Kind of Malbec: Mendoza Wine + Business Collaboration

April 9, 2024 By Mike Veseth in Argentina, wine, wine brands, wine markets 3 Comments

“Kind of Blue” is one of my favorite jazz albums and, although we usually think of it as a Miles Davis work, it is really a collaboration of talented artists at the height of their powers. Recorded in 1959, it features John Coltrane, Cannonball Adderly, and Bill Evans among others (who can forget Paul Chambers’ bass on the title track?). A timeless classic.

Wine is like jazz in many ways, including the power of ensemble work. Although we often give credit for a wine to the head winemaker, there is usually a team involved. The collaboration can take many forms. Recently, for example, Sue and I have sampled the wines of Ventisquero made by Chilean Felipe Tosso and Australian John Duval (of Penfolds Grange fame). Their “Obliqua” Carmenere, the result of a 20-year collaboration, was probably the best version of this wine we have tasted. The two winemakers harmonize well indeed!

Here in Washington State, the Long Shadows winery is organized like an album of duets. Allen Shoup, who founded the project, invited renowned winemakers from around the world (including John Duval, as it happens) to work with his team to make their version of Washington wines. The idea was to showcase what Washington can produce (and it has done that successfully) and give the international winemakers a new melody to riff on.

Miles Ahead: Marcelo Pelleriti

We were recently introduced to the wines of Pelleriti Priore, which are the result of a different sort of collaboration that makes complete sense. Marcelo Pelleriti is kind of the Miles Davis of the team. He is a rockstar (to mix musical genres) winemaker who has worked in both his native Mendoza and in France. An associate of Michel Rolland, Pelleriti has made famous wines in both hemispheres. His focus today, however, is Argentina, which is a great place to grow wine, but a difficult place to grow a wine business because of its many economic problems.

If Pelleriti is Miles Davis, then Miguel Priore is more like Bill Evans on the piano, driving the project forward and creating the foundation for Pelleriti to riff. Priore, also a Mendoza native, knows the region’s terroir, too, but especially contributes his understanding of the business side of wine to the partnership. Pelleriti makes great wine, Priore makes the great wine business possible. Together with other members of the Pelleriti Priore team, they are a tight ensemble.

The Business Side: Miguel Priore

The business side is very serious and I can see how it empowers Pelleriti. They insist on owning their vineyards, which is a very considerable investment. They have also invested to ensure effective distribution of their winery’s 50,000 case annual production both in the United States and in Europe. Looking to the long run, they have prioritized wine quality and providing their clients quality service over other factors.

I had to ask Miguel Priore about the problems of doing business in Argentina, with its high inflation and uncertain future given new President Milei’s bold policies and strong opposition. Priore acknowledged the challenges, but business in Argentina is accustomed to headwinds and his intent is to provide Pelleriti with a firm economic foundation for winegrowing and to insulate buyers from the economic changes, too. This is the right approach, but not easy to do. Makes me appreciate how important both parts of this duet are to the final product.

Kind of Malbec

In vino veritas, they say, and this was one of those times when the wines sang in harmony with their reputation. Sue and I tried two Malbecs from the Flagship line, a Marcelo Pelleriti Signature Malbec made from old vines and the 1853 Selected Parcel Malbec made from very old (more than 100 years!) vines. The year 1853 is significant for Argentina; it was when the first Malbec vines arrived from France.

Sue and I are now working our way through the next level of Marcelo Pelleriti and 1853 wines Last night we opened an Altamira Malbec they call Terroir Expressions “Hostage.” Why “hostage?” Because once they tasted the fruit from this “old little vineyard,” they felt themselvews held hostage to its charms. It is a real pleasure to experience the complex harmony. Powerful. Elegant. Unique.

Kinda reminds me of “Kind of Blue.” Another timeless classic?

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P.S. Although he is best known for rock and roll, I don’t think Marcelo Pelleriti will object to the jazz references in this article. When Sue and I interviewed the two protagonists via Zoom I noticed that Pelleriti was wearing a vintage Ramones t-shirt under his jacket.

What’s Your Wine’s Story? From 19 Crimes to 1000 Stories

March 12, 2024 By Mike Veseth in The Next Big Thing, wine, wine brands, wine markets 4 Comments

“What Young Wine Drinkers Want” is the title of a recent Financial Times article by Hannah Crosbie, one of several recent reports probing the priorities and buying habits of younger consumers. Taken together, they give anyone concerned about the future of the wine industry a lot to think about. Compared to the baby boomers who drove the wine industry for many years, younger consumers differ greatly in terms of their economic situation, communications preferences, relationship to alcohol, and much else.

