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July 6 2007
Or, the headline could read, “Screwcaps gain mass acceptance,” according to a proprietary Good Grape online poll. Though, it could’ve been, “1 in 5 polled are Concerned about Franken-Wine.” Or, if I wanted to be sensational, “Wine Industry poll indicates a lack of concern for labor issues.” It depends on how you look at it.
To paraphrase Mark Twain, “there are lies, damned lies and polls.” In utterly unscientific fashion, the poll on the front page of this site ran for enough time to gather 25 responses. It’s still relevant, however, based as much for what it says as what it doesn’t say.
The question was: What is the Most Important Issue Facing the Wine Industry?
The results are as follows, based on a closed response format:
Closures – 0%
Manipulation – 20%
TCA/Cork Taint – 8%
Labor Issues – 8%
Terroir – 4%
Wine Shipping – 56%
Other – 4%
The results are not at all surprising, if anything, online wine bloggers and those that read blogs are in tune with small brands of wine and on the cutting edge of having wine shipped to their door—so the wine shipping and wine manipulation responses, as the greatest percentage of respondent answers are to be expected. And, as a matter of collateral poll pick-up, a respondent having no concern about closures is expected because most wines sold online, by price point, from smaller wineries are probably finished with cork. Or, at least that’s my best guess.
But, what is surprising to me is that labor issues didn’t register a higher response rate or that “terroir,” or, more specifically, a wine continuing to cultivate a sense of place wasn’t more important, particularly for a very savvy and enthusiast-oriented online audience.
Check out the new poll. Please feel free to vote.
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June 18 2007
File this under: Head-scratcher.
I just read the current “Summer” issue of the Quarterly Review of Wines (QRW). Generally a pretty good magazine, the slim glossy magazine isn’t easily categorized—it’s not wine Spectator with an emphasis on ratings and lifestyle, it’s generally less proletariat oriented than Wine Enthusiast, and it’s not as incisive as Wine & Spirits magazine. And, like its brother-in-arms, Wine News, it has news items that have long since become old hat information for those that read and write blogs.
QRW is a hodge-podge, skewing more towards profile pieces on wineries, written from the inside out—that is they typically come off as flattering, if not fawning, from the wineries perspective and not analytically constructive from an independent third-party perspective i.e. general journalism. In journalism circles, it’s something of a “House Organ” – defined as a periodical that is published by a business for its employees or customers. In this case, a magazine written by the wine industry for the consumer.
While I’m not explicitly in tune with HOW the editorial is written for QRW, I have noticed a trend that is questionable.
Every article written by QRW that is attributed to “QRW Staff” as the writer (akin to a movie directed by Alan Smithee—the pseudonym for a movie director that wanted to be disassociated from the movie) is pretty much a puff piece—a puff piece to the extent that I’m not sure that this editorial isn’t written by an in-house p.r. rep. and provided spec. to the magazine.
Take for example the article in the current issue called “No Mean Feet” about Barefoot Wine.
Barefoot is a winery owned by E&J Gallo and generally has a $4.99 - $5.99 price point, it’s found in most supermarkets with annual production of 2M cases
Some excerpts from the article:
Barefoot Wines, for those unfamiliar with the brand, has virtual cult status with the young, consumers from 21 to 29.
Hmm … maybe this is true, but it flies in the face of a ton of other research that says that Gen. Y is drinking at a much higher price point and predisposed to imports. At any rate, Barefoot Wines doesn’t have a Myspace.com page that I can find. So, if this cult status is true, it must be completely self-manufactured by the consuming public, something I’m somewhat dubious about.
Check out this quote and see if this reads like anything that was directly quoted from somebody’s mouth:
“It’s inaccurate to say I’m enthusiastic. In fact, I’m passionate, fully vested, personally attached, a complete believer in Barefoot wines, and for the charitable assistance we offer. We are doing 1,000 barefoot events just in 2007, and I’ll be at many of them. There are now nine Barefoot regional operations in most major markets and growing.”
Now, read this descriptive piece, patterned after a magazine profile piece akin to Vanity Fair magazine:
In 1995 Jen Wall, a native of California, became winemaker, “much better,” she says than being the MD she planning on becoming after graduating from the University of Santa Cruz. Wall is an attractive thirtysomething woman, with an extrovert’s good cheer. She has handsome features, with a high brow and engaging attentive eyes. If she weren’t stomping grapes, you’d gladly let her take your pulse and hear your heart.
