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Coming Home to Roost

The premium wine industry, made up largely of small case load producers, 5000 cases or below, are not just facing challenges with soft sales, “trading down,” inventory reduction in the supply chain, and securing distribution problems, they are facing a far graver challenge:  in sheer numbers, there are not enough customers to go around.

I had a recent conversation with a gentleman in his 60’s; he was trying to secure funding for a business venture.  He said to me: 

“What’s happening now is people are getting very smart about business.  They want to see how, what, why, when and where for their investment dollars.  It’s good, practical business 101, but we haven’t seen that in the last 15 years.”

Call it the age of reason coming out of other unreasonable times.

Mark Twain said, “There are three kinds of lies: lies, damned lies and statistics.”  There is some truth in that quote, but some recent wine sales statistics are worth heeding.

Consider recent research from Pointer Media Network, as reported by Wine and Spirits Daily (excerpted):

… 7.5 million consumers, drive 80% of overall wine volume …

Research from Wine Market Council, also reported by Wine and Spirits Daily indicates:

People who drink wine daily (or) several times a week, “super core” wine drinkers, account for only 10.5% of the U.S. adult population and consume 82% of all table wine.

I did some back of napkin/swag math on this.  Based on reports indicating there are about 303M people in the US, of those, about 218M are over the age of 21.  Using the 10.5% from Wine Market Council for percentage of adult population, that means that about 23M are “super core” drinkers. 

That figure is more optimistic than Pointer Network Media, yes, but still not great against the total population if just 1 in 10 people drink wine daily or a couple of times a week.

In fact, given the rising momentum in popular media coverage coupled with the dozens of health benefits for wine, that’s a darn paltry figure.

It doesn’t matter which figure for “core” drinkers you believe.  Both research companies acknowledge that a small, very small sub-set of wine drinkers drive the majority of the purchase activity.

If you also consider that the Top 30 wine companies, by some reports, drive 90% of the wine volume load in the U.S., then you begin to see a very real problem.

It’s not a wild extrapolation to say that non “super core” drinkers buy largely nationally distributed brands that are in front of them in traditional retail – a grocer or wholesale club.

It’s the “super core” consumer that drives a more discerning palate and higher price-point purchase point decision, generally $15 and above in wine shops, via wine clubs, online, etc.  Did I mention that it’s at $15 and above that smaller producers generally sell their wine for?

And, even these “super core” folks, me included, are buying less wine and buy less expensive wine.

Yet, there are over 5000 wineries in the US.  There is the worst kind of 80/20 rule governing wine sales volume. 

You have a very small amount of consumers supporting a very large amount of wineries.

Kim Wallace Stare, owner of Dry Creek Vineyard, wrote the following at her blog:

The results were conclusive. No matter how authentic our story or how good our wines, selling wine today has very little to do with quality, consistency or even scores. It (has) become a minefield of brands all doing battle for the same elusive sale. A war of wines, if you will.  Personally, I’m bracing myself for a long tough road ahead.

You know what?  Dry Creek Vineyard is well-distributed, with a national footprint.  If she’s feeling that way, how are smaller wineries feeling who haven’t even gotten a seat at the table, an opportunity to get in front of a customer at the wall of wine?

The biggest problem facing small to medium size wineries today is not the swirling business issues du jour – trading down, distribution, brand development, etc.

It is very simple:  The biggest issue facing the wine industry today is that there aren’t enough “super core” customers to go around. The rising tide isn’t raising all ships.

The answer to how to remedy this is more convoluted, however.  Changing purchase intent and creating mind share for an industry takes a long time and a lot of money.

But, that’s what is necessary right now, not for this period of economic distress, but for the long-term betterment of the wine industry. 

Every winery needs to go on an aggressive customer acquisition plan aimed at marginal consumers in order to turn them into their own “super core” customer.

Secondarily, the wine industry—associations, distributors, and wineries need to band together and create an industry-wide campaign akin to the food boards that advertise for Wisconsin cheese, Milk, Almonds, etc.

Sure there are other remedies available, but only until a winery aggressively takes accounting for their own customer base, and contributes to creating more ardent wine drinkers coupled with an umbrella campaign by the industry will we be able to move the needle to turn that very small “super core” consumer into a bigger figure that is healthy and sustainable.