The Changing Nature of “Story Wines”

One common theme is that younger consumers want more than something to eat or drink. They want products that tell a story that they can pass on to their friends and make part of their own story, too, in one way or another. Wine is good, but wine and a story about the wine are much better.

To be fair, the story element of wine purchases is not new, it is mainly that the importance has increased and the type of story has changed. First-person stories of visiting wineries and meeting winemakers are powerful, for example. I have some boomer friends who like to tell some version of a numbers story. Sometimes it is about how much the wine cost and sometimes it is about how little they paid (hello, Two Buck Chuck). Often it is about critics’ ratings. These stories intersect with various identities ranging from aspirational to reverse snobbery.

I am sure that these stories resonate with many younger consumers, but recent articles suggest that today’s consumers are looking for narratives that better connect to their identities. So story-telling, which has always been important in wine, is even more critical today.

Don’t Need No Stinkin’ Badges

One of the most-read articles in Wine Economist history is a 2018 column about 19 Crimes wine, “Outlaw Wine? 19 Crimes Succeeds by Breaking All the Wine Marketing Rules.” The article argues that there is no particular reason 19 Crime, which started as a brand featuring rather unfashionable Australian Shiraz, would have become a hit, especially with younger consumers. The key, I wrote, is the “outlaw” backstory, which resonated with many young male consumers.

19 Crimes is still a storied wine, but the story has shifted a bit since that column first appeared. Now it is also a celebrity story wine, with labels that feature Snoop Dogg and Martha Stewart. “Every bottle tells a story,” the wine’s website proclaims along with the outlaw motto, “It’s good to be bad.” And every bottle does tell a story via augmented reality technology. Just download the app and scan the label. Talk about a story wine.

One Thousand Stories

Sue and I recently took part in an online tasting of wines from a winery that has so completely embraced story-telling that it is even in its name: 1000 Stories wine. 1000 Stories is a line of California appellation wines produced by Fetzer/Bonterra, which is part of the multinational Concha y Toro wine group.

The name draws directly from the interest in story-telling. We all have stories, according to the website, and we want to add stories and share stories. Every bottle tells a story, too. The mood is upbeat compared with the darker 19 Crimes vibe, but wine as part of your identity theme is still there.

This umbrella story is supplemented by several (but not necessarily a thousand) supporting stories. 1000 Stories claims the title of the first bourbon barrel-finished wine (there are now several of these on the shelves). Used bourbon barrels are toasted and used to finish the wines. Since these barrels come from different distilleries and have different characteristics, each batch of wine is a bit different (that is, it tells a different story of its origins). In a world of homogeneous commodities, this will be a story that will resonate with many.

The use of bourbon barrels is not traditional, but I don’t see a problem. I remember visiting Justino’s winery on Madeira, where used barrels are so important to the process. They were using a few used whiskey barrels in an exchange with a distillery that was using used Madeira barrels to add some complexity to its whiskey. I thought that was pretty interesting, so I can’t criticize bourbon barrels for Zinfandel if the results are worthwhile.

The Bison Story

Concha y Toro and all its subsidiaries are certified B Corporation businesses, so there is a subtle social and environmental responsibility story told by the “B Corp” logo on the back label.

The back label doesn’t mention the story behind the bison on the front label, which is kind of puzzling. What does a bison have to do with the 1000 Stories? The answer is a good story. 1000 Stories is working with a group called Yellowstone Forever to support bison conservation in Yellowstone National Park. Why not advertise these efforts more clearly on the wine bottle? I speculate that perhaps it is left to the informed wine drinker to share the story with friends. Word-of-mouth is the most effective way to get a story passed around.

Sue and I have been tasting through the 1000 Stories lineup. The Zinfandel is balanced and rounded by its 5 grams per liter of residual sugar, but not avoids being the sugar bomb that many wines that target younger drinkers have become. It was great with BBQ brisket. The Red Blend is an interesting mix of grape varieties including Teroldego, Zinfandel, Cabernet Sauvignon, Petite Sirah, and Pinot Noir. It played nicely with a ham dinner.

I admit that I sort of wish that 1000 Stories really just focused on one story — it would make the wine’s story easier to tell. But I admit that people aren’t one-dimensional, so why should wines and their stories be monolithic.

