.steveheimoff.com/index.php/2010/09/08/how-much-info-is-too-much-info-for-consumers/#comments</comments>
		<pubDate>Wed, 08 Sep 2010 07:10:21 +0000</pubDate>
		<dc:creator>steve</dc:creator>
				<category><![CDATA[Sparkling wine]]></category>
		<category><![CDATA[Wine Industry]]></category>

		<guid isPermaLink="false">http://www.steveheimoff.com/?p=6765</guid>
		<description><![CDATA[
			
				
			
		
A sparkling wine house recently sent me a bunch of their new non-vintage sparkling wines for review, but they didn’t include the varietal composition or case production numbers, so I emailed back their P.R. manager to inquire.
I like to have this information so I can share it with readers, if I think it’s appropriate. For [...]]]></description>
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<p>A sparkling wine house recently sent me a bunch of their new non-vintage sparkling wines for review, but they didn’t include the varietal composition or case production numbers, so I emailed back their P.R. manager to inquire.</p>
<p>I like to have this information so I can share it with readers, if I think it’s appropriate. For example, a reader might like to know if a wine should be easy to find (with a case production of, say, 10,000), or whether it might be very hard. Readers might also enjoy understanding what’s in a blend, aside and apart from the actual score and review.</p>
<p>The P.R. person (who gave me permission to use her name and that of the winery, even though I subsequently decided not to) quickly sent me the information I asked for. But she also emailed: <em>“We do not normally give varietal percentages for sparkling wines as these are non-vintage products which include a percentage of reserve wines for consistency and complexity. I find that people looking for this information don&#8217;t readily understand that concept; they think of these percentages as they would for still wine blends.” </em></p>
<p>This puzzled me. On the one hand, I agreed that most people probably don’t understand the concept of how a non-vintage wine can be as good as a vintage wine, since all their lives they’ve been told by “experts” that “vintage” is the highest thing a wine can aspire to.</p>
<p>And I also understand that most people probably don’t know that a good non-vintage sparkling wine will have a certain percentage of expensive older “reserve” wines blended in, for richness and complexity.</p>
<p>However, I didn’t get the connection between that, and why the P.R. person didn’t like to reveal varietal percentages. So I emailed her again to ask.</p>
<p>This time, she called back, and we had a good conversation. She said, <em>“With sparkling wine, what I believe is that the percentages aren’t as important as how much aged wine goes into the blend, and how much lees, and that, as a non-vintage product, it’s blended for consistency.”</em> (She means “consistency of taste,” not consistency of varietal composition.)</p>
<p>I agreed with that, too. But as I thought about it, I replied, <em>“What you say is true. But I think people want more information these days, not less, in the name of transparency. Of course, with all that extra information, that gives them a greater responsibility to understand it appropriately and in context. Which in turn gives us educators more responsibility to explain these things to people.” </em></p>
