Monday, June 18, 2012

Regionality, commodities and brands (brief thoughts on appellations #3)


Anyone who knows about the 1960s cult UK drama series, The Prisoner, will recall the repeated claim by the protagonist that he is not a number. The theme of the programme was the clash between individualism and collectivism, a dichotomy that occurred to me while considering the way some producers choose to stand outside their regional appellation system.

Viewed from one angle, appellations, denominations and regional designations of one kind or another seem to be the natural state of the wine world. In Europe, new regions and sub-regions seem to be given official recognition almost every week. But the picture is hardly different in the New World. Nudge an Australian winemaker and his Pavlovian response will probably be "We need a much greater focus on regionality". Across the Southern Hemisphere and the Americas, vineyards are being graced with brand new appellations of some kind.

Appellations, wherever they are, embody the character of the specific conditions in which the wine is produced. And, for people like Jamie Goode of, they are the noble opposite of "Commodity wine". This, Goode says is "inexpensive wine purchased in most cases not for its intrinsic qualities but because it serves a purpose, like milk, sugar or instant coffee". "Terroir wine", by contrast, is "any wine that has some sort of link to geography – where the grapes were grown and also local cultural influences"

I tend to look at the word "commodity" rather differently. Going beyond the dictionary definition of "something that is useful or necessary", I prefer the definition from investorwords: "A physical substance, such as food, grains, and metals, which is interchangeable with another product of the same type". This interchangeability - or fungibility - fascinated Marx who wrote that  "From the taste of wheat it is not possible to tell who produced it, a Russian serf, a French peasant or an English capitalist."

Now, experts and enthusiasts will claim that they can always appreciate the difference in taste between two bottles of AC Bordeaux or DO Rioja but, whatever Jamie Goode may think, regionally designated wines like these are undeniably sold as commodities. There are published bulk prices for them and a glance at the website of Global Wines & Spirits reveals how tenders for "Pinot Noir from Burgundy for China" sit alongside "White Generic Wine in bulk needed for Italy". 

In fact, and this is possibly an indigestible suggestion, I'd argue that choosing to fall within an appellation actually raises the risk of being treated as a commodity, for the simple reason that to do so is to put oneself within a fungible group. 

Outside the cosy world of wine, it is interesting how successful producers strive to separate themselves from categories in which others might want to place them. You don't find Apple describing its iPhone as a smartphone or its iPad as a tablet. L'Oreal makes hair colourant, not hair dye; Baileys is "Irish Cream", not a "cream liqueur", Martini prefers to be thought of as "the world's most beautiful drink" than as a vermouth... I could go on.

The cleverest wine producers - to my mind - are the ones that transcend appellations. Wines like Guigal's top Cote Roties, Gaja's Barbarescos, Palacios's Priorats, DRC, Lafite, Petrus, Penfolds Grange, Harlan Estate, Cloudy Bay, Pingus... All of these are bought for themselves and not because of the category in which they fall. There may occasionally be people out there who say, "I fancy a glass of wine from the commune of Margaux... Which shall I have? Palmer? Rauzan Segla? Or Chateau Margaux..? Oh, on balance, maybe I'll go for the Chateau Margaux." But not many...
One person who sees this in the same way as I do is the brilliant cartoonist and blogger, Hugh Macleod, who covered it in a fine blog post"The other day I sho­wed the above car­toon to the owner of a large Ame­ri­can wine impor­ter.'What a lovely grain of sand you are. Too bad you’re lying on the beach.'
 My the­sis that came out of that con­ver­sa­tion: Wine has become a com­mo­dity. But most peo­ple in the wine trade are too self-absorbed with their own wine sch­tick to ack­now­ledge the fact. OTHER PEOPLE’S WINE may already be a com­mo­dity, but NOT OUR WINE, no no no no… Our wine is SPECIAL, yes yes yes yes… If you want to remove the “com­mo­dity fac­tor” from your wine, you first have to admit that yes, you too are also selling a com­mo­dity. And then work from there."

I can't really add much to that - but I look forward to hearing what others think...

