Wednesday, November 28, 2007

Weekly Wine Industry Memo

Wine Industry Innovation

Coppola's wines-by-the-glass and mini sparklers: A wine offering 'you can't refuse'

Movie director and producer Francis Ford Coppola, who spends most of his time tending to his Napa Valley winery, specialty foods business (pasta and pasta sauces) and restaurants these days, has introduced an innovative wine-by-the-glass packaging option for some of his Napa Valley, California-produced wines.

Francis Ford Coppola Rosso (Cabernet Sauvignon) and Bianco (Pinot Grigio) wines-by-the-glass.

The ready-to-drink wines are designed to be popped open at events or at home when only a glass of wine is desired, rather than having the bottle go to waste or have to be refrigerated. As we all know, white wine never taste's as good after being opened and refrigerated. And in the case of red wine, the unfinished bottle has to sit out with the cork in it. The result: the wines' usually end up getting pured down the drain after a couple days.

New types of packaging such as Coppola's wines-by-the-glass is aimed at getting non-traditional wine drinkers to try the fermented fruits of the grape. In particular, this target market is focused on young people who tend to choose spirits or craft beers over wine. The idea behind Coppola's glass of wine serving option is that it will appeal to these younger consumers not only because it's different and unique but also because it's convenient. This convenience factor is designed to appeal to traditional wine drinkers as well of course--and get them to buy the wines-by-the-glass to drink at settings where they might not otherwise serve wine.

Coppola hasn't stopped its innovation with the wine-by-the-glass items however. The winery also has introduced "mini sparklers," sparkling wine varieties in a mini-can and in a juice-type box with a straw. The sparklers are named Sofia (after Coppola's daughter) and come in a slightly sweet Pinot Banc blend, Sauvignon Blanc, and Muscat Canelli. The sparklers are inspired by Italy's light and fruity Prosecco. Coppola also owns a vineyard and winery in Italy but the sparklers are made from California-grown grapes and produced in Napa.

Coppola Winery's mini sparklers; three varieties of sparkling wine in a can and in a mini juice-type container with a straw. We call them sippy cups for grown-ups.

This downsizing, or minis trend, exemplified by Coppola's wines-by-the-glass, mini cans, and juice-type container minis with a straw, are part of a larger trend in the wine industry to package wine in smaller containers and in alternative ways. It seems to be working according to recent AC Nielson research. Sales of single-serve minis (187 milliliters or 6.3 oz) have been increasing significantly more than those of the overall wine market. Minis sales are up 10.3% this year, compared to about 6% for all table wines. Wine industry experts say much of the growth in the sale of the minis is coming from young people, who are being drawn to wine because of the innovative and convenient packaging.

[For an interesting look at how one group of young people (generation Y college students) is embracing wine, read this story from the the Golden Gate Express, the student newspaper at San Francisco State University in San Francisco, California. The article, Fine Wine Strikes Generation Y, talks about how San Francisco State University students are exploring wine in large part because of the wine industry's new product development initiatives and packaging innovations, along with the fact that premium quality wines likes Charles Shaw's "two-buck-chuck" are in their price range.]

As a director, Coppola was know to be a bit of a maverick. It served him well in his movie making career, and just might do the same for him in the wine business. To paraphrase Don Corleone in Coppola's Godfather trilogy, "The wines-by-the-glass and mini sparklers might just be an offer younger drinkers just can't refuse."

Screw top wine bottles gaining ground for premium wines

The screw-cap fastener used to be reserved for inexpensive jug wines like Gallo's Carlo Rossi
or its infamous Thunderbird brand wines. However, that's been changing radically over the past five or so years. Premium wineries in California, and even in France, more and more have been using screw-top caps on their best wines of late, and it's a growing trend.

In fact, Tesco, the third largest retailer in the world, recently announced than more than half (55%-65%) of all wine sold in its stores now has screw top fasteners on the bottles. Tesco's supermarkets carry extensive wine selections, including lots of premium wines from all over the world.

Many Napa Valley, California premium wineries like Plump Jack, which was one of the first to do away with corks in favor of screw caps, also are using screw-cap bottles for their finest, and most expensive, wines. In fact, many wine experts argue that today's modern screw-caps are superior to natural cork, especially for red wines, in that they don't allow oxygen to reach the wines as they age and prevent contamination caused by chemicals in some corks which can make red wine taste musty.

