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Tuesday, December 21, 2010

Top wine stories of 2010

Yes, another look at the year.   These items are related to the local (Sonoma/California) wine biz.

The Economy
Many would like to see more visitors
heading home like this!
Well, duh, this is the big story.  Mostly you hear about retail sales and pricing, but direct-to-consumer is suffering, too.  There are fewer visitors and they are spending fewer dollars. Plus there is a general oversupply of wine.  No, you won't find Screaming Eagle at Costco, but there are lots of good wines at nice prices--even Pinot Noir!  If the price pressure stays long-term there will be fallout from the marginally successful (or over-extended) growers and producers.   One thing that didn't change, but should have, is over-priced restaurant wine lists.
The Harvest
Bad weather led to bad grapes--low yields, rot, sunburn, you name it.  There were much lower yields of some varieties in some areas.  It appears Chardonnay, Pinot Noir and Zinfandel took the biggest hit.  Whatever your beliefs on climate change it appears the coastal areas may be cooling down.

Marketing
Many wineries are putting more attention on the under-30 consumers.  Much of this is a reaction to the slow-down in purchases by their traditional customers, the 35-55 year olds. If you can't beat 'em, tweet 'em!  It will be interesting to see if this pays off.

Corporate Turmoil
There seem to be changes afoot at Brown-Forman, Constellation, Diageo and Foster's wine groups. The large family holdings, such as Gallo and Jackson, don't go public though there's been consolidation within Jackson to save money.  There was news earlier this year that Diageo may sell off some brands to cut costs.  Foster's has separated their wine division from the rest of the company in preparation to spin it off or sell.  Constellation is selling off its non-U.S. wineries.  Brown-Forman appears to be ready to sell their wine holdings.   All of this affects brands like Beringer, Chateau St. Jean, Rosenblum, and Sonoma-Cutrer.

Government Control
While Washington state might be doing away with state-controlled liquor sales Pennsylvania installed wine vending machines complete with a Breathalyzer.  And you wondered why people make fun of bureaucrats?

The Wholesalers Attempted Power Grab
It's called HR5034 and it's having a difficult time in Congress, so far.  The wholesalers want to do away with any form of competition allowing them to set the prices and prevent stores and wineries from shipping you wine directly. They want it all to go through them so they get a cut.  Any alcoholic beverage wholesaler that says he's your friend is, well, a liar.

Sonoma County Labeling Law
A new law says any wine made of Sonoma County grapes must say so.  Napa has been doing this for years (and Sonoma, being #2, likes to copy Napa).  If you think about it some Napa winery labels make no sense--like the ones saying "Napa Valley, Diamond Mountain."  OK, is it from the valley or the mountain?  The idea of the new regulation is to promote Sonoma County.  In reality you're going to see wine labels saying something like "Sonoma County, Sonoma Valley."  Don't get confused like I already am.

Being Green or at Least Politically Correct
Sustainable farming, and using less energy and water gets a lot of press.  Maybe that's what the wineries were hoping for?  Some really care. Others may just be trying to set themselves apart from the competition and get a little free publicity.  As more and more wineries move this way (a good thing) the marketing side of being green isn't there any more.