Archive for the ‘Wine Sales and Pricing’ Category
Monday, April 1st, 2013
by Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)
 As we try to open our winery and tasting room, I think (maybe) we are heading into the home stretch, at least as far as getting the necessary applications in is concerned.
I spend a decent amount of time dealing with real estate investment, and I’m always blown away how for every transaction you seem to end up with something between Moby Dick and War and Peace once you have added up all the documents that you need to sign to buy or sell a property.
But the real estate business can’t hold a candle to the wine business. If buying a property means having to deal with a Moby Dick of paperwork, trying to start a winery seems like something equivalent to the entire corpus of 19th-century American literature. I used to consider myself a winemaker. Now I think of myself as a professional paper pusher.
But maybe it’s coming to an end. Then again, maybe I’m just fantasizing that because if I truly believe that this paper pushing frenzy was going to go on and on, I think I might shoot myself.
I am not, by nature, anti regulation. I think there are lots of things that you can’t just allow people to do willy-nilly without any supervision.
But as I’ve worked my way through this process, I can’t help but feel that things have gotten out of hand. Each requirement makes sense when you look at it narrowly; however, when you add them all together, it becomes an overwhelming challenge to comply with every one of them. So the exercise becomes one of dotting i’s and crossing t’s.
What increases the problem exponentially is the fact that you’re dealing with a number of jurisdictions. There’s no one place you can go, fulfill their requirements, and walk out with the right to open winery. Have you complied with the federal requirements? That’s good, but don’t forget the state. Covered that too? Well, don’t forget the county. But it’s not just the “County”. It’s planning, it’s building and safety, it’s health.
The latest form I had to fill out required that I designate the location and size of the various functions of the winery. Where are we going to crush? Press? Store barrels? Store finished wine? For each of those, how large is the area going to be.
I have a ready answer to each of those: how the hell should I know? When we get in, we’ll try putting the tanks one place, and if that doesn’t work, we’ll put them someplace else. I think I know where we’ll put the crusher, but maybe it’ll turn out that that’s too far from the electrical outlet, or something.
Of course, putting: “how the hell should I know?” on the form doesn’t cut the mustard. So I made my best stab at it, and hopefully I’ll end up not being too wrong.
I guess the saving grace to all this is that while they are big on requirements, enforcement is virtually nonexistent. I am quite sure that if enforcement were even half assed, the wine business, as we know it, would cease to exist.
At any rate, it looks like we will be ready to submit to the Feds, the state of California, and Solano County all within the next week. I have to admit I’m keeping my fingers crossed on that, though.
After that, I am sure everything will just sale through, and we’ll be up and running shortly. Maybe that’s a fantasy, but it keeps me going.
Posted in Wine Marketing, Wine Sales and Pricing | No Comments »
Monday, March 18th, 2013
by Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)
I have been a bitter critic of wineries, usually the biggest of the big, that routinely churn out mediocre wines stripped of all that makes wine interesting. Start with perfectly good grapes, and filter and fine and stabilize and centrifuge them and they lose most of what makes them potentially wonderful drinking experiences. True, not a few of these wines still manage to be pretty good, but it’s in spite of, not because of, these processes. It’s not good enough to say you made a good wine, when you really started out with something capable of being a whole lot better.
So I guess I got something of comeuppance last week. One of our distributors reported that one of our wines (our Petite Sirah to be precise) had been stacked at our warehouse upside down. Since this wine is unfiltered, and naturally subject to throwing off sediment anyway (it’s a fairly tannic wine), it has been accumulating sediment on the cork surface.
My immediate reaction: So what? When I get a wine with sediment, that’s a big plus for me. It shows it’s a real wine. It’s a tradeoff I’d gladly make: a little sediment for a real wine.
Our consumers reaction? Not nearly so positive. In fact, downright negative.
It’s a bummer, plain and simple. If you don’t go the “strip everything out of the wine that any person could possibly find offensive” route, you run the risk that those someones will find the wine wanting, or even flawed. That this is the furthest thing from the truth, is a big “so what?” if what counts is getting your wines sold.
I can remember tasting some years ago the same wine, one that had been cold stabilized, and one that hadn’t been. The unstabilized wine was subject to forming crystals when put in a fridge for a period of time. But my God it was so much better. Yet pretty much everyone cold-stabilizes their white wines, because, God forbid, a consumer might think there’s slivers of glass in his wine.
Want your wine to be clear as bell, without the slightly hint of haziness? Bentonite filter the hell out of the wine, and you’ll get that super clear look that everyone likes. But taste that super clear wine against the pre-filtered version, and you’ll find it has lost a lot of what the wine originally had.
So what do winemakers do? They routinely bentonite filter their whites.
So what starts out as a vibrant, even profound, wine, gets dumbed down into something innocuous but commercially acceptable.
I can rail about this til the cows come home. But I am but one lonely voice in the wilderness.