Why are appellations like the euro? (Three brief thoughts on appellations #2)

Okay, cards on the table: I've always liked the idea of the Euro. I have no more nostalgia for the lira, escudo and deutschmark than I have for the sovereign, or the louis d'or. And, after living for nearly six years in the heart of Burgundy, I believe in terroir and appellations. A glass of Volnay should taste recognizably different to a Pommard made from vines grown a few metres on the other side of the track. At least to someone with experience of both villages' wines. So, in theory, at least, I believe in appellations.

However... both the currency and the notion of regional designation are human concepts. And for that reason, they don't work. The problem  with the euro is that it cannot sustainably work for both tax-shy Greeks and industrious Germans.

I'm writing this after recent encounters with two bottles of attractively labelled Rioja on sale in Spain for under €3.50, and one with a bottle of Marques de Murrieta Reserva costing over five times as much. The first two were near- worthless wines and the equivalent of Greek euros; the latter was absolutely delicious and, in Euro terms, had German quality and reliability stamped all over it.

The inherent flaw in both appellations and the currency lies in the way they have been allowed to expand. When the first appellations contrôlées were created in the 1930s, the people behind them were mostly the best and best-known producers in their regions. As time moved on, the clubs they launched opened their doors to ever larger numbers of others who did not necessarily share their skills, values or aspirations.

All too often the lowest common denominator gets the upper hand. This arc seems to be the destiny of almost every denominated wine region in the Old and New World. Anyone familiar with Margaux will be familiar with some chateau-owners in that commune's tendency to demand the highest possible yield per hectare for their wines. Priorat was an irrelevant source of communion wine until Palacios and Barbier came along. Then, for a while, this region was transformed into a synonym for fine, expensive reds. Today, Palacios's wines still command a healthy premium but anyone who wants to put a bottle of Priorat on their table should head straight for Lidl in Germany which offers a version at €4.85. Similar stories could be told of the late-comers in Marlborough in New Zealand who contributed to a collapse in the price of wines there.

The only hopes for the Euro, the experts say, is either for all of the countries that use it to be obliged to work to the same strict set of rules ( through some form of central control) or for it to be limited to an inner core" of genuinely like-minded players. There are parallels in the wine world. The appellations that are most coherent are ones like Pauillac (limited in numbers, with shared ambitions and standards) and Buzet (one winery controlling most of the production). Elsewhere, producers try to create some coherence of their own within appellations (the Douro Boys in Portugal; Union des Grands Crus de Chablis in France; VdP in Germany). Alternatively, they do what several countries have chosen to do with regard to the Euro: they decide not to join. The premium, non-appellation Vinos de Tierra in Spain, IGTs in Italy and IGPs and (rather fewer, so far) Vins de France in France strike me as all being rather like the Swedish and Norwegian currencies, relying on their own strengths to survive.

Of course, there's one huge difference between the Euro and appellations; the former has been attacked by critics since it was launched; very few people ever question the logic of lumping hundreds of great, mediocre and humble wines together. Which is why I'm doing so here...

Sunday, June 17, 2012

If there were no customers there would be no whores (Three brief thoughts on appellations #1)

The Burgundy negociant Labouré Roi has been charged with fraud. Apparently, some 500,000 bottles of its wine did not contain what the label promised. I have no idea whether the Cottin brothers who run the company are or are not guilty of the crimes of which they have been accused. Over the years I have had some very enjoyable bottles of their wine and several pleasant conversations with them. I have also encountered numerous bottles that were far from impressive examples of their appellations. Most of the latter were sold under supermarket own-labels at prices that were lower than anyone who knows anything about Burgundy would expect to pay.

I remember in particular tasting an attractively priced Gevrey-Chambertin with the buyer of a major UK chain and suggesting that, to my taste, it was not only worse value than the cheaper Bourgogne Rouge and Chilean Pinot Noir he was also selling, it was actually a significantly poorer wine.
"Oh I agree 100%" came his disarming reply.."I'd never drink that stuff myself, but we have customers who'd never pay the right price for Gevrey-Chambertin but want to be able to buy it. So we have to offer one".

