Wine Exchange – Page 2

THE BURGUNDY PARADOX (Steve’s Burgundy rant)

‘You are SO going to want these’
-Stephan Tanzer on the 2015 red Burgundies

It’s that time again, the bane of all wine merchants…a great vintage in Burgundy.

Why is that a problem? Why would an outstanding vintage in one of one of the world’s most revered wine areas be an issue at all? Wouldn’t that just make for more exciting wines for us to sell? Well, on the surface, yes it would be, if you only consider the positive sales aspect of having more good things to offer. The problem is the nature of Burgundy itself. From the production side, other than a few large negociants, the majority of the landscape is small producers making limited bits of variety of different wines based on small holdings in the region. Production of each individual wine is limited because the holdings are small. All-too-often these various little wines are offered as a ‘package’ (the operative word is parcel) in not particularly advantageous (from a sales perspective) assortments. For that reason, they are rather difficult to market profitably (or succeed in breaking even for that matter).

So why does anybody do it? Sadly, if you ask most long time wine folks what their most memorable vinous experience was, there would be a disproportionate large percentage who would count Burgundy experiences as their most treasured memories. As those who have been around wine for a long time will also tell you, Burgundy is the cruelest of mistresses. It can provide ethereal moments. But you can spend a lot of time and money trying to recreate the experience again, usually being disappointed most of the time because the wine is in a funny place developmentally or simply doesn’t live up to lofty expectations. That is simply taking it from the ‘drinking’ perspective.

The problem is, when you ‘hit’ one, all of the past travails are forgotten. All those disappointments fade from view and you are lost in the moment. Thus the process starts again. It is almost narcotic in how those experiences can haunt you, and we understand how someone can get swept up in the pursuit of Burgundy because the good times are so good. It drives rational people to consider things they would not otherwise. There are those who will tell you can get some of the greatest Burgundies in existence for $300-400 dollars a bottle even now with world wide demand at an all-time high, whereas top vintages of Bordeaux (Lafite, Petrus, La Pin) cost a lot more.

Point taken, but we’d rebut that you won’t likely get the actual wine for those prices as quantities are small, demand is well beyond supply, and there is usually a requirement to perform something else to secure those gems. The actual importer will only dribble out the ‘cherries’ to their very top customers, usually as a reward for exceptional past support, and even then there is usually a hitch. You can find things on the open market in Europe, but usually bundled in such a way with other wines from a producer’s portfolio (either lesser wines from the same vintage or remnants of past vintages) that even with the most creative math don’t make business sense.

So is this a new problem? Not at all. It is merely a worse manifestation of something that has existed for a very long time, exacerbated by that increasing world-wide demand for Burgundy and the physical limitations of the region. You cannot make Burgundy bigger. If you did, it wouldn’t be the same. Therefore a greater pool of folks clamoring for a piece of a fixed production asset only drives the price up and the creativity of those who broker these wines increasing the cost of making that mistake.

The whole growing demand for a limited production wine is not the end of the problem either. The typical affirmed Burgundy buyer is the most finicky in all of the wine world. He usually has the money to buy the best, and the temerity to expect restrained pricing as he moves in on the crème-de-la-crème. On the other side, most Burgundy producers expect their importers to buy everything they are offered, every year, regardless of proportions. As an estate’s popularity rises, so do their prices because the estate can always seem to find another buyer somewhere in the world. The ‘parcel’, as we called it previously, is typically a mix of a fair bit of the entry level (Bourgogne) and ‘Village’ wine, a few crumbs of the tippy-top Grand Cru cuvees, with a disproportionate chunk more-than-you-would-ever-buy-on-your-own Premier Cru bottlings at or near prices that the Grand Crus were just a few years ago.

In the olden times, Burgundy was sold the same way, in parcels. However, back then, the pricing was conducive to selling the different prestige levels to different tiers of the marketplace. The prices were moderate enough that buyers for the ‘entry’ and ‘village level’ wine that you could market the wine to people as an alternative to domestic Pinot Noir. You would have to wait a bit on the Premier Crus until their time had come, but they still went head-to-head with top Caifornia bottlings price-wise so their would eventually be an opportunity. Their top-notch Grand Crus eventually found a buyers. But as prices escalated on Burgundy overall, the prices went up on the higher end things to where even the most affluent Burgundy fans had to think about it, if in fact they could even find the wine for sale.

At that point, most collectors were still ‘ in’ for the top 2-3% at the higher prices for the top tier. But they had no interest in anything else. One could develop interest in moderately priced Bourgogne and ‘village’ level juice in a great vintage vis-à-vis Pinot alternatives. But with the rising prices overall, it was the ‘middle’ that killed the market, or at least the sanity of playing at all. In a world where lieu dits (village vineyards marketed under the vineyard name…typically a cut above the ‘standard’ bottlings) are now in the $50-60 range and Premier Crus from top guys had three figure prices, value was out the window. The pricees left them out of the reach of most buyers, and, since they were not the top, of considerable less interest to those elite buyers who could pay the freight.

At the low end, there were folks that were interested in the value Burgundy section provided the prices weren’t scary high. You could find buyers that were interested in Bourgognes and village ‘Vosne Romanee, though they have been a much tougher sell for those that have escalated price-wise. Usually Bourgognes that were in or near the price of domestic Pinot value versions ($15-30) still found buyers as long as the tabs didn’t stray too far away from the price ‘comfort zone’.

In summary, you could find buyers for the top tier as long as you didn’t charge too much. You’d have a tough time selling those entry level wines at fair prices from bigger named domaines. And there was n0 one to buy those Premier Crus, which often made up 30% of the dollar value of a parcel, except at a sometimes substantial loss though you could simply think of them as ornaments. Does that make any sense from a business perspective in a great vintage? Of course not, and that is without even considering having to buy other, less economically feasible vintages previously (and having them as ornaments, too) to establish your place in the pecking order. Even then, some Swiss guy could drive to the domaine with cash and likely get a portion of ‘your’ prime allocation cellar door (see also Napa Valley). Are we conflicted? Burgundy does that because, in the end, when it is right, it is magic. Otherwise no one would bother.

