Monthly Archives: January 2008

The Demise Of Stormhoek?

The tragic news is that 2008 has not started well at Stormhoek. The Wine Conversation reported on Monday that Orbital Wines, the company behind the Stormhoek brands has gone into administration. Even worse, all ten staff, including MD Mike Paul, have lost their jobs.

According to one report a major retailer delisted Stormhoek recently because of “a lower retail price available to a competitor.” Well if this is correct it shows the power that these big supermarket groups really have, and how badly they can treat their suppliers if they don’t play the game according to their rules. It also highlights the danger of having all your eggs in one basket.

Josh at Pinotblogger rightly asks “Does Social Media Work For Wine”? “Marketing experts” will be debating this very point for a long time to come but in my opinion social media and blogs are just one part of your overall marketing strategy. Building brands takes time and plenty of money but Stormhoek’s selling price point probably didn’t leave much fat for the latter.

By Mike Carter.

Best of Wine Tourism 2008

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Want to get away but have a hankering for some great vino? These top wine touring locations will satiate your wine desires while providing a luxurious and picturesque backdrop to enjoy it in. And you don’t just have to stay in the states — explore the world of wine in a global fashion hitting the top regions on wine on earth.

  • Marques de Riscal, Bilbao-Rioja Region: Known for its Caudalie Vinotherapy Spa this is a must-see location! Drink it or smooth in on my skin — either way I’ll feel fabulous.
  • Planète Bordeaux, Bordeaux: A hands-on, multi-sensory experience worth traveling for.
  • Vergelegen, Cape Town: One of the Cape’s oldest wineries but most innovative as well, it has 18th century gardens to complement its classic architecture.
  • Castello di Meleto, Florence: Stay in Meleto Castle in the heart of Chianti enjoying your own private apartment.
  • Familia Zuccardi, Mendoza: A blend of wine, art and gourmet food, Zuccardi is one of the oldest names in Argentina.
  • Victorian Alps Winery, Melbourne: Offering live music, theatre or cinema under the stars, the events and views won’t disappoint.
  • The House of Sandeman, Porto: Ancient cellars, history and heritage make this winery a unique place to visit.
  • Grgich Hills Estate, Napa Valley: Biodynamic and organic winemaking with solar power and traditional crushing of grapes by foot will make for a interesting experience.


By Laura Malesich.

Feature Article: The U.S. is turned on to wine.

Americans are drinking more and better wine and love a dependable bargain bottle, which is increasingly easier to find. And with every sip we are breaking records: For the 15th consecutive year, wine consumption in the United States is projected to have risen in 2007, after a 4 percent gain in 2006.

Projected estimates for 2007 have the nation reaching a record 304 million cases of wine consumed. That will, for the first time, place the United States ahead of Italy in per-capita consumption, trailing only France, according to the 2007 wine market report by Impact Databank. At the current rate of growth, Americans will overtake the French by 2015.

A host of factors have contributed to the steady rise, the report says, including publicity about the potential health benefits of red wine, sustained increases in the number of new drinkers of legal age, growing numbers of women with high incomes in the work force and, more important, how wine is marketed.

Industry consultants say wine has become more approachable. Something as simple as an image of an animal on a label, such as Yellow Tail’s bouncing wallaby, has broken down barriers.

“Highfalutin turns people off,” says wine consultant Jon Fredrikson, publisher of the Gomberg-Fredrikson Report. “People see Yellow Tail, the largest-selling brand in U.S. food stores based on volume, and they say, ‘Gee, this is down-to-earth.’ “

The growth is also fed by accelerated competition from an ever-expanding world of winemakers who vie for a spot on the retail shelf with as many 13,000 products.

On a more local level, “the story of the Texas wine industry is growth,” says the Texas Wine and Grape Growers Association. In just six years between 2000 and 2005, according to the organization’s statistics, the number of Texas wineries jumped from 40 to 113. Now, barely three years later, it counts 138 wineries. Texas, the association adds, ranks fifth nationally in in wine production among states.

