The United States of Wine
Independence Day has again come and gone. It's one of my favorite holidays because it SHOULD have real meaning for every American. It also gives me the opportunity to watch eyes roll when I tell the story of Jefferson and Adams both going on to their eternal reward on the same day, 50 years after the signing of the Declaration of Independence and declaring at the end of the story, "Jefferson Lives".
But I like Independence Day also because it also provides an opportunity to contemplate the state of our Union. Spending Independence Day with wine industry folk means that contemplation is focused on the state of our wine union or, better put, the state of our wine industry. This year the conversation rolled around to how to fix the industry.
The idea of "Fixing" the wine industry today seems vitally connected to fixing our economy, which, it appears, is still broken and awaiting an influx of jobs. How can more jobs be created in the wine industry? The simplest way to accomplish that is to get the economy moving and selling more wine. But that again goes back to fixing the economy. Catch 22.
However, myself and my fellow revelers did have the presence of mind whilst consuming excellent wines to discuss what the industry itself needs in order to make it more vital; to provide it with an enhanced foundation by which to thrive when our economy does start to turn around. Below are some of those changes, enhancements and revolutions that are necessary to see the re-invigoration of the American wine industry.
1. Make Wine Drinking An American Pastime
Nothing would invigorate sales of wine more than instilling in the minds of Americans the natural inclination to consume wine. Of course achieving such a thing is the most difficult item on this list. But here's what I know. We are a society who's proclivities are driven by pop culture. We are people demanding to be entertained and who respond to entertainment by emulating those that entertain us. Putting wine visibly into the hands of our celebrities, be they Hollywood, sports or political types, would spur sales in an enormous way. This may sound silly, but someone tell me that "Celebrity Wine Judging" on FOX wouldn't spur interest in wine. Someone tell me that more sports figures making wine wouldn't create interest in wine. Someone tell me that prominent politicians highlighting local wine industries as the exact kind of jobs we need in America wouldn't sell more wine. Someone tell me that more movies and television shows that feature wine wouldn't spur interest in wine. It would, all of it. But, this campaign to place wine at the center of our culture would need to be coordinated. There's the tricky part.
2. Emergence of the Small, Specialty Wholesaler
Many wineries, despite their promotion of direct to consumer sales and shipping, would happily sell a good percentage of their wine to wholesalers if they could work with a small, engaged, wine-knowledgeable wholesaler that really marketed their wines and were not burdened by having to focus so intently on huge mass-marketed brands. We need to see the emergence of far more Specialty Wholesalers in strong and moderate wine markets. These are the kinds of wholesalers that wineries would get forcefully behind and help move goods. We need wholesalers who can not only get behind smaller brands and really market them but also use every ounce of new technology to promote those brands and who also understands the needs of the wine savvy restaurants and retailers in their marketplace. The revitalization of the wholesale tier is vital to the future of the American wine industry.
3 De-mandate the Three Tier System
Giving wineries on the one hand and retailers/restaurants on the other the legal means to do business directly without the use of a wholesaler and to do so across state lines would spur tremendous innovation inside the American wine industry not only in the realm of marketing but in the logistics channel too. While it is a simple task for all involved to assure taxes and fees get paid, the real problem in achieving this kind of systemic change is political. Legislatures across the country would have to be pried out of the hands of the wholesaler lobby who have argued for years that only wholesales are capable of providing the states with an efficient tax collection model. While absurd, this notion is strongly ingrained among policymakers and regulators. Yet, the benefits to de-mandating the three tier system and making the use of the wholesale channel voluntary would play a huge role in re-vitalizing the American marketplace for wine.
4. "Buy Local"
It seems self evident that real and stunning growth within the American wine marketplace could best be found among wine producers outside the primary wine producing states of California, Oregon and Washington, but what's key to the growth of these local industries is a forceful campaign to "buy local". Illinoisans need to commit to buying Illinois-made wines in greater number. Residents of Missouri should be drinking more Norton. Virginians need to be encouraging the growth and prosperity of their local wineries and vineyards. There are trends in place, particularly in food production and consumption, that make this seem possible. But it may take much more effort by local, state-based organizations to truly kick-start the "drink local wine" effort. However, if successful, it means that not only will local wine industries gain more support and greater prospects for success, but also as Americans continue to be the mobile people they are, appreciation for these wines will spread across the country as we bring our affinity for these wines from out past places of residents to our new places of residence.
