Category Archives: Value

First-Rate Second Wines

Caymus, Grgich Hills, Haut-Brion. These wineries, and others of their ilk, have worked tirelessly to build brand awareness. They start by crafting memorable and compelling wines, as all great wineries must. Then they travel, in the flesh and digitally, telling their story from hilltops and dales. With this work they build recognition, and garner top-tier price tags.

Many winemakers though, including those producing the most exclusive wines, share a serious respect for everyday wines. But the economics of selling handcrafted wines at everyday prices rarely makes sense. . . .

Read the full article here at The Growler.

People’s Wine

Real wine is hard to find. The charade that populates most store shelves is a group of elixirs, created to poke and tickle the right taste buds. Made in the vein of Pepsi or Fritos, these commodity wines typically showcase excessive fruit, residual sugar, and serious chugability. These are circus wines with circus labels, and the industry has created a sometimes-impenetrable wall of them—one that obscures the wines made by real people, from real grapes, for our honest pleasure . . . .

Read the full article here at The Growler.

No Fun Getting Old: Age and Wine

“How you doing, Grandpa?”

“Well, it’s no fun getting old,” wheezed my great-grandfather Wes. Then, a deep breath. It was meant as a direct response to a rote question. It frequently left me grinning uncomfortably.

For many, aged wine contains an aura of near mythical power. Hold a 30 year old wine in your hands, and you hold history, even time itself. We are taught that aged wines bring new depths to explore, and we hear a similar message about elderhood. I have certainly felt this rapture when holding aged bottles of wine.

Too often, however, the rapture doesn’t extend to the tasting experience.

In truth, most wines (and humans) don’t age gracefully. While recently drinking a bottle of 1998 Brunello, I (again) held a wine in my hands that undoubtedly tasted better 10 years earlier. I’m not talking about $10 grocery store wine, which surely should be drunk young. Most well-crafted wines made with great care do not benefit from 20+ years of cellar aging. More of us, collectors included, would do well to drink our wines with 5-12 years of age on them. In this window, we run little risk of pulling a cork on a worn out bottle, and the resulting experience will provide a surer pleasure for a broader audience. Between a wines youthful release and tired, raisened age rests an ideal window when a wine holds both fresh fruit, and complexing, intriguing layers that only time can add.

I can already hear the scoffers. “Is this clown really telling me I can’t age my First Growth Bordeaux for 30 years and find glorious fruit and captivating aged aromas and flavors?”

Of course not. For most, however, wines of this ilk are out of reach. And to those scoffers, I bet them their cellars that I will enjoy fewer tired, no-fun-getting-old wines, and many more in their prime of life. And when I win their cellars, I’ll start pulling the corks.

The mystique of aged wines leads collectors to buy futures from many fine Chateaus and Domaines, but a disturbing number of these stunning wines rest for decades holding nothing but the promise of vinegar 30 to 40 years in the future. We’ve sanctified the status of aged wine to the point that many dare not touch their pearl-white treasure.

Perhaps as I age, I will find new meaning in the brittle aromas and flavors of dried fruit and leather. In the meantime, I will enjoy my wines while I know they will please.

Repackaged, Repriced: Trickster Branding in the 21st Century

In the February edition of Wine Business Monthly, Kevin O’Brien penned a noteworthy article filled with curious nooks and crannies.

Good news! Wine sales continue to grow, especially in the $10-$25 category. Sales of $6-$10 wines have meanwhile declined. This has resulted in the “premiumization” of the wine business. Even better, wine drinkers are lusting for honest wines. “. . . consumers are continuing to demand premium products across all beverage alcohol categories as they seek an authentic, high-quality experience.”

Of course, corporate wineries want in on this action, but only have a few options (beer drinkers, this should sound familiar):

  1. Increase price of existing wines
  2. Create new labels and reprice
  3. Buy premium brands*

As a consumer, beware of number two and a flip side of three. Thankfully you aren’t being duped by numero uno.

In the face of falling cheap wine sales, corporate wineries with substantial vineyard holdings have the need to put that fruit to better use. Quick, put the marketing department to work! Slap a new, shnazzy label on the identical bottle of vino (or nearly identical), get the PR machine buzzing, and out of the corporate sphincter comes a glimmering new bottle for the new and improved price of $15 (formerly $8).

Beware.

Massive producers have also used a related though sneakier tactic. “It should be noted that these large transactions, as well as several other completed during the year, were primarily focused on the brand rather than underlying vineyard or production facilities. A leading driver behind ‘asset light’ transactions is the flexibility in grape sourcing and resulting scalability of the brand.”