I am not sure which of the many stories of 1000 Stories resonates with me, but then I doubt that I am the target audience. Pragmatically, what’s important for the wine industry is that wine brands pitch stories that connect with consumers, especially newbies who are looking for reasons to connect.

Fiasco Flashbacks? Rediscovering Chianti Classico

November 28, 2023 By Mike Veseth in Italian wine, wine, wine brands, wine history, wine markets Leave a comment

It is called a fiasco.

Fiasco? Yes, I know what you are thinking, but you’re wrong. I’m not talking about what happening in Congress with the debt ceiling. And I am not talking about the bonehead moves your favorite sports team’s coach always seems to make.

A fiasco is a type of bottle. It is bulb-shaped and wrapped in straw that both protects the glass from breakage and keeps the rounded-bottom vessel from tipping over. Back in the day, if you spotted a fiasco you knew instantly what was inside: a tasty medium-bodied Italian wine that probably wouldn’t break the bank when you hit the check-out counter.

Fiasco meant Chianti, which along with Lambrusco and Valpolicella, was the easily recognizable popular face of Italian red wine here in the U.S. The Chianti fiasco was popular with me and my young friends years ago because you got the wine itself and a decorative candle holder (the straw-wrapped bottle) all for the same price. What could be better? The traditional Chianti fiasco still exists, although I don’t see them very often (you can buy empty bottles on eBay if you are into retro decorating).

Sue and I discovered a 1.5-liter fiasco of “red Chianti wine” at Trader Joe’s as this column was being prepared for publication. The fiasco endures!

Chianti Identity Crisis?

I suppose that the move away from the distinctive fiasco was a bit of an identity crisis for Chianti, but it might not have been the only or most important one as Bill Nesto MW and Frances Di Savino explained in their 2016 book Chianti Classico: The Search for Tuscany’s Noblest Wine.

Nesto and Di Savino argue that Chianti’s historical roots are in a relatively well-defined area that we now associate with Chianti Classico. As Chianti wine became more popular around the world, the Chianti zone expanded and the wine inevitably lost of some its distinctive character. Not all of it represented the original idea of Chianti very well. That’s a more serious identity crisis, especially at a time when there is more and more competition from within Tuscany, within Italy, and around the world.

Product Differentiation

The task for Chianti Classico producers, as it is for quality producers everywhere, is what economists call product differentiation. They need to make consumers aware of the difference between Chianti and Chianti Classico and then, because this is the age of premiumization, to further differentiate the best wines they produce.

The first task – Chianti versus Chianti Classico — is easy from a visual standpoint. Chianti Classico stands out on the shelf with its distinctive black rooster logo. But the wine needs to be distinctive in the glass, too, which has not been as clear in the past when both Chianti and Chianti Classico could be found with quality that varied from excellent down to just fair.

Climbing the Cecchi Chianti Classico Pyramid

The Cecchi family of wine producers invited us to sample their wines and taste the difference and it was an eye-opening experience. The Cecchi winery dates to 1893. Andrea Cecchi, who guided our tasting, is the fourth generation of the family in the business. The family’s home vineyard is Villa Cerna, which they acquired in 1962. The Villa Rosa vineyard was acquired in 2015. Both are complex mosaics of elevation, soil type, and aspect.

We started with their Chianti Classico Storia di Famiglia, which makes up about 60 percent of Chianti Classico production. It is made from 90 percent Sangiovese and 10 percent other grape varieties. Sue took one sip and said “Wow!” This wasn’t like any other Chianti that she tasted recently, she said. Bright, intense, and persistent in the glass. She was immediately taken by the wine’s style and substance. Product differentiation goal #1? Check!

We moved on to Cecchi’s Chianti Classico Riserva wine, Riserva di Famiglia, which is 90 percent Sangiovese and 10 percent Cabernet Sauvignon. Riserva wines are about 35 percent of production. Sue appreciated this wine but didn’t find it as exciting as the first, perhaps because the Riserva might be an attempt to balance the traditional wine identity with the power that the international market sometimes prefers. An excellent wine. And I think Sue’s reaction might have been different if she had tasted it first.

We reached the top of the pyramid with Valore di Famiglia, the Cecchi Chianti Classico Gran Selection wine. Gran Selection accounts for just 5 percent of production. The grapes are 100 percent old-vine Sangiovese from the Villa Rosa vineyard. The wine ages in both oak and concrete. The goal is elegance, limiting intervention so that the identity of the vineyards is not obscured. Goal achieved! A wine of many layers and nuances. Memorable.