<p>The P.R. person explained that she was telling her sales people the same thing she told me: she discourages them from revealing the varietal composition in their sparkling wines, because she doesn’t want them leaning on such crutch phrases as <em>“This wine has 40% Pinot Noir and 40% Chardonnay.”</em> I can see how a harried sales person might fall back on an easy sell like that. After all, Pinot Noir and Chardonnay are prestigious names that practically sell themselves. And next year, if the wine contains only 35% Pinot Noir, the buyer might think it wasn&#8217;t as good.</p>
<p>Beyond that, few people have heard of Pinot Meunier, which goes into several of the winery&#8217;s bubblies. That might cause some buyers to wonder why a grape they never heard of, and which they might easily think is inferior, is going into a high-end sparkling wine. Of course, Pinot Meunier is widely used in the greatest French Champagnes, but most people don&#8217;t know that, and even if you tell them, they might not believe it. As they say in politics, as soon as you have to explain yourself, you’ve lost the argument.</p>
<p>I do completely understand the P.R. person’s point of view. Selling wine is very different from writing about it. When you’re a writer, you want as much information as you can get, in order to have the fullest palate (as in the artist’s palate) to paint your word-picture. It&#8217;s all about freedom of information, and the more, the merrier.</p>
<p>When you’re a sales person, you want to say the things that will persuade your customer to buy your wine. Sometimes, success depends on, not what you say, but what you don&#8217;t say.</p>
<p>Still, when all’s said and done, I’m on the side of complete  information (although I&#8217;m not sure if I favor listing all wine&#8217;s ingredients on the label). If we &#8212; critics and wineries alike &#8212; don’t collaborate on educating consumers, who will? We can&#8217;t bemoan their ignorance, and then do nothing to correct it. I’ve made the same observation when it comes to wineries not putting the name of smaller appellations on their labels. This happens from Santa Ynez Valley to Arroyo Grande to Atlas Peak. <em>“Nobody’s ever heard of Santa Ynez Valley,”</em> people will tell me. “<em>But everyone’s heard of Santa Barbara County.”</em></p>
<p>I ask them back, <em>“How do you expect them to hear about Santa Ynez Valley when you won’t tell them about it?”</em></p>
<p><em>“That’s not our job, it’s yours,”</em> they frequently reply.</p>
<p>Well, yes, it is my job, as a wine writer and educator, to let people know where a wine really comes from. But it’s also the producer’s job, isn’t it?</p>
<p>All I’m saying is that we’re in a new age. People want to know the facts. I think they can be trusted with the facts. They don’t want information selectively spoon fed to them in tiny amounts because somebody thinks they can’t handle the truth. And besides, a smarter wine consumer is more likely to spend more money than an ill-informed one. I don&#8217;t have any studies that prove that, but I&#8217;ll bet you anything it&#8217;s true.</p>
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		<title>When it comes to wine, is it still a man’s world?</title>
		<link>http://www.steveheimoff.com/index.php/2010/08/26/when-it-comes-to-wine-is-it-still-a-man%e2%80%99s-world/</link>
		<comments>http://www.steveheimoff.com/index.php/2010/08/26/when-it-comes-to-wine-is-it-still-a-man%e2%80%99s-world/#comments</comments>
		<pubDate>Thu, 26 Aug 2010 14:40:01 +0000</pubDate>
		<dc:creator>steve</dc:creator>
				<category><![CDATA[Advertising]]></category>
		<category><![CDATA[Marketing]]></category>
		<category><![CDATA[Wine Industry]]></category>

