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Some execs are “worried,” but really, there’s nothing to worry about wine’s future

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Nobody asked, but here’s my two cents on “top Golden State vintners [express] concern about the future of the $23.1 billion industry, especially among the discerning millennial market.”

That’s from Tuesday’s Santa Rosa Press Democrat, which reported on “a UC Davis survey of 26 senior executives” in the state, and found that “Everyone was a little bit worried.” Those execs included Joseph Gallo, from you know who, Jay Wright (Constellation) and my own boss, several levels up, Rick Tigner.

Seems the chief worry is “the intrusion into the wine category of spirits and craft beers,” according to the guy who conducted the survey, the well-known emeritus of Davis’s Graduate School of Management, Robert Smiley (who I had the pleasure of interviewing numerous times during my magazine days).

What do the execs base their impressions on? One of them said more “people are starting out with craft beers and then as dinner goes they switch over to wine.” I suppose this does “rob” the industry of that extra glass of sold wine. I like to start the evening out with a cold IPA, especially when the weather is warm, but that doesn’t stop me from consuming my share of wine. Still, I can see that if the theoretical consumer used to drink three glasses of wine at night, and is now drinking just two, with a bottle of beer making up the difference, that represents a 33% decrease in consumption.

Another exec wrote that he and his wife “have been having more cocktails than we’ve ever had in the past…”. That too, the exec speculated, “is maybe taking a little bit of the wine-by-the-glass business away.”

Then there’s the liquor store owner who said,“Ten years ago we were about 70 percent wine. Now we are down in the 60s.” Even with increased wine sales in the U.S., the execs are troubled by this nibbling away at the margins.

I have several reactions. One is that, after following this industry for more than 30 years, I’ve seen multiple times when winery execs were afraid that the sky was falling. It never did. Here in California, we’re coming off several boom production years (despite the drought) and quality has never been higher. Profits seem to be up everywhere at well-run companies, the mood is optimistic among employees, and with all the bashing California wine gets from certain quarters, it remains the best seller in America. Prices continue to rise, and where wineries are holding the line, they’re feeling pressure to increase—if only slightly—the cost of cases. That wouldn’t be happening if wineries felt truly threatened.

It is true that beer and spirits consumption is on the rise, but my feeling is that we’re becoming more of an alcohol-drinking country, so a rising tide lifts all boats. It’s also true, as I’ve insisted for years, that wine is fundamentally different from beer and spirits. Wine signifies aspiration. Beer never did; it signified only getting drunk. Neither did spirits signify anything, except a quick buzz at the end of the work day. Now, that is changing, because the craft beer and spirits producers have stolen from wine the concepts of lifestyle and aspiration that have always fueled wine. It is now possible to drink (as I do) great craft beer and spirits and appreciate them, not only for alcoholic punch, but for complexity, deliciousness and even (dare I say it?) intellectual interest. But I still believe aspiration goes along more with wine than any other drink. And America is an aspirational country.

What then for the wine industry? It can’t become complacent. It has to continue to appeal to its existing consumers, and not alienate them, as it learns how to reach out to younger Millennials. The messages and the products therefore must be extremely well-thought out and crafted with precision. But successful wine companies know how to do that. Believe me, they’re working overtime figuring this stuff out. If I were a betting man, which I’m not, I’d put my chips on the wine industry. Spirits seem to come and go in America; their fundamental problem is that they’re simply too strong for millions of people to drink on a regular basis, throughout the meal, for the rest of their lives. Beer always stays popular, but it’s craft beer that’s got all the excitement now, and craft breweries are small; they do not, I think, represent a threat to the wine industry in the long run, although some stores are giving them increased shelf space.

Wine, by contrast, has staying power. There’s a reason it’s been top beverage in the western world all these centuries, and is now becoming top beverage in the developing world, too. Human nature doesn’t change; wine is more consonant with human nature’s aspirational elements than either beer or spirits. It’s the Goldilocks of alcoholic beverages: not too strong, not too weak, just right. Am I an admitted booster? You bet. But that doesn’t make me wrong.


DTC, snobs and market segmentation: A personal view

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“Wines delivered to your door” has been the business theme of direct-to-consumer entrepreneurs since as long as I can remember.

