Burgundy wine sales have started to decline over the past few weeks, which vintners blame on the rising euro against the weak U.S. dollar and weakening British pound. Winemakers estimate a volume decline of 4-5% in the first quarter of this year and a similar rise in sales, according to a piece in Reuters.
After two years of steep price increases and strong demand, however, growers say they have little reason to be overly concerned.
"We had been expecting a decline in volume this year after two years of growth and in any case stocks are very low in Burgundy, so we are not in tears," said Frederic Dupray, head of economic studies for the Burgundy wine association, to Reuters.
"There is a lot of demand still but what we want in Burgundy is to get a hold on volumes and improve the price level," he continued.
The euro has gained 16% against the U.S. dollar over the past 12 months. As slow economic times hit the U.S. and other parts of Europe, consumers are opting for more middle-of-the-road wines. Demand in emerging markets, such as Russia and Asia, are helping fill the space left by western countries.
Wine & Spirits Daily
Sunday, June 1, 2008
ALMADEN AND INGLENOOK GO FROM JUGS TO BAGS
After acquiring Almaden and Inglenook wine brands from Constellation in February, The Wine Group is changing their packaging from jugs to bag-in-box to help reduce carbon footprint. By switching from 3L and 4L glass jugs, The Wine Group will save 11 million pounds in packaging waste and reduce the brands' carbon footprint by 60%, not to mention dramatically reduced shipping costs.
The private company said the move was "consistent with the consumer's desire for both value and environmentally-friendly packaging."
"Consumers and the industry should applaud this move," said Jon Fredrikson, wine industry analyst and industry consultant. "Recent research has shown that consumers have great interest in environmentally friendly packaging...The fact that these two popular American brands are now taking this step is significant because of the volume they represent."
Almaden was founded in 1852 when Frenchman Etienne Theé planted grapes near Los Gatos, while Inglenook quickly gained popularity after fur-trading sea captain Gustave Niebaum purchased the Inglenook vineyard in Napa Valley in 1879.
The brands account for 10 million cases annually and sell for about $3 a bottle, which puts them in the slow-growing "value" segment.
Wine & Spirits Daily
The private company said the move was "consistent with the consumer's desire for both value and environmentally-friendly packaging."
"Consumers and the industry should applaud this move," said Jon Fredrikson, wine industry analyst and industry consultant. "Recent research has shown that consumers have great interest in environmentally friendly packaging...The fact that these two popular American brands are now taking this step is significant because of the volume they represent."
Almaden was founded in 1852 when Frenchman Etienne Theé planted grapes near Los Gatos, while Inglenook quickly gained popularity after fur-trading sea captain Gustave Niebaum purchased the Inglenook vineyard in Napa Valley in 1879.
The brands account for 10 million cases annually and sell for about $3 a bottle, which puts them in the slow-growing "value" segment.
Wine & Spirits Daily
Is Bordeaux in cartons the last straw for French wine?
Purists are spluttering over their decanters after a fine wine-maker announced plans for drinkers to take their wine through a straw from small plastic cartons.
The containers, like those used for lunchbox-sized fruit juices, go on sale in supermarkets next month in the latest attempt by the French wine industry to boost consumption among young urbanites.
Produced by Cordier Mestrezat, which has been selling fine wines since 1886, the 25cl product, called Tandem, will arrive in Britain next week at the London International Wine Fair.
“Instead of buying a soda to go with their sandwich, people might want a bit of Bordeaux,” David Bolzan, the managing director of Cordier Mestrezat, said. “If you’re having lunch at your desk and you want a drop of wine, you’re not going to get a bottle, a glass and a corkscrew. But you could buy a carton.”
His box comes with a “sensory straw” with four holes to send a spray of wine around the palate and “ensure you enjoy exactly the same sensations as with a wine glass”, according to Cordier Mestrezat.
However, traditionalists said that the initiative would deprive them of two of their greatest pleasures – the wine’s bouquet and colour. “You won’t be able to smell the wine before drinking it and that’s very important to me,” said Aurélien Maubert, a salesman at Lavinia wine store in Paris. “And you won’t be able to see it either inside the carton. I certainly won’t be buying this.”
But with annual wine consumption in France falling from 100 litres per person to 54 litres during the past 40 years, Mr Bolzan said that it was important for producers to move with the times.
