March 12 2008
In investing you can either go long meaning you are buying a stock on the presumption that it will increase in price, or you can go short, meaning you can anticipate that a stock price will go down in value. There may be a wine stock buying opportunity that goes “long” --long like the finish of a nicely crafted Pinot Noir.
I am talking about Willamette Valley Vineyards.
Willamette Valley Vineyards is hot. Red hot. Hot like you read about. Hot like Lebron James scoring 22 points and the go-ahead basket in the 4th quarter.
And, the great thing is, you can get in on the action.
Willamette Valley Vineyards is the albino elephant of winery stock market plays. There are precious few stocks that you can get into if you are a wine lover—Constellation being one, but certainly not nearly as charmingly endearing as a winery that has production of just about 100,000 cases, still exhibiting a personal touch.
The hot streak started for Willamette Valley with their mention in the San Francisco Chronicle as one of the best selections of 2007, a distinction accorded wines that earn three stars from the Chronicle tasting panel. Their Pinot Noir, at $24, bested wines at double the price point.
The next month, in January of this year, Willamette Valley Vineyards was the #1 hottest small brand of 2007 as named by Wine Business Monthly magazine. This, perhaps, more than any other, is a meritorious distinction as the WBM staff seem to always be about 2-3 years ahead of the curve for brands that go on to achieve widespread and mainstream merit.
In WBM words:
From the beginning, the hottest small brands list has been about standing for something. Most of the wineries represented are from up-and-coming wineries that have achieved success by delivering on quality. Several represent apparent overnight success stories that were, in fact, years in the making. We tend to highlight wineries and brands that represent market trends, are innovative or take a leadership position.
Next, Willamette Valley Vineyards was featured in a February issue awarded 90 points for a 2nd label Pinot Noir, the Tualatin Estate Pinot Noir.
Now, I am not a financial guru. In fact, I am not giving any advice. Nor, do I currently own any Willamette Valley Vineyards stock (though that may change). That said, WVVI is traded on Nasdaq and has a share price in the $6 range and seems to be making all of the right moves. Buying stock in a winery play is like being in the wine club, except with a little more skin in the game.
The Willamette Valley Vineyards site also has some special features for shareholders:
1. Admissions to special events at the winery.
2. Priority on the purchase of limited production wines, wine futures, discounted items and wines with personalized labels.
3. Discounted pricing of selections purchased through the Oregon Wine Guild.
4. Priority use of the Winery’s tasting and hospitality facilities for events (open dates only).
5. Personalized winery business cards, the initial set is complementary.
6. Reports on company developments seeking shareholder feedback and/or involvement.
7. Numerous opportunities to volunteer and increase wine knowledge through the non-profit group, Oregon Wine Enthusiasts.
In reading the 2007 Annual Report, tedious though it may be, you actually glean a couple of things that are of interest:
First, they use a technique called a “Geneva Double Curtain” for their trellising. This reminds me of two things--#1 it sounds like a wrestling move and #2 when is somebody going to start writing an accessible blog on viticulture, the one that lightheartedly explains the “Geneva Double Curtain?”
More importantly, their strategy meshes with other moves that we have seen from Kendall-Jackson and Don Sebastiani & Sons in moving upstream in terms of price point.
They say:
Based upon several highly regarded surveys of the US wine industry, the Company believes that successful wineries exhibit the following four key attributes: (i) focus on production of high-quality premium, super premium and ultra premium varietal wines; (ii) achieve brand positioning that supports high bottle prices for its high quality wines; (iii) build brand recognition by emphasizing restaurant sales; and (iv) develop strong marketing advantages (such as a highly visible winery location, successful self-distribution, and life long customer service programs).
Now, make no mistake, their annual report certainly doesn’t read like an oratory from Warren Buffet, but for a wine lover, especially a Pinot lover, who happens to dabble in recreational gambling via the stock market and a personal brokerage account, buying some stock of WVVI, picking up the benefits of membership, and enjoying some wine while you watch a fledgingly winery grow seems like a lot of fun to me.
Perfunctory disclaimer: I do not currently own WVVI stock. I am not in the stock market advice business. In fact, I was a journalism major in school and took “math classes for non-math people.” Any financial risk you make is yours alone. The stock market is mercurial and I bought Amazon for $5 and sold at $25, while it was climbing up to the $70 range. I am, generally, not that smart about betting on stocks. That said, the P/E is high, but it looks like a better bet than losing a couple hundred of bucks on a blackjack table.
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March 9 2008
In the pantheon of national value wines, Cline Cellars, along with Don Sebastiani & Sons, Castle Rock and Rosenblum are some of the most reliable wines at price point.
Say what you will about the mildly geeky online debate between “wines of place” and “wines of technology,” but the fact remains that the majority of wine lovers are not buying uber-expensive wines, but instead are looking for a reliable quaff that provides enjoyment against the palate and not necessarily wines that provide enjoyment against a background criterion that is sometimes impossible to match.
In simple terms, more people, including influencers like bloggers, are drinking more national brands than they are wines that have not been inured by “Parkerization.” And, frankly, most of these national brands are either blends from various vineyards or bulk juice, without a real sense of place, so to speak.
