Diageo drifts after merger talk revival (Excerpt)
by: Bryce Elder
September 4, 2015
A revival of Diageo merger speculation helped give traders a distraction from another grim day for the FTSE 100.
The drinks maker should consider a merger of equals with SABMiller, said Nomura analysts. Cost savings could add 18 per cent to combined profits and would face few regulatory hurdles, it said.
Diageo and SAB have been frequently rumoured to have investigated a tie-up, and in 2007 considered a joint bid for Scottish & Newcastle.
With Diageo's growth stalled and SAB reported to be looking at strategies to fend off AB InBev, a deal might make sense to both management teams, said Nomura.
"We estimate that with circa 50:50 emerging and mature market split of profits, a merged group could offer a firmer profit base in uncertain times (for SABMiller holders) and potentially increase its growth profile in the longer term (for Diageo holders)," Nomura told clients.
The biggest SAB shareholders, the Altria and Santo Domingo families, might also prefer a merger to an InBev takeover for tax reasons, the broker added.
SAB closed 3.1 per cent lower at £29.46 and Diageo drifted 0.9 per cent to £16.98, which valued the drinks makers at £48bn and £43bn respectively.
Diageo may not be able to recover $135mn loan from Vijay Mallya firm
September 6, 2015
Global spirits giant Diageo has said it may not be able to fully recover a loan of USD 135 million given to Vijay Mallya-affiliated Watson Ltd by Standard Chartered Bank where it had acted as a guarantor in case it is asked to pay up.
The world's largest spirits maker, Diageo, which acquired control of United Spirits (USL) in 2012, had issued a guarantee to Standard Chartered Bank for a USD 135 million (around Rs 900 crore) loan to Watson to release certain USL shares that were to be acquired as part of the deal.
The company said the risk had arisen due to default by Watson in May and Debt Recovery Tribunal (DRT) in Bengaluru preventing sale or any other transfer of such UBL shares in June as part of the enforcement process pending further orders following petition by a consortium of banks led by State Bank of India.
"Standard Chartered is required to take certain pre-agreed steps to recover from Watson prior to calling on the Diageo Holdings Netherlands BV (DHN) guarantee... In the event that DHN makes any payment under the guarantee, DHN would intend to pursue claims under these indemnities to seek to recover any outstanding amount," Diageo said in its annual report of 2015.
The company said the underlying security held by Standard Chartered includes shares in United Breweries Ltd (UBL) and Watson's interest in a venture that owns the Force India Formula One (F1) team.
"Under the terms of the guarantee, there are arrangements to pass on to DHN the benefit of the security package if it makes a payment under the guarantee of all amounts owed to Standard Chartered," it added.
However, in June 2015, a consortium of banks led by State Bank of India obtained an order from DRT preventing the sale or any other transfer of such UBL shares as part of the enforcement process pending further orders.
Flagging concerns that the company may not fully recover the amount, Diageo said: "In light of the litigation risk associated with the UBL shares and the potential loss of realisable value of the F1 security during enforcement, Diageo believes that the outstanding amount may not be fully recoverable."
Mallya has been battling a number of cases, including against banks over a 'willful defaulter' tag related to loan defaults by the now-defunct Kingfisher Airlines.
Earlier this year, a 17-bank consortium led by state-run SBI had initiated the process of taking over physical possession of the prized Kingfisher House, worth Rs 100 crore.
Mallya has also been under scanner over issues at his various group companies, including United Spirits Ltd where he has sold the controlling stake to UK-based Diageo Plc.
UK-based Diageo has spent nearly USD 3 billion for a controlling stake of about 55 per cent in United Spirits Ltd (USL).
The company had first acquired 25 per cent in USL from Mallya-led UB Group in late 2012, while it bought further shares from non-promoters last year.
In April this year, Diageo-controlled USL Board said it has "lost confidence" in Mallya after an internal probe and a forensic inquiry by PwC revealed alleged fund diversion to Kingfisher and other UB group entities.
USL said "various improprieties and legal violations" were found in the probe into loans given to UB Group firms and it asked Mallya to quit the board.
However, Mallya rejected the charge against him and said Diageo has contractual obligations to support him.
In July, 2015, USL alleged irregularities and potential violations of law in diversion of funds by UB Group and said it is initiating process to recover dues of Rs 1,337 crore.
United Spirits AGM may be delayed
Source: The Hindu Business Line
There is a possibility of the annual general meeting of United Spirits, controlled by Diageo, being delayed due to the impasse between the multinational and Vijay Mallya, who is the Chairman of United Spirits, over review of the shareholders' agreement.
Assuming the AGM is called now, Diageo has no option but to allow Mallya, in whom it has "lost confidence", to chair the meeting - something that it would not want.
United Breweries and UB Holdings have called their AGMs for September 22 and September 28, respectively. The usual practice has been to hold the AGM of United Spirits along with that of the other two companies.
Significantly, Diageo's CEO Ivan Menezes is expected to visit India next week as part of a UK trade delegation. In April, Diageo said it will review the shareholders' agreement after the United Spirits board said it had lost confidence in Mallya and asked him to resign as its chairman as well as from the board following an internal probe report which said the Indian liquor maker's funds were diverted to other UB group companies.
A spokesperson for Diageo said that no fresh developments have taken place regarding the shareholders' agreement. "There is no update to share from Diageo and our statement remains the same," the spokesperson said. Mallya did not respond to a query whether he has agreed for a review.
It also remains to be seen whether the board can move a resolution seeking shareholders' approval to oust Mallya from the board.
Diageo's stake in USL is now about 55 per cent, which it has acquired for $3 billion. Mallya owns as little as 0.01 per cent in his personal capacity, while a few of his UB Group entities hold about 4 per cent stake.
As per the internal probe report which was submitted to the USL board on April 24, between 2010 and 2013, about ?1,337 crore was diverted from United Spirits to certain UB group companies, particularly Kingfisher Airlines.
The probe report said the manner in which certain transactions were conducted prima facie indicated improprieties and legal violations.
A spokesperson for InGovern, a proxy advisory firm, said that there will be an "uneasy calm,'' when the AGM presided over by Mallya is held.
He said it is up to Mallya to decide whether he wants the share purchase agreement with Diageo to be revised.
"The ball is in Mallya's court. It is a very, very tricky situation for both Diageo as well as for United Spirits," said Shriram Subramanian, Managing Director for InGovern.
Canada: Smirnoff Ice Recall Issued Over Possible Glass Contamination
Source: The Huffington Post Canada
By Andree Lau
Drinkers in Canada are being warned not to consume some Smirnoff Ice products due to the possibility that the bottles contain small pieces of glass.
Parent company Diageo Canada recalled the products "in an abundance of caution" after discovering an issue with its glass supplier, according to a news release. However, it said it believes less than one per cent of bottles are affected.
The Canadian Food Inspection Agency posted the voluntary recall on Friday, just before the long weekend.
The affected beverages were sold in 330 mL glass bottles on or after July 24, 2015 and include peach bellini and green apple flavours.
You should throw out the recalled products, or return them to the store where they were purchased.
No injuries have yet been reported in relation to the consumption of these products, said the agency, which is investigating to see if other Diageo products also need to be recalled.
Diageo owns several other alcoholic beverage brands including Crown Royal, Captain Morgan, Tanqueray, and Guinness.
Cool Video, Old News
Source: The Chuck Cowdery Blog
September 5, 2015
This video is all over the internet today. It's amazing, well worth watching, but it's not news, and much of what is being said about it is wrong.
First, it happened in 2003, twelve years ago. Second, lightning didn't ignite a leak from the factory. Lightning struck a warehouse, at least that's the conclusion reached by investigators at the time. It couldn't have been a 'leak from the factory' because the two Beam distilleries are each about 15 miles from where this occurred, at a separate maturation facility just north of Bardstown off Withrow Court. The lake into which the burning whiskey flowed is a man-made retention pond. I don't believe there was a significant fish kill from the event, as some have reported.
Fire is a constant threat at whiskey distilleries and maturation facilities due to the combustible combination of wood and high proof alcohol. This particular warehouse was relatively small, containing about 800,000 gallons of whiskey. The ones they're building now hold more than twice that much, but they also have better fire controls. Beam has 72 maturation warehouses at various locations in Nelson, Bullitt and Franklin Counties, a few more than it did in 2003.
This location has been particularly unlucky. In 1968, before Beam owned it, another fire destroyed a warehouse there. It was still a distillery then. The other buildings were saved but the distillery closed the next year anyway. Beam bought the site to replace some warehouses it lost to a tornado in 1974.
If a warehouse starts to burn, about all firefighters can do is try to keep it from spreading. It can't be extinguished. Some barrels explode, sending others flying through the air. You don't see it here, but usually the flames are blue, like an alcohol lamp.
The first distillery at that particular location, known as S. P. Lancaster, was built in 1881. Like many distilleries built at that time, the location was chosen to take advantage of the newly-built Bardstown-Springfield Branch of the L&N Railroad. Like many Kentucky distilleries, it changed names often. It was variously known as Independent, Shawhan, and Waterfill & Frazier.
Beam had a fire at another site in 2007. Wild Turkey had one in 2000. (That one, by the Kentucky River, did have a significant fish kill.) The worst one on record was at Heaven Hill in 1996, which destroyed the distillery and seven warehouses. The Cummins-Collins Distillery in Athertonville had a bad one in 1972. Barton had a bad one in 1944. Both of those were in the distillery itself.