I used to be a member of one of these subscription services, back in the early 1980s. I can’t remember the name (I’m sure someone out there will remind me), but they sold German wines that “arrived at your door” on a monthly basis. I didn’t continue, because I eventually reached the point where I preferred shopping for wine myself, in a store, especially if I could taste it or see a recommendation—and that is the point of this post.

There’s now another “delivered to your door” service, Club W, and while I wish them well, I don’t see how they overcome the challenges that led to failure of almost every one of these ventures.

They all promise the ease and convenience of having pre-selected wines that arrive at your door once a month. They all say the wines are “curated” by experts or, in this case, actually produced for Club W “by noteworthy winemakers who develop their ‘juice’ for Club W exclusively.” And they all make claims that they offer lower prices [even with shipping?] than traditional outlets.

That may well be true in Club W’s case. The claim that their “exclusive” winemakers “have great talent but may lack access to capital enough to get their wines made and into the market” certainly rings true. That is a common challenge for winemakers, especially younger ones, who may have access to interesting grapes, and are making interesting wines, but have no realistic way of getting them to far-flung customers.

What are those wines? I went to Club W’s website and tried it out. They ask you to answer a couple of (kind of silly) questions, and then, after you give them an email, Facebook or Twitter account, they “recommend” appropriate wines. For me, they suggested three brands I’ve never heard of: a Wonderful Wine Co. red blend from Paso Robles, a Black Market Cabernet-Petit Verdot blend from Livermore, and Casa de Lila Airén, a white wine from Spain. Beyond these three wines, there are others on the website I could buy. They all have attractive labels, and I wish I could go to a tasting and try them out, because at $13 a bottle, that’s pretty affordable. There’s also a “Curator’s Choice” menu for wines costing $14 and up.

Now, any and all of these might be wonderful wines. Or they might not. The problem is, even thought they’re just $13 a bottle, I don’t want to buy a pig in a poke: A wine I’m not familiar with. Under their “Tastemakers” dropdown menu they have the names and pictures of folks I guess are some of their winemakers: a fine-looking bunch of men and women, young and appealing. There’s also a cool recipes link. That’s all good.

So I have mixed feelings. A lot of thought obviously has gone into Club W. The website is really nice. But I just don’t see how they get around the fact that you can’t taste the wines before you buy, or even see what the critics have said, since they’re club exclusives and have never been professionally reviewed. (I do make an exception for winery wine clubs: people join them because they know and trust those wines, so even if they haven’t had the latest vintage, they possess plenty of prior evidence that they’re much more likely to enjoy the wine than not.)

Finally, although this isn’t Club W’s fault, I hate the way the Wall Street Journal portrayed Club W; their headline reads “Club W Raises $9.5 Million To Appeal to Wine Lovers, Not Snobs.” Can we please get over this “snobs vs. everybody else” nonsense? I mean, does Lettie Teague write for the “Snobs” in the WSJ? I have news for you: All wine writers write for the people who read them; all wineries produce wine for the people who buy them. There are indeed snobs in the world of wine, as there are in other arenas, but they are the exception to the rule, and to toss the word “snob” around so much is really misleading to young people, who may end up thinking that wine isn’t for them because they’re not snobs and don’t like being around snobs.

Instead, why can’t we talk about beginners, amateur wine lovers and experts? The experts aren’t “snobs,” they just have a lot of experience, nor are the beginners “idiots” because they have little experience. Some “beginners” will be “experts” someday; will that make them “snobs”? So really, anyone (writer, blogger, winery, ad agency) who throws around the snob word so insouciantly is just indulging in lazy language that moreover insults a significant number of wine lovers.

And then there are new wine companies targeting everybody: I got this blast email from one of them just this morming: I omit the winery’s name: “We here at ___ have created a wine that will capture thegrowing new generation of social media savvy, adventurous, health consciouswine drinkers as well as the seasoned, more experienced ones.” Talk about something for everyone! Beginners, Millennials, twitterers, greenies and granola munchers, Baby Boomers, old folks, and snobs. Sic semper, market segmentation!