		<guid isPermaLink="false">http://www.steveheimoff.com/?p=6693</guid>
		<description><![CDATA[
			
				
			
		
Does the wine industry do a lousy job marketing to women? That’s what this article in the Oregonian says.
“[T]he corporate wine world has got it wrong when it comes to marketing to women” is the conclusion, and the article offers plenty of supporting evidence, most of it anecdotal. There are all those dumb brand names [...]]]></description>
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<p>Does the wine industry do a lousy job marketing to women? That’s what <a href="http://www.oregonlive.com/foodday/index.ssf/2010/08/women_love_wine_but_not_how_it.html">this article in the Oregonian</a> says.</p>
<p><em>“[T]he corporate wine world has got it wrong when it comes to marketing to women”</em> is the conclusion, and the article offers plenty of supporting evidence, most of it anecdotal. There are all those dumb brand names that are supposed to appeal to women: Little Black Dress, <a href="http://blog.seattlepi.com/melodybiringer/archives/218675.asp">Girly Girl</a> wine, White Lie, and they might have mentioned <a href="http://www.google.com/products?hl=en&amp;q=bitch+wine&amp;um=1&amp;ie=UTF-8&amp;ei=bHZ2TL6wNYaesQP7rP2gDQ&amp;sa=X&amp;oi=product_result_group&amp;ct=title&amp;resnum=1&amp;ved=0CCsQrQQwAA">Bitch wine</a>, with its pretty in pink label.</p>
<p>The article also draws a sharp line between the way men and women shop for wine. Men, who are <em>“more likely to be posting on eRobertParker,”</em> will <em>“bring in their Blackberries and look up Spectator points.&#8221;</em> Women by contrast <em>“come in [the store] by themselves&#8230;Their attitude seems to be more, &#8216;This is what I really like and that&#8217;s why I want to drink it.&#8217; It&#8217;s really more about &#8216;me time&#8217; rather than getting another 95-point trophy to show your friends,”</em> says the owner of a Portland wine bar.</p>
<p>The article cites some female wine marketers who give advice on how to target women. <em>“Emphasize the ‘elegance’ of wine&#8230;Advertise the activity, not the object&#8230;How about showing women cooking together or sitting at their book club, socializing and enjoying wine&#8230;”.</em></p>
<p>I asked my Facebook friends what they think of the industry’s marketing to women, and the replies came in fast and furious. <em>“The wine industry does a crap job of marketing to everybody. Women just get an extra dose of crappy,”</em> said one, a man. A woman, who sounds like she had a lot of pent-up feelings, wrote, <em>“Overall the wine industry does a TERRIBLE time marketing to women. We are treated overall like second class citizens or as if we are attempting to enter an all male social club. I&#8217;ve actually had wine merchants say to me ‘Wow, not many women know what they are talking about when it comes to wine.’ Really? Really? Maybe if they would shut up and freaking listen to us, they would understand how ridiculous that statement is.”</em></p>
<p>Another woman summed it up: <em>“Women don&#8217;t buy on points, first of all (the ‘mine is bigger than yours’ doesn&#8217;t work). And women don&#8217;t like dumbed down wines (less calories!) or ridiculous targeted names (girly girl? give me a break). This is why tastings are important, because women seem to buy what they like and in order to do that, they must have a reference.&#8221;</em></p>
<p>I thought about the women I know who buy wine. They’re mostly strong and independent, and can hold their own with a bunch of yakkity guy wine snobs. But maybe that’s just the women in my life. It does sound like there’s a problem out there, especially considering that <a href="http://blog.timesunion.com/tablehopping/11147/women-drink-more-wine-than-men/">women drink most of the wine</a> consumed in the U.S.</p>
<p>If there is a certain anti-woman snobbism in fine wine shops, I can relate to how women experience it. I remember how awkward I used to feel when I went into Draper &amp; Esquin, an upscale shop in the Financial District. This was back in the Eighties, when I was getting into wine. I was ready to buy (not the most expensive bottles, but still), I was curious and had questions, and I longed for the clerks to make me feel welcome. They never did. Instead, they made me feel like I didn’t belong there. You can communicate a lot through body language, and theirs was basically: get lost. As a result, I never bought a single bottle at Draper &amp; Esquin, which eventually closed down. Gee, I wonder why.</p>
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		<title>No on HR 5034!</title>
		<link>http://www.steveheimoff.com/index.php/2010/06/14/no-on-hr-5034/</link>
		<comments>http://www.steveheimoff.com/index.php/2010/06/14/no-on-hr-5034/#comments</comments>
		<pubDate>Mon, 14 Jun 2010 07:10:27 +0000</pubDate>
		<dc:creator>steve</dc:creator>
				<category><![CDATA[Distributors]]></category>
		<category><![CDATA[News]]></category>
		<category><![CDATA[Opinion]]></category>
		<category><![CDATA[Uncategorized]]></category>
		<category><![CDATA[Wine Industry]]></category>

		<guid isPermaLink="false">http://www.steveheimoff.com/?p=6124</guid>
		<description><![CDATA[
			
				
			