During Prohibition, a distillery at Elkhorn Forks near Frankfort, built in 1901 by John D. Hinde, was destroyed in a fire. Arson was suspected. The event was fictionalized in Irwin Cobb's 1929 novel, Red Likker. After Repeal, a new distillery was built there by Kenner Taylor, son of E.H. Taylor of Old Taylor fame. It eventually became Old Grand-Dad. Today it is owned by Jim Beam and used for maturation and bottling.
Firenado! 800,000 gallons of Jim Beam accidentally released into a Kentucky lake bursts into flames after being hit by lightning... before a tornado sucks the flaming liquid 100 feet up into the air (Excerpt)
The freak weather destroyed a warehouse in Kentucky holding bourbon
The inflammable spirit flowed into a nearby creek towards a lake
A lightning strike then set fire to the bourbon on the lake's surface
A small tornado sucked up the flaming liquid and set fire to nearby trees
Source: Daily Mail
By Darren Boyle for MailOnline
4 September 2015
Read more: http://www.dailymail.co.uk/news/article-3222526/Streams-whiskey-Lightning-destroys-Jim-Beam-factory-Kentucky-releasing-800-000-gallons-bourbon-lake-catches-fire-struck-Firenado.html#ixzz3kxVi9bs6
58 related stories
Exane BNP Paribas equity research : The Distillers' Digest (Europe - July/August): slight improvement
September 4, 2015
We have received the latest AC Nielsen data for Western Europe spirits, covering the 4 weeks ending 09/08/15 ('July/August'). Please see the attached file for related data and dynamic charts. Our key takeaways are as follows:
Western Europe Spirits markets:
Overall a slightly better month for the Western European spirits market, with total industry sales up +1.8% in July/August vs -0.4% in the previous month and Q215. France sales were down -0.6% in July/August (where Pernod Ricard and Remy had a disappointing month) while GB and Germany saw a sequential acceleration in the month.
An underwhelming month for Pernod Ricard in Western Europe. Sales were up 0.5% in July/August vs.+6.3% in the previous month and +0.7% in Q215. Volumes were down 0.7% (vs. +5.7% last month and +1.5% in Q2). Price per unit was +1.5% in the month (vs. -0.8% in Q215). Pernod Ricard lost 10bps of value share in the month (-10bps in Q2). Pernod's France sales were down 3.9% in the country in July/August (-1.3% in Q2) as the French group lost 80bps of share in the month (+10 bps in Q2). GB showed better momentum (Pernod gained 50bps value share in the month, vs. +10bps in Q2).
A subdued month for Diageo in Western Europe. Sales were up +1.2%% in July/August vs. +2.2% in Q215. Volumes were down 1.9% in the month vs. +1.9% in Q215. Price per unit was stronger in July/August at +3.2% vs +0.3% in Q215. Diageo lost a bit value share in the month (-10bps vs. +20 bps in Q2). By country, we note that Diageo sales in GB were flat both in the month, resulting into share loss of 40bps (vs. +130bps in Q2).
A weak month for Remy in Western Europe. Sales were down -4.2% in July/August vs. -2.9% in Q215. Volumes were down -2.4% vs. -2.6 in Q215. Price per unit was down 1.9% in the month vs. -0.3% in Q215. By country, we note that as for Pernod, Remy Cointreau sales in France were weak in the month (-5.1% vs -3.1% in Q215).
A good month for Campari in Western Europe. Sales increased +2.4% in June/July and +2.6% in Q215. Volumes were +1.2% and +3.1% in Q215. Price per unit was +1.2% and flat in Q215. By country, we note that Germany sales were up 4.1% in the month and that Italy sales were down -4.6% (-1.3% in Q2).
European beer Nielsen tracker
Volume growth in France and Italy, decline in GB and Germany
Source: Morgan Stanley
SEPTEMBER 4, 2015
In the four weeks to 9 August, Nielsen data shows solid volume growth in France and Italy off an easy comp and helped by good weather. GB and Germany both saw a moderate decline in volumes, with negative price/mix in GB.
Heineken: Lost share in GB, France and Italy
Heineken lost share in GB with volume -10.9% versus market -2.9% y/y in the 4 weeks period to 15 August. Price/mix of -2.3% was slightly below the market of -1.6%. In France, Heineken volume grew +7.5% y/y, which was below market growth of +8.8% y/y in the four weeks period to 9 August. Heineken lost share in Italy with volume +12.5% y/y versus market +15.5% y/y. We estimate GB, France and Italy are 6%, 3% and 1% of Heineken's group FY15 EBIT respectively.
Carlsberg: Market share loss in GB, Share gain in France, Italy and Germany
Carlsberg's GB volumes declined -7.1% y/y, well below the market rate of -2.9%. Price/mix was negative at -1.8% due to promotions on premium San Miguel, which saw double digit volume growth. In France, Carlsberg volumes grew +11.9% y/y, gaining share thanks to its premium 1664 and Grimbergen brands. In Italy, Carlsberg volume grew +16.1% y/y, ahead of the market growth of +15.5%. This was helped by strong performance of Poretti. In Germany, Carlsberg gained share with volume +26.8% y/y, versus market -1.2%. We estimate GB, France, Germany and Italy are 8%, 8%, 2% and 1% of Carlsberg's group EBIT respectively.
ABInBev: Share gain across Europe boosted by Corona
Off an easy comp, ABInBev volume in GB grew +7.4% y/y in the 4 weeks to 15 August, well above the market. Price/mix of -2.1% was slightly lower than the market. It is worth highlighting Corona+216% volume growth y/y, which shows the positive impact of taking over the distribution from Molson Coors. In France, ABI gained share, driven by its premium brand Leffe . In Italy, ABI volumes were up at 34.8% y/y on a relatively easy comp of -26.1%. Corona and Beck's grew 65.7% y/y and 41.5% y/y respectively. In Germany, ABI volume declined -10.7%, vs. market -1.2%. We estimate those 4 countries account for 3% of ABI's group EBITDA.
SABMiller: Maintained share in Italy, gain share in GB
In the 4 weeks to 15 August, SABMiller GB volumes grew +0.2% y/y, gaining share. However, SABMiller portfolio in GB is skewed to the on-trade, which is not captured by Nielsen. In Italy, SABMiller maintained its share with volume 15.9% y/y despite a price/mix growth below the market average. GB and Italy are 2% of SABMiller's EBIT.
Hennessy tops the IWSR's World Class Brand ranking (Excerpt)
Source: The IWSR Magazine
By Alexander Smith
Hennessy just edged out Jack Daniel's to top this year's IWSR World Class Brands rankings. Jameson, Grey Goose and Jim Beam rounded out the top five brands.
The IWSR's World Class Brands list is the definitive ranking of top-performing global spirits trademarks. 142 brands met the IWSR's definition of 'international'. The IWSR then scored each of these brands on its overall market volume in 2014, average price per case and volume growth over the last year.
Hennessy rose to the top of the list despite the crackdown on conspicuous consumption in China and the economic problems in Russia - two key markets for the brand. Hennessy achieved an impressive overall market volume of 5.2m cases in 2014, an impressive average price per case of just under $800 and volume growth of 3% in 2014. It was Hennessy's performance in the important US market that provided the springboard for that success. Hennessy rose by just under 10% in 2014 over 2013 to reach 2.5m cases. Hennessy also saw high rates of growth in South Africa, Nigeria and travel retail. These helped to offset the near -21% decline in China in 2014.
Jack Daniel's is another brand that is at the top of its game. The brand is riding the crest of the US whiskey revival in its large domestic market. Successful innovations, such as Tennessee Honey and Tennessee Fire, a cinnamon-flavoured extension, are helping to bring in non-traditional consumers, such as females, and participate in new drinking occasions.
Jameson also remains one of the real momentum brands in the US and, last year, surpassed the 2m-case mark there.
Last year's top World Class Brand, Johnnie Walker, only reached no. 34 in this year's list due to a loss of global volumes between 2013 and 2014. It is worth noting that not one Scotch brand ranked in the top 10 of this year's World Class Brands list despite having the largest overall number of brands on the list with 40. The growth of US and, to a lesser extent, Irish whiskey may also be a contributing factor behind the Scotch slowdown.
The full list is exclusive to the IWSR Magazine September issue. http://www.iwsrmagazine.com/
Micro-distillers craft limited space in crowded market
* Smaller players springing up in spirits market
* Mindful of craft beer growth, Diageo and Pernod respond
* Craft beer model harder to replicate in spirits industry
By Martinne Geller
Small, independent distillers are popping up and taking market share but liquor giants like Diageo and Pernod Ricard say barriers to entry and the range of spirits already available will limit their impact.
Mindful of the way big brewers were caught out by the craft beer trend, the world's largest spirits makers are launching lines such as Orphan Barrel and Our/Vodka that tout small batch credentials and refining their marketing of big brands.
They are acting while "craft" spirits like Sipsmith gin and Hudson whiskey are still relatively niche products.
"The U.S. spirits market faces a growing threat of substitution," analysts at Credit Suisse said. "A market that had been characterised by large-scale national brands is becoming increasingly focused on local, authentic, small-batch production."
After compound annual growth of about 50 percent since 2010, craft distillers -- or those producing under 100,000 cases per year -- now account for about 2 percent of the U.S. market, the largest and most profitable in the world.
It remains to be seen whether it will ever get as big as craft beer, which makes up 11 percent of the volume and 20 percent of the value of the U.S. market.