A $30 Bourgogne from a top producer in a great vintage? Just think of it as top flight Pinot and it is competitive. A $200-300 Grand Cru? Hey, if you have the funds, they are the best of the best. But who buys the ‘middle’? The guy buying at the top wants the ‘top’. The prices of the middle are 2-3 times (or more) greater than the entry level stuff, and beyond the financial reach of most folks. So those expensive Premier Crus have no market these days, and will essentially collect dust long after the others are gone.

We are pretty creative, but the Burgundians are in the driver’s seat in a vintage like 2015. Someone will buy these wines somewhere at whatever price the market will bear, but at that point it is far beyond what makes sense as a ‘business proposition’. We have seen a number of stores and distributors get crushed from within by the Burgundy mistress. We feel particularly sorry for them. Like we said, they have to play the game or get kicked out of the queue in a vintage like this, no matter how bad the proportion is within the offer. Even worse, they would have to have bought the prior two vintages, one that was kind of crummy (2013) and one that was quite good but no one cared (2014) because the ‘good’ vintage was on the horizon. So two vintages that weren’t going to sell to anyone for the right to buy a third that was only 40-60% viable? Do the math. Even the government can’t make that make sense, yet people still do it.

Is it sour grapes (no pun intended) on our parts? Nope, just reality. This is the most difficult region for consumers (and most of the wine trade) to understand, and easily the most difficult financially from a return-on-investment (or even rational?) perspective. We have spent a number of seasons on the sidelines over the years, simply not buying anything of note because the cost is too much. We do it with our eyes open with the understanding that it might hurt our chance to get the kind of crummy, overpriced ‘bundles’ that will be the ‘main course’ of the high demand vintage that 2015 promises to be. Hey, if we don’t buy 20 cases of wine we will probably have to sell at cost or below to move through to get three bottle of some kitchy Grand Cru that we could never charge enough for, the upside is that we have a much better chance of being here when the next ‘vintage of the century’ comes along.

So if you want to know where the waiting list for the 2015 Roumier Musigny is, it’s right next to the unicorn registry.
We have tasted enough of the 2015s to tell you that these wines are epic. They bring back memories of our favorite vintages of all time like 1985 and 1990 in that they have great stuffing, sufficient structure, and are at the same time oh so sexy. These are the kinds of wine that can make smart people do dumb things (we could make the appropriate comparison to romance but we won’t).

For our part, we’re going to fight to get everything we can, but don’t feel like we have to sell our souls. In a juicy vintage like 2015, where areas that don’t usually get as warm had unparalleled success, a few new faces will appear on the scene, and a few new importers will try their hand at selling Burgundy, we will (and already have) found some delicious things to sell without mortgaging the farm. We have tasted great vintages of Romanee Conti, for which we are thankful. But we have also seen an angel or two in a Marsannay from a right vintage at the perfect point in its development. For us, Burgundy is our desert island wine. There are a number of pain-averse ways to approach the subject in 2015 if the goal is simply to find great wine to drink. We wish it was easier. But that’s Burgundy.

Winex Launches New Sale Site!

UPDATE: THE SITE IS NOW LIVE – CHECK IT OUT AND SUBSCRIBE!

Wine Exchange is excited to announce to you, our amazing friends and customers, that we are launching a brand new website dedicated to offering even more incredible wine deals! Don’t worry, our daily offers from Winex aren’t going to disappear. In fact we are launching this new brand as an outlet for all of the amazing offers that we just don’t have the means to send you the traditional Winex way.

As loyal customers of Wine Exchange we’re giving you the opportunity to get a sneak preview of how our new site will work and to sign up to be among the first to take advantage of the deals once the site goes live in a few short weeks. Think of it as an exciting new flash deal site with a few other fun bells and whistles. You’re going to see some of the best deals that the buying team at Wine Exchange has ever come across, but you’ll have to be fast. Check out the look of the new site below and sign up at the bottom of the page to be on the email list for sale notifications. As an extra incentive we’ll send you 20% off your first order!

The three tier system

The term ‘three tier system’ is used to describe how the alcoholic beverage market works in most states. The term is tossed around rather liberally, particularly in articles regarding the ongoing battle of shipping wine to adults across state lines. This has been a hot button issue for at least the last quarter century, and we are sure a lot of consumers wonder what all of the fuss is about. We thought it might be a good time to touch on this issue. It’s complicated, and we should definitely recuse ourselves as we have a definite bias. But here goes anyway.

So what is the three tier system? The explanation is simple enough. It is a system in which each segment of the market is focused on a specific aspect of that market. At the origination level, either wineries (distilleries too for that matter) are producing wines which they then sell to wholesalers or importers are bringing in wines (or sprirts or beer for that matter) which they in turn sell to wholesalers. The wholesalers in turn sell the products to retailers and restaurants who, in turn, sell to the public. The flow chart is simple

Producers/Importers sell to>Distributors who sell to>Retailers/Restaurants

Couldn’t be simpler on paper. But in this ‘eliminate the middleman’ world we live in, there will be someone who will ask the obvious question ‘why do they need a wholesaler?’ Why not just sell direct to those retailers and restaurants? Wouldn’t the price be better without the extra markup? Pretty logical, right? Well, not really and, of course, it’s all about the money.

As you may know, some wineries do sell direct. Usually though they are limited volume brands that have a very tight control on where their wines go and don’t have to spend a lot of money on sales. Their brands are popular enough that buyers seek them out or consumers demand that the outlets carry them. In those cases it is often the case that the cost savings is minimal because the winery would just as soon pocket both ‘cuts’ of the distribution system. Also, out of state, wineries need to have a distributor either for the sake of functionality, or (often) by law.

Because they need to leave a little space to allow the wholesaler in the other states to make a profit, the winery will fix the ‘export’ price at one level (FOB) and then charge the ‘wholesale’ price here in state and keep that portion themselves, effectively selling it to everyone nation-wide at the same price. This provides what the wineries love to call the ‘level playing field’ for one and all. We could go off on quite the rant about how ‘level playing fields’ are like unicorns and leprechauns in that they are an interesting myth (and we still might do that someday). But today we are more on about the ‘why?’.

So why do wineries need distributors at all? Don’t they make more money if they sell it in the way described in the last paragraph? Yes, they do. But only a tiny portion of the winery roster has that kind of clout in terms of demand and can afford to put their own small sales force out in the market for business development and maintenance. Others that don’t necessarily have the situation to support their own sales force will offer their wines through a brokerage, paying a small commission to the seller.

