20cm of snow in Stockholm today - the things we do for wine marketing!

Mike Ratcliffe
Warwick Estate & Vilafonte
P.O.Box 2 Elsenburg, 7607, South Africa

FOLLOW ME ON TWITTER www.twitter.com/mikeratcliffe

Vilafonte 2004 vs Mouton 2004

The Wine World in 2010: What to Expect

High unemployment, pared-down expense accounts and a glut of wine mean that in 2010 consumers will find lower prices and better selection

Not since the millennium folly in 1999 have I seen so much frenzy in the wine market. Back then, with stock markets booming, auction houses setting records for wines and Champagne producers warning there wouldn't be enough fizz for the celebration, producers were enthusiastic and bottles were getting pricier by the month.
What a difference a decade makes. With high unemployment, pared-down expense accounts and a glut of wine, it's the consumer's turn to make merry, with lower prices, more choice and less pretension. Those 99-point ratings don't seem quite so requisite any more to buying good wine.
So what do I see happening in 2010?

1. Prices will continue to drop across the board, from the priciest of Bordeaux and Burgundy to cult California wines that were once available only by subscription. This goes, too, for those Italian, Spanish and Chilean producers who thought that they could easily get the same kind of money those age-old French estates used to command.

2. More people will buy online. Consumers can go to sites like wine-searcher.com or vinfolio.com and compare prices for the same wine not just around the U.S., where many states now allow cross-state shipping, but in the U.K., Germany, and other countries. The spread can be amazing: a wine costing $40 in one store may be $75 in another. Wine stores will stock more inexpensive wines, which account for most of their profits.

3. Wine blogging will increase, mostly among those contending they've found spectacular bottles that will "blow your doors off" for under $15 a bottle. As with all blogging, readers should be wary of the source of such claims.

4. California, alas, will fail to back away from big, high alcohol, oaky reds and whites, because the producers believe that is the style most Americans prefer over subtlety and complexity. The problem is that cheaper wines of this style are so often dreadful, out of balance and undrinkable after one glass. California wineries talk a good game about finesse, but then they overripen their grapes and stick them in new oak for too long.

5. The tsunami of new wines from South America and Eastern Europe will ebb as the market overflows. Greek, Portuguese, and Brazilian wines have had good press in recent years, but unless they keep prices down, they won't make much headway.

6. New Zealand wineries will be in trouble. The country's recent prodigious harvests have glutted the market for their overly fruity punch-like style, and many fans want to move up in quality.

7. Champagne will be in serious trouble. It's not just that prices have gotten way out of whack, with too many selling above $100 a bottle, but other sparkling-wine producers have been canny about getting their bubblies well-positioned, well-priced and well-reviewed. Champagne is reducing output and holding back product already bottled to get some balance, but it's going to be a struggle to win revelers back from Italian prosecco, Californian sparklers and Spanish cavas. There are just too many Champagne labels out there.

8. Fine-dining restaurants will buy nominal numbers of expensive wines after trimmed expense accounts caused them to sit on their previous big capital purchases. They'll wait until guests are telling sommeliers, "Money is no object." Good luck with that. Fewer top-end restaurants will even open, and more modest new eateries will build wine lists with interesting, small labels from around the world and sell them at reasonable mark-ups.

9. More producers will switch to screwtops from cork stoppers in an effort to stem damage to the wines in the bottle from corkiness and oxidation as well as to make wine more accessible to the average consumer. The dirty secret is that most winemakers I talk to say they'd love to switch to screwcaps but fear buyers will think them cheap! Very dumb.

10. Americans will buy more wine at the $10-and-under level. The best bet for an expanding market is China, which is thirsty for good, inexpensive wine. And, like everything else, they'll soon be producing that themselves.

Review by John Mariani (Bloomberg)


Mike Ratcliffe
Warwick Estate & Vilafonte
P.O.Box 2 Elsenburg, 7607, South Africa

FOLLOW ME ON TWITTER www.twitter.com/mikeratcliffe

VIRTUAL TOUR OF CAPE TOWN GREEN POINT STADIUM – 2010 WORLD CUP SOCCER

2010 Stadium from the top in South Africa

Vilafonte wines about to hit Google Wave... watch this video below.

