Tuesday, January 29, 2008

The Public Just Wants to Know!

As reported by wine & Spirits Daily, January 29, 2008


A newly released survey indicates that American consumers support the proposal by the TTB to require serving fact panels on alcohol beverage labels, according to an article in Wines and Vines. The survey results were submitted to the TTB on Jan. 22, five days before the agency closed its public comment period on the issue.

The survey was taken by 503 Americans and found that consumers want complete labeling information, including the percentage of alcohol by volume, the serving size, the amount of alcohol per serving, the definition of a "standard drink" and the number of standard drinks per container, said the article.

A strong majority (92%) of those surveyed ranked the amount of alcohol in each drink as the top priority for required labeling information, followed by the amount of calories (84%), carbohydrates (75%), fat (71%) and protein (66%).

Sunday, January 27, 2008

Valentines Day in El Paso, Texas

It's February and time for a Valentines celebration at Jaxon's in El Paso, Texas. Friends and the owners of Jaxons are Kate and Gary Helston. When you visit El Paso, they have four great restaurants to visit. See you there on February 9th, 2008.

Wednesday, January 16, 2008

Wine Industry News - Which consumer are you?

Wine & Spirits Daily

January 16, 2008

Imported Wines Face Big Headaches

Much like spirits, the wine industry looks like it's headed for an interesting year. Strange industry trends tend to erupt when the economy is questionable, and wine is no exception. One trend that's emerging is climbing import prices. This of course can be good news for domestic wines but not so great for importers, particularly importers of smaller brands. The rate of growth for imported wines slowed in the four weeks to December 2, according to IRI scan data. Value of overall wine grew 4% in the four week period, while domestic wines grew 4.8% and imports grew only 1.5%. Domestic dollar share of the category grew 0.6% and imported dollar share declined -0.6%.

Volumes of domestic table wines grew 1.5%, which suggests that consumers were buying more expensive wines. Imports, meanwhile, were down -1.1% in volume. During the four weeks, domestics gained 0.4% of volume share and imports lost -0.4%. November trends seem to bode well for domestic wines. Could this be a foreshadowing of bad tidings for imports? Many in the wine industry, particularly importers and retailers, say prices for European and Australian imports are on the rise due to a declining U.S. dollar and droughts in Australia. As a result, sales are expected to suffer and domestics are expected to look more attractive to U.S. consumers.

EUROPEAN IMPORTS. Many retailers and importers of European wines say they have swallowed supplier price increases during the holidays to drive consumer traffic and help prevent "fickle" wine consumers from switching to less expensive brands. As you'll recall, the majority of wine and spirits sales are made during the holidays.

French imports were down -3.4% in dollar sales in the four weeks to December 2. Volume declined a whopping -8.4%. For awhile it looked like France was posed for a comeback, but perhaps the weakening dollar and continued "freedom fries" sentiment has changed things.

AUSTRALIAN IMPORTS. When it comes to the Australians, however, severe droughts have produced a smaller harvest which may push prices too high - and all this after Australians braved grape gluts and cheap bulk exports for years. Consumers that have come to rely on cheap Australian imports - we're talking price, not quality - may trade in their bottle of Shiraz for a cheap Chilean import or inexpensive domestic wine. Australian wineries face two options. One, they can cut profit margins and keep brands competitive, or two, companies can raise prices and risk losing market share of wine exports.

"Faced with volume shortage (and related grape price inflation) selling price increases will be necessary to protect profits," says Andy Kovacs of Macquarie Research in a note last November

Dollar sales of Australian wines in November declined -3.8% and volumes were down -2.4%. Dollar sales of wines priced $5-$8 were down -6.5% and volumes were down -5.7%. Similarly, sales of wines priced $8-$11 were down -6.6% and volumes were down -9.1% The rate of growth for Australian wines has slowed for the past several months, so will the trend continue or will Australian imports manage to bounce back?

