Yesterday’s big new from ShipCompliant that direct to consumer wine sales grew four times faster than sales from traditional wine retailers is quite stunning. If you project the rate of increase out into the future, you can easily foresee a time when the DTC sales line crosses the retail sales line, eclipsing it. And the sooner the pesky states that currently do not allow direct shipping come around and enter the 21st century, the faster DTC will become the default mechanism by which consumers buy most of their wine. I’m talking to you, Alabama, Delaware, Kentucky, Mississippi, Oklahoma, Pennsylvania, and Utah. There’s hope they may actually come around: Last year, South Dakota finally allowed direct shipping of wine.
Will DTC really be the next big thing? I mean, everybody talks about it as the Holy Grail, but let’s face it, there are difficulties. For one, consumers have to pay the added cost of shipping in DTC, which they may be reluctant to do on all but expensive bottles—the kinds of wines they buy for gifts, to impress somebody, to cellar, and other special purposes. They’re not going to buy, say, a $10 bottle direct from the winery, then pay for freight. As Forbes Magazine recently pointed out, “Shipping is the top deterrent to buying wine online.”
Another reason why DTC may prove to have its limits is because consumers seem to enjoy the browsing experience that off-premise stores allow them. I do. I like to look at bottles, pick them up, read the front and back labels, talk to the floor staff (at least, in a decent wine store) and maybe even check out a few reviews on my smart phone if I have the time.
Leaving those concerns aside, the big shipping companies are eagerly trying to grab their fair share of what they perceive as a booming DTC market. GSO hopes to compete with FedEx and UPS by pitching itself as the DTC wine shipper of choice; they just presented their Select Wine Delivery Service at the Unified Wine & Grape Symposium.
At any rate, wine stores don’t have much to fear from DTC at this moment, but they’re going to have to figure out ways to make themselves more relevant over the coming years. One way to do it is for the wine store to become the direct shipper, not the winery itself. This is the position taken by the National Association of Wine Retailers.
But is “retailer direct shipping” the same as “winery direct shipping”? In both, the consumer ends up with the same bottle of wine. But wine consumers who buy direct from wineries tend to have a greater emotional attachment to the wine than they do if they buy from stores, and this is why the Holiest of the Holy Grail for wineries is to form a personal relationship with the customer, a relationship they hope will last for a long time.
Anyhow, it’s great to witness this growth of DTC. It’s too bad that, for so long, the anti-alcohol, anti-common sense forces in this country have had so much sway over what Americans can drink and how they can buy it. That is so unconstitutional, so contrary to our value, so inimical to the free market system, it deserves to be buried once and for all.
I’m largely in agreement with Fred Franzia when he defends the Central Valley and “California”-appellated wine, as he did the other day when he presented the keynote address at the Unified Wine & Grape Symposium.
Fred’s affection for the Central Valley comes naturally: he runs Bronco Wine Co., whose scores of brands, including Two Buck Chuck, are based on Central Valley fruit. Fred’s point, if I understand it correctly, seems premised on two things, one explicit, the other implicit.
The explicit point is that wine production in the Central Valley could be greatly increased, offering consumers greater opportunities to buy inexpensive wine, as well as for restaurants to sell bottles for $10 each. This latter point is something Fred’s long called for.
As a diner myself, I wouldn’t mind $10 bottles of wine in restaurants, where a bottle can frequently exceed the cost of the food itself. Indeed, everyone I know who isn’t rich—and that’s most people I know—sees expensive wine as the single biggest hassle of eating out. So I’m all onboard the Fred Franzia train on this one.
Fred’s implicit point, or so it seems to me knowing the man a little and reading between the lines, is that there long has existed a certain disrespect and dismissiveness towards California-appellated wine on the part of the establishment: sommeliers, high-end restaurateurs, certain wine critics and, through trickle-down, some consumers. According to this crowd—and I think Fred is sensitive to their attitudes—if the grapes come from the Central Valley then they wouldn’t touch it with a ten foot pole.