A look around the wine blogosphere and you will find a commensurate number of bloggers reviewing wines under the $20 benchmark and, frequently, under $10.
More often than not, this is where I do the majority of my drinking and as such, it is always nice to do a bottle choose and be rewarded.
In fact, I have moved a lot of my drinking to whites simply because it is easier to find a decent wine at this more normal price threshold.
Despite being ready to give up the ghost on Cline based on a couple of real recent clunkers—their Zinfandels running oaky and sweet and the Cashmere running very plonky, in my opinion, despite a recent Wine Spectator score of 87, I’m very glad to report that their 2006 Viognier is an exceptional wine for under $10.
Cline Cellars has been providing that reliable enjoyment for years and the fact that they can do so with Viognier, a very mercurial grape, perhaps more difficult to produce enjoyably than even Pinot Noir, tending to want to run on the flabby side, needing some acid to make its fruit forward overtones not seem kool-aid like. Fortunately, the Cline has an abundance of acidified balance creating a delicious wine.
Maybe the acid was added in, maybe the wine is a blend from sixteen different vineyards, and maybe it is even bulk juice. It may not be “of the earth, for the people,” but it is still a darn good wine and sometimes that is okay by me.
Classicwines.com, in the video below, gave the ’06 Cline Viognier a serviceable grade. I think it is a mild disservice because this wine is quite enjoyable and spending additional money for a Viognier is not necessary in this case.
Classicwines.com Video Review for the Cline Viognier
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March 8 2008
On the heels of the February and March editions of Wine Blogging Wednesday (WBW), an important point of interest has emerged that is a stunning dichotomy for wine lovers online, and it will not be resolved any time soon.
First, the February edition of WBW, hosted by Andrew from Spittoon, asked participants to write their tasting note in just seven words. This was a hyper approach to a “sniff-swirl-spit-jot” routine that challenged most to act as their own harshest editor, losing the adverbs and refining the tasting note to its essence—a sort of “keep it simple for stupid” in our fast-paced, ‘cut to the quick,’ ‘net it out’ kind of lives.
Then, just a few short weeks later, Joel from Wine Life Today implored us to discuss our “comfort wines” – the wines that acted as an oasis in a sea of craziness, the wine that that we love to relax to.
It is an interesting contrast in thematic flavors, to be sure.
I’m reminded that a book on the market, Microtrends by Mark J. Penn, posits that decrease in French wine consumption, that affords the U.S. to increase its market size on the world stage, is partly based on our export of an “on-the-go” culture—in stark contrast to the convivial, take it as it comes approach to food and wine that has been the French trademark. Simply, according to this book, the French are drinking less wine because they are eating more as a function of need and less as a promise of relaxing repast.
A recent article in the USA Today (found here) says in part:
Our fast society is only getting faster, putting inordinate demands on our time and prompting the people and companies that service our lives to come up with ways to help us reclaim some of it.
The article goes on to say, in a quote from author Timothy Ferriss:
Acceleration isn’t necessarily a bad thing, but it is when applied to all things … I find that for most people, a sped-up life leads to feelings of guilt and anxiety instead of productivity and relaxation. Unending acceleration isn’t scalable, whether as a lifestyle or a business model.”
With the convergence of technology and the wine industry occurring at a very accelerated rate, what is it folks?
Is technology a tool to deliver our “oasis?” Are Twitter tasting notes a “cut-to-the-chase” tool for cutting the fat and getting to the point?
Or, is technology a tool that will further threaten and commoditize; isolate the relaxing notion of a good bottle of wine shared with good friends, fostering memories of time, place and circumstance?
Your comments welcomed …
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March 6 2008
Either I read too much, or the Anderson Valley Chamber of Commerce has an active pr intern. How else to explain reading two mentions of the native dialect, Boontling, from Boonville in Anderson Valley, in two major magazines within the span of two hours?
First, I have to say, prior to Tuesday evening, I had never heard of Boonville, CA, in the Anderson Valley in Mendocino County and I definitely had not heard of their local dialect, Boontling.
However, in the April 2008 issue of Wine & Spirits magazine, in an article about micro Pinot Noir vintners, there was a reference to a “Fog-eater,” a term used to refer derisively to a coast dweller, on the margins of an already rural society.
Then, while reading the March 2008 issue of National Geographic Adventure magazine, there it is again. In an article about traversing Hwy 1 north of San Francisco, the magazine suggests cutting over from Hwy 1 to Hwy 128 and stopping in Boonville, where the folks have their own language, before heading over to Hwy 175 and cutting down Hwy 29 through Napa Valley.
With Pinot and Alsatian varieties hotter than a stolen pistol, it makes some sense to become familiar with the Boontling dialect, you know, in case you find yourself in those parts and without your Berlitz Guide to Words and Phrases, Boontling edition.
First, it is important to note that Anderson Valley (download nice four-color, printable map here), aside from the Central Coast and its overlapping AVA’s, is one of the hottest up and coming regions in California.
