Category:Wine trends

Winecast 54: Melanie Ofenloch and wine’s #MeToo moment

by Wine Curmudgeon Posted On

Melanie Ofenloch
Melanie Ofenloch: Yes, wine has a good old boys network.

“It’s something that is so pervasive and such a part of the fabric of how men feel they can take things. It’s just not right.”

• Melanie’s post about the podcast and the sommelier sex scandal

Melanie Ofenloch writes the Dallas Wine Chick blog, and is well regarded for her work. But that’s not her day job — she is a long-time top-level marketer, and she has traveled the world for a variety of multi-national companies. As such, she lends a unique perspective to wine’s #MeToo moment.

And, not surprisingly, says Melanie, the Court of Master Sommelier sex scandal is no different than anything she has seen in the business world. The surprise is that so many people accepted it as part of the culture. But the stories that have come out, she says, don’t even scratch the surface.

So why were people in wine so complacent? Why did it take so long for this to come out? Why did it happen in wine, which prides itself on being different? And what can be done to fix it?

Click here to download or stream the podcast, which is about 13 minutes long and takes up almost 9 megabytes. Quality is mostly excellent.

Expensive wine pricing and snobbery have been institutionalized, legitimized, and even admired

by Wine Curmudgeon Posted On

expensive wineCan’t afford to buy one of the world’s great wines? Then lump it

This is the second of two parts looking at the conundrum that is wine pricing today – we’re awash in cheap, often crummy wine, while the prices of the world’s great wines are at all-time highs. Today, part II: How we got to the point where no one but the ultra-rich can afford the world’s great wines. Part I: The grape glut, and what it means for consumers.

The problem with expensive wine prices is not that they are expensive or that wine snobs are eager and willing to pay them. We’ve always had both. Rather, it’s that never before in the history of wine has pricing and snobbery been institutionalized, legitimized, and even admired. We’re at a point where people buy the world’s great wines not to drink them, but to keep them in a vault and watch them appreciate in value, using their acquisitions to prove their superiority to the rest of us.

How screwed up is that?

But that’s where we are, and it’s the reason why the world’s great wines cost thousands of dollars a bottle. Consider: I can pay for a place to live for a month, or I can buy a  2016 Harlan Estate cabernet sauvignon for $1,450 at a Dallas retailer. By one estimate, prices of the finest wines have increased eight-fold since the early 1990s, even after inflation.

On the other hand, the price of decent everyday wine, despite premiumization and inflation, is probably about where it was when I started the blog in 2007. I could buy Domaine Tariquet for $10 then, and it’s more or less $10 today.

So how did we get to this point?

Much of it has to do with the seismic shift in U.S. wealth distribution over the past 40 years, where we’re approaching disparities not seen since the Depression. More millionaires mean more people with more money to spend, so why not spend it on wine? Isn’t that what rich people do? Or, as Sports Illustrated’s Jonathan Wilson has called it, the greed of late-period capitalism.

Besides, as one California winemaker told the San Francisco Chronicle’s Esther Mobley: “I’m starting to come to terms with the fact that wine has always been a luxury commodity. Unfortunately, it’s a beverage of privilege.”

And what better way to leverage that privilege than with Liv-Ex, the stock market for wine? Buy a bottle, put it away, and watch it appreciate in value. Who cares if it spoils or goes off? The point is not to drink it, but to use it to amass even more wealth. And, since the supply of fine wine is limited, the more it’s in demand, the higher the price will go. And, as Eric Asimov pointed out in last week’s New York Times, demand is increasing thanks to all that wealth.

How sad is that? Great wine reduced to a share of stock.

The irony, of course, is that legitimate stock markets serve an economic purpose, to help companies raise capital. Amassing wealth is a benefit, and not a stock market’s reason for being (as it is with Liv-Ex). The other irony? Liv-Ex is a lousy way to amass wealth. Its Fine Wine 50 index has increased 26 percent in five years, or about what an ex-sportswriter who writes about wine could do with a mediocre mutual fund. The Dow Jones Industrial Average, on the other hand, has increased about twice that much.