Of course, being in the market for a regular supply of the cheapest possible example of a product - any product - that normally commands a premium price does not mean that you condone fraud. Or in the case of meat or fish, that you are turning a blind eye to abusive farming methods. Or, if we were talking about clothes or toys, the use of sweatshop or child labour. But, let's face it, you're certainly increasing the odds of corners having been cut somewhere. As my father used to say, you may not always get what you pay for, but you very rarely get what you don't pay for. There really is no such thing as a free lunch and suspiciously cheap meals should be treated, well, with suspicion.

All of the chatter about the Labouré Roi affair has so far inevitably been about whether fraud was committed, and whether for example that bottle of Gevrey-Chambertin had been cut with basic Bourgogne Rouge. While I wouldn't want for a moment to condone a crime, frankly, that isn't what bothers me. I'm actually more interested in another form of cheating the consumer: of allowing him to create a false and ultimately unsustainable impression of the nature of something and what it should cost. This is just as true of water- filled, factory-farmed poultry or pork as of unfeasibly cheaply-produced bottles of wine from a famous region.

And that, in its essence is one of the fatal flaws in the traditional system of wine packaging and distribution. Everybody knows the " right" price of their favourite brand of toothpaste, car, or whisky. Even members of the wine industry would struggle to say how much a bottle of Chablis or Chianti should cost. Everything depends, they would say, on the producer and the vintage. Which is just fine and dandy for everyone with a comprehensive knowledge of either wine region, and pretty useless to everybody else. Most normal wine drinkers still go out looking for a name they recognise at the most attractive possible price. And for as long as those names belong to appellations with vast ranges of qualities and prices and production standards, they stand a high chance of being confused, disappointed - and on occasion, defrauded.

Sunday, June 10, 2012

Asymmetrical warfare: Ross Brown and private-label wines


"ROSS BROWN, the former boss of the 120-year-old winery Brown Brothers, has attacked [Australia's] leading retailers for flooding their stores with private-label wines, that he said were hollow, copycats and masquerading as real brands..."
Sydney Morning Herald, June 7, 2012
Dear Ross,

We've known each other for a long time - since 1984 I think, when Brown Brothers and Rosemount effectively led the Aussie charge into the UK wine market. Over the years, I've always thought of you as one of the canniest members of the Australian wine industry. You've managed to steer your family company through some pretty choppy waters, you have pioneered wine tourism with an extraordinarily popular destination that's well off most visitors' beaten track, and following in your father's footsteps you've headed a varietal innovation program that is arguably unequalled by any similarly-sized company in the world. And, of course. you helped to launch Australia's First Families of Wine, at whose event you raised the issue of the private-label brands.

You  called the private labels "hollow logs", because, in your words "they masquerade as brands but in fact they are just a label which has none of the values that traditional family wine companies bring to the market''. According to the news report, you went on to say that if private labels were allowed to dominate, traditional wine companies would be disenfranchised, and the future of the Australian industry as a whole would be under threat.

I've been interested in the subject for a while - though not in the context of the domestic Australian market; they are a growing trend across the globe. When we first met, I was a consumer wine writer - for the London Sunday Telegraph - and co-chairman of the then embryonic International Wine Challenge. In those days, like my colleagues, I was obsessed with finding great new wines and especially ones that offered value for money. Some came from companies like yours; some from corporately-owned businesses and some bore supermarket own-labels, though not what we now know of as private labels. Back then, we were more likely to be looking at "Sainsbury's Claret". While, I'm pretty sure that the long-term thinking implied by family ownership is far more ideal for a wine business than anything that involves shareholders obsessed with latest quarterly results, I'm afraid I can't subscribe to it being an absolute good. There are several Bordeaux chateaux I can think of that profitably make much better wine now they are owned by insurance companies, and plenty of family-owned wineries whose quality is annually compromised by concerns over cash flow. So, while it is obviously important to you at Brown brothers, I'm going to leave the family or corporate question for another day.