		
I haven’t yet addressed the issue of HR 5034, now going through the U.S. House of Representatives, because it seemed complicated, and I didn’t want to take a position until I understood the details.
I wanted to try and see this from the distributors&#8217; point of view. There may be a case in favor of restrictions [...]]]></description>
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<p>I haven’t yet addressed the issue of HR 5034, now going through the U.S. House of Representatives, because it seemed complicated, and I didn’t want to take a position until I understood the details.</p>
<p>I wanted to try and see this from the distributors&#8217; point of view. There may be a case in favor of restrictions on alcohol sales of the kind they&#8217;re trying to push through in 5034. After all, alcohol isn&#8217;t your average consumer product, it&#8217;s a drug. If it gets into the wrong hands, it can cause lots of pain. So I didn&#8217;t want to have a kneejerk reaction and just say, <em>&#8220;All distributors are jerks,&#8221;</em> even though my initial instincts were strongly in favor of direct shipping. Sometimes, instinct needs to be tempered by informatio, and gathering information takes time. In the end, though, I&#8217;m coming out against 5034, because the arguments in favor of it are very weak, and they don&#8217;t stand up to intellectual scrutiny.</p>
<p>Most of what I knew about 5034 came via <strong>Tom Wark</strong>, <a href="http://fermentation.typepad.com/fermentation/2010/04/stop-hr-5034the-anticonsumer-wine-bill.html">who’s blogged extensively against it</a> at Fermentation. As Tom explained it to me, 5034 was a sort of end run around the Supreme Court’s famous 2005 <a href="http://en.wikipedia.org/wiki/Granholm_v._Heald">Granholm v. Heald decision</a>, in which SCOTUS said (I&#8217;m paraphrasing) states cannot prohibit wineries from other states from sending in their wines to consumers, if those same states allow their own wineries to disseminate wines. It was a basic issue of fairness, but also seemed to comply with the Commerce Clause (Article I, Section 8, Clause 3) of the U.S. Constitution, which gives the Congress &#8212; not the separate states &#8212; the power to regulate interstate shipping.</p>
<p>That was a good development, especially for smaller wineries, who had found themselves locked out of the distribution system. The smaller wineries wanted to be able to ship their wines directly to customers anywhere in the country, especially in the age of the Internet; and Granholm v. Heald seemed to give them that right (although when I interviewed <strong>Ken Starr</strong>, who successfully argued the case, he told me it would be many years before there was unfettered wine shipping across U.S. states, and boy, was he right).</p>
<p>Tom also explained to me that 5034, if enacted, <em>“would give states the ability to enact discriminatory bans on wine shipping,” </em>reasons too complicated to get into. Bottom line, according to Tom: <em>“The law encourages and will result in states&#8230; passing bans on direct shipping that cannot be challenged in court.”</em> (Disclosure: Tom is the paid executive director of the <a href="http://www.specialtywineretailers.org/">Specialty Wine Retailers Association</a>, which is very anti-5034, and so he’s not exactly unbiased. But I am.)</p>
<p>I always operate on the theory that you can figure out what’s up with an issue by seeing who’s for it and who’s against. So who’s in favor of 5034? Let’s start with the <a href="http://www.winebusiness.com/news/?go=getArticle&amp;dataid=73573">Wine &amp; Spirits Wholesalers of America</a>. In a press release last April, they <em>“encouraged members of Congress to support state-based regulation of alcohol and look beyond the mischaracterizations and misinformation being circulated”</em> by its opponents, like Wark and SWRA. They took a states-rights position &#8212; the kind that conservative red states always take when they want to be discriminatory &#8212; and said 5034 would <em>“place the burden in litigation where it should be: on the plaintiff challenging a state alcohol law.”</em> That’s pretty much the same flimsy argument that opponents of <a href="http://en.wikipedia.org/wiki/Brown_v._Board_of_Education">Brown v. Board of Education</a> used in the 1950s: the Federal government doesn’t have the right to desegregate public schools, and if a black family doesn’t like a school’s admission policy, they can sue that school board in court. If not for Brown v. Board, we&#8217;d still have segregated schools today.</p>
