Category:Wine trends

Can Grocery Outlet spread the gospel of quality cheap wine?

by Wine Curmudgeon Posted On

Grocery OutletGrocery Outlet, the west coast discount supermarket, wants to use cheap wine to help it expand across the country

Grocery Outlet, the west coast discount supermarket, wants to expand across the country. Can it do so in this age of Walmart, Aldi, Trader Joe’s, and all the rest? And if it does, can it spread the gospel of quality cheap wine?

That’s the question I tried to answer in a freelance piece for Meininger’s Wine Business International. Grocery Outlet’s plans are ambitious: Expanding from 332 to some 4,000 stores as it moves east —  and, say company officials, with cheap wine a key to that expansion.

So why should we be so excited about wine at Grocery Outlet?

For one thing, there are 50 wines in each store that cost $5 or less. For another, those 50 wines are usually not bottom-feeders like Winking Owl. Rather, it’s branded wine from producers we’ve heard of, but that the company buys as seconds, remainders, and discounted items from wholesalers and wineries. And Grocery Outlet is famous among California wine geeks for discounting expensive wine, which it sells for as much as 50 percent off.

This isn’t a new business model for retailing, but it’s very unusual for wine. For one thing, three-tier makes it more difficult than selling overstocks of canned soup. For another, it means each store’s selection changes depending on what the chain can find to discount, so the great $5 wine that was there the last time may not be there the next time. Third, it doesn’t usually stock national brands like Barefoot or Kendall-Jackson, which isn’t the conventional wisdom.

“What we’re doing, and we’re doing it every day, is to find wine through the normal channels, but that it’s wine that we can sell at the right price,” says Cameron Wilson, Grocery Outlet’s director of wine, beer, and spirits. “But what we’re also doing is upgrading the technical quality of the wine we carry, so that everything we carry is in good shape and that it shows well.”

Which sounds like a fine reason for us to care about Grocery Outlet’s success.

Panic wine buying

by Wine Curmudgeon Posted On

panic wine buying
Panic wine buying, as the Wine Curmudgeon stocks up before a possible 100 percent European wine tariff.

The Wine Curmudgeon, faced with the prospect of a 100 percent European wine tariff, does some panic wine buying

The picture pretty much says it all. I spent an hour or so last week at Dallas’ biggest wine retailer, stocking up in case worse comes to worst. The result? 28 bottles of wine for $290. It’s good to know that the Wine Curmudgeon hasn’t lost his touch in the face of an international crisis of epic proportions.

A few thoughts after my panic wine buying:

• Lots of gaps on the shelves. Lots. I bought the last two bottles of the Chateau Bonnet white, and there wasn’t any Chateau Bonnet red or new Hall of Fame member Azul y Garanza, the $11, 1-liter Spanish tempranillo. Apparently, I’m not the only one who has panicked.

• Lots of cheap wine I haven’t seen before. It looked like the retailer had done some buying, too, stocking up on inexpensive European wine before the 25 percent tariff raised its prices. I bought some of these new wines, and will report back as the situation warrants.

• I even bought California wines. This included the always dependable McManis as well as the Shannon Wrangler red blend, which was the wine of the week 4 ½ years ago. Oddly enough, the wine cost $2 less this time.

2020 $10 Wine Hall of Fame

by Wine Curmudgeon Posted On

2020 $10 Hall of FameJust six wines entered the 2020 $10 Hall of Fame, and it’s probably going to get worse

Remember how distraught I was about last year’s $10 Hall of Fame? I’m even more distraught this year; compiling the 2020 $10 Hall of Fame was an exercise in misery — and that’s even before I started worrying about tariff-induced price increases.

Just six wines entered the Hall, five dropped out, and none of the new wines were roses or from California. My notes contained so few “HoF 2020” notations that I went through almost all the wines I drank last year, just to make sure I didn’t miss anything.

I didn’t.

How did we get to this point? Premiumization, of course, as well as the dumbing down of what’s left of wine costing less than $15. Big Wine, Big Retail, and all the rest are convinced that if they make wine taste less wine-like by adding sweetness, fake oak flavors, and purple grape juice concentrate, they’ll convince people who don’t drink wine to drink it. Which, as White Claw demonstrated, doesn’t really work.

Availability, always a problem, got worse last year thanks to wholesaler consolidation. There are too many wines and not enough distributors, and the distributors that remain are so big that they prefer Big Wine products. Since most of the most interesting cheap wines are from smaller, niche producers, they can’t find a distributor (or suffer a small one with little clout) and disappear from shelves.

Meanwhile, the Trump Administration’s proposed 100 percent tariff would double the price of European wine, which means there would be almost no $10 wine worth drinking or writing about. If that happens, the 2020 $10 Hall of Fame might well be the last one.