“People are battling it out to deliver quality at every price point,” Fredrikson says. “You have wonderful wines for the money: plenty of wines under $10, and 90 percent of all wine, by volume, is sold in a food store for below $10.”

Still, buyers are not necessarily looking for the cheapest bottle in the bin.

“People expect higher quality in everything they buy, and wine has become a badge of quality,” says Barbara Insel of MKF Research in St. Helena, Calif. Five years ago, wine drinkers were spending $6 to $8 a bottle; now the number is up to $10 to $15. “I call it the Costco definition of value. They are not looking for cheap wine. They are looking for a deal on quality.”

Americans continue to prefer chardonnay above all other varieties, with sales of 64 million cases projected in 2007, according to Wine Spectator magazine. That is the wine most consumers know best.

“It’s the wine that baby boomers discovered when they first discovered wine,” says John Gillespie, owner of Wine Opinions, an Internet-based company that provides wine-industry research.

But a survey released this month by the firm found that chardonnay has fewer fans among younger drinkers. The most devoted chardonnay drinkers are 60 or older, with 38 percent counting it as a favorite. Tastes are changing, however.

“There is a decided trend away from the overblown, unctuous, often sweet chardonnay with too much oak, and greater interest in chardonnay without oak or barrel fermentation,” Gillespie says.

Women continue to buy more wine than men. But younger men are discovering wine. “The typical 21-to-35 male is a beer drinker when he is with other males. But when he is with a woman he drinks wine, because wine is considered less rowdy,” Insel says. “And these young people have little brand loyalty. They don’t care where it comes from or about the label.”

Analysts say reasonably priced domestic, South American and Australian wines will continue to be attractive to U.S. consumers, but European wines, with the drop in the value of the dollar, will lose some appeal: They will rise in price by 10 percent to as much as 30 percent in the coming year.

By Walter Nichollis & Peggy Grodinsky.


Jamie Goode’s Wine Predictions for 2008

Predicting the future is a mug’s game, and it’s not something most people are any good at. After all, anyone who had a real talent for it would never need to work again. Still, it’s quite fun to look ahead and guess where the next 12 months might lead.

(1) It’s going to be an increasingly competitive market, which is bad news for producers of commodity wines and brand owners. Most people see wine as a commodity, and they know how much they want to spend on it—which is usually as little as will buy them a reasonably drinkable bottle of wine. As a recent Asda press tasting demonstrated to me, it’s still possible to buy quite drinkable wines for £3 a bottle in the UK, which is startling when you consider that prices at the bottom end for wine haven’t really changed in the last 10 years. Getting people to trade up much beyond £4 is beginning to look like a bit of a fantasy, especially when you consider point (2) below.

(2) The financial pages are looking pretty gloomy, with all this talk of credit crunch and global recession. Most people are likely to be doing a bit of belt tightening over the next year, which is bad news for wine producers and retailers, because when it comes down to a choice between feeding your kids and buying wine en primeur, the kids tend to win out (most of the time). But I don’t think this will hit prices too much at the very high end: the finest wines will continue to become increasingly unaffordable as the small quantities made are being chased by a growing band of multimillionaires around the world, such that demand for a limited resource should keep prices high. While the prospect of economic slowdown or recession means decreased earning potential for most, I don’t think it will hit the growing ranks of the super wealthy to the extent that they’ll stop buying fine wines.

(3) Neoprohibitionism is on the move. Towards the back end of last year there were lots of stories in the news about the dangers of middle class wine drinking. Rather than target binge drinkers with health messages as they have in the past, the UK government has now turned on the large numbers of professionals who drink a bottle of wine a night with their dinner, claiming that this sort of consumption is likely to have long-term health implications. Just you wait: this sort of talk is sure to precede a massive hike in duty, because making booze more expensive seems to be the only way to stop people drinking so much. But I have two questions: (1) is the government sure that drinking a bottle of wine with dinner is going to cause real health problems in the long-term?; and (2) if the country really is drinking itself to death, why is that? Shouldn’t they be getting tough on the causes of problem drinking, rather than just targeting the behaviour? My worry is that all this anti-booze propaganda will cause healthy, pleasure-giving, life-enhancing wine drinking to become seen by the majority as socially unacceptable.