Adam Sage
Paris, France
Remembering the first auction of Napa Valley wines
Alex Dirkheising, owner of All Season’s Bistro and the Hydro Grill in Calistoga, stands behind three of many large bottles of wine — one of them a jeroboam of pinot noir — he has collected from the Napa Valley Wine Auction since it started in 1981. On the wall hang bid paddles he has collected from Napa Valley’s biggest wine event of the year. John Waters Jr. photo
A bottle of wine sold at the first Napa Valley Wine Auction, held June 21, 1981, remains unopened.
The successful bidder was Calistogan Alex Dierkhising, who paid $6,000 for a Jeroboam of 1969 Chappellet Cabernet Sauvignon. When contacted on Monday, Dierkhising said the large-format bottle that holds 4.5 liters of wine, never left the winery. He said he bought the 1969 wine because he had tasted it and thought “this is a great bottle of wine.” It was one of four made by the winery.
Dierkhising said he attended the 1982 auction and bought Chappellet’s next vintage, 1970, of cabernet sauvignon, also in a Jeroboam bottle. “I thought I’d put together a small vertical of the large format bottles,” he said, but instead he bought other large format bottles, including those from Mondavi, Phelps and others.
At the first auction, Dierkhising said he spent $9,000 on some 60-75 cases of wine. He added, “I bought wine at the auction for 20 years, but I’ve not been active buying for the last five. It’s been a whole different league in the last 10-15 years.” To show what he calls the inflation of wine, he said he did a study a few years ago. He claims the 60-75 cases he bought in 1981 for $9,000 would now cost $1.5 million.
What are the plans for the two Chappellet Jeroboams? Dierkhising said he had thought he’d throw a “Millennium” party and open the bottles of wine, but New Year’s Day 2000 came and went. Now, he said, “I don’t know what I’m going to do with the bottles.” When asked how big his cellar was, he replied that he would “have to check his computer,” but added, he probably has a “couple thousand” bottles of wine.
Dierkhising and his partner, Gayle Keller, operate two Calistoga restaurants, Hydro Bar & Grill and All Seasons Bistro, across the street from each other at the intersection of Lincoln Avenue and Washington Street. Occasionally, some of the wines Dierkhising has bought at the auction, now called Auction Napa Valley, will be on the wine list at All Seasons. He said he will attend this year’s auction as usual and said it remains a spectacular event. All of his bidding paddles line one wall at All Seasons Bistro.
The inaugural auction of Napa Valley wines, hosted then and now by the Napa Valley Vintners, with proceeds going to Napa Valley charities, included 596 lots — barrels, bottles and library wines — from 44 vintners. The auction began at 10 a.m. with a break for lunch from 12:30 to 2:30 p.m. and continued into the evening. Michael Broadbent was the auctioneer and the event was held at Meadowood.
1981 catalog found
In 1981, Earl Brown was one of the developers of Temp Trol, a temperature controlled wine warehouse with freight facilities in St. Helena. He said he attended the first auction and remembers the sale of the first case of Opus One produced. The winery was a joint venture between Robert Mondavi and Baron Phillipe de Rothschild and the case sold for $24,000, which Brown said was an unheard of price at the time. “People figured it might go for $10,000 or $12,000 for the case, but $2,000 a bottle was amazing. That was big money at the time,” he added. The second case, sold for $2,400.
Brown knows the figures because he owns an auction catalog from the first auction, along with his bidding paddle, an invitation to the auction and other memorabilia. The 96-page catalog lists the 44 vintners who participated, from Beringer to ZD, and gives a description of the 596 lots. He kept track of the prices paid, so he knows a double magnum of 1972 Clos du Val Cabernet Sauvignon reserve, for example, sold for $310 and two bottles of 1973 and 1974 Chateau Montelena Cabernet Sauvignon sold for $320. A case of magnums of 1974 Martha’s Vineyards Cabernet Sauvignon, produced by Heitz Cellars, sold for $2,100.
Brown said he had the best time attending the auction, but added, he no longer needs the auction memorabilia, so he’s listed it on eBay. What is it worth? “I have no idea, I just put it on there. The main thing, though, is that it probably should go into someone’s archives,” he said.