Hmm … we now know it’s written by a male on the alleged “QWR Staff.”
Next comes this piece of fodder straight from E&J Gallo acquisition press release boilerplate:
The best thing that could’ve happened to barefoot was that Gallo bought it. As with everything they buy, Gallo works on a laissez faire attitude, which is to say leave it alone, if they ain’t broke … Gallo, who knows good things when they see it (Louis Martini, MacMurray, Bridlewood Estate, among other winery purchases) infuses money, technology, and marketing/PR into every winery they buy. They make the new winery better. Mike Martini, Kate MacMurray, and David Hopkins (Bridlewood Estate), and Jen Wall would all agree
Methinks that this author is very intimate with these other winery owners, flush with a fat bank account, or somebody on the inside at Gallo. The above paragraph is simply not one a journalist would write, an E&J Gallo p.r. intern, yes. A journalist, no.
The next sentence says:
Anyone looking for good, everyday wines – and who isn’t? – at great prices ($5) should try Barefoot.
Journalistic balance?
The advertorial, er, article ends with this capper:
Most of the “barefooters” we know tell us that Barefoot introduced them to wine, and that it made a lot of difference in their lives. “Best of all,” says “Barefooter Beth,” as she refers to herself, “Barefoot is the only wine I started with that I can still drink today; I’ve outgrown all the others.”
Unnamed sources, too. “Barefooter Beth???” Barefoot is the only wine she hasn’t graduated from? Puh-leeze.
I picked up a bottle of the Zin last year because I was piqued by the on bottle stickering that gave it a positive review from a Beverage Institute in Illinois and, frankly, I dumped the whole damn bottle down the sink.
With this treacle, masquerading as fair and balanced journalism, it’s no wonder that the transparency of blogging is becoming a more influential mode for wine information.
Will the real writer of this article please stand-up: “QRW Staff” or “E&J Gallo” p.r. intern? Or worse still—QRW advertising sales staff.
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May 30 2007
I caught the recent article(s) on Charles Shaw wine celebrating its 5th birthday. This excerpt from the AP sums it up:
It’s been five years since the first of these amazingly cheap chardonnays and cut-price cabernets started rolling off the line, released by maverick vintner Fred Franzia under the formal label of Charles Shaw wines.
Three hundred million bottles later, Two Buck Chuck is still selling, and Franzia is still preaching his message of wine for the masses.
Last year, Two Buck Chuck, available only in the Trader Joe’s grocery chain and priced at $1.99 in California, hence its nickname, accounted for at least 8 percent of California wine sold in-state, said Jon Fredrikson, who tracks wine shipments through his Woodland-based company, Fredrikson, Gomberg & Associates. National market share figures are not available. A bottle can range as high as $3.49 elsewhere.
Can that be right? 8% of California wine sales. That is an astounding figure to me. California, the land of milk and honey in terms of wine and Charles Shaw represents eight out of every 100 bottles sold?
Wow. Color me shocked.
I did some back of napkin math on the 300M bottles sold in five years:
• Over 5 years Franzia has sold 25M cases of Charles Shaw, or
• Approximately 5M cases a year
• Charles Shaw alone, measured against the Wine Business Monthly list of Top Wine Companies, would be tied for the 9th largest wine company with Jackson Family Wines, makers of Kendall-Jackson
• Trader Joe’s has approximately 274 stores that sell wine and 5M annual cases works out to 18,248 cases per store, per year
• Each store averages 350 cases sold per week or 6.25 pallets of 56 cases
It gets a little complicated to do the math for mark-up and sales because transportation does come into effect and there is a discrepancy between California pricing at $1.99 a bottle and prices in the Midwest($2.99) and the East and Southeast (3.49), but suffice to say that Franzia is probably giving Trader Joe’s, by virtue of their profit rich private label business aesthetic, a margin much richer than the traditional 30 – 40% mark-up. If mark-up is 50% on a case of wine that has a wholesale case price of 10.50 than Trader Joe’s is making about $13.40 a case or $244,523 in profit per store!