(4) Alternative packaging will become more accepted by consumers. Bag-in-box has been around for a while, and has a loyal following. But what we will see more of is the likes of Tetrapak (and variations on the theme) and bladder packs (effectively bag-in-box without the box), as well as increasing use of PET (plastic) bottles. Part of the drive for this will be environmental/carbon footprint concerns.

(5) High alcohol wines are going to take a bit of a beating this year. Guilty producers will finally begin to realize that over-ripe, alcoholic, international-styled reds are boring and a bit pointless, and they’ll look to make wines that reflect their sites better by adapting their viticulture and picking a little earlier.

(6) Wine retailers will finally twig that trying to sell fine wine to intelligent customers on the basis of ‘RP96’ scores is a bit silly.

(7) Closures: cork will continue to lose customers as alternatives take new ground. Cork will remain the main closure for fine wines, but for commercial wines the likes of screwcaps, Diam, synthetic corks and Vino-Lok. With screwcaps, fewer wines will be sealed with the tin/saran liners and more producers will be using the saranex-only liner.

(8) So, what about the various wine producing countries? I reckon it will be a good year for New Zealand as people wake up to the fact that there’s more to Kiwi land than Sauvignon – in particular, some very smart reads. At the bottom end, the USA should be able to wrestle some market share from Australia (drought problems mean less wine to sell). Chile will continue to do well with its less expensive wines; it will continue to learn and struggle a bit with its high end wines, and its whites will get increasing recognition. Argentina will gain a bit of ground with its reds, although whites will be more of a problem. France and Spain will begin to show that they can actually make decent commercial wines in significant volumes, and will outperform the new world in the £5–10 bracket. Portugal will take further strides at the top end ( Douro in particular), but will remain a bit hit and miss at the commercial end of the market.

By Jamie Goode. Check out Jamie’s comprehensive online wine resource The Wine Anorak.


Gold-Plated Bubbly

New Year’s celebrations may be over but that doesn’t slow down the house of Dom Perignon, which has unveiled their latest divine creation with the 1995 Vintage White Gold Jeroboam commemorative champagne.

This seductive beauty is the newest addition to the famed Perignon name and the limited 100 luxurious bottles will be available through only a few select locations: Hotel Byblos in St. Tropez, Matsuzakaya Department Store in Nagoya’s Sakae-ku of Japan, and a few chosen nightclubs in the United States. Balanced notes of fresh apricot, brioche, honey and almond make this champagne a true taste of elegance.

It’s price tag ranges from 1.26 million Yen ($11,005) per bottle to $40,000 at U.S. nightclubs. Even after the last drop has been enjoyed, the white gold bottle can stand as a testament to the consumer’s luxurious lifestyle.

Source: www.luxist.com

Notebook

Even Seth Godin finds time to write about packaging these days!

If you’re given a bottle of wine as a present should you open the bottle immediately? The Wino suggests giving two bottles, one to be opened and the other for the host (to be opened at the host’s discretion. Advice like this can only be good for wine sales!

Tom Wark comments that we are not about to see any major paradigm shifts in the wine industry soon. He says “Despite the different ways we now have for marketing wine (meaning, how we communicate with those who will buy it) it always comes down to the same thing: “Hey, buy this…It’s really great!!”.  Explaining why the wine is great is where the creativity comes in.”

Bottom line is that wine producers are stuck between a rock and a hard place. Over production and the power of giant retailers forced wine producers to compete mainly on price which turned wine into a commodity product. If disruptive change is ever going to happen it will come from outside the wine industry.