Brown, who is 63, said when he worked in the Napa Valley, he lived in Belvedere and commuted back and forth, since it was only 67 miles away. He worked in the valley for eight or nine years and commented, “It was a wonderful place at that time.” He now lives in Santa Barbara.
2008 Auction Napa Valley
Terry Hall, communications director of the Napa Valley Vintners, said this year’s Auction Napa Valley has already begun with online bidding of 81 lots of wine. In four days of bidding, he said, there have been 2,000 bids from all over the world.
“It has already surpassed the bidding from three years ago,” he said, adding that both in terms of traffic and dollars, bidding is twice last year’s volume after four days. Bidding started Friday, May 23 and ends Friday, June 6. Items can be viewed and bids made at the Napa Valley Vintners’ Web site: www.napavintners.com.
On Thursday, June 5, the four-day Auction Napa Valley begins, with vintners throughout the valley hosting afternoon and evening parties. These are available for participants who have bought tickets, which are available through the NVV.
Friday’s Taste Napa Valley is the signature event for local residents as it will include 150 vintners pouring wine under tents, 127 barrel lots inside a building at the Trinchero Family facility in St. Helena, and 60 food purveyors. The event is from 11 a.m. to 4 p.m. During different times of the afternoon, the E-Auction lots will close. The barrel tasting and auction closes at 4 p.m. Some 3,000 people are expected to attend and Hall said all the 700 tickets for Napa Valley residents, at $125 apiece, sold in less than eight hours.
Thirty-two vintners throughout the valley will be providing intimate dinners for their guests and an additional 15 wineries will be hosting private luncheons at mid-day Saturday.
Live auction
An expected 900 people, including vintners, bidders and volunteers will attend the live auction, held inside a huge tent on the Meadowood grounds. The auction, which includes 44 lots, begins after dinner and a performance by Jay Leno, who is the master of ceremonies this year. The auction chairs are the Heitz Family and its auction lot includes an exclusive vacation for 16 people at a resort in the Adirondacks, including private jet transportation from Chicago and two cases of Heitz wines.
The Auction Napa Valley, The American Wine Classic, is the Napa Valley Vintners’ community fund-raiser and since the auction began, it has donated more than $27 million to fund health care, affordable housing and youth programs throughout the Napa Valley. Hall said, “All the vintners host the event and all the auction lots are donated. Whatever is raised goes back to local charities. Our goal is for this event to be a fundraiser, because there is such a great need out there.
“We want to welcome our out-of-town guests, because they are supporting the charities within Napa County. It is so great to roll out the red carpet for them,” he said.
DAVID STONEBERG
France relaxes its old wine rules to fight off New World challenge
Traditional methods have stood France in good stead for centuries but it now exports fewer bottles than Italy and Spain and is losing ground to Australia
After long scorning the international appetite for “vulgar” wine, France joined the fray yesterday and allowed growers to make and market their product in the fruity fashion of the New World.
Wood chips, added tannin and other “foreign” techniques will be tolerated in a new category of mid-quality wine that will be defined by grape variety rather than origin.
In a heresy for traditionalists this means, for example, that you may grow gewurtztramminer, the classic Alsace white, anywhere in France and sell it as gewurtztramminer in the new Wine of France category.
Under the law the main label on a bottle will identify the wine as merlot, cabernet, grenache, chardonnay or other variety, as well as mentioning its vintage.
President Sarkozy and his Cabinet approved the measures as part of a five-year plan to win back market share from the all-conquering Californian and southern hemisphere wines. With its antiquated classification and concentration on the mystique of le terroir — the soil and traditions of the vineyard — France has lost out in the past 15 years as world consumption has risen.
The New World has won drinkers over with what the French regard as simple, standardised fruit-forward wines with brand names. Supermarket shoppers prefer labels with Australian marsupials to Appellation d'origine contrôlée from obscure villages with six syllables. “French wine is complicated and often little understood,” the Agriculture Ministry said.
While it might raise some purist eyebrows the scheme has caused little offence. “I have faith in the savoir faire of French winemakers,” said Jean Claude Ruet, chief sommelier at the Paris Ritz hotel. “We will not fall as low as the Americans, who make vin rosé that is sugary and fizzy like soda.”