Is Chianti Classico a Terroir Wine?

The premise of Chianti Classico is that terroir makes a difference. If it doesn’t, then wines from the larger Chianti appellation (and indeed wines from all over Tuscany) that are made in the same way with the same basic grape varieties should be just as good.

To test the terroir hypothesis we were invited to compare two of the Cecchi Chianti Classico wines that are sourced from two very different vineyard sites. Primocelle (first hill) Villa Cerna is a particular part of the Villa Cerna vineyard while the Ribaldoni Villa Rosa is from a vineyard of that name with the youngest vines on the estate. The differences showed themselves clearly both on the nose and in the mouth. I enjoyed the violet and iris notes of the Primocolle. Sue was attracted to the elegance and sleek style of the Ribaldoni.

Rediscovering Chianti Classico

Sue says that she enjoyed all the Chianti Classico wines we have tasted recently (and looks forward to a couple of others we have in reserve). Excellent wines are all very different from one another. But she couldn’t forget that first glass of the Cecchi Storia di Famiglia. The purity and clarity stood out. And the surprise punctuated the experience.

I think that we are not the only ones to be rediscovering Chianti Classico. I see that there are seven Chianti Classico wines (including Sue’s favorite from Cecchi) on this year’s Wine Spectator Top 100 list. That’s a strong showing for what is a relatively small region. Congratulations to Cecchi and the other producers for this timely recognition.

Will Success Spoil Marlborough Sauvignon Blanc?

October 3, 2023 By Mike Veseth in New Zealand, wine, wine brands, wine markets 4 Comments

Will success spoil Marlborough Sauvignon Blanc? That is the question that haunts the 50+ winery members of Appellation Marlborough Wine (AMW). Sauvignon Blanc, as everyone knows, is New Zealand’s signature wine variety and Marlborough is world-famous for the distinctive wines made there. Marlborough Sauvignon Blanc is one of the most powerful brands in the world of wine.

I have friends who don’t claim to know much about wine, but they know what they like. And what they like, they will tell you, is Marlborough Sauvignon Blanc. No wonder exports of the wine grow year after year (except when short harvests intervene). Here in the United States, it is one of the few bright spots in the market and its success has invigorated the whole Sauvignon Blanc category.

Kiwi World Domination?

Marlborough Sauvignon Blanc isn’t the next big thing. It is the big thing right now and has been for some time. I charted the rise of this distinctive wine more than ten years ago in the first edition of my book Wine Wars and even hallucinated (that’s what they call it when an artificial intelligence robot makes stuff up) about Kiwi SB world domination in Wine Wars II, which came out last year.

World domination? No, not really. But it is quite a success story and, ironically, therefore a cause for nervousness for some Kiwi producers. That was already apparent way back in 2004 when Sue and I first visited New Zealand. Some winemakers were trying to diversify their sales away from such a heavy reliance on Sauvignon Blanc while others doubled down on their cash cow, even going so far as to question plantings of Pinot Noir for fear that it might dilute Brand NZ.

There is concern today about New Zealand’s great Sauvignon Blanc success, but it is a bit different than in the past. The focus is on control of the very valuable Marlborough Sauvignon brand. You might think that the issue is foreign control because so many important Kiwi wineries are owned by international wine companies, but the issue is a bit different.

New Zealand’s Global Reach

France’s LVMH owns icon Cloudy Bay, for example. And Pernod Ricard has Brancott Estate, Church Road, Deutz NZ, and Stoneleigh in its portfolio. Treasury Wine Estates owns Matua. Gallo owns Nobilo and part of Whitehaven according to my sources. Kim Crawford, Monkey Bay, and Selaks all belong to U.S.-based Constellation. International investment has driven the wine industry’s expansion and provided built-in global distribution systems. As I argued in my books, the New Zealand wine industry is a product of globalization.

I can’t imagine such a degree of foreign ownership anywhere else in the wine world, but that’s not the main issue. No, the problem, as I understand it, is that so much Marlborough Sauvignon Blanc is exported in bulk, in those huge shipping container tanks. The wine is bottled in the receiving market. Much of it goes into private-label products that may or may not have the quality Kiwi producers desire. Some producers have written to me over the years that they feel they are losing control of their brand.