Vintage 2014, and California declares war on small wineries

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With the first (light) rain of the season expected tomorrow (today, as you read this) north of the Golden Gate Bridge, I thought it was a good time to consider the 2014 vintage in California. So, as usual, I asked my loyal Facebook friends, who responded in force.

The story is this: short, compressed harvest. Record early, in many cases a month before normal. (This means that Autumn rains should not be a problem. If they actually come, which everyone is hoping they will.) A good crop, tonnage-wise, not a record, but then, it comes on the heels of two record-setting years (2012, 2013).

Quality? Overall, pretty good. The wines should be plump and approachable. Several people commented on soft acids, but that can be corrected in the winery. On the other hand, others remarked about high acidity, which also can be corrected, partially, through the malolactic fermentation. The exceptional drought has resulted in small berries but that should make for intense flavors.

Potential problems? Smoke taint tops the list. The Sierra Foothills have been hit heavy by wildfires. So has the extreme North Coast, but that smoke drifts down to the south. A second potential issue is that the warmth, combined with the drought, has resulted in fairly high sugars, especially in reds, but true phenolic ripeness lags a bit behind. I wouldn’t call this a statewide problem but it could result in some structural and balance problems. In a few cases, the crush rush could be a challenge for vintners running out of cellar space.

Several respondents commented on the inverted order of picking, with Cabernet coming in earlier than Pinot and some of the whites, a situation that has vintners scratching their heads, and which may be due to the drought.

Overall, the mood among vintners is positive. I’d call 2014 the third year in a row where there’s more cause to celebrate.

* * *

I must say I find this story disturbing. In brief, the State of California has fined a local winery for using volunteers. Seems the winery didn’t pay them wages, or worker’s comp, so Sacramento has cracked down with a fine so heavy, it looks like it will put this little family winery, in business since 1986, out of business.

The story was so preposterous, I called the winery to see if it’s true. I spoke with Westover Winery’s owner, Bill Smyth, who confirmed it. “The State is out of control,” he told me. What will happen now? “We’ll go out of business, 900 of our club members and thousands of customers will lose, and wineries all over California will be devastated.” Bill contacted his state assemblyman, who’s calling for hearings to “do something,” Bill says. But what exactly can be done isn’t clear.

What were the volunteers doing? “The same things as they do at all other wineries: work behind the bar, making wine,” Bill says. They’re friends of the winery who loved participating.

I’ve volunteered at wineries. I’ve punched down, cleaned tanks and worked in the vineyard, and enjoyed and learned from it. There’s something seriously wrong with this development. I hope things work out for Bill Smyth, and I hope that the California Legislature changes the law to allow volunteers to work at wineries. And how about Wine Institute? Guys, it’s time for you to use your clout in the State Capitol.


A tale of two bars: dives and tasting rooms

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1. Is the dive bar doomed?

I have two images in my head of the classic American dive bar. One is from the movies, where so many scenes of intrigue, drama and violence have occurred in them. I think of the Silver Bullet, the bar in Thelma and Louise, for example, with its country & western band, pool table and cowboy drifters chugging beer from the bottle. (You’d never order wine in such a place!)

The other image I have is from my own past. There used to be a place in San Francisco, South of Market, in Clementina Alley, which in the Eighties was not the yuppified haven it is now. It was called, for a variety of reasons, the Headquarters. On any given night you’d have drag queens and businessmen, Pacific Heights doyennes and dudes in leather chaps, hippies and hustlers and young straight couples out slumming, all playing pool or darts, or dancing on the postage stamp-sized dance floor to Blondie’s Rapture. I once brought Marilyn, who found it amusing, but, on emerging from the rest room, remarked that she should have brought her hip boots. That was the Diviest. Dive. Bar. Ever.

The dive bar played a role in America’s mythic development. The old saloons of the Wild West were dive bars, and so were the shadowy joints of film noir, if we go by Wikipedia’s definition: “Dive bars:disreputable, sinister, or even a detriment to the community.” Or, in Playboy’s view, “A church for down-and-outers and those who romanticize them, a rare place where high and low rub elbows—bums and poets, thieves and slumming celebrities. It’s a place that wears its history proudly.”

