Monday, May 26, 2008

The Rising Dragon & Wine

Top U.S. seller gears up for Asia's largest wine auction

HONG KONG (Reuters) - America's top wine seller will host Asia's largest ever auction of fine wines in Hong Kong this week, betting on Chinese consumers developing a finer nose for the beverage as the territory aspires to become a global industry hub.

Acker Merrall & Condit's inaugural auction of fine and rare wines in Hong Kong comes months after the city abolished duties on the drink in a bid to uncork some $500 million of new business, particularly with the city poised to tap the potential of the huge China market as a flood of newly minted consumers there chase Western lifestyle trends.

"We really made an effort to cull some of the best wines from the best sellers that we know," said John Kapon, the President and Auction Director of Acker Merrall & Condit.

"Hopefully China will become a little more wine friendly and follow the lead of the Hong Kong government ... perhaps make it easier for some of the mainlanders to acquire (and) import their wines back to mainland China," Kapon told reporters in Hong Kong.

The estimated $6 million sale will feature top vintages including a case of 1990 Domaine de la Romanee-Conti, often considered the world's most expensive wine, which could fetch up to $240,000.

Other top lots include a case of 1945 Chateau Mouton Rothschild which could sell for $160,000 and a single large Jeroboam of 1961 Chateau Latour estimated at up to $50,000.

Most of the over 200 registered buyers at the sale hail from Hong Kong, Macau and mainland China.

Over the years, a small clique of affluent so called "super-collectors" in Hong Kong has established a reputation for seemingly limitless spending on some of the best vintages coming onto the market each year, outbidding other global connoisseurs.

Top American wine critic James Suckling, who writes for the respected Wine Spectator magazine, has described bacchanalian jaunts with such Hong Kong collectors including tycoons and the territory's number two official, Henry Tang.

"The profile of our Asian customers so far and their purchasing habit have been very top end ... the best of the best of the best," said Kapon.

Bonhams hosted a small but symbolic auction in Hong Kong last month worth $1.5 million, the first in the city in over a decade and the first since wine duties were abolished. Global auction houses Christie's and Sotheby's are also reported to be considering getting in on the act.

Industry representatives say the slashing of Hong Kong's 40 percent duty on wine will give it an edge over rivals such as Tokyo and Singapore.

(Reporting by James Pomfret; Editing by David Fox)

Friday, May 23, 2008

High-Tech Wine Cap Design

A design for a high-tech closure for wine bottles that would allow the wine to breathe much like traditional bark corks won the $15,000 first prize in the annual Big Bang! Business Plan Competition at the University of California, Davis. The contest is run by students in the Graduate School of Management.


The screw-cap concept, which could help prevent some $10 billion worth of wine from being ruined every year by cork taint, will compete next on May 28 at the Draper Fisher Jurvetson Venture Challenge in Palo Alto, Calif. The challenge pits the UC Davis team against the winners of business plan competitions at 15 other top west coast business schools. The prize: $250,000 in start-up funding.

"These students are trying things that more experienced people might say shouldn't be done," said Scott Lenet, managing director of DFJ Frontier and a volunteer judge for this year's Big Bang! Business Plan Competition. "That's why these business plan competitions are so important. These are the people who will create the next Microsoft, the next Amgen."

In addition to the first-prize-winning cork concept, a $5,000 second prize and $3,000 "people's choice" award -- selected by audience vote -- went to the same team: Arcus. Led by second-year MBA candidate Matt Vogel, who has had diabetes since adolescence, the team is developing technology that would allow people with diabetes to test their blood sugar levels by blowing into a small handheld device -- a pain-free alternative to current glucose monitoring, in which patients must prick their fingers to draw a blood sample two to eight times a day.

The Big Bang! competition, founded in 2000 by students at the UC Davis Graduate School of Management, is designed to reward innovation at UC Davis and encourage entrepreneurship in the region at large. Previous winners and finalists have gone on to form such companies as Bloo Solar, Instant Effects and Improved Converters.

This year's Big Bang! awards were announced on campus Wednesday evening, following presentations of the five finalists' plans. The event drew a standing-room-only crowd of about 275 people at a ballroom at the Activities and Recreation Center.

The high-tech wine cap was developed by MBA student Tim Keller, a UC Davis viticulture and enology alumnus who worked for 10 years as a winemaker in Sonoma and Napa counties before enrolling in the Graduate School of Management, and his teammates, Kevin Chartrand and Diana Mejia. Chartrand, a fellow MBA candidate with an undergraduate degree in materials science, worked as a thin-film expert at IBM. Mejia, a former engineer for Anheuser-Busch, is earning a master's degree in food engineering at UC Davis.

