Cheers. . and Jeers

Cheers:
*Sophia-Mini (www.sofiamini.com), sparkling wine in a can, perish the thought? I served these at a party last weekend and probably converted a half dozen people to champagne drinkers (oh, pardon, sparkling wine drinkers). Great product, great package, . . . nice work N-C.
*Camille Seghesio, Kim Frazier (Frazier Winery), Gibsey Beckett (Peachy Canyon) for just being hot. Thank you ladies, we appreciate your pulchritude, we need you out on the road bringing wine to a new generation of US consumers.
*Rosenblum - for throwing a great open house (forthcoming article on the Alameda event) and for keeping it real, in the bottle and on the price.

Jeers:
*Lettie Teague for writing an entire years worth of pretention laden and otherwise utterly worthless articles about the wine world for Food & Wine magazine. Nice work Lettie, your article 'Supermarket Wine Scout' for the April 2004 edition was a masterpiece of anecdotal evidence and specious arguments. Brilliant. Looking forward to an equally banal 2005.
*$27 bottle of Viognier at Imagery Winery (a Benziger 'sister' winery) and to the tasting room staff who were as lively and engaging as a bunch of zombies. C'mon people, $27 for a bottle of Viognier, it's not my fault you insist on putting silly commissioned art on each label, but do you have to pass the cost on? (one saving grace, up the road at Benziger, there are a few hotties on the Benziger family photo in the parking area).

Saignee: The Bleed...

In the course of making red wines, winemakers have a tool in their bag of tricks called “bleeding” their tanks (“saignee” in French).
This is a process by which some of the juice is drained out of the original "must" (a technical term for the mix of juice, seeds and skins), usually right before the ferment starts, and is held separate.

What’s the purpose behind this removal?
Red wines get their color, the majority of their tannins and aromas from compounds found in the skins of the fruit that’s used to make them. Winemakers are always on the lookout for ways to get fruit with small thick-skinned berries, as this will provide them with a naturally higher ratio of skins-to-juice than clusters of big berries will.
(More skins equals more aroma, more color, and more potential tannin for the winemaker to use.)

Nature sometimes will give these berries to you, by having some higher then normal temperatures during the period when the fruit is ‘set’ after flowering…but whenever Nature doesn't provide and the winemaker wishes too, they may influence this ratio.

Wines which have been bled generally have more intensity and can command a better price. But this leaves a slight problem for the winemaker - What do you do with the 10 ~20% of your original must volume which now has little to no varietal aromas, tannins, or color?

Well, here are some options:

• Blend it out through other larger blends which can absorb it
• Bottle it by itself and sell it as “Saignee” or “White (varietal)”
• Place it on the bulk market for someone else to put into their mega-blend

Blending it out within your own cellar provides you with the best way to recoup your costs from processing, and if done right produces no problems with the ‘other’ blend it’s being put into. Though this is tough when you’re a small producer and don’t have a home for all this weak under-extracted wine.

Bottling it by itself is certainly acceptable, but you have to have an outlet for the wine or it won’t work. Also, you’ll want to have it priced attractively so it doesn’t hang around in your cellar – since it doesn’t age well! (You’ll also want to think about what that offering to the public will do to your brand image…do you really want to be the first still-wine “White Pinot” or “Pinot Rosé” producer in your area?) The path to market for White Zin has already been paved ([Valley Girl voice-over] "...like, you know, with cobblestones, because it can be pretty bumpy..."), but the wineries who produce it do have a stigma attached to them.

White Merlot has been market tested, and hasn't taken off (at least not here on the West Coast). It's doubtful that White Cab would fare much better, or White Mouvedré, White Syrah, etc.

Placing the saignee on the bulk market is generally the best way to get rid of the wine as there's no stigma to tarnish your main brand image. Expect to take a loss on your price however, as others won’t really want to deal with that problem either. At least not at full price...

How’s it work from an economic standpoint? Watch…
Say we'll produce 1,000 cases of decent Pinot Noir that we’re going to sell for $250/cs (generating $250,000 revenue).

Our winemaker informs us that she’d like to bleed 10% of the volume off prior to fermentation to concentrate the wine even more, and really make a statement. And since they’re a winemaker, they really don’t care what happens to the saignee afterwards (or how it affects the rest of our operations financially!).