Yet last Friday’s San Francisco Chronicle headlined on its front page, “In boom time for booze joints, is it dive bar’s last call?” (The online version is headlined “Is it last call for dive bars in San Francisco?”) It seems that with rising rents and shifting demographics, dive bars are an endangered species, especially in neighborhoods like The Mission, SOMA and even to some extent the Tenderloin, that used to be their strongholds. I frankly doubt that the dive bar will go the way of the dodo bird, but the situation in San Francisco does bring to the fore a certain gentrification process that seems to be hitting many of our cities. Old-fashioned dives are turning into fancy little cocktail bars; bartenders are being replaced by tattooed “mixologists” for whom an appearance in The Tasting Panel is their Red Carpet; whiskey rocks has morphed into elaborate concoctions of flavored spirits, sweet liqueurs, bitters, candied fruits and sugar. Dashiell Hammett is turning in his grave. For that matter, so is Herb Caen.

* * *

2. My gig at K-J’s tasting room bar

When I gave a little talk to the Kendall-Jackson tasting room staff a while back, and I told them I’d never worked a tasting room, they very kindly invited me to work in theirs! I thought it was a splendid idea, so we made a date, and on Saturday I drove up and did a six-hour stint.

I was as nervous as an opening night understudy as I “went on” but the truth is, there was nothing to be scared of. I quickly learned that all you have to do is be yourself. And since I’m a pretty sociable guy, I had lots of great conversations, always including but not necessarily exclusively about wine.

The visitors are from all over the place, America as well as abroad, but the main thing they had in common was that they’re happy to be in wine country, at a winery they like, on a beautiful summer day. When you’re with happy people it rubs off. I met a Dad from Atlanta who was taking his daughter on a tour of California after she graduated college. I met a surgeon from U.C. San Francisco Medical Center and his wife and baby. I met a pair of chiropractors who told me about nervous system health. There were several folks from my home town of Oakland—even from my neighborhood. I met a family of Cuban-Americans from Miami who love wine and cigars. There was a woman from Canada and a young couple from Silicon Valley. And on and on. People have such amazing stories. Wine-wise, they all have different tastes, of course. Some only like sweeter wines, like Muscat Canelli. Some don’t like Pinot Noir, some shy away from Cabernet Sauvignon. G-S-M is new to almost all of them. Most are eager to learn, and of course one does one’s best to share information with them in a respectful manner. It being a Saturday, in this last gasp of summer, the tasting room was very crowded..

One thing I noticed is that sometimes people are shy about asking questions about wine. You don’t want to lecture them in a high-handed way; you want to respect their privacy and personal space. So it’s a balancing act: you infer when it’s appropriate to talk about the wine and, if so, to what degree. With most of the people, I found that even the reticent ones opened up once the conversation got flowing, and then their wine questions and observations came out. As I’ve always instinctively known, but have to constantly remind myself, there are no dumb questions about wine.

KJWEG


Tales from Content City, or How I Learned to be a Storyteller

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I seem to have established the reputation as someone who knows a thing or two about “content marketing.” We’ll get to a definition of that in a moment, but first, two examples of how that view has attached itself to me.

In the last two days, I’ve been invited to participate in events by two organizations: The Unified Wine & Grape Symposium wants me to moderate a panel called “Content is King: How to Craft and Share Stories that Stand Out.” The other one is from The Exchange, a Nomacorc effort that holds forums on various aspects of marketing, to speak at a Yountville event called “The Art of Storytelling: How wine brands can become both top of mind and center of heart.”

Storytelling. As words go, it’s a marketing neologism (it used to be two words), but the history and myth of storytelling is as old as humankind. I think of shamans telling epic tales of olden times to small groupings of people, clustered in a cave around a fire ten thousand years ago. Aesop was a storyteller; so were Virgil and Homer. After the written tradition took hold, storytelling often found its way onto the page and, eventually, onto the big and small screens. For how else are we to describe the films of (for instance) Steven Spielberg or T.V. programs like The Sopranos except as modern versions of the ancient practice of storytelling? But whether written, projected, broadcast or told, they’re all still stories.

Why we humans should like and need to hear stories has been the stuff of scholarly analysis. Children love fairy tales, which are a part of how our species passes on precious knowledge, often of a moral nature, through the generations. Why adults love stories is harder to define. They take us away from our daily woes and cares; they entertain, enchant and occasionally inform; and humans are, after all, curious and social creatures. From our positions in life we like learning about faraway places to which we may never go, in the physical form; but a good story is transportive. Stories appeal to the imagination, without which life would be unbearable.