Actually, the way I see the Central Valley is as California’s Midi. And there’s nothing wrong with that. The Midi is the vast, sprawling region of southern France that produces oceans of vin de pays wine that is inexpensive and quaffable. These are the kinds of wines I personally drank and immensely enjoyed in the 1980s, when I was a broke grad student living in San Francisco. And such wines can be, as Hugh Johnson reminds us, “charming trinkets.”
I’ve long given Fred and Bronco immense credit for allowing Americans the opportunity to drink affordable wines on an everyday basis. I, personally, never turned up my critic’s nose at his brands, to which I gave dozens of “Best Buys” over my years at Wine Enthusiast. So I think Fred has the right to feel a bit of righteous indignation at what he perceives are the snubs and slams he sometimes endures.
I do differ, though, with his statement, reported in the Modesto Bee, that “’California’ should be the one and only appellation for our home-grown, best-quality wines.” That’s stretching things a bit. The best table wines in California come from the coast, where weather conditions are more compatible with the nobler varieties of vitis vinifera. Winemakers back to the Greeks and Romans understood the importance of proper terroir, and so too did the Holy Roman Emperors and the monks who planted the great vineyards of Europe. When Charlemagne noticed the snow melting early on a certain slope in Corton and ordered grapes to be planted there, he acknowledged how vital mini-terroir conditions were for wine quality. When the Duke of Burgundy banished the “very evil and very disloyal” Gamay grape from growing in his kingdom of Burgundy, he too testified to aspirations for a higher union of grape variety and local terroir. And when Andre Tchelistcheff turned to the Carneros, not Napa Valley, to grow Pinot Noir, it was because The Maestro understood that Pinot Noir had to be planted in what he called “my North Pole,” Carneros, “because it’s cooler” (a realization Louis Martini also experienced).
I just think that not all wines are created equal, and that the Central Valley does not produce wines of the quality of the coast. But I recognize that reasonable people can disagree. Still, the fact is that Fred Franzia has a knack for saying things that drive the elitists crazy, and I like him for that. The Modesto Bee article reported that, at the conclusion of his keynote, “The speech drew a standing ovation…”. I suspect that was because, no matter what you say or think about Fred Franzia, the industry understands he’s been good for it. Very good.
King Estate 2006 Block 4D Clone 777 Pinot Noir. Originally $75. The appellation on the label is “Oregon.” Wine Enthusiast (I think it was Paul Gregutt) gave it 92 points back in 2009; oddly, they said nothing about its ageability. Spectator gave it only 89 points and recommended drinking it only through 2014. I think Enthusiast was more accurate about the score. It really is a very fine wine; I’d rate it 94 if I were scoring it now. Here we are in 2016 and it’s rocking with a good future. Loads of blackberry, boysenberry, cassis, and such nice, sweet toasty oak and vanilla. Great tannin structure, good acidity, lowish alcohol (13.5%) and a rich earthiness, like Portobello mushrooms and an umami tang, like prosciutto. At nine years of age, a wonderful, rewarding, silky wine that offers plenty of pleasure. Just what you want in a fine West Coast Pinot Noir, and I think that earthiness signals its Oregon origin.
And now to some controversy. This post raises so many issues that it’s impossible to address them all in a single post, but let me just say that I sympathize with the sentiment expressed by the author, Maxwell Leer, who says he’s a sommelier. To some extent it’s a rant against the 1 percent but, hey, that’s fine with me: Maxwell had me when he compared Cristal to Prosecco and said “you can…be fucking happy, too” with the cheaper wine.
Now, Maxwell’s position is something that every wine writer has expressed since, well, forever. I know that the meme of post-Prohibition wine writers was “Wine snobs make wine sound too fussy” and probably there was someone running around ancient Rome saying the same thing. Every generation has to discover the same truths, so I cut Maxwell some slack. Still, that doesn’t take away from the force of Maxwell’s argument, which he expresses strongly and well.
