Monday, June 28, 2010

More layoffs for Sonoma County winery powerhouse?

There are several rumors circulating (with some very well informed parties providing me with confirming info just last evening) that there are more layoffs in the works for at least one major Sonoma County winery....
Ready to guess which?
  • one which has already had a few large rounds of layoffs in the past 18 months...
  • and has scaled back (mothballed & consolidated) a few of its properties recently....
  • and has management which currently seems to know no other answer to flagging sales than to cut its workforce...
  • management which also saw fit to raise the price of their main bread and butter product at the beginning of the recession...despite knowing the recession was on the way, and would negatively impact the next few quarters as their sales dropped due to the higher prices and the fact that distributors packed their warehouses at the lower prices, and then didn't deplete their stock like they had in the past.
Time's up! 
Put your pencils down, but don't worry, if you didn't guess you'll find out when it hits the paper...

The continued trend of consumers not to "trade back up" from the lower priced tiers they have gone to in the past 18 months is contributing to many changes in our industry - especially regarding wineries which used to seem beyond the grasp of such trivial things as market fluctuations....
Many people have suggested that this is mainly just a matter of time, and that given enough time the industry giants will rebound to the same stratospheric heights they used to occupy. Though many readers of this blog in the past will know that I don't give the Titans the same respect they do, and for good reason.

I was lucky to have realized long ago how much of the current fluff regarding the hierarchy of wines & wineries is just that...."fluff". People (consumers), have "traded down" for financial reasons, but quite a few have found enjoyment at the lower tiers (~$15/btl) which they used to think only existed at the $30/btl range.
I really don't think they are ready to go back yet, and the wineries which aren't looking to price their wines at a price to move right now are missing the boat. Any talk of "not losing price point" (read that as "prestige" & "ego") is not really realistic. To be sure, many will weather the storm even with that attitude, but the healthier ones will be - in my opinion - the ones which make it through the storm without having to sacrifice facilities and product lines to get there. Witness the recent changes with Beaulieu and Sterling being sold/leased by Diageo....these are some of the previously "untouchable" storied wineries now leased-back to provide "nimble" and "entrepreneurial" business opportunities for the Diageo group.

The bad news for the producers whom are filling the market needs now will be expected by consumers to continue providing these $15 wines which drink like $30 wines for the foreseeable future.

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Wednesday, June 09, 2010

Biodynamics is a Hoax!

Stu Smith of Smith-Madrone Vineyards & Winery in Napa has launched his own blog - dedicated to the exposure of Biodynamics as a hoax!

From his June 1 post:
"Welcome to “Biodynamics is a Hoax.”  I created this blog to offer an alternative view to Biodynamics and to engage the Biodynamic community in debate over the merits and efficacy of Biodynamic farming.  I challenge any Biodynamic farmer or supporter to defend the writings of Rudolf Steiner.  I submit that if you believe in science you cannot believe in Biodynamics, and the corollary is just as true, if you believe in Biodynamics you cannot believe in science.  As you can tell by the title I believe that Biodynamics is a hoax and deserves the same level of respect the scientific community has for witchcraft, voodoo and astrology."

Done in Stu's no nonsense style, and backed with his 40+ years of industry experience, this will be one blog not to be missed...
For those of you willing to try to defend Steiner, be sure to try to explain WHY Steiner suggested distributing "finely divided lead" over a rose garden would combat mildew (yes - that's elemental lead, Pb!)
Extra credit if you can reason why ANYONE could see Steiner as the father of ORGANIC FARMING -and all that is good agriculture- when he had such obviously crappy ideas as that whopper!

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