Their team, Advanced Enological Closures, set out to design a better bottle cap because cork taint, a byproduct of a fungus that infects cork and makes wine smell like moldy mop water or sweaty gym socks, now contaminates the corks of an estimated one in 20 wine bottles on store shelves, ruining billions of dollars of wine annually. Although synthetic corks have been developed in response to the problem, they allow too much oxygen into the bottle, according to Keller. Overly oxidized wine has a shorter shelf life and can develop a fingernail-polish odor. Screw caps -- another alternative to bark corks -- are a viable option for wine white, but do not allow in enough oxygen for fine red wines, Keller said. Without enough oxygen to draw on, red wines start to smell like burned rubber or matchsticks as they age.

The team's design, a "breathing screw cap," has small vent holes and is fitted with a liner made of alternating layers of thin metal and a porous polymer. The liner can be customized to allow optimal oxidation for specific varietals, something that is impossible with bark corks. A patent is pending for the design.

"If you open up lots of bottles of the same wine, you'll notice variability from bottle to bottle because of differences in the amount of oxygen that gets in," Keller said. "With cork, you just never know. Our product will give a level of control that the wine industry has never had."

The cap would sell for 20 cents a unit -- or 10 to 11 cents per unit less than cork-and-foil closures, and only 5 cents more per unit than ordinary screw caps and synthetic corks, according to the team's projections.

UC Davis News

Wednesday, May 21, 2008

UK drinkers loyal to wine despite credit squeeze

Consumers continue to keep faith in wine, with many reluctant to reduce their spending despite the gloomy economic climate, according to figures out today (May 21) at the London International Wine Fair (LIWF).

A survey commissioned by the Wine and Spirit Trade Association (WSTA) showed the sector is proving resilient, regardless of recent duty hikes and an ongoing global credit squeeze.

The research, conducted by Wine Intelligence, questioned 1,000 regular wine drinkers and discovered 60% would readily cut back on buying beer, soft drinks, chocolate and sweets before reducing their wine expenditure.

The survey showed that 13% thought wine was inexpensive or very inexpensive, 52% had no definite opinion, and 35% thought it was expensive or very expensive.

Jeremy Beadles, WSTA chief executive, said: “With household budgets feeling the squeeze, it should be some comfort to the trade that many regular wine drinkers will pause for thought before they cut back on wine purchases.”

The study assessed price changes in the sector over the last six-month period. Wine ranked near the bottom in wine consumers' minds for weight of price increases.

Half of the respondents had noticed no real change in wine prices over the last six months, while the majority judged wine to have undergone less significant price increases than household staples such as bread, poultry, cheese and coffee.

The picture for the on-trade was more negative, as 77% of consumers who drink wine by the glass think it is more expensive. But wine trailed beer in the on-trade in terms of consumers' perceived price increases in the last six months.

Jamie Coggans

After Mondavi, who will lead Napa winemaking?

Decades after the pioneer winemaker made his mark, success in the region has become tricky.

NAPA Valley lost a charismatic leader when Robert Mondavi died on Friday. Has the Napa Valley that fostered such a maverick passed as well?

Mondavi's Napa was the Wild West of winemaking. For the dozen wineries in operation in 1966, costs were low, there was room to grow and mistakes weren't fatal. The challenge was to persuade Americans to drink wine at all. Today, high costs have created a region dominated by small producers. Four hundred wine brands with limited landholdings compete for a share of the top 10% of the U.S. wine market.

When Mondavi planted his initial 12 acres in Oakville, an acre cost less than $10,000, according to Vic Motto, chairman of Global Wine Partners, an investment bank dedicated to the wine industry. He gradually expanded to 1,400 acres.

Now an acre of "good" Oakville vineyard land costs an average of $250,000. Prime land can cost $500,000. Most of Napa's 450,998 acres of planted vineyards are owned by individuals, Motto says. Big holdings are the exception. "Napa is really hundreds and hundreds of small growers." Most are economically viable, but no one is getting rich quick, Motto says.

That doesn't faze today's novice vintners, many of whom arrived in Napa with considerable wealth. The cost of a vineyard can be rationalized as an investment in the wine lifestyle. Deep pockets don't guarantee success, Motto says. "More than money, you need drive and passion to succeed here."

Good news for these vintners: Bottle prices have skyrocketed. Motto recalls the furor in 1970 when Mondavi raised the retail price of his reserve Napa Cabernet Sauvignon by 50% -- to $3 from $2. Today, he says, the average price of a Napa Cabernet is $45. A $100 price tag is common.

Getting a fledgling brand noticed among the proliferation of pricey bottles is tough, says Bo Barrett, Chateau Montelena owner and winemaker. "It was difficult in the old days when no one thought we made good wine, but at least you could buy an old cow pasture to expand your vineyards. We didn't have to charge $70 right off of the bat."

