Monthly Archives: November 2007

Countering Counterfeit Wines

Many citizens recycle their empty wine bottles in order to be green. But certain shady citizens and sellers recycle because they want that other kind of green that ultra-pricey bottles can bring, industry insiders say. Empty bottles of pricey vintages, obtainable from restaurants specializing in great wine, can make their way to the underbelly of the wine trade, where counterfeiters refill one or more of the bottles, their prestigious labels intact, with inexpensive wine. The bottles would then be re-corked and their necks wrapped in new foil. Voilà — the bottles are ready for resale.

The world is suddenly awash in newly minted, cash-heavy wine collectors. As they vie with European and American collectors for trophy wines, prices have soared to levels unimaginable just a few years ago. Château Lafite Rothschild 1982, for example, which was originally released for under $500 a case, sold for $28,800 a case two weeks ago at Christie’s. Last month at a Zachys auction, two cases of Château d’Yquem 1945, the legendary sweet wine, fetched an astonishing $178,500 each. No wonder such wines have become fodder for fakers, who have one leg up on art counterfeiters. While a prospective buyer can examine art closely, the best test of the authenticity of wine is in the drinking — and that can come only after purchase.

How much fake wine is out there? It’s impossible to say, since nobody knows how many skillful examples are taken for authentic. One certainty: It’s a relatively small circle of stellar wines that are the target of counterfeiters, what John Kapon, the president of Acker Merrall & Condit, a leading retailer and auctioneer, calls “an A+++ problem.” Happily, that rules out the less stellar-rated wines most of us drink. But it does make for a highend cat-and-mouse game. Earlier this year, just prior to an auction in Los Angeles, Christie’s took the unusual step of withdrawing a featured lot of six magnums of Château Le Pin 1982 (estimated between $60,000 and $100,000), a rare St. Emilion, after stripping of the neck capsules revealed corks of questionable authenticity. “We have now installed a system in which at least two people must inspect any consignment worth over $10,000,” the wine sales director for the Americas at Christie’s, Richard Brierley, said. Mr. Kapon reports that he recently removed the foil on a purported bottle of a great Burgundy, La Tache 1971, only to discover that the cork was branded 1970. That unremarkable vintage is worth only a quarter of the price of the 1971.

An unpublicized effect of the fake wine problem is that the top Bordeaux châteaus including Lafite Rothschild, Mouton Rothschild, Latour, Margaux, and Haut Brion, have cut back their long-standing service of “reconditioning” old bottles to extend their lives. That process involves removing the old corks, tasting each bottle, and “topping off” those that show the proper character with wine from a “donor” bottle. New corks stating that the bottle has been reconditioned at the château are then inserted.

But now the properties are wary of giving the gift of provenance to possibly fake wine through reconditioning. The owner of Chateau Lafite-Rothschild, Baron Eric de Rothschild, said, “At one time, we sent our maitre de chai [cellarmaster] to the U.S., Britain, and Germany to re-cork our wines. We did thousands of bottles. No more.”

One prestigious winery continues to conduct traveling reconditioning clinics: Penfolds of Australia. Earlier this month, a stream of collectors lugged their bottles of Penfolds wine to a clinic held at the Westin Hotel. One of those collectors was a former Time Warner executive, Michael Pepe, who arrived with five bottles of Penfolds’ greatest wine, Grange, from the 1985 vintage. “I always choose the bottle that looks like it’s in the worst condition to open and taste first,” Penfolds’ head winemaker, Peter Gago, said. Once uncorked and tasted, the “worst” of Mr. Pepe’s Granges was declared to be just fine. The bottle was “refreshed” with a bit of a younger Grange, and resealed with a cork bearing the clinic’s date. On the back of the bottle went a tracking label attesting to its reconditioning.

Wines brought to the clinic that are drinkable but don’t measure up to Mr. Gago’s taste test are resealed with a blank cork. “If there’s an ulterior motive to what we’re doing,” Mr. Gago said, “it’s to take faulty bottles out of the system.” With auction prices having exceeded $1,100 a bottle for top vintages of Grange, it has been a target of counterfeiters. Would Mr. Gago consider giving up the re-corking clinics? “Absolutely not,” he answered. “If anything, they are an excellent vehicle to detect fakes.”