"I don't think the response to craft per se is any big brand or little brand," said Michael Ward, Diageo's global head of innovation. "I don't think it has anything to do with the size of a brand."
Diageo, which has posted flat sales for two years, wants to reignite growth with a host of new labels including Blade and Bow and Orphan Barrel, whose marketing relies heavily on their links to the mothballed Stitzel-Weller facility in Kentucky, which was opened in 1935.
"Consumers are demanding a better understanding of what's behind the product and our job is to figure out how to tell that story better than we've done," Ward added.
Pernod, which took a 404 million euro ($449 million) write-down on its Absolut vodka after its U.S. sales fell, says it needs to better differentiate its marketing and may take a "craft-targeted approach" on some brands.
Craft "can be an opportunity or a threat -- a threat if we are not adapting our marketing platforms," said Gilles Bogaert, Pernod's chief financial officer. "I think today net net, we see it as an opportunity."
Pernod is playing up the artisanal nature of single malt Scotch with launches like the Glenlivet 50-year-old Winchester Collection. It also launched Our/Vodka, which it says is partly distilled, blended and hand bottled in microdistilleries.
SMALL AND GROWING
The number of U.S. craft distilleries jumped from about 200 in 2011 to about 600 in 2014, lifting sales volume from about 700,000 cases in 2010 to about 3.5 million last year.
Craft distillers' sales are nearing $450 million a year, according to the Distilled Spirits Council of the United States.
If current trends continue, Credit Suisse estimates craft could reach a 12 percent share over the next decade, helped by a consolidated distribution system that is allocating more resources to craft and the potential for proposed tax reform.
The rise of craft may cause greater pain for Diageo than Pernod, Credit Suisse says, since Diageo is more reliant on the United States, has put through a lot of price increases in recent years and has seen less consistent growth in whiskey, which has more craft credentials.
Yet a number of factors could cap the rise of craft spirits.
Distilling is more complex and capital intense than brewing as whiskies, rums and many tequilas require years of aging.
"Starting up a craft distillery is a very different cash flow exercise than starting up a craft brewery," said Diageo's Ward.
For gin, which can be made in one day, craft brands make up about half the "super-premium" market in Britain, according to Bernstein Research, but only 5 percent of gin overall. Because craft players lack the scale benefits of larger rivals, their prices are often higher.
"In vodka and gin, the barriers to entry depend entirely on how you want to do something," said Zoe Zambakides, head of marketing for London micro-distillery Sipsmith, which just hired its third distiller as it boosts output which she said is as much in a year as big brands make in a day.
The fact that there are already so many high-quality drinks at different price points and taste profiles means there is no obvious gap in the market like there was for beer 15 years ago, when light, easy-drinking, mass market lagers dominated.
What is more, Bernstein Research said craft beer was arguably ignored by big brewers, with leader Anheuser-Busch InBev only really ramping up its presence in the last 18 months.
"The large spirits manufacturers already offer premium niche products that compete head on with craft and have perceived heritage and authenticity," Bernstein said. ($1 = 0.8992 euros)
Pernod on 'mission' to 'stabilise' Absolut in US
Source: The Spirits Business
by Kristiane Sherry
4th September, 2015
Pernod Ricard's Gilles Bogaert has spoken of his company's "mission" to "stabilise" its Absolut vodka brand in the US following a 5% sales decline in the market.
In its full year 2014/15 results, Pernod Ricard reported a ?404 million "impairment charge" on the brand as it struggled in the country.
Absolut, which is the company's largest brand by volume, lost market share with the category "changing rapidly" with the rise of "so-called craft vodkas", said Bogaert, the company's operations and finance MD.
Speaking at a recent media event, he acknowledged that Absolut has lost market share to new vodka brands, which are driving the "modest" overall category growth.
However, "we are confident we can do a good job with the brand in the US", Bogaert continued. "Absolut is still a key priority".
Crucial to this "mission" will be recruiting key millennial consumers to the brand. Marketing efforts should communicate the brand's provenance, the Pernod Ricard team added.
An increased focus on super-premium Absolut Elyx is also part of the medium-term plan to see the brand return to growth in the country.
"Outside the US there is good growth,"Bogaert emphasised, with Denis O'Flynn, Pernod Ricard UK managing director, adding that the brand "is the fastest growing sku in the on-trade" in the UK.
Natural wine: It's unfiltered and unrefined - and could make hangovers a thing of the past
The yeasts and bacteria are still alive in 'natural wine', even after it's bottled, making it wild, exuberant - and the drink of choice of a growing number of foodies, says Rosie Birkett
Source: The Independent
06 September 2015
'Remember this wine. Memorise the flavour, because you won't come across it very often. That searing acidity. That saline quality. It's going to be a very hard act to follow," says Eric Narioo with a twinkly smile, as he pours out glasses of a golden, headily aromatic bottle to accompany our seafood starter.
It's a balmy hot summer evening and we're sitting in a chic gastronomic restaurant called Saturne in Paris's 2nd arrondissement, drinking a white Jura from Arbois-Pupillin in eastern France, a Savagnin/Chardonnay blend from Renaud Bruyère.
Narioo is not your standard wine buff. He is, specifically, an authority on natural wines, having founded importer Les Caves de Pyrene in 1988, and a clutch of much loved natural-wine-led restaurants in London, including Terroirs in Charing Cross and Toasted in East Dulwich. He's brought me here to Paris, along with Terroirs' head chef Dale Osborne, on a "natural-wine crawl", to show us that these artisanal wines don't merely pair with food, they enhance the experience.
Narioo orders Domaine de Peyra 2004 Gamay, an 11-year-old bottle from the Auvergne that, he tells me, was ahead of its time. This wine is the most distinctive colour - when held up to the light it glows an opaque scarlet, and it tastes wild, gamey almost, yet light and fruity. We drink it with duck breast with beets and walnut oil, and it brings vivid woodland flavours to the dish. Its maker, Stephane Majeune, went bankrupt and stopped making it. The 2004 was the very last vintage of this special wine, and the few bottles remaining are treasured.
"The strange thing is, 10 years ago, no one understood this wine. Now they love it, now the market is ready." Narioo sends a photograph of the liquid, held up to the light, to Ed Wilson, the chef with whom he started Terroirs and who now owns and runs Brawn in Columbia Road, east London. Within seconds, Wilson texts back "Gamay D'Auvergne".
That's what happens when you spend time in the company of Narioo, a man so knowledgeable and passionate about wine that it's hard not to listen and take note. He's on the cusp of launching a new restaurant in Melbourne, Australia - which has a huge natural-wine movement of its own - and is at the helm of a gang of evangelical natural-wine champions: people such as Master of Wine Isabelle Legeron, whose natural-wine fair in London, RAW, was a sell-out success this year; and fellow importers Raeburn Fine Wines and Tutto, who are banging the drum for provenance in wine as chefs have been doing for years with food.
Over the past decade, visionary restaurants on the World 50 Best list , including Noma, have championed the wines, and now a fresh generation of UK sommeliers and wine folk - at Brawn, Nopi, Lyle's, Hibiscus, Raw Duck, Verden - is basing its lists around them in London.
Yet, natural wine is still something you have to seek out in the UK. So, what exactly is it? As Narioo points out, there is no official accreditation. In his deep, rolling French lilt, he explains: "What we should really be saying is that there is wine, and then there is chemical wine. The term refers to wine made in a natural way."
The people who follow this route tend to be small growers, who work their vineyards sustainably, organically or biodynamically (according to the holistic farming philosophy of Rudolf Steiner), meaning they rely on wild, naturally occurring yeasts to ferment the wine, and don't acidify or add tannins. The farming is labour-intensive, promoting biodiversity and eschewing chemical fertilisers, with all of the picking and selection of grapes done by hand; the wines are often also made with indigenous grapes. Many of the wines are unfiltered and unrefined, and made with minimal, if any sulphur dioxide - the sulphites usually used to "preserve" wine.
This means the natural yeasts and bacteria are at work even when the wine is bottled; the result, typically, is unusual and wild or lively k flavours, and sometimes even a subtle fizz. Essentially, the wine is still "alive", which, according to Narioo, makes it a better match with food. "They help you digest and there's no rubbish in them," he says. "You feel great when you're drinking them - and afterwards. There's an old term in France, Le Vin Docteur. If you filter and disinfect your wines with sulphites you take away all that goodness.
"For natural wines, there are two ingredients: grapes and knowledge," Narioo continues. He should know: along with his wife Anna he runs his own natural vineyard, Vino Di Anna on Mount Etna in Sicily. "Ninety-nine per cent of the work is done in the vineyard; if you've got healthy grapes it's much easier to make good [natural] wines."
All of which appeals to chefs, restaurants and foodies - hence the increasing presence of natural wines. "It goes hand-in-hand," says Narioo. "Wherever in the world there is natural wine, there is usually good food. If it's a restaurant, whether high-end or something more simple, you'll find they're sourcing good bread and cheeses and artisan products for their menu."
Nowhere is this more apparent than in Paris, where today you'd struggle not to drink natural wines when you go out for something good to eat. We lunch at a tiny, gorgeously scruffy bistro called Le Verre Volé in the 10th arrondissement, famous for its selection of natural wines and a prime example of the "bistronomie" movement - a term used to describe casual bistros serving well-priced gastronomic food. Its walls are lined with shelves of wines, their individually designed, hand-stuck labels reflecting the character of the winemakers themselves.