She informs us that she’ll be bleeding 100 cs worth of must off, ferment it by itself as a $5/btl table Rosé (since it’ll never see a bit of oak), and ferment the remaining wine with skins into a fabulous vintage that we’ll be able to charge $350/cs (that’s $6,000 for the Rosé, and a whopping $315,000 for the Pinot – we’re already ahead $65,000!).

And even if we have to eat some/all of the cost of the Rosé because we can't convince our prima donna winemaker to put her label on it, we’ll still be $59,000 above what we thought we would get!

So the up side is that the consumer gets a more concentrated wine, albeit at an increased cost, and the potential to buy an inoffensive (though not stellar) Rosé for everyday consumption.
The down side is still the increase in price for the consumer.

Brett(anomyces) Poster Child - 02 Nozzole Chianti

2002 Nozzole Chianti Riserva - If you were looking for a wine to be the poster child for brett(anomyces) taint then here it is. I don’t know what was worse, being served the wine, being served the wine by my sister in law, or being told by my sister in law that she thought this was what good chianti smelled and tasted like.

First, that classic brett ‘band-aid’ aroma dominated the nose. There was a little burnt cedar aroma also but that freshly opened ‘band-aid’ smell made it difficult to smell anything else. The wine itself tasted like burnt cedar, smoke, and that wonderful wet leather smell that seems a positive attribute in old world wines. The tannins were holding it all together and you could probably violate your senses with wine for at least another 10 years.

My question here is, “Where is the Sangiovese varietal characteristic?”. Someone please tell me, because this wine is contaminated to the point of waste. If after my numerous articles you still don’t know what brett contamination is, please pick up a bottle of this.

Frankenstein Wines

Remember "Northern Exposure" the early 90's TV show set in Alaska? There was an episode where one character broke a bottle of old Bordeaux and secretly replaced it with a generic bottle that she doctored up with peat moss, cedar dust, and ink (for color). Now I don't know what that says about common tastes and descriptors of French wine (okay I do, but this post is going in another direction for once) but I was reminded of this episode when I tasted two bottles of Petite Syrah the other day.

The first was California appellation, and as soon as the first pour fell into my glass, I knew something was odd. The color had an iredescent pink hue around the rim of the wine. Not a natural color at all (I've seen some fresh Malbec before that seemed to nearly "glow" but not with the rest of the wine having such deep, deep color). The nose and palate were a muddled mess with too much sweet dark fruit, lots of acid, and some oak. None of it went together or seemed balanced at all. On the finish there was nothing, nothing, nothing, then (bam!) Sawdust. I'm don't know if they used oak dust or oak chips but the finish certainly gave that impression.

The second Petite Syrah was the "reserve" and while it was a better wine (it didn't seem so "cooked up in the lab") with better fruit depth and integration of components, it still had that odd color and dusty finish.

While I realize that many producers at all price points make Frankenstein wines of varying degree with grape concentrate, powdered tannin, acid additions, and oak dust or chips, most of them are able to integrate the "adds" in such a way that they improve the wine and integrate with the other components. Some of the Napa cult cabernet producers are said to force their employees to sign confidentiality agreements to prevent to loss of such "trade secrets". Please note that I'm not against innovation or experimentation...by all means, I'm in favor of it! It's just that the outcome of those experiments should be an improved wine, not an awkward swill.

However, these Petite Syrahs were far and away the worst culprits I've had to taste. Some keys to spotting Frankenstein wines:

• The label says "Caution: consumers should filter through a dust mask before drinking"
• The back label says "Vinted and bottled with a grant from Dow Chemical"
• Jim Laube liked it
• You spill some on your shirt and the acid burns a hole in it
• You smell concord grapes (may be Ok on the East Coast)
• Neon colors
• You find a big splinter in the bottle
• Your chardonnay has lots of tannin ('you got your tannin in my chardonny' 'you got your chardonnay in my tannin')

"A Legacy Lost" - Yet another Mondavi Write Up

A front-page article on the rise and fall of Mondavi:

http://www1.pressdemocrat.com/apps/pbcs.dll/article?AID=/20041121/NEWS/411210303/1033/NEWS01

I find it odd to have this described as a "Greek tragedy"....after all, as the article points out, the family will get $365 million before taxes. Yes, they lost control of Bob's namesake winery, but in another 12 months all three kids will be back in the business. If you want a tragedy, look at DeLoach, they went bankrupt through the mismanagement of the business by the son and lost nearly everything. Now that is a tragedy. Mondavi, on the other hand, could have turned out better I guess, but they built up a hugely successful business and sold it for over a billion dollars! I'd like a little more of that kind of tragedy in my life....