At least now, though, wine fakery is being countered by new technology. At Château d’Yquem, a tiny serial number is embossed on each bottle of new wine. So-called “smart corks,” embedded with a chip, are being tested by the Italian winery Arnaldo Caprai. The giant Australian winery, Hardys, has imprinted the neck label of its top wine, Eileen Hardy Shiraz, with vineyard DNA.

The simplest DNA test of all, however, is provided by Ann Colgin, owner of an eponymous Napa Valley boutique winery whose wines have sold at auction for more than $700 a bottle. Upon request, Ms. Colgin will imprint any bottle of her wine with a wet lipstick kiss.

By Peter Hellman.


Paul Newman Enters The Wine Business

Following in the footsteps of Martha Stewart, Paul Newman becomes the latest celeb with a wine label. Newman’s Own 2006 California Chardonnay and 2006 California Cabernet Sauvignon will be released next March. In the press release, Paul Newman notes that he originally bottles his first product, his salad dressing in old wine bottles with parchment labels, so the brand is coming full circle. Since that beginning 25 years ago Newman’s Own has grown into a major brand offering pasta sauce, lemonade, salsa and more. Money generated from the products has allowed the Newman’s Own Foundation to donate more than 200 million dollars to thousands of charities.

Newman worked with Rebel Wine Company, which also makes True Earth organic wine which we have previously profiled. The Newman wines are made from grapes sourced from coastal vineyards and are expected to sell for $16. An article in AdAge mirrors a question I had which is whether $16 is too high a price for wine’s that have a celebrity name but not a lot of celebrity input. The True Earth wines sells for around $13 and Martha Stewart’s wine is expected to sell for around $15. Newman’s products generally seem to be a little pricer than others and consumers have been willing to pay a little more knowing that it goes to a good cause. Wine lovers, however, tend to purchase based on a complex variety of factors (including terroir and the recommendations of wine bloggers and critics) and might be a tougher nut to crack as they expect a lot from a bottle that veers toward the $20 bottle range.

By Deidre Woollard.


Vampire Vineyards – Blood Thirsty

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Which came first, the winery or the brand?

Michael Machat admits he didn’t follow the traditional route into the wine business—that is, developing a nose for grape varieties and building a plant, followed by coming up with different blends and brands.

Instead, the president and founder of Beverly Hills-based TI Beverage Group, parent company to Vampire Vineyards, got his start when a blood-colored light bulb went off in his head. “I had this idea that it would be cool if somebody had a wine called ‘Vampire’ and they made it in Transylvania. It was so obvious, I thought surely somebody had done it,” he says. Others may have thought of it but nobody followed through, so Machat was able to sink his teeth into the concept.

He wanted a name that would attract young people who wanted to drink wine but were put off with the shelves full of monikers they couldn’t pronounce. “A lot of people in the wine business don’t understand why people drink wine at all. They’re so wrapped up in what they’re making they forget the purpose is to have fun. People want a buzz, they want to change their state of consciousness,” he says. “When young people want to buy wine, they just want to get something to drink. They’re looking around the store and Vampire brings up lots of pleasurable connotations in their minds. They don’t know what else to drink so they buy Vampire. It’s cool, we get the new drinkers.”

Vampire is indeed succeeding with that demographic, according to Machat’s market research. He says 40 per cent of customers buying Vampire, which typically sells for less than $10 a bottle, are under 30. That’s unusual in a business where most consumers are 40 and older. Machat started the company while living in England in the mid-’90s and though he began buying his grapes elsewhere, he eventually sourced them from Transylvania, a real live region in Romania with a population of more than seven million people.

Once he moved to California and the company started growing, he was confronted by a major decision—relocate to Romania himself or start sourcing his grapes from a West Coast vineyard. He chose the latter option earlier this year. “Being nearby, I can check on the quality control. To take it big we have to be reliable and have good, consistent quality in the bottle,” he says, adding the company broke through the $3-million mark in revenue last year.

