Category Archives: Wine trends

Why Big Wine will keep getting bigger


Big WineThink this year’s wave of Big Wine buyouts was impressive? Just wait. Big Wine is only getting started.

The wine industry is going through unprecedented consolidation, and even I’m surprised — and I’m the one who predicted it. That’s because three things have made this the perfect time for companies like E&J Gallo, Constellation, and The Wine Group to snap up smaller producers the same way a small child attacks Chicken McNuggets. This is a mixed blessing for the consumer, who will get increased access to well-made wine, but at the cost of much of the wine tasting the same regardless of where it’s from and who made it:

• Cheap money. Interest rates are not just at historical lows, but have been there for almost 10 years. That makes the cost of borrowing to buy a winery so low that even those of us who aren’t M&A geniuses understand how much sense it makes. Plus, rumors of an interest rate hike this fall may have spurred this summer’s wave of buying, so that Big Wine could lock in all that cheap money.

• The biggest wine companies are preparing for a world where we buy most of our wine at grocery stores, warehouse stores like Costco, and large chains like Total Wine. This will happen sooner rather than later (if it hasn’t already), and anyone who doesn’t understand how important this is is missing the biggest change in the wine business since the end of Prohibition. Big Wine wants product to fill all those store shelves, and the easiest way to do that is to buy another winery. Could the local wine shop, with someone who waits on you, become as quaint as the corner drug store and gas stations with attendants who clean your windshield?

• The end of the family winery era in California, which started in the 1980s and did much to make California wine some of the best in the world. But wine is not immune to the laws of family business, which say that any family business that lasts past the first generation is the exception. And most of the family wineries that have been sold in the past couple of years are first- and second-generation companies. As one banker told me, there are more wineries that want to sell than anyone can imagine.

The other thing about all these buyouts? That wine, despite what so many think, is no different from any other industry, and the same kind of consolidation that has transformed U.S. business since the beginning of the century — Heinz buying Kraft, for example — will transform wine. This is a change many don’t like and even more don’t understand, but it seems inevitable.


Oregon and pinot noir


oregon and pinot noirOr, how a state that everyone laughed at when it first started making wine has turned into one of the best regions in the world for pinot noir. That’s the subject of a story I wrote for the Wine Business International trade magazine. Given Oregon’s success over the past 30 years, and how little too many consumers still know about the state, and it’s worth noting the story’s highlights about Oregon and pinot noir:

 • Oregon’s lesson for other states that want to be something besides a winemaking curiosity? Don’t be afraid to zig when the rest of the wine world is zagging. In this case, it was growing pinot when everyone else said it couldn’t be done, and not accepting the conventional wisdom that said they should do what California did. “The people who came to Oregon in the first place were pioneers, not just because it was a new region, but because they had a different spirit,” says Thomas Houseman, the winemaker at the 15,000-case Anne Amie Vineyards, who worked for Ponzi Vineyards, one of the state’s first producers. “They really didn’t have an idea about what they wanted to do. They just figured it out as they went along. And that’s still part of Oregon.”

• Legend says that a group of growers smuggled the first pinot cuttings from Burgundy in France, home to the world’s greatest pinot noir, to get around federal regulations. Ask about the legend, and you get a lot of winks and grins.

• Pinot noir isn’t the only grape Oregon’s producers do well. Its pinot gris, fruit forward and crisp, puts most of the rest of the world to shame, and I have always enjoyed Oregon sparkling wine. Ironically, chardonnay has never fared well, despite the state’s favorable terroir, but producers are making another effort with the grape, and have enjoyed some success.

• Price is also an important part of Oregon and pinot noir. My pal Wayne Belding, MS, a wine educator and reformed retailer, says that “at $50 and $60 for the top-end wines, they provide value not seen with pinot noir anywhere else in the world. There’s a common style, delicacy and nuance. They aren’t trying to make powerhouse wines.”

Want Oregon wine suggestions? Use the search box on the right side of the page and type in Oregon.

The craft wine dilemma

craft wine dilemma

Which is craft wine and which isn’t?

How do you describe a wine that isn’t made by a multi-national and that doesn’t sell millions of cases? Is craft wine the proper description? And, if it is, how do you prevent the multi-national from describing its product the same way?

That’s the craft wine dilemma, as producers try to find terms to separate their wine from mass-produced grocery store plonk — even if their wine isn’t all that different.

There is no legal definition of craft wine, and borrowing the term from beer doesn’t help. Craft beer, which is assumed to be made by small, independent producers, is driving what little growth there is in the beer business, but craft beer includes Shiner and its 6 million cases and Boston Beer’s Sam Adams and its $2.9 billion in sales. Both belong to the Brewers Association craft beer trade group, demonstrating how empty the term is. Consider (and allowing for a 24-can case of beer vs. a 12-bottle case of wine) that Shiner would be tied for 12th on Wine Business Monthly’s top 30 U.S. producers list, just ahead of Bogle, and Boston Beer would be among the top three or four biggest wine companies in the country by sales.

The Brewers Association trade group guidelines don’t help much either, offering lots of PR speak (“Craft brewers tend to be very involved in their communities through philanthropy”) and little else. Also complicating matters: The rash of lawsuits over the past year from disgruntled consumers suing craft brewers and distillers because their craft products don’t seem to be that much different from the products made by multi-nationals, save for higher prices. No wonder there was such a spirited discussion on Tom Wark’s Fermentation blog this summer about the subject, looking for the best way to describe what Wark calls wine made by a “small, hands-on, privately owned, high-quality oriented winery.”

The craft wine dilemma reminds me of Justice Potter Stewart’s famous definition of pornography: “I know it when I see it.” If an 8 million case producer like Delicato Family Winery uses the term hand-crafted for some of its wine, does hand-crafted have any meaning? On the other hand, can a producer that mostly fits Wark’s definition be called a craft winery if its idea of quality is to make an overoaked fruit bomb designed to get 98 points and cost $100?

Establishing legal (or even trade group-agreed) definitions for craft and similar terms is the obvious solution, but most of the wine business will burn down the blog and carry me off with pitchforks for suggesting it. Still, given that some plaintiffs have won their craft definition lawsuits, maybe that idea is worth considering. Otherwise, it will be a long time before anyone solves the craft wine dilemma.


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