So there still isn’t a reason to go with a distributor, you say. Why not minimize that middle tier cost? Like we said, it’s about the money. Usually brokers can’t sell enough of one winery’s produce to make a living. So they will assemble and represent a group of wineries, giving them more wines to offer clients. On the flip side, there is less time to focus on each of those individual wineries because there are still the same amount of hours in a day (except today of course) and they must attempt to sell everything. So the winery’s ‘sales force’ is marginalized as the representatives must spread their attention among the group. And at the end of the day, the winery themselves are responsible for collecting the money for the wines that the brokers have sold. That is easier said than done.

There are a lot of good operators out in the retail/restaurant marketplace, but also a lot of flakes. It doesn’t take long for a few slow-pays or bad-apples to run up some serious arrears that amount to thousands of dollars. Such sums can be crippling to a lot of wineries. As we have stated before in other pieces, the winery rep has to work very hard just to even get a placement in most restaurants, and then if they have to go back and try and collect that money, even if they are successful, it takes time away from selling.

The distributor model takes away all of that financial risk by buying the wine and reselling it, But they will need to be compensated not only for their investment, but their expenses of maintaining a sales force. And the distributor doesn’t necessarily want to operate as a de facto collection agency. They want the ‘good apples’, to. So typically the arrangement is all or nothing. The winery geets a smaller cut, but their money worries are greatly reduced. The distributor’s existence, the maintenance of an infrastructure, sales force, and as a collection arm, has to all be financed by that extra margin. Wineries love restaurants over retail 90% of the time, but restaurants are still one of the highest failure rate businesses, making money problems part of the territory. It’s not rocket science. Physics is much more predictable.

There is also the delivery system, and the maintenance of other services that the winery would otherwise have to arrange themselves. This model, as we said, largely eliminates financial risks (we say largely because sometimes distributors go under, too, though rarely). It also affords the winery to concentrate on production, broad market planning, going to lunch (see ‘broad market planning’), or whatever they feel they need to do.

Are we saying we embrace the distributor model and feel it is important to maintain the ‘three tier system’? Sort of. We are saying that the model exists for good ‘market’ reasons. In a lot of states, the arcane laws give the distributors almost ‘gangland-like’ fiefdoms, but that’s just the way it is (money, politics, etc.). The bottom line is there is a need for some manifestation of this service in virtually every market.

A winery could sell all of their wine to a big-box store or national chain. That would eliminate the need for a distributor. But they also wouldn’t end up with any other customers and pretty much be at that store’s mercy in time. Distributors ideally mediate that by spreading the product far and wide. It’s just like ‘diversifying your portfolio’ by establishing a broad and varied customer base.

So as to our take on the three tier system is, ‘we don’t have a better idea’. It works well enough and stabilizes the market enough that we can spend time looking for the seams and cracks and pockets where the ‘deals’ reside. The ‘system’ provides options for us to get the things that we want. The middle tier does serve a purpose because the market needs those services and they also absorb some risks. This is from guys (us) who are less in need of those services than most.

What we aren’t keen on is how some of the ‘modern’ distributors are playing fast and loose with the system, and how some of the wineries and importers are playing fast and loose with the distributors. Something’s got to give, but we’ll get into that another time.

VIDEO: THE EXTRACT INTERVIEWS WINEMAKER TROY KALLESKE

Have you checked out our Youtube channel, The Extract? It’s a weekly video series dedicated to wine geeks and cork dorks from novice to expert. We talk shop with wine producers, growers, and makers from all over to bring you candid discussions about wine philosophy, technique, and most of all…passion.

Here’s our most recent interview with Australian winemaker Troy Kalleske of Kalleske Wines. Troy’s family has been around the Barossa block growing grapes for over 160 years but somehow Troy is the first generation to actually make wine with them!

Enjoy.

Gauging Temperature: What happens when my wine gets hot?

Throughout the years we’ve always found ourselves caught up in discussions about the effects of certain things on a bottle of wine, predominantly temperature. Now we could be like much of the industry and simply stick to the perfection rule that all wine must be kept between 52 and 65 degrees through all of its life or it will be ruined. That not only refers to the storage in your home or office, and the temperature of the place where you acquired the bottle, but all points in between including the weather through which it is shipped from beginning to end. In a perfect world, sure, why not? But let’s face it, things in your life are rarely this perfect.

It gets warm, it gets cold, and people make mistakes. We aren’t going to try and tell you that those fears are overblown. But there are people out there that think anything short of perfection is actionable. They think that the UPS driver should be there at a specific time to avoid any prolonged ride on the truck when the temperature is over 70 degrees, and that the driver should wear insulated gloves so as not to transfer any body heat to the wine when he touches it. Yea…right. With all of the new virtual reality stuff that’s happening these days, maybe someone will come up with that perfect world. But in the meantime, it isn’t realistic.

We once saw a merchant claim in a written advertisement that all of his wines came in refrigerated trucks. Hmm… ‘Long haul’ trucks might be refrigerated. We shipped a lot of loads from a Washington State importer with a company that also hauled fish. Sometimes the truck smelled, um, like the sea? But the wine arrived in great shape. Shipping containers for expensive wines, and even not so expensive wines, were usually refrigerated. But as far as trucks that delivered from the local distributors, or couriers around town, we only saw one refrigerated truck per year…the Romanee Conti release. The rest of the time they were at ambient temperature. For everyone.

Our merchant ‘friend’ was being less than honest, but often consumers are over-the-top the other way, saying two hours on a truck at 80 degrees is ruinous. It isn’t, and we say that knowing there are plenty of holier-than-thou types in the industry that will call us out because it is easier to be elitist. It’s easy to preach perfection, a lot harder to actually do it where weather and human beings are involved.

We’ll tell a short story about an experience a few years ago. I put a case of mixed Burgundies in the car after work and went off to do a bit of ‘research’. Upon getting home, I went straight into the house, forgetting that case of Burgundy in the trunk. I did not have occasion to go into the trunk for another week during a very warm July, essentially driving the case around town until one day when I had a reason to get into the trunk…and saw the case. My reaction was, oh shucks (or…something like that). But I figured it was a way to test the heat/wine thing real time (bear in mind I am a trained professional).