Some good news

The six wines that entered the Hall are top-notch, as good as anything I’ve tasted in 20-some years of wine drinking. That includes the 2020 Cheap Wine of the Year, Le Coeur de la Reine Gamay; the return of the Gascon classic, Domaine Tariquet; the stunning Portuguese red and white Herdade do Esporão Alandra; the 1-liter Azul y Garanza tempranillo; and the French white blend, Little James Basket Press.

The complete 2020 $10 Wine Hall of Fame is here. You can also find it at the Hall of Fame link at the top of the page. The Hall’s selection process and eligibility rules are here. I considered wines that cost as much as $13 or $14 to take into account price creep and regional pricing differences.

You’ll be able to print the Hall as either a text file or a PDF. Look for the printer icon on the upper right hand corner of the post.

Wine prices 2020

by Wine Curmudgeon Posted On

wine prices 2020
Damn those Europeans and their snotty wine. No self-respecting American likes that junk.

The current 25 percent European wine tariff, which may turn into a 100 percent covering all European wine, makes deciphering wine prices 2020 a sad and painful duty

Forecasting wine prices 2020 should have been easy. Combine too many grapes in California with fewer wine drinkers in the U.S. and Europe, and throw in the beginning of the end of premiumization. The result? Steady to lower wine prices, and maybe a lot lower, by the end of the year.

And then the tariffs happened.

The first, last October, seemed horrible. And then we heard about plans to impose a 100 percent tariff on all European wine, which would effectively double the price of every bottle of wine made in Europe and sold in the U.S. And suddenly, 25 percent didn’t seem so horrible.

Tariffs artificially raise prices, and economic theory says consumers then switch to cheaper, similar domestic products. But the similar products are not as cheap as the original, so the consumer is paying to prop up a domestic industry. Which pretty much explains the popularity of tariffs on goods like steel.

But there are very few $13 California wines that are similar to $10 French or Spanish wines. Wine isn’t finished steel. So in my search for a cheaper product, economic theory says I could well move from wine to something even cheaper, like beer or White Claw — especially if I’m buying wine on price. Which is the dark, dirty secret of the wine business.

In this, the tariff will push wine prices 2020 up, until demand weakens so much that no one will buy wine at the tariff-inflated prices. Then we will have shelves full of wine, including domestic, way too many grapes, and even weaker demand than before. How much fun will that be?

And, among all this mayhem, there would be little point to the blog. Somehow, I don’t think that’s supposed to be the result of a political dispute about aircraft parts.

Havoc and destruction

In this, the 100 percent tariff would come close to destroying the European wine business while wreaking havoc on U.S. wine retailing, distribution, and importing. That’s because the U.S. is the EUs biggest wine market, accounting for more than one-quarter of its exports. The tariff would all but eliminate the market for European wine in this country; who’s going to pay $30 for a $15 bottle? It would also lead to bankruptcies, layoffs, and business closings among retailers, importers, and distributors. That includes the largest wholesalers, who, I’m told, are just as worried about the end of the French wine market in the U.S. as their smallest competitors.

So I’m going to do something I have done but once in the blog’s history: Get political. When the publisher of the Wine Spectator and I agree about something, then there’s no time to waste.

The 100 percent tariff is nothing but spite, a finger in the eye of the EU for no legitimate reason by a Trump administration that apparently has no understanding of economics or tariffs. For it, it’s easier to tweet trade war bravado than to understand the implications of the Smoot-Hawley tariff in the 1930s. That U.S. citizens will suffer far more from the tariff than U.S. aircraft companies will benefit is beyond their comprehension.

And it’s not like U.S. aircraft companies need the help. Boeing, the focus of the original World Trade Organization ruling that led to the 25 percent levy, had $10.5 billion profit in 2018. That’s larger than the gross domestic product of 30 countries, and that’s just Boeing’s profit. Its revenue was $101 billion, which would make it the 177th biggest country in the world by GDP.

But Boeing gets a boost, while many U.S. wine retailers will get to go out of business. That seems fair, yes? The owner of a small wine shop in the Dallas area, with a wife and child, can ponder his fate (as well as ousted Boeing CEO Dennis Muilenburg’s $62 million farewell package) while he looks for work.

You can comment on the proposed 100 percent tariff — go to www.regulations.gov, enter docket number “USTR-2019-0003” and click search. Then, click “comment now” and explain why this is not a good idea. Comments are open until Jan. 13.

And those of you who disagree with me – you’re more than welcome to pay $20 for $10 wine. Enjoy the privilege.

Wine trends 2020

by Wine Curmudgeon Posted On

wine trends 2020
I wonder: Can I fit White Claw into this gizmo?

Wine trends 2020: The wine business will ride premiumization until it dies, plus more wine-like products, more neo-Prohibitionism, and a tariff that could kill the wine business

Wine prices 2020

• Premiumization will continue until it doesn’t. This approach is scarily similar to what happened to the newspaper business. In the late 1980s, many industry leaders knew that the days of throwing papers from cars at 6 a.m. were numbered. I was even told that in a meeting. But no one did anything about it, because newspapers were still obscenely profitable and the industry had so much money tied up in printing presses. The smart people in the wine business know premiumization is on its last legs, but they don’t have another plan and they’re still making money, so it’s easier not to worry about what’s next.