Franco - American wine relations

Karen writes:

"Hi there,

Although the French wine industry has hit a bit of a slump in the U.S., many of my friends are still drinking it. In fact, the December issue of Wine Enthusiast recommended a great French Wine - Red Bicyclette, we tried the Syrah and thought that it was fab!! What are your opninions? Do you still drink and enjoy French wines. Would love to hear your thoughts. "
=======================================
Karen,

Thanks for the note. Red Bicyclette and Fat Bastard are both doing well, but they are bucking the trend by using brand names rather than the name of the producer, which creates confusion for consumers. Living in California, I have a pretty compressed market for French wines (limited shelf space, that is). Nonetheless, I do like some $10 Rhones and a few other "gems" that are at decent prices, but in general, I'm not a fan of French wines for a number of reasons (I won't get into Brett as I've beaten that dead horse too much). The French still make nice wines, but its their infrastructure that is killing them - especially problems with the AOC system, though it did start as a good idea. AOC's, while promoting "traditional" wine regions and varietals grown within those regions has put a serious stranglehold on the French's ability to adapt to the changing market and it's commitment to quality has been compromised (read more here by Jamie Good).

Let them blend some Syrah into a Bordeaux for example! The world is not going to end! Eliminating the artificial market controls throughout France and allowing them to use modern winemaking and viticultural techniques (did you know that watering mature vines in France is illegal?) that will be needed to save the French wine industry. France will survive, but the form it will evolve to in order to do so will be quite telling......

Mondavi Selling Arrowood and Byron

Just when you thought the Mondavi rumor mill had run its course, Mondavi has produced another. They have quietly continued selling off their smallest brands (Arrowood and Byron) and have reportedly received (what seems to me to be) a pretty generous offer for both of $37 million. Somebody buying both indicates that its likely a large player, not a local buyer since the wineries are in Sonoma and Santa Maria. My money is on Allied-Domecq because they recently bought Gary Farrell and might be going after smaller, boutique producers.

Water added to your wine?

There was a time a few years ago when this wouldn’t have been publicly discussed…I applaud those winemakers who are willing to bring this topic up.

http://www.hollandsentinel.com/stories/110804/lif_110804031.shtml

Now most of the article is fairly accurate. Though I’d recommend anyone interested in the regulation to read it for themselves…

27 CFR 24.176

[Please pay attention to the fact that this is part of the Code of Federal Regulations (CFR’s) and applies to all the US, not just California (hence “Federal” regulations). People may add water in Texas, Arizona, Nevada, Florida, Arkansas, New York, etc. In hotter drier climes, the probability of finding fruit which may require water added generally increases.
Colder short harvest regions – like Long Island, or France for example – usually have the reverse problem…not enough sugar & too much acid. So they may have to add grape concentrate in the US, or ‘chaptalize’ with beet sugar in France instead.]

I’ve been around a few fermentations during my day, and I’ll confirm that these water adds are not that uncommon. But most winemakers make these additions as a last ditch effort to keep fermentations from sticking (stopping before all the sugar’s consumed).

No winemakers that I’ve ever come across have added it for the purposes of ‘extending’ their stock (just increasing volume). Generally speaking, they’ve worked far too hard to get the intensity of flavors in the fruit to just casually dilute it for a longer bottling run. When these decisions are made, they’re made with improved quality and drinkability in mind.

With some varietals – namely Zinfandel – the long flowering period and uneven ripening causes quite a few raisins to be present in the fruit when it’s harvested. When crushed, those raisins take a few days to rehydrate, and when they do they add quite a bit of sugar to your ferment. I’ve seen ferments that don’t appear to be moving at all (sugar being released at a rate roughly equivalent to that being consumed), and yet others that were ‘fermented dry’ until pressing, when sugar from some rehydrated raisins was squeezed out, sweetening it back up.
(This also happens in other varietals, but Zinfandel is truly the 'poster child' of this effect.)