Today, Vampire Vineyards is a “virtual winery” as the production of its merlot, cabernet sauvignon, pinot noir, chardonnay, and white zinfandel blends is outsourced to a winery in nearby Paso Robles. He says the company has been careful not to use any vampire images in promoting its “blood of the vine” because everybody has a different idea of what a vampire looks like. “If we commit ourselves to one version, we turn off those who have a different conception. We’re talking a thin line. It’s easy to market it in a silly way and make it cheap looking and totally uncool,” he says.

Machat says when you buy a bottle of Vampire, you’re not just getting “juice in a bottle.” “You’re getting all the unconscious associations that go along with the vampire theme. If somebody just wants a bottle of wine, they can buy a bottle of two-buck chuck. We blend our drinks with romance, intrigue, and adventure,” he says.

Vampire’s brand is reinforced through its website—vampire.com, naturally—which includes a quasi-fictional history of the vineyard and a virtual store selling Vampire wine glasses and DVDs of classic blood-sucking movies such as Dracula, Blade, and Buffy the Vampire Slayer. Machat didn’t stop there with his colored beverages. He subsequently launched a pair of vodkas called Vampyre, one white, the other red, and a sports energy drink called “Vamp NRG.” He says the red vodka is particularly impressive because when it’s swirled around a glass, the “legs” that come down look like little drops of blood dripping into the bottom. “Some bartenders didn’t like it because it turned their hands red (when it spilled) but some customers really got off on it. You get red lips, it’s like drinking blood,” he says.

Vamp NRG (short for energy), meanwhile, is a black cherry-flavored beverage competing in the same category as Red Bull. Bernie Hadley-Beauregard, principal at Vancouver-based Brandever Strategy Inc., says Vampire will certainly be “the king” of all wines consumed on Halloween. His concern, however, is its theme implies strict seasonality, leaving it prone to a boom and bust sales cycle. “That’s difficult in the wine business,” he says. “Vampire distinguishes itself readily from everyone else in the pack. It really pops off the shelf in late October but it’s hard to think you’ll find it as alluring on November 1st as you did on October 31st.”

He says the challenge for Vampire’s marketing team is to get creative and expand the ppropriateness of their sales the rest of the year. He even suggests a starting point. “If it was my brand, I’d probably try to do a lot of promotions around full moons,” he says. Hadley-Beauregard is a bigger fan of the red vodka, calling the addition of a color to a neutral spirit “innovative.” “It’s pretty brave. I think it will bring them some good results, it could do very well on the retail shelf,” he says.

By Renée Alexander. Renee is a freelance business and lifestyle writer based in Winnipeg, Canada.

Feature Article: How To Find A Packaging Supplier For Small Quantities

I look forward to reading packaging articles written by JoAnn Hines – she always has something of interest to say. Here’s an excerpt of an article she recently wrote that applies equally to the wine industry.

This will probably be one of the hardest tasks you have associated with getting your product to market. Many packaging manufacturers simply don’t handle small quantities so it’s important to find a supplier that works with minimum quantity or small quantity orders at the very beginning. Fortunately there are now many resources available to someone starting the process of packaging their product.

First you need to decide the absolute minimum quantity you can order. Chances are you may end up ordering more but what you don’t want is a lot of excess packaging that you paid for and can’t use or packaging that ends up not being what you were expecting. Your packaging will evolve too so don’t be concerned if you can get exactly what you want the first time.

Start by asking your existing resources or vendors who they know and who they use or recommend as a packaging supplier. Believe it or not sometimes you can find the name of the packaging manufacture on existing packaging too. See what you like then try to find out who made it and give them a call.

Keep it simple to begin with. I know you have visualized fantastic or exotic package designs and as your business grows you will be able to order custom packaging for your products. But in the beginning you may need to decide to keep it relatively simple and use what is readily available.
Today there are many great options available in small quantities. Suppliers have finally recognized that there are many small business clients out there too.

Before you spend a lot of time and development creating a package you can’t afford or can make you need to determine what’s available at the right price and in the right quantities. I know your product is fantastic, but you still may need to start out on a smaller scale than you envision.