Vintners Hall of Fame 2010 class announced today by CIA in Napa - Zelma is a rock star!

The Culinary Institute of America (the other CIA) based in St. Helena, California today announced the Vintners Hall of Fame 2010 class. The five new members to be inducted are Randall Grahm, Andy Beckstoffer, Al Brounstein, Zelma Long and Leon Adams. When we toured the hall earlier this year (see below for video tour) Loni wondered, “where are all the women?” The long, dimly lit, barrel room on the second floor of the CIA is indeed a mostly male place with famous names and faces such as Robert Mondavi, Ernest and Julio Gallo, and Charles Krug. But there are a few woman who also adorn the hall and have left their mark on the industry. Carole Meredith pioneered the use of DNA to analyze relationships among grape varieties. Jamie Davies (along with husband Jack) forged a path of producing high quality sparkling wines. And now the hall will have its third woman, Zelma Long, who became one of the first woman to run both a the winemaking and business sides of a winery.

Wine Tube TV: The Culinary Institute of America in Napa Valley from StarkSilverCreek.com on Vimeo.
 

The ceremony will take place March 2010.

Vintners Hall of Fame, Class of 2010

Randall Grahm

Randall Grahm was educated at UC Santa Cruz and UC Davis, while earning a reputation as an “enfant terrible” for telling everyone he planned to make the first great American Pinot Noir. Instead, he found himself entranced by “ugly duckling grape varietals” thereby introducing American consumers to vinifera far beyond Cabernet and Chardonnay. His vintage 1984 wine “Le Cigare Volant” proved that it was possible to craft and sell great Rhône wine blends from California. His amusing marketing still defies and at times defines the pretentious approach, such as when he held a funeral for the Cork (aka Thierry Bouchon) in 2002. Grahm, a longtime proponent of biodynamic viticulture, downsized his production in 2006 to focus on small estate wines. His first book, Been Doon So Long: A Randall Grahm Vinthology, was published by U.C. Press in 2009.

Andy Beckstoffer

Andy Beckstoffer came to Napa as a corporate executive in 1969, after earning an M.B.A. from the Amos Tuck School of Business at Dartmouth College. Recognizing the potential for growth in premium wines, he started a farming company which he eventually purchased in 1973. Beckstoffer Vineyards has grown to be the largest vineyard owner, farming group, and winegrape seller in the Napa Valley and the North Coast, delivering grapes to more than 100 of the state’s most famous wineries. Andy Beckstoffer developed a formula for paying growers based on the finished wine value, thus reducing the incentive for excessive yield and focusing growers on quality. He has played a major role in preserving agriculture in the Napa Valley and has contributed to efforts to restore the Napa River.

Al Brounstein

Established in 1968, Al Brounstein’s Diamond Creek Vineyards was the first wine estate in California to be planted solely with Cabernet Sauvignon. Noticing three distinct soil types on his property, Brounstein became one of the first California wineries to produce different Cabernet Sauvignons from single vineyards (Red Rock Terrace, Gravelly Meadow, and Volcanic Hill) on the same estate, setting the stage for what was to become known as super-premium Cabernet Sauvignons from Napa Valley. His 1978 Lake Vineyard Cabernet Sauvignon – a wine produced only in exceptional years – was the first California wine with a suggested retail price of $100 a bottle—an important milestone in the production of premium wine from California. The graceful aging of Brounstein’s wines continues to be one of his main legacies to the fervent fans of Diamond Creek wines.

Zelma Long

After studying enology and viticulture at UC Davis in the late 1960s (where she was the only woman in her class), Zelma Long became the chief enologist at Robert Mondavi Winery, while also helping to establish Long Vineyards. She spent the 1980s and 1990s breaking the glass ceiling at Simi Winery as winemaker and CEO, becoming one of the first women to run both the winemaking and business sides of a California winery. Regarded as one of the early technical leaders in winemaking, Zelma has received national and international awards, including induction into the James Beard Hall of Fame in 1996 and receiving The James Beard Wine and Spirits Professional of the Year in 1997. Today she and her husband, Phillip Freese, are producing wine in South Africa under the Vilafonte  label.