Many times this fruit shows up at your crush pad at, say, 24 °Brix, only to reveal itself to be 28.5 °Brix after a few days! I’ll drink an occasional late harvest Zin, but I don’t like it when it happens throughout an entire vintage…

There are some areas grapes are grown that have a tendency to cause this sort of thing happen more often. Areas that have higher heat, and are drier will see fruit like this as a common occurrence later in harvest. Unfortunately, those same conditions usually cause high sugar levels without true flavor ripeness, fruit that lacks intensity, and tannin development that’s incomplete. California's Central and San Joaquin valleys are areas where fruit like this is exceedingly common.
Adding water to wines made from fruit like this further dilutes the anemic flavor profile, and decreases the quality of the finished product. It’s doubtful anyone would go back for a second bottle…

I have no problem with a judicious water add that’s provided for by law. I think the law’s a recognition of the fact that Mother Nature sometimes sends you a curve ball.

If the French view this practice as fraudulent, it’s mostly a cultural phenomena: in France with it’s weather, the only reason anyone would add water is just for that – fraud.
Just as we in America tend to think that sugar adds are fraudulent, because here they’re not so common (especially in California).

Finally, I wish that Wente wouldn’t try to position itself at the $50/btl level. From the sound of the article it appears to be mostly an ego hit for them as they’ve never been in that segment before (my memory is that they play in the $10~$19/btl range). It almost feels as though they’re turning away from the consumers on this one…

Pansy wines

Look out La Crema and Fat Bastard there's a new gay wine in town, Pansy. Methinks this one is doomed to fail however, since overt marketing toward your audience tends to turn off that audience, particularly the more "hip" they think themselves to be.

ML question & barrels

Thanks to Derek for his email question on barrel fermenting whites:

“Is it harder to finish malic fermantation (sp) in tanks than in barrels? People i’ve talked to say that ml fementations go naturally in barrels...and does it matter to the flavor, or is it just the change of the acids from malic to lactic?”

First, it’s not harder to finish ML fermentation in tanks rather than in barrels. Barrels seem to take ML fermentation faster, or “naturally” start ML ferm, usually because some of the ML bacteria is still present in the barrels from previous wines, and inoculates anything new that’s put into it afterwards.
In fact if you don’t want to have the wine go through ML fermentation (or only a partial fermentation of the malic acid) then it’s probably easier to avoid full ML conversion and/or arrest it when it’s left in tank.

As far as flavors produced, the tank ferment will tend to be "cleaner" expression of just the fruit without the oak flavors added. It really shouldn't have much effect the flavor of just the ML fermentation.
It could affect how the sur lies contributes flavor to the wine, as it's difficult to stir the lees up in the tank when compared to barrels.
Also the surface area of lees that's exposed to the wine (in tanks) may be much less than that in barrels, and can change the flavors and aromas of the wine.

I don't think it's appropriate to ascribe one way as superior to another, as it really depends on what the winemaker is trying to do. Personally I like barrel fermented Chardonnay wines, but prefer stainless fermented Sauv Blanc and Viognier to their barrel fermented counterparts.

Thanks again for the email. Please feel free to email any questions, or to suggest topics for discussion!

Cheers!

Here Comes the Onslaught of Thanksgiving Wine Suggestions

For the next two and a half weeks, prepare for wine suggestions for your Thanksgiving meal from every major (and minor) wine writer in the country. Don't hate them, they have to fill space, its what they do.

"Pinot, Riesling, Beaujolais Noveau, Zinfandel, Sparkling (not Champagne, this is an American holiday!) maybe even a Grenache"

There, I've done it for you, now you can skip the 200 articles that will be published soon....

White fermentations: to barrel or not?

Harvest is over.
Let's assume that all the viticultural techniques we'd applied to the vineyards were successful. Our fruit has been harvested & is on it's way to our winery right now.
What do we do next?
First we have to make a few assumptions about what type of wine we're going to make...then we can get started.

Let’s discuss white wines this time; later we’ll start to explore reds.
For white wines, here are a few considerations:

• We want to process the fruit as quickly as possible to prevent any contamination problems (this means NO 4-hour rides from the vineyard to the winery…especially in the late September heat!)