Lastly don’t overlook current suppliers. They have existing relationship lean on them to help you find appropriate resources. Designers, graphic artists, product producers all have sources. You may be able to open a door to a relationship even if your quantities aren’t quite large enough. Don’t wait however till you have a product then end up in a bind to get a package made. This process should start at the very beginning.

By JoAnn Hines Packaging Diva

Wine Publicity 101

Let’s face it, good press sells wine. That is why launching a campaign to gain publicity is a very important aspect of the wine industry and a great way to drive sales. In American culture, people love to trust the middle man. If we don’t know about something, we like to read about it from someone who does. When you look to buy a new car or a new fridge, you look to the ratings in Consumer Reports. People do the same for wine. Because there are so many options out there, we have to look to the professionals to make our decisions. So learn to love your wine writers, they’re here to stay, but take into consideration the following tips when dealing with the media…

1. Focus Your Pitch. If you are trying to get good press and are looking to target specific publications… do your homework!!! The easiest way to do this is to use Google, read what your target has written and figure out what projects they are working on now. Think of creative ways your winery or wines could be incorporated in a travel or lifestyle article. When you contact your target, make sure you are ready to provide them with all the information they need. You can predict this based on all of the background research you have done and present them with all the details. For example; a writer from a lifestyle publication is probably more interested in the restaurants to eat at that feature your wines or are near the winery, while a writer from a trade publication is probably more interested in the varietals, harvest dates, alcohol percentages, and so on.

2. It’s All About Packaging. Having a presence on the web is really your most important step in launching a publicity campaign for yourself. If you have an attractive, comprehensive and easy to navigate website you may have already gained customers, fans and created a landing site for good media hits to feed back to. People often make a large percentage of their judgments within the first 10 seconds they see something, and the internet is no different. Your website is a window to the world that represents your winery and this is a very important place to deliver your message. Spend time developing it, be very specific, keep in simple, and yet focus your message.

Try to make your site one of the best out there, remember that even if you are small and only produce 200 cases a year, you can make a much bigger name for your brand and your winery online, and this is important. Once your website is up and running you must make sure you maintain the content and keep it updated. When you drive people to your website you will want to make sure you want to keep them coming back! Use rotating graphics, encourage people to bookmark your site, post pictures of harvest and winemaker events, and make sure all vintages are up to date and ready to ship.

3. Create A Network Online. Beyond just your own website, be involved in other networks online. We live in a world of social networks, and more of these are connecting people to others who share their same interests, particularly in wine! This is not only a great way to meet cool people and discover wines yourself, but also a great way to promote your own wines and upcoming events. For a start, try logging on to Snooth, or adding the application to your Facebook account. Do some research on wine blogs and read them often, or begin checking websites and blogs like chow.com that talk about food as well. Post your comments and don’t be afraid to share your opinions!

4. Be Selective when it comes to Events. While events are often great exposure, if you attend every event you will be wasting your time. There are SO many events, you could probably register to attend something three times a week. Aim to attend events in specific markets you are targeting. If you are donating product for an event make sure you get details and request the appropriate signage and recognition, otherwise you will be wasting wine. If possible, have a representative in that market stop by the event to educate the staff on the wines before the event starts. The more they know, the more the consumers will know!

When planning your own media events, partnering with other wineries is often a great way to gain good media attention. Many writers have policies against attending an event sponsored by only one winery. Also, ALWAYS over-book. Just like the rest of us, people in the media are busy. Although members of the media often tell you that they will attend your event, things happen. People overbook their own schedules, and you absolutely have to plan for this. After all, it is much better to have to deal with too many people attending than too little.

5. Set Reasonable Expectations. None of us can run a marathon the first time out on the track. In the same way, while you should think big, it is hard to target the largest publications when you are first starting out. The wine business is built on name recognition and reputation and you have to build this. Just keep telling your story, and if you are honest and persistent, eventually you will gain the recognition you deserve. Talking to the media takes practice, so always start with the smaller publications like your local newspaper and slowly work your way up the chain. When targeting media outlets, start slow and find different and creative outlets, and try to use your online resources to communicate with and start getting the word out!