Long-term effects

So why does this matter to the rest of us? Shouldn’t we happy with our Tariquet and leave it at that? Let the snobs waste their money. And don’t we have more important things to worry about, like the increasing disparity of wealth?

Yes, obscenely expensive wine prices are a result of the disparity, not a cause. But know two things: First, that these prices work their way down to the bottom, so every $1,000 bottle of Harlan ends up raising all prices. The Mulderbosch rose, a pleasant enough wine, now has a suggested retail price of $17 for no good reason at all, save rising prices elsewhere. In fact, that’s the sham of premiumization — we’re paying more money for the same  quality wine and not a better bottle.

Second, and more important, can you imagine a world where only the most wealthy are allowed to look at great art and to read great books? You’re not rich enough for Picasso or Rembrandt or Shakespeare or Jane Austen, so lump it.

That’s not a world I want to live in. Do you?

Photo: “Wine Auction” by alans1948 is licensed under CC BY 2.0

The WC Wine Business Index: Four more signs the wine glut is upon us

by Wine Curmudgeon Posted On

grape glutThe grape glut means there’s lots of cheap wine on the market, from Aldi to Costco to Albertson’s

This is the first of two parts looking at the conundrum that is wine pricing today – we’re awash in cheap, often crummy. wine, while the prices of the world’s great wines are at all-time highs. Today, part I: The grape glut, and what it means for consumers. Part II: How we got to the point where no one but the ultra rich can afford the world’s great wines.

How do we know the wine glut is upon us? Because the Wine Curmudgeon’s Wine Business Index tells us so. How about $2 wine in many of Albertson’s California stores? An Aldi chardonnay where the bottle probably cost more than the wine inside it? Or a constant flow of samples this fall of cheap wine that I’ve near heard of before?

In other words, there are lots and lots of grapes in California, and neither the Trump tariff or increased on-line sales have done anything to fix it. And why do we care about a grape glut? Because if there are too many grapes, we’re going to see cheaper wine prices, thanks to the law of supply and demand. This doesn’t necessarily mean we’ll see lower prices on established wines; rather, what I’m hearing is that producers are “inventing” cheap wine brands or making private label wine to soak up excess grapes.

First, though, what you need to know about the WC Wine Business Index. It’s my attempt to overcome the contradictions, inaccuracies, and confusion that are inherent in most wine statistics. I interview retailers, producers, and marketers from around the country to see if I can outline where the wine business is and what it means for consumers.

Alive and well

And from what I’ve found, the glut is alive and well:

• Consider Albertson’s Sea Ridge wines, which have been marked down to $2.21 from $3.49 in many of the chain’s West Coast stores. At that price, the supermarket is more or less selling the wine at cost. (And a tip o’ the WC’s fedora to blog regular Nick Angel for sending this my way.)

• Aldi’s $8 Exquisite California chardonnay. It comes in a heavy bottle (about 21 ½ ounces) with a deep punt and a heavy foil cap. This is could well be a “shiner,” said one long-time Sonoma winemaker. That means the wine was bottled by another producer, but sold to Aldi at a discount. “I haven’t tasted it,” said the winemaker, “but it would have been produced by someone who thought they would sell it for $30-plus a bottle, but it became ‘albatross inventory’ and got sold real cheap.”

• Costco’s Kirkland Sonoma chardonnay, which has sold for $7 or $8 for the past couple of vintages That’s an almost unheard of price, even for a deep discounter like Costco. It works out to about $3 a bottle for the wine (allowing for $2,400 a ton for chardonnay and 756 bottles to a ton). So, somehow, the cost of production and any profit has to come out of the other $4 or $5. (Another tip o’ the WC’s fedora to blog regular Walter Blood for sending this my way.)