DOMESTICS AND EVERYONE ELSE. Dollar sales and case volume of California wine grew 3.7% and 0.9%, respectively, in the four weeks, but shares were down slightly (-0.2%). Oregon and Washington wine value grew 19.1% and 18.8%, respectively. Oregon volumes were up 7.1% and Washington volumes were up 15.8%. Not too shabby.

South African table wine continues to show the highest rate of growth for imports, up 57.4%, followed by New Zealand, Argentina (29.7%) and Portugal. Chilean wines, which are expected to be big, saw dollar sales rise 3.6% in November, but volumes were down -5.1%. Problems with the peso have reportedly hurt exports. (Sound familiar?)

Dollar sales of red wine grew 3.6%, while volumes were up only 0.6%. Surprisingly, white wines grew 6.1% in value and 3.6% in volume. The winter months usually encourage wine drinkers to reach for a red varietal, but it appears consumers were mainly in the mood for white wine in November.

Major wine varietals experienced the following dollar sales growth or decline in the four week period: Cabernet Sauvignon (5.7%), Chardonnay (3%), Sauvignon Blanc (12%), Merlot (-3.7%), Pinot Grigio (13.3%), Pinot Noir (15.7%), Syrah/Shiraz (-6.7%), White Zinfandel (-4.2%) and Zinfandel (17.3%). Not too bad considering that most the varietals, excluding Merlot and White Zin, showed growth. White Zinfandel has been in the red for some time now, and Merlot seems to still be recovering from the "Sideways" backlash in 2005. French Champagne's value grew 2.9% and volume increased 1%.

When it comes to price segments, super-premium ($15-$20) reigns supreme, jumping 15.4% in dollar sales. Ultra-premium ($20 and up) grew 10.4% and premium ($11-$15) wines increased 9%. The rate of growth for wines priced below $3 to $8 was in decline. It appears that rumors of a recession and failing economy has yet to negatively effect trading up in the wine industry. It's an interesting trend to note since spirits seem to be having more problems in that arena.

Tuesday, January 15, 2008

The Four Amigos Annual Holiday Lunch

The Four Amigos were at it again this year. Lunch started at noon and ended at 9:00 pm. The food and wine experience was incredible. Thank go for limousine service! Check out a few of the courses below!

Monday, January 14, 2008

Maybe You Should Pay More for Your Wine

Wine & Spirits DailyJanuary 14, 2008
What's New in Wine & Spirits


Researchers at the California Institute of Technology found that pricier wine increases a person's enjoyment of the wine. Antonio Rangel, associate professor of economics, led a research team to test how marketing shapes consumers' perceptions, according to an AP article in Theage.com. The findings come to us during an interesting period when trading up is at an all time high.

The volunteers were told the price of the wine, or so they thought. The researchers served two of the wines twice, once with the true price and another time with a fake price. By monitoring the volunteers' brain, the study found that inflating the price of a bottle of wine enhanced a person's experience of drinking it, as shown by the neural activity. Volunteers consistently gave higher ratings to more expensively labeled wines. We don't find these results surprising, especially given the fact that consumers are drinking more expensive alcohol than in years past.

Friday, January 11, 2008

Maybe this is Why You Cannot get your Favorite Wine

Wine & Spirits DailyJanuary 11, 2008
Three Tier Battles - A Talk with Tom Wark and Craig Wolf

There has been a lot of back and forth between online retailers and wine wholesalers in the past week, so we sat down with Tom Wark, executive director of the Specialty Wine Retailers Association (SWRA) and Craig Wolf, ceo of the Wine & Spirits Wholesalers of America (WSWA) separately to get to the bottom of the issue. Both trade groups say they are working for the greater good. But the SWRA claims wholesalers are only out for the money, while the wholesalers claim their concerns are for minors and for state-based regulation.

WINE & SPIRITS DAILY: Why have the SWRA gone through the effort of investigating distributor political contributions in every state?

