Monday, January 21, 2013

New Label Overload?

It was bound to happen.  The marketplace may be saturated.  Every time I turn around a new brand is rolled out or an extended product line is announced.  Customers have been conditioned to expect new and potentially exciting beverage options to appear on retailers shelves with more regularity than ever before.  Are the customers complaining?  Nope.  The producers are.
The problem has long existed for wineries, but now brewers are decrying the variety.  Shanken News Daily reports that "The number of active brewers in the U.S. has risen to a record high...[t]he figure represents  an increase of almost 20% from last year."
Sheer volume alone can create problems, but the same publication also mentions concerns due to bars rotating tap handles rather than dedicating certain spots for a longer period of time.  "The tactic - while often successful strategy for on-premise [bars and restaurants] operators - is damaging to all craft brewers."
Bob Sullivan of Boulevard Brewing in Kansas City, Missouri had this to say, "It's actually a disservice for new craft beer startups as they're getting even less of a chance to build their brands."  Restaurants and bars do not care about building a brand for someone else.  They want to build their own brand and they can do that by offering their customers new beers that constantly arrive on the market...from new and established craft brewers.
Sorry folks, the market that allowed craft brewers to exist in the first place - customers wanting variety - will also be a huge hurdle for you to clear to remain viable.

Wednesday, January 9, 2013

Price Increases Coming

I hope this does not contribute to the general doom and gloom so pervasive these days, but I feel this warning needs to be shared.
As reported earlier in these pages (2012 Harvest) you should be prepared for potentially significant price hikes based on a significant drop in production across the board in the European Union.  Shanken News Daily says the "price hikes on exports to the U.S. are likely in 2013, especially at the lowest and highest ends of the market."
Notably, Italian pinot grigio bulk prices are up over 20% so look for that segment to become even more expensive that it can already justify.
Burgundy saw harvest amounts "down by as much as 40%" and Champagne had "as much as 30%...destroyed by heavy rains and mildew." Most are not complaining about quality though, so if you can accept the new prices on the shelf for these areas, you will be happy with what's inside the bottle.  The Languedoc's prolific 2011 vintage "will help blunt the effect's of 2012's short crop." [All above quotes from Shanken News Daily]
To temper the confidence of those with wine to sell at potentially higher prices, be aware that Chateau d'Yquem, the storied Sauternes producer, has decided not to produce a vintage.  According to their blog, "Mother Nature was simply too contrary in 2012 to enable us to produce the sort of quality associated with the Yquem name."  Bad October weather is blamed.
That prices will increase for many European wines remains a given.  Whether the confidence of some producers about the quality of the vintage is realistic remains to be seen.