Decode: Corporate wineries gobble up a sexy, premium brand name, leave the vineyards and production facilities behind, and then put their less costly, already held vineyards to work under the newly acquired brand label.

Clever, clever, and harder to detect. The answer, the same tried and true answer, can be found in the following:

“The recent wave of wine industry transactions has been notable for its size and breadth. These acquisitions have been driven by suppliers’ desire not only to improve profitability through increased scale but also to remain relevant to their wholesaler and retailer partners. The past few years have seen several significant mergers between some of the country’s largest wholesalers and retailers. As the distribution funnel continues to narrow, wineries are finding access to the market increasingly difficult. . . . In general, larger retailers prefer to work with larger wholesalers in order to better integrate and simplify their supply chain and forecast demand.”

Corporate wineries need one of the big three distributors to move their product into the large retailers. It’s that simple.

Gallo     Constellation Brands    The Wine Group    Bronco Wine Company

Breakthru Beverage     Southern Glazer’s     Republic National

Safeway     Total Wine     Costco     Whole Foods*

The answer, my friends, remains the same. Shop your locally owned wine retailer, get to know your steward, and you will bring home bottles with authenticity, character, and value. You will also support three authentic tiers rather than the behemoths above.

 

  • *Premium brands = wineries producing $20+ wines
  • *Whole Foods has historically worked hard to diversify shelf space with large and small wineries. However, results at any given store vary by state, and market pressures continue to push retailers of this size to consolidate and simplify i.e. work with fewer distributors and reduce options on the shelf.

Sources:

A Romantic Ideal Must Tumble

I recently read an excellent article on “White Label wines” by Madeline Puckette and Co. over at Wine Folly. Except for one glaring bullet-point:

“Some wineries with tasting rooms will make a few own-vineyard wines, but will use bulk wine sources to make their cheaper, lower-end affordable bottlings. We’d ask what’s the point of selling something you pre-bought, rather than making at the winery? But it happens…”

It certainly does. Frequently. And understandably so.

First, what is bulk wine? Many established wineries at all quality-levels sell some of their finished wine on the bulk market. This is purchased by the gallon by other wineries or winemakers, typically at a fair tariff. Why would an established winery sell off the fruit (wine) of their hard-earned labor? Sometimes the wine is flawed. Other times it simply doesn’t make the cut for the premiere producer who grew the fruit and made the wine. One man’s trash is another’s treasure, though, and I have drunk many fine wines in the $12-$20 range that resulted from the latter. Finally, some producers sell finished, bulk wine to increase short-term cash flow. It turns out that bottling, labeling, marketing, selling, and then taking a hit in the three-tier system (producer, distributor, retailer) costs wineries a lot of money.

Punching down the cap of fermenting red wine.

Many wineries buy bulk juice, and for essential reasons. For instance, young wineries buy bulk to produce enough volume to create a viable business. Owning your own vineyards is an expensive proposition (understatement of the year at Wagon Wine), and buying fruit is also expensive as a result. Buying some bulk juice allows many new, small, and moderate-sized wineries to enter the market and sustain their business.

I certainly respect the notion that established wineries need not turn to the bulk market.

Thankfully, Madeline contradicts herself at the end by writing:

“We’ve pointed out several issues that white label wines can have, but we believe there’s a lot of potential with this segment of the market. The bulk wine market involves a lot of great wineries and great wines from special places all over the world. A lot of these producers are focused so much on making wine that they lack the resources to market it. Winemaking is very capital-intensive, and the winery may need to sell wines in bulk to raise cash faster than they can sell their own wines, even if the wine is perfectly good.”

Yep, and many young winemakers and wineries rightfully take advantage of this “perfectly good” juice to create their entry-tier wines. Perfectly understandable, and ultimately beneficial to us, the consumers.

So yes, Madeline, transparency matters. And not all bulk juice is equal. However, don’t take a sledgehammer to a nail. Bulk juice in entry-level bottles sustains many reputable, small to medium-sized family wineries.

The Tiers Produce Tears: Tear it Down

I recently returned from a marketing trip with my employer, a small Willamette Valley producer of Pinot Noir and Chardonnay. As we explored the Minnesota market, meeting with local wine shops, three separate owners asked pointedly, “Will you be in Total Wine? If so, we won’t carry you.” Early in 2014, Total Wine & More entered Minnesota, grabbed hold, and shook it like a martini. A few locally-owned shops have closed, including the beloved Four Firkins. While appreciated by many buyers for their substantial selection and low prices—a reputation buoyed by titles like “2014 Retailer of the Year” by Wine Enthusiast—we should pause and reflect on the big box economics of Total Wine.