Fruit should be picked when at it’s coolest, when just light enough to see (dawn) or under a light fog early in the day (this helps maintain the fruit quality on it’s way to the winery)

Whole clusters are preferable to fruit that’s been ripped apart by too vigorous picking (excessively rough pickers, or mechanical harvesters)

Contact with the skins in white wines is to be avoided in general

A tank should be directly available to receive the pressed juice, and should have adequate cooling to control the fermentation

At this point we need to decide whether we want to barrel ferment the wine or ferment it in tanks to dryness (RS only, or RS & ML dryness) and then barrel age it (moderate expense & labor), or just ferment and age in stainless steel tank (least expense & labor). Some people DO still use wooden tanks, but they’re more of an anachronism for white wines, so we’ll skip them here (stainless steel being the industry standard).

If you’ve chosen to barrel ferment your white wine (most expensive & labor intensive method) you’ll be rewarded with a wine that has more depth to the oak and more complexity when finished. But since you’ll be needing to maintain the wines inside the barrels monthly, you’ll need a winery that has enough floor space for you to store those barrels you’re not working on while simultaneously having space to work the rest.

A lot of people are needed for this type of operation: forklift drivers, people to stir the barrels, and make any needed additions to them, people to top the barrels with wine, laboratory techs to run analysis, etc. An added consideration is the need to replace your barrels after 4 to 5 years with new ones (assume ~20% per year of your barrel inventory). At $400 for a domestic American oak barrel to $750 for an imported French oak barrel, this can be a daunting expense! Stainless steel tanks will last virtually forever, with negligible maintenance costs. (Your task’s not over once you’ve got the wine out of the barrel either…you’ll need to maintain the barrels in a sanitary manner – cleaning and using sulphur dioxide to kill any microbes lingering inside.)

All of this work means additional cost for your production.

Using stainless tanks for the fermentation means slightly less oak contact, and less labor during the fermentation process. The additional labor costs still occur during the barrel aging period, though! Benefits of this method are (other than slightly reduced labor costs) clearer fruit expression without so much oak getting in the way, and yet still some of the characteristics of a sur lies aging (extended contact with the yeast lees). Costs for replacing barrels will still occur, and will add to your final production expenses.

Full fermentation and aging in stainless steel tanks will eliminate any cost for barrels (maintenance, replacement, storage, forklifts, etc), and will have the clearest expression of the fruit’s true nature. It will be the least complex wine, and the least expensive to produce labor-wise. The positive effects of lees contact will be minimized as well.

Additional oak character can be added to the two stainless tank fermentation methods by using oak staves, oak chips, or oak powder in the tanks. Some have even gone as far as oak extract additions, though personally I just don’t find that flavor profile too attractive.

The use of staves, chips and powders is in imitation of the traditional barrel aging. And while these methods do add oak character to the wines, they don’t mimic the slight (dare I say ‘micro-‘) oxidation of wines stored in oak barrels (micro-oxidation will be discussed under it’s own header in the future).

One of the drawbacks is the contact of the wine with the oak: with chips & staves suspended inside a tank, the wine surrounds the oak – while in a barrel the wine is in contact with only one side of the stave. This differential between the interior (wet, low oxygen levels) and exterior (dry, high oxygen level) seems to be rather important in some recent literature as far a transferring compounds from the toasted staves into the wine.

Another drawback to the use of chips or staves is the apparent inability to toast them evenly. This leads to variable oak character in the wines, and makes replication from wine to wine more difficult.

The final decisions for white barrel fermentation rest with the winemaker:

• What price point am I trying to make a wine for?
• How much labor do I want to have/can I afford?
• How much storage/work space do I have available?
• What flavor profile am I looking for?
• How important is the perception of “traditionalism” to my brand and consumers?

The ultimate decision of which is the most accepted in the marketplace is up to – of course – the consumer, and will be decided by an enjoyment/cost ratio.

As you can see, there's quite a bit to think about...
Cheers!

Eliminating Brett...

It appears that some of the major wine critics are unwilling to demand wines free of Brettanomyces (Brett) contamination, as they can “tolerate it”. In fact, it’s well documented that (in general) scores given by some wine critics rise with increasing Brett levels, while scores by consumers decrease. (Bisson, link)

So exactly what good are the critics doing for us (the consumers) if we can’t “trust” the review scores they give?

And as far as Brett is concerned...I cannot, nay – will not – tolerate it.
What can we do then to minimize the effects of – or eradicate – Brett in the wine industry?

First we have to demand better sanitation in the cellars. While it’s true that Brett can come into the cellar on infected fruit, or infected equipment, the greatest threat that Brett poses is an infection of the entire inventory of a cellar through cross-contamination.