France, once the world's wine reference, now exports fewer bottles than Italy and Spain. It was overtaken by Australia in the British market three years ago. Thanks to the high-quality products of Champagne, Bordeaux and Burgundy, France still dominates the €17.4 billion (£14 billion) market in value, with 35 per cent compared with 25 per cent for the New World. The fight is now on for new wine drinkers in India and China.
The French industry generally approved the measures, which have been drawn up in the past two years.
Producers insisted that the system aims to boost “entry-level” wines while keeping old restrictions on the quality AOC category. “It's a way of giving new consumers a taste for wine,” Mr Ruet said. He was doubtful however about the merits of adding oak shavings to wine made in steel vats to add a woody flavour.
Jerome Agostini, director of the National Committee of the Wine Professions, said: “Young generations of consumers need simpler wines that are easy to drink, sweet and aromatised. You cannot condemn practices like wood chips because we have to fight with the same weapons.”
The Wine of France is being created along with two other categories. The second one will correspond to a specific area and the third will cover the AOC appellation, of which there are 457.
Many critics say that the revered 75-year-old AOC system is in dire need of reform. In September experts commissioned by Que Choisir, the leading consumer organisation, decided that one third of AOC wines should be stripped of their appellations. “The AOC label is no longer a guarantee of quality or a link to terroir,” it said.
Sections of the French industry have already been adopting New World methods to fight back. The Languedoc region of the Mediterranean has been particularly successful, importing New World vintners and playing up grape varieties.
Some have gone as far as inventing “critter labels” to compete with Australia's Yellow Tail and assorted other parrots and wallabies. These include Rhôning Stones and Bois-Moi (Drink Me). A French Languedoc wine sold 1.3 million bottles to Australia last year under the brand of Arrogant Frog.
Charles Bremner & Marie Tourres
Paris, France
THE PEOPLE'S COMMENTS ABOUT THIS:
There is no defense of the soft drinks masquerading as wine though the new world. Where is the reverence for tradition? I will take intrigueing AOC wines over the commercial beverage of the new world any day of the week. It is interesting that even with the dollar decline the values come from the EU
Brian, Bellingham,
The French wine industry has been coming up against the same problem that we all feel encroaching upon us and it is the problem of globalization. Traditional aspects of culture from terroire driven wine production to American driving habits are being crushed by the boom of global "sameness". Too bad
Carl, West Hempstead, NY, USA
The french will need to do alot more than name the grape variety. They export poor quality but expensive wines. And are the wines in France really any better?
For £5-£7 in the supermarket you can get a very nice aussie, NZ, US, S African, spanish, italian, argentinian bottle, or ropey french plonk.
Jim, Liverpool,
The AOC system isn't broken, nor is this new category needed. Someone needs to make wine for smart people; traditionally, it has been the French. Let those countries without a wine and food heritage facilitate the dumbing down of the wine drinker, but let France remain France!
Bill Adams, Westfield, USA
Here! Here! It's great that France is finally deciding to compete. Everyone wins with competition.
Let's hope that French winemakers are a bit more plugged in to reality than Monsieur Ruet, the Paris Ritz sommelier who thinks Americans only make pink, fizzy roses.
Pete, Dallas, TX, US
All the so called New world wine branded as Cabernet Sauvignon/Merlot and so on are of mediocre quality at best. It is sad in a way that to accomodate the vuglus who think they know better we have to lower the quality of our wine. The only good thing is that those wines will be only for exportation.
Jean , Dublin, Ireland
This looks promising for the French. I do however recall a tasting of French and American wines in 1976 (and 2006) that perhaps Chief Sommelier Ruet has dismissed.
Eric C, Atlanta, USA
As a traditionalist, I find AOC intriguing and comforting. However, this sounds like a good idea for the average consumer who does not have the time or interest to study AOC. I just hope that French pride in their wines will not allow this to deteriorate AOC.
Jim, Scottsdale, USA
OK,OK , the new world wine does produce a tastier mid-range wine than France. BUT, their rosé is lamenable. Try a really cheap rosé fruité from provence, straight from the fridge. I will regret telling you anglo-saxons this but Ragusse from the Aix-en-Provence region takes some beating.
Paul Cadier, Viens, France
Much French wine is non-copetitive (over-priced), and they have a naughty habit of "mis-labeling" their wine from time to time. With Australian and California wine you know what you are getting, and you get what you have paid for.