Far more important is the issue of whether private labels are or are not really brands and whether they threaten your industry. As you  know, Ross, in recent years, I've stopped writing for consumers and running competitions, and moved into producing wine myself - with two partners and a great team of winemakers in southern France - and into a research consultancy called DoILikeIt?, also in partnership, with your old friend Hazel Murphy and Judy Kendrick. This has given me a rather different view of the world from the one I had a decade ago. As a producer, I know what it is like to discuss prices and marketing contributions with big retailers and to see my bottles on shelves at ludicrously high off-promotion and ludicrously low on-promotion prices - and been able to do nothing about it, other than to seek other  routes to market. As a researcher, I've also spent time learning about what ordinary consumers actually know and think about wine. 

Wearing my producer hat, I agree that competing against private labels is what I'd term asymmetric warfare, like a modern soldier  fighting against a suicide bomber. The nicely labelled bottle of Prilab (my just-invented Private Label) goes through none of the hoops to get on the shelf that your wine or mine might, and there's every chance that the contents are a copy of something we went to a lot of trouble and risk to launch ourselves. But, as I regularly have to remind my five-year-old daughter, life isn't fair. Asymmetric warfare goes back to the earliest conflicts when one tribe had bigger clubs than the other: more recently, the Brits had no defence against German V2 rockets; the Japanese had no atom bombs. In the wine business, you at Brown Bros have to compete internationally against the muscle of bigger companies like Gallo and Constellation, but smaller, ill-funded wineries have to match up against you and the distribution strengths you have built up over the years. Back in the 1990s, when everybody loved the UK retail chain Oddbins, any Champagne brand wanting to sell its wine there did so in the knowledge that the staff were incentivized to push Mumm and Perrier-Jouet which both belonged to Seagrams, Oddbins' then owners. Indeed the very survival of Oddbins as the company it was, depended on its success at distributing Seagrams products.

Of course Mumm and Perrier Jouet were not private labels, but nor, in the minds of UK consumers at least, are brands like Ogio and Etienne Dumont. I can't talk about any private labels Coles and Woolworths may be selling in Australia, but we did some research in Britain in which we discovered that more regular wine drinkers recognised an Ogio label from which the name and other text had been removed than could identify labels from Guigal, Louis Jadot and Cloudy Bay that had had similar treatment. Ogio, a Tesco-exclusive, is currently the 16th best-selling brand in the UK. Etienne Dumont, Sainsbury's private label Champagne is either the best or second-best-selling Champagne in the UK, depending when you're counting. Some private labels may be hastily-knocked up, short-lived shelf-fillers; others develop lives of their own and grow into "proper" brands, at least in the eyes of the consumers who buy them

If it looks, quacks and flies like a duck, I'm afraid it probably isn't an owl. Ogio may have begun life as a private label but I can think of a least one big wine company that would rather have it in its portfolio than some of the turkeys (sorry about all these birds) it's struggling to distribute profitably.

Ross, we live in a very changed world. Family ownership and heritage have value, but so does branding and, even more crucially, distribution. Once, companies that owned clothing brands manufactured clothes; Tommy Hilfiger changed all that. One of the youngest brands on the market and without a factory of any kind, it was more valuable (based on its sale for $3bn in 2010 to the owner of Calvin Klein) than long-established French fashion houses. 

One reason why some wine private labels have been so successful is the relative feebleness of the real ones. It would be far, far more difficult to launch a strong private label gin or ale; proper spirits and beer brands are just too strong. So, Ross, I'd humbly (well, not too humbly) suggest that, rather than complain about something that is not going to go away (supermarkets will do what suits them when all is said and done), you'd be better advised to focus on building your own fan base. The nearly 20,000 Facebook Brown Bros followers is not bad, but Gallo's Barefoot Cellars' 350,000 "likes" gives you a slightly higher target to aspire to. Similarly, Brown Brothers deserves more than 2,500 followers on Twitter. Your story - including the family-ownership - deserves to be told, and heard by a far wider number of people. We recently proved the power of social media when we launched WINESTARS, with almost no time and very little budget. I recently learned of a US (non family-owned) company that has built sales of over 1m cases across two new brands, exclusively through social media ("we do everything we can to keep them out of the hands of the traditional critics and media" was the comment).

The wonderful thing about social media, when properly and cannily used, is that it can reverse the balance of power: David's catapult versus Goliath's size.