5. Reduced Mark-Ups in Restaurants
The excessive mark up of wines in too many restaurants is criminal—well, not really "criminal", but certainly obscene. Wines with a $20 suggested retail price from the winery will often end up on wine lists at $50 or $60. Wines with retail prices of $40 often cost $120 or more. Diners who will happily pay a $250 food bill for a meal for 4 people won't balk at buying a couple bottles of wine if it is fairly priced. But when they know that wine can be had at retail for much less than half of what they see it priced at on the wine menu they will often stick with a glass or two. A movement among America's top and medium-end restaurants to reduce wine list pricing will immediately lead to more sales, quicker turn around of inventory and happy diners.
SIX BENEFITS OF MAKING YOUR OWN WINE
The tradition of making wine is thousands of years old. Wine is a delicious drink, enjoyed internationally, by all socioeconomic classes. Wine unifies people at meals and is known to encourage truth. “In Vino Veritas” or “In Wine Truth” goes the Latin saying. But why make it yourself?
Pinch your pennies. Buying wine at retail is expensive. Sin taxes are large ones. When you make your own wine, it is taxed as a food product, and the savings are passed on to you. Why not make great tasting wine for 1/4 to 1/3 of what you’d pay at retail?
Fewer Chemicals. Homemade wine contains less than 1/5th the preservatives of commercially produced wines. Many people react to commercially produced wines because it can contain up to 350 parts per million of sulphites. Homemade wines tend to contain less than 75 parts per million.
Drink Wine – Save the planet! You can reuse your own wine bottles for decades. When you make wine, you sterilize and re-use your bottles over and over. This means less landfill or energy used to recycle your used bottles.
So easy – anyone can do it! Visit your local winemaking shop. They will get you started. Anyone can do it – honestly! Have your winemaking shop do the processing for you or do it at home.
Consider the health benefits. Drinking a glass of wine a day (especially red) is good for you. It is suggested that one or two glasses of wine per day could help promote a longer life and a stronger heart. Plus, red wine contains antioxidants and resveritrol – known to arrest the aging process.
It’s a hoot. Wine making is a great excuse to get together with your friends and family. Host a wine tasting. Share batches with friends and loved ones. People love to try new wines and pairing wine with food is easy – simply Goggle “ how to pair wine with food”
Mark Whalen operates The Wine Butler, a local store where people save money by Wine Making Toronto style! Come check them out at winebutler.ca
Thanks for encouraging people to drink local. We’re all about local wine and love to hear others buy in as well.
Nice article, Tom. Some old themes put together in a useful whole. Some will be harder to achieve than others but each deserves attention.
–Making wine a national pasttime is, as you say, the most difficult of all. It is not hard to see that wine drinking happens in two kinds of places–where it is made and where people with money congregate. I have a theory that the CA wine industry could do worse than to partner with or even invest in wineries in other states that have real potential like Michigan, Virginia, Texas with at least a look in to places that have had or still have vibrant wineries at times like Ohio, Arkansas and Missouri.
–Buy local. Totally agree, and that is why I like the idea of building up the wine industries all over the country. Buying local does not mean not buying broadly as well. Increasing local production across the country will increase wine consumption and ultimately wine awareness.
–Wholesalers and The Three Tier System. You would have a better idea of this than I, but I wonder which comes first–de-mandating the three tier system or the development of a small, specialty wholesaler class?
–Restaurant pricing. I wish I thought accomplishing this were easier than doing away with the three-tier system, but as long as a buck can be made, some folks are going to charge what the market will bear on the theory that they make more money on high wine prices than low.