The heat was substantial but not extreme (90s but not over 100). Over the course of the next month I had those twelve bottles. Eleven of them were just fine and one was corked (which it would have been regardless of temperature). We continued the experiment for years testing the occasional shipping ‘mishap’bottles as they came back. For the most part, we found that in the difficult cases, the wine did show some deterioration after a few months, even sooner in the cases where the corks were pushed up (which of course would allow more oxygen to reside inside the bottle)*. But most were good to go early on.

What we are getting at is that, much of the time, if there is a temperature ‘accident’, it is rarely the proverbial ‘bullet to the brain’. It can, and again we are talking extremes, cause deterioration over time probably as often because the airspace in the bottle changed as being the direct effect of extreme heat or cold. If it does happen, like we said, as long as you get to it sooner (let’s nominally say within a month or two), you should experience little if any perceptible depreciation. So if it is a ‘drinking bottle’, as most bottles are these days, go ahead and drink it. The one caveat is ‘natural wines’. Since such wines are not typically stabilized, a change in temperature might occasionally set off an unanticipated reaction within the wine itself .

“wine is a living thing, which means it can take anything you can”

Obviously nobody goes out of their way to create these unfortunate scenarios. We do our best to avoid them and mediate the weather with our shipment timing as best we can. We tell people picking up wine that, when it’s hot, they should put their wine inside the cabin of the car where its air conditioned and go straight home. Some don’t listen, go to the mall for two hours and complain to us because the bottle leaked.

If someone asks us to ship into Phoenix in August, we will simply say no. One must be cautious to a point. However weather being what it is, you never know for sure how it will play out.

In truth, most of the industry doesn’t worry about it that much. But then something like 90% of the wine purchased is consumed with in a couple of weeks so it’s rarely ever an epidemic. The point is we don’t live in a perfect world and sometimes stuff happens. When it does, don’t panic. Move those bottles up in the rotation, serve them at the proper temperature, and most of the time you’ll be just fine. Occasionally unfiltered wines might throw off some extra sediment. In those cases, stand them up a day or two, and then proceed as planned.

While we always practice, and recommend, exercising caution, wine is not as fragile as some might have you believe. As someone told us once, yes wine is a living thing, which means it can take anything you can. In other words, except in extreme cases, it isn’t ‘life or death’, at least in the short run.

* Extreme heat or cold will cause liquid to expand which will push the wine out of the cork or push the cork itself up in the neck. As it comes back to a more normal temperature the wine will contract to where it should be, minus any that pushed out. In either case, there may be a larger air gap in the bottle, which will accelerate the process. It’s basic physics.

And Now, a Look Even Further Ahead: Part III

Our last piece (Part II) ended with a very telling question. It is based on different patterns of the populace and tries to predict the behavior of the generation that grew up with the internet, cell phones, more ‘less traditional’ households, and, now, the dawn of virtual reality and Wingstop. While we can only predict with limited accuracy (if we were really able to predict that stuff, people would pay us money), there are some reasonable basis for hypothesis.

One is that ‘entertainment’ happens more outside the home in casual restaurants, gastro pubs, pizza places, et al. Clubs, cocktails, and craft beers are much more ingrained in the culture. Entertainment options are at historic highs (since now you’ve added virtual reality to plain old reality), as are the dining choices. A generation of immigrants (we do not make presumptions about anyone’s status), mostly not from Europe, have brought their food traditions with them. There’s an amazing array of cuisines from South and Central America, Asia and the Pacific Rim. Mexican cuisine, longtime staples in California, has countless more regional examples.

In places like Los Angeles and San Francisco, there is a dizzying array of food choices. All kinds of folks are eating all kinds of different foods. The thing is, and we say this in the most objective way possible, the majority of this new, expanded ‘food scene’ are from places with no ingrained wine culture. We interpret that as a potential problem from the standpoint of the learning curve. Everybody who ultimately gets ‘serious’ about wine has an experience or two that tickle the imagination, that motivates them to follow the path.

The typically bustling, high-decibel eating environments of today don’t necessarily support the quiet contemplation of your beverage. Sometimes you can’t even hear the person across from you, let alone talk about the wine. The energy of such a room is part of the experience, but the odds of randomly discovering wine is reduced by the fact there us so much other stimulus. In most Thai, Vietnamese, Chinese, or Indian eateries, if there is a wine ‘program’ at all, it’s usually a small list of ordinary, very commercial bottles selected by a distributor rep without necessarily any regard to the cuisine but rather what they are supposed to sell. Often times the restaurateurs themselves don’t care. Beer is easier (though less so today with the craft explosion).

A lot more people eat at these types of restaurants as a percentage than three decades ago. Heck the extent and diversity of cultural food options really didn’t exist back then, and the ones that did were an occasional novelty for the typical family. The key point is that the expansive landscape of more ethnic fare will provide fewer opportunities percentage-wise for people who have yet to have that ‘definitive’ wine experience.

One would think that there would be more avenues than ever where someone might stumble into wine. But that’s not necessarily the case in today’s world. We old-timers learned by tasting, reading, and finding a few folks to talk to in a wine store. Since all the prices were fixed back in the 70s, a standard wine venue could support itself by carrying ‘the hits’ and a lot more options that grocery stores did not. When price fixing went away, so did a lot of those types of venues because they couldn’t adjust to the new reality. Fast forward today and buying patterns have changed (at least in California) because of the market shifting to a different group of venues that provided convenience and price advantages.

People today are a lot more harried. They will shop ‘specialized’ for big purchases, but most would like to take care of the day-to-day stuff in as few stops as possible. So they are less likely to make the extra trip for wine when they can find something palatable in the now-somewhat-expanded grocery store selection or ‘big box’ set. Are they interested in trying something new? Maybe, but there is little information on the shelves in such places save for an occasional point score from some publication that they may or may not know. It’s not likely there is anyone that can answer even the simplest of questions, either.

Big box stores? There’s a modest selection of ‘the hits’ and no one that knows anything on the floor. So unless you know what you are looking for, you’re flying blind and likely to just buy the same old things. Is just buying the same old thing wrong? Not for a lot of people. But even if you have the desire and motivation to expand your horizons you might need a little help. In such venues, if there even is anyone ‘working the floor’ (which is rare), it’s usually some supplier rep with an agenda to sell their own stuff.
The wine store of old is generally gone, replaced by more hybridized versions that have passionate buyers and innovative selections. The problem is that most aren’t going to have many of those old familiar favorites for you to fall back on because ‘big brand’ giveaways by grocers and big box stores have made these brands untenable even to carry for convenience. So basically to make that extra trip, you have to have made the decision that you want to get out of the ‘rut’ and get into wine. That’s a big commitment for most people.