With my very best wishes


Friday, June 08, 2012

Location, Location, Location... Or why moving the London International Wine Fair would not be the answer

As someone who has made no secret of his fears for the London International Wine Fair - unless some very big changes are made - I have inevitably  been at the receiving end of many visitors' and exhibitors' comments. Extraordinarily, to judge by the majority of them, the only thing the organisers need to do to revive the event is to shift it back into the centre of London. The problem with LIWF is that it's out in Excel, a difficult place to get to and absolute hell when the trains aren't working.

There's no denying the appalling nature of the UK capital's transport system and it's a good thing that there aren't any major sporting events due to be held here this summer, but to suggest that this is a really significant reason for the LIWF's problems is frankly ludicrous. Some 24,500 publishers managed to attend this year's London Book Fair, despite the insuperable hazards of the DLR, 33,000 caterers were at Hotelympia and a massive 48,000 people managed to get to last year's World Travel Market at Excel and a similar number is expected this year. 

So, either the wine world is simply more precious than the travel, catering and publishing professions, or the UK wine trade doesn't warrant a trade fair, or the one we've got needs some attention. Now, given the fact that an extraordinary number of members of the international wine trade somehow manages  to make its way to Cheshunt when it wants to present its wines to Tesco, Leeds for Asda, or Bracknell for Waitrose - to name but three big UK retailers - none of which is within a convenient  distance from Central London, I'd have to say that it's either the UK wine market or the fair that has a problem. Or both.

The imaginary Indian wine boom

Hold the front page! Indian wine taxes finally due to fall! Stand by for a China-style Indian wine boom!

Except that it isn't going to happen. Or at least not yet anyway. First there's the inconvenient little truth that every time a wine tax goes down in India, another one is levied to prevent wine from becoming affordable. But second, there's the rather larger fundamental fact that there is an anti-alcohol lobby in India that makes its counterparts in other countries look like pygmies.

This is the only nation that includes a call for total prohibition in its constitution. And lest anyone imagine that this is a long-forgotten joke by the original authors of that document, at the end of 2006, two members of India’s Supreme Court - Justices SB Sinha and PK Balasubramanyan – wrote, in a ruling on a case involving the payment of Bombay distillery fees, that  "Article 47 of the constitution clearly casts a duty on the state at least to reduce the consumption of liquor in the state, gradually leading to prohibition itself,

“It appears”, they continued, “to be right to point out that the time has come for the states and the union government to seriously think of taking steps to achieve the goal set by Article 47 of the constitution.". There is little likelihood of total prohibition being introduced, but nor is there much chance of anyone repealing the “Dry Day” legislation that effectively stops any kind of wine retailing on up to a dozen or more days per year. In Delhi, alcohol is still banned for anyone under 25, while the 1.3m inhabitants of Wardha District in Maharashtra have to wait a further five years until they are 30 before they can have a drink.

SB Sinha and PK Balasubramanyan were principally talking about spirits, of which many Indians, including supposedly teetotal Muslims are very fond. Very, very few people in India have actually been infected by the wine bug. Wealthy Indians who readily pay outrageous sums for luxury Cognacs or whiskies balk at splashing out on the top Bordeaux that fill the cellars of their British, American and Chinese counterparts and middle class Indians generally prefer whisky. India has an infant wine industry, but most of it is unprofitable and in the hands of people with little understanding of the business. It is revealing that the majority of the domestic production is centered on the table-grape growing region of Nasik, close to Mumbai, and within the control of the Maharashtra regional government which has offered large incentives to anyone wanting to invest in winemaking. There is very little proper retail infrastructure (most wine that is sold outside restaurants and hotels is still traded from non-air-conditioned shopfronts) and little real progress in sommelier training. London auction rooms rarely see Indian hands waving in competition with Brits, Americans and Chinese when top wines come under the hammer.

After several visits and after chairing three International Wine Challenges in India, and despite many absurd conversations with people who imagined that the subcontinent really does have a chance of competing with China to become a giant wine market in near future, I have been pretty clear where I stood.

I received further confirmation, as chair of the London International Wine Fair Conference in the excellent presentation by Spiros Malandrakis of Euromonitor on the BRICs. Despite its huge population and thriving economy, India, Malandrakis explained, is contributing negligeably to the growth in wine consumption in the developing world.

