NoBullGrape

US wine market: Big and soon to be the biggest

In a statement similar to those of my child (he is all about what is big, bigger and biggest), Jon Fredrikson proclaims that the US wine market is in very good shape and predicts it will be the biggest wine market in the world soon.  Speaking at the Unified Grape and Wine Symposium yesterday, Fredrikson said "From the perspective of 3½ decades in the wine industry, I can assure you right now that things have never been better in this market and the future looks outstanding." 
Here are some key points from his speech (as reported here):

• Americans purchased an estimated 300 million cases of wine last year, worth more than $25 billion (both records). 
• Census numbers show drinking age adults in the United States is growing as well, from 164 million in 2000 to an estimated 184 million in 2010.
• If per capita consumption continues to go up 3% every year, the US will be the largest wine consumer in the world by 2010.
• Wine drinkers bought an estimated 187 million cases of California wine last year, 6.5 million more than 2004 and a 4 percent increase.  At the same time they bought 8.4 million more cases of imported wine than in 2004, soaring to 81.5 million cases, an 11 percent increase. 
• sales as Baby Boomers and 20-somethings bought more - and more expensive - wine.

Thoughts on this:
I am particularly struck by the fact that this report shows such broad based expansion.   Fredrikson is saying is that the US wine market is not just growing in volume, but also in price (a weak, but useful indicator of quality).  The price increases are being fueled by a. Baby Boomers and, most interestingly, by 20-somethings who are paying more for bottles than previous generations.  This is most pleasing as it shows that the growth is not just targeted on those who are greying, but also on those who will be drinking wine for the next 60, 70 or 80 years. 

Would think that this kind of data would keep investment in the US and those who import to the US up and support more pushes to improve the quality of the wines produced for consumption in the US.

Also very interested in the faster growth rate among non-US wines.  Past years this kind of stat would be attributed to Australian wine, yet the growth over past years seems to indicate an even broader growth in who is successfully importing wine.  Doubt you will see brilliant numbers from France as they announce annual industry wide results over the next few months, but quality players in France, Italy, Portugal and Spain clearly are improving their ability to pierce the US market.  These import numbers may also be boosted by other countries such as South Africa, New Zealand and Argentina whose wines seem (anecdotally) to be getting more shelf space each year.

Please note: some of this comes from personal notes, but the majority of the info here comes from a very comprehensive article in today's Press Democrat titled "US Forecast to become world's #1 wine market."

Couldn't have said it anywhere near as well

Guest columnist Richard Olsen-Harbich of Long Island's North Fork winery Raphael has a great piece on the importance of location -- everywhere around the world -- at the always interesting Lenndevours.

As he says:

Remember a merlot grape -- the same merlot grape -- grown in upstate New York or Sonoma or Bordeaux will not taste the same even if we used exactly the same processing techniques. It's the terroir stupid!
In our arrogance, we sometimes forget how little influence we have over the natural world. I want to know what goes into my wine if that’s not too much trouble. (And please don’t bother to tell me its organic -- that’s a topic for another post.) But when I’m enjoying wine from another region, I want to imagine what that part of the world smells like, tastes like and what the people drink. Maybe its because I can’t afford to travel there myself so enjoying the wine is the next best thing to being there.

As you think about going to pick up your turkey, take a read here.

Wine stores

Great follow up to Eric Asimov's column at Dr. Vino. Highlights lots of good retailers who fit the model that Asimov talked about yet who are located throughout the country.

The impact of Big Wine!

Others have pointed to this article, yet I am so astounded by these three simple points made by Hoyt Hill in the Nashville City Paper that I must repeat them...

Thirty percent of the wine sold in the United States is distributed by one wholesaler, Southern Wine and Spirits, and, in the states where Southern Wine and Spirits actually does business, they distribute more than 70 percent of the wine sold?

Approximately 80 percent of the wine produced in Australia is made by three companies? Approximately 70 percent of the wine produced in California is made by five companies? And that Foster’s is one of those three Australian companies and one of those five California companies?