Leon Adams

Considered a seminal historian of wine in the United States, Leon Adams is best known for his 1973 book The Wines of America, a comprehensive and ground-breaking history and survey of wine and wineries throughout the country, which celebrated American regional wines and their styles. Mr. Adams was a tireless advocate of the farm winery bills passed by many states in the 1970s and 1980s which eased the way for grape growers to open wineries and sell their wines retail and wholesale. Leon Adams was also a founder of the Wine Institute, a public policy and advocacy group for California wineries.

MARKETING REFLECTS CHANGING DEMAND OF NAPA VALLEY WINE

More than a year into the economic downturn, Napa Valley vintners are looking toward the future. “I think that we’re already starting to see a little bit of a turnaround as far as wine sales go,” St. Helena winery owner Kent Rasmussen said. Wine drinkers are buying more readily than they did a few months ago, he said, and retailers and restaurateurs are finally stocking up again. During the second quarter of 2009 — the last quarter for which information on sales tax revenue is available — winery sales in Napa County actually rose 3.9 percent over the second quarter of 2008. Spring 2008 was about the time that wine sales in Napa County first started to slip. Now, vintners are waiting on the holidays, when the bulk of their wine is sold, to see if there’s reason to be optimistic. “The fourth quarter is when the thing really crashed last year, so you better see a darn good increase this year, because a good portion of our production is sold during the holidays,” said Jack Cakebread, owner of Cakebread Cellars in Rutherford. “This is sort of the crunch time,” Napa Valley Vintners spokesman Terry Hall said, “because the fourth quarter really is the most active sales period for wine.”

 

The new ‘normal’

Regardless of how things go this winter, some say the Napa Valley wine industry may have changed forever. “I don’t think it can go back to normal,” Calistoga winery owner Laura Zahtila said. “I think we’ll have a new normal.” New Jersey wine merchant Gary Fisch agrees. “It will never be like it was,” he said, “and boy, did I like what it was.” Deborah Steinthal, founder of Napa-based Scion Advisors, predicts that $75 wines will move down permanently to $50, and Napa Valley wineries will be forced to reconsider their luxury-only portfolios. “I think we’ve got about three to five years to redefine our position in the world of wine,” she said, “and that means not just in terms of proving we can sell as much wine in the categories we’ve been selling in the past.” Ultra-premium wine producers could have an especially hard time if wine buyers permanently tighten their belts. “I think there’s going to be a lot less cult cab out there,” Zahtila said. “I think that wineries need to get realistic about what people should be and are willing to pay for their wine.” Bill Harlan, whose Harlan Estates wines go for up to $500 a bottle online, said he expects a shakeout in the next three to five years among cult wine producers, but he adds that those who survive will come out even stronger.

“I feel that if we stay the course and continue to work on producing better and better wines and build relationships one-by-one, then things will come back,” he said. Relationships may be the key to success, according to industry officials. As people change the way they buy wine, and as distributors change the way they sell it, wineries are beginning to focus more on selling directly to consumers than relying on other retail channels. “National distribution makes sense for some wineries, but direct is more critical to survival and growth,” Steinthal said. This may mean a new approach to marketing, one that emphasizes personal relationships with consumers. “If we just keep doing things as we have done in the past and hope things will eventually come around to the way they were 10 or 20 years ago, I think many businesses will be sadly surprised at the outcome,” said Ed Matovcik, vice president of Foster’s Wine Estates, and one of a group of wine industry representatives lobbying for fewer restrictions on local winery marketing events. Winemaker Mike Grgich said he believes that Napa Valley is entering “a new chapter of the wine industry.” “We can learn from this,” he said, “(but) we have to work hard and smart and learn new ways of marketing.” Some vintners say this means more than just changing their marketing techniques, it means changing to whom they market.

The younger generation.