In the field:
Force viticultural changes that lead to better ripeness, and demand more sunlight exposure on the fruit. This will lead to better color in the fruit & wines, as well as reduce the potential for Brett (some of the precursor color compounds are also precursors of 4-ethylphenol [4ep] which are eliminated in riper fruit).

Change your fruit sources to growers that haven’t had fruit with Brett problems in the past.

Sanitize all field equipment between every picking/vineyard to ensure that you aren’t transferring Brett problems into everything you bring into your winery.

In the winery:
First, maintain individual vineyard lots so there’s no co-mingling of possible problems into other wines (this is going to tweak those producers who are still just dumping all their fruit into large generic fermentations without regard to quality).

Secondly, sanitize all equipment between every wine you handle to reduce chances of cross-contamination.

Then start to sanitize the heck out of all wooden cooperage (wood fermentation tanks, wood storage tanks, ovals, puncheons, etc)

Anything made of wood that shows contamination should probably be decommissioned. Reconditioning does work, but is risky if you aren’t familiar with how to do it…Ozone is showing good signs of effectiveness in the war against Brett, but is somewhat expensive.

Apply SO2 in larger batches, less frequently, to have a better kill effect on Brett, as well as lower the temperature in your cellar to maintain a less inviting environment for it to grow in.

Finally, filter ANYTHING that starts to show signs of infection.
You could even post-fermentation filter every red wine to reduce any undetected Brett load in your winery…maybe just stop releasing unfiltered wines altogether (Boulton, Butzke, et al, @ UC Davis have been saying this for years!). This does add costs onto your production runs, but is essential for strict control of your product’s quality.


While the above isn’t a guarantee that your winery won’t find some infected lots from time to time…but it’ll keep those infections in small manageable lots, and allow you to safeguard your wines more effectively.
It’d also be a great step forward in reducing the total amount of Brett infections, and therefore reduce the number of tainted wines that we consumers would be presented with.

How to Structure a Wine Industry Company - Top down or Bottom Up?

If you were going to build a wine company, would you start at the top (Robert Mondavi) and work down (Woodbridge) or would you start at the bottom (Gallo) and work up (Gallo Sonoma, Louis Martini)?

During the roaring 90's, when producers could seemingly violate the laws of supply and demand by both raising production levels and prices, anybody could sell wine and be successful at it. Particularly after 1991, when CBS' 60 Minutes broadcast its landmark "French Paradox" segment, which attributed the health of the French to their high red wine consumption, despite a relatively high-fat diet. Since then, wine consumption in the US has grown by 90 million cases! However, in the post 9/11 economy, consumers have become increasingly drawn toward value wines (two-buck chuck, yellow tail, Black Swan, Fat Bastard, Columbia Crest, Blackstone) and brands at higher retail prices have languished, particularly high-production Napa wines and, somewhat ironically, French wines (since they started the boom).

Add to this the apparent failure by Robert Mondavi, Inc. to be able to simultaneously sell both below $10 and above $10, the huge gap in profitability of Chalone (compared to other wine companies) which sells nearly 100% above $10, and the reported troubles at Paterno Wines (who have always prided themselves on only selling wines above $15) and one has to wonder, just how do you best structure a company to sell wine today?

The problem is that wines under $10 (and I'm grossly generalizing here) are primarily sold in Supermarkets, Liquor stores, Drug Stores, and large chain retailers of various types. As the price creeps farther above $10, the likelihood of selling a given wine in a restaurant, hotel, small retail shop, or direct-to-consumer via wine club or internet increases.

Example #1:

If you are in charge of selling brands ranging from $5-$50, how do you set up your sales group for best efficiency? Do you ask a guy in South Dakota to work the $5 sales at Costco before driving over to the nearest 4-star restaurant to push the $50 stuff? Or do you have two guys to cover that territory, resulting in lower total sales (and pay!) for each? If they have to sell your entire line can they even fit all the samples they need in a vehicle smaller than a Suburban?

Example #2:

You've established your company exclusively as a marketer of fine wines. The economy takes a u-turn and suddenly your wines seem overpriced, people are eating out and traveling less. Do you spend more money to create consumer demand (pull) at the retail level, lowering your margins in the process? Do you quickly move to launch a lower-end line extension to "bleed off" some of the excess supply at the high-end, thereby trading down on your name? How do you do any of this in such a way that you don't irreversibly damage the images of your brands that you've spent years cultivating?