A cool climate area, Pinot’s and Alsatian whites are coming out of that area that are earning critical acclaim and playing right into the sweet spot of balanced, acid-friendly and food-friendly wine trends that are gripping restaurants on either coast. Most notable, perhaps, aside from the micro-vintners that are earning their way into securing grapes from growers, is Londer and Navarro, both of whom make a consistently popular Pinot Noir, amongst other varieties.
But, aside from the wine, more interesting to me is the fact that the folks in Boonville, the largest town in Mendocino County (whopping population of about 1300) have their own dialect.
From Wikipedia:
Although based on English, Boontling’s unusual words are unique to Boonville. Scottish Gaelic and Irish, and some Pomo Indian and Spanish also influenced the vocabulary of the language.[1] Boontling was invented in the late 1800s and had quite a following at the turn of the century. It is now mostly spoken only by aging counter-culturists and native Anderson Valley residents. Because the town of Boonville only has a little over 700 residents, Boontling is an extremely esoteric dialect, and is quickly becoming archaic. It has over a thousand unique words and phrases.
From the Anderson Valley Brewing Company web site:
Boontling flourished in the valley for as much as forty years, and can still be heard, when some of the codgy kimmies (old men) get together. There are very few Boont harpers left, and its use has dwindled greatly, but evidence of the language can still be found, if you know where to look. Local public pay-phones are designated as Bucky Walters (nickel telephones). The local tow-truck has “ Boont Region De-arkin’ Moshe” (Anderson Valley Un-wrecking Machine) stenciled on the side. And the Anderson Valley Brewing Company has christened their ales with the Boontling names of certain valley regions, as a tribute to the spirit of Anderson Valley and its people.
In the event that you ever find yourself up in Boonville, visiting some wineries, here are a couple of words that may help ease your way into the local culture (from Wikipedia):
abe - to butt or crowd in so as to push a person out of line and take his or her place.
branching - stepping out for a good time.
itch neem’r - with desire to drink: one would say, “I itch neem’r”
tidrick - A party; a social gathering
Bahl - Good; of excellent quality
Bahler - Anyone or anything of unquestionably good quality
Bahlest - excellent, best, or great
Beemsh - A show; an entertainment; a spectacle, program, or exhibition
Bee’n - The buttocks
Blooch - To chatter aimlessly
Bluejay - A resident of Philo, in lower Philo
When you are visiting Navarro in Philo, just a piece up the road from Boonville, try this one on for size and do not blame me if people look at you funny.
“I was itch neem’r and we were branching out to Navarro with the bahler wine it was a beemsh on Saturday and I had to abe a Blooch Bluejay with my bee’n at the tidrick.”
On the other hand, perhaps, just buy some of the Anderson Valley vino and make up your own words.
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March 5 2008
In August, I asked in a post found here, “When is Amazon.com going to tilt the wine industry? It might only be a matter of time.”
Sure enough, according to an article today found at Ft.com the answer is “now.”
Kudos to the Financial Times for doing some creative sleuthing and looking at job postings, of all things. Of course, I did the same and found the following:
From the Amazon.com job posting:
The Sr. Buyer is responsible for the acquisition of massive new product selection, as Specialty Foods is an emerging segment and the Sr. Buyer will work to build out entirely new selection from the ground up. Responsibilities will include sourcing leads, defining and tuning a leads qualification process, and calling on vendors directly, both from our Seattle corporate offices and in the field. Sr. Buyers must demonstrate a deep and broad experience with the Wine segment, as well as demonstrated ability in Buying. Key areas of responsibility include among others: negotiation of agreements with a wide set of vendors, inventory planning, catalog management, supply chain and logistics Best Practices, market research and a strong knowledge of current market trends, persuasive selling of the platform and the value proposition of Amazon.com’s Consumables offering.
As I elaborated in my post in August, there is a ripe opportunity to source wines directly from the wineries and act as the e-commerce engine for e-commerce retail sales, but the greater opportunity, in my estimation, is Amazon’s infrastructure capability and their distribution centers across the country. Should they choose, Amazon.com could use their 13 + distribution centers and turn into, immediately, one of the most sophisticated wine distributors in the country powering thousands of vertical wine web sites.
I have often used the analogy that online wine e-commerce is, present day, akin to selling books online circa 1996. Amazon.com apparently thinks so, too, seeing as how they pioneered the space.
Do you think it would be that hard for Amazon.com to file permits in each of the states in which they have a distribution center to cordon an area for dedicated wine storage as a distributor? Me neither.
Using Amazon.com technology, I could open up an e-commerce store, draw from Amazon.com inventory, use Amazon.com logistics to ship to my customers and run a vertically focused online wine retail business.
Frankly speaking, Amazon.com could do the same and sell directly to bricks and mortar businesses, as well--a just-in-time wine distributor.
It will be interesting to see how this unfolds because it would appear that the initial foray might be strictly retail for Amazon.com proper, selling to a consumer, but I would be surprised if they did not have the eye on a larger prize.
For more reading:
New York Times Article from April of last year on their infrastructure
Site on Amazon.com fulfillment services
My original post dated August 16, 2007
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