The go-go era over the last 10 years have created a golden age for wine and wine consumption, but it’s not a lark to suggest that this was the wine industry equivalent of the mortgage industry collapse. 

The chickens are coming home to roost, now is the time to do something about it.


Are you a Switch Hitter?

I love wine.  I love good food.  I love both; I can swing both ways, but if I had to choose my lover, it would be wine, all contemplation, a thinking man’s pursuit, a contrast to the creativity that marks foodies.

Years back I met a guy on vacation who lived in San Francisco, and he had both a live-in boyfriend AND a girlfriend.  I seriously wondered where the energy and stamina to adeptly handle both came from.  It seemed like a lot of work, these competing interests, not to say you can’t handle both with ardor, but managing dual loves simultaneously seemed like a lot of work.  Though, I guess the triage (ahem!) could be majestic, if that was your sort of thing.

Related to food and wine, I have been thinking about the marriage of food and wine and the respective interests held by enthusiasts—the perpetual delta between food and wine; conjoined bedfellows, so linked, yet so different in appreciation, a ménage a trois, maybe, but more often just a regular relationship.

Who has the energy for pursuing both with equal energy?

Even in the restaurant biz, you often read stories about the kitchen being a completely different animal than front of house service with Sommeliers and the wine list.  Chefs don’t often pair their dishes unaided and Sommeliers don’t work the line or write the menu.

And, the irony is most foodies will tell you they love wine.  Most wine lovers will tell you they are foodies.

I’m no different.

It’s an odd convergence of circumstance.  Um, the rivers kind of meet at the basin, only to head off in their own direction again.

My first passion is wine – But, for relaxation, a creative time for me, I love to read food magazines.

Subscriptions to Gourmet, Bon Appetit, Food & Wine, Saveur, Cooking Light and a couple of others are all devoured in my home, a sort of arm chair creative spawn for my sub-conscious, definitely first off the pile before Spectator or Advocate.

In fact, one of the best books I’ve read recently isn’t a wine-related book it’s Eat Me: The Food and Philosophy of Kenny Shopsin.  It’s a memoir-ish cook book from the owner of Shopsin’s, a diner of semi-renown in NYC.

Shopsin considers the act of cooking to be a creative process, in his book he says:

I am not an Alice Waters type of cook who is inspired by ingredients and builds from there.  The inspiration is mine – it comes from within me.  But as a creative person, ingredients are the tangible medium I work with, so when I am inspired, when am in the therapeutic, creative process of cooking, I start looking around and the more ingredients I have, the more creative I can be.

I think that is an ethos that is shared by chefs and foodies – they are inspired by the creative process, the artistry that food can be.

Consider this in contrast to a wine lover or Sommelier who is more likely to wax philosophic about wine in terms of shared memories, or ponderous personal ruminations, contemplative types of endeavors.

I’m inspired by the creativity and artistry that food can inspire as well, even if I retreat into the arms of my lover, wine.

Now, I don’t have a ready GOOD answer for why food and wine are intrinsically linked, but definitely different.  But, the conclusion I have come to is simple: food and wine enthusiasm is like being a bisexual. 

Like my friend from San Francisco. 

You can like men AND women, but you usually have a dominant preference.

If your dominant preference is food, you are inclined to a great deal of creativity in your life.

If your dominant preference is wine, you are inclined to contemplation.

And, if you like both equally well, if you’re a true switch hitter, then, my friend, I want to know how you manage the energy for both contemplation and creativity because I want some of that mojo.


Defending Mondavi and the Worst Kind of Liberal Elite

The worst kind of the liberal elite in wine media are those that use their keystrokes as wannabe Lenin communists under the cloak of quality.

As the playwright said, “the pen is mightier than the sword,” but most times the sharp edge of the writing (or cutting) device should be well protected in the sheath of defensible opinion.

Simply, basing opinion with substantive context and a smattering of fact always engenders people to the writer’s opinion.

As any storyteller will tell you, detail makes the story both interesting and credible. 

Unfortunately, however, for some mainstream media, notably Paul Gregutt, wine writer for the Seattle Times newspaper, he didn’t get the memo.