It's beginning to be clear that Constellation has the answer. Their decentralized approach to running their various business units combined with separating the different units into operating groups by price point is a continued success. Further, their success in foreign markets (helped by a very strong UK presence), particularly with their low-end wines, gives them tremendous distribution clout and the ability to push slower moving exported wines.

Further, Constellation has built its success from the ground up. They started as producers of products like Wild Irish Rose, Inglenook, Almaden, and Paul Masson. Carefully using the leverage and capital created from high-volume lower-end wines, they moved into the super-premium and ultra-premium business with acquisitions of Franciscan, BRL-Hardy, Blackstone, Ravenswood, and now Chalone. Unlike Gallo, they have been able to avoid having their higher-end acquisitions painted by the same brush as the low-end. Letting each business unit run more autonomously allows them to maintain a separate and distinct image. This also avoids having the Mondavi problem, where you sprinkle the flagship brandname over every product up and down the portfolio, ultimately diluting the value of the name (Woodbridge drinkers have been overheard saying "I didn't know Robert Mondavi made expensive wines too!").

Like it or not, corporate players are here to stay and Constellation is going to be the one to watch.

Mondavi to Sell to Constellation $1.3B

http://biz.yahoo.com/prnews/041103/nyw158_1.html

More of the "Wine. Since 6000 B.C." Snoozefest

The Wine Market council, the wine-industry association tasked with "establish(ing) the widespread acceptance of wine as a rewarding part of American culture and to encourage the responsible enjoyment of wine by current and future generations of adults in the United States" has unveiled its latest ads in its "Wine. Since 6000 B.C." campaign. The idea behind the campaign is to somehow tie in wine's roots with ancient civilizations and make it seem ok to drink since it was made by the Mayans, Egyptians, etc.

Now, personally, I hate this campaign. Wine's main problem in this country is that its image is stuffy, elitist, and non-hip. Associating the product with something that is "old" only reinforces its stodgy image. Come on, Wine Market Council, if you want to draw in Gen-X and Millennials or at least reform wine's image in middle America, let's rethink this approach....

The above images look like they belong in a museum. They look French (or at least European), old, and stodgy. If they're going after Joe Lunchbox and Sally Housecoat of Columbus, Ohio, why not run ads that create some interest or reposition wine's image in people's minds?

Wine Vision gets it. They had an entire conference on repositioning wine and attracting younger consumers. Maybe the industry should be shifting funds their way....?

Cheers - a vintner in it for more than the money

Okay, so I've plugged Coffaro already - but he's got a great website with lots of hidden "gems" like this one:

http://coffaro.com/diary/16_17_2004.html

Wednesday April 21, 2004
I have people all the time suggest that I raise prices. Recently a customer suggested I should raise the price of my new 2003 Cabernet Sauvignon which is still in the barrel. It seems that maybe I could attract the RIGHT people, because they would think I had better wine if I sold the wine at $35 to $50. As most of you know, I feel if someone is so impressed with the price of a bottle, then maybe they aren't the right people. On average (From the start of pre-harvest Futures and after bottling until sold out), I will not sell wine for more than 50% above my cost. That cabernet costs me no more than $10 even if I consider all my audio video and new screw cap equipment. If I sold wine for more, what would I do with my profits? Buy better clothes? Buy a new jet plane? I will leave higher prices to other wineries.

Cheers!

Another Mondavi Bidder, none for Chalone

Word is that there's another bidder working on Mondavi. The identity is not known yet, but my guess is that its a major spirits company that wants to buy a completely integrated wine company (as opposed to buying one brand at a time and building a company around that) with an existing Sales and Admin infrastructure.

No other bidders have emerged for Chalone, who today announced they would accept an offer from DBR (Domaines Barons de Rothschild) to buy them out and merge them into a 3-way partnership with DBR, Constellation, and the Huneeus family of Napa's Quintessa. If other bidders, emerge, however, DBR can match their bid or they have to vote their shares toward accepting the higher offer. Chalone's extensive real estate holdings should make it an interesting target for its break-up value alone.

The lack of other bidders for Chalone is likely due to the 48% control of DBR. The current control of Mondavi by the Mondavi family appears to be less daunting to suitors.