Thursday, February 03, 2005

Direct shipping progress in Florida?

Go Jeb! Good to see that Bobby Koch of the Wine Institute is having a positive influence on his brother-in-law.

Its dismaying, however, that muddled thinking exists in the minds of Attorney Generals everywhere: "Attorney General Charlie Crist said the ease with which the shipments were made and received made it clear that the law should not be tinkered with. He said 55 percent of school-age students have consumed alcoholic beverages and that 40 percent have done so within the past month."Easier access to alcohol by our youth is in fact a recipe for disaster," Crist said. "We should not make it easier to add to the numbers."

And what percent, Mr. Crist, purchased alcohol over the web?

Can't you just see it - "Dude, I'm planning a raging party next month when my parents are out of town, I'm buying some Mouton Cadet over the web, how many cases can I put you down for?" (Replace Mouton Cadet with yellow tail or Coor's light and its still ridiculous).


Anonymous Anonymous said...

Dear Huge,

I’m not sure what the Southern acquisition of Lauber will mean to New Jersey, probably very little. New Jersey does have several large and small distributors operating there. Lauber may be family owned but they’re not what could be called small, and, although they may be incorporated in NJ, their business is done in the entire NY region. New York is arguably the nation’s largest wine market (depending how you slice the pie.) Their portfolio takes fully twenty-five pages of the NY regional Beverage Media (it took 35 seconds to scroll through their offerings at their website), and anyone familiar with their portfolio tasting, held annually in the Marriot Marquis Times Square, will tell you that it dwarfs anything else held in this town (Someone might say, “Well it wasn’t as big as VinExpo that was here a couple of years ago.”)

I also think it’s unlikely that Southern bought Lauber to substitute the wines that Lauber carries for the wines from the big players you mention. First, Southern already is here hawking their wares (about fifty pages of the Beverage Media.) Much more likely is that they bought Lauber to have immediate access to a high quality, widely diversified portfolio of small, medium and large producers from all over the world that would cost a fortune and take an eternity to duplicate. (Please look at the total Lauber portfolio. California is only about twenty percent of Lauber’s list.) The NY wine market is sophisticated, and there is a high demand for wines from all over the world, the notion that there is conspiracy here by Southern to dump the Lauber portfolio and replace it just doesn’t fly. There are many competing distributors who wish that your theory had some merit because they’d love to scoop up the producers in the Lauber portfolio for themselves, which would be done as they say, in a “New York minute.”

In short, I don’t think this is the acquisition that will make your point. Lauber is already a monster, and the NY wine market is very competitive. There are some small distributors here who market their wines only to New York City restaurants and make out well.

Please don’t take this to mean I support the free lunch that the distributors feast on. I don’t. I think they occupy the low end of the wine evolution scale. I’d like to see the system unregulated, to give everyone an equal chance. (Color me Libertarian on this issue, I guess.)

I’d like to see you push the issue about the future of mid-sized family-owned California wineries further. For me in the east it’s interesting and you seem to have a good view of the situation. What’s the solution? Should the small producers be protected from competition somehow like the French are doing with their wine industry (rather unsuccessfully)? Or should the small producers join in a secular religious frenzy like biodynamics to rage against the heartless and evil economic system of the west? Is it all based on the loosening of the grip of archaic wine distribution laws that stifle competition? Can these producers not survive otherwise? Even though there is consolidation, aren’t there some advantages to being small and flexible in a competitive industry? Is it fair to compare this to the restaurant industry? Remember McDonalds and Burger King were going to put the mom and pop delis under. Upper scale restaurant chains were going to dumb down our tastes in food and make us dependent on processed food forcing family restaurants out of the market. An observation I have from this side of the country is that I continually see new startup wineries from California displaying their wines at distributor tastings in NY. When I ask their motivation, I find that many times they’ve come into wine fairly recently from other careers, some rather lucrative. What about simple business decisions concerning risk? What does “family-owned” really mean? The image comes to mind of Grant Wood’s “American Gothic” painting. Does this include husband and wife lawyer couples yearning for the good life? Or amusing characters like Randall Grahm, who some liken to a one-man marketing machine. I’d like to hear your take on this.

Best regards,

February 04, 2005 7:46 AM  
Blogger Huge said...

Wow, Tuco....lots to cover there. Thanks for the comments on the NY/NJ distribution scene. I was aware that Lauber was in NY and that they are sizeable, my comment about them being "smaller" was relative to Southern who dwarfs them in scale. My comments about wines being replaced was specifically from a couple of California wineries who are concerned that they may have to leave Lauber (who has been very good to them) as they have had bad experiences with Southern here in California.

As for "family-owned" wineries (which would include Sutter Home and Kendall-Jackson!), I think that in a truly free market, where they could ship anywhere in the US, they would survive nicely. However, without free trade, I wonder how they will survive if they are not a "must have" wine (Randall Grahm's Bonny Doon being a fine example of that, indeed). I will be commenting more about the mid-size wineries in the future, I think they will be going through an evolution both in how they get to consumers and how big they can get.

Thanks for commenting!


February 04, 2005 9:23 AM  

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