Because the winemakers are operating outside official and heavily regulated appellations - AOC (or DOC in the case of Italian wines) - they sometimes don't identify themselves in a conventional way on the label. "The AOC system is a good idea, to protect the terroir, but it's not doing that any more, it's restrictive," says Narioo. "So lots of winemakers who are working in well-known regions aren't claiming appellation, but they're making the purest wine."
He orders a bottle of Fêtembulles ("party time with bubbles"), made by Jean-Pierre Robinot, which sports a psychedelic-looking label. As we sip the light, golden, fizzy Chenin from the Loire we hear how the winemaker, now in his sixties, sometimes mis-labels his bottles. "Sometimes you open it up and it's pink - it's Gamay!"
The following day we lunch at Le Servan in Père Lachaise in the 20th arrondisement with Michel Tolmer, an artist/illustrator who's been involved in the movement for years. His satirical graphic blog Mimi, Fifi et Glou Glou has been lovingly adopted by the natural-wine scene, thanks to its depiction of its eponymous characters' love of "les vins naturels".
We share whelks with basil and mayonnaise, boudin noir wontons and a bottle of rosé pétillant as Tolmer shows me some of his drawings, reminiscing about the nascent days of natural wine in Paris. "I remember a world before natural wine, when we were all looking for them and they hadn't arrived," he says. "They came in the 1980s and 1990s thanks to a new generation [of wine drinkers] who were curious and started to communicate with winemakers and say that they should be farming in this way."
Narioo explains how, when he started importing to the UK, there was resistance from restaurants and sommeliers. "All the sommeliers and wine journalists of my generation have a knowledge of wines from when they were studying them, so the 1980s, 1990s and early 2000s were an era when winemaking was really controlled. The best wine was actually being made in the 1920s to the 1940s - it was all organic then, but then we lost that knowledge."
"So these sommeliers would be taking a risk by putting natural wines on their list - because they were different to these very controlled wines. That's why we opened Terroirs. And then people came, and they didn't know what they were drinking, and they loved it."
We return to London and Narioo invites me, along with a group of fellow wine importers and retailers, for dinner at Terroirs. Osborne puts together a complementary menu of simple food: sweet, juicy Scottish langoustines, meaty, piquant anchovies from Cantabria and clean, butter-soft native sea trout with brown shrimps.
The group is Alex Whyte and Damiano Fiamma of importer Tutto; Liam Kelleher from Noble Fine Liquor and P Franco in Hackney; and Raef Hodgson from Gergovie Wines and 40 Maltby Street - a new generation in their twenties and thirties. Each talks excitedly about the wine he has brought, and in our glasses we travel to the Jura with an oxidised Savagnin from Arbois; to St Joseph in the Rhône Valley with a bottle of beautiful organic Syrah; to the Yarra Valley in Australia, with a Sauvignon that tastes of macerated strawberries; and up to the volcanic Lake Bolsena in Lazio, central Italy, with an intensely mineral bottle of Le Coste.
In turn, Narioo brings out some wines from the Terroirs list, including his soft and drinkable Palmento from his own vineyard. We stay until 1.30am, and must drink more than 10 different wines. The next morning I have to be up very early. I wake up feeling fit as a fiddle, and no, I'm not still drunk - it must be the Vin Docteur.
Price war threatens Prosecco
Source: the drinks business
by Lucy Shaw
2nd September, 2015
Rising grape prices and the resulting price war threaten to damage the strength of 'brand Prosecco' according to one major producer in the region.
Speaking to the drinks business during a recent visit to London, Paolo Lasagni, managing director of Bosco Viticultori, said:
"There's huge competition between the co-ops and grape growers are expecting a lot of money from their crops this year, but if the price of Prosecco gets too high suppliers and consumers will start looking for alternatives like Asti Spumante.
"Prosecco is in a really good position at the moment, it would be a shame to destroy a fantastic product with a price war. If people speculate too much on price then buyers will look elsewhere for their fizz."
Lasagni told db that the grape price are likely to rise this year from ?1.20 per litre to ?1.75, which will dissuade some suppliers from buying at the higher bottle price.
"I think £6.50 for own-label Prosecco is the sweet spot. Supermarkets aren't losing money on Prosecco but they aren't making money on it - the favourable exchange rate is helping," he said.
In July a law was passed in the Prosecco region that allows producers to harvest 180 tonnes of grapes per hectare up from 155 tonnes, which will result in three million hectoliters of Prosecco being produced in 2015, up from 2.3m last year.
Lasagni calculates that a million of the three million hectoliters of Prosecco produced this year will be needed to honour ongoing contracts around the world.
"If consumption continues at its current rate then we'll barely get to the new vintage without running out, and if consumption rises then we'll run out before the 2016 vintage goes on sale," he warned.
Lasagni described the 2015 vintage as "average" from a quantity point of view and "good" from a quality point of view.
He also spoke of a possible relaxing of the rules in the region that would allow sparkling rosé to be produced and bottled as Prosecco, a move he approves of.
"I think it will happen and when it does, we'll be making it. I'm a fan of rosé and rosé Prosecco is easy to make as you're allowed to include up to 15% Pinot Noir in the blend. Rabozo is also a good grape for making sparkling rosé," he said.
New wine movie to open Napa Valley film festival
September 4, 2015
A new wine film claiming to 'raise the curtain' on how wine is produced is set to open the Napa Valley film festival this year.
Napa Valley film festival organisers said their screening of Somm: Into the bottle would be the wine film's world premiere.
It is screenwriter and director Jason Wise's sequel to 'Somm', which attempted to capture the intensity of the Master Sommelier training and exam programme. Somm also opened the Napa Valley film festival in 2012.
This time, Wise has broadened his sights to include how wine is made, who touches the bottle on its journey to your dinner table and how wine prices are decided. It also includes wine history.
'Somm: Into the Bottle raises the curtain into the seldom seen world that surrounds the wine we drink,' said a synopsis of the plot published by Samuel Goldwyn Films, which made the documentary movie.
'This is a never before seen look into the world of wine,' it said, adding that viewers will see some of the world's most rare bottles of wine opened to see how they age.
Wise said, 'Somm was a great introduction into the world of Sommeliers but I still wanted to delve deeper into the profession and the wine industry as a whole.'
Napa Valley film festival is scheduled to run from 11 to 15 November this year, featuring 125 independent films showing across Napa, Yountville, St Helena and Calistoga.
Sonoma County vintners counting on quality, not quantity
Source: THE PRESS DEMOCRAT
BY BILL SWINDELL
September 5, 2015
Midnight had come and gone, but winemaker Boyd Morrison was still walking through the Laguna Ranch Vineyards outside Sebastopol to examine the grapes that will become the foundation for his 2015 vintage.
Halogen floodlights lit up the vineyard as crews moved down the rows, swiftly snipping clusters of pinot noir grapes from the vines. Morrison, who had been up since 4 the previous morning, was filled with a mixture of exhaustion and elation, a feeling that winemakers know all too well in September as the North Coast's annual grape harvest shifts into high gear.
As winemaker for MacMurray Estate Vineyards, a pinot noir specialist owned by Modesto-based E&J Gallo Winery, Morrison monitors all the different vineyards in his portfolio. He had been down to Monterey earlier in the week and wearily joked that harvest is "just the time to live in your car."
But the payoff approached as Morrison sampled the grapes from Wednesday night's pick. The berries, he noted, were "super small" with a good juice-to-skin ratio, which should translate to very flavorful wines with great depth that will age well.
"The flavor and the quality we are going to get out of this harvest is going to be incredible," Morrison said.
Vintners like Morrison across the North Coast are relieved about the quality of the fruit. It helps take some of the sting out of this year's harvest, which will be much less bountiful than last year's $1.4 billion crop.
The Sonoma County grape crop alone could be anywhere from 30 to 35 percent smaller than 2014's total of 255,635 tons, said Karissa Kruse, president of Sonoma County Winegrowers, which represents more than 1,800 local growers.
"We are really happy with the wines we are getting. . We wished we had more," said Laurence Sterling, director of operations at Iron Horse Vineyards in Sebastopol, where this year's crop is down 45 to 55 percent from 2014 in some blocks. "We'll make it work."
This year's harvest is one of the earliest ever, beginning July 22 in Napa County and July 29 in Sonoma County. About 30 percent of the Sonoma County crop has been picked, Kruse said, and harvest should be finished well ahead of its typical ending, which occurs around the first week of November.
Unusual temperatures are responsible for both the early start to harvest and the smaller yields.
Record heat in January and February awoke the vines from their winter hibernation far earlier than normal, kicking the growing cycle into action.
But cooler weather in April and May slowed down flowering and fruit set, when small flowers on the vines are fertilized and transformed into tiny grapes. That, in turn, reduced the size of the 2015 crop, even though the vines continued on their march to an early harvest.
Vineyard managers and vintners in certain areas, such as Napa's Atlas Peak, have reported significant amounts of shatter, which is essentially when clusters have not developed fully. Others have reported an uneven ripening of grapes - "hens and chicks" in the parlance of growers. In some cases, growers have sent crews out into the vineyards before harvest to cull the unevenly ripening grapes.
In general, cool sites in higher elevations such as in the wine grape growing areas of Sonoma Coast, Bennett Valley and Sonoma Mountain have struggled with very poor set and uneven ripening, said Eric Flanagan, proprietor of Flanagan Wines. He has found crop yields down from 5 percent to 80 percent relative to last year.