Total Wine carries an array of wines produced by medium to large producers. Their margins? Minimal—lower than any locally-owned shop can match. This clearly harms the boutique shops, but it also abuses the smaller wineries carried by Total Wine. Yes, Total Wine pays the same price to the distributors as any other shop, and so the wineries make equal money when sitting on the shelves of Total Wine. However, the low markup ultimately devalues any wine on the shelf, and consequently any brand on the shelf. Small to medium-sized boutique wineries only thrive if they create a value brand rather than a discount brand. Big box economics undercuts the value.

Let the sun shine upon the back alley short cuts that lure so many of us.

Let the sun shine upon the short cuts that lure so many of us.

Total Wine makes one exception to their minimal mark up philosophy—their private labels. They amass a fleet of private label wines, which they create through contracts with wineries around the world. “You make the wine, we’ll provide the label.” This model allows the producers to move volumes of mediocre to crappy wine easily, thanks to the serious power wielded by large entities like Total Wine. It also masks the grape growing and production facts, allowing Total Wine to mark these private label wines up substantially more than the other brands on their shelves. Total Wine stocks over 2,500 private labels, and sources report 53% of their sales come from these private label wines. This ultimately means that Total Wine’s management, and subsequently store employees, have an incentive to push the private label wines.

Thankfully, unique Minnesota distribution laws allow some local stores to cleverly fight back.

Shop at locally owned and operated stores, wine and beyond. civiceconomics.com “Local Recirculation of Revenue”

This story, of course, is not unique to wine, and this fact only bolsters the message. We all benefit when we shop at locally-owned stores. Michael Pollan, food writer and journalist, first turned me on to the power of voting with my money. Every dollar spent is a vote for that product, that company, that retailer, and the business practices that support that chain of businesses. A son of a rural Minnesota business owner, I shouldn’t have needed Pollan to clarify the power of shopping locally. Yes, you may pay an extra dollar or two*, but the benefits so clearly outweigh the cost, sun to a grain of sand.

 

*Take advantage of case discounts at your local wine shop, and prices come nearer to alignment when comparing the superstores and small shops.

Sources:

The Head, The Heart, The Slurp

I recently attended an Oregon Syrah tasting with a trio of Willamette Valley winemakers and a few other industry compatriots. We tasted through seven different Oregon Syrahs, including a vertical from Dion Vineyard in the Willamette Valley produced by Anne Hubatch of Helioterra. Violet-blue in color, the 2013 Dion grabbed me by the shoulders and force-focused my energy directly into the glass. Confident white pepper aromatics lead, followed by spice, blueberry, and boysenberry. Floral undertones add a lovely, gentle layer. This wine will excite those who respect and value Rhone Syrah—a mentally stimulating experience.

Other Syrahs from southern Oregon, especially the 2012 Cowhorn Syrah from the Applegate Valley, luxuriously warmed the heart with New World fruit. The Cowhorn Syrah danced a laser-line between density and buoyancy, fruit leather and black pepper. Wines this thick often fail to inspire, but Cowhorn manages to add layers of nuance into the folds of fruit.

Admittedly, Oregon winemakers and viticulturists have only now entered the dawn of this Syr-era. Few have plumbed current or potential vineyard sites with an eye for Syrah gold. The varietal has, however, found a home in Oregon, and the cool-climate Willamette Valley within. I expect to taste starlight from the misty cave depths once it settles into the embrace of well-selected Oregon vineyards.

A few days later, I dined with family at a casual mid-week gathering. My mother-in-law, a bargain wine shopper, opened a bottle of 2014 Blackstone Merlot from California. This sweet, grape slurpee of a wine lacked everything that makes wine sing. It declared itself robotically, centuries away from passing the Turing Test—Mass Market at its worst. It served as a reminder that $10 Washington flattens $10 California every time. Biased as I am, I challenge you: Apothic Red v. Two Vines, Menage a Trois v. Columbia Crest Grand Estates,  Bogle Essential Red v. Lone Birch Red. Let me know your results.

Cheers to wines that stir the head and the heart.

Focus on Fruit

There are no short cuts.

As a new “insider” to the wine trade, I walk the hallowed halls with antennas tuned for insight. For one, I hope to uncover the vineyard gems that supply the best value Pinot Noirs in the valley. I, like many of you, spend most of my nights sipping wines in the $10-$20 price range. The Willamette Valley, however, only seems to deliver $20-$60 Pinot. How can we reconcile this dilemma?