A case can certainly be made that bulk shipping makes sense for New Zealand wine. The carbon footprint of the wine is already there because of the long distance from the vineyard to the final buyer and this factor grows if the product is bottled in New Zealand before shipping. However, NZ bottling would be one way for local producers to better control the product chain and protect their brand.

Appellation Marlborough Wine

Appellation Marlborough Wine (AMW) is an association of Marlborough producers that was formed in 2018 “to safeguard Marlborough Wine, initially focused on Sauvignon Blanc, whose purity and flavour intensity has earned it a phenomenal global reputation,” according to the group website.

“With this global demand, comes the proliferation of players and a range of quality expectations, which can put this hard-earned reputation at risk. AMW has been established to safeguard Marlborough wine for future generations to enjoy and provide assurance to consumers who seek wines of provenance, authenticity and integrity.”

There are currently 53 AWM member wineries, including several of the “internationals” mentioned above such as Cloudy Bay and Whitehaven plus Clos Henri, Framingham, and others. It is an impressive list. The intent is to establish the AMW logo as an indicator of quality and authenticity that extends beyond the “Marlborough” geographic designation.

The criteria for the AMW designation include 100% Marlborough grapes, sustainability certification, and the requirement that the wines be bottled in New Zealand, which excludes the bulk-shipped, foreign-bottled wines discussed above, including private label products.

As I understand it, the concern is that the popular bulk-shipped products will define Brand Marlborough Sauvignon Blanc in a way that is detrimental to its long-term sustainability. This kind of threat always exists when a region is associated with a single “signature varietal,” and you can appreciate how the bulk shipping element adds to producer concerns.

A Tale of Four Bottles

I wonder if the AMW designation will catch on. The back labels on wine bottles are often very crowded with logos and certifications and a good deal of education effort is needed to make a new one like this an effective tool. This could be a hard sell. That said, I think Sue and I will be checking out the back labels of Marlborough Sauvignon Blanc wines in the future because a recent research tasting persuaded us that there might be something to learn here.

Sue and I were joined by research assistants David and Terri for a dinner and tasting featuring the four wines shown in the photo above. Three of the wines — Lawson Dry Creek Sauvignon Blanc, Mahi Sauvignon Blanc, and Astrolabe Sauvignon Blanc — were provided by AMW as examples of member products. I added a fourth wine to the mix: Kirkland Signature Ti Point Marlborough Sauvignon Blanc, which sells for about $7.49 at Costco. It is an example of the sort of private-label wine that AMW is a reaction to. I have heard that it is Costco’s best-selling private-label wine. In any case, it probably defines Marlborough Sauvignon Blanc for many consumers.

What did we learn at our tasting? The Kirkland Signature was a bit less punchy than I remembered, but otherwise, it pretty well fit the popular notion of a Marlborough Sauvignon Blanc. The three AMW wines, which sold for about three times the Costco price, were very different and very different from each other. There was subtlety and elegance and, to be honest, if you defined Marlborough Sauvignon Blanc by the characteristics of the private label wines (or the big brands like Kim Crawford), you might not have guessed they were the same grape variety or came from the same place at all!

A Plausible Hypothesis

Obviously, three wines cannot represent the more than four dozen member wineries and the Costco wine cannot represent all the different bulk-shipped products. So nothing was proved here, but I think we learned something. Certainly, there is a stereotype of Marlborough Sauvignon Blanc that the big-volume brands embody. But there is more to Marlborough than that. More different grape varieties. More different styles of Sauvignon Blanc.

The AMW initiative is thus worthwhile. Will it succeed? It won’t be easy to persuade consumers to look for the AMW logo on the back label. I suspect consumers will be converted one glass at a time.

A Wine Emissary from Planet Bonny Doon

July 25, 2023 By Mike Veseth in wine, wine brands, wine history Leave a comment

Sue and I had an unexpected visitor recently. He said he was an emissary from another world, a place called Bonny Doon Vineyard. He came in peace, bearing two very interesting Bonny Doon wines.

Was I happy to see the visitor? It doesn’t look like it from the photo shown here (and he looks pretty serious, too), but things aren’t always what they appear at first glance.

Wine from Planet Earth

The wines that the emissary brought were very good. Le Cigare Volant is fresh and delicious, a blend of Grenache, Syrah, Cinsault, and a bit of Petite Sirah. “Red wine of California’s Central Coast, USA, Earth” it said.