Glenorchy, Perthshire, Scotland
If it needs the President of France to approve the production of wine based on grape variety, rather than geography, there is little hope for the future of French wine.
Bob Lindo, Camel Valley, Cornwall, UK
About time too !
I only hope they now become honest too, dishonesty of past labeling was well known.
This was the only way to get trust back.
Let's see if the French are up to it, any modern methods I have ever suggested [ in other areas ] has always been greeted with , 'this is the French way', !
maggie millington, brittany, france
Ah yes, nothing like good old implacable market forces to force people to think in new ways and try new things.
Samuel Young, Paris, France
Sour grapes from the USA? Well someone had to say it!
Peter, Sydney, Australia
It seems like a bit of a tempest in a teapot over something that is nothing but spoiled grapejuice.
Dan, Tulsa, USA
CONCERNS FOR LOOMING GRAPE SHORTAGE
In a research note yesterday, William Pecoriello of Morgan Stanley expressed concern that Constellation may eventually have to take a price increase due to a looming grape shortage and economic declines.
Among other short-term concerns, Morgan Stanley believes the U.S. wine business will likely slow with the economy and ultimately hurt STZ.
"The concern is that a US wine shortage leads to margin contraction and profit disappointment. We believe that a shortage in US wine is coming, with the income statement impact hitting in calendar 2010 / 2011. Our biggest concern is that STZ will be unable to pass on price increases due to a lack of brand loyalty in wine. We are also concerned with the impact of passing on higher prices. Our consumer research points to roughly 50% of wine drinkers altering their consumption in reaction to a price increase (trading down or reducing consumption)."
Wine & Spirits Daily
Among other short-term concerns, Morgan Stanley believes the U.S. wine business will likely slow with the economy and ultimately hurt STZ.
"The concern is that a US wine shortage leads to margin contraction and profit disappointment. We believe that a shortage in US wine is coming, with the income statement impact hitting in calendar 2010 / 2011. Our biggest concern is that STZ will be unable to pass on price increases due to a lack of brand loyalty in wine. We are also concerned with the impact of passing on higher prices. Our consumer research points to roughly 50% of wine drinkers altering their consumption in reaction to a price increase (trading down or reducing consumption)."
Wine & Spirits Daily
WHAT HAS AMERICANS SIPPING WINE
An interesting article in the Staten Island Advance touches on why American's are drinking more wine. Most of us in the industry are already familiar with most of the theories for why consumption is increasing, but it's always beneficial to hear what the mainstream press is reporting (and what consumers are reading).
The article says Americans are learning about wine and realizing that it pairs well with food. Although the downturn in the economy has resulted in more Americans eating at home, the article says experience has taught people that they will still get quality when ordering inexpensive wines at restaurants.
"There aren't as many wine drinkers out there who are perusing a restaurant wine list in order to impress their table companions... many of them aren't adverse to seeking out bargains."
News of health benefits related to red wine has helped boost consumption, in addition to demographic factors. For one, an increase in female wine drinkers who are earning higher salaries has helped volume, and flashy labels have managed to attract younger drinkers (think millennials). Lastly, says the article, vintners are "putting more effort into producing higher quality wine that they can sell at lower prices."
Wine & Spirits Daily
The article says Americans are learning about wine and realizing that it pairs well with food. Although the downturn in the economy has resulted in more Americans eating at home, the article says experience has taught people that they will still get quality when ordering inexpensive wines at restaurants.
"There aren't as many wine drinkers out there who are perusing a restaurant wine list in order to impress their table companions... many of them aren't adverse to seeking out bargains."
News of health benefits related to red wine has helped boost consumption, in addition to demographic factors. For one, an increase in female wine drinkers who are earning higher salaries has helped volume, and flashy labels have managed to attract younger drinkers (think millennials). Lastly, says the article, vintners are "putting more effort into producing higher quality wine that they can sell at lower prices."
Wine & Spirits Daily
Wine In Sample Shots-The Enomatic Way
Wine lovers can have the world's vineyards at their fingertips inside Vino, a unique boutique in downtown Hollywood that offers up self-service tastings with the touch of a button.
The shop carries hundreds of labels, with a good number available for sampling using a simple system that lets people try before they buy.