Certain varietals have suffered more. Zinfandel and sauvignon blanc have been particularly hard hit with lower yields, said Duff Bevill, founder of Bevill Vineyard Management, which oversees about 1,000 vineyard acres.
Winemakers, however, are adjusting. On Wednesday night, Scott Johnsen, a viticulturist for Gallo's Frei Brothers Reserve, summed up this year's harvest as he picked up a cluster of pinot noir grapes during the Laguna Ranch pick. He noted the small Pommard clone he held in his hand had a lot of small berries that had no seeds, while some of the larger ones had only one seed. That meant the grapes would have to spend more time on the vine.
"We're going to have to get this cluster pretty ripe, riper than we would have otherwise if they were all full, mature berries," Johnsen said.
At Iron Horse, the unevenness was evident when a crew picked a block of pinot noir grapes for sparkling wine on Aug. 18 and then left fruit on that section to ripen for an additional two weeks. The vineyard was fully picked Thursday and Friday, Sterling said.
"We did that first pass . and it was crossing our fingers because we had no idea what was going to happen," Sterling said. "Was all this fruit we left out there going to be pickable?"
Growers have benefited from good vine weather this summer with little rain and temperatures for the most part in the high 80s and low 90s with few heat spikes. That temperate climate has given winemakers enough lead time so they are not rushed to make a pick. Some local vineyards had an influx of powdery mildew earlier this summer, but it didn't pose a significant problem.
Still, the lower yields are having repercussions.
Sterling said he is paying his pick crew by the hour, as opposed to by the weight, so they don't suffer significant wage losses because of the small harvest. Some vintners who have relied on surplus grapes that were readily available in recent years have found themselves scrambling for fruit.
"Most of the winemakers are getting less than they expected," Kruse said.
In addition, some contract growers may find it will be tough to break even on certain vineyard blocks because they will not get the tonnage they projected earlier in the year when they entered into price-per-ton contracts with wineries, Bevill noted. Roughly 85 percent of local growers are locked into contracts, as opposed to selling their grapes on the spot market.
"It's a crapshoot all year long," Bevill said of growing grapes.
Industry executives say the lower yield, however, is actually good for the overall North Coast wine marketplace because it will help bring it back into balance after three previous bumper crops, including 2013's record-setting crush for Sonoma, Lake and Mendocino counties. Napa County's largest crop was in 2012.
"We have some short-term pain for some moderate-term benefit," said Brian Clements, vice president for Turrentine Brokerage, a Novato-based grape broker.
Another large crop would have depressed prices in the bulk and spot markets, Clements said. Some varietals, such as chardonnay and pinot noir, could have slipped below $1,000 per ton, he said. Local chardonnay is priced around $1,700 per ton and above, while pinot noir is about $2,500 per ton and above.
"Mother Nature gave us exactly what we needed for the marketplace," Clements said.
It will likely take an average 2016 crop to bring the bulk market back into balance, he said. The only varietal that appears to be immune from price sensitivities right now, Clements said, is cabernet sauvignon, which he called "bulletproof."
Even Bevill agreed, saying, "another bumper crop would not be good."
What's the Point of Scoring Wines?
A wine's character changes almost daily, and taste is subjective-so is giving them marks a pointless exercise?
By Will Lyons
Sept. 4, 2015
PICTURE THE SCENE: It's early September and the day is drawing to a close, but there is still enough summer in the air to enjoy supper outside. In front of you is a plate of juicy prawns, sizzling away in a garlic sauce. Next to it is a glass of chilled white wine, nothing particularly expensive, nothing particularly special, but at that moment when you reach for a first sip and swirl it around your mouth it is as good as anything you have ever tasted. If I asked you there and then to score it out of 100, you would probably give it full marks.
Therein lies the difficulty of rating wines. While there are perfect situations for specific wines, can you ever really say a wine is perfect? After all, a wine's taste and character changes almost daily, and whatever any critic says, taste is subjective.
Among wine critics, there is an almost constant debate about scoring wines. Does it help the consumer, or does it confuse matters? Are we dumbing wine down or demystifying it?
Scorers of wine argue that it is a helpful guide for consumers, a shorthand to identifying quality. The opposing camp argues that there is a lack of uniformity, and scores are given out of context. Some ask if it's a pointless exercise-isn't a description sufficient?
I can't help feeling that at the heart of this debate is an element of self-justification. As Caspar Bowes, a British wine merchant with a self-described "visceral hatred of scoring wine," says, "it is people pretending that they are doing something scientific when they are not."
There are several different systems for scoring wine. The most famous is the 100-point scale, widely credited to Robert Parker, which is used by the Wine Spectator and Wine Enthusiast magazines. This system looks at the color, bouquet and taste. Each wine is awarded a base score of 50 for being created in the first place. On top of this, points are added-up to five for the color, 15 for the bouquet, and 20 for the palate and texture, and another 10 for the overall quality and potential for development. You could argue it is actually a 15-point scale, as so few wines score under the 85 mark.
The second most common scoring mechanism is the 20-point scale used by the University of California, Davis, recognized as the finest wine university outside France, and several British critics. There is also a five-star scale adopted by Decanter magazine, and a three-star scale, or three wineglasses, the "Tre Bicchieri" used by Italy's premier wine guide, the Gambero Rosso.
So what is the point of scoring? Robert Parker told me that he began doing it as a reaction to too many wine merchants hedging their bets. "I just thought by using the 100-point scale it is a stake in the ground, the ultimate accountability," he said when I spoke with him last year.
Perhaps it would help if there could be more clarity in the scores. Why not publish the score for each individual component rather than just a final number? Mr. Parker acknowledges that scoring is akin to taking a photograph of a marathon runner, and that it is the description that matters. To this I would add, the only opinion that really matters is your own.
Jancis Robinson on wine experts versus amateurs
In the age of the smartphone the role of the critic has never been more complex, writes the FT's wine columnist
by: Jancis Robinson
September 4, 2015
Only once in my life did I ever think I knew everything there was to be known about wine. It was in 1978, after finishing two years' worth of courses run by the Wine & Spirit Education Trust. By dint of luck, and a dose of grammar school diligence, I was the top student of my year, and reckoned that with a WSET diploma under my belt, I was now a fully fledged wine expert.
The succeeding years have taught me just how much there still is to learn. But, as someone celebrating her 40th year writing about wine, I have to concede I am considered by many as a wine expert. However, I am keenly aware of the sands that have been shifting under the notion of expertise in this era of instant communication and (often anti-) social media.
In the last decade or two of the 20th century, when it took more than a nanosecond to communicate, the most successful wine writers around the globe were considered near-oracular. This was most obviously the case for America's Robert M Parker Jr, who from 1977 promulgated a system of scoring wines out of 100 that made "understanding" wine or, at least, working out which he judged the best, delightfully easy, whatever your native language. The points system also made it possible for those selling wine to let a third party - often, but not always, Parker - do much of the work of selling (and selection) for them, and in the Parker era, shops, catalogues and websites featured not prose, nor enthusiastic verbal recommendations, but numbers, almost all of them between 89 and 101. Parker could certainly make or break wines and wineries with the same power as exercised by the most highly regarded theatre or restaurant critics.
Parker was not alone in enjoying the status of someone handing down incontrovertible judgments on tablets of stone. Most wine-consuming countries had their wine authorities, such as James Halliday in Australia, Michel Bettane and Jacques Dupont in France, and annual guides such as Gault Millau in Germany and the Platter Guide in South Africa. They were followed fairly slavishly by both consumers and wine professionals.
Back in those days, wine used to be one of those subjects about which ordinary people in anglophone countries would hesitate to express an opinion. It used to be left to us experts to tell ordinary tasters what to think and how to describe those thoughts. But now wine has definitively lost its elitist veneer.
In the 21st century, the internet and now, particularly, the smartphone have changed everything. Wine drinkers can compare multiple evaluations concurrently - not just at home but in the wine shop and restaurant. Label-scanning apps such as Vivino and Delectable are designed to present as much information as possible on individual wines, often including ratings, as soon as you point your mobile phone at them. Winesearcher.com has been providing invaluable price comparisons and stockist information for individual wines and retailers around the world since 1999 and it has now added average quality ratings and diversified with its own label-scanning app. Another app, with the slightly painfully punning name Raisinable, compares the value offered by specific wines on the lists of restaurants in London and New York.
CellarTracker.com, set up in 2003 by an ex-Microsoft wine geek, has played a big part in transferring power from experts to the wine-drinking populace: it now hosts, and presents for free, almost 5m tasting notes with scores from more than 100,000 wine amateurs. (Since last year it, too, has had its own label-scanning app in conjunction with Vivino.) Cellartracker has, admittedly, also factored in the wine reviews and scores of various specialist wine writers' websites, including my own, but it is arguably the sheer weight of consumer as opposed to expert opinion that makes CellarTracker so popular.
One retailer, Naked Wines, differentiated itself early on in its short history by encouraging customers to review wines and communicate directly online with the winemakers supplying the website. Its business, built on crowdfunding, has been so successful that the company was judged Online Business of the Year in 2011 when it was just three years old, and the model has since been rolled out throughout the US and Australia. Professional wine commentators are redundant in Naked Wine's marketplace.
My point is that I have gone from being a unique provider of information to having to fight for attention. Since word of mouth is the most powerful sales tool in the world, its power amplified exponentially by social media, what is the role of those of us who make our living giving out expert advice in this new, democratic, much more populated landscape of opinion?