Le Cigare Orange, the second wine we tasted, is mostly Grenache Blanc with ten percent each of Grenache and Orange Muscat. “Skin-contact wine of the Earth,” the label explained. Nice peach aroma with the bit of tannins that orange wine lovers look for. I think someone has written that this is an entry or gateway orange wine and that’s not a bad description. A wine to appeal to both red and white wine drinkers.

Randall Grahm founded Boony Doon Vineyard nearly forty years ago. Its original mission was to make wines like those in Burgundy, but Grahm quickly shifted focus to Rhone-style wines. The first vintage of Le Cigare Volant was released in 1986 and it has headlined for Bonny Doon line-up ever since.

Flying Cigar?

Le Cigare Volant — the flying cigar? What kind of a name is that? It is complicated, so I will explain.

Grahm is serious about wine, but playfully creative, too. Le Cigare was meant to pay homage to the wines of Chateauneuf-du-Pape. It is a little-known fact that, during the flying saucer craze in 1954, the village of Chateauneuf-du-Pape adopted a law banning alien craft (called cigares volant in French) from landing, taking off, or flying over the vineyards. The label artwork shows a spacecraft casting a beam of light on a chateau and its vineyards. Beaming aliens down? No, I’ll bet they are beaming the wines back up!

Bonny Doon makes excellent wines and is a strong, distinctive brand. When Sue and I heard Grahm talk to a group of wine writers a few years ago, he seemed almost embarrassed by his ability to successfully build brands (he is also the creator of Big House wines, Cardinal Zin, and Pacific Rim wines). But there is no reason that good wines cannot exist along with popular brands.

Tale of Two Brands

Grahm sold off the brand rights to Big House, etc., to fund his various vineyard projects and in 2019 he did the same with Bonny Doon, selling it to WarRoom Cellars. WarRoom Cellars is in the business of building brands and making the brands that it acquires (like Bonny Doon) more marketable.

Brands are very important in the wine business and I will admit that it makes me nervous when brands are bought and sold like properties on a Monopoly board (which happens quite a lot these days). Some of the biggest wine industry transactions of recent years have involved the exchange of brand intellectual property with no vineyards or production assets attached. For example, Constellation Brands paid $285 million in 2016, the The Prisoner brand.

Sometimes brand transactions work out just fine, but I am haunted by the story of Paul Masson, which I recounted in a chapter called “Martians versus Wagnerians” in my book Wine Wars II. Once California’s most expensive wine, Paul Masson’s brand was sold and sold again, eventually becoming a cheap generic jug wine before slipping off the wine market map altogether. (The brand still exists, I’m told, in the form of Paul Masson traditional and flavored brandy). These days the wine is best remembered for its sometimes accidentally ridiculous television commercials featuring a possibly sober Orson Welles.

Good News Travels Fast

In this case, the good news is that the Bonny Doon brand transition seems to have worked out very well. The signature red wine is different, but certainly in the founder’s spirit. It is a bit lighter in weight and brighter, too, but has good fruit and some complexity. Significantly, it is a good deal cheaper, resting comfortably in the wine wall’s current sweet spot of $15 to $20 ($17.99 on the winery website).

It is not the wine that Grahm made when he first created the brand, but it is not ridiculous to think it might be the wine he’d make now if he were starting up today.

So cheers to Bonny Doon and its alien emissaries for making planet Earth a better place for wine lovers.

Has U.S. Wine Industry Consolidation Gone Too Far?

February 8, 2022 By Mike Veseth in Unified Wine & Grape Symposium, wine, wine brands, wine markets 4 Comments

Is the U.S. wine industry becoming too concentrated, with just a few big firms dominating the marketplace? That, more or less, was one of the questions we were asked at the press conference that followed the annual “State of the Industry” session at last month’s Unified Wine & Grape Symposium in Sacramento, California. How would you answer this question?

The query was prompted in part by Mario Zepponi’s excellent presentation about merger and acquisition activity in the wine industry in 2021. Mario is principal at Zepponi & Company, a firm that advises winery and vineyard M&A clients and was very busy indeed last year, when a number of large (for the wine industry) deals were concluded.

How concentrated has the U.S. wine industry become? How competitive is the wine marketplace? The answer you get depends in part on how you look at the data. Wine Business Monthly (which sponsored the State of the Industry session again this year) publishes a report on the U.S. wine industry early in each new year which is required reading. This year’s report appears in the current March 2022 edition, which can be accessed online.