So what to do with our Petite Sirah? Well, you can have the warehouse spend its time (and our money) to turn all the cases upside down. Of course, this isn’t the best way to store wine, since you want the cork contacting the wine, not the air (hopefully neutral air) inside the bottle. Keeping the cork in contact with the wine keeps it from drying out. Dried out corks let air into the bottle, which will result in oxidation of the wine. It’s probably not that big a deal for our Petite Sirah, since we don’t have that much of the wine left, and it’s probably not going to go off on us before it gets sold.
Of course, whenever you do anything, it has unintended ramifications. When you turn the case upside down, all of sudden your label is upside down too. Solution: plaster new labels over the old ones.
So it really comes down to simple choice: do we stick to our guns, damn the ignorance of the wine consuming public, or do we do what we have to do keep our sales going? Well, that’s no brainer if there ever was one. I’m ordering the new labels tomorrow.
I still think those big megawineries are scoundrels guilty of compromising and adulterating their products. But maybe with a little less of the vehemence I felt a week ago.
Posted in Wine Sales and Pricing, Wine Tasting, Winemaking | 5 Comments »
Monday, February 11th, 2013
by Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)
Steve Heimoff’s post “Closure of Masa’s raises questions about cult wines” (http://www.steveheimoff.com/index.php/2013/02/04/closure-of-masas-raises-questions-about-cult-wines/) really has little to do with Masa’s and a lot to do with cult wines. Heimoff questions whether cult wines are becoming something of a dinosaur, something that will expire before the ever changing demographics and tastes of our society. I have my doubts, but I’m really going to devote this post to my own views on cult wines.
I can summarize my views succinctly: I hate cult wines. It seems like no matter how I approach cult wines, no matter what my point of view of the moment, I can find no redeeming quality in cult wines.
First, let’s look at quality. No doubt, the average cult wine is better than the average wine, when you factor in all the mediocre wines out there. And, let’s face it, lots of wines don’t just end up being mediocre—they were mediocre from the get-go. Not even an attempt to be anything other than plonk.
But cult wines are no better on that score than most well-made wines. Ask yourself if, tasting blind, you could pick out with any regularity the cult wine ringer from a flight of non-cult wines. I know to the extent I could succeed on that score, it would be blind luck. Even when I know which wine is the cult wine and which is not, I can’t see how the cult wine is, on average, better than a $15-30 wine of the same variety and style.
But, when you think about it, what is it that makes a cult wine a cult wine? It really has more to do with mob psychology, abetted by savvy marketing, than anything else. Everybody says Harlan or Screaming Eagle or whatever the latest entry into the cult wine Hall of Fame is, is lights-out, and the herd meekly follows. Again, I’m not saying these wines are piss-poor. They are, by and large, fine wines. But are they really head and shoulders above the rest? Hardly.
But the quality issue is really the least of my issues with cult wines. Wine should be one of life’s simple pleasures, nothing more, nothing less. It’s a complement to a good meal, or conversation with good friends, or, even better, both. It’s something that should be enjoyed by all, old, young, male, female, high-school graduates and Ph. Ds.
I had today what I can only describe as an exceptional glass of ice tea. Don’t know what it was about that glass, or maybe my mood, but it just really hit the spot. That ice tea was of one of life’s little pleasures. That’s what wine should be as well.
Cult wines are the exact opposite of that. Instead of being a simple pleasure, it turns wine into a contest where those with the money and “sophistication” can supposedly enjoy something the rest of us can’t. They become the self-anointed high priests of wine. Instead of a simple pleasure for all to enjoy, it’s the prized possession of the few insiders.
I think this does enormous harm to the business. How often do I hear someone say that they are “just” a novice, don’t “know” wines, can’t “appreciate” a truly fine wine? Most of those people probably aren’t going to become regular wine drinkers because being able to appreciate wine has become a feat to be mastered with great effort. Note that there are no “cult” beers, “cult” orange juices, or “cult” much of anything else. To win a few snobs with money to burn, we’ve alienated a large part of our potential market, to our harm and their loss.
Since snobbery is unlikely to disappear anytime soon, I think Heimoff is wrong, and that cult wines will be with us for some time. But if Heimoff turns out to be right, no tears will be shed here for their demise.
Posted in Wine Sales and Pricing, Wine Tasting | 2 Comments »
Monday, February 4th, 2013
by Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)
Last week’s post generated a few comments of interest pertaining to why most restaurants serve pretty uninteresting, if not downright piss-poor, wines. One from Beth caught my attention:
Jeff,
It’s true, many restaurants serve sucky wine, but it’s not because they aren’t interested in serving better wine. It’s because they believe their customers aren’t interested in spending the money to buy better wine. They say their customers are more concerned with price point than with quality.