Just over a week after hearing those figures I was at Vinexpo Hong Kong talking to members of the Union des Grands Crus de Bordeaux who travelled there via the subcontinent. They had, they said, held reasonably successful tastings, but there was no real buzz. Other chateau representatives who had opted to travel via Brazil were far more energised by what they had seen.

But, say the optimists, If the taxes were to fall, surely that buzz would emerge, as it has elsewhere. After all, the British love fine wine and the historic links between the two countries and the use of English by educated Indians must count for something. Mustn't it? But if high excise and import duties certainly don't help, they are not necessarily an insuperable barrier. A passion for wine - or even just an eagerness to show off with a few great bottles  is rather like love. It will find a way. Brazil actually also faces obscenely high taxes on wine, but the market is booming. Until now, that boom has been in local and Portuguese (through old colonial connections) wines and bottles from neighbours like Chile and Argentina which belong to the same tariff-free zone. Now, there seem to be growing opportunities for other countries.

I'm sure that India will develop a wine market eventually and I know that people like Simon McMurtry of Direct Wines who has just invested in the Wine Society of India will be doing his best to accelerate the trend, but my money is on it taking at least five to ten years, by which time China will almost have certainly taken an insuperable lead.

Won't get fooled again

An adapted version of a column in the current edition of Meininger's Wine Business International

This is the story of a rather wealthy Hong Kong-based businessman we'll call Aaron (choosing a random name at the top of the alphabet).

Aaron is a regular En Primeur buyer, who places an order for a reasonable number of very top end wines every Spring. Like many other people, he did not get nearly as many bottles of 2009 as he would have liked, but overcame his disappointment and readily took the call from his regular merchant 12 months later. Demand for the 2010s he was told, was once again going to be high; he had the choice of drawing up a wish list with no guarantee of getting anything on it, or he could "buy forward". This option increased the chances of securing the wine, though possibly at a far higher price than he might want or expect to pay.

Aaron replied that he liked neither of these options. What he wanted, as a regular customer, was for the merchant simply to let him know what he could have and at what price. At this point there must have been a misunderstanding because the merchant presumed that Aaron was placing a firm forward order. A few weeks later, he phoned to say "I have some really good news! You're very lucky to have got all the wines you wanted, but I'm afraid they were a bit dearer than we expected". Aaron took one look at some of the prices and said "No thank you very much!"

"But you have to take them" came the response, "You ordered them."

"Surely", Aaron countered, "If I was so incredibly lucky to get them, you'll have a waiting list of other customers who'll be fighting to take those wines off your hands".

"You ordered them" came the obdurate reply. "You take them".

Aaron pointed out that his understanding of the law led him to believe that the merchant would have a very hard and expensive time trying to force him to do so, before finally acquiescing and taking half of the cases - and vowing never to have anything to do with that company again.

Aaron was not alone in not enjoying the experience of buying 2010 Bordeaux. Indeed, from what I understand, there are rather a lot of Chinese in Hong Kong and elsewhere who have not taken up their orders, not to mention a few high profile European merchants who have opted not to take up their allocations either.

The picture in 2011 is worse. Far worse. According to one negociant, this was "the worst En Primeur campaign in 30 years" with only 20% of the wine having found buyers. Call him or one of his competitors today and you might even be offered the latest vintage of some of the first growths that were so famously hard to obtain just twelve months ago.

"What I really resent," Aaron says "is being taken for a fool". And that is precisely the mood of many Chinese buyers. These are not unsophisticated people. Almost none of them adds Coke or any other soda pop to their Bordeaux and even if they can't speak English, they are often very well informed about what is being written and said about them in that language. When France's Nouvel Observateur revealed last year that "Asian millionaires' thirst for the best Bordeaux wines has sent prices skyrocketing, and the most prestigious Châteaux have been turning astronomical profits as a result.", they heard about it. When Time magazine article, in March 2011 talked of a "China-driven bubble" and offered various questionable explanations for the Chinese readiness to pay over the odds, including the story that the king of Thailand was prescribed red wine by his doctor, they heard about that too. Imagine what it feels to walk down a street and to overhear your neighbours gossiping about how much you've overpaying for your rent; that's precisely the way the Chinese are feeling today.