It’s funny when he writes about pouring Kistler Chardonnay into a glass that was rinsed with bourbon. I bet that’s a seriously tasty sip! Maxwell seems to be saying, don’t worship the Kistler itself and think you have to experience it in all the profundity that has been lavished on it by wine critics—which is exactly what you’d think from reading the critics. You want to have a few drops of bourbon in there? Fine! (Hey makes you think of an American Kir, doesn’t it?) What wine is about, as Maxwell writes, is “love, peace, love, unity, and respect.” As I pointed out in my post the other day about Premier Cru’s troubles, wine is not about snobbery or elitism or the fear that just because you can’t afford Petrus you’re missing out on the best. You’re not! Maxwell understands that and it’s a message we have to continue to get across. My generation did a horrible job of it, despite our best intentions. We perpetuated the myth of “cult wines” and while I do have some issues with Maxwell’s suggestion of “simplifying” wine, he’s onto something, especially for younger drinkers. He’s right when he says that “Wine culture needs to evolve like everything else.” That doesn’t mean we have to throw the baby out with the bathwater. It doesn’t mean that you can’t trust anyone over thirty. It does mean that, as Maxwell says, “we have groups of people every day who come into the restaurant and literally say, ‘OK, show us what you got.’” They want interesting wines, wines with stories, wines that drink well with the foods they like. They don’t want to spend a fortune on them, and the good news is that they don’t have to.
We never saw this level of wine scam before. Now it’s Premier Cru, which had been a very well respected wine shop in Berkeley until their recent collapse. Coming on the heels of the Kurniawan scandal and others, Premier Cru’s problems raise a troubling question: Why so many of these wine Ponzi schemes and frauds?
My answer: The greed of some consumers, who see wine as a commodity investment.
Premier Cru was the go-to store in the East Bay for collectors who wanted that extra-special bottle. But, as so many of them are now learning, Premier Cru appears to have been selling wines they didn’t have, or selling the same wine twice, stalling buyers off who weren’t getting wines they had already paid for, and eventually ending up with “more than $70 million in unpaid debts.”
How the heck does a wine store achieve that dubious distinction? Simple: When it takes advantage of credulous customers who want to own trophy wines nobody else can get and think they have an inside track on getting them.
The regrettable seeds for this were a long time coming. I can speak only from my perspective of nearly 40 years watching the San Francisco wine market, of course, but in many respects the S.F. Bay Area has been the epicenter for this remarkable era of show-off wines. Even when I started, there was a cadre of collectors who wouldn’t touch anything but First Growths and Grand Crus. At first I thought it was because they were men of discernment and refined tastes, but I soon learned that that wasn’t it. They were label drinkers, pure and simple. I doubt if one in ten of them knew what he was talking about. But what they did know was that having a vertical of Mouton-Rothschild gave them a certain cachet in their crowd, and that’s the only thing that meant anything to them.
They weren’t bad people, just wine likers (I hesitate to say wine lovers) who’d gone astray. Something about the rarity and scarcity of these collectibles made them crazy with lust. These were the sorts of people for whom Premier Cru was a sort of nirvana. Whenever I was there—looking for some under-$20 value in Burgundy or Cabernet—I’d see them conferring with the floor staff over some missing vintage in their collection they just had to fill. They were the same sort of people I used to see at the old Draper & Esquin on Montgomery Street in the FiDi, back in the day. Snooty snobs—“snoo-snos,” I called them. I thought that was an unhealthy development in the world of wine, at least the world I inhabited, which was of people who truly loved and cared about wine, and had a curiosity about it that drove them to try new things from new places.
Sadly, this distorted psychological phenomenon concerning wine got worse during the Reagan years, when fast and easy money gave MBAs the ability to collect Bordeaux and Burgundy and cult Cabernets before their thirtieth birthdays. It seemed to level off in the 1990s, why I don’t know, but then, with the burst of wealth in San Francisco in the 21st century, it has returned, with a vengeance. People are not content simply to drink good, interesting wine anymore. They want the trophies, the bragging rights wines, the Fabergé eggs, and they’re willing to pay whatever it takes to possess them.