Golfer Retief Goosen has become South Africa’s newest wine producer and wine ambassador. With his connections and celebrity status he’s bound to raise the profile of South African wine on a global scale. Read the full story & interview.


Second-cheapest wine syndrome

According to a survey conducted by UK cheese maker Castello, 25 percent of diners will choose the second-cheapest wine on a restaurant wine list an effort to cover their ignorance in front of waiters and friends. The “second-cheapest wine syndrome” afflicts many who want to give the impression they are making an informed choice from the wine list while avoiding any accusation of being a tightwad. Additionally the survey revealed that more than half (56 percent) will not ask a waiter for advice in case he recommends something expensive and that in general that having to choose a wine is stressful. Also one in four would not know a good wine from a bad one and only a third think they know more about wine than a waiter.

One tip for anyone who needs help but has to watch the budget, you can always ask your waiter if a wine in your price range would go well with the meal you are ordering or if he has any other suggestions. A good waiter will either agree with your choice or point you to something in the same price range for you to enjoy with your meal. In any case, do not be afraid to ask for suggestions from your waiter.

Source: Consumers Corner


What’s ahead for wine drinkers in 2008

The start of a new year is an appropriate time to consider some of the wine trends we’re likely to see in the coming months. I’d like to tell you that there will be a huge shift away from wines that are all about power and alcohol, but I doubt that will be the case. Though I hear more talk about that, I’m still not seeing the evidence in the bottle. But here are four trends that I do see on the horizon.

1. Domestic wines should look more attractive as prices rise on many imports.

If you’ve done any traveling lately or watch the financial reports, you know that the dollar is very weak these days. The euro is worth about $1.45; two years ago, it was worth close to $1.20. The dollar is falling against other currencies, too. The Australian and New Zealand dollars have become stronger against our dollar, as has the Chilean peso. The main wine-producing country whose currency has become weaker is Argentina; maybe we’ll all be drinking more Argentine malbec.

Complicating things in Australia is a tighter grape supply, the result of frost damage to the 2007 vintage and an ongoing drought. There has been a wine glut in the country, resulting in some great bargains, but that glut is expected to dry up this year and next. The drought has been a particular problem in areas that rely heavily on irrigation to grow large crops. Those vineyards are the sources of most of Australia’s modestly priced wine.

Currency fluctuations aren’t automatically passed on to consumers, of course. Big wine companies, in particular, tend to absorb some of the pain. But some price increases seem inevitable.

I hope California wineries hold the line on prices. They may feel tempted to raise them. Domestic sales of California wine have been on the rise, and the 2007 harvest brought a smaller-than-normal crop, especially in the better growing areas. But grapes were plentiful in 2005 (a lot of wines being sold now, especially reds, are from that year), and it will take a couple of years for most of the 2007 wines to hit stores.

2. More companies will start touting how “green” their wines are.

For years, some wineries have labeled their wines as being made from organically grown grapes. More recently, there have been statements about vineyards being certified as biodynamic, a cousin to organic farming that emphasizes the influence of cosmic forces and involves the use of specific “preparations” in the vineyard.

Now there’s also an emphasis on “sustainable” wines. Sustainability encompasses not only the way the grapes are grown (minimal use of chemicals, though not strictly organic) but also such practices as energy and water use, recycling and worker safety. Regional certification programs are slowly being set up. The Lodi-Woodbridge area already has one in place and has received federal approval to include the certification on wine labels; the Napa Valley has started a certification process, and the Central Coast Vineyard Team will begin one soon.

Fetzer Vineyards, which has championed organic and sustainable practices for years, last year took its message on a “green tour” to tout what the company is calling its “earth friendly” wines and to educate consumers about sustainability. Australia’s Banrock Station, part of the huge Constellation Brands portfolio, publicizes its commitment to wetland conservation; labels bear the slogan “Good Earth Fine Wine.”