If you compare that per store profit figure against SIC code 5921.0102 for wine retail shops it would tell you that wine shops in their first three years of operation average $182,927, $214,035, and $205, 085 respectively in gross sales.
So, yes, in sum, a single SKU in a single Trader Joe’s PROFITS more in a year than the average new wine shop grosses.
Unless you’re a small wine retailer, that should make you feel better about your lot in life. And, it’s a pretty good indicator why Fred Franzia, when his $2 wine wins blind tastings and he controls his own supply chain, doesn’t give a damn what other people think of him.
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May 15 2007
I’m reminded that the reality TV show Survivor has the tagline of “Outwit, Outlast, Outplay” it kind of typifies the state of the regulated wine industry today.
Tom from Fermentation has a post on his site today citing the two year anniversary of the Granholm vs. Heald decision and based on current state of affairs some outlasting is probably in the offing, for both sides.
Two years ago, on May 16th, when Granholm came down, I remember where I was, as if it was Princess Diana, or the Space Shuttle crash, or, well, the day Jerry Garcia died.
Then, I had no idea I would be here a mere two years later as that was pre-blog, pre-wine industry days. At that point, I was t-minus 32 days to my wedding date and I was fighting with the caterer because they gave me a crap selection of wine and they wanted to charge me 2.5X mark-up plus what equated to a corkage fee for selecting the wine. For the record, I whittled ‘em down on price, but the Beverage Manager at the catering facility was, shall we say, a remnant of another time, similar to the antiquated laws we’re discussing. He probably had adult kids when Kennedy was assassinated, but I digress.
That May day, I was in the cafeteria at my previous employer making my way to the line to order some lunch and I stopped off, serendipitously, to read the headlines in the newspaper. I had been following the proceedings from a distance and I was relieved that the Supreme Court ruled for consumers. I even dashed off a note to a small, local distributor who was procuring one of the wines for my wedding to see if he had any thoughts.
Flash forward two years later and I would argue that while the laws have changed, they really haven’t changed enough, and a lot of the law changes are what I politely call, “plant hiding.” That is, they change a couple of things, but at the end of the day you still have a crack in the wall and the proverbial plant there to cover up the crack in corner.
Case in point: I talked with a high-ranking person in the Alcohol Tobacco Commission in the Indiana government today! Today! My question was centered on the micro-wholesale permit capability that was enacted in mid-2006 as an accommodation to Granholm that allows an Indiana winery to self-distribute up to 12,000 gallons (5000 cases) annually. After three weeks of trying to pin this person down about the ability for an out-of-state winery to use this same permit because under Granholm you can’t discriminate against out-of-state wineries privileges that are afforded in-state wineries, I get my answer. Suffice to say it’s not what I was hoping for, but I got the “Well, the laws are changing all the time, who knows what will happen in the future.” In the future, I ask? What about the present? I thought the law was changed to be in compliance with Granholm?
Pregnant pause …
Um, yeah. Not really. Indiana, despite changing the laws in the wake of Granholm isn’t Granholm-compliant. An out-of-state winery in order to get the micro-wholesale permit must have a physical premise in the state of Indiana. That is hardly a balancing of the playing field and is about as asinine as the fact that if an Indiana consumer wants wine shipped directly to them they have to fill out a state-administered form in person in the tasting room for subsequent shipment.
We have a long way to go. And, unfortunately, I fear it’s not going to get any easier. To wit, the following quote from Craig Wolf, President and CEO of the Wine & Spirits Wholesalers Association in response to the Supreme Court refusing to review a Virginia case limiting out-of-state wine sales (and taking a swipe at at the Specialty Retail Wine Retailers Association—Executive Director Tom Wark—) in the process—the SWRA is engaged in battling retail wine shipping laws in many states, including the ones Wolf cites.
Wolf says (quoted from Wine & Spirits Daily):
“This should send a powerful message to those seeking to dismantle smart state-based alcohol regulations-states retain virtually complete control over how to structure their alcohol sales and distribution systems, which are based largely on the wholesaler-centric model.”