How else would you explain a largely baseless, fact less and sweeping indictment (with simpering caveat) of Robert Mondavi winery in his most recent column?


I’ll give Gregutt, a writer and author of some merit, a bit of the benefit of the doubt because his column is a scant 615 words, about the length of a decent blog post, and certainly not long enough for a think piece on the state of Robert Mondavi winery, but his column sets up with an agenda that really reads like a grinding axe, hardly reason to extend much grace.

Now, mind you, I am no Mondavi apologist, nor mouthpiece.  However, I do have an affinity for the man, I have enjoyed my visits to the winery and, for the most part, I’ve found the wines to be consistently well-crafted, of high quality with a quality to price ratio that is usually spot-on.

Gregutt’s column reeks of the same kind of liberal elitism that permeates mainstream business media.  In the mainstream business press, the so-called liberal elite champion the underdog allowing big business to play the evil foil. 

Played out in the wine press, it is the same story with a different protagonist—small wineries are our heroes with corporate wineries playing the role of spoiler.

Ah, it makes good copy if it were not a threadbare angle and about as tired of a writer’s device as exists.

In his Seattle Times column Gregutt primarily laments the expansion of the Mondavi wine line-up under the ownership of Constellation (a fact that did not start with Constellation and actually was one of the well-chronicled divisive differences between Tim and Michael Mondavi as growth tugged at the company).  Juxtaposing a 1969 Cabernet he enjoyed for a recent birthday, Gregutt sets the table for a “then and now” piece using the President of Constellation, José Fernandez, and his phrase “premiumization” against the company.

And, of course, Gregutt references Constellation and their spot on the Wine Business Monthly (WBM) Top 30 wine companies (#3); this is well and good, if not disingenuous. 

Instead of using their position on the list of large wine companies as a Scarlet Letter, as Gregutt does, for balance, it would be nice if he encouraged all wine lovers to read the WBM annual report on the Top 30 wines companies. 95% of those that consider themselves fans of wine will be surprised at how much wine is produced from these large companies (who act more as holding companies for individual businesses than an evil conglomerate), and, by and large, there is nothing wrong with this scope in size – most of these companies keep the brands or the wineries largely autonomous and quality minded, and even the biggest wine company is still a pimple on the ass, in terms of size, of most corporations.

Big in wine terms, isn’t really big.  In addition, big can mean consistent—as in consistently keeping key members of staff by paying them competively and giving them tools to expand their interest and expertise.

To wit, Mondavi’s Director of Winemaking, Genevieve Janssens, has been in her post since 1997, by virtue of that, Gregutt’s premise of his column, to revisit Mondavi under the stewardship of Constellation, is largely a canard to present a pre-existing opinion.

In his reviews of wines he visits the Woodbridge line, Private Reserve wines, the Solaire line and the winery wines, with not a lot of good things to say along the way, ending his column with the following:

“My survey barely scraped the surface of the Mondavi wines. Perhaps some hidden treasures are out there; I did not find them.”

If Gregutt is serious about finding a Mondavi hidden treasure he should end, where he started.  If he uses the 1969 Cabernet as his baseline for Mondavi of days past, he should visit the 2006 Robert Mondavi Winery Napa Valley Cabernet. 

For about $20 he would find a stunning value in Napa Cab. – an elegant, concentrated, intense wine with fruit, earth and spice, built to age, but ready to drink.  It is a superb value in quality and price and an example of the best that a so-called “corporate” winery can offer as it does its “premiumization.”

Liberal elite messaging notwithstanding, I would urge anybody looking for consistent value to not give short shrift to Robert Mondavi Winery.  The man himself never gave up, bucking many setbacks along the way, and I have a hunch his namesake winery is not going to either, despite a popular wine media tide that may be against them.

What I blogged about a year ago: The $3M Question


The Sauvignon Blanc Epiphany

Mouth watering aromas of cat pee, tomato plant, nettle, asparagus, artichoke, capsicum, cut grass, pea pod and other vegetable aromas predominant over gooseberry, green apple and grapefruit; is it any wonder that Sauvignon Blanc is an enigma to many wine lovers?