• Sample after sample of wine costing $15 and less from producers I’ve never heard of. Typically, this only happens when there are excess grapes and chance to make a wine at high margins even at lower prices.

Having said all of this, one Napa winemaker told me she doesn’t expect the glut to last much after the 2020 vintage. This year’s harvest almost certainly won’t be as big as 2019’s, which will limit production. So the future for prices as we go into 2021 remains uncertain.

Wine history lesson 2: Maynard Amerine on quality, price, and value

by Wine Curmudgeon Posted On

maynard amerineLegendary UC-Davis professor Maynard Amerine told us 45 years ago that price was no guarantee of quality or value

One of the most intriguing things about U.S. wine history is how it repeats itself. Time after time, smart people warn the wine business about what will happen if it doesn’t pay attention to its customers. And, time after time, the wine business ignores the warnings – much to its detriment.

Today’s wine history lesson comes from legendary University of California-Davis professor Maynard A. Amerine, with wisdom from his 1976 book (written with UC-Davis math colleague Edward B. Roessler), “WINES: Their Sensory Evaluation.” It was perhaps the most important wine book of its time.

What made it so important? I asked Randy Caparoso, a long-time wine critic and restaurateur, who wrote about Amerine on the Lodi wine appellation blog. What struck me about his Amerine post was that the UC-Davis professor echoed the analysis of pioneering wine writers Leon Adams and Frank Schoonmaker, who earned their own blog post about a year ago.

“I think people like Amerine, Adams and Schoonmaker could clearly see the writing on the wall,” says Caparoso. “That’s because, even in the ‘50s and ‘60s, they personally knew many a well-heeled wine collector or connoisseur. Same for me during my career as a wine professional, which started in ’78. These kinds of people were already driving up prices with their mania for ‘great’ wines. This was the essence of Amerine’s quote, ‘Drink wine, not labels.’ … But what was true 50, 60 years ago was bound to get even worse in the 21st century, and it has.”

In other words, Amerine – like Adams and Schoonmaker – predicted the mess we find ourselves in: Too much ordinary wine, too much overpriced wine, and a wine industry that doesn’t understand that it has lost its audience because it has focused on either ordinary or overpriced wine.

Enjoying wine –without the fuss

Hence, three of Amerine’s eight guidelines for enjoying wine:

• You don’t have to be an expert to enjoy wine. It’s “nonsense… The expert may know why he enjoys a certain wine but he would be presumptuous to claim that he enjoys it more than the amateur. The latter may, in fact, enjoy a certain wine more fully than the expert precisely because he doe not have the knowledge and experience to make all the possible comparisons among wine.”

• Small wineries are not better just because they are small. “Some of the worst wines we ever suffered came from small, picturesque wineries. We hasten to add that some of the best also came from small wineries. It is the standards of the producer, and a fair amount of luck, that determines the quality of the wines produced, not the size of the winery.”

• Expensive wines are not necessarily better than cheap wines. “Some are, many are not. Price depends on many factors that are not necessarily related to quality. Those who buy wines on a price-basis deserve what they get. … But it is the quality of the wine, not the price, that is important. Some famous vineyards, secure in the knowledge that they have an established market, often charge whatever the market will bear. This means that the wines are sometimes not worth the higher price if quality alone is the criterion for selection.”

Photo courtesy of the UC-Davis Library, using a Creative Commons license

New study says we’ll be eating – and drinking – more at home, even after the pandemic ends

by Wine Curmudgeon Posted On

restaurant wine
USA Today reports that 2.3 million restaurant jobs have been lost during the pandemic.

As many as one in four say they anticipate forgoing restaurants – and restaurant wine – in the future

A Florida consultancy predicts that restaurant spending could fall by as much as one-half by the time the pandemic ends. Even more surprising, says its study: Consumers seem content to cook and eat at home. If true, this has tremendous implications for the wine business.

