Tuesday, September 23, 2014

Let's Raise the Price Again, They're Still Buying!

Financial reading is dull and usually has little to do with wine, the only regular link is that they both involve my wallet. Last night, however, two articles by the same author reminded me of pricing insanity that has long been part of the wine world. 
A fund I have a small investment with apparently bought some of the stock mentioned but their decision better not have been based on either article. The analysis began by admitting the company was having trouble attracting customers but then said everything is fine because they are making more money off of fewer people. In fact, his delirium over this so infected the author he continued to say the sky was the limit. Sure, as long as people are willing to pay $1,000 a ticket and $50 for a hamburger, the sky might be the limit. 
Steve Martin did a routine about this decades ago where he calculated how much money he was making and how much he could make. Eventually he reached a high enough ticket price, assumed a five digit audience count, figured he could retire and announced, "One show and goodbye!"  
Bordeaux, Burgundy and California, among many others, are all guilty of the same backward logic. We can make more money if we just charge more! That's great until one day you realize you've pushed it too far and revenue begins a slow (if you're lucky), steady decline. At first customers might keep coming/buying but less frequently. Then lots of them will find something else to do/drink. Suddenly your loyal cash cows are grazing in someone else's field and they're not coming back.
During the wild price escalations of the late 1990s I asked a winemaker from California how some people priced their wines. He told me the in vogue method was to gather a handful of similar wines from the area and taste them blind with a wine made in house. While the tasting was technically blind, winery people tend to recognize their own product and rate it more highly then the others, almost without fail. Then they would price the "winner" higher than the other bottles on the table. This led to prices spiraling out of control with, seemingly, no end in sight. It was a nightmarish Escher print of high end grape juice.
It happens on the spirits side too. Allow me to quote Stoli Group USA's president from this article in Shanken News Daily
“We’ve successfully moved our price up to premium, which was one of our goals this year,” says Esposito, adding that Stoli’s retail price now sits at around $25-$29 a 1.75-liter and $19 a 750-ml. “Previously, we were $3-$5 a bottle below Absolut. So right now we’re moving toward that, and we’ll continue to move it up. It’s where the brand belongs, and now that the advertising is there, we have a great opportunity to justify our pricing.”
Wow, wow, wow. No mention of changing quality, just a higher price - followed by advertising to justify that increase. If I drank Stoli and read this, I would be looking for another vodka, quickly. They are far from the only ones employing this style of pricing but this is just so blatant it was impossible to ignore.
But I never thought this upside down logic would reach the financial sector. In addition to the specious argument that declining attendees and higher costs result in a sound investment the author admits there is a lot of debt and that operating expenses are rising every year. Sounds great, how do I invest? Oh wait, I am invested...bye, I've got a call to make.

Wednesday, September 17, 2014

Huber Heritage - an Indiana Gem

I "discovered" this winery at Vintage Indiana in 2013. Miss Wright and I tried a lot of wine that day. She had visited this farm in the past but hadn't fully explored the wines. We had a stellar tasting experience with that day, including tasting with the winemaker - always a nice treat.
Huber's is a family run operation, since 1843, with wine production coming in the late 1970s. All of the wines are estate based. The winemaker admitted that sometimes they run short on fruit due to you-pick-'em sales but those issues are limited to non-grape-based wines like their blueberry port. If extra fruit is needed for these wines it is purchased from other Indiana farms.
The Heritage wine I purchased that day clearly wanted some time to develop in the bottle and I tried to offer that. Eventually, the temptation overtook my desire to let it age and I opened my bottle for some friends.
The bottle claims the blend in 65% cabernet sauvignon and 35% cabernet franc.
The website says 45% cabernet sauvignon, 40% cabernet franc and 15% petite verdot. I am going with the website since that specifically references the 2008 vintage. The back label does not. Plus, I'm pretty sure I tasted petite verdot...see below.

Heritage 2008 - A round dollop of oak greets the nose along with deep red and black fruits and even a little hint of mint. No green, herbal flavors, but mint, like I sometimes find in Aussie shiraz. This wasn't so pronounced that it reminded of a Thin Mint Girl Scout cookie but it was much closer to that than a mint julep or mojito. The wine fills the mouth nicely, from the roof to the tongue and is clearly rich without feeling heavy. The color is impeccable - no browning despite the age and the bright violet rim leads to an opaque purple core. Petite verdot provides great color and contributes to the fleshy texture of wines and I would be hard pressed to believe there is none in this blend. The flavors come in layers and the wine evolved while we drank it.
I continue to be amazed that they can achieve the ripeness with a grape I do not associate with the middle of the country. Cabernet franc loves the sun but thrives in cooler climates. Cabernet sauvignon, to my palate, demands sun and warmth or else it can taste of bell pepper and feel sharp, almost punishing.
While $40 (the current price, I think I paid $30) is more than I usually pay for a bottle of wine from anywhere, much less Indiana, this wine should be the calling card of Indiana wines. If you're a wine fan from Indiana, or visiting Indiana or want a distinct gift for a wine lover in your life, this would be an excellent choice.
If I was helping to develop the Indiana Wine Trail, I would be sure to include this in any tasting for high profile wine writers. This is the kind of bottle that can reshape perceptions and all of Indiana's wineries would benefit.
I look forward to visiting Huber in person and can't wait to try more of their wines.