“Today’s Supreme Court action ends years of litigation in Virginia, but it is perhaps even more relevant to regulators facing retail direct litigation in Texas, Michigan, New York- and potentially Illinois. The Supreme Court’s decision reaffirms the 4th Circuit’s ruling that nothing in Granholm supports the notion that states have an obligation under the Constitution to ensure that out-of-state retailers, no matter how geographically distant, have equal access to in-state retail markets.”
I’m not an apologist for either side, but any rational human being should see the facts that are clear—if you want to buy wine from a winery, at the least, you should be able to and have it shipped to your door. The three-tier system, while valuable as a means of providing logistics support for large wine companies, is an industry woefully under-skilled to serve the entire wine industry effectively. All of this is colliding—two years ago and today, like bumper cars at the Carnival.
What will happen in the future? Who knows, but I do know it’ll come down to who can “Outwit, Outlast, Outplay.”
For additional reading, see Tom’s original post, Wine & Spirits Daily and an article on Granholm at Appellation America.
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April 30 2007
I’ve blogged about Joe Dressner before. Dressner, the eponymous founder of wine importer Louis/Dressner Selections, is something or an irascible sort. There’s a difference between being a cynic and calling a spade a spade in a deadpan kind of way.
Dressner walks that line, but does so in a way that engenders respect—at least based on writing alone.
Dressner is even updating his site, mercifully now RSS-compatible, on a more frequent basis.
If you’re desiring a little more Dressner-like deadpan, then I’d like to introduce you to Gerald Weisl from Weimax Wine & Spirits in Burlingame, CA
It’s amazing what you find when you Google: “Wine Trade Tasting.”
Um, yeah.
Generally speaking, I love these sorts of snarky insider kinds of things about the trade. It’s like watching the arguing couple while out to eat—thoroughly distracting, but completely interesting.
Oh, the drama.
Weisl has written something of a two-part screed exhorting trade sales people to raise their game a notch. I cut and paste both articles into a word document so I could print it out and read … the first article on “How to Be A Wine Sales Rep” is 17 pages and the other “How to Hold a Trade Wine-Tasting” is 14 pages. Pour a glass of wine …
I’ll leave it to you, dear reader, to determine if Weisl inspires respect or a careful scratch of the head. Either way, he doesn’t pull punches—while giving plenty of examples of trade sales rep. inanity.
Some choice excerpts from the “How to Be a Wine Sales Rep.” I’ll do a couple more from the “Trade Tasting” tomorrow.
“When you first get your sales job, you should contact the buyer. Doing this is in person is a good idea, as it will take the buyer several visits before they even remember your name and what company you are affiliated with.”
“One fellow shows up sporadically. One year he did not pay a single visit to our account during the Christmas holidays. When queried he said, “Parking is such a hassle during the holidays, so I try to stay at home!”
“Don’t visit the account and take up valuable customer parking! We often see sales reps driving up to our front door availing themselves of a vacant parking space. If you are parked there, where does a paying customer park? If the customers can’t get to the place, the store or restaurant will not need your products, will they? We are often viewed with disdain by sales reps when we ask them to be more considerate of our customers”
“Some of the distributors in California have thousands of different wines to offer. One firm’s rep arrives on a weekly basis and yet almost never has even a single bottle to show. This individual presumes I know everything in their portfolio and since I attend their annual trade tasting, what more could I possible be interested in? Even though the catalogue is printed every month or two, showing NEW items, this lady never thinks to bring bottles by the shop for “show & tell.” The same can be said for a fellow who works for a small importer … they have new arrivals highlighted ever MONTH in their price list, but it’s a rare day he even asks if we would like to have a look at anything new.”
We often see sales reps who arrive un-prepared! BE SURE YOU HAVE A CORKSCREW! BE SURE YOU HAVE YOUR SALES NOTEBOOK!! BE SURE YOU HAVE A PRICE LIST!!! BE SURE YOU HAVE SOMETHING WITH WHICH TO WRITE DOWN THE ORDER!!!
“DON’T TAKE “NO” PERSONALLY. You didn’t make the wine, did you?
“We have a reputation for being a “difficult” account. We’re not difficult, at all. We KNOW what we’re looking for. And, we’re honest about our appraisal of the wines we taste.
You can find the entire article here. It makes you glad, almost, that you don’t have to make sales calls in Burlingame, even if somewhat funny in a dramatic kind of way.
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