I am feeling particularly sensitive because the fourth edition of The Oxford Companion to Wine is about to be published. Together with assistant editor Julia Harding, I have spent two intensive years, helped by almost 200 contributors around the globe, updating the old entries and adding 300 new ones so that the whole thing now totals about a million carefully chosen words arranged in 4,000 alphabetically-listed entries. When the first and second editions came out in 1994 and 1999, much of the information in the Companion was unique. But nowadays, anyone with internet access can look up the book's subject headings on Wikipedia - and, admittedly, often find the Companion entries cited at the bottom of the page.
I have read arts critics fulminating against the proliferation of "amateur" reviews and arguing that these cannot possibly carry the weight of those freighted by decades of experience and deeply relevant education. But it's not an argument I can use when I have spent my entire working life trying to arm consumers with as much information as possible so that they can make up their own minds about individual wines.
Unlike Robert Parker, I have never believed that there is only one "correct" objective judgment to be made about each wine. Quite apart from the huge variation that there can be between bottles of the same wine, some of it due to storage conditions, I have always argued that wine tasting is so dependent on individual sensory equipment, not to mention partialities and sensitivities, that it is bound to be subjective - no matter how reliably we professionals may be able to judge its dimensions such as sweetness, acidity, tannin and alcohol level and be able to discern technical faults.
Even here, individuals vary enormously in their sensitivity to the different compounds responsible for them. Some wine professionals, for example, are unable to pick out which wines are corked, or spoilt by cork taint, because they are insensitive to trichloroanisole, or TCA, the compound responsible. Similarly, we all vary in the number of taste buds we are able to deploy in the tasting process. As long ago as 1994, the experimental psychologist Linda Bartoshuk coined the inflammatory term "supertaster" for those who have more taste buds than most and tend to be particularly sensitive to bitterness.
The wine market today is more crowded than ever. As wine production has transformed itself from peasant activity to plutocrat's bucolic folly, and as drinking wine has become a social signifier on every continent (most recently - and most spectacularly - Asia), consumers are presented with a baffling array of choices. And, as producers strive to make better and better wine every year just to stay in the game, so they have to shout louder and louder to get attention.
This may partly explain why some days no fewer than six or seven boxes of unsolicited samples arrive on my doorstep - more than ever before - in the hope that I will publish a tasting note on them. But could it also have something to do with the fact that, even in this era of the citizen critic, my 40 years of visiting vineyards, listening to winemakers, watching trends emerge, making comparisons and seeing wines evolve from barrel to decades in bottle might just be regarded as worth something?
It may be difficult to believe but tasting wine is hard work: it is completely different from the relaxation and joy that I associate with drinking wine. Tasting requires complete concentration and a mind that is every bit as open as the mouth, and all-important nose, to new flavours, styles and developments. Prejudice engendered by certain producers, grapes or appellations can be a terrible thing, which is why I prefer to taste blind (ignorant of the exact identity of each wine) as often as possible.
Tasting is physically tiring, particularly if, like me, you wish to provide drinkers with information on as many wines and tasting notes as possible. Thus I often find myself tasting up to 100 wines a day. While this puts me straight into the sights of those who have been warning recently in the UK about the perils of toping in middle age, I should stress that when we are tasting wine, we professionals see alcohol as the enemy. Rather than seeking any hint of inebriation, we want our senses to remain as sharp as possible and so try to spit out every drop of wine tasted. (Contrary to popular opinion, there is no tasting equipment in the throat; and several of the world's most respected wine tasters, such as Katsuyuki Tanaka, are teetotal.)
Occasionally, when I mention my decades of experience, friends remark somewhat accusatorily, "Isn't your sense of taste meant to decline with age?" Though I have no way of directly comparing the performance of my olfactory bulb today with 40 years ago, I do know that my ability to concentrate is infinitely greater than it was when I was young. I used to be genial and chatty at wine tastings. Today, blinkered and working feverishly, I look only at my glass, laptop and spittoon. (The fun bit of wine happens in the evening.)
But tasting fairly, acutely and accurately is only half of what is required. Just as difficult, possibly more so, is finding the right words to describe the wine. I like to major on the dimensions of the wine: how tough/tart/powerful/sweet/ready is it? And I describe only the most obvious flavours in it because I'm always writing with the consumer in mind and I know how variable everyone's tasting equipment is. But, just as wine critics have been accused of score inflation (it used to be that 85 was regarded as a good score; nowadays a wine has to be above 90 to sell easily), there seems to have been inflation in the number of flavours cited in tasting notes. This is particularly true of wine reviews generated in the US, where 10 different flavours, some of them questionable to say the least (grilled watermelon, anyone?), identified in a single liquid is commonplace nowadays.
Back in 1989, the Australian taste scientist David Laing, from the University of New South Wales, conducted an experiment in which he demonstrated that humans have great difficulty in identifying more than four different flavours in a single liquid. And when in 1996 he tried a similar experiment on experts who smell and taste for a living, they were better than amateur tasters at identifying mixtures of two and three components but did no better when it came to four.
If some of my colleagues really can identify grilled watermelon, star anise, black raspberry, fennel seed, oolong tea, gardenia, sandalwood, mandarin orange, rose petal and fresh thyme in a single wine, as one resourceful recent reviewer managed, I take my hat off to them. But I get the impression that, in this crowded arena of opinion, where we are all trying to make ourselves heard (or at least read), an increasing number of wine reviews are written for producers and retailers to quote rather than with the prime purpose of helping the consumer make decisions about what to buy. Quite apart from the variation in our individual perceptions, who really gets up in the morning and tells themselves that they simply must find a wine that tastes of fennel seed, grilled watermelon and gardenia?
I would honestly be delighted if every wine drinker felt confident enough to make their own choices dependent on their own individual responses to wines previously tasted. But I do recognise that, for many people, it will always be simpler to be told what to like. As long as I am valued by wine consumers and producers, I will embrace the new landscape, knowing that nowadays it is all too easy for readers and tasters to criticise the critics in online comments that will be read by as many people as the original judgment.
With a growing army of opinionated young wine drinkers - whether consumers or professionals pouring their latest finds by the glass in a bar in Shoreditch or showing fellow enthusiasts round an urban winery in Brooklyn - I know that, like any other wine expert, I can stay in the game only by working hard and accurately enough to earn my readers' trust.
The fourth edition of 'The Oxford Companion to Wine' (£40, OUP) edited by Jancis Robinson and Julia Harding is published on September 17
Maximizing Revenues: What I learned in the wine aisle at Trader Joe's
Source: Miami Herald
BY ADAM SNITZER
I enjoy drinking wine. But I'm not good at remembering the names of wines I like. And I have no idea which years were particularly good for one grape or another.
So I'm lost in the wine aisle of my local grocery store. Who knows why the 2011 from Argentina is worth $10 more than the 2014 from Chile? I prefer red to white, and I'm partial to California because I used to live there.
Beyond those guidelines, I buy on price. For weekday wines to accompany dinner and relaxing in front of the TV, I look at bottles in the $9.99 to $12.99 range. I gravitate toward what's on sale; and I'm a sucker for BOGO.
I'll spend a few dollars more for Friday night because we linger over dinner longer. If friends are coming over, I'll go to the $18.99 to $21.99 range because that seems respectable. And if it's a gift, or we've been invited to a friend's home, I'll look for a cool, artsy label on the top shelf and go as high as - gulp - $39.99.
But I don't know what I'm doing. It's about my willingness to pay, not about wine regions or vintages or pairings with the other items in my grocery cart. Every week, I resolve to pay more attention to the names of wines I like, or get an app for my iPhone so I can have more guidance in the wine aisle at the grocery store. But I never do.
Then I made a pilgrimage to Trader Joe's, the holy of holies when it comes to grocery stores, and I learned some lessons about selling wine that I think are applicable to all businesses.
I went to see what the fuss was about. My brother, who lives in San Jose, California, says that no matter where he is, he knows the way to the closest TJ's. My sister-in-law has been known to drive from Miami to Naples on a Trader Joe's run. And my daughter's devotion borders on militancy.
So I braved the traffic on I-95 and U.S. 1 to get from Miami Beach to Pinecrest. When I arrived, there was a line to get into the parking lot, so I risked having my car towed by parking at a neighboring commercial establishment.
I was skeptical, but I came away a convert, at least when it comes wine. Trader Joe's does more than just put wine on their shelves. They add a small, whimsical placard with a delicious description of each wine.
It was easy to choose one $9.99 bottle described as a "luscious red with berry aromas, cherry and plum flavors" and another that was "smooth and zesty, with rich flavors of cherry, raspberry and blackberry with a long finish."
I grabbed an $11.99 bottle because it was "elegant and sexy." And I felt confident spending more for Friday night's wine. After all, who could resist "aromas of ripe berries, cranberry and candy apple with a silky texture."
I even saw bottles that I recognized from my local grocery store. But who knew that one was "aged in oak for 14 months?" Or that another was "wonderfully complex, spicy, earthy and upfront?" All of the sudden, I liked them much more.
So what's the lesson for business owners? Don't let price be the sole differentiator of your products. Tell a fun, engaging story to help guide your customers' purchase decision. You'll sell more and at higher prices.
If you need further inspiration, head over to the wine department at Trader Joe's. But go on a weekday. You'll stand a better chance of finding a parking space.