<p>WSWA also argued that 5034 doesn&#8217;t violate the Commerce Clause because it <em>&#8220;does not expand state legislative or regulatory authority into what is currently and appropriately federal jurisdiction.</em>&#8221; This seems to me to be disingenuous, an Alice-through-the-looking-glass playing with words. WSWA says that the Federal government, through agencies like TTB, FTC and FDA, remains free to regulate alcohol <em>&#8220;in such areas as labeling, advertising and food safety.&#8221;</em> Okay, but if the Feds can regulate in those areas, why can&#8217;t they regulate interstate shipping? Totally bogus argument.</p>
<p>Finally, WSWA asserts 5034 <em>&#8220;does not favor any segment or tier of the industry.&#8221;</em> Puh-leeze! Everybody knows 5034 favors wholesalers. Who&#8217;s kidding whom?</p>
<p>Who else is in favor of 5034? Well, there’s the <a href="http://www.nbwa.org/news/press-releases/nbwa-applauds-introduction-of-legislation-to-reaffirm-states-authority-to-regulate-alcohol">National Beer Wholesalers Association</a> (NBWA), whose position is a carbon copy of WSWA’s (and for similar reasons). Then there are 5034’s backers in the Congress, about 100 of them. There’s ample evidence that WSWA and NBWA have contributed boatloads of money to their supporters, as for instance <a href="http://www.winespectator.com/webfeature/show/id/42823">here</a> and <a href="http://www.wineberserkers.com/viewtopic.php?f=1&amp;t=20864&amp;p=300987">here</a> and, especially, <a href="http://webcache.googleusercontent.com/search?q=cache:h8o-V0oav9gJ:www.wswa.org/userfiles/2008%2520PAC%2520Annual%2520Report%281%29.pdf+delahunt+wswa+contributions&amp;cd=4&amp;hl=en&amp;ct=clnk&amp;gl=us">here</a>, where you can draw direct lines between WSWA’s main contributors (all the big distributors) and individual congressmen who are beneficiaries of its largesse (and by the way, this isn’t a partisan issue: Democrats and Republicans alike take campaign donations from WSWA and NBWA).</p>
<p>So what we have is a collection of odd bedfellows lined up in favor of 5034: wholesalers, distributors, and the politicians who take their money to run for election or re-election.</p>
<p>Now, who’s against 5034? Like I said, there’s Tom Wark and his Specialty Wine Retailers Association. No surprise there, since their members are smaller wineries and merchants, and their slogan is “wine without borders.” Also against the bill is <a href="http://www.freethegrapes.org/index.php?q=content/media_updates">Free the Grapes!</a>, which is a leading group in favor of direct interstate shipping of wine; various state legislatures (including the New Jersey Senate, where my cousin,<a href="http://www.uncorknj.com/"> Sen. Loretta Weinberg, voted</a> to open up interstate wine shipping); <a href="http://docs.google.com/viewer?a=v&amp;q=cache:HgSRQ6zaWV0J:www.wineinstitute.org/files/Wine%2520Institute-WineAmerica%2520Opposition%2520Letter%2520to%2520H.R.%25205034.pdf+wine+institute+5034&amp;hl=en&amp;gl=us&amp;pid=bl&amp;srcid=ADGEESjcm3yqs2d4XlU49ZMQcDJS6BVBTy4d2CJr4GldRiff7a1JncEwrDjQBfnrxQPEFCWbMmPTix1zdVd71KQ1U-XEWndWz8fu90wPUXC_R9O77HmH2f4dlt435g8nNkvptEKA1-XY&amp;sig=AHIEtbS6vwHcJGBgd3GxgnOdd3JAkHW6GQ">the Wine Institute</a>; <a href="http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&amp;newsId=20100420007070&amp;newsLang=en">Family Winemakers of California</a>, and many congressmen from wine-producing districts, including Rep. Mike Thompson, who represents the North Coast.</p>
<p>For me, the good guys are against 5034 and are in favor of the free, unfettered shipment of alcohol, to and from adults, throughout the 50 states. Isn&#8217;t that as it should be in America &#8212; isn&#8217;t that as Thomas Jefferson intended? I don’t want to say those in favor of 5034 are bad guys, because I&#8217;m sure they’re good people who are simply trying to protect their economic interests, same as all of us do. But I’m siding with those trying to defeat 5034. It’s a bad bill. Please call your Congressional representative and urge him or her to oppose it.</p>
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		<title>A call for more transparency in where wine comes from</title>
		<link>http://www.steveheimoff.com/index.php/2010/06/03/a-call-for-more-transparency-in-where-wine-comes-from/</link>
		<comments>http://www.steveheimoff.com/index.php/2010/06/03/a-call-for-more-transparency-in-where-wine-comes-from/#comments</comments>
		<pubDate>Thu, 03 Jun 2010 07:10:56 +0000</pubDate>
		<dc:creator>steve</dc:creator>
				<category><![CDATA[Opinion]]></category>
		<category><![CDATA[Wine Industry]]></category>

