Wine studies, wine analysts, and wine foolishness
by Wine Curmudgeon Posted On
A couple of months ago, I wrote about what I thought was the dumbest thing ever written about the wine business: That chardonnay was declining in popularity because more Hispanics were drinking wine.
Turns out I was the dumb one, because a study released last month was even sillier ? that the Internet and big retailers would eventually put the local wine store out of business. Where do people get these things? And who is goofy enough to pay them to write this stuff? More, after the jump:
VINEXPO, the international wine and spirits trade fair, commissioned the report, ?Distribution in the World and Expected Changes by 2020. ? It said that the key trends in the wine business in the 18 countries that drink three-quarters of the world ?s wine were the rise of China, and declining sales in small stores, bars and restaurants thanks to the Internet and the increasing influence of mass retailers like supermarkets and big box stores.
And, as Reuters quoted VINEXPO Chief Executive Robert Beynat: "We will probably see corner stores disappear eventually. ?
Nothing like hedging your bets, is there?
The study strikes me as written to reinforce conventional wisdom ? first, of the omniscience and omnipotence of the Internet, and, second, that China will usher in a golden age where everyone in the wine business will get rich without having to work very hard. The latter may eventually be true, given the 1.3 billion Chinese. But it ?s worth noting that today, the Chinese market, in terms of volume, is less than half the size of the U.S. market. And 40 percent of us don ?t drink.
It ?s the first statement, though, that makes me really wonder what the study ?s authors were thinking. It ?s not that the Internet isn ?t all powerful; just ask anyone who owned a book or video store. Rather, that Internet retail wine sales are illegal in most of the U.S. (constitutionally prohibited, in fact). So how will the Internet eventually replace small retailers in the U.S.? Equally as bizarre: How will big retailers, who aren ?t allowed to sell in key states like New York thanks to the three-tier system, replace small retailers?
The study was done by the Wine Intelligence consultancy, which is usually better than this. In fact, there ?s a more nuanced look at the study at thedrinksbusiness.com, which leads me to believe that Beynat and VINEXPO, in order to grab headlines, got ahead of themselves. Which apparently worked, since they got lots of cyber-ink in China. That U.S. consumers drink more wine than anyone else in the world was probably too first decade of the 21st century for them.
Most Hispanics in the U.S. would not know an Albarino or a Mencia from a Chardonnay or a Cabernet. Whoever wrote that stupidity deserves a glass of “natural” wine.
I am a wine columnist, former sommelier and wine educator. However, before my wine career, I was a marketing consultant whose last book,
“Multicultural Marketing: Selling to A Diverse America” sold out three printings.
Just a quick correction: “… Internet retail wine sales are illegal in most of the U.S. (constitutionally prohibited, in fact)” is not quite true. The Granholm decision was specific to wineries, and State courts and legislatures have mostly followed suit, keeping the decision narrowly focused as applicable to wineries only. But the basic premise of the dispute that led to Granholm remains true also for retailers – the Constitution guarantees equal treatment in commerce between in-state and out-of state businesses. The Repeal only provided that the States had the right to regulate sales of alcohol. The Granholm decision in essence stipulated that States must be equal in their treatment of in-state and out-of-state businesses even when they have authority over the federal government in regulating a business sector. I’m fairly certain that this will ultimately be codified into law as more retailers’ challenges make their way to the Supreme Court.
Paul, most people in the U.S. can’t legally buy wine on the Internet from a retailer save several exceptions like wine.com. The federal courts, as recently as the Texas Siesta Village case in 2010, have reaffirmed that.
I once thought, as you write, that the 2005 Granholm decision, which allowed consumers to buy directly from wineries, would change that. I long ago changed my mind. The three-tier system is too entrenched for that to change any time soon.