Kroger paying for beer, getting liquor-sales rights
Source: The Columbus Dispatch
By Earl Rinehart
September 6, 2015
Kroger has spent almost $26?million on 19 cases of Miller Light beer since 2013.
It's not sloppy accounting, or the world's biggest tailgate party. It's a combination of a temporary hold on state liquor-agency contracts and the grocery giants paying a premium to get existing contracts from smaller retailers.
You can't sell the hard stuff in Ohio without the golden ticket of an agency contract.
When the Ohio Division of Liquor Control sees a need for a new liquor agency in an area, it posts a notice that it's accepting applications, said Matt Mullins, spokesman for the state Department of Commerce, which oversees the Liquor Division. The applicant the division thinks would be the best fit for the area wins the contract, a supply of liquor and 6 percent of sales.
The last contract was awarded in February - to the Giant Eagle store in Kingsdale Shopping Center in Upper Arlington.
City officials opposed it, saying the area didn't need a second liquor agency. Owners of Huffman's Market, the existing contract-holder a mile down Tremont Road from the Giant Eagle, said the competition could put their store out of business.
Kroger came to Huffman's rescue in June - to the tune of $3 million. It was one of 19 contract transfers the Cincinnati-based chain has obtained throughout the state in the past 21/2 years. It was the most anyone paid for a single contract in that period.
"We are investing in capital improvements, renovating existing stores and constructing new stores," said Jennifer Jarrell, spokeswoman for Kroger's Columbus division. "A contract liquor agency inside a Kroger provides an added convenience; customers are able to do their grocery shopping and purchase liquor without making two trips."
The 19 transfers involving Kroger are out of a total 42 since 2013, according to Liquor Control records.
Ryan Huffman has said that with the Kroger payment, his family will expand other offerings, such as beer and wine. Other than Huffman, no market owner contacted would talk about transferring its agency contract.
State liquor contracts cannot be bought and sold, Mullins said, although the asset purchase agreements that accompany the contracts clearly call the parties "buyer" and "seller."
"You have to buy the business or some asset of the business," he said. Those are listed on the "asset purchase agreement" attached to the paperwork sent to Liquor Control.
Each time, Kroger lists that it's buying "One (1) Case of Miller Light Beer, One (1) Small Gondola Shelf; Good Will" and the agency contract.
Asked to explain the list, Jarrell said, "It wouldn't be prudent to discuss details of any particular asset purchase agreement."
Kroger's offers contrast with other operations that actually buy the inventory of stores, sometimes the store itself, as well as the agency contract. Ekadant LLC is paying $309,000 for the Wine Guy at 1383 E. Johnstown Rd. in Gahanna.
Smaller retailers make up the bulk of the contract transfers.
Giant Eagle has had three transfers in Ohio since 2013, one in Canton and two in central Ohio, for a total of about $3.2?million.
The records show that Kroger had nine transfers in central Ohio besides Huffman's and more in the rest of the state. It paid various amounts, depending on how much it wanted a contract and on the success of the business, experts said.
It was unclear why it paid a Port Clinton seller only $100.
With its new contract, the Kroger at Graceland Shopping Center is encroaching on her turf, Jennifer Williams said.
Williams and her husband, Scott Bowman, own Weiland's Market at 3600 Indianola Ave., which has had a liquor-agency contract since 2006. The market is about 3 miles from Graceland.
"We've always considered ourselves the state liquor agency for Clintonville," Williams said, standing in a large room among a sea of shelves and coolers featuring myriad brands of liquor. "This will hurt us. We'll lose the Worthington crowd that will stop at Graceland."
With no contracts available for now and the chains obtaining them from markets, Williams wondered if Liquor Control was trying to put small retailers out of the liquor business. The big boys could sell more liquor, making more money for the ultimate benefactor of liquor profits, JobsOhio, the state's private, nonprofit economic-development agency, she said.
"We do not favor grocers over smaller agencies," Mullins said. "Among other things, there would be no economic incentive in such a policy. The state receives the same revenue from a sale whether that sale is made by a larger grocer or a small agency."
The division doesn't seek new agencies unless an area needs one, he said. That often is measured by requests from merchants and communities.
"We have been awarding about four new agencies a year," he said. "The vast majority of our agencies are small businesses - 80 percent of a total 467 agencies."
Williams said she might consider an offer for her agency contract, "maybe a million and a half." Sometimes, she questions whether it's worth having the agency contract.
Weiland's sells about $5,000 of liquor a day during the week, $10,000 to $15,000 on Fridays and Saturdays. The 6 percent cut would earn the store between $300 and $900, depending on the day.
"A lot of our customers come in, buy a bottle, and leave," she said. "They might take some shrimp samples on the way out."
Retailers have to take whatever product the division gives them, whether it sells well or not, Williams said. "They give us what they want us to sell. It just takes up space."
Rin Gristwood, Weiland's liquor-department manager, pointed to shelves of flavored vodkas the state sent; not exactly big sellers in Clintonville, she said. When Gristwood sends in a special order, it's often weeks before she gets a response, she said.
Williams and other retailers interviewed said they thought there was a 3-mile buffer between state liquor agencies.
"Those are guidelines, not rules," said Marc Myers, a lawyer who handles liquor-related cases and represents Williams. He said Liquor Control sticks fairly close to 2 or 3 miles between retailers.
"It's nothing sinister," he said. "It's nothing more than a free-enterprise system."
Liquor Control's new computer system, which replaces one that's 40 years old, "has given us challenges, but it has not slowed or eliminated services, and we are experiencing record revenues from sales," Mullins said.
He said complaints most likely stem from frustration "in the changes forced by a new system that has its share of bugs."
Soft pharmacy sales drag on Rite Aid
By David Salazar
September 4, 2015
Prescription counts decreased a little and pharmacy same-store sales were up in August, according to numbers reported by Rite Aid Thursday.
The company, which also announced its Q2 sales figures, said that overall same-store sales increased by 1.6% in August over the same period last year, and pharmacy store sales were up 2.1% over 2014. The company also saw fewer prescriptions filled and a 222 basis point negative impact from new generic introductions.
As for the quarter, same-store sales rose 2.1% over the same time last year to $6.602 billion. Among drug store sales, prescriptions constituted 69.3% of all sales and third-party prescription sales made up 98.7% of sales.
So far in Rite Aid's fiscal year, drug store sales are up 2.3% over last year to $13.2 billion, with an increase of 3.2% in pharmacy same-store sales.
Despite a lower monthly prescription count, so far this year the company has dispensed 0.9% more prescriptions than it did during the same period last year.
The company also reported that front-end sales rose 0.5% in the first 26 weeks of its fiscal year.
Labor shortage making a comeback?
September 4, 2015
Restaurants have added more than 1.8 million jobs since the end of the recession, and the expectation is for continued growth in the months ahead. However, there are indications that job vacancies are becoming more difficult to fill, according to the NRA's Chief Economist Bruce Grindy. His Economist's Notebook commentary and analysis appears regularly on Restaurant.org and Restaurant TrendMapper.
The restaurant industry closed out the summer with a solid month of job growth, according to preliminary figures from the Bureau of Labor Statistics (BLS). Eating and drinking places added a net 26,000 jobs in August on a seasonally-adjusted basis, which pushes the industry's post-recession payroll growth above the 1.8 million mark.
Although restaurant job growth shows no signs of slowing - 2015 will mark the fourth straight year with employment gains of at least 3.5 percent - there are indications that job vacancies are becoming more difficult to fill.
The average monthly job openings rate in the restaurants-and-accommodations sector* rose to a post-recession high during the first half of 2015, according to Job Openings and Labor Turnover (JOLTS) data from BLS.
End-of-month job openings in the restaurants-and-accommodations sector averaged 650,000 during the first half of 2015, which represented an increase of nearly 70,000 job openings over what was reported during the first half of 2014.
At the same time, the pace of hiring in the hospitality sector is also the rise. Restaurants and lodging places filled an average of 773,000 positions each month during the first half of 2015, which represented the strongest pace of hiring since 2007.
Note: The 'hires' figures represent the total number of additions to the payroll during the month. Net job growth - which for eating and drinking places is in the +30,000 to -30,000 range during a typical month - is the difference between total hires and total separations during the month.
Overall, both hiring and job openings trended upward during the last few years, as would be expected during an economic recovery. However, as the chart below illustrates, the gap between monthly hires and job openings is much smaller than normal. In fact, during the last 12 months, the average gap between the two indicators is the smallest that it has been since the JOLTS data series began in 2000.
While these recent developments indicate that the restaurant industry's labor market is likely tightening, the same data series suggests more significant labor challenges for other industries. In the health care and social assistance sector, average end-of-month job openings exceeded monthly hires by 66 percent in the first half of 2015. In the manufacturing and professional-and-business services sectors, average monthly openings were 12 percent above average hires.
In the overall private sector, average end-of-month job openings were essentially on par with hires during the first half of 2015. This is a divergence from the historical patterns in the JOLTS data, where hiring exceeded openings. Although some slack still remains in the labor market, this development will likely put upward pressure on wages in the private sector.
For their part, restaurant operators are starting to echo the reemergence of a tighter labor pool. In both the July and August editions of the NRA's Restaurant Industry Tracking Survey, 18 percent of restaurant operators said 'recruiting-and-retaining employees' is the number-one challenge currently facing their business. Both readings were post-recession highs and ranked only behind 'government' as the top concern identified by operators.