* * *

Individuals have always sold things, and one imagines that stories always have accompanied that old practice. Perhaps the camel dealer in ancient Carthage had a story about a particular beast of burden known to go further, faster, on less water than others, and with a sweeter nature, too; that was his sales story. In the eighteenth century sprang the seeds of modern advertising, with billboards and hawkers informing us of the virtues of individual taverns and silversmiths. The twentieth century of course witnessed advertising grow into a planetary behemoth; in 2012, global advertising spending amounted to $542 billion U.S. dollars.

Since advertising is simply storytelling, there’s little wonder that wineries want their stories told, too. The assumption is that having a good story is good for sales. Why this should be so—what the precise connection is between a winery telling its story and the consumer buying its wine—is a little obscure. As with many other areas of soft science, there are some assumptions going on, mixed with anecdotal information. For example, companies pay huge amounts of money to advertise—tell their stories—on the Super Bowl, on the assumption that it will result in increased sales. The evidence is mixed: Some studies suggest that this simply isn’t the case. Yet Cheerios, Audi, Budweiser, Coca-Cola and Microsoft are some of the most successful companies of all time, and one thing they have in common is that they advertise on the Super Bowl. So even though the final proof of the success of any particular ad can’t be determined with the rigor of a mathematical equation, enough CEOs believe strongly enough in the ROI of advertising for them to devote considerable sums of money.

I did not set out to be an expert on storytelling (if in fact that’s what I am). I set out to be a wine writer and critic. Telling stories didn’t seem to be a part of my job, but looking back, in retrospect, that’s what I was doing from Day One. It’s just that the concept and terminology of telling stories didn’t invade the wine industry until comparatively recently. Yet when I wrote about the early history of Napa Valley, or how the Russian River was born, or how Bill Harlan came about being a winery owner, or how Boz Scaggs ended up with a winery on Mount Veeder, or how Francis Ford Coppola gambled his Godfather money on Rubicon, or how the Talleys of the Arroyo Grande Valley decided that winegrapes, not row crops, were the path to the future, or how Gary Pisoni let other wineries establish the fame of his vineyard before starting his own brand, or how Ehren Jordan cleared his land in the remote wilds of Fort Ross with his own hands—what are these besides stories, tales, adventures, myths, movies in the mind?

Which brings us to “content marketing.” I don’t know when this rather inelegant term arose. Probably fairly recently, I would think. It sounds modernish and scientifikky, but it really isn’t. It’s just one of those neologisms, like B2B and social media, that describes phenomena whose antecedents have long existed. And of course, like all other forms of marketing, there now exist scores of content-marketing consulting businesses making claims like “marketing is impossible without great content” and “content marketing is educating people so that they know, like, and trust you enough to do business with you.”

Well, this latter formulation is pretty spot-on. Wine companies want people to like and trust them, just as the producers of other commodities do. I like and trust Whole Foods, so I shop there even though they’re expensive. But I’ve come to absorb the Whole Foods story enough so that I’m willing to pay the premium for that positive experience (which is reinforced every time I shop there). Yet storytelling can exist at any price point, for any product.

Why storytelling should have become the huge 800 pound gorilla in the wine business it now has, is explainable by looking at the market in our 21st century. It’s a cliché, but true, that competition never has been fiercer. I hear the tales of road warriors out there on the blood-soaked sales trail, with hard-nosed buyers demanding $3 less per case and some competitor always willing to give it to them. It doesn’t matter if you’re Harlan or Fred Franzia or anybody inbetween, you’re looking for that extra edge. And that’s what stories give you.

Then too, stories never have been easier to tell. With the press of a “send” or “publish” button, a storyteller can send her tale across the entire face of the planet—and beyond, into the endless reaches of interstellar space. Given that ease, it’s a wonder why the wine industry, taken as a whole, was relatively slow to get into social media, blogging and all the rest. I always attributed that to the fact that winery owners tended to be older types who didn’t understand computers and were in fact intimidated by them. But they’re catching on now, with a vengeance (or they’re hiring young people to do it for them).