I’m a wine industry member who represents a fantastic portfolio with great values. The biggest challenge I have in selling to casual style restaurants is the buyers are looking for wines in the $3-$4 acquisition range for which they charge $5-$6 a glass. Between the profit margin they make and the inexperienced wine drinkers frequenting these establishments, they have no motivation to serve better wines - even at a 2nd tier price point.
It’s easy to blame the restaurant, which is what I guess I did, but in many ways it does make more sense to blame the consumer. I think Beth is right—the restaurants are simply responding to what the consumer demands. And for many (not all) restaurants, the demand is for something cheap, and quality comes in second. And if you can sell a bottle you buy for 3-4 dollars for 5-6 dollars a glass, then maybe there’s not a whole lot of motivation to try to put something a little more interesting out there.
No small winery can make a wine that can be sold by a distributor for $3-4. So that market goes by default to the megawineries that can churn out plonk by the tankersfull.
But I do have to admit that I truly wish restaurateurs which would at least make the effort to push something a little bit better. Even in the $6-9 wholesale price category, you can find interesting wines. Maybe no one is getting rich at those price points, but the wines are there to be had.
Anyone who has been reading this blog knows I’m not a believer that you need to pay a lot of money to get a truly good wine. But you do have to pay something, and few if any $3-4 bottles of wine pass muster. I’m not even sure why that is, because I do believe it’s possible to make a decent wine at that price point, though again it will take a large winery to do it. But while I believe it’s possible to do, no one seems to be doing it.
Which gets me back to my original point—if you want a decent glass of wine, you have to pay a little more for it. In my experience, at most moderately priced restaurants, you can get a pretty decent wine in the 8-10 glass range, but not in the 5-6 dollar range. At least that’s my experience.
To my mind, those extra few dollars are well worth the expense. Personally, as much as I like wine in theory, in actuality I really don’t enjoy drinking a insipid glass of plonk at all. I’d just as soon drink a decent beer (in fact would prefer one), or even a glass of water. Bad wine just doesn’t give me any pleasure. So if I can pay a little more and get something I truly want to drink, why wouldn’t I do that?
Obviously, there are many more people who feel differently, so I think we’re in for more of the same—second rate wines dominating the restaurant scene.
Posted in Wine Marketing, Wine Sales and Pricing, Wine Tasting | No Comments »
Monday, January 7th, 2013
by Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)
I would highly recommend reading this article, “Concentration in the U.S. Wine Industry”, that can be found at https://www.msu.edu/~howardp/wine.html.
Just a few of the interesting tidbits of information contained in the article: Bronco Wine Company, maker of Two Buck Chuck, has 3.5% of the US market. I’ve always thought of Bronco of being a pretty large wine company, and I guess it is. But it’s puny compared with Gallo, which has the largest single share of the wine market at 22.8%. Think of it—almost a quarter of the wine sold in America is sold by Gallo. That’s mind-boggling.
The Wine Group isn’t that terribly far behind at 15.9% of the market, followed by Constellation at 12.8%. Such large companies as Trinchero and Treasury are less than 5% each.
The interesting thing about these companies is that they each have a stable of brands that, on the surface, doesn’t betray their ownership. Turning Leaf is a Gallo brand, for instance, Corbett Canyon a Wine Group brand. So it’s very easy for a consumer to pick up bottle of wine at his local store and not have a clue he’s really buying a Gallo product. That bottle of wine doesn’t come from some relatively small winery at all. In fact, the name on the label isn’t even a winery, it’s just a name that Gallo or one of the other megawineries has fashioned as a vehicle for their millions of gallons of wine. As the authors note: “Although choices remain abundant, particularly for those with access to non-chain retailers, it is increasingly difficult for consumers to recognize which companies they are supporting with their purchases.”
When it comes of variety, there’s nothing like that—you pretty much know what variety you’re getting. But once again, there’s a great deal of concentration when it comes to variety. Chardonnay, Cabernet Sauvignon, and Merlot are the biggest sellers. Zinfandel, which seems like a pretty common variety, is far down the list. So Americans seem to like a few varieties of wine, and by and large ignore the rest.
But for most other consumer products, the degree of concentration is much greater. As dominated as the wine business is by a few large firms, it’s even worse in the beer and soft drink businesses. So, as hard as it is it start up a small winery and find distribution, microbreweries and small soda manufacturers have an even tougher time of it.
I find this all a bit depressing. What may, at first glance, look like a wide range of choice, is really pseudo-choice. Basically the same product by the same producer is peddled under a variety of brands, creating the illusion that there’s a plethora of different products, when that’s simply not the case. And the illusion is even worse when someone who thinks he’s buying a wine from a small producer is really buying a Gallo or Wine Group product. It’s as if Budweiser produced its beer but bottled it under any number of names to hide the fact that it was just Bud. I’m not sure if that would be tolerated in the beer marketplace, but it certainly is when it comes to wine.
Posted in Wine Marketing, Wine Sales and Pricing | 2 Comments »
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