To be a Sauvignon Blanc lover, especially France, New Zealand, Chile, and other parts not named California, requires a mildly intrepid soul, not engendered to the biggest fruit flavors, instead someone appreciating wine couched with nuances of the garden with a pleasant citrusy, mouth wateringly acidic tropical spirit.

For the longest time, I wasn’t the biggest Sauvignon Blanc fan—celery, nettle and cat pee not exactly flipping my switch. 

If I wanted tomato plant and celery in my drink I’d have a Bloody Mary, usually on a Saturday morning during football season, a 10:00 am way station to beer(s) until kick-off.


I kept trying, though, not resigned to simply saying I don’t enjoy something, the mark of somebody resolute in their own convictions, but not wide-eyed enough to see a world bigger than themselves.

It’s only been within the last year that I have come around. 

I have come to peace with Sauvignon Blanc, you might even call it blushing fandom, particularly New Zealand and Chile, more classic renditions and kissing cousins to Sancerre and Pouilly Fume then California Sauvignon Blanc, even if the gun metal flintiness doesn’t come through as often as it could.

I can unabashedly say that I like Sauvignon Blanc—like the former serial dater of cheerleaders who suddenly realizes the art students offer more grounded, thinking delight.

The reason for my Sauvignon Blanc turnaround is, ironically, the eloquence of passing time and not something bigger than me, but rather something within me.

The older I get, in my mid-thirties, though as yet childless, I’m starting to recognize the subtleties in our daily lives, the routine, the small traditions, the annual stages that we go through that mark significance—the pebbles that make up the bedrock of family, tradition and values.

Spring is no longer simply a respite before we get to summer and its attendant fun, both anticipated and in reality, it’s a chance to appreciate the visceral thrill of things coming alive, the promise of every baseball season, the smell of earth, the season’s first wafting smell of cut grass, young asparagus shoots growing inches over night ready to be cut, steamed and dolloped with a pat of butter, a dash of salt and a twist of lemon. Spring is a time to appreciate the fact that, to paraphrase Andy Dufresne from the movie The Shawshank Redemption, we better get busy living, or get busy dying. 

The reason I am enjoying Sauvignon Blanc these days has every reason that I can attribute to psychology, my own head, and not physiology, my tastes changing.

With spring sprung, spending time at our family’s lake cottage for Easter, I’m reminded of my Grandparents, gardeners they were, wine that is less fruit-tastic and more nuanced and discerning, elemental around my family on this holiday weekend.

They say that you don’t start with Sauvignon Blanc, that you graduate to it.  I guess that is appropriate, given the time of year.

Asparagus on the plate, asparagus in the glass.  Yeah, it tastes good.

Sauvignon Blanc Wines to Try
Thanks to the public relations folks at Wines of Chile, I’ve been sampling some good ones, not a single dog in the bunch.

Chilean Sauvignon Blanc is predominantly affordable and findable with a flinty character and acidic backbone– major criterions to being a winner in my book. 

2008 Quintay Reserva Sauvignon Blanc         

Crisp lime zest and wet stones with prominent grapefruit, gooseberry, and bold, vigorous acidity.  Freshly mowed grass on a lingering and mouth-watering finish.  The fruit, acid and minerality mark this as a very good wine.

2008 Caliterra Reserve Sauvignon Blanc   

Granny Smith apples, grapefruit, and lime zest with a just right acidity.  Nettles and herbaceousness on the medium length finish.  A good wine.

2008 Montgras Reserva Sauvignon Blanc 

Honeydew, lime zest, gooseberry and herbal notes with balanced acidity. A subtle, grassy finish makes this a good wine.


The New, New Thing for Winery Marketing

A year or two back I had an exchange with winery owner who was staking out some new marketing territory on the edge of progressive with a desire to do something “first” and leave a path like a slug trail.

He explained his desire to go into relatively uncharted marketing territory because the wine industry is rife with trailblazers, people whose knack for leading a movement, or at the least, getting in front of a movement is legendary and the opportunity to attach your name to being the first at something is relatively difficult.

Well, I just saw some technology and a new marketing technique that a winery needs to jump on and quick.