What about those alcoholic beverage chain stores that advertise they have ‘experts’ on the floor to help you? Good luck with that. The term ‘experts’ is tossed around rather loosely, and most of them are only trained to move you into that high margin ‘store brand’.

Restaurant-by-the-glass programs should offer the best opportunity to learn. But there are a host of problems. In a busy, noisy restaurant, the likelihood of being able to talk to someone who actually can spend the time to help you and knows the wine is small (though they are out there). Plus, as we have mentioned in other pieces, you don’t know if the wine you’re tasting is representative of the genre it represents if you don’t already know the genre. Moreover, given the generally marginal condition of most ‘back bar’ wines, where you have no idea how long that particular bottle has been open, you don’t really know if the juice in your glass is even representative of that wine. Given that, it is fairly remarkable how much energy wineries put into wine-by-the- glass offers since they have little idea what the customer is actually drinking. They could be turning off potential wine drinkers to their brand or wine in general with some half-dead white or decrepit red.

As for experimenting with wine list at restaurant, where you see them open the bottle, you can learn that way provided it’s an eatery with a more enlightened yet still consumer friendly list. It’s no easy task to find one of those, and the learning curve will be the most expensive of any. This of course also presumes the person running the wine program is actually concerned about the diners themselves and doesn’t have some sort of personal agenda.

There are suggestions of forming tasting groups where a bunch of people all learn together. They work, but they are at least step B or C. At that point you have already gone to the next level of interest and aren’t a novice any more. The same goes with wine education classes. The passionate will find a way. Our point is that the person who might potentially be interested in learning more will have a much harder time in today’s market stumbling onto that formative ‘aha’ moment that will give him/her the fire. More to the issue, those who might have it may never find out they do because, under a wide range of scenarios, the situation may never present itself.

The ‘next generation’ of wine drinkers, whoever they might be, will have the most to do with how the next couple of decades play out for the wine industry in general. They are likely to be more open to wine as a beverage choice than any generation to date, but less likely to go far beyond that (other than the occasional tech millionaire who wants to fill the wine cellar in the mansion he just bought). As the prices of better bottles get to be more expensive, and the range of beverage choices competing for the consumer dollar continues to expand, wine geekdom will likely be even more ‘the road less followed’.

Pricing, marketing, global warming, is it the ‘juice’ or the ‘show’? We’ll take a swing at that stuff in a couple of weeks…

The 2015 Germans: Sie Sind Gut!

We actually wrote this piece a couple of months ago to with the idea of promoting a couple of specific, higher end estates that happened to arrive ahead of the pack. As it turned out, we never fired it out because savvy buyers hit them pretty hard before we ever had the chance. Some of our suppliers treat vintage like a nuisance in their quest to get wines ‘branded’ so that people buy them every year. But let’s face it, vintage matters. Some folks can get more out of a difficult harvest than others, and, funny thing, there is always seems to be more widespread success when Nature is kind. But ultimately vintners are limited by the cards they are dealt no matter how good a player they are.

“our assessment has been and continues to be O! M! G!”

What’s our point? Well, after an extensive tasting of the Germans in 2015, our assessment has been and continues to be O! M! G! We left two massive tastings this spring shaking our heads. Are the 2015 Germans really that good? In both cases, we had the opportunity to retaste a few selections from each event in our own, somewhat more clinical environment and let’s just say that we are pretty sure these are the real deal like there hasn’t been in quite some time.

We have a perspective there having been deeply involved in the subject (Germans) since the early 1980s, and have tasted extensively virtually every year since the mid-90s. We think we have a pretty good handle on the subject, we dare say perhaps better than most critics. The Germans have had an excellent run over the last couple of decades from a historical perspective. However, based on the 200+ wines we have tasted thus from the 2015 vintage, we can honestly say it is one of the best vintages we have ever had.

If you are a true fan of great Riesling, it is go time. The 2015s have powerful but ripe acidity, plenty of packed-in fruit, and already show some complex and defined aromatics even though they were still wound up from bottling and transport back when we had the majority of them. Even beyond the impressive up front ‘attack’ that you intuitively knew was only going to get better with a little time, and the subtle but sizzling underpinning of acidity, there was a ’second gear’ to almost all of them. You’d taste, you’d spit (mostly), and the wine would still linger a bit, after which it had an unusual ‘second hit’ on the palate, almost elevating again and saying ‘I am not done with you yet’ (say it with a German accent and you’ll really get the feel). The wines are precise, loaded and true to their pradikat levels.

We know there are pundits who may not be on the same page (even though they should be), though we have not seen a lot of widespread commentary thus far (which is surprising). For the most part the pundits seem to favor wines that are sweeter and softer, just the opposite of what we think makes for exceptional Riesling. We would hold forth high scoring examples from vintages like 2011 and 2014 as proof of our premise. We found consistent concentration issues that we were not particularly enamored with. In fact even when some of these wines were offered to us at discounted prices, with scores in hand, we passed!

If you go back to the turn of the century and read the reviews since, the written word would suggest that 2001 would still be the reigning ‘vintage of the century’. In our minds, 2015 looks to be at least the equal of 2001 and we’d actually give it a slight edge. That’s saying something from a long term perspective, but we are pretty thrilled with the 2015s overall and it is a vintage where the ‘big dogs’ truly shined. The only downside to the vintage is, as it is so often with exceptional vintages, quantities are rather small.

Needless to say it is high time we started seriously promoting this great vintage, and do we have a lineup for you! We’re going to make references to a few specific bottlings, but consider this an endorsement of 2015 as a whole. The beauty here is it is an amazing vintage, and we’ve already done a bit of filtering. So if you love Germans like we do, have at it knowing full well it’s impossible to make a mistake.

As far as what to buy, it’s all about personal choice. But we’ve highlighted ten that represent a lovely cross-section of styles and appellations. We’ll start with Stefan Gerhard Hattenheimer Hassel Kabinett Feinherb 2015. As most of you know feinherb is another way to say halb trocken or ‘off dry’. Gerhard was a favorite of ours a few years back before his importer liquidated and the wines were off the market for a while. The 2015 has the riveting fruit, sizzling acidity and drier profile that defines the style of this up-and-coming Rheingau estate.