Be persistent and always follow up with any media leads. Remain patient with outlets that may take awhile to develop your story. Finally, don’t get too discouraged if you get some negative press, all PR professionals will tell you, all press is good press, and remember you are just getting started! Good luck!

By Rachel Reed, Program Development Manager, Inertia Beverage Group.

New Strategy for German Wine Marketing

German Wine Institute Realigns Communication Efforts

Monika Reule, managing director of the German Wine Institute, outlined
the most important goal of the new marketing concept as follows: “Wine
enthusiasts at home and abroad should be made aware that German wines
number among the finest in the world and are unique in nature.
Furthermore, it is important that Germany – also in the domestic market
– be perceived as a wine-growing country in which its wine is an
important cultural asset as well as inherent to a modern lifestyle.”

In order to achieve these goals, focal points are to be defined and
coordinated for public relations and marketing concepts in the domestic
and foreign markets. As is already the case in export marketing, key
regions in Germany are to be targeted. In particular, consumer
communication will be intensified with well-aimed activities and
measures. Furthermore, to strengthen the institute’s own communication
efforts, new strategic partnerships are to be developed, taking into
consideration existing EU joint and promotional programs.

Monika Reule also emphasized that “it is important that we intensify
our work with the 13 regional wine promotion boards – herein lies great
potential for synergies.”

In general, the German Wine Institute will focus more on event
marketing that places wine in the limelight. Traditional print
advertising will be reduced in favor of other promotional measures –
all with a view to strengthening communication efforts at home and
abroad. This includes expanding press relations as well as further
developing information available online.

Grape varieties, in conjunction with wine-growing regions, as well as
culture and lifestyle are to play a more important role in the Wine
Institute’s communication strategies in the next five years.

Restaurateurs and the trade – as well as the press and other opinion
leaders – will remain key target groups and are to be more closely
integrated into marketing activities. Consumer communication will focus
on wine enthusiasts with a modern, upscale lifestyle.

Restructuring Goes Hand in Hand with the Strategy

Monika Reule explained that the future strategy will be implemented in
conjunction with structural adjustments within the German Wine
Institute. “The domestic and export marketing departments will no
longer be separate entities, but rather will form a network of five
departments on an equal footing.” Furthermore, a new “marketing and
communication” advisory board will be founded to replace existing
boards responsible for promotional and export activities. To foster
more efficient and extensive cooperation with the 13 regional wine
promotion boards, they will be more closely involved with tasks that
have been handled by various committees and circles in the past, and
take on more of an advisory role. The Wine Institute’s services on
offer to the German wine industry are to be expanded.

Monika Reule feels that the new strategy puts the German Wine Institute
in a good position: “After many conversations and constructive
discussions we have laid the foundation for a stronger presence for
German wine at home and abroad. We will begin to implement our new
strategic goals in the coming weeks.”

Source: www.wine.co.za

French Champagne House Spotted Checking Out English Vineyards

I’m fascinated by what I am terming the “Champagne scramble” as the various Champagne producers confront a world in which the
growing need for Champagne is compromised by both the limits of the region and the specter of global warming. The latest move in the battle comes from Champagne house Louis Roederer , the maker of Cristal one of the most recognizable brands, they are now looking at vineyards in Kent and Sussex. This could lead to the company producing English sparkling wine.

Over the last few years southern England has begun to get attention for sparkling wine production. The chalky soil is similar to that in the Champagne region and global warming has created a more hospitable growing climate. For the Champagne houses the lure of English land is also partly the price.

Decanter reports that a 50 acre block for planting vines might cost between £8,000-£10,000 per acre in England while an acre of vineyard in
Champagne would cost around £300,000. That’s quite a lot to pay for a name. The hard part is convincing the world just how good English sparkling wine is. Having a major Champagne house invest in the region would certainly go a long way toward doing that.

In the short run however there is nothing to worry about in the region, this year’s harvest in Champagne is set to achieve recordbreaking production.


By Deidre Woollard.