There are all sorts of reasons for paying over the odds for anything, as anyone in the luxury business knows, but essentially they all boil down to the buyer wanting or needing to make the transaction. 2009 Bordeaux was desirable wine, and like 1982 for a generation of new American wine drinkers, a great first step onto the wine ladder for Chinese novices. The "need" to buy 2010 and still less 2011 is far harder to demonstrate. It remains to be seen whether 2010 is or is not the finer vintage, as some UK critics claim, but without the head of steam 2009 received from Parker et al, it was not a must-buy. And certainly not at the prices that are being asked for 2011.

The recent Union des Grands Crus de Bordeaux  tasting at Vinexpo Hong Kong should give the Bordelais pause for thought. Two  years ago, a mass of Chinese tasters eagerly gathered to sample the 2006 and 2007 vintages; the words 'feeding frenzy' were used. This time, the wines on offer were 2009s. In other words, this should have been a very memorable event: the vintage of the century being presented in Hong Kong, the current hub of the wine world. And yet... it seemed to be far, far calmer than in 2010. The room was admittedly larger, so it was hard to judge whether there really were fewer tasters than two years earlier, but the fact that this was even being discussed speaks volumes; there certainly weren't more.

In the same building, in an admittedly far smaller room, Chinese tasters were queuing to taste examples of Grand Cru Chablis. In 2010, it is very doubtful whether the Union des Grands Crus de Chablis could have attracted any kind of audience. China was not interested in white Burgundy. Today it is. And it's increasingly interested in red Burgundies, white Germans, New Zealand Gewurztraminers and all sorts of  other fare.

If the producers in these countries treat the Chinese with respect, they may well find that the relationships they are building may last a little longer than Aaron's has with his London wine merchant.

Tuesday, June 05, 2012

What's in a name?

Could a beer company successfully launch a wine under its own brand? A Carlsberg Cabernet perhaps? Or an Adnams or Anchor Steam Albariño? Until quite recently, I'd have thought the question preposterous; now I'm far less sure. After all, it wasn't so very long ago that I'd have dismissed the notion of a wine company launching a vodka or a brewery selling a cider.

But Cupcake, last year's fastest growing wine brand in the US has indeed released an award-winning range of vodkas and AB InBev's Stella Artois Cidre has just recorded £36m in UK supermarket sales during its first year on sale. When Cidre was first launched, many industry experts dismissed its chances, especially given the strength of Magners its main competitor. But just under half of the Cidre sales were incremental to the cider and beer categories. The value of Magners sales actually grew by 21% by value across the same period.

But, I hear you say, beer and cider are quite different to wine. Well, up to a point, would be my response. When people drink best-selling sweet Californian "white" rosé, are they really drinking "wine" as traditionalists understand the term? I ask because, while researching consumer attitudes to a 5.5% pink South African wine with added flavours, few recognised that it was not one of those Californians. 
Booming sales of low-alcohol flavoured wines like First Cape's Cafe Collection from the wine aisles of UK supermarkets suggest that in Britain at least, there's plenty of flexibility in the way that consumers view inexpensive "wine".


Another example of the way that lines are being blurred comes with VINNI, a new launch by McGuigan (disclosure: a company for which I have provided consultancy and research). Unlike Cafe Collection, VINNI is technically and legally a wine - a 5.5% Moscato - but it comes in a pint-sized (568ml) bottle and has a label that describes it as "wine based refreshment". Tesco, the UK's - and the world's - biggest wine retailer evidently believes in VINNI, having just decided to list it in all of its stores.
It's rose, but it's not rose wine

Now please don't misunderstand me. I'm not saying that drinks like these are going to take over the wine market, but I'll lay a bet that - at the high-volume, lower end of the price spectrum - they will be increasingly important. And they deserve at least as much attention as the "Natural" wines that have commanded so much attention.

Since posting this I've discovered that Adrian Atkinson of Pernod Ricard asked this very question at a recent conference. Credit to him for raising it first!