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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?

Winebits 415: Pennsylvania, direct shipping, cheap wine

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PennsylvaniaMore obstacles: The Wine Curmudgeon has watched with glee and sympathy as Pennsylvania has tried to reform its state store system, where you can only buy wine from stores operated by the state. Some of it has been silly, like wine vending machines in grocery stores, and some of it points to how screwed up the political system is when it comes to liquor law in the 21st century. like state store reform held hostage in the state’s budget impasse. So we should not be surprised that spirits producers are threatening to hold their breath until they turn blue if the state allows wine to be sold outside of state stores but not liquor. Which means, I suppose, that state store reform is no closer today than in the past.

Personalized direct retail shipping? The VinePair website reports that the next big trend in wine shopping will be stores or services that send you wine that you want without you having to decide what you want; the trendy 21st term is “curated wine.” Which sounds nifty, but doesn’t take into account three-tier. That’s probably one reason why the post has to quote a retailer in New York City that offers the service, shipping to New York customers. Yes, this is a terrific idea, but it will never work in the U.S. unless the retailer can ship to all 50 states with a minimum of fuss, paperwork, and legal obstacles. Which, unfortunately, will probably not happen any time soon.

Blue collar wine: A tip o’ the WC’s fedora to Forbes’ Cathy Huyghe, who spent the month of November writing about the wine that most of us drink, and not Forbes’ one percenters. “…[I]t has turned out to be one of the most eye-opening projects I’ve ever done. … The longer I’m a wine writer, the further away it’s possible to get from the wines that most people drink.” Welcome to the fight, Cathy. The more wine writers who learn this, the better off wine will be. One of the biggest problems I have is convincing my colleagues that there is demand for serious criticism of what your articles call “Blue Collar” wine. 

Winebits 404: Restaurant wine, distributors, direct shipping

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restaurant wine One person’s inexpensive: One more example of how restaurants are out of touch with their customers when it comes to restaurant wine prices. This new Dallas restaurant is boasting about its reasonably-priced list, because, said a restaurant official, “We have a low mark up on our wines, so we’re priced fantastic.” That would be a wine list with most wines supposedly costing less than $100 (no website for the restaurant yet, so I couldn’t check). What would the official have said if there had been really expensive wines on the list? Is it any wonder, unless there’s a special reason to go, that the Wine Curmudgeon has all but abandoned Dallas’ restaurants? Besides, it’s more fun eating at home.

Bigger and bigger: It’s not just wine companies that are getting bigger, but distributors as well. Wine Industry Insight reports that the 10 biggest distributors in the country control more than two-thirds of the wholesale business, which makes the group more or less as dominant as Big Wine. Why does that matter to consumers? Because, thanks to three-tier, every wine sold to a retailer or a restaurant in the U.S. has to pass through a distributor, which tacks on as much as 25 percent to the cost of the bottle for their effort. Fewer and bigger distributors means less competition, which means that percentage won’t get any smaller any time soon.

Best practices: Want to know how to help your wine survive shipment, whether it comes directly from the winery or from an online or local retailer? This list, from Entrepreneur magazine, hits the highlights nicely, emphasizing how little wine likes heat, vibrations, and being left on a delivery truck all day. One overlooked point: Give the wine, particularly the pricier bottles, a chance to recover from the trip. The bottles need to rest after being bumped across the country, and letting them sit in a cool, dark room for a week or so isn’t a bad idea.

 

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