Suffice to say, generally speaking, I am not easily impressed.  In fact, mostly, I am an insufferable lout.  However, if you strip out hyperbole, what you are left with is less revolution and more tactic, but just the same, “augmented reality” is cool.

Winery marketers have long been handicapped in their marketing efforts.  The reason is two fold – for years, wineries have built their brand around their winery back-story and their property – their vineyards, their winery and their tasting rooms.  However, the ability for a winery consumer to get to the tasting a room and experience the winery experience first hand is relatively finite, mostly left in the minds eye of the consumer, and largely intangible. 

The fact is most winery visits leave an indelible impression.  With no visit, you are left with a circumstantial impression; one that you hope resonates by virtue of the rest of your marketing and the quality of your wine.

Of course, a web presence can take you to a certain point, but it is a 2D medium, as well.  Dynamic, yes, but still rendered statically.


Last week, I wrote a post on what seems to be an explosion of 3D items in our consumer consciousness – movies, games, etc.  I suggested that wineries could buy a 3D attachment for their camera and shoot 3D photos that they could giveaway or sell in conjunction with a Viewmaster – kind of a kitschy cool tactic that can add some dimension to winery marketing, but perhaps not worth the effort.

This week I saw some new technology, ready to be implemented today, that is also 3D oriented, with a serious sizzle factor, that can transcend the boundaries of winery marketing in 2D.

Augmented reality is so new it squeaks.  I have only been able to find two marketing based applications in usage – one for the GE Smart Grid and another for Topps baseball cards.

According to an Online Media Daily article from last month regarding augmented reality and Topps cards:

Attempting to attract a generation of kids growing up on Twitter and text messages, The Topps Co. has introduced a series of baseball trading cards whose players come to life through a standard Web camera and technology.  Consumers who buy the Topps 2009 Series 1 deck of baseball cards for $1.99 have an option to pull the “magic” card from the deck, sign onto with a code, download a browser plug in and pitch, bat or catch in games served up from the Web site. The cards, which sport members of major league baseball (MLB) franchises, also are available through the Topps Attax baseball card game.

The consumer’s Web camera pointed at the two-dimensional card laying on someone’s desk or in their hand projects the picture of Tampa Bay’s Evan Longoria to the computer screen, for example, allowing the picture of the baseball player to come to life in 3D.

It is seriously fun stuff.

Excerpted from “How Stuff Works,” augmented reality is:

In the next decade, researchers plan to pull graphics out of your television screen or computer display and integrate them into real-world environments. This new technology, called augmented reality, will further blur the line between what’s real and what’s computer-generated by enhancing what we see, hear, feel and smell.

On the spectrum between virtual reality, which creates immersible, computer-generated environments, and the real world, augmented reality is closer to the real world. Augmented reality adds graphics, sounds, haptics and smell to the natural world as it exists. You can expect video games to drive the development of augmented reality, but this technology will have countless applications. Everyone from tourists to military troops will benefit from the ability to place computer-generated graphics in their field of vision.

The reality is that this ability isn’t overly complex.  If you have a web camera and a designer that can do some 3D animation, you can implement this technology on your web site.

To me, the application for wineries are innumerable.  To get your head around it, visit and test it out at the GE Smart Grid site where they show off a model of solar panels and wind turbines.  It’s super simple and only takes a couple of minutes.  Essentially, you print off a sheet from the website that has a graphic on it.  When you hold up this graphic to your web cam, a 3-D model is produced on screen, by moving the paper you can look at different views of the 3-D model, zoom in and out, and if you have a microphone set-up it will react to other actions like blowing into a microphone. 

Would a winery want to show off its tasting room, its barrel room, its vineyard, anything at its property?  Would they want to do it in a way that is immersive and wrapped within a brand experience online? 

Absolutely.  Do it from a computer today?  Absolutely.

The technology exists, it’s not overly expensive and somebody in the wine business gets to say they did it first.  At the least, the bane of many folks existence is the winery press release touting the new solar array.  At least this way, I could see the darn thing in a cool way.  Which winery stepping up?

For more information Google “Augmented Reality” or search for the same on YouTube

What I wrote about a year ago:  The IBM Value-Chain and its Translation to Wine


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