On the kabinett front, this is a sensational vintage with the traditionally styled wines showing plenty of fruit and nicely tucked away, lifted acidity. Start with the Shafer-Frohlich Bockenauer Felseneck Kabinett 2015. At the first major German tasting we attended last June, in a lineup filled with top drawer traditional estates Tim Frohlich’s wines were one of the two clear winners in the room (along with Schloss Lieser). This young, talented Nahe winemaker is emerging as one of the top guns in all of Germany and his 2015s are epic from top to bottom. Intense fruit, plenty of verve, and beautifully infused minerality, this Wine Advocate 93 is a winner.

In a slightly fruitier vein, we have the pick-a-pair from the reliable Monchhof and Christoffel, both made by the talented Robert Eymael of Monchoff. These definitely play at a little sweeter end of the kabinett range with the biggest different being the sites themselves, with the J. J. Christoffel Riesling Kabinett Erdener Treppchen 2015 playing the tighter, mineral-laced, highly spiced precision hand while the Monchhof Riesling Kabinett Urzig Wurzgarten 2015, while still playing the spice and slate card, leans more in the direction of red currant and violet in its profile. These are some of the classiest kabinetts you will find for this kid of fare.

It should come as no surprise that Willi Schaefer hit it out of the park in 2015. His layered, honeyed, insistent, stony Willi Schaefer Graacher Domprobst Riesling Spatlese #10 2015 is, as importer terry Thiese puts it, profoundly expresses the vintage and, like epic vintages 2001 and 2010, more electrifying, and in many ways more astounding. Selbach Oster seems to have upped their game over the last three or four vintages and the 2015s are a high point. This single bloc masterpiece from a super-steep slatey site, the Selbach-Oster Riesling Zeltinger Schlossberg ‘Schmitt’ 2015, has impressive density and range, and it’s just getting going.

Finally, after a couple of surprisingly ‘un-amazing’ vintages, the 2015 Donnhoffs are some of the best we have ever had from this Nahe legend. The Donnhoff Oberhauser Brucke Riesling Spatlese 2015 (WA 92) and Donnhoff Riesling Spatlese Schlossbockelheimer Felsenberg Nahe 2015 (WA 91) play way above these modest scores..

Hey, it is still early in the game because there hasn’t been a lot of ‘chatter’ in the press about the 2015s in Germany (or about German wine in general for that matter). But this is an epic year that we speak of in terms of the all time greats we’ve experienced like 2001, 1990, and 1983. See our complete 2015 German Wine List here.

The New Stock Report: What’s Past is Prologue

Since the first ‘Stock Report’ (such as it was) got sent to probably 100 people back in February of 1985 (we were actually called ‘Liquor Exchange’ back then), our approach has remained the same. We see ourselves as part wine finders, part educators and part librarian. The ‘wine finders’ part is obvious. We are always looking to find new genres, new producers and new ideas to present to our customers. We have been, and still are students of wine, secure in the knowledge that nobody knows everything about this ever changing subject.

Our job as educators is extremely important, and maybe a little bit self serving. We feel it is essential to offer people the opportunity to learn and experience more in the world of wine, be that explaining new growing areas, helping you understand new techniques, essentially trying to get as many people as we can comfortable with this vast, very ‘subjective’ subject.

We understand our role as storytellers as well, as we seek to offer a wide range of different approaches to get to the point of why this or that wine tastes like it does. Wine is varietals, regions, weather, soils, and a litany of other things we can recite. But the wines don’t make themselves, so sometimes the ‘people’ story matters, too. The librarian part is simple…to help you find what you are looking for within our large and ever changing collection of wines or using our network to find you something you are looking for we don’t have. These are the things that, in our minds, are what a wine merchant is supposed to do.

In the beginning, the newsletter, via ‘snail mail’, was our only outreach. Things started to change in the 90s with the internet and the continued rise of wine information in the computer age. Essentially, the fax machine, the computer and and ultimately the Internet, sped up the dissemination of information and the sales cycles for wines in general. While the ‘Stock Report’ was always something of a personal expression of the wines we had found and our ideas on them, the timeliness of a ‘monthly’ publication was compromised in the New Era.

“It will be the ‘old’ Stock Report, written by the same old dudes, presented in a different ways.”

Email marketing was something we embraced early (2002) and the fastest, most cost effective way to let you know what was happening. But the Stock Report always served to fill in the smaller categories and specific- interest wines that weren’t best served by the direct email format. As we have experienced, trying to make an all encompassing ‘monthly’ missive, on top of everything else we do, wasn’t necessarily doing the best service to those cool little things we find and love to talk about. Yet we didn’t want to eliminate that geek driven message that has been such an integral part of our program since the start.

It’s all about communication, but the ways people can communicate is ever changing. The email program is important, to be sure. But there are only so many days in a year, and we can only highlight maybe 300-400 wines using that format. We have ten times that amount on the floor, exciting things we had good reason to purchase, and each has a story to be told. To that end we are making the Stock Report a more ongoing type of information source, with regular updates as often as daily.

New things come in almost every day and the ‘new’ Stock Report format can be updated on a continuous basis for you inspection and referencing. There will be content referring to wines we have talked about before that we think should have gotten more attention. Rants from the editorial team will also be regular features, as will the one or two line ‘Briefs’ giving ‘quick hit’ updates on a variety of wines and subjects. But, most important, it will provide a platform for us to make notes on some of the other cool, fun juice we get in.

Some might be a little too eclectic, or too limited in quantity, or for some other such reason, not be best suited for the email format. Yet they are worthy of attention. Plus, like the site itself, you’ll be able to access it 24/7.

It will be the ‘old’ Stock Report, written by the same old dudes, presented in a different ways. It aspires to be more dynamic and ongoing, as well as, ultimately, intended to provide more information in an easier-to-access format. We hope you enjoy it.

-Steve

And Now, A Look Even Further Ahead: Part II

To briefly recap from last time, the production side of the wine industry is better than ever, more people have the tools and the knowledge to make the best wines ever. There are very few ‘bad’ wines these days that suffer from bacterial, microbial, or other forms of ‘funk’ that hygienic winemaking has mostly eliminated. The most significant source of bad bottles stem from the closures, either those with TCA that cause the wine to be corked, or an imperfect seal that allows the wine to oxidize.