Pinot Noir hanging in Lichtenwalter Vineyard in the Ribbon Ridge AVA

Pinot Noir hanging in Lichtenwalter Vineyard in the Ribbon Ridge AVA

Nearly half of Oregon producers purchase all of their fruitº from independent vineyards or significant estate vineyards owned by others. These wineries do not own vines, and as a consequence pay the market prices for their fruit. Pay $1600 per ton for your Pinot Noir, and you will get your $15 bottle from the Willamette Valley. Unfortunately, it will taste like it too, as these vineyards often rest on the flat lands outside of the blessed zones for primo Pinot Noir. Pay $3000 per ton for your Pinot, and you will start producing wines that sing. . . and you will charge $30 per bottle to cover the cost. Many have touted, “Great wine is made in the vineyard.” This is a truth, and as a consequence winemakers pay for quality wine. There are no short cuts.

Unless. Unless the producer owns an estate. Those who own a vineyard and make wine from it have unique opportunities, especially when they have owned portions of their vineyards long enough to bury the loan notes. Through ownership, they have fixed their costs for fruit*. If this estate is on ideal vineyard land, and if the owner and winemaker value producing value, and if they have volume enough to sustain a business**, and if they do not build a lavish, over-the-top winery and tasting room, then they could possibly produce memorable $18 Pinot Noir in the Willamette Valley. This estate likely needs to be outside the sexiest AVAs, or the allure of that name will tempt the hands in control to charge the prices they can command. Importantly, the $18 bottle will only be one of many wines offered by this winery, and the rest will fall into the $25-$60 price range to support a balanced ledger.

The odds of the stars aligning for you, the hopeful consumer? Minimal. Reality leaves me craving $15 Willamette Valley Pinot Noir that inspires, and thankful I receive industry discounts. Quality cannot come from wine cellar magic. “You can make a bad wine out of great fruit, but you cannot make a great wine out of bad fruit.” For the $10-$20 seekers of quality Willamette Valley Pinot Noir, a handful of producers do compassionately craft affordable, insightful Pinot. Ultimately, though, the economic winds of this challenging varietal blow, like a February gale, against us.

 

*Fixed cost is not 100% literal here. Tax payments will rise as land values increase, and labor costs for tending the vines will increase over time. However, you purchased the land at a set price, and you have locked in that value.

**5 acres of Pinot Noir will not allow you to produce $15-$20 Pinot Noir of quality if you want to sustain a livelihood, rather than take a vow of poverty (very few fit this bill).

ºhttp://industry.oregonwine.org/wp-content/uploads/Final-2014-Oregon-Vineyard-and-Winery-Report.pdf

Price Matters: Important Words from Giorgia Casadio

“You must know the price. Ask! You are professionals!” Giorgia Casadio began to preach her gospel. Too many wine professionals had come to her table, tasted her wine, and failed to inquire about the price of each bottle. A group of Wine Bloggers Conference attendees shifted, alert on the chairs and bed corners of a fellow blogger’s hotel room. “I recently tasted a Cabernet in Napa Valley. It cost $140 a bottle. In Italy, it’s understood that it’s easy to make excellent wine when it costs $140. Judge a winery based on its table wine, its $15 bottle. That is the truest test.”

Amen.

Expensive wine deserves respect, and if worthy of the price, it can penetrate your psyche for years to come. However, with a high price comes the unique opportunity for the winegrower to coddle the vines and juice endlessly to massage them into producing profound wine. Terroir also influences quality, and it too adds to the price tag—prime vine real estate commands fortunes. Some wine historians contend first and second growth Bordeaux* grew into their titles rather than earning them justly in 1855. Essentially, the chicken or egg debate applies, and world-class quality came second. The prices the “First Growth” designation allowed wineries to charge gave them the capital needed to produce stellar wine.

Flip the equation. What can a winery create for $10 a bottle? This depends on terroir, care, and commitment. Vineyard managers and winemakers must take the time and energy to weave through the tangles and nuances of their vineyards and varietals. Which corner of your vineyard will blend with another vineyard row a mile away to produce a wine better than the two parts? Which varietals will uniquely meld to enhance and elevate the finished wine? Will you care for the lesser locales within your vineyards with as much force and drive as the rest? Will you seek out the over-looked acres hiding on and beyond the edges of your AVA? I respect producers who care enough to ponder these questions and heed their call. These winemakers craft memorable wine for the common man. Amen, Giorgia.

Tuscan vineyards

The vineyards of Villa Trasqua in Tuscany

Giorgia attended the 2015 Wine Bloggers Conference to share her wines from Villa Trasqua. Her Tuscan winery deserves respect at every price point, which speaks to Giorgia’s truth. Seek value. Does the wine rise above others at the price point? Thankfully you can find her valuable wines in 14 states, including Washington and Oregon.

