Looking like I’ll be leaving about 30 tons out there when it’s all said and done. A split between Pinot and Chard. What would I do if winery X came to me with an offer of 50% of what I sold to others? No way. I won’t give a bottom feeder ultra quality fruit and an unfair advantage in the market and disrespect my clients.
Price of fruit vs. area is drifting into the old terroir talk again. It is a factor for some, maybe even the majority of the more established markets still, but probably diminishing in importance for emerging consumers. For the millennials, less value is put on where the fruit comes from, as long as it fills a lot of other criteria or perceived benefits. They don’t buy Methode Sauvage or Bichi’s Mexican wines because of what vineyard the fruit was grown at, they buy it because they agree with their principles or ethics and enjoy that style. I think it will become less and less important where things are grown, but more and more important how they’re grown, from a consumer standpoint. And a move away from anything that smells corporate.
What does that speak of the future of the high status areas/fruit/terroir of today? I think it’s a little dangerous to say that they’re somehow immune from all of this emergence and that there’s enough money to sustain that indefinitely. Millenials will grow older and won’t have the same relationship to Napa as maybe our generation or the one before had. But maybe new prestigious areas will crop up and the whole cycle starts over again? I don’t know.
Relating to that: this was a conversation I had with one of the growers just a few days ago in Contra Costa where I took some fruit. He’s 60 years old.
Grower: “So, I hosted my granddaughters wedding here at winery.”
Me: “Oh, cool. What wine did you serve?”
Grower: “Well, it was funny. I put out shitloads of rosé, some white and some of my reds. But this time I really sat back and observed carefully. And you know what?”
Me: “What?”
Grower: “Only the old guys, my generation, was drinking Cabernet Sauvignon. None of the young ones drank it.”
Me: “Wow. Really?”
Grower: “Yep, too heavy. And you know what else? At the end of the night I counted the cases - they’d drank 4x more of the rosé than any other wine.”
Seriously Casey? You’d rather get nothing than something? The fact that you sold cheap doesn’t mean that you have to do it next year. That hypothetical guy would be getting a one time opportunity. Unless people treat wine as a simple commodity, any advantage in the market would not come strictly from the juice, but from the marketing and effort people put into selling the wine. Also, you might be able to get some agreement that links the wine to you.
I don’t know. Doesn’t seem to make business sense.
I feel like there needs to be more co-ops that excess fruit can be sent to–like France.
My wife has has a jewelry business where she purchases stones, metal, pearls, etc from numerous suppliers. She has walked away from more than one of them after finding out that they sold the same product to someone else at a lower price. I totally understand the decision to not upset existing customers.
awesome for the consumer!
yes
the US is so angrily capitalist
Relating to that: this was a conversation I had with one of the growers just a few days ago in Contra Costa where I took some fruit. He’s 60 years old.
Grower: “So, I hosted my granddaughters wedding here at winery.”
Me: “Oh, cool. What wine did you serve?”
Grower: “Well, it was funny. I put out shitloads of rosé, some white and some of my reds. But this time I really sat back and observed carefully. And you know what?”
Me: “What?”
Grower: “Only the old guys, my generation, was drinking Cabernet Sauvignon. None of the young ones drank it.”
Me: “Wow. Really?”
Grower: “Yep, too heavy. And you know what else? At the end of the night I counted the cases - they’d drank 4x more of the rosé than any other wine.”
I might caution trying to read too much into that. I would infer that the wedding was held during the summer. If it was at a winery, it was an outside event and likely at least part of the reception was during daylight hours.
I love me some good Cabernet Sauvignon but at a daytime summer wedding as long as it’s palatable I’m going for the rosé or maybe some of the white. At most a glass of the Cab during the dinner if the food match is suitable.
True, and a very valid point.
Isn’t that just an indication that there is not enough open information across the market to establish proper pricing?
Partnering with a Berserker Winery to get a bunch of it into our hands could be a boon for everybody…just a thought!
Sites like casemates.com also commission branded wines that can help good leftover fruit go to good homes where people will appreciate it (albeit at a generally lower price point).
At least Cameron Hughes is going to be doing OK.
And he mentions something that others have told me, which is that the younger people are not taking up wine at the same rate that the older generation did.
As for walking away from stones that were sold at a lower price - was the lower price before or after she was offered the materials? If the seller raised the price when she came through the door, I’d have left too. But if she found out that after she bought them he sold the rest at a clearance price, I don’t see that as being a problem. People clear things out all the time. More importantly however, grapes are very perishable and there’s a short period of time in which to make your decision. Seems like a guy along the lines of Hughes would be on everyone’s cell phone.
’
I thought Cameron Hughes Wines went bankrupt and was sold? And that’s when he started the whole HG Beef thing?
He is still involved, I am sure he has a contract and maybe some ownership. I love his Monte Rosso cabs, and some of his Napa Cabs are fantastic values.
Vintage bought it out of bankruptcy but they didn’t close it down. They just paid off the debt to the banks and said they’d operate it as a stand alone business. They helped with cash flow and intended to keep the business going. Cameron also stayed involved. Vintage thought it was a good fit because at one point they warehoused wine for Hughes and they were already in Costco because they provide the Kirkland brand wines. With Hughes they got additional shelf space at Costco, in addition to a DTC channel.