U.S. Wine By the Numbers

Judging by the number of firms competing for retail shelf and restaurant wine list space, the U.S. market is very competitive indeed. For perspective, consider that the WBM report for 2014 found 8,287 U.S. wine producers in total, 3913 in California, 734 in Washington State, 632 in Oregon and the rest distributed across the country. Mississippi was at the bottom of the league table with just two wineries.

Zoom ahead to the just-published WBM report for 2021 and the numbers have jumped. The U.S. winery count rose by 36% in the intervening years, with 11,300 wine producers in total. California again leads the way with 4804 wineries, Oregon comes second with 877, followed by Washington with 875. Mississippi’s winery count increased to six. The Other Washington — Washington DC — is last with two wine producers.

Looking at the data this way, the U.S. wine industry is very competitive, with amazing growth in number of wine producers for such a brief period of time. The increase in winery count in 2021 was slower than in 2020, WBM reports, but that’s not a surprise given the covid and economic conditions we have experienced.

The U.S. market is actually more competitive than these numbers suggest because imports account for about a third of U.S. wine sales, so thousands of international brands are also vying for buyer attention.

Top of the Table Concentration

But number of competitors is not the only factor to consider when assessing industry competition. Market power matters a great deal and the U.S. wine industry features a number of very large players. WBM reported on the top 30 companies in 2014 and the top 50 companies in 2021 along with the lineup from the first report in 2003 and the lists make interesting reading.

The top five producers, ranked by volume of sales, in the very first WBM report in 2003 were as follows: E&J Gallo Winery, Constellation Brands, The Wine Group, Beringer-Blass Wine Estates (now Treasury Wine Estates), and Bronco Wine Company (followed by Mondavi — now part of Constellation — and Trinchero Family Estates).

The 2014 report produced this list: E&J Gallo Winery, The Wine Group, Constellation Brands, Bronco Wine Company, and Trinchero (followed by Treasury and Ste Michelle Wine Estates). The current (2021) line-up is: E&J Gallo, The Wine Group, Trinchero, Delicato Family Wines, and Constellation Brands (followed by Treasury and Bronco).

I think you would have to conclude that the top of the U.S. wine table has been very stable, with a good deal of the movement due to transactions within the industry such as Constellation’s acquisition of Mondavi and more recently its sale of many brands to Gallo and The Wine Group. The steady rise of Trinchero (think Sutter Home, Menage a Trois among other brands) and Delicato (Bota Box, of course, and now also the Francis Ford Coppola Winery) is noteworthy.

The 50 largest wine companies (out of the 11,000 total) account the vast majority of sales volume for domestic wines (not counting the imports) and it is easy to see why because firm size is very large. JUSTIN Vineyards and Winery is #50 in the 2021 table but still produces a very substantial 339,000 cases of wine each year. Gallo is at the top of table with a WBM-estimated 100 million case annual wine output. That’s 1.2 billion bottles. Incredible!

It is interesting to look at how production measured by volume of the top three largest wineries has evolved over the years reported here. In 2014, for example, the big 3 totaled over 187 million cases (not bottles) of wine (Gallo 80 million, The Wine Group 57.5 million, Constellation 50 million). The Big 3 total for 2021 is actually bit less: Gallo 100 million + The Wine Group 51 million + Trinchero 20 million = 171 million total. That is less than in 2014, which could be due to a number of factors including, as I have heard some insider’s comment, a lack of investment in some of the brands involved in the Constellation-Gallo transaction during the long regulatory approval process.

If we assume that the total U.S. wine market was about 450 million cases in 2021, then the Big 3 accounted for about 38% of sales by volume. If imports accounted for a third of total sales, then the Big 3 alone were responsible for 57% of domestic-produced wine sales by volume.

The biggest wine companies are really, really big, but some of the market power has shifted down the line. The 30th largest wine company in 2014 (out of the 30 listed), for example, was Purple Wine Company, which produced 415,000 cases. Number 30 in 2021 is Firstleaf at 700,000 cases. Firstleaf is a direct-to-consumer operation founded in 2016 with more than 75 brands in its portfolio.

What’s Driving Consolidation?

Big is in for U.S. wine and a lot of the bulking-up is taking place in the tiers below the Big 3. What’s driving it? Mario Zepponi presented an interesting perspective in our State of the Industry session. He argued that you have to put wine production in the context of its linkages in the product chain.