Especially as Baby Boomers retire and cut back on their wine purchases, some wineries are starting to focus marketing efforts on the younger generation of wine buyers, including those born approximately from 1980 to 2000, known as the “millennials.” “The millennial category is really stepping up,” Steinthal said, “and wineries are learning how to market to millennials. Folks are really thinking through how to leverage the next generation of their family with a new category of customers, a new generation of customers.” Ceja Vineyards, for example, is one of the few wineries in Napa County that is actually expanding right now, and winery president Amelia Ceja attributes its success in large part to her children. “I have three children in their early 20s and they’re big on all the new technology and on the Internet,” Ceja said, “so that has been extremely helpful. We don’t do a lot of advertising, but our presence on online social sites has helped. We do a lot of videos and marketing on Facebook and Twitter.” Ceja said she and her children spend about an hour a day using Web 2.0 tools and social networking sites to market their wines. “It’s knowing what the customer wants and how to capture that customer’s attention,” she said, “and people are attracted to the millennials.” Ultimately, those who are quick to adapt may actually come out stronger than they were before the economic downturn. “In any kind of downtime, the industry gets stronger,” Steinthal said. “The innovators really show up, and so unfortunately, it means some folks drop out, but for the long-term health of the industry, the strong get stronger. Fisch agrees. “We’re entering a new economic age, and the people that can change and adjust will thrive,” he said. “The people that stick their head in the sand and say, ‘This is the way we’ve always done it and this is the way it will continue,’ I think will have challenges.”

Ken Forrester at the WOSA USA conference

Mike Ratcliffe
Warwick Estate & Vilafonte
P.O.Box 2 Elsenburg, 7607, South Africa

FOLLOW ME ON TWITTER www.twitter.com/mikeratcliffe

WOSA USA WINE MARKETING WORKSHOP

VENUE: Vilafonté Function Room, Bosman’s Crossing Stellenbosch

DATE: Tuesday, 17th November 2009 - Registration and coffee from 09h45.
PROGRAMME:
Matome Mbatha: Welcome 10:10 – 10:15
Matome Mbatha is Wines of South Africa Market Manager for Americas and Africa

Zelma Long: Successful American Brands 10:15 – 10:45
Zelma Long is one of Americas well known winemakers with an enviable international reputation. One of the first women to study oenology and viticulture at U.C. Davis; she began her winemaking career at Robert Mondavi winery, rapidly becoming the chief winemaker. Zelma will share her knowledge of the American consumer and what makes a successful brand.

Panel Discussion USA Marketing 10:45 – 11:30
Mike Ratcliffe - Warwick
Ken Forrester - Ken Forrester Wines
Charles Back - Fairview
Neill Ellis - Neil Ellis wines
& Zelma Long - Vilafonte:

Ken Forrester of Ken Forrester Wines, Charles Back of Fairview, Mike Ratcliffe of Warwick Estate, Neil Ellis of Neil Ellis Wines and Zelma Long of Vilafonté Wines will discuss and share their market experiences in the USA market. There will be ample time for questions.

Wine Tasting - Zelma Long: 11:45 – 12:30
Zelma will conduct wine tasting and discuss 8 wines selected from the USA and share her views on what the US consumers preferences are at different price points.

ROOTSTOCK: IS THE GRASS GREENER ON THE OTHER SIDE?

Rootstock invites you to our last event of 2009. We explore GREEN ISSUES in the winelands, viz Organic , Biodynamic , Bio-logic  and Carbon Neutral . Join us to hear from our panel of producers how they are applying their approaches, and what they are doing to make a difference to our environment. Participate in the panel discussion which will ensue. We encourage active debate from all present. We can all learn from their experiences, and invite you to ask questions, in fact if you would like to email questions to us before the event - we will pass them on to the speakers. Emails to info@rootstock.co.za. Our panel consists of:

- Michael Back from Backsberg on their Carbon Neutral work

- Michelle du Preez from Bon Cap on their organic production
- Johnathan Grieve from Avondale on their Bio-Logic approach
- Johan Reyneke from Reyneke Wines on his Biodynamic approach.

If you would like to contribute to the discussion - feel free to participate after they have made their 10 minute presentations.

- How do these approaches differ? How are they the same?

- What impact are they making on their environment?

- What impact are we making on the environment but not adopting similar approaches?

Bookings are essential through http://www.rootstock.co.za/ ONLINE only. You need to register with Rootstock to attend. Rootstock membership is free - but you pay for events attended

- Date: TUES 24th NOV 2009

- Time: 5.30pm for 6pm start until about 8.30pm
- Venue: Backsberg Estate (thanks to them for making their venue available and providing wines)
- Cost: R50 (to cover snacks) - bring cash with you

If you book and do not attend - you will still be invoiced accordingly. For any urgent matters please contact Judy Brower on 083 301 8569 or email info@rootstock.co.za