I look at how much prices for wine have gone up over the last 5-10 years and I say that this is great. Wine prices have gotten ridiculous and to me this is the best news I have read in a long time.
plus 100
there is more juice in the world than ever and the quality is also better than ever
cheers
My off-the-cuff, somewhat tongue-in-cheek, not-yet-crying-in-my-beer, gently fact-polluted take:
The problem is worldwide.
Wine consumption in the U.S. is stable, with the occasional microscopic decrease in per-capita consumption offset by the growth in population.
The product mix is changing rapidly. Consumption of supermarket 3L and 5L boxed wines is nosediving even faster than consumption of Bugweiser (“the Beer that Infested Saint Louis”).
Consumption of all other categories is increasing gently, except for ‘super-premium’, variously defined as over $10, 12, 15 or 20, which is growing very rapidly.
My business has been affected by over-supply. We were early in the Rose market; I’ve imported my sole Provence producer for 30 years. That wine is well-established and sales have been steady to growing in the face of a tsunami of competition for the past few years. However my other Roses have suffered decreased sales. I finished last year with a lot of stock that had to be closed out. I bought less Rose this year and it’s sold through.
As little as five years ago, a good retailer would stock 5 – 20 Roses. Today, 50 is a typical number. Even if sales go up by 10 – 20%, it’s obviously a lot fewer bottles per wine. This is an extreme example, but indicative of a global over-supply.
Wine consumption world-wide is growing strongly in almost every other country, with exceptions for places like Venezuela, Zimbabwe and Tuvalu.
Millennials are more likely to be vegetarian than teetotal, although there are a significant number who are both. Whether from an ecological, spiritual or health point of view, vegetarianism clearly makes more sense. Wine (and beer, and spirits), consumed in moderation, should be guilt-free.
To Sh@n A: Your ‘anecdotes’ are just that… not statistics. Extremes attract the attention of media, so you see anecdotes that do not reflect the general population of millennials.
I have not seen any statistics on consumption of what board members would probably consider ‘super-premium’, which I will arbitrarily define as $50+. My guess is that consumption of wine in this category is growing very strongly worldwide. The problem is that production is growing far, far faster. The number of people who have made (or inherited) money and want the winery-owner ‘life-style’ is appalling. There are many documented instances of new producers who establish the price of their wine by calculating production costs and margins before a single grape has been harvested.
How many board members have bought Perrarus?
That’s what I thought.
To Michael Martin: It’s fortunately not only old white guys who buy wine (there’s more evidence for golf and Corvettes). Please remember that over half the wine purchased in our own country is purchased by women. I’ll take a wild guess that women represent less than half the golfers and less than half the Corvette buyers.
To Adam Lee: If Constellation had a contract for this vineyard, how can they simply say they are not going to buy the grapes, and walk away?
Oh, they can afford more expensive lawyers than the vineyard owner, sorry I asked such a stupid question. There’s capitalism, and there is unregulated capitalism.
What is happening is easy to explain. As little as twenty years ago, an American consumer who wanted an artisanal beverage with alcohol wanted wine. Sam Adams, Sierra Nevada and Maker’s Mark were just making their marks in the market. Today the consumer has a choice. But eventually, for most consumers, wine is a more appropriate alcoholic beverage to accompany a meal than either spirits (NO!) or beer (it’s close, and dependent on a lot of factors). The future is fine, with bumps in the road.
The wine market has been around for at least 8000 years (probably started in China… so what’s new? Although it could have been Georgia). I don’t know if it will be around for another 8000 years. But I expect to be selling the stuff and to make money doing it through at least 2020.
Dan Kravitz
To Nathan Smyth,
You seem to have an obsession about residual sugar in California wines, which based on limited sampling by a colleague, might be inaccurate.
A cheap saccharometer will measure residual sugar as low as 0.15%. A friend who owns a small wine shop here in Maine has one and uses it regularly. He carries a normal selection of California wines and reports that very few of the wines he carries register above that level. He’s not selling $50 – 500 California Cabs or anything really exotic or expensive, although he does like somewhat offbeat wines. K-J Chardonnay consistently registers at about 0.30% RS. Mondavi Napa Cab is below the threshold. So is Fetzer Sundial Chardonnay as well as all of the Bonterras he’s measured. So is Stags Leap Petite Sirah, so is Ridge Estate Cab (he usually carries this rather than Monte Bello, being in a price-sensitive market). Zins sin more frequently than other wines.
Nathan, please post a list of wines that you know for a fact are high in R.S. Is it possible that your new diet has made you hyper-sensitive to R.S., possibly even to the point of detecting it when it isn’t there?
Nathan, I eagerly await your detailed reply, complete with specific RS levels for all wines mentioned.
Dan Kravitz
Dan,
KJ Chard is 7.9 g/L, a bit higher than the 0.3% you quote, but to your point, I don’t see a bunch of amped up sugar bombs outside of the labels you’d just expect to be sweet, and I have to taste thru a lot of wine for a living and not all of it is fun, just work.