TOM WARK: Wholesalers have every right to contribute obscene amounts of money to politicians across the country. But when those contributions are accompanied in nearly every state by anti-consumer and pro-wholesaler laws, it's time to take stock of exactly what's behind those laws. That's what the "Wholesale Protection" report does.

The enormous contributions tell me that the wholesalers understand that a great deal is at stake and they are willing to spend what it takes to protect a regulatory scheme that functions to keep them awash in cash. In nearly every state law there exists a mandate that wholesalers get a kickback on nearly every bottle of wine that consumers eventually consume. This is what wholesalers are protecting by spending $50 million on campaign donations.

CRAIG WOLF: Everybody in this business should be, if they are not, involved in the political process...We know the SWRA is involved in political donations and we know they're funding lawsuits to the tune of millions of dollars. They're spending money in the way they deem fit for their agenda and so are the wholesalers who are putting up money to support candidates and elected officials who understand the importance of an accountable licensed system and protecting it. That is the American way. To try and vilify wholesalers in that way I think is absurd.

If you look at the report, they mix in beer wholesalers' money with ours and try to attribute all the $50 million to wine and spirits wholesalers.

Second of all, we lobby on any number of items that are important to our members beyond simple issues of direct shipping or threats to the three tier system. Unlike us, the SWRA has one specific goal in mind: deregulation of the system. Our money is not only to protect a very important system, but to protect our employees and their jobs, which are in the score of thousands in the country. We also, like every other industry, lobby in the areas of health care, workplace safety, employee benefits, etc.

WSD: I understand your contention, Tom, that Wine.com is playing a tattle tale, but shouldn't all online retailers be playing by the same rules?

TOM: Yes. And that's why I was very pleased to read the CEO of Wine.com saying that an open market for wine is best for the consumer, for the wine industry and for Wine.com. My hope is that Wine.com will join the effort by other retailers to create exactly these kinds of markets. But if they choose not to fight these pro-consumer, pro-industry battles by educating their customers and contributing to the effort, I at least hope they'll say "thank you" to those retailers and consumers who did fight the battle on Wine.com's behalf when the laws are changed.

WSD: In the past, the SWRA has argued that online retailers follow state laws and therefore should be allowed to ship directly to consumers. Has Wine.com's "sting operation" hurt the SWRA's argument that retailers are lawful and should ship direct?

TOM: I've yet to meet any wine consumer that believes markets should be closed to out-of-state retailers so that wholesalers can make more money. And by reading the various comments across the Internet and elsewhere on this issue by consumers, I think it's pretty clear that the only thing that has resulted from this episode is that consumers have been made further aware of the anti-consumer laws that have been put in place to protect wholesalers. So, no. This doesn't hurt our argument. It helps it. We are simply asking for the right to ship wine in exactly the same way that most states allow wineries to ship.

CRAIG: Wholesalers read the wine blogs. We know what's going on with the wine blog websites. If they think that when they make these statements about acting with impunity and violating the law and that nobody is going to find out about it, they're wrong. What's most shocking about all these conversations we're seeing by Tom Wark and other retailers on these blogs is that they're more concerned with not getting caught violating the law then they are with trying to effect change legally. We have no problem if they want to go into the legislatures to fight these battles...but what they're advocating for is to have their illegal conduct go unreported and unaccountable. They're not upset with the fact that their own members may be violating the law and jeopardizing their licenses. No, they're upset about the fact that they got caught.

Say what you want about Wine.com's business model and their viability. The fact is they're trying to operate legally and change the system. We don't agree with Wine.com trying to ship direct - we disagree with that - but we think they're going about it the right way. And we're happy to debate Wine.com and any other retailer about whether direct shipping is or is not a bad policy. But we're not out their vilifying people.

I guarantee you the wholesalers will make these statements by Tom Wark and the other retailers out there about their lack of concern for illegal sales available to every regulator in this country.

They can't engage in illegal conduct just because they don't like the way the system is.

WSD: It seems like the SWRA has really stepped up its activity and PR in the last year. Is that because the organization smells success?