That’s because about 40 percent wine sold in the U.S., measured by dollar sales, is sold in restaurants. So if that market goes away, there’s going to be even more wine glutting the market – and there’s already a glut.

And if that happens, we could be looking at lower prices but also more winery failures – and especially on the high end, since that’s where much restaurant wine comes from. This might also lead to more winery consolidation, which means less consumer choice. The biggest wineries have the deepest pockets, and will be better able to survive a massive glut.

The results come from Florida-based Acosta, in a study called “COVID-19: Reinventing How America Eats.” It described what seem to be massive shifts in consumer eating habits: 44 percent report eating breakfast at home daily, compared with 33 percent pre-COVID. Similarly, 31 percent are eating lunch at home every day versus 18 percent pre-COVID, and one-third are eating dinner at home daily versus 21 percent pre-COVID. All of those people eating at home, says Acosta, translates into 31 to 50 percent less spending at midscale, casual and fine dining restaurants.

Don’t panic yet

But let’s look at the caveats:

• Acosta didn’t respond to a couple of requests for an interview. The study is based on “online surveys of Acosta’s proprietary shopper community” in early July, as well as industry data and “proprietary information sources.” Proprietary means the company doesn’t discuss how the survey works, which means it’s OK to be skeptical about the results. We know how Nielsen measures sales; we don’t know how Acosta divines its results.

• On the other hand, Acogta’s pessimism about the future of the restaurant business dovetails with most of the gloom and doom prognosticated elsewhere. USA Today reported in early October that 2.3 million restaurant jobs have been lost during the pandemic, while 12 percent of sit-down restaurant chain units that were open before COVID-19 had closed.

• The 40 percent restaurant wine sales number is misleading, since it’s measured in dollar terms. Given that restaurant wines tend to be more expensive, and that restaurant markups inflate that total, the amount of wine sold in restaurants in actual bottles is probably much less than 40 percent of the U.S. total. Hence, the loss of the restaurant market wouldn’t be quite as devastating, and it would also be mitigated by people buing less expensive wine at the supermarket.

• Some of the results in the survey require a second look. For example, “35 percent of consumers said they’ve discovered a new passion for cooking amid the pandemic.” Which is all well and good, but does it actually mean anything? And one-fifth to one-quarter of the respondents say they anticipate eating out less in the future, which is understandable in July but may not mean much next spring.

So, yes, more not good news for the restaurant and wine businesses. But maybe, given all the bad news we’ve had, not quite as bad as it seems.

Buying wine online: Six months of virtual shopping during the pandemic

by Wine Curmudgeon Posted On

buying wine online
“Hmmm.. what does the WC say about buying newer vintages?

Seven things I’ve learned while buying wine online during the pandemic

Buying wine online during the pandemic has not necessarily been difficult. Aggravating in many ways, certainly, and especially for anyone who likes to visit wine shops. Virtual shopping is just not the same as holding a bottle in your hand and waving at the employee in the next aisle.

Having said that, there’s something to be said for buying wine at the keyboard instead of masking up and braving a retailer in a state where not everyone believes in science. So, seven things I’ve learned to make buying wine on-line easier during the pandemic:

• Retailer websites are what they are, and that isn’t Amazon – and there’s nothing you can do about it. When the pandemic started, several analysts told me that most retailer e-services weren’t prepared to handle the traffic they would soon get. So when national e-tailer Wine.com has to apologize because it’s having trouble filling orders, imagine how much trouble smaller retailers are having. Consider one Dallas retail site advertising 15 wines for $15 or less – three of which cost more than $15.

• Pricing is all over the place. The La Vieille Ferme French rose, long a Wine Curmudgeon staple, costs $8.99 on Wine.com and at Whole Foods; $6.99 at Total Wine; $14.99 for 1.5 liters, the equivalent of two bottles, at Kroger via Instacart; $8.95 at Central Market, the Texas version of Whole Foods; and $7.34 at Spec’s, Texas biggest retailers (but it isn’t for sale on Spec’s via Instacart).

