Archive for the ‘Wine Sales and Pricing’ Category

Sediment

Monday, March 18th, 2013

by Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)

jeff-smI 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.

Cult wines, or the triumph of hype

Monday, February 11th, 2013

by Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)

jeff-smSteve 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.

More on Sucky Wine

Monday, February 4th, 2013

by Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)

jeff-smLast 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.

Concentration in the US Wine Industry

Monday, January 7th, 2013

by Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)

jeff-smI 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.

A bureaucratic morass

Monday, November 26th, 2012

by Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)

jeff-smAs I write this, I’m a couple of hours from meeting with our possible new landlords for a tasting room and winery location.  I can’t help but feeling that the whole process is set up to be an obstacle course where every advance seems to be followed by a strategic retreat.

Unfortunately, alcohol is probably most regulated industry there is, apart from things like nuclear reactor waste disposal.

In order to do almost anything in the wine industry, you need to run the gauntlet of first federal, then state, then local regulation.  Each regulation viewed in isolation seems reasonably tailored to some reasonable goal.  That’s not 100% true, since many regulations have no other purpose than to make the production and sale of alcohol more difficult for no good reason.  And many other regulations seem more tailored to protecting the vested interests in the three-tier system than anything else.  But even if you grant that most of the regulations are well-intended, in practice they become a labyrinth that at times seems overwhelming.

We started off with the desire to open a tasting room.  To have a tasting room, you need to be winery.  Since we’ve used another winery to make our wines, this meant we had to made to the transition to being a winery ourselves.

That wouldn’t have been too much of problem, since the law allows for alternating proprietorships.  In essence, that allows more then one winery to share one physical facility.  So we could have continued doing pretty much what we’ve been doing for years with the technical difference that we would have obtained an alternating proprietorship permit.  That would have also allowed us to open an off-site tasting room.

But each step of the regulatory system seems to impact every other step.  The county, which had initially indicated all we had to do to have a tasting room was to store some wine there as well, decided we needed to ferment some wine there too.

Only the feds don’t allow you to ferment wine at a location that isn’t a winery.  So now our tasting room needs to become a winery in its own right.   So much for the alternating proprietorship route.

On the other hand, the idea of having our own winery is pretty attractive.  It’s been fine having our wine made to our direction.  But the idea of actually making it ourselves is pretty attractive.  So maybe it’s a blessing in disguise.

The county didn’t stop there, though.  Originally we had intended to have our wine outside.  This would have avoided some costly alternations to the interior of the building we had our sights on.  But now the county wants the wine stored inside.  So the improvements appear to be unavoidable.

Having to ferment onsite is costly in other ways.  You need equipment, such as a crusher and press, that you wouldn’t otherwise need.

So the next step is, with the county’s requirements a known quantity (at least for now), I need to meet with the owners of the property to see if we can work out the various issues (rent, improvements, etc. etc. etc.) that need to get worked out before we can move forward.

I have little doubt that every winery that opens a tasting room has to go through a similar travail.  But, as with pretty much everything else, the burden on a small winery is greater.  The costs and work are similar, but that cost must be supported by a much smaller operation.  And a larger enterprise has access to many resources to help the process along.  For us, it’s pretty much me.

I’m still optimistic I can make this happen, one way or the other.  But the idea that you just rent some space somewhere and start pouring is light-years away from what you really have to go through.