Natural cork also is an endangered species. It's harder to obtain and as a result much more expensive. Hence, the reason you also are seeing so many synthetic, plastic-like corks in premium wines today, along with the expanded use of screw tops.

From sports nutrition bars to premium wine: Clif Bar makes a (long) line extension

Gary Erikson and Kit Crawford, the Northern California couple who founded the successful sports nutrition brand Clif Bar (as well as the Luna Bar), have diversified into the wine making business. And, not wanting to let a successful brand name go to waste, they've named their wine brand Clif Bar Wines. The wines are produced at the Clif Bar Family Winery and Farm, owned by the couple, in Northern California's Napa Valley.

On the farm, the couple grows organic fruits and vegetables, raises free-range chickens and turkeys, and produces bio-diesel fuel, which they run all the farm equipment and their own personal vehicles on. The couple is part of the Slow Food movement and supports small, artisan food producers through their businesses.

But, back to the wines. Clif Bar Family Winery sources the grapes for its wines from their Napa Valley neighbors and from grape growers on the nearby north coast. They say they try to buy either organically-grown or sustainable-farmed grapes for all their wines but it isn't always the case, depending on availability, price and other variables. The winery's mission is to produce sustainable, premium quality wines.

There currently are five wine varieties available under the Clif Bar brand. There's the 2006 vintage Climber, a white wine blend; the Climber 2006, a red wine made from North coast-grown grapes; Kit's Killer Cab (named after Crawford), which is a Napa Valley Cabernet Sauvigon; Gary's Improv (named after Erikson), which is a 2003 vintage Napa Valley Meritage; and lastly there's a 2004 Napa Valley Syrah. It has no special name like the others. Erikson is a mountain climber, which is where the first two wines get the inspiration for their names.

The wines use the same brand name and logo as the company's Clif sports nutrition bars. We aren't sure however if the wines give one the same energy lift that the sports nutrition bars do. We doubt it. In fact, if they did we would be disappointed.

We also aren't sure if the line extension from sports nutrition bars to wines is a good one. Time will tell we suppose. Perhaps Clif Bar wine and sports nutrition bar tastings will take off as the next hot trend for parties? The bars give you energy, and the wine brings you back down again. All fun aside, the wines have received good reviews and are attractively packaged. You can read more about the wines and the Clif Bar Family Winery and Farm here.

Wine Industry Notes:

Fat Bastard Wines names top ten most pretentious figures in the U.S.: Fat Bastard Wines, a wine described by Newsweek magazine as a "Wine for the anti-snob," has built it's reputation in part by mocking the sense of self importance often seen in the wine world--and elsewhere in society. As a result of Fat Bastard's loathing of self-importance, the company created its "Fat Bastard Most Pretentious Poll, a poll of 100 lifestyle section newspaper editors from throughout the U.S.

This year's top ten is a who's who of media whores. Coming in at number one is Donald Trump, followed by Paris Hilton and Fox News host Bill O' Reilly. After the top three, fourth place honors go to Rosie O' Donnell, actor Tom Cruise, Presidential candidate Hillary Clinton, British spice girl turned Beverly Hills professional shopper Victoria Beckham, supermodel turned talk show host Tyra Banks, rap star and activist Kanye West, and last but not least, chairwoman of the "I hate underwear" club Britney Spears.

You can read more about these choices, including some choice comments about them, here. Something tells us we won't see any of these ten sipping a glass of Fat Bastard wine anytime soon. But come to think of it, since Fat Bastard is the wine for the unpretentious, we doubt if any of them has even tried it before.

Wine Retailing

Supernatural grocer Whole Foods Market, Inc. has been chosen as the 2007 Best Wine Retailer of the Year by the Wine Enthusiast Magazine. This is the first time a supermarket has received the magazine's prestigious Wine Star Award, which recognizes excellence in the wine industry.

The Wine Enthusiast said, in giving the award to Whole Foods, "Whole Foods Market has worked hard to establish its wine departments as must-visit destinations in a supermarket setting by focusing on providing a high level of customer service and a wide selection of wine varieties, characteristics and prices. Catering to each of its local communities, the wine departments at Whole Foods market stores also focus on locally produced wines."

