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Category Archives: Wine news

Winebits 380: Wine prices edition

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wine pricesCheaper imported wine? That’s the question that many people were asking last month at a major European industry trade show, ProWein in Germany. The dollar has gained more than 20 percent against the euro in the past year, and the exchange rate is near 1-1, something that hasn’t happened in decades. This change was welcomed by many foreign producers, since it would make their wine easier to sell in the U.S. Said one Spanish winery official: “Obviously, the exchange rate is helping us very much and gives us a number of opportunities at the moment.” Whether consumers will see lower wine prices on store shelves, though, remains to be seen. Distributors and importers are reluctant to cut prices, not only because it means more profit for them if they don’t, but because the industry seems committed to the idea of premiumisation, trading U.S. consumers up to more expensive bottles of wine.

Less cheap wine? Maybe, maybe not. This story, from CNBC, is the sort of thing that makes me crazy — a reporter is given an assignment and isn’t quite sure how to do it. The story starts saying that California’s drought will make quality cheap wine more difficult to find, but soon detours into sake, wine writing, the difference between Old World and New World wines, and that drought isn’t necessarily a bad thing for grapes. Blame the editor, who was too busy or too lazy or too indifferent to offer the reporter any direction. How do I know this? The reporter quoted another reporter, which is not something you’re supposed to do. A better editor would have taken that out, with a stern warning not to do it again.

Lots of effort to little effect? Researchers say they have discovered how to successfully price wine futures, part of a disturbing trend in wine research that focuses on wine that almost no one buys but that gets a lot of attention. It’s one thing to research the futures market in corn, wheat, and pork bellies, because that determines the price of food. But wine futures? Would it matter to anyone but the Winestream Media, very rich people, and a handful of retailers if they went away tomorrow?

The most popular restaurant wines

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restaurant winesOr, to phrase it more accurately, why the most popular restaurant wines aren’t wines that most of us drink. Which is not surprising, given the way too many restaurants treat wine drinkers.

The tipoff, of course, is price: Only one of the top 10 wines in the annual Wine & Spirits poll retails for less than $20, so by the time you add restaurant markup, we’ve passed that all-important $20 threshold. That’s the price that 95 percent of Americans who buy wine won’t cross. The average price for the top wines are ridiculous: $103.50 a bottle, up more than 20 percent from last year, and almost $13 a glass. That means one bottle is almost enough double the price of dinner for two at a nice restaurant, and who wants to do that?

Is it any wonder, then, that restaurant wine sales have not returned to pre-recession levels, and that one restaurant executive has criticized what he called restaurant complacency, adding “We see early warning signs for wine in the restaurant business. We may say, ‘wine is best with food,’ but that isn’t what our customers are telling us.”

Which is what the Wine Curmudgeon has been saying for years; that someone in the restaurant business agrees with me is welcome news. But does it matter, or is that complacency too much to overcome? I’d argue for complacency, based on the poll results. Eight of the 10 best-selling wines are the same as they were 10 years ago, which is hardly different or unique. And, to add insult to injury, the best-selling sparkling is Veuve Clicquot, about as hip and with it as I am.

Also depressing: Sommeliers, both here and elsewhere, keep insisting that they’re trying to make restaurant wine lists more interesting, but that doesn’t come across in the survey. Gruet, the sparkling wine from New Mexico but which is now made with California grapes, hasn’t been interesting for years. But it’s the third best-selling bubbly by the glass, as if the cava and Prosecco revolutions had never happened.

In this, restaurant wine is the trendsetter in just one thing: That wine is becoming increasingly splintered, with the focus on selling to the elite and leaving the rest of us to fend for ourselves.

Winebits 379: Big Wine, diet soda, regional wine

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big wineBig and getting bigger: Wine sales in the U.S. were mostly flat last year, which makes the growth in E&J Gallo’s various brands. including Barefoot, all that much more impressive, reports Shanken News Daily. Total U.S. wine sales were 321.8 million cases in 2014, and 17 million of those were Barefoot — more than five percent of the total. Given the thousands of wine brands in the world, that one brand, and especially one that isn’t sold in many wine shops, accounts for that much wine is difficult to imagine. It speaks to Big Wine’s ability to put product on store shelves and to market it onces its there. It also illustrates the divide in the wine business between what we’re told we’re supposed to drink and what most of us do drink.

Is diet soda dead? Which matters to wine drinkers because the sales of diet Coke, Pepsi, and so forth appear to have started an irreversible slide, down 20 percent from their all-time high in 2009. The reasons are many, reports the Washington Post, but center on health, including the artificial nature of diet soda. So where will diet soda drinkers go next? It’s not soft drinks, which are also declining in sales, again for health reasons. The Wine Curmudgeon could offer wine as an alternative, pointing to the growth of Barefoot and what are considered wine’s heart health benefits. But that would mean the wine business is interested in attracting non-wine drinkers through education and outreach, something that we know isn’t true. Ah, missed opportunities.

The next Napa Valley: During my many years working with regional wine, the one thing that has always made me crazy is hearing someone from a U.S. region talk about how they wanted Texas or Colorado or Virginia (or wherever) to become the next Napa Valley. To which I always asked: Why do you need to do that? Why can’t you be the best Texas or Colorado or Virginia (or wherever)? Turns out I’m not the only who feels that way. Rob McMillan at Silicon Valley Bank writes that he sees the same thing all the time, and with California wine regions. “Do you really want to be like Napa?” he asks. The post is a little technical for consumers, but the point is well made. If you can’t make world-class cabernet sauvignon, why would you even think of being like Napa, let alone build a region behind that goal?

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