		<guid isPermaLink="false">http://www.steveheimoff.com/?p=6035</guid>
		<description><![CDATA[
			
				
			
		
Two things that happened lately have made me think about how the law as its currently written allows wine brands to cloak themselves in absolute secrecy concerning where the stuff in the bottle actually comes from.
Over the weekend I went down to my local Cost Plus, as I sometimes do, to hang out in the [...]]]></description>
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<p>Two things that happened lately have made me think about how the law as its currently written allows wine brands to cloak themselves in absolute secrecy concerning where the stuff in the bottle actually comes from.</p>
<p>Over the weekend I went down to my local Cost Plus, as I sometimes do, to hang out in the wine section and talk to the guy who works there. He was explaining why some bottles are priced at $X.97, where others are $X.98 or $X.99. The .97s are closeouts. The .99s are the regular price (reminded me of when Don Draper said, on Mad Men, “Whoever invented .99 cents was a genius!”), and then there are the .98s. Those are the most interesting category; they’re mainly wines that Cost Plus bought, out there on the open market, then labeled with their own made-up brands.</p>
<p>First off, you’d never know that these are Cost Plus brands unless you asked; each brand has a different name and a different label design (although all the labels are similar enough in style to suggest they were designed by the same hand). Secondly, you’ll never know who actually made the wine, or where the grapes were grown. Take that Napa Valley Cabernet Sauvignon. Was it made by a well-known Napa winery that couldn’t sell it at their usual price because of the Recession? Lots of wineries don’t want to reduce their prices, because if the economy ever rebounds, consumers who are paying $12.99 will resist paying the $40 the wine cost before the Recession. So these wineries will sell off their wines to an outfit like Cost Plus. Sometimes (the clerk told me), the wine is in the bottle. All Cost Plus has to do is remove the old label and put on the new one.</p>
<p>The consumer is often the beneficiary of this, of course, since she stands to get a $40 bottle for $12.99. But wouldn’t it be nice to know who actually made the wine and where precisely it’s from? I think so. But as far as I know, there’s no law, federal or California, that mandates such transparency. There should be.</p>
<p>The other thing that happened was that I got an email press release from a new brand, which I won’t identify because there’s no need to. Suffice it to say it’s a Napa Valley Cabernet Sauvignon. After touting the wine (which I have not had), the press release said, “There are several intriguing mysteries about the wine&#8212;one of which is that the winemaker’s name will not be disclosed. In addition, the exact vineyard sources for the Cabernet grapes will not be divulged.”</p>
<p>Well, I emailed the people back and asked why they couldn’t divulge the winemaker or source, and the answer was: confidentiality agreements. Whoever made the wine evidently had a say in whether his or her name could be associated with it. Ditto for whoever owned the grapes.</p>
<p>I can understand why a winemaker or winery would not want it to be known that they’re basically dumping unsellable wine at bargain basement prices. On the other hand, I think consumers have a right to know where their wine comes from and who made it. Maybe most consumers don’t care. All they want is a tasty glass of wine at a good price. But surely, some consumers desire to know this information. I do. Do you?</p>
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		<title>Dead cat bounce for wineries?</title>
		<link>http://www.steveheimoff.com/index.php/2010/05/25/dead-cat-bounce-for-wineries/</link>
		<comments>http://www.steveheimoff.com/index.php/2010/05/25/dead-cat-bounce-for-wineries/#comments</comments>
		<pubDate>Tue, 25 May 2010 07:10:05 +0000</pubDate>
		<dc:creator>steve</dc:creator>
				<category><![CDATA[Marketing]]></category>
		<category><![CDATA[Wine Industry]]></category>