• More wine-like products – bourbon barrel wine, fruit-flavored wine, and the like. Because, of course, White Claw. The irony is that producers see White Claw-like products as their chance to attract younger wine drinkers, when White Claw’s success is about its cost and low alcohol. Which, of course, has nothing to do with wine. It’s also worth noting that White Claw and its ilk are hurting beer more than wine, and that not just younger people drink it.

• Neo-Prohibitionism becomes an accepted part of American life. In other words, this will be the year when we find out Dry January isn’t just a story in a woman’s magazine. The evidence has been there for a long time, not that anyone in the wine business paid much attention. But when designated drivers, mocktails, and all the rest are as common as smoking and drunk driving were when I was a teenager, then the world has changed significantly. And the wine business better figure that out, sooner rather than later.

• The tariff. Or tariffs, as the case may be, since the threat of a more inclusive 100 percent levy is hanging over our heads. I’ll go into more detail in Monday’s 2020 wine prices post. But know that as bad as the 25 percent tariff will be, the 100 percent tariff could destroy the European wine business and wreak havoc in the U.S. And, as I have noted many times before, spite is not a good enough reason to do either.

• More three-tier excitement. That’s because 2019 saw a couple of significant legal decisions, and 2020 promises even more. My best guess, after talking to attorneys who deal with this stuff, is that there is momentum for change in the way beer, wine, and spirits are sold in the U.S. So there’s a chance that Internet sales could eventually become legal. And there’s also a chance (though much smaller) that some states may eventually make it possible for wines to be sold at retail without a wholesaler. This would vastly increase choice. Having said that, those things won’t happen immediately, and what we could see in 2020 are more legal decisions that continue to chip away at three-tier.

Photo: “Modern wine tasting” by kellinahandbasket is licensed under CC BY 2.0 

Winecast 42: Jay Bileti and the AWS Drink Local program

by Wine Curmudgeon Posted On

jay bilettiJay Bileti talks about the American Wine Society’s program to help its members Drink Local

The American Wine Society is one of the largest consumer wine groups in the country, so that it’s helping its members discover regional wine is one more victory for Drink Local. The AWS’ Jay Biletti, a long-time advocate for regional wine, discusses the chapter sharing program and how it works. And you don’t even have to belong to the group to participate.

For more information, click this link to find a chapter near you (scroll down to the map). Then, you can contact the local group to find out how they are participating.

Click here to download or stream the podcast, which is about 9 minutes long and takes up 3.6 megabytes. The sound quality is excellent, even though we had to try several different ways to make the recording.

Holiday wine trends 2019

by Wine Curmudgeon Posted On

Holiday wine trends 2019We’re buying big and red and pricey for holiday wine trends 2019

The wine we’re buying for the holidays this years seems to have little in common with what we bought in 2018. Call it the holiday wine trends 2019 conundrum.

The retailers I talked to three parts of the country said we’re buying big and red and pricey. A Boston retailer reports that his customers are also much less adventurous, opting for the tried and true – and even bourbon and rye whiskey – instead of taking a chance on high priced wine they may not know much about.

Who would have expected that after a year like 2019 and especially after we were apparently looking for different and less expensive in 2018?

“I’m actually kind of surprised that we’re selling so much expensive wine,” says Dan Fredman, who oversees the upscale Biagio Wine & Spirits in Dallas’ Victory Park neighborhood. He is selling lots and lots of Napa Valley caberent sauvignon, as well as Champagne and sparkling wine costing as much as $150.

That’s also the case for the wine shop at Lake Geneva Country Meats, a small grocer in a tourist region in southern Wisconsin. Nick Vorpagel, a long-time friend of the blog, reports that his customers are buying a $16 or $18 California cabernet instead of a $12 bottle, and that paying $15-$20 a bottle seems much more common than a year ago. In fact, his average bottle price increased seven percent this year.

The reason? Premiumization, of course.

“Wine has become so much more expensive that people don’t want to take chances,” says Fredman. “What’s the point of buying or trying something different that costs more, when you can get what you know someone will like?”

So it’s no wonder that the wine business is more than content with selling less wine, since premiumization seems to be working so well. Having said that, several retailers (I won’t name theml no sense in getthing them in trouble with their suppliers), that they are seeing more and more poorly made wine selling for $18 under the guise that if it costs more, it must be better.

“How much longer can they continue to fool people like that?” asked one of them.

It’s a question that may well be answered sometime next year.

More on holiday wine trends:
• Holiday wine trends 2018
• Holiday wine trends 2017
• Holiday wine trends 2016

Photo: “Stacked wine bottles” by niallkennedy is licensed under CC BY-NC 2.0