In a historical context, the proportion of operators reporting labor availability as their number-one challenge remains well below 2006-2007 levels, when the reading averaged more than 30 percent and consistently topped the list of concerns.
However, it signals that many restaurant operators are experiencing the double-edged sword of stronger customer traffic and a shrinking labor pool that comes with an improving economy and job market.
Heritage influences how America eats, new research shows
September 4, 2015
Personal preference and availability are strong influencers of which ethnic cuisines consumers tend to eat, but another factor also plays a role - ancestry.
"Many Americans trace their family history - whether established for generations or more recently rooted - beyond U.S. borders," said Annika Stensson, director of research communications for the National Restaurant Association.
"Food is often deeply ingrained in culture. You may not be able to visit all the places around the globe from where your family originated, but sharing a meal of those cuisines right here at home is an accessible way to connect with your ancestry," she said.
A new report by the National Restaurant Association found that 43 percent of Americans say the ethnic foods they like to eat are tied to their family ancestry or heritage. Younger adults especially - 57 percent of 18- to 24-year-olds and 65 percent of millennials who are frequent ethnic cuisine eaters - say what they prefer to eat relates to where they and their families have roots.
Among those who say the ethnic food they like to eat is tied to their family's ancestry or heritage, 43 percent say those choices are most influenced by Europe. Twenty percent say the United States and Canada most influence their food choices, and 17 percent say Latin America.
The geographic areas that influence ethnic food choices vary dramatically by age. A majority of consumers 45 or older say their food choices have European ties, while one-quarter of younger consumers identify Latin America as the primary source.
The Global Palates: Ethnic Cuisines and Flavors in America report details consumers' familiarity, trial and frequency of eating various cuisines, when and where they get them, plus findings by 30 individual and group cuisines and items.
Minnesota: New chief of liquor association plans to take new course
Source: Star Tribune
By Abby Simons
September 5, 2015
Tony Chesak's first phone call of the day Thursday was crucial for one of the thousands proprietors he represents:
Is it legal to take a drink from a bar on to a party bus?
In his 14 years with the Minnesota Licensed Beverage Association (MLBA), the phone call from a local bar owner was nothing new - it's his job not only to advocate for the 1,400 bars and liquor stores the organization represents - commonly referred to as license-holders, but also to be an everyday problem-solver from major to mundane. In this case, he told the bar owner, no, it's not legal.
Chesak is now doing his job in a more prominent role. Over the summer, he was named the new executive director of the MLBA - the powerful organization well-known for its staunch and vocal opposition to efforts in the Legislature to repeal the state's ban on Sunday liquor sales. Chesak, who claims in his years on the job that he's visited "every bar in the state three times and towns you've probably never heard of," said that while the MLBA's stance on Sunday sales remains the same, he's taking the organization in a new direction, with business owners becoming the face of the MLBA rather than simply lobbyists. He'd like to do that in part by boosting membership.
"I think legislators value seeing their constituents and license-holders, and we're going to have a different face to us; more boots on the ground," he said.
Chesak is passionate about the job. A Wisconsin native whose grandfather ran four bowling alleys, Chesak grew up in bars and remembers his grandfather's deep admiration for the Tavern League of Wisconsin's service to liquor license-holders. He's taken on that role in Minnesota.
Although the push at the State Capitol to repeal the Sunday sales ban has been growing in momentum, Chesak said it's not necessarily bound to happen. "I don't buy the 'It's inevitable' pitch," he said. "I know the public polling shows more support, but when you look at the industry, an overwhelming number of license-holders don't want Sunday sales, and we represent the license-holders."
Those license-holders say Sunday sales would simply be bad for small businesses forced to compete with big-box stores. "It'll kill us. The businesses right now are having a hard enough time," said Joe Gardner, an employee of Mac's Liquor in Hopkins, who was enjoying a beer with friends at the State Fair last week.
Not far away as music thumped at the Leinie Lodge, Katie Heckley and her boyfriend, Vaughn Leuzinger, of Mankato, sipped their beers and mused that yes, it would be nice to be able to hit the liquor store on a whim on Sunday. "Would it be a convenience if the law were to change? Absolutely, but I don't think it's something I'm going to lose sleep over," Leuzinger said.
Tom and Kirstin Schmitz of Braham are open to a repeal. Or not. They don't really care. "It's fine. Whatever," he said.
"We have nothing against having a drink on Sundays," Kirstin Schmitz said. "It doesn't really matter if you plan ahead."
Minnesota: After Minnetonka rejects liquor license, Target makes new plan and Total Wine watches
Both want to sell alcohol in Minnetonka, but the rejection of Target signals an uphill battle.
Source: Star Tribune
By John Ewoldt
September 5, 2015
The Minnetonka City Council rejection of Target Corp.'s application for a liquor store has sent the company back to the drawing board and raised questions about the prospects for another national retailer, Total Wine & More, to enter the suburb.
The council's vote on Aug. 17 marked the first time Target has been denied a license since it started adding liquor and wine sales to its Minnesota stores last year.
The company planned to add the liquor store as part of a $10 million remodeling of its SuperTarget store at highways 101 and 7. The revamp includes an overhaul of the grocery department but, without the liquor license, its plans for the 2,000 square feet space are now up in the air.
"We are working through new plans for that space now," Katie Boylan, a Target spokeswoman, wrote in an e-mail.
Minnetonka currently has 11 off-sale liquor licenses and an ordinance that says 12 liquor stores are generally sufficient to serve the city.
"I think we have plenty of liquor stores in Minnetonka," said Brad Wiersum, one of four City Council members to vote against Target's liquor license. "The area is adequately served."
Total Wine applied to the council for a license to build an outlet near a Whole Foods location on the north side of Interstate 394, across from Ridgedale Center. With the council's rejection of Target, the company put its application on hold.
"We're evaluating our next steps in Minnetonka based upon the city's tweaking of its policy," said Ed Cooper, vice president of community affairs for Total Wine.
The council won't vote on Total Wine's license until the Maryland-based liquor superstore chain formally resubmits its application.
"We're very committed to Minnetonka," said David Trone, Total Wine's chief executive. "We're definitely coming there or we'll go to a town close by. We want to be in the north lake area."
The company's prospects are unclear. While the City Council rejected Target, a month earlier council members declared they weren't going to be constrained by the ordinance limiting the number of liquor licenses to 12. They said they may consider more if a business offers "distinctive specialty service."
Any firm applying for a liquor license needs support from five of the Minnetonka council's seven members. Two, Wiersum and Patty Acomb, have said the 11 in the city are enough.
Another member of the council, Tony Wagner, said he believes more choices are better but hasn't taken a stance on Total Wine, which has reshaped competition across the Twin Cities since its market entry last year.
"Total Wine has strong appeal, but it brings a lot of traffic," Wagner said. "That doesn't mean I would approve Total Wine. I need to look at it more closely."
Total Wine has stores in Bloomington, Burnsville, Roseville and Woodbury. It plans to open one in Maple Grove in November and in Chanhassen next spring.
Target opened its first liquor store in Minnesota since the 1970s in Otsego last year. A St. Louis Park store opened in April. Liquor will debut at St. Paul's Midway store in early November and Chaska in fall 2016. The company has chosen to include liquor stores in existing stores being remodeled or that have non-selling space that can be converted into a separate entrance, as in Otsego.
Colorado: Officer Warns About Legalizing Marijuana
Source: ABC 22
Sep 03 2015
Before you vote on whether to legalize marijuana this November, learn more about how the issue could impact your safety from the people who patrol the streets where pot is now legal.
In exactly two months voters will decide whether pot should be legal in Dayton and all around Ohio.
A drug investigator from Colorado spoke at Sinclair Community College September 3, 2015 about what his state has gone through since legalizing medical marijuana in 2001 and recreational marijuana two years ago.
Marijuana, reefer, pot, weed. whatever you call it, could soon be legal in Ohio for medical and recreational use.
"There's a sales job happening in Ohio and it's the same sales job we got in Colorado. There were a lot of promises of miracle and tax revenues, all kinds of wonderful things that were going to happen. What we're seeing is a public health and public safety disaster," said Jim Gerhardt.
Gerhardt warned Ohioans not to go down the same road as his state.
"It 's created a lot of problems but it hasn't solved anything," said Gerhardt.
"Accidents, impaired drivers, children being hospitalized, mental health problems and violent behavior, those types of things," he said.
Gerhardt told 200 social service and business leaders the tremendous impact the drug can have on communities.
"And it will be extremely potent here, this isn't the marijuana of the 60s and 70s," said Gerhardt.
Montgomery County's Alcohol Drug and Mental Health Service brought Gerhardt to town to talk about his experiences.
"If you give people the right information, then it's their choice but we want people to have real facts, facts as opposed to innuendo and myths," said Helen Jones-Kelley. She's the executive director of the Alcohol Drug and Mental Health Service of Montgomery County.
"It's going to create a lot more jobs and it's going to help the economy a little bit. So me personally, I think it should pass," said Naman Clark, a Sinclair student.
"I think it's something that would be great for medical use. I think recreationaly it just kind of depends on the person you are. If that's something you can handle and don't have an addictive personality," said Chad Roberts, another Sinclair student.
"We're playing around here with something we know very little about and in Colorado we're playing a big price for that," said Gerhardt.
Voters go to the polls November 3rd and will sat yay or nay on Issue 3.
If it passes, medical marijuana users will need a doctor's note.
Recreational users could have up to one ounce at a time..
Growers at home could have four marijuana plants at a time.