–If I were making your list, I think I would have added–make wine available in grocery stores. At the prices that most wine sells for, it is not a major intoxicant but a mealtime beverage. Wider distribution, especially in places where people are buying food will not lead to more public drunkeness but will lead to higher tax revenues to the states and the opening up of wine as a beverage that is for everyone.
Tom,
Nice article. I agree with 90%, but I disagree about the need to develop more “specialty” wholesalers. In the key markets of the Northeast, there is an abundance of such wholesalers. (I would argue too many currently.) In the NYC market, it seems that every day another “Sommelier” opens a wholesale operation, selling more wines that are $40 retail and $100 wine list items whose QPRs are terrible. They never seem to stop and think about why they can open a business and immediately represent 10 Napa wineries. It’s because the other 25 (or more) wholesalers already said no.
Perhaps in other markets there is a lack of wholesalers, but certainly not in the key Northeast markets. (NY, NJ, MA, CT)
Mr. McCann, if I might ask a question.
If other wholesalers have already said no, it would seem that the alternative is either no representation for such wineries or the new specialty wholesaler who is willing to represent the brand.
I don’t see how QPR, which after all is in the eye of the beholder, enters the equation as to whether or not someone should be able to start a business. If the product mix is a bust, the biz will be also.
It’s hard to expect people buy local when they can get similar tasting or better tasting wine from France or Italy for half the price.
Perhaps Americans wine consumption would go up if wine was promoted more as an essential accompaniment to food than as a cocktail.
Mr. Olken:
I agree with you. My point is that these specialty wine wholesalers already exist in great numbers, at least here in the Northeast. However, their failure rate is very, very high… they open a business and then look for wineries. The wineries without representation are rarely worthy of representation, but the new wholesaler has to sell something. (Thus, the terrible QPR of the wines he is trying to sell ultimately is his undoing.) In fact, I think that this has artificially propped up wineries with suspect business plans. It of course eventually bites them when these small wholesalers fail to pay their bills and then fold.
The idea of wholesaler consolidation leading to fewer wholesalers is a myth. The consolidation has taken place among the large wholesalers, not the small specialty wine guys who have been around for a long time and whose ranks are added to every year.
Mr. McCann–
Thanks for your response. It is, however, a continuing complaint of new, small wineries that they cannot get distribution because the existing channels are jammed–even in the populous East Coast.
Philly–
People will seek out value, and if value cuts into “buying local”, so be it. But buying local does not, a priori, mean paying over the odds. There is a whole snobbism thing that goes on here–on both sides of the buying local equation.
In this neck of the woods (SF), there are restaurants in Sonoma that only list Sonoma wines. None of that yucky Napa stuff for them. In San Francisco, there are, by contrast, restaurants that do not list any CA wine. One very good restaurant I patronize because the chef/owner is great, Slanted Door, has virtually no CA wines on its list because the Somm/wine buyer says CA wine does not fit the taste profile of the food. I personally think the winebuyer is a Euro-snob of the first order. Buying local ought to be about two things–and QPR is only one of them. The other is finding and supporting locals who are trying to advance the cause. I wonder if that is a lot harder in PA than in some other places.
Mr. Olken:
Correct, the channels are jammed, but not at the wholesale level. There is only so much wine that can be sold… if CT went from 38 to 48 wine wholesalers, would that really help the new wineries? How many wholesale reps can an account see, how many wines can they taste?
I especially like point #3. I live in Massachusetts where we deal with amazing amounts of bureaucratic meddling between wine producer and consumer. I would very much like to be able to shop for wine online exactly the way I shop for shoes. In the 21st century, it seems incredibly backwater that this is not the case.
Today, at its blog, The Legal Pulse, Washington Legal Foundation (WLF), a nonprofit public interest law and policy center, posted a commentary on the CARE Act and its ramifications for interstate commerce and regulation of the multi-billion dollar alcohol industry: http://wlflegalpulse.com/2010/07/13/care-proposal-more-effective-state-alcohol-regulation-or-just-more
For more information about WLF, please visit our institutional website at http://www.wlf.org. Thanks very much for you time, and we hope you enjoy the commentary.
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