The judges listed the following innovations by Whole Foods and its Wine Team members, which helped the grocer win the award. These features include: enomatic wine sampling stations in the wine departments which allow customers to try a wide range of wines by the ounce or the glass, wine seminars, food and wine pairings and tastings, and lots of signage and communications, educating shoppers about wines from the basic varieties to higher-end premium wines.

Whole Foods' new Market Bistro, like the one pictured above in its Potrero Hill store in San Francisco, is a combination restaurant and wine bar. The grocer is placing Market Bistros in most of its new stores.

Whole Foods also has been an innovator in selling organic, biodynamic and sustainable wines, including those in innovative "eco-friendly" packaging. The grocer also recently introduced a new in-store food and wine feature which it's putting in most of its new stores. That feature is an elaborate in-store wine bar/bistro called the Market Bistro. The wine bar offers an extensive selection of wines by the glass. Food items in the Market Bistro also are paired with wine selections for customers.

In accepting the award, Geoff Ryan, Whole Foods' national wine buyer, said the supernatural grocer is "working hard to change the face of wine purchasing and merchandising within the supermarket setting to provide high quality, affordable, unique wines." Ryan says the grocer's goal is to make its wine departments a destination for current and new shoppers. Creating the full experience of food and wine by pairing food and wine and creating complete dining experiences is part of that strategy for Whole Foods, according to Ryan.

Wine Enthusiast magazine has grown to be one of the most read and respected wine publications in the U.S. and internationally. It currently has a readership of about 700,000 per issue. The magazine rates and reviews wines in addition to writing about many aspects of the wine industry and the convergences between food and wine. It present its Wine Star award annually.

Wine Retailing Notes:

Big demand by Brits for big-bottled bubbly: Consumer demand for bubbly in big bottles causing holiday shortage in UK. Consumers in the United Kingdom (UK) have acquired such a huge taste for sparkling wines and champagne that retailers there are saying there likely will be a shortage of the bubbly for the holidays. Of particular concern, is premium bubbly in large bottles, which the Brits and others in the UK have learned to love.

According to a recent story in the, famed UK wine merchant Berry Bros, & Rudd says it's considering instituting a waiting list system for customers who want magnums and jeroboams (the real big bottles) of champagne and sparkling wines. In fact, the wine merchant says its seen sales of bubbly double in just the last two weeks alone.

Consumer demand for the larger bottles of champagne and sparkling wine has been increasing so fast in the UK that production hasn't been able to meet it. Industry experts there say the trend caught bottlers by surprise, which is why they're so behind the demand curve with production. Additionally, the more premium and expensive the bubbly, the more in demand it is. Berry Bros. & Rudd says getting hold of the large bottles of the best champagne is getting near impossible as it gets closer to the holidays. Sounds like lots of celebrating is going on--in a big bottle way.

Organic wines at top of trends list: Organic wines, along with craft beers and signature cocktails, top the list of top restaurant beverage trends in the just released National Restaurant Association annual beverage trends survey. The survey of over 1,000 professional chefs found alcoholic beverages are among the hottest culinary trends in restaurants in the U.S. currently. the professional chefs, all members of the American culinary Federation ranked craft beers as the hottest trend, followed by energy drink cocktails, martini's, mojitos, artisan liquors, organic wine and specialty beers in the top 20 culinary trends for 2007-2008.

Organic wines aren't just popular diner drink choices. The chefs said they're using the wines in various innovative culinary ways. For example, the chefs said they are using organic wines (as well as other premium wines) in deglazing, reduction and sauce preparation. They also are using the wines to prepare wine-flavored ice teas. The most popular wine varieties for these interesting drinks are Chardonay, Cabernet and Merlot. Food and wine pairings are a growing trend the chefs say, and with the fast-growing popularity of organic foods, the organic wines are becoming popular for organic food and wine pairing events. Fruit-flavored and rose/blush wines also are hot say the chefs.

The growing popularity of organic wines at restaurants mirrors their growing popularity at retail. This trend also dovetails with the growing "mainstreaming" of organic foods and the sustainable, buy local and "green" food movements. In fact, the survey also identified what the chefs say are the hot food trends in their restaurants. At the top of the list are organic foods, local produce, sustainable seafood, grass-fed beef and free-range meats and poultry of all types.

