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Tag Archives: Big Wine

Winebits 373: Big Wine, Treasury, direct shipping

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Big Wine How big is big? One of the most difficult concepts to get consumers to understand is that their wine probably isn’t made by who they think it is. As noted here, Big Wine controls a majority of the U.S. market, and Big Wine includes many companies most of us have never heard of. Case in point: Trinchero Family Estates, a 20-million case producer that wants to be a 30-million case producer. And how many of us have heard of Trinchero, a California company? It’s best known for Menage a Trois and Sutter Home, but those are only a fraction of Trinchero’s production and its three dozen brands. If Trinchero makes it to 30 million cases, it will be as big as the entire U.S. wine business was in 1965.

Now they’ve figured it out: Regular visitors may remember the Wine Curmudgeon’s attempt to cash in on Treasury Wine Estate’s financial woes, which — not surprisingly — failed. One reason, aside from my lack of financial acumen, is that the people running Treasury were a little confused about how to sell cheap wine. Luckily for the company, that seems to have changed, and its results in the U.S. are much improved. Ironically, it seems this success came from a formula that I suggested when I wrote abut Treasury’s problems last year. Not that the company needs to give me credit — I’m used to saving really rich people lots of money.

The judges like their wine: Supreme Court Justice Ruth Bader Ginsburg made a bit of news last week when she admitted she fell asleep during the State of the Union address in January because she had too much wine. This got giggles from many, but they missed the point, focusing on Ginsburg’s age, 81. Rather, it points to the real reason the court ruled in favor of direct shipping in 2005 in the landmark Granholm decision, which surprised many observers. Forget precedent and constitutional interpretation; the Supremes carved out an exception to the three-tier system because they liked wine and wanted to be able to have it shipped legally from their favorite California wineries. How else to explain that Ginsburg, Anthony Kennedy, and Antonin Scalia, all referred to in the BBC story in the first link, voted to allow direct shipping?

Winebits 363: CDC, lawsuits, Big Wine

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CDC excessive drinkingSaving us from ourselves: The Centers of Disease Control is at it again, reassuring those of us who drink too much that there is hope. Says the head of the health agency’s alcohol program: “Many people tend to equate excessive drinking with alcohol dependence. We need to think about other strategies to address these people who are drinking too much but who are not addicted to alcohol.” This strikes me like being sort of pregnant, but what really matters is that the CDC’s definition of excessive drinking is wine with dinner, and this fact doesn’t appear in the story. For which the Wine Curmudgeon must call out Tara Parker-Pope at the New York Times for repeating that assertion. Which, as near as I can tell after doing the reporting, is scientifically unfounded.

When is Champagne not Champagne? When it’s the name of a wine writer, reports Decanter, the British wine magazine. Hence the lawsuit filed by France’s Champagne trade association against Australian Rachel Jayne Powell, who goes by Champagne Jayne. Since Powell also writes about other sparkling wine, the Champagne group says her name violates European Union rules. Their logic? That Champagne can only come from the Champagne region of France, so a writer who uses Champagne as a name can only write about Champagne. The case is scheduled to go to trial next week in Melbourne, believe it or not, and Decanter reports that it could set precedents. The Wine Curmudgeon, whose aversion to silly lawsuits like this is well known, has a suggestion: Settle by letting Powell call herself champagne Jayne with a small C, since every wine geek knows Champagne only comes from Champagne with a capital C.

Yet another million case producer: One of my goals with the blog is to help consumers understand that most of the wine we drink doesn’t come from artisanal producers, but from Big Wine — the multi-million case producers who dominate the business. That’s why this two-part interview with someone I’ve barely heard of is worthwhile. In it, Vintage Point’s David Biggar talks about his company’s 17 brands, the best known of which is Layer Cake. In this, what the wines taste like barely comes up, though there is plenty of discussion about pricing, distribution and the three-tier system, and margins. Which is what the wine business really is, and not all that foolishness that the Winestream Media would have you believe.

Winebits 356: Big Wine edition

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wine news big wineBecause it’s always worth knowing what the six companies that control 60 percent of the U.S. wine business, plus their biggest competitors, are up to:

The biggest producer you’ve never heard of: Delicato Family Vineyards makes 5 million cases of wine a year, almost all of it Great Wall of Grocery store stuff, and almost all of it in anonymity. You might have heard of some of its brands, like Bota Box and Gnarly Head, but the winery itself is perfectly happy to be little known. That’s why this two-part interview (here and here) with Delicato president and CEO Chris Indelicato, conducted by the Shanken News Service is worthwhile. Indelicato talked about wine prices and that another big harvest in California this year will mean lower margins for producers, if not lower prices for consumers; that we’ll see more cheap pinot noir that doesn’t exactly taste like pinot noir because consumers want it; and that consumers are smarter than they used to be. Which doesn’t exactly jibe with doing Bota Box pinot noir and what Indelicato calls the consumer’s demand for soft — i.e., sweet — red, but who am I to argue with a 5 million case producer?

• Big companies, big results: Each year, the Impact trade magazine names its Blue Chip Brands, which have to meet growth and profit targets. Not surprisingly (at least for those of us paying attention), one of the Big Six, Constellation Brands, and Diageo, in the top 15, account for nearly one-third of the 2014  of Blue Chip Brands for beer, spirits, and wine. Constellation’s wines included Woodbridge, Black Box, Estancia, Ruffino, Kim Crawford, and Simi, though Diageo’s brands were all beer and spirits. I’d also mention that all but one of the Constellation wines cost $10 or less, but that would probably be preaching to the choir.

Big and getting bigger: The news release itself is close to useless, full of jargon and terms most of us don’t understand. But the gist is what matters: That Chile’s Concha y Toro, the biggest Latin American wine producer with $950 million in sales, is growing at a rate of 18 percent a year. That makes it one of the 15 biggest wine companies in the U.S. market, with more market share here than Diageo.  Again, this is a company that most wine drinkers don’t know (though they have likely heard of Fetzer, which Concha bought in 2011). In this, it’s another example of how the biggest companies continue to tighten their grip on the market.

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