Well, that’s what happens when you have a critical mass of credulous buyers: unscrupulous dealers are perfectly happy to take advantage of the situation. The bubble gets bigger and bigger, until poof! It bursts, and the poor souls who entrusted these crooked businessmen get holding the bag.
Running a reputable wine shop is a wonderful career. Most wine shops are reputable. There are many I’ve been in that do a fabulous job. Unfortunately, this current atmosphere of show-off seems to be fostering some bad apples. But maybe, with the arrests, detentions and lawsuits ensnaring these Ponzi wine dealers, we’ll see less of this sort of thing going forward. I do hope so. I hope that everybody will come to see that wine isn’t an artifact for collection, much less investment, like a stock certificate. What a horrible way to see this noble, divine beverage, as the liquid equivalent of loot, to be bought and traded like pork bellies, or even worse: as the garish equivalent of a gigantic diamond pinky ring.
If you’ve been reading this blog for any length of time, you know I’m interested to the point of obsession with industry issues, such as who’s buying wine, how it’s doing with Millennials, price points and so on. One thing I’ve been keeping my eye on is restaurants. Everybody loves to eat out, but what are they drinking with their food?
The conventional wisdom of the past few years is that wine is losing ground to craft beer and cocktails. I’ve tended to agree: Beer and mixed drinks are getting a lot of love from the media, with all those tattooed mixologists and craft brewers grabbing the headlines (and spotlights; layout editors know exactly who looks good on the page or screen). Wine by contrast seems stodgy. It’s not, of course, and never has been, and remains my favorite; but for some reason, wine seems less hip lately than beer and mixed drinks.
Forbes has written an interesting article along these lines, citing Paul Franson, of Wines & Vines, that “Millennials [have] gravitated toward cocktails and craft beer,” and moreover, that when Millennials do drink wine in restaurants, the wines tend to be those that are “hot,” which I take to mean things like Muscat or orange wine, which have no lasting value at all.
This squares with my observations of my Millennial friends in Oakland, a very hip town, on the cutting edge of most cultural things, and thus an interesting case study. What happens in Oakland, from hip hop to fashion in clothing not to mention politics, often leapfrogs across the country.
And the truth is, my friends in their 20s and 30s like to drink; in fact they drink a lot, bless their little souls, but what they’re not drinking is wine. They are, as Forbes and Franson point out, downing cocktails and beer.
Why? The answer is important, but not simple. On one level they see wine as the alcoholic beverage of their parents if not their grandparents. Why is that? Because beer and cocktails don’t make a big deal about their intellectual components, the way wine does with notions of terroir, etc. Another is that beer and cocktails don’t pretend to be about anything else but getting buzzed. Wine tries to hide the impact of its alcohol. It always has, especially at the top levels, where it portrays itself as offering an experience that is intellectual, sensual, hedonistic, imaginative, fabulous—anything and everything but a liquid that makes you high. Wine seems almost embarrassed by its alcoholic content, which is why this entire argument against alcohol levels has arisen. Is vodka embarrassed by alcohol? Is tequila? Are IPAs? Of course not. But wine likes to pretend it has no alcohol.
I don’t know how we got into this situation. Possibly it’s because the intellectual conversation about wine got started a lot earlier than our conversations about beer and spirits. Between the Bible, the medieval references to wine, Thomas Jefferson and so on, wine has assumed an august place in the culture. Nobody was praising beer and spirits two and three hundred years ago. Maybe, back then, they were ashamed of wine’s alcoholic effects on the brain and body, so they avoided writing about them. We have inherited that tradition today.
I’m not suggesting we should brag about how high wine gets you. But the fact that beer and spirits tend to be grabbing Millennial attention strongly suggests a new approach to how we portray wine. We need to make wine cooler, sexier, and more relevant to a generation that instinctively recoils against canned messages and cheap advertising slogans. There is, in its essence, no reason why wine is less attractive than beer and spirits. But the way we’ve been communicating about wine hasn’t been enough to convince Millennials that it’s something they should feel cool about ordering in a restaurant. Can we change that?