2013 Traluna Toscana Rosso ($13): Red fruited with a pinch of baking spices. Mostly Sangiovese with a bit of Alicante Bouschet, this table wine currently strikes me as a bit discordant. However, age will certainly allow it to meld (age-worthiness quickly became a theme when tasting through a line up of Villa Trasqua wines). 13% abv. Good (will likely move to “delightful” with age).

2009 Fanatico Chianti Classico Reserva ($25): 100% Sangiovese, this Reserva resonated purity. Rustic, sexy, honest, age-worthy, memorable—a benchmark wine. Stellar.

2008 Trasolo ($120): Made with 100% Merlot, round, dark fruit produces a lush depth. Aged in new French oak, the fruit stands up proudly against its force. Italian-style shows through this historically French grape. Surprising. Excellent.

*The 1855 Classification System solidified a hierarchy amongst the wineries of Bordeaux. First growth estates, the top-tier, only number 5. The list goes from first to fifth growth, though the large majority of wineries in Bordeaux exist outside this classification system.

Spare Parts Needed: Wine in the Finger Lakes

I step off the flatbed of the vineyard truck and on to the soil I have come to explore. As I brush straw from my pant leg, winemakers and viticulturists John and Mark Wagner, Cameron and Tim Hosmer,  and Tom Macinski guide my group of wine writers through one of Wagner’s estate riesling vineyards. This is boutique wine country. Soils and climates vary too drastically from acre to acre to plant more than 3 acres here, and 5 acres there. A rare site lies ahead of us; 30 acres planted on one slope. The vineyard sits on the eastern shore of Seneca Lake. At over 600 feet deep, Seneca serves as a cooler during the summer and a heater come winter. -10°F can kill vines, and therefore Seneca provides insurance. During a recent winter, Wagner Vineyards maintained a steady -6°F while neighboring vineyards on adjacent lakes witnessed -12°F and worse, killing many vines to the ground. As a consequence of location and dutiful viticulture practices, Wagner Vineyards owns 250 acres of vines, many of them 20 to 30 years old, making them a powerhouse in the still fledgling Finger Lakes region. I stand on hallowed ground.

John Wagner steps forward and introduces us to “spare parts viticulture,” a necessity in the Finger Lakes. Most vines here have two or three trunks splitting from the root stock, an anomaly in most of the New World. A single trunk is the norm. Here the excess acts as a back up. One trunk may freeze and die, but the other can, if lucky, survive. Between the extreme cold and bedazzling array of soil types (the site specific, color-coded maps may induce a seizure), the Finger Lakes AVA proves a challenging “friend.”

John Wagner, owner of Wagner Vineyards, discussing “spare parts viticulture.”

 

Seneca and Cayuga lakes remain unfrozen in the midst of a deep cold snap in 2014, evidence of the warming effect they provide the vineyards hugging their shores. (Photo courtesy of the National Weather Service)

While the Finger Lakes has garnered world-wide attention for 20+ years, the local industry still maintains some youthful awkwardness. The tension between vinifera, hybrids, and native grape varietals* exemplify the point. Those seeking to lift the Finger Lakes global reputation prefer to rip out native and hybrid varietals and replant vinifera, particularly riesling and cabernet franc. The majority of the 100+ wineries in the region have not reached a global audience and produce low volumes of wine. Within the local market, however, wineries have little problem selling hybrid and native varietal wines. The tension is palpable. The debate, like most, presents itself as a duality, perhaps unnecessarily so. Both worlds can exist—world-class vinifera and localized hybrid and native distribution. The global market will only see vinifera coming from the Finger Lakes.

For those seeking to peruse Finger Lakes wines, take advantage of the  2008, 2012, and 2014 vintages, which all resulted in excellent wines. Stick with riesling and cabernet franc to begin. As I tasted my way through wine after wine, producer after producer, the price point on many excellent bottles caught my attention. Most wines fall between $17–$26 range, a great value if you seek small to medium-sized producers working honestly with their wines.

Dinner amongst the vines at Wagner Vineyards hosted for the 2015 Wine Bloggers Conference

Recommended producers:

Thank you sponsors for the privilege of exploring the Finger Lakes wine region during the 2015 Wine Bloggers Conference. The Finger Lakes can hold its head high.

*Vinifera grapes are recognizable worldwide and originate in Europe. Native grapes, think concord, existed in the United States before European settlers arrived. Hybrids have been created more recently to carry traits from both vinifera and native varietals. Ideally, hybrids exhibit the aromas and flavors of vinifera, but maintain the cold-hardiness of native varietals so that winemakers need not worry about winter kill. Most serious producers acknowledge that hybrids produce inferior wine.