• Bookmark the LCBO website – the government owned retailer for Canada’s Ontario province. It includes alcohol levels, something many retail websites don’t list. Because they don’t, I’ve bought too many whites and roses at 14 ½ percent, which is not what I want in a white or rose.

• Scores and winespeak dominate, which does most of us – since we aren’t looking for trophy wines – no good. How about a wine that “expresses citrus and floral notes reminiscent of hawthorn and vine flower. “ Oh yeah, hawthorn and vine flower. On the other hand, I’ve had decent luck with the star ratings on Wine.com; less than 4, and I know to stay away.

Where’s the wine?

• Availability is just as goofy as pricing, and not just for the wine made with weird grapes that I like. It’s even true for mass market products like the La Vieille. I bought it on Wine.com on Sept. 10, but when I checked the price for this post, about two weeks later, it was sold out. This vanishing act happens on other other retailer sites, large and small. Much of it stems from increased demand, as more of us buy wine online, as well as pandemic-related supply chain problems. Plus, as one retailer told me, they’re keeping less wine in inventory to cut costs. My advice? If you see something you like, buy more than one. No guarantee it will be there next time.

• Given this limit in selection, I’ve been forced to try different wines and different styles. Which has been terrific – who wants to get in a wine drinking rut? That includes a variety of South African wines, several from the New World, and even Italian sparkling.

• If the site doesn’t list a vintage, good luck – and many don’t. I’ve had wines as old as 2013 dumped on me, with not unexpected results – oxidized, spoiled, or vinegary. In addition, if the e-tailer is out of one vintage, it will substitute another (check the fine print on the site, which says whether they do this). That’s a problem when I’m buying a 2019 to review and get a 2016 instead. Hence, I’ve started leaving notes, specifying which vintages I’ll take, Otherwise, I tell them to skip that wine.

Finally, make sure to uncheck all the “We’re going to send you e-mails, e-mails, and more e-mails” boxes in the permissions in your account. Otherwise, you’ll spend more time deleting email than buying wine. And, no, Instacart, I don’t want to rate my delivery experience with Eric, no matter how many times you ask me.

Photo: My Friend’s Coffee by John Beans is licensed under CC BY 2.0

More about buying wine online:
• Is the coronavirus pandemic the beginning of changes to the three-tier system?
• The buying wine on-line checklist
• Winecast 45: DCanter’s Michael Warner and wine retail trends during the duration

Winecast 51: Ray Isle, Food & Wine magazine and wine during the pandemic

by Wine Curmudgeon Posted On

ray isle
Ray Isle: “Producers are doing anything they can to keep prices from going up.”

“It’s a complicated time for sure, and especially complicated for small producers. … It’s not a time I’d want to be starting a winery.”

Ray Isle, the executive wine editor of Food & Wine, has a unique perspective on wine during the pandemic. He not only writes about wine for one of the country’s leading food magazines, but he brings a practical sense to the job that many of his colleagues don’t bother with. Or, as he said during our chat: “I got into wine as a poor graduate student, and my budget for wine was about $14.99 a month, and I’ve never abandoned that. You have to write about the affordable stuff. That’s what people like to drink.”

We talked about that, and Ray offered a variety of value wine suggestions, including the Sokol Blosser Evolution No.9 white blend (in a 1.5 liter box, no less, which I also liked); a South African red and white; and an $11 Chianti. We also touched on:

• Wine prices and availability during the pandemic — both seem to be better for domestic wines than for imports because of the tariff.

• The future of the tariff; he, too, is cautiously optimistic about getting rid of the 25 percent levy regardless of what happens in November.

• The state of restaurant wine, and why we should be worried about the future of the U.S. restaurant business because trouble there means trouble for or wine.

Click here to download or stream the podcast, which is about 18 minutes long and takes up about 12 megabytes. Quality is very good to excellent.