Where all this is going, I don’t know. Since I like writing and telling stories, it’s good for me. It can’t hurt a wine company to have its stories told. Telling its story, though, can be only one part of the marketing mix—but it’s a vital part, a lung or kidney, if you will, not the whole organism, but without which the being would have a hard time getting on.

And finally, this: if the storyteller doesn’t have credibility, neither does the story. In fact, the storyteller and the story are inextricably linked. This is why star athletes get fired from their pitchman gigs if they’re caught in scandals. Their stories haven’t changed; but their credibility and likeability have eroded to the point that they’re rendered functionally useless. As people turn against them, personally, they turn into the wrong messengers.

By the way, storytelling works when you’re tasting wine with others, too. I’ve long been a steadfast defender of tasting wine blind to get to its root worth—but there’s clearly much more to the winetasting experience than merely what happens in your mouth. Your conscious thinking is involved, too, which is why some winemakers will allow critics to taste only in their presence, at the winery. They want to get their story across. We will never, ever, all agree on the best way for critics to taste—openly, closed, single- or double-blind, at home, at a winery—but that is not to take away from the value of telling a story that’s real, credible and compelling.


The Empire Strikes Back: Laube Takes on IPOB

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Brother Laube comes out swinging against In Pursuit of Balance, in the Sept. 30 issue of Wine Spectator. (Sorry, no link. The Spectator has one of the best firewalls in the business. No subscribe, no read.) I’d been wondering how long it would take him. After all, Jim is famous for giving high scores to ripe, plush wines that can be high in alcohol—which is exactly what IPOB is against. You might even say that IPOB is the anti-Laube (and anti-Parker) establishment. So Jim had to declare himself sooner or later. He’s a nice, modest man who doesn’t pick fights, but even shy folks fight back, if attacked enough.

 

LAUBE

This isn’t to say that Jim is merely defending his own reputation. For there is something fundamentally irrational about IPOB. Jim implies this when he says that IPOB “admittedly [is] unable to collectively arrive at a definition of balance,” which is true enough: Ask around, and you’ll find that the majority of wine critics, sommeliers and merchants believe that the rationale of IPOB is for wines to be under 14% alcohol by volume. But I’ve heard co-founder Raj Parr say, at an IPOB event, that that’s not at all what IPOB is about. So what is it? IPOB’s Manifesto defines “balance” in rather boilerplate language. It doesn’t say anything about alcohol levels, only that alcohol should “coexist” alongside fruit, acidity and structure “in a manner such that should any one aspect overwhelm or be diminished, then the fundamental nature of the wine would be changed.” But there’s something tautological about that statement, not to mention deeply subjective. Which leads back to the question, What is IPOB really about?

Well, publicity, for sure. There’s some real marketing genius at work with IPOB, which in the few short years of its existence has become something of an insurrectionist force rather like, well, another 4-letter acronym group: ISIS. I Googled “In Pursuit of Balance” and came up with 155,000 hits, but that doesn’t even begin to measure the impact IPOB has had in sommelier circles from San Francisco to New York and beyond. IPOB has, in effect, gone viral.

Jim also referenced the “contentious relationship [that] has developed between somms and producers,” and I’m glad he did, for his voice carries weight. His message—to somms—is that if they don’t put certain wines on their lists just because of “a number” (alcohol percent), they do a disservice to their customers, who may prefer those kinds of wines. Somms, of course, are famous for not liking wine magazines and wine reviewers, who are threats to their existence: If all you need is a famous critic’s score, then somms would be out of a job. So joining forces with IPOB is, for a somm, a way of fighting back against a media elite they never much cared for anyway.

Be that as it may, this is not a quarrel among equals. For Wine Spectator’s senior columnist—one of the most powerful wine critics in America, if not the world—to throw down the gantlet to IPOB is a significant gesture. Jim has presented his case cogently and respectfully, and mostly without snark. (Well, “dim somms” wasn’t his invention, it was Helen Turley’s.) I think In Pursuit of Balance must reply to the rather serious charge that it fundamentally doesn’t know what it’s talking about.

READERS: You can comment here, or join the conversation at my Facebook page.


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