Other companies are publicizing how eco-friendly their packaging is. Bag-in-box packages, for example, weigh less than glass bottles, so they require less fuel to be shipped. (The boxes are also recyclable.) Tetra Pak aseptic cartons, which are similar to the cartons used for soup, juice and other liquids, also weigh less than glass, and Three Thieves, which packages its Bandit wines in these cartons, stresses the environmental benefits in its marketing.

In light of the trend toward eating locally produced foods, I’m wondering when we’ll hear the first pitches about drinking locally produced wines to reduce our carbon footprints.

3. We’ll see more wines from ever-more obscure places.

Not so long ago, most Italian wines sold here were from Tuscany (Chianti, brunello di Montalcino) or Piedmont (Barolo, Barbaresco), with the occasional bottle of pinot grigio, Valpolicella or Soave thrown in. Spanish wine usually meant Rioja or sparkling wines like Freixenet. Now Italian wines are coming from the top to the toe of the peninsula, and wines from Sicily are one of the hottest trends. In Spain, whites from Galicia and reds from Priorat are all the rage, and lesser-known places like Toro, Bierzo and Murcia are coming on the scene.

Sommeliers are pushing gruner veltliner from Austria, moschofilero from Greece and syrah from South Africa. Eastern European countries such as Croatia, Bulgaria and the former Soviet republic of Georgia are increasing exports, too.

With table wine production on the rise in China, can it be long before wine is among the Chinese-made products at your local Wal-Mart?

4. Some wine producers will become more transparent about their winemaking practices.

OK, maybe this is mostly wishful thinking, since openness and transparency are things I’ve been arguing for in recent months. Honesty can come back to haunt winemakers, as was the case in the PBS program “Wired Science,” in which the use of certain technologies was derided as manipulation and a “dirty little secret.” But I’ve found a number of winemakers to be remarkably open, describing in detail (if asked) some of their practices. A few years ago, one winemaker even replicated for me an experiment that his winery did with adding powdered tannins to wines.

Randall Grahm at Bonny Doon Vineyard in Santa Cruz is taking a big step this year in the direction of transparency: He will start listing ingredients on the back labels of his wines. The labels, which will appear on the 2006 reds and 2007 whites, include all ingredients contained in the wine and used in the production of the wines (even when, in the latter case, none of the substance remains in the wine).

Grahm says he’s adopting the new labels to show his commitment to minimalist winemaking practices. He thinks such a move will be good for the industry and hopes it will start a conversation. “I don’t really want to tell people how to make their wines, and I don’t want to preach,” he says, “but I just want to set a good example. It’s a little provocative, but I think it’s a good thing.”

The first wines to carry the labels will be the 2007 albariño and 2007 muscat, produced under Bonny Doon’s Ca’ del Solo label and made from grapes grown at the winery’s biodynamic-certified vineyard near Soledad. The wines are scheduled to be released in February.

By Laurie Daniel.


Selling Wine by SMS

Half the world’s population now owns a mobile phone. As this article suggests, mobile phones are no longer just for talking, and represent another opportunity for savvy wine marketers.

After encountering a great wine in a restaurant or at a friend’s house, instead of vowing to remember the name and vintage, Dutch consumers can now dash off an sms to BuyYourWine.com. The online wine seller will then get back to them with a price and delivery details.

In the US, WineZap offers a similar service. If someone emails or texts them the vintage and wine name, WineZap will email or text them the current low, high and average prices for that wine. If a user adds their zipcode, WineZap includes a list of the nearest retailers that stock the wine, as well as their prices.

Both companies are currently offering the service at no charge. Another example of catering to people’s insatiable desire for relevant information, when and where they want it. Wine-by-text is a great little add-on both for merchants like BuyYourWine, and for intermediaries like WineZap, and it could of course be expanded with such obvious options as letting customers send in cameraphone pictures of wine labels or barcodes.

For more examples of how tuned-in companies are satisfying consumer infolust, check out trendwatching.com’s briefing on the subject.

Websites: www.buyyourwine.com / www.winezap.com

Source: www.springwise.com