Not sure I agree that “fake wines take a toll on everyday consumers,” as this opinion piece from the Boulder Weekly claims. (The article is by Terroirist.com’s David White.)
It’s hard, on the surface, to see how or why 99.9% of wine drinkers are harmed by the shenanigans of a Rudi Kurniawan. They don’t play the auction game, which so often is fueled by greed and ego. They don’t even look for those kinds of wines. Nor is there any evidence of fakery among wines that don’t cost an arm and a leg. Most people just want to have a nice wine at a fair price, and they couldn’t care less that some criminal ripped off a Koch over a bottle of ’34 Romanée-Conti.
David himself concedes that the problem of counterfeit wine means little or nothing to consumers who “can’t afford cases of grand cru Burgundy or first growth Bordeaux.” If it hurts anyone, it’s extremely wealthy collectors who probably don’t even properly appreciate these wines, but just buy them to show off: people who might deserve the comeuppance they get for spending so much money, for such venal reasons, on something as trivial as rarity wine, when so many people are trapped in poverty and despair.
(Did I just call wine “trivial” ? Yes, in this context: that there are far more things Koch money could do to elevate mankind than spending it on bragging-rights wine.)
But in order to prove his case that fake wines really can “take a toll on everyday consumers,” David cites the case of a guy, John, whose late father had loved ’61 Lafite. John then had the opportunity to buy a bottle of it, for $1,300, but—familiar with the Kurniawan case—John shied away. He explained, “I decided I could not risk paying $1,300 for something that wasn’t real.”
I can understand. “Once burned, twice shy,” goes the saying; although John hadn’t been one of Kurniawan’s victims, he apparently now sees every expensive bottle as suspect, and would rather save his hard-earned cash for bottles whose authenticity is near certain.
The case of John is an anecdote, one that “tugs at the heartstrings,” in David’s words, but I don’t think it represents the feelings of the vast majority of wine people, even those who aren’t rich but who might want to occasionally spend a lot of money on a special bottle. With all due respect to John, I just can’t believe that the Kurniawan case scares very many people off. I think they might want to have a conversation, or a series of conversations, first, to make sure that spending four figures on a bottle is really something they want to do. They should talk to the seller (restaurant, auction house, whatever), and to whatever experts they can find, asking tough questions about provenance, before making up their minds. And that’s a good thing.
The interesting issue this brings up is, Would somebody who drank a fake expensive wine, but didn’t know it, even notice it? It’s like one of those Zen koans: “If a tree falls in the forest and nobody hears it, does it make a sound?” You can rephrase it as, “If somebody put a lovely, full-bodied red wine into a Lafite bottle, would people who didn’t know about the ruse admire it anyway?” My belief, based on long experience, is, Yes, they’d like it anyway, because they were drinking the label, not the wine. And this applies, not just to everyday consumers like John, but even wine experts. Perhaps that ’61 Lafite was really a Second or Third Growth, snuck into the Lafite bottle; or maybe a 50-yer old Zinfandel. How would you ever know?
The point is that we drink wine with our minds as much as with our palates. It is in the mind that the mystery and romance of wine dwell. It’s good that wine possesses mystery and romance; may it always be so. But it’s horrible that certain wines have become a commodity, a Gobelin tapesty in a bottle for the uber-rich to compensate for their shortcomings in other areas. I’m not saying that law enforcement agencies shouldn’t go after these counterfeiters with maximum diligence. They should. Like white-collar criminals everywhere, the fakers should be held to account. It’s just that, for the average consumer, this Kurniawan business, and associated scandals, really has no impact. If somebody out there wants to drop $1,300 for a once-in-a-lifetime wine, they should do so without paranoia. Go to a reputable supplier, the vast majority of whom are ultra-dependable, and be assured. And consider that, even if the wine you buy is fake, you probably won’t know the difference anyway. So enjoy!