The Top Wine Stories of 2015
It has been an interesting year in wine. No single story dominated the wine news. There was no economic disaster. There was nothing that had an overwhelming impact on the wine world. Still, a diverse set of very interesting stories emerged from the U.S. wine world. Below are those stories from 2015 I thought most important, particularly for members of the wine trade. They are in no particular order. However, I can say that the story listed as #1 will have the most long term impact on the wine business and it is a story that has barely been covered.
1. Middle Tier Consolidation
In the span of a couple of weeks it was announced that Wirtz Distributing in Chicago would merge with Charmer-Sunbelt, while also reported that Southern Wine & Spirits would merge with Glazers. With these mergers of giant wholesalers, it can be said that a mere four different wholesalers control more than half of retail wine business in America. The consolidation hasn’t increased to the point where the feds might look at the consolidation, but anyone who produces wine understands that this kind of power invested in so few wholesalers, combined with the state mandated three-tier system that requires producers to sell to wholesalers, means that it’s all too easy for wholesalers to completely control the relationship between producer and distributor. And that’s a bad thing since wholesalers rarely demonstrate any interest in the interests of their producer “partners”, let alone consumers.
2. Lake County Fire Devastates Region
The gigantic and fast-moving fire in Lake County this summer burned over 500 homes and displaced more than 13,000 people. Lake County also happens to be home to a vibrant wine industry. Though some vineyards burned and a few wineries were impacted, it appears that no severe catastrophe impacted the industry in Lake County. As for smoke taint such as was experienced in 2008 after many fires broke out that year, it appears that the smoke from the Lake County fire dissipated rather quickly as well as blew away from the region, which is good news for the Lake County grape industry.
3. Arsenic In Wine Accusations Come Up Short, But Provoke Scare
In March, news broke that a laboratory in Colorado had discovered extremely high levels of arsenic in numerous wines, primarily high production low-cost wines. A class action lawsuit was filed against the wineries. It was a perfect storm of bullshit. The claims made by those who tested the wines that the levels of arsenic were dangerously high did not take into account the amount of wine one would have to drink to see any impact from the arsenic in wine. It took the wine industry a while to respond to the lawsuit as well as the life or death headlines that appeared in nearly every major publication across the country. But when they responded, they responded well, offering information on the bogus nature of the claims. However, this episode should serve to remind the wine industry that whether true or not, claims about a product can have devastating impact.
4. Drought in California
Severe drought in California continued to have a huge impact on everyone, including the wine industry. The fear is that the severe drought will continue on into 2016 and beyond. It’s for this reason that the prediction of an El Nino in the coming months (not the actual arrival of that wet phenomenon) nearly made it into this post on the top wine stories of 2015.
5. Meiomi Purchased by Constellation Brands
The $300+ million purchase of the Meiomi brand by Constellation gave us all an indication of just how fast a new brand can grow in today’s marketplace. The Meiomi brand grew from 60,000 cases to more than 600,000 cases in just four years. the growth of the brand should also give us all an indication of the continuing tendency among American wine drinkers to covet sweet red wines.
6. Direct To Consumer Wine Sales Surge
In January ShipCompliant and Wines & Vines released their annual study of direct shipping and showed that in the previous year sales of wines that were ultimately shipped direct to the consumers increased by a whopping 15.5% over the previous year. The Direct Shipping channel rose to account for more than $1.8 Billion and more than 3.9 million cases. The report demonstrated that the shipping distribution channel is by far the most robust today.
7. Oregon Comes on Strong
The buzz is strong in this one. Oregon is on a roll in so many ways. In 2015 we saw continued investment in vineyard land, more than 90 new wineries open their doors, continued support for strong pricing of Oregon wines and continued media interest in Oregon wine. There is no reason to doubt that there will continued interest in Oregon’s wine industry going forward and not just from the media and the trade.
8. Illinois Lawyer Sues Wineries for Millions in Bottom-Feeding Frenzy
Unless you are a winery that got hit with a lawsuit by a private lawyer in Chicago asking you to pay millions in fines for following the direction of the Illinois Department of Revenue, you probably are unaware of this story. However, in 2015 hundreds of wineries and retailers across the country got hit with a shakedown operation run by a bottom feeder in Illinois. It cost wineries hundreds of thousands if not millions in what essentially amounted to blackmail payments. The situation is still ongoing with the courts now involved.
9. Empire Wine in NY
Over the course of 2015 the Empire Wine saga in NY played out in a regulatory environment, in the courts and in the Albany Statehouse. In essence, the New York State Liquor Authority (NYSLA) attempted to run a New York wine retailer out of business by accusing it of breaking the laws of others states when none of those other states ever asked the NYSLA to do a thing. The retailer was never charged with wrong doing by any other state, let alone prosecuted or convicted of anything. Yet, the NYSLA attempted to shut down Empire wine for allegedly shipping wine to other states in violation of those other states’ laws. Empire sued the NYSLA. Meanwhile, the New York legislature passed a law prohibiting the NYLSA from ever attempting to do such a thing again. The bill awaits Governor Cuomo’s signature. It was an object lesson in how regulatory authorities are too easily capable of overreach.
10. America’s Most Important Direct Sales Company Sold
Most people like to talk about mergers among wine companies or purchases of wineries and winery consolidation (I do too, see above). But in 2015 one of the wine industries more important service providers was also sold. In April, ShipCompliant was purchased by Sovos Compliance. ShipCompliant is one of the most essential companies in the wine industry. It processes millions of direct to consumer transactions every year, assuring those transactions and the wineries carrying them out are in compliance with the various state wine shipping laws. In many ways, ShipCompliant IS direct sales in the United States. To-date, the purchase of ShipCompliant has appeared to have no impact at all on their winery clients or the services they provide.
11. Wine Train and #LaughingWhileBlack
The single most important story in 2015 that put Napa Valley in front of readers (and TV watchers) was that of the renowned Wine Train’s decision to ask a group of women (primarily African-American women) to leave the train in the middle of the ride for being too disruptive. News spread across the country of the Wine Train’s decision to ask these ladies to leave for allegedly #LaughingWhileBlack. The ladies are suing. Meanwhile, many have noted that The Wine Train regularly (once a month, apparently) ask patrons to leave for being disruptive and those ejections are most commonly not of African-Americans. It certainly isn’t the kind of story Napa Valley wants to see in the media. However, it provided a number of lessons for the wine industry.
12. Foie Gras Returns to California
In January a federal judge struck down the California law banning the production and service of Foie Gras, that most delicious of deliciousnesses. The judge ruled that the ban encroached upon the regulatory domain of the federal government. Most chefs and a good many lovers of deliciousness didn’t care what the grounds were for overturning the law. They cared about something else. The SF Chronicle put it this way: “Menus across the Bay Area were being hastily rewritten”. Indeed they were. Three cheers!