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Category Archives: Wine news

Winebits 424: Scottish wine, domain names, crowdfunding

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Scottish wine

A Scottish wine story requires a picture of haggis, the Scottish national dish.

 • Too much rain: Scotland’s hopes for its own wine, which never seemed possible because the climate was too cold and too went, have been dashed once again. The drinks business reports that persistent rain in eastern Scotland has prevented Aberdeen’s Christopher Trotter, a chef and food writer, from producing anything commercially viable. He wasn’t able to bottle any wine in 2015, and the 2014 vintage yielded just 10 bottles — which critics called “undrinkable.” The Wine Curmudgeon feels Trotter’s pain. Regional wine, no matter where the region, is always more difficult than you think it will be, and there are always problems you never imagined. And I’ve tasted plenty of undrinkable regional wine.

Bring on .wine: Want to brand your website as definitely wine? Then you can buy the .wine and .vin domain names, two so-called not-coms that are finally available. There was concern from some legally protected wine regions, like our friends in Champagne, that the .wine and .vin names would be used to abuse their place names, but they bought Champagne.wine and solved the problem. The Wine Curmudgeon probably won’t buy winecurmudgoen.wine or .vin — not sure it would make much different to my brand, and winecurmudgeon.wine sounds stupid, anyway.

Kickstarting a winery: Recent changes in federal investment law allow businesses like wineries to use crowdfunding sites like Kickstarter and Indiegogo to raise $1 million in any 12-month period from friends, followers, customers and community as long as the sites meet federal guidelines. This is a significant change to current law, though not everyone is sure it’s a good idea. It’s one thing to raise money for a wine book on Kickstarter; it’s another to raise millions to expand a winery. Regardless of anything else, writes Jesse Debban in the North Bay Business Journal, the new regulations mean “the public — including your competitors and customers — will have access to sensitive information about your business.”  Which may be OK in the tech business, but is something completely different in the highly private wine business.

Winebits 423: Kroger wine, direct shipping, Bordeaux

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kroger wineThe big get richer: The Wall Street Journal is reporting that Kroger wants to contract management of its wine and beer departments to Southern Wine & Spirits, the biggest distributor in the country, so that the grocer doesn’t have to worry about buying or stocking the shelves. If accurate, this represents another significant change in the way we buy wine and the choices we get when we do. For one thing, Kroger is one of the biggest wine retailers in the country, and has paid for political campaigns to allow supermarket wine sales in many states, including Texas. Second, Southern could favor its brands over those of other distributors, giving its products better shelf space. Third, and the story isn’t clear on this, producers would have to pay Southern for the privilege of having it manage the shelves, and how many small producers could afford to pay those fees? I’m going to follow this story, because if it happens, other big retailers will follow, and our wine-buying lives will get that much more difficult.

Rapid growth: The direct shipping market — wine sold to consumers directly from the winery and the only exception to the three-tier systemgrew eight percent last year, to almost $2 billion. Which is a lot, though some perspective is needed: the U.S. wine market totaled about $39 billion in sales in 2014, so direct shipping represents less than five percent of the total. In addition, direct sales are focused on consumers in just five states, and one of them is California, where shipping costs are less of a factor. Also, the cost of the average bottle sold directly is $38, which means most U.S. wine drinkers are priced out of the DTC market. (And a tip o’ the Curmdgeon’s fedora to Steve McIntosh at Winethropology for sending this my way.)

Cheap by whose standards? The Wine Curmudgeon has long advocated that Bordeaux’s sales problems in the U.S. are a function of price, and this gem from the Village Voice demonstrates that nothing has changed. It touts the value in the current vintages of Bordeaux, yet only one of the eight wines in the story costs less than $25, a $17 bottle from what’s called a satellite appellation — a lesser region of Bordeaux. To add insult to injury, the story says it’s difficult to find satellite appellation wines because they usually don’t have scores and you will have to consult a “Bordeaux connoisseur.”  Yeah, like most wine drinkers have a Bordeaux connoisseur in their phone. And aren’t we done with scores yet?

Is the U.S. wine boom over?

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U.S. wine boomThat’s the question that the annual Silicon Valley Bank state of the wine business report addressed last week, and the answer? It does look like the U.S. wine boom is over — for now, anyway. And though Rob McMillan, who writes the report, was optimistic that the slump may be short-lived, the fact that he cut through the usual pom poms and short skirts that pass for wine business analysis speaks volumes about how serious the situation is for anyone who loves wine.

The report predicts a decline in U.S. per capita wine consumption after more than 20 consecutive years of growth, and while overall sales in dollar terms will increase slightly, sales measured by the amount of wine sold will remain flat for the fifth year in a row. That is also the end of a two-decades-old trend; after sales bottomed out in the early 1990s, they increased annually, even through the recent recession.

McMillan points to three reasons for the change:

• The collapse in sales for wine that costs less than $6 a bottle, the boxes and jugs of Almaden and Carlo Rossi that have been some of the biggest cash cows in wine retail history. “That market is gone,” he said during the report’s webcast last week, “and it’s not coming back.” Yes, consumers are buying more expensive wine, but not as many of them are buying wine overall, and premiumization seems to stop at $15. There is little evidence that anyone is trading up higher than that.

• Competition from craft beer and spirits, which are more appealing to younger consumers. The report didn’t go into detail about why they’re more appealing, but as a 20-something woman told me the other day (and she worked in a wine shop): “Wine is such an anachronism.”

• Generational change, and McMillan said what few others in wine want to admit publicly. The Baby Boomers who powered the 20-year wine boom don’t drink as much as we used to, and we’re going to drink even less as we age. Meanwhile, the Gen Xers and Millennials aren’t making up the difference, whether because they’re drinking craft beer or can’t afford to. I talked to McMillan after the report came out, and he was blunt: “The Millennials are not going to spend the money on wine that the Baby Boomers did.”

In fact, most news reports of the study downplay that bit about the Millennials, who are supposed to be the wine business’ savior. But anyone who is clear-eyed about the economy understands that that may not be possible. First, this isn’t the 1990s, when the gross domestic product grew three to four percent a year. Second, the Millennials, for all the talk about peak earning years, don’t have access to the same high-wage jobs the Boomers did 20 years ago. And third, without those high-wage jobs, they will have even more difficulty paying off an unprecedented $1.3 trillion in college loan debt. All of which means it’s more likely they’ll buy a $5 craft beer instead of a $15 bottle of wine.

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