Mondavi was instrumental in this transformation, but he failed to appreciate that surviving in Napa had become a high-wire act. When he ignored a shift in critical and public taste toward a lusher wine style, sticking instead to his personal preference for lighter, more reserved wines, his publicly traded company suffered. In 2004, Mondavi was forced to sell his winery to Constellation Brands, the world's largest wine company .

Concern spread that more of Napa Valley would be owned by outside corporations. Constellation already owned Mount Veeder Winery and Franciscan Estate. Australian beverage giant Foster's Group owned Beringer Vineyards, Stags' Leap Winery, Etude and St. Clement. Another spirits giant, Diageo, owned Beaulieu Vineyard, Provenance, Acacia and Sterling Vineyards. In 2007, U.S. Tobacco added a 50% stake in Stag's Leap Wine Cellars to holdings that included Conn Creek. But there has yet to be a rush of outside investors into Napa.

Will one of the boutique producers rise to fill Mondavi's shoes? Without him, there is no individual or institution who personifies Napa, says Jacques Lurton, scion of one of Bordeaux's most prominent winemaking families. "Mondavi not only created Mondavi wines, he created Napa."

Whoever takes his place, Lurton says, will be someone who can transform Napa Valley yet again. "That person will be the new hero," he says.

Corie Brown

InkSure and eProvenance Form Technology Alliance to Protect the Fine Wine Market

FORT LAUDERDALE, Fla., May 21 /PRNewswire-FirstCall/ -- InkSure Technologies Inc. (OTC Bulletin Board: INKS), a leading provider of covert machine-readable security solutions ("CMRT") for the detection of counterfeiting, fraud and diversion, today announced that it has signed an agreement with eProvenance LLC for exclusive distribution of InkSure’s authentication solution into the fine wine market in major wine producing countries in the world. InkSure has customized the covert security ink and handheld readers that are an integral part of the eProvenance system to address the growing counterfeiting problems within the fine wine industry.

eProvenance applies advanced technology (RFID and InkSure covert ink) to authenticate and track fine wines and champagne from producer to consumer. In addition to authentication, the system monitors and records the storage temperature, while collecting the pedigree for each bottle in a secure online database. With the eProvenance system, the bottle is secured, the contents are secured, and temperature history can be tracked for each case shipment, thus assuring the long-term value of the asset.

"The portfolio of technologies from eProvenance provides an enhanced level of authentication and confidence for the fine wine supplier and consumer," stated Don Taylor, Vice-President of Global Marketing for InkSure Inc. "We anticipate eProvenance will be highly successful with their integration expertise in France and other major wine producing areas. We look forward to working with them exclusively in this market."

"InkSure emerged as our preferred supplier for authentication due to their ability to provide custom covert codes and highly reliable handheld readers that are integral to our anti-counterfeit solution for the fine wine industry. Their responsiveness and technical capability has been invaluable," commented eProvenance CEO Eric Vogt.

About eProvenance

Founded in January 2007 by Eric Vogt, eProvenance applies advanced technology to assure the provenance of fine wines from producer to consumer using its innovative Intelligent Bottle(TM) and wine temperature tracking system along with its web site, http://www.eprovenance.com. eProvenance serves the rapidly growing fine wine industry globally (1.1 billion bottles) and generates the proprietary information and reports which can assure the actual Provenance of each bottle, thus proving and preserving the asset value. The company is currently implementing programs with nine leading Bordeaux Chateaux, including several first growths. Among its first customers are Chateau Bauduc, Chateau Lynch Bages, Chateau Margaux and Chateau Palmer. The Franco-American team is headquartered in Boston, Massachusetts, with offices in the USA and in Bordeaux and Paris, France. eProvenance has exclusive rights for its technology as applied to the global wine industry, and has four U.S. patents pending for eProvenance technology certifying provenance and authenticity of alcoholic beverages using RFID and other technologies through all stages of the distribution channel.

About InkSure Technologies Inc.

InkSure Technologies Inc., with its corporate headquarters in Ft. Lauderdale, Florida and its research and development center in Science Park, Rehovot, Israel, specializes in comprehensive, covert security solutions designed to protect high profile brands and documents of value from counterfeiting, fraud and diversion. The Company’s sales and marketing activities target a number of market opportunities, including financial, pharmaceutical, branded products, transportation, and government/institutional, on a global scale. The Company’s R&D activities include the development of "chipless" RFID technology for affordable item-level secure logistics and track-and-trace applications.