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Just when we thought the U.S. had rounded the corner of the recession, there are renewed fears of the notorious “double dip” (or, more colorfully, the “dead cat bounce”) of the economy’s performance. The Dow Jones stock index has fallen more than 1,000 points since April, triggering a new mood of gloom. Financial problems in [...]]]></description>
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<p>Just when we thought the U.S. had rounded the corner of the recession, there are renewed fears of the notorious “double dip” (or, more colorfully, the “dead cat bounce”) of the economy’s performance. The Dow Jones stock index has fallen more than 1,000 points since April, triggering a new mood of gloom. Financial problems in Europe seem to be the proximate cause of the problem. Not being an economist, I’m not in a position to analyze what’s going on; not even the economists agree on the causes. But “recovery,” whatever that is, does seem agonizingly slow. Not only is the stock market in trouble, unemployment remains stubbornly high. Banks still aren’t lending; people still aren’t spending. It all adds up to what Thomas Friedman, <a href="http://www.pressdemocrat.com/article/20100523/OPINION/100529831/1042?p=2&amp;tc=pg">in the New York Times this past weekend</a>, calls <em>“the new pessimism”</em> in America.</p>
<p>Friedman casts his gaze over the economic landscape and perceives some pretty dire things. Consumer prices continue to fall, leading to the prospects of deflation. I used to think deflation was a pretty cool thing, as it would make the things I want more affordable. But no; Friedman calls deflation <em>“really bad news”</em> because it <em>“tends to perpetuate an economic slump, because it encourages people to hoard cash rather than spend, which keeps the economy depressed, which leads to more deflation.”</em></p>
<p>This isn’t particularly good news for the wine industry. I sometimes look back over the last twenty years here in California in total wonderment. How have these thousands of wineries all have managed to survive? Somebody should write a book about it. The top-of-the-head answer is that the 1990s was a time of such economic boom that almost any winery owner, no matter how lame, could make money simply by riding the expanding economic bubble.</p>
<p>But just behind the shiny surface of that bubble, there always lurked a troubling spectre: debt. Winery owners are no different from the rest of us. They have debt; the only way they can pay their bills is to sell product at a profit. So what happens when <em>“people&#8230;hoard cash rather than spend”?</em></p>
<p>Krugman himself doesn’t have an answer. He suggests he’s in favor of Stimulus II, but acknowledges it<em> “would have no chance of getting through a Congress that has been spooked by the deficit hawks.”</em> Short of that, all he can come up with is <em>“hope [which] is not a plan.”</em></p>
<p>I doubt if many California wineries have a plan, either, to ride out the next several years, which Friedman says could resemble Japan’s infamous “Lost Decade” of the 1990s. Many are hoping that the Internet and direct shipping will come to their rescue, but of course, it won’t. Others play the old game of reshuffling their sales and marketing teams, but that increasingly seems like re-arranging the deck chairs on the Titanic. Some strike off in the direction of new varieties they hope will excite consumers: Nebbiolo, Trebbiano, Pinotage. Others place their hopes on labels that jump off the shelf, or cute proprietary names. Winemakers travel more than they used to, schlepping from city to city to meet with clients, trying to persuade them to buy a case or two. If it’s Wednesday, we must be in Cleveland! P.R. agents court writers like Romeo crooning to Juliet on her balcony. Stores try to figure out how to position wines so they sell, what names to call the aisles, what to put in the window to lure shoppers in. The big wine companies are bringing in experts from other industries with a proven track record of sales. Everybody’s trying to game the market. It’s crazy.</p>
<p>It’s tempting to predict that, if anyone survives, it will be the big wine companies like Gallo, Bronco and Constellation, because in the past, they always have. That’s probably true, especially with private companies, which don’t have to satisfy shareholders and thus can steer a more controlled course. But we’ve seen big companies hit the ropes. (Hello, Foster’s! And does anyone remember Heublein?) Then I think of the thousands of small family wineries, from Temecula to Placerville, Salinas Valley to Mendocino, Lodi to Lompoc, and I really have to wonder if they’re going to make it through America’s Lost Decade. I hate to sound gloomy, but I am. There are also lots and lots of really nice wines from foreign countries that cost much less than even mediocre California wines that tend to be high-priced. Why would anybody pay more for less? There&#8217;s nothing deader than a dead cat bounce.</p>
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