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Big Wine tightened its grip on the U.S. market in 2013

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Big Wine tightened its grip on the U.S. market

So how many smaller wine companies should we buy this year?

Big Wine tightened its grip on the U.S market in 2013, with new figures showing that three companies accounted for more than half of all the wine produced during those 12 months. E&J Gallo, The Wine Group, and Constellation Wines totalled some 187.5 million cases of the 370 million produced.

Throw in the next three biggest companies — Bronco, home of Two-buck Chuck; Trinchero Family Estates; and Treasury — and that total rises to 241.4 million cases — about two-thirds of the wine made in the U.S. The top 30 by themselves account for some 90 percent; in other words, all the wine that those of us who write about wine love to write about? Hardly anyone drinks it. No wonder availability is such an issue.

More, after the jump:

Winebits 324: WC favorites edition

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Winebits 324: WC favorites edition

Will empty tables force restaurants to change the way they approach wine?

Because the things that fascinate me about wine and that consumers need to know — and which rarely include toasty and oaky — keep making news:

Distributor clout, once again: When in doubt, they get out the checkbooks, reports an Ohio newspaper group. The state’s beer and wine wholesalers donated $146,000 to Buckeye state lawmakers around the time the Ohio legislature passed a bill — apparently, without anyone knowing — that made it illegal for the world’s biggest brewer to buy more distributorships in the state. In addition, said the story, “both Republicans and Democrats benefited from the wholesalers’ cash. And donations sometimes rose noticeably around the time a key vote was scheduled.” My favorite part of the article is the quote that says the distributors, who have a constitutionally-protected monopoly that all but guarantees them profits, were saving Ohioans from the nefarious actions of an evil multi-national beer company. Talk about the pot calling the kettle black.

Restaurant sales still slow: The restaurant business continues to struggle, says this story from Nation’s Restaurant News, and no one is quite sure why. Is it the result of the worst winter in 40 years? Is it a hangover from the recession, which never really ended for all but the most high-end restaurants? Is it a fundamental shift in the way Americans eat? The restaurant business matters in wine, as regular visitors here know, because restaurants go out of their way to hurt wine. And the slump in restaurant sales, which has lasted more than five years, may force changes in the way restaurants deal with wine, which means better quality and lower prices. Or so some very smart analysts have told me.

The biggest wine companies: Mike Veseth at the Wine Economist looks at disintermediation, an economic term that refers to the specialization of labor. In this case, it’s about the number of employees needed to to make a case of wine. Not surprisingly, the formula is not as simple as it sounds, and speaks to the way post-modern business works — outsourcing, contractors, and the like. Many of the biggest wine companies don’t own vineyards or even wineries; one company, Castle Rock, produced 550,000 cases with just nine employees. “With product chain disintermediation, the number of people actually employed by a winery can be surprisingly small with that tiny workforce specializing  in coordinating the various firms and contractors that make up the links in the chain,” wrote Veseth. What this means for consumers? Less expensive wine, of course, since disintermediation lowers the cost of production.

Image courtesy of Berenika, via stock.xchng, using a Creative Commons license

Marketing foolishness, or ‘Yes, but what does the wine taste like?’

One of the most important developments in wine, and especially for consumers, is the upsurge in marketing. Yes, the business always marketed its product, but the approach usually focused on the wine.

No more. Today, it’s almost all about wine as lifestyle product. If the following are any indication of what’s to come, wine drinkers are in deep, deep trouble.

• From Trinchero Family Estates, one of the Big Six wine producers, for a new product called Fancy Pants: ““Fancy Pants has certainly struck a chord with consumers. It’s a memorable brand name with a stunning package, but more than anything Fancy Pants is about bringing ‘fun’ and ‘fancy’ to any occasion.”

• Also from Trinchero, for its best-selling Menage a Trois line: “As a seductive wine, Ménage à Trois wines are a perfect fit to watch ‘The White Queen’ series. STARZ urges viewers of ‘The White Queen’ to ‘choose your side,’ and at Ménage a Trois, we offer our consumers the chance to ‘choose your wine,’ with a portfolio that now includes 11 different varietals.”

I was going to write something snarky about each blurb, but what’s the point? Each is already snarky enough, and that certainly wasn’t the intention. Sadly, the people who wrote these, like this person, probably figure they’re award winners.

One day, perhaps, the Wine Curmudgeon will figure out why some producers treat wine drinkers like we’re idiots. Because I sure don’t understand it now.

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