Tuesday, May 20, 2008

Rivalry and angst in Champagne expands

The news that the Champagne appellation area is to be extended has unleashed a torrent of anticipation and anxiety among local vintners. Converting a field of corn into a Champagne vineyard multiplies its price by a satisfying 350.
Yves Bénard, who presides the wines and spirits committee of the Institut national de l’origine et de la qualité – INAO – announced the extra communes now permitted to plant Champagne grapes. The current 319 villages are to be increased to 357. Two communes will lose their growing rights. The exact parcels will not be clear until 2015, when all the hearings and legal appeals are over.
Lawyers in the region are sharpening their wits for what will inevitably be a fantastic legal punch-up. Landowners who find that the new boundaries fall just outside their property will try to get them adjusted in their favour. Farmland sells at E5,000 a hectare whereas a hectare of AOC vineyard has been known to change hands recently at more than a million euros. The justification for each new parcel must be based on the most learned geological and oenological research. The land must have the necessary chalky or clay-chalk subsoils. It will take more than weighty scientific evidence to convince the disappointed that they not been robbed by their neighbours.
Philippe Wibrotte, director of the Comité Interprofessionnel des vins de Champagne (CIVC), told French News that the aim is to up production to meet steadily growing demand. Champagne is the highest selling French wine. Exports broke records again in 2007 with 150.9 million bottles sold in 190 countries. The quantity of grapes permitted per hectare was recently increased from 13,000kg to 15,500kg. Since 1927, when the present system was set up, there have been 33,500 hectares round Reims and Épernay in the Marne but with 25% of Champagne actually produced in the next door département of the Aube, near Troyes, and some in the Aisne and the Haute-Marne.
Wibrotte admits that the corks of the new Champagnes will not be popped until 2021 at the earliest, by which time the world economy may be totally different, so the initiative is something of a leap in the dark.
However, he stresses that the increase in area is also intended to pre-empt individual villages following the example of Fontenay-sur-Ay which individually won the right to produce Champagne in 1995 after a legal battle lasting 13 years. He is also keen to emphasise that the extension will in no way be at the expense of quality.
Champagne and legal strife go hand in hand. Wibrotte’s CIVC is eternally vigilant in defending the brand name. It was even guaranteed in the Treaty of Versailles that ended World War I. In 2002 they succeeded in stopping the Swiss village of Champagne in the Vaud (pop. 660), calling their local wine by the village name. More seriously, in 1994 and 1995, they defeated an attempt by American sparkling wine producers to have the name declared semi-generic worldwide. This would have meant the name had no geographical significance and was merely a type of sparkling wine, which could be produced anywhere by the tanker load. Champagne lovers throughout the world heaved a sigh of relief when this challenge was defeated.
Similarly, the Yves-Saint-Laurent perfume house has had to change its brand name Champagne to Yvresse. The two villages thought to be scheduled to lose their AOC status are unlikely to accept being dropped from this exclusive and uniquely profitable club without a fight.
The British drink more than any other country – 39 million bottles last year. Now the trend towards global warming could lead to competition in production from across the Channel as well, where suitable subsoils exist. Pancho Campos, president of the wine academy of Spain, speaking at a recent conference in Barcelona on wine production and climate change, said some French Champagne houses have already bought farmland in Sussex and Kent, just in case.

French News

Sparkling Wines

With champagne production stretched to the limits, many other countries and areas in France are cashing in on producing quality sparkling wine. The UK and Germany are leading the way in the upturn in consumption – the former drank around 63 million bottles in 2001.

By 2005 the figure had reached 90 million, set to rise by another 7.9% by 2011. All production methods, except perhaps carbonic maceration (the infamous méthode pompe bicyclette), are showing good returns. Due to automation and modern production techniques, prices remain reasonable – a far cry from the labour-intensive processes of 40 years ago.

In those days the second fermentation took place in a bottle sealed with a cork and a spring metal clip – agrafe. The stacking of wines in the cellars was done by hand. The remueur – who riddled the bottles to shake down the sediment – was the most expensive blue-collar worker in the wine trade. A lot of disgorging of the sediment was still done manually without going through the brine ice-bath, meaning additional care when disgorging. Demonstrating what could go wrong in the process was the star event for many a trade trip. You were told that once the agrafe and cork were removed the bottle was ‘live’. Giving the bottle a firm tap with the disgorging key, the demonstrator would prove his point.

So what better to drink this Easter, a time for celebration, than sparkling wine? Nowadays the choice is vast – for style, colour, sweetness, method of production, country of origin and, of course, price. Between the Northern and Southern parts of the Rhône Valley region, in the département of the Drôme, the small town of Die gives its name to a variation of the traditional method – the Méthode Dioise (or sometimes Méthode ancienne or ancestrale). For the alcohol conscious, it is an ideal wine, having only between 7.5 and 8% alcohol. The area also produces traditional method wines from 100% Clairette with the AC of Crémant de Die (until 1999 Clairette de Die).

Yet another of the excellent independent vignerons, Bérard et Maubouché at Saillans have 30ha of vines in the Drôme Valley growing grapes for producing both these styles of wines. The Domaine les Trois Becs has a fine reputation for quality. The cellars are on the main D93 from Valence to Die itself, with adequate parking, so it is an ideal stopping off point to sample and buy these wines and regional produce.

French News