One man, Michel Rolland, is the winemaker at more than 200 wineries?

And those stats don't even talk about Constellation and Gallo!

Big is not inherently bad and some of these companies/trends ensure that more US consumers are introduced to wine.  Yet, the inherent homogenizing effect that these big companies can have -- be it compromising quality in the name of "scale," undermining key wine making areas that could have wonderful futures if supported or focusing heavily on the latest marketing trends as opposed to the long-term investment that great wine requires -- must be watched.  Mr. Hill is right to highlight a few of the better known importers as sign posts for quality wine. 

Yet, consumer groups -- and maybe it starts with the small community of wine bloggers -- need to hold these companies accountable so that there is always an environment for quality wine.  Fermentations' work following the Michigan shipping issues is  a great example of this.  Their opposition to proper use of place names, their efforts to weaken (as opposed to maintain or strengthen) US vintage dating rules, their weakening of quality wines that they acquire (I've heard this is the case with Gallo's purchase of Louis Martini in Napa, yet have not witnessed anything myself) or the limited selection of wines carried  by distributors like Southern are just a few places where they need to understand that they are undermining the future of a great industry.  Finally, I do not believe that this is merely a fight to protect small producers against "Big Brother." I believe that such watchdogs actually have the shareholders (at least in Constellation's case as Gallo and Southern are private companies) long term best interests at heart. Happy to pitch in on this and am open to good ideas that can launch such an effort.  If the world Mr. Hill describes is allowed to continue to grow, we all could lose.

Center for Wine Origins launches and Location Matters

Just noticed that the "Center for Wine Origins" launched via this press release.  They seem to have a survey that shows 57% of those surveyed (and they seem to be higher income folks) "believe where a wine comes from is one of the single most important issues in choosing a wine. This underscores the increasing importance Americans are placing on location when it comes to selecting quality wines. Whether a wine comes from Napa Valley or Champagne, France, Walla Walla, Washington or Oporto, Portugal --location really matters," said Shannon Hunt, director of the Center for Wine Origins.
These guys were also at the Napa Declaration that we covered earlier.

Developing clones: EU vs. rest of the world

This blog is dedicated to discovering and celebrating great winegrowing locations.  Yet the discussion often returns to the vines that go into the ground in these places to produce the wine we like so much.  As such, clones (the different sub varieties of grape vines) are very important.  Many of the wine regions that we (as consumers) are just discovering (e.g.Mendoza) are using relatively new clones as the backbone of their resurgence. 
In many places around the world local governments are funding important research into the discovery of newer and newer clones that are disease-resistant and favor certain characteristics that impact grape quality and production.  This is happening in Australia, New York and many other places. 
However, there are some who believe that this is a scandalous attack on the industry and the environment.  An interesting insight into the tension that a very small project in France can be read in this article in today's NYT.   
In addition to being useful in understanding grape clones, this is yet another talking point in the ongoing (and important) dialog about the future of the French wine industry when the rest of the wine world (and not just the New World) is moving so quickly.

US-EU Wine Accord: The Consumer (Part 2)

The Center for Wine Origins (signatory to the Napa Declaration that we've discussed before) came out with an interesting statement about the agreement signed by the US and EU recently.
As Dr. Vino also noted, the Center makes an important point: that the agreement does nothing to help consumers not be mislead by false "Champagnes", "Ports" and "Sherries" and that neither government really did anything to help consumers in this agreement.  In fact, they answer the questions I asked previously -- what do consumers get out of this -- in the following quote:

Securing wine trade between these two countries is very important for all sides and creates positive conditions for all wine producers.

However, the real world effects for consumers of this agreement will be minimal. In fact, the agreement marks a real missed opportunity to make progress on one of the largest issues -- including the protection of many famous winemaking locations and putting consumers first. Instead of ensuring that consumers have the true facts about the contents of their wine, the agreement requires further talks on these important issues. This is unfortunate as the burden rests solely with the consumer. Consumers must seek out information on where their wine comes from to ensure they are not being misled by wine producers who choose to include names of winegrowing regions that are not their own.