Screw cap closures virtually eliminate all of those problems, and the next generation is not as connected to the ‘screw caps mean cheap wines’ mentality. Millennials grew up with fine wines that came with screw caps and there’s no reason to think the acceptance of screw caps will not continue to increase moving forward to the point where most of the wines that are consumed ‘off-the-shelf’ will come in cap closures, allowing the cork trees to replenish to make better corks for those ‘special’ bottles destined for the cellar.

One must ask a simple question here before moving on. Presumably the wine industry will cater to the market (though it is known to try and manipulate certain aspects) as time marches on. But what exactly is the market? Is it the small upper part that maintains cellars and buys wine on a regular basis, usually with the curiosity to try new genres just because they want to and the itch to keep up on trends? The small, savvy group is the one we maintain has the most impact on the market and spends the most money proportionately. The trends often start here.

Is it the second tier that is willing to spend money on high priced wine clubs and restaurant markups with just enough knowledge to know they want something better? These are professional folks that have the money to spend but not necessarily the experience or desire to sort through the rhetoric. They are more susceptible to price (more expensive is better, right?) and marketing (‘being in a wine club makes me a special insider’) impressions. There’s a mediocre, single vineyard $60 Petit Verdot Reserve out there somewhere for these folks but they do make up a sizeable buying force. Certain market brands (not mentioning names) have established remarkable followings with this largely loyal group. This is the ideal target for most wineries and direct-to-consumer entities. Some will take the step to the smaller group, others will become disenchanted with the lack of value, but the remainder is still a sizeable group with buying power.

The third group is the largest in population though probably far less connected. These are the more occasional buyer that purchases wines pretty much the same way they buy potato chips and soda. They find a brand they like and stick with it unlike shaken out of the pattern. Of course they make up the largest group in terms of tonnage and are the targets. For the most part these are the folks that like wine but aren’t fanatics about it. They will see things when they filter down to the grocery/’big box’ level, and won’t see or seek out many opportunities to try something different. These are the ‘brand buyers’ that corporate wineries seek.

We aren’t casting judgment from our perspective, just observing. At this point we have described these groups from a multigenerational context. In truth the big change in wine perception came with the baby-boomers, arguably the first American generation to have some sort of wider-spread wine culture. It was rare to see people ordering wine in restaurants or bars as an aperitif or cocktail back in the day. But it is pretty common now and the next generation, the millennials, grew up with this around them. Most ‘boomers’ are now in their 60s and 70s and aren’t buying a lot any more. The industry looks to the next-gen buyers to try and figure it out.

“It was rare to see people ordering wine in restaurants or bars as an aperitif or cocktail back in the day.”

It’s a little hard to cover all the bases, and our perspective is certainly a bit skewed as we deal largely with the savviest group. But there are a few things we have noticed over the last few years. The media has changed buying patterns. We hardly ever hear the term ‘vertical’ from a buyer any more. For those that don’t know the term, a lot of folks would find a few wines they liked and buy some every year, year in and year out. These days a buyer will be more sensitive to reviews on high end wines and cluster buy the highest rated vintages and top wines from the media. He is more attuned to score than brand if push comes to shove.

Back in the olden days, brands established themselves more slowly but on a much more solid footing. In today’s lightening communication world, wines and labels can get hot overnight and disappear almost as fast. In the ‘148 character’, digital world where a lot of folks don’t ever look up from their phones, slow building would seem to be at a disadvantage. It’s hard to get someone’s attention long enough to tell much of a story (unless you have them trapped in your winery tasting room).

Most of the wine purchased is drunk right away, though that isn’t necessarily a massive societal change. It is however on a bit of an upswing. The next-gens seem to be more inclined to meet outside the home, which kind of precludes the whole cellar building process. We would suggest that this trend has supported the explosion of casual restaurants, ethnic eateries, and ‘pub-like’ venues over ‘fine dining’ (that itself is a very fertile subject for another time). Suffice it to say that those are less likely to provide that ‘revelation’ moment wine-wise, and support the more casual buying of wine.

On the production end, things are technically much better as we said. But the combination of the media formats favoring blowsier, more overt styles and the general public’s waning attention span (air a wine for a half hour?…omg, lol what am I supposed to do in the meantime?), favors the sweeter, more commercial, more obvious style of wine. Sadly for the big picture, we see wine, like the world, becoming more homogenized. Busy people don’t have time for details, so simple and non-obtrusive has a ready market.

Another key issue is how wines are sold (we’ll address this detail next time). There are more exceptional wines than ever as we said in our last piece. So let’s take our next-gen buyer, the people that the industry will have to rely on for the next 20-30 years, and let’s make a couple of big suppositions. Let’s assume that a couple a next-geners were at lunch and ordered a glass of wine and actually paid attention to it for a moment. Now this presumes a lot of other things, like the wine they got poured was actually opened within the last 24 (or 48?) hours and the batteries on their smart phones, tablets and smart watches all ran out at once and they left their wireless charging devices at home.

That a pretty unlikely convergence of events but for the sake of theory let’s move on. Under these extreme circumstances, let’s say they find they really like what they were drinking. Suddenly, through no fault of their own, they have the ‘aha’ moment (like we all had at one point or another) and decide maybe they’d like to pursue the wine thing a little bit.

Where are they going to do that? How are they going of do that? Where’s the next generation, the generation that will be expected to support the wine industry, going to learn about wine? That probably is the biggest question because, as much as the wine industry loves to tell itself otherwise, the world has changed a lot since the baby boomers turned 21. But that’s too big a question for right now. We’ll take a swing at it in a couple of weeks…

2017: Good Things on the Horizon

This has become a tradition for us to give everyone an outline of what to expect out of the coming year. Part of the reasoning is that we have the information because we rely upon this info as part of our yearly business plan seeing as there’s always a limit to the amount of money one can spend (even, of course, for the U.S. Government who can simply print it). Since we have already done the homework, there’s no reason not to share it with you so you have the option of strategizing your own purchases and consider cellaring options.

Some years there is a lot going on, other years less so. Last year (2016) had a few strong categories and a few big categories that were not so strong performance-wise. We dare say 2017 has the possibility of being one of the best years for wine buyers in half a decade. We say that without considering an improved economy which some are predicting. We are merely talking about the quality and breadth of really good stuff we anticipate should hit the market.