A&P buys wine merchant as way to upscale wine merchandising: The A&P supermarket chain has decided to pursue an interesting strategy to grow it's wine merchandising capabilities. The supermarket chain has acquired Best Sellers, a New York City wine merchant/retailer famous for its Great Wines for Everyday Merchandising strategy. That strategy focuses on selling wines by flavor rather than origin, and does so at reasonable prices.

Joshua Wesson, Best Seller's co-founder and a wine expert, will join A&P as the grocer's director of beer, wine and spirits. Best Sellers has five retail locations. A&P says it plans to keep all the stores located in its core market, which is all but one which is located in Boston. That store will be sold. The larger strategy however isn't operating the Best Sellers stores as much as it is bringing the wine merchant's merchandising strategy, and Wesson's expertise, into A&P. The grocer will use this new talent to revamp the wine, beer and spirits selections in its stores using the Great Wines for Everyday Merchandising philosophy.

A&P has been revamping its food merchandising, moving from a conventional approach to more of an emphasis on specialty and natural foods, premium quality prepared foods and other upscale offerings. The move into more extensive and premium wine merchandising fits well with the grocer's overall change in merchandising strategy. Just as specialty, premium and natural/organic foods are the fastest growing categories at retail, so to are beverages in these categories. In particular, premium and organic wines, craft and specialty beers, and innovative signature cocktails are hot. The Best Sellers acquisition should give A&P a specialty food and beverage one-two punch in their new merchandising program.

Tesco's wine chief to Aussie wine industry: "Put the personality back into wine:" Dan Jago, who runs wine merchandising for British retailer Tesco, the world's third largest retailer, recently gave a scolding to Australian wine producers at the 13th Annual Wine Industry Conference in Melbourne.

At the conference yesterday, Jago told the winemakers they've been resting on their laurels. "I would really, really ask you to put the personality back into wine," he told them. "For too long you've been saying 'this is good because it's Australian.' You have to tell us why it's different."

Jago went on to expalin what he meant more specifically. "I would also urge you to make your wines lighter and more refreshing," he said. "Wines with 13 or 14 percent alcohol just aren't exciting anymore, and consumers are looking to the 'old world' for more refreshing wines."

Did the Australia winemakers listen? Well, Tesco is the largest overseas buyer of Australian wines, and one of the top retailers if wines in general in the world. The British-based mega-retailer also is considered in the industry to be one of the best at merchandising and selling wines.

Jago did offer some positive words to the Aussie winemakers though. He told the group he sees "considerable opportunities" for Australian wine exports in terms of gaining market share and profitability. He suggested that as an industry in general, and as a retailer (Tesco) in particular "we're running to hot on promotions right now." As such, "You shorten the life of your brands by over-spiking them," he told the winemakers. His solution: "Let's reduce promotional participation" in general. In other words, he let them know Tesco plans to cut back on its promotional activity in the wine category.

Jago urged the winemakers and marketers to embrace change, telling them "If you don't change, others will change faster." That's likely good advice for any industry. However, we can't help wondering if the Aussie's will invite Jago back next year?

Tesco's Fresh & Easy offers its own version of two-buck-chuck: British retailer Tesco's new Fresh & Easy Neighborhood Markets venture in the U.S., which is sort of an IGA neighborhood grocery store meets Trader Joe's. is taking a wine merchandising page from the Trader and offering its own version of a two dollar bottle of wine.

Fresh & Easy's version is called Big Kahuna, an Australian Shiraz imported for the retailer by Cornerstone, a new U.S. subsidiary of Copestick Murray, a wine company based in Wiltshire, England. Copestick Murray is a major wine supplier to Tesco, and the British-based retailer brought the company along with it to the U.S. to import many of the wines it sells in its Fresh & Easy grocery markets. Thus far 13 Fresh & Easy stores have opened in Southern California and Nevada and more are on the way.

Fresh & Easy also is selling another private label wine which is getting rave reviews, especially for its price-to-quality value. The wine is a Recoleta, an Argentine wine. It's a blend of Malbec, Argentina's primary red wine, and Bonarda. The wine sells for $3.99 bottle. We're told by a couple wine lovers in Southern California that they bought all the bottles in one of the Fresh & Easy stores after buying a bottle a couple days earlier and loving it--and it's price. They call the wine "premium four-buck chuck."

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