"Missed opportunity" sounds right to me.

US-EU Wine Agreement: What Does It Do for Consumers?

The US and EU seem to have signed a wine agreement, yet there are differing interpretations of what they signed.
The Wine Institute is claiming a huge victory saying that US wines get greater access to Europe and that all of the semi-generics (e.g. Champagne, Burgundy, Sherry, Port, etc.) can still be used in the US.

Reports from European based reporters claim "EU, US Agree to Protect French Champagne, Other Names"

"EU, US Agree to Protect French Champagne, Other Names"

By REUTERS
Filed at 8:33 a.m. ET

BRUSSELS (Reuters) - The European Union and the United States have reached the first phase of an agreement on the wine trade that will help protect some of the most famous European names like champagne, chianti, madeira and sherry.

Under the agreement, the use of the names by producers in the United States -- where they are currently considered semi-generic -- will be limited, the European Commission said in a statement on Thursday.

Furthermore, U.S. authorities will exempt EU exports from new certification requirements among other measures to smooth trade, the statement said.

The EU and the United States have been at loggerheads over the wine trade for 20 years.

Top EU trade officials held talks with their U.S. counterparts in Washington on Wednesday.

The French Wine Exporters Federation welcomed the deal, saying it would secure the country's wine exports to the United States which it said were worth 1.6 billion euros.

Everyone seems to talk about the producers and trade.  Not one word about consumers.

What do we get out of this agreement?

Big wine working hard to lower vintage standards

TTB comments to the proposed watering down of the vintage date requirements have been posted and it is pretty clear that the majority of the big US wine interests are pushing for a lowering of US vintage standards while little guys are opposed.  I, personally, am always suspicious when big companies from any industry get together and am betting the little guys are closer to having the consumers best interests at heart.

Here's how they break down:
For weakening the vintage requirements --

• Eric Wente (President of the Wine Institute)
• All the comments submitted from Gallo
• All comments submitted from Constellation
• Gary Heck of Korbel
• Ted Baseler from Stimson Lane
• Diageo
• The Wine Group

Against weakening the vintage requirements --

• California Association of Wine Grape Growers
• Napa Valley Vintners
• Terlato Wine Group -- also sending lots of letters around to key wine publications
• F. Paul Pacult from the Spirits Journal
• Every consumer who wrote in!

Of particular note (and deserving of real congratulations for sticking to the stronger position despite their size): Kendall Jackson and Wine America (another trade group that often is in lock step with the Wine Institute).

Should be interesting to keep watching this... Unfortunately, my guess is that big business will win...

Time to weigh in on vintage dating

As many blogs have written, the Wine Institute has gotten TTB to consider lowering the percentage of wine from a particular year in wines labeled "vintage."  At the present time, all US vintage wine must contain 95% wine from the year claimed on the label.  The Wine Institite (a group we have discussed before that seems to have become more powerful the more it focuses on the wants and desires of big players like Gallo and Constellation as opposed to AVAs and smaller quality focused growers) is pushing (and will probably get) the federal government to lower their requirement to 85%. That sounds like plenty, yet when you think that 15% of the wine in a Cabernet Sauvignon from California labeled 2002 could have come from the 2004 harvest, the proposal loses some of its appeal.
However, I think there is a larger problem here.  The Wine Institute and US industry should be urging an increase, not a decrease in the percentage.  There may be winemaking claims that justify a lower number, yet they are making a horrible PR mistake.  In a world that is embracing quality, the US should be urging other countries to join their HIGHER levels,not lowering them.  It is a shame as this is an opportunity missed to highlight quality US wines.
I know some other bloggers whom I respect disagree, yet I think they are forgetting who is calling the shots (big companies) and who loses (the customer) in this case.
I urge you to join me in reviewing the proposed rule and voicing your opposition to the proposed ruling here.
Move fast as today is the dealine for comments!