Thursday, September 11, 2014

Winery Spin Unspun

This is the first in what I envision being a series of articles taking winery PR or writing and debunking it. Being able to put a nice shine on a pile of something you might not want to step in always amazes me. This practice is particularly egregious in the wine world where far too many people are confused and the spin patrol only serves to keep them that way. 
Don't worry, this won't take long...
Diageo, a massive liquor/beer/wine company, is preparing to release a new line of wines called Woodwork. I nearly did a spit take when I read their information. 
"Diageo Chateau & Estate Wines has launched Woodwork Wines, a brand with three varietals. The wines are created using wood staves instead of barrels, which is a lower impact on the environment and allows more robust flavors, according to the company."
You can read the other few sentences here if you want.
Vintners have used wooden staves for a long time but I have never seen anyone brag about it. It saves money not the environment. Oak for barrels is mostly farmed now so no one is out cutting down old growth forests. 
Wooden staves, less expensive than actual barrels, are placed into stainless steel tanks to flavor the wines with oak (I assume they're using oak, they only say "wood"). However, when you're saving money you rarely go the extra mile of allowing the wood to age and mellow (seasoning). This means that what you have is a very raw product that will indeed result in "more robust flavors." I would view this as a potential flaw, not something to brag about, although staves are superior to wood chips and sawdust, two other inexpensive ways of getting wood flavor into wine. Still, you have to hand it to them, spinning this money-saving technique into being environmentally friendly is brilliant. Especially if you can keep a straight face.
A true barrel allows the wine to breathe and soften and develop while stainless steel tanks do not. For crisp, fruity whites that lack of oxygen contact is a bonus, preserving their freshness. Woodwork is producing chardonnay, cabernet and pinot noir, all varieties that benefit from some air. 
Bizarrely, the Diageo website has no reference to the brand and, at a different time of year, I might write this off as a prank. However, Shanken News (the industry daily from the Wine Spectator) also featured the same press information so I have to believe it's real. Perhaps they're already backpedaling and rebranding? 
Good luck to them, I won't be buying.

Wednesday, September 3, 2014

Stop the Vino Vitriol

Create an organization in pursuit of a reasonable goal and you will have enthused participants go too far. Their actions or statements will then rile up people who feel threatened or wronged and the entire undertaking can devolve into a pointless exchange of unpleasantries that pretty much misses the point entirely. The gloves come off, civilized discourse devolves into name calling and most people tune out. This is the nature of politics but it shouldn't happen over wine.
Steve Heimoff reported yesterday that James Laube wrote an editorial in Wine Spectator that "comes out swinging against Pursuit of Balance." "The Empire Strikes Back: Laube Takes on IPOB" is the title of Mr. Heimoff's piece. During the summary paragraph Mr. Heimoff says, "Jim has presented his case cogently and respectfully." I disagree. You can sort of read the article from the picture Mr. Heimoff posted but you must subscribe to the Wine Spectator to read it more easily. However, anyone can see the title, "Dim Somms." There is nothing respectful about that.
I have no skin in this game. James Laube routinely bestows rave reviews on wines that I find to be over the top. Many of his favorites are too lush and too oaky for my palate but most of these are very popular. He and I do agree on some wines. Mr. Laube's status in the wine world as well as his predilections have set him up at the opposite end of the spectrum from IPOB.
In Pursuit of Balance focuses on California chardonnay and pinot noir and desires wines where terroir appears. I like the concept but they have gotten off base as well. The entire exercise feels like a clique of cool kids promoting indie bands you've never heard of and sneering at you if you mention a band that's played on mainstream radio. It all seems a bit like work...as does drinking more than half a glass of some of Mr. Laube's choice wines.
IPOB's manifesto says nothing about alcohol levels but that has become the big point of contention. There are sommeliers who will not even taste wines above a certain level as there are people who sometimes buy because of that same elevated percentage. Mr. Laube makes a good point about alcohol levels not being absolute on wine labels. Producers in California have 1.5% to play with if the wine is actually below 14% or 1% if they tip the scales over 15%. (If you don't want to strain your eyes trying to decipher his piece on Steve Heimoff's site, read an earlier post from me that discusses this, here.)
Unfortunately, some zealots decry wines in sweeping generalizations that confuse, or anger, their customers. These fanatics are not all supporters of IPOB and this sort of vinous bullying has existed far longer than that organization. I remember a soon-to-be famous restaurant opening in New Orleans in the 1990s that refused to carry white zinfandel. The sommelier didn't consider white zin 'real wine' and planned to offer (force?) those customers to drink German riesling. Customers complained and eventually, as I recall, some white zin was available, if not actually on the wine list.
The fine balance of offering what people want and what you want them to experience is a challenging one for restaurants. I'm sure seeing a delicate dish being crushed under the ponderous weight of an over-oaked monster is frustrating to sommeliers but my 20+ years in the wine business has taught me you don't win converts by forcing them to drink the wine you want. Let them drink what they want and offer a taste of something you recommend. If/when that clicks, you will have an ambassador of you and your employer. If it never does you will still have an appreciative customer because you are offering something extra, allowing them to explore.
The wine world is large and varied and far from absolute. There is no reason to denigrate wine styles that are not your favorite, they are not foes to be vanquished. Palates change and tastes evolve. Nurture your passion, share it when appropriate, but don't try to browbeat others into joining your cult of wine.
In the meantime, wine "professionals" yelling at one another and uttering wild generalizations will not serve to enlighten anyone. I thought the idea of wine writing and education was to share insight and offer options so people could make the best choices for their palates. If no one else likes the wines I like, that's okay. I don't need confirmation of approval, in fact, it might mean more for me...and at better prices.