TOM: Everyone smells success on the issue of retailer-to-consumer shipping. All one has to do is listen to the arguments that wholesalers advance in opposition to it and you realize that they do too. Direct shipping will increase minors' consumption of alcohol? Come on. The Supreme Court and the Federal Trade commission as well as nearly every alcohol regulator in America know that's absurd. Then when you hear wholesalers argue that the Granholm v. Heald Supreme Court decision only applied to retailers you further realize that there is a certain desperation...eventually it will be made clear that the principles explained in Granholm apply to wineries and retailers alike.

That said, in the last year we've stepped up our efforts to educate consumers, retailers, lawmakers and media. That hasn't been too hard to do when you have states like Illinois passing anti-consumer laws in the face of massive consumer opposition. We will continue to expose the protectionist arguments for what they are, continue educating and continue to stand up for consumers.

CRAIG: Look, welcome to the battle. Their advocacy for direct shipping is just the next in the chain of things we've been dealing with all along with direct shipping. We're happy to have this debate at the state and federal level. But that is where the debates should occur. Not in the courts. And certainly not by condoning illegal conduct. We're not out to vilify retailers or wineries. We understand they have a different perspective on things. We think they're incorrect, we think their policies are misguided. But we're not out to vilify them.

WSD: Tom, since presumably all of your retailers are buying their wine from licensed wholesalers, why do you think wholesalers are so against you?

TOM: Wholesalers don't have to pick and choose their battles because they are so flush with cash as a result of the protectionist laws that exist everywhere. As a result they play a zero sum game where they oppose even the most benign and reasonable pro-consumer laws. Any effort that in any way alters the state mandated, anti-consumer three tier system is opposed. Think about this: A retailer selling and shipping a bottle of wine to a consumer in another state is exactly the same kind of transaction as a winery selling and shipping a bottle of wine to consumer in another state. Exactly the same. Yet the wholesaler are willing to argue that it is so fundamentally different in some way that it must be stopped. That's just Fantasyland thinking. But, the wholesalers can AFFORD to think that way and advance that argument because there is no restriction on what they can spend to advance that argument. In the end, as always, the consumer looses to the Fantasyland Faction.

CRAIG: If wholesalers were simply interested in the bottom line, we would be advocating for more direct shipping by retailers. After all, every bottle sold by a retailer ultimately came from a wholesaler. But wholesalers don't believe in commerce at any cost. And as can be seen from the Wine.com investigation, the cost to the states is in lost revenue, lack of accountability and open disdain and disregard for their laws.

WSD: It seems like people in the wine industry are mainly bothered by the way Wine.com went about "tricking" its competition. What bothers you and other SWRA members the most about the Wine.com situation, Tom?

TOM: I can't speak for the various members of SWRA. But what bothers me is that Wine.com says one thing and does another. If Wine.com really believe what they say they'd be sending e-mails to their customers in every state where retailer-to-consumer shipping is illegal; they'd be cutting checks just like other retailers to support the legal efforts to overturn the laws that prohibit wine lovers from getting the wines they want. They'd not be letting others do the heavy lifting while they play a game of Wine Cop that has no effect on their long term profitability and does not benefit the American wine consumer.

CRAIG: I think it's wrong for the SWRA to vilify others who are simply pointing out that illegal conduct is occurring and should stop. Tom Wark is supposed to represent legally licensed retailers - and those retailers have an obligation to sell product legally. What kind of message does it send that he is more concerned about his members getting caught than he is about complying with the law?

Sunday, January 06, 2008

Family Christmas at "Chateau Julien Wine Estate"

As Reported by Wine & Spirits Daily


Reporter Laurie Daniel for the San Jose Mercury News made four interesting predictions for the wine industry in 2008, which we generally agree with. Here's the short of it:

1. Domestic wines should look more attractive as prices rise on many imports.
2. More companies will start touting how "green" their wines are.
3. We'll see more wines from ever-more obscure places.
4. Some wine producers will become more transparent about their winemaking practices.