Devotees of the grape can choose from 64 wines dispensed from Enomatic devices that pour one- to six-ounce servings. If they enjoy their selections, customers can purchase bottles to drink at home or have uncorked on the premises, which also features an antipasto bar where folks can feast on freshly prepared platters of imported cheeses and cold cuts.
The computerized Enomatics have become a popular attraction at the shop, opened this winter by Fulvio Sardelli Sr., his wife, Carmen, and their son, Fulvio Jr.
If the family's name sounds familiar, it's because the Sardellis are already well-established on the block as owners of Fulvio's 1900, a neighboring Italian restaurant that's been serving patrons for the past decade from the corner of Harrison Street and 19th Avenue.
The fine-dining establishment has long catered to connoisseurs with its extensive collection of wines. Samplings have been available to patrons there for the past two years, following the installation of Enomatic systems, Fulvio Sardelli Jr. said.
Vino takes the concept to another level, placing it in a retail environment with a sophisticated decor of leather seats, dark woods, brick walls and flat-screen TVs.
To start sipping, visitors put money on a prepaid club card that's inserted into the glass-encased Enomatics, with its ever-changing array of reds, whites and dessert wines. Samples cost $1 to $13 per serving.
Each bottle's contents are kept fresh using nitrogen.
''It's preserved to perfection,'' Fulvio Sardelli Jr. said.
The self-serve system is appealing to experts and novices alike. It gives people more options and control over the selection process, letting them try different labels from different countries back to back, he said.
For example, a person can compare pinot noirs from France, Italy and California in one sitting, he said.
Vino also carries more wines in the shop's cellar room, including vintage and hard-to-find labels.
''Our prices are competitive, from the teens to the thousands,'' Fulvio Sardelli Jr. said ``We have reds, whites, champagnes, ports, dessert wines from South America, Australia, Italy, Portugal. You name the country, we have the wine.''
Vino's list continues to expand, with labels constantly being added. ''We're trying to get niche wines from around the world,'' he said. ``We want to have an ever-evolving selection.''
Beth Feinstein-Bartl
The shop carries hundreds of labels, with a good number available for sampling using a simple system that lets people try before they buy.
Devotees of the grape can choose from 64 wines dispensed from Enomatic devices that pour one- to six-ounce servings. If they enjoy their selections, customers can purchase bottles to drink at home or have uncorked on the premises, which also features an antipasto bar where folks can feast on freshly prepared platters of imported cheeses and cold cuts.
The computerized Enomatics have become a popular attraction at the shop, opened this winter by Fulvio Sardelli Sr., his wife, Carmen, and their son, Fulvio Jr.
If the family's name sounds familiar, it's because the Sardellis are already well-established on the block as owners of Fulvio's 1900, a neighboring Italian restaurant that's been serving patrons for the past decade from the corner of Harrison Street and 19th Avenue.
The fine-dining establishment has long catered to connoisseurs with its extensive collection of wines. Samplings have been available to patrons there for the past two years, following the installation of Enomatic systems, Fulvio Sardelli Jr. said.
Vino takes the concept to another level, placing it in a retail environment with a sophisticated decor of leather seats, dark woods, brick walls and flat-screen TVs.
To start sipping, visitors put money on a prepaid club card that's inserted into the glass-encased Enomatics, with its ever-changing array of reds, whites and dessert wines. Samples cost $1 to $13 per serving.
Each bottle's contents are kept fresh using nitrogen.
''It's preserved to perfection,'' Fulvio Sardelli Jr. said.
The self-serve system is appealing to experts and novices alike. It gives people more options and control over the selection process, letting them try different labels from different countries back to back, he said.
For example, a person can compare pinot noirs from France, Italy and California in one sitting, he said.
Vino also carries more wines in the shop's cellar room, including vintage and hard-to-find labels.
''Our prices are competitive, from the teens to the thousands,'' Fulvio Sardelli Jr. said ``We have reds, whites, champagnes, ports, dessert wines from South America, Australia, Italy, Portugal. You name the country, we have the wine.''
Vino's list continues to expand, with labels constantly being added. ''We're trying to get niche wines from around the world,'' he said. ``We want to have an ever-evolving selection.''
Beth Feinstein-Bartl
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