While the domestic market is not near as volatile from a vintage perspective as Europe, particularly in California, the top domestic regions all seem to be on a continuing ’roll’. California, Oregon and Washington will be mainly rolling out 2014s and 2015s, which are surprisingly uniform in quality, appealing and, from what we’ve seen from 2014, quite accessible.

Domestic quality is such that there should be a trickle down into the next level of players and even the ‘bargain’ producers should be able to find good juice to work with (provided they can find any juice). That’s the one caveat… quantity. It is low in certain areas, particularly in 2015, a consistent theme with most of the California producers we’ve spoken with. What that means to you is that, if you see something that strikes your fancy (particularly among those 2015s), you should move in some haste as they may not be around long if they get any critical attention at all.

The big news of course is the ‘foreign’ 2015s. The vintage promises to be a watershed for quality wines. We haven’t seen this much uniform success across borders since 2010, and can only think of a few other times (1985, 1990, 2005) where so many folks from virtually anyplace that grew grapes had a smile on their face.

“The good times are going to roll.”

The good times are going to roll. As northern Italy gets through the remainder of their rain-affected 2014 whites, they will be (and are being) replaced by the sensational 2015s. We haven’t had anything this good since 2010, though the more fruit-driven profile is more specific to 2015. Very tasty. We have been pleased with some of the whites from the Rhone as well, but will admit that the 2015 whites from Burgundy, while quite good, are a little riper and lower in acidity that the outstanding 2014s. They will however make for an excellent bridge for fans of domestic Chardonnays who are used to ‘fatter’ wines. Buy up those 2015 Loire Valley whites as they arrive and the Cabernet Franc-based reds in particular appear to be the finest since the 2005s.

We have already talked at length about the 2015 Germans and Austrians which are both very special vintages. For whatever reason, the media has not given these wines their due as yet (if they ever will…it’s a Cabernet and Bordeaux world…still). This has afforded a longer buying window, which is not necessarily a bad thing, and we continue to tell anyone who will listen that this is a vintage of historic quality in both regions.

Bordeaux has the opportunity to really make a comeback, provided that they don’t lose sight of reason when it comes to prices. The 2014s are delicious and should provide some really appealing earlier drinking, the 2015s are definitely vins de garde, and the 2016s, which should be offered as ‘futures’ this spring, are rumored to be spectacular in certain areas (clay soils, old vines) that were able to handle the unprecedented drought that hit the region. Good times for Bordeaux lovers, particularly if the euro stays on the low side (the euro was around $1.35 back when the 2010s came out, it’s now around $1.05).

Sadly, the euro probably isn’t going to be much help in Burgundy because the highly anticipated 2015 vintage was also short on quantities (and because it’s Burgundy). But the little red Burgundies we have tasted so far have been remarkably appealing as a group, which only means good things for the ‘bigger dogs’. It’s definitely a vintage to keep an eye on the entry-level Bourgognes, well priced village bottlings, and places like the Cote Chalonnaise and Marsannnay as well as Beaujolais. If you are super ‘brand conscious’, acquiring certain labels might be frustrating, but we anticipate there will be some opportunities if you love the genre and are looking for some very tasty juice.

There will be lots of ample southern Rhones and seriously good northern Rhones. We suspect the 2015 Chateauneufs will require some attention as there hasn’t been a vintage this good since 2010. As to the ‘top notch’ Cote Roties and Hermitages, etc., quality will be ‘amaze-balls’, but a lot of the small, famous names will be hens teeth when it comes to sourcing.

The great thing about 2015 reds is that they are generally gregarious and outgoing. We have seen that all over France and in the ‘little’ reds from northern Italy. If you can’t find something delicious, you’re not trying. There will be those that will say that, because of their outgoing fruit, these wines aren’t structured enough to be considered ‘serious’. They are ‘fat’, true, but also fresh, which bodes well for development. We have tasted enough ‘super jammy’ vintages that have been declared ‘great’ that haven’t necessarily aged as well or as uniformly as some experts said they would. Besides, what’s wrong with being pretty and precocious?

We expect South America will continue to be one of the biggest surprises. We keep finding really compelling start-ups and producers previously unknown to us that have raised the bar considerably. We said they same thing last year about Argentina and Chile, which at the time, probably raised a few eyebrows. In fact, we ran across a lot of stuff that exceeded even our expectations and have to presume that there is a lot more to be found. What is perhaps even more telling is that some of the labels that have been around a while have upped their games as well (just today a Malbec from Bodega Neomia showed a touch and fruit component that got us excited…we don’t recall something of this fineness from this source in the past).

Finally, our ‘dark horse’ prediction for 2017 is…South Africa. Now we have been trying to create a niche for South African wines since the 90s. The wines were often parochial, sometimes solid, and occasionally breakthroughs. But sustainability of the genre proved to be elusive. As soon as we stopped promoting them, they seemed to have little carry through on their own. We have happened upon a few interesting, some maybe a little quirky but delicious items that indicate there is another tier of innovative South African small producers that we have not seen in this marketplace.

By ‘dark horse’ we kind of mean these South African boutiques haven’t had, nor do we expect that they will get much media exposure, and there are all kinds of marketing and distribution issues with small importers and unknown genres by definition. In other words, we aren’t going to bet the grocery money on their success, but only because market mechanics kind of work against them. The wines we are talking about got us really pumped, and we have to assume there are some others out there like them. These wines definitely deserve an audience.

This promises to be a very exciting year for wine drinkers. Besides all that we have alluded to thus far, there are still remnants of the 2010 Reserva and Gran Reserva Riojas from Spain to be had, and Italian reds will certainly have their share of successes (2013 Tuscans, 2015 Barbera and Dolcettos, 2015 ‘little’ Chianti Classico wines) on an individual basis. The only question we can’t answer yet is if this will be Australia’s time to recapture the market share they deserve, that will be up the consumer as the wines are better than ever. We’ll also be on the lookout (and hoping) for ‘deals’ on the delicious 2014s from the southern Rhone and Burgundy, a vintage that got largely overlooked as buyers focused ahead on the more ‘newsworthy’ 2015s. At reduced prices, we will be all over those wines.

Are we looking forward to 2017? You bet! Happy New Year…