A lot of wine is sold in grocery stores, for example, and the top 5 U.S. grocery companies account for about half of total revenues in that sector. Big store chains, with their thousands of assorted SKUs, tend to prefer to work with a small number of distributors in each product segment if possible. So maybe it is no surprise that the top 3 wine distributors account for about 65% of revenues according to Zepponi’s data. Connect the dots here and it is easy to see why distributors might favor large wine companies with broad portfolios.

Big favors big, which favors big. Evolutionary forces point towards increased concentration, even in an industry as fragmented in some ways as wine.

To a certain extent, then, wine consolidation is the result of a process (accelerated by the covid channel shifts) that is affecting retail more generally. Consolidation, in this view, starts at the retail level and works its way backwards.

So has U.S. wine industry consolidation gone too far? It depends upon how you look at it and where you are positioned within the industry — in the Big 3 tier, the broader top 50, or further down the pyramid. And maybe the question should start higher up the food chain with consolidation at the retail and distributor levels. The market sure is competitive even if market power is concentrated at several points.

It is, I am afraid, one of those annoying “on the one hand …” situations that provoked President Harry Truman to ask for someone to send him a one-handed economist.

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Thanks to Cyril Penn and his Wine Business Monthly team for the 2022 edition of their wine industry report. A very valuable resource for anyone interested in U.S. wine market dynamics.

Bastille Day Reflections: Libertè, Ègalitè, Rosè

July 14, 2020 By Mike Veseth in wine, wine brands, wine markets 3 Comments

Rose aurore Today is July 14, France’s national day — Bastille Day — and it is a good moment to consider Rosè and the democratization of French wine and wine in general.

One thing that I like about Rosè is that is symbolizes to a certain degree the classic values of freedom (libertè) and equality (ègalitè). There isn’t any fixed recipe for Rosè. Winemakers have considerable liberty in choosing grapes, blends, and styles. And Rosè levels the playing field a bit, too, allowing less well-known regions to compete with the elites.

I have friends who tell me they just don’t like Rosè — and I believe them — but which Rosè offends them? There are so many different styles that it seems like there would be something for everyone. If you don’t like Rosè maybe you just haven’t tried the right one yet. Sue and I have sampled Rosè wine all around the world (see this list of global Rosè wines of note from the recent Decanter wine competition) and enjoyed pink wine’s diversity of hues, flavors, and aromas.

Libertè, ègalitè

French wines are traditionally identified by place, a practice that privileges a few elite regions and their wines. Bordeaux. Burgundy. And especially Champagne. This is not an accident. As I wrote in my book Money, Taste, and Wine: It’s Complicated, the appellation system was more or less invented by Champagne producers to protect their sparkling wines first from copycat wines produced elsewhere and then from sub-standard quality wines made at home. Only Champagne was Champagne, which consigned many first-class French sparkling wines to the third class carriage.

The famous Classification of 1855 established a pecking order for Bordeaux wines. It is not a big stretch to move to the idea that wine in general is rank-ordered, with the most famous names at the top. France has lots of different wines (even more different wines than cheeses, if that is possible), but they are not equal, at least in the marketplace.

This situation is changing. The popularity of Prosecco has weakened Champagne’s hegemony. Besides, the joyous gatherings where special corks are popped are fewer and smaller in the age of Covid-19. Bordeaux, which priced itself into irrelevance in some ciercles, has descended a bit with softer prices flowing out of this year’s unusual en primeur circus.

The Pink Wine Boom

But the biggest force in the growing democratization of French wine is Rosè. Sales of French Rosè were booming in the U.S. before the crisis and continue to be very strong. Indeed, French wine today rides on a pink wave. This is apparently true even within France, where reports suggest that pink outsells white wine in French supermarkets. Incroyable!

Yes, I know there is a hierarchy within the Rosè world. Provence is a first among unequals in the opinion of some. But even taking this into account, I think that Rosè is the wine of French democracy. What is Rosè after all? It is not a region (Rosè is made all over France and the world). It is not a grape variety, either. Rosè wines from all over France and sometimes all over the world are often displayed together in shops and supermarkets, giving humble appellations and obscure grape varieties an opportunity to compete on their own terms, which does not happen very often in the world of wine.

An Arrogant Frog?

carte-domaines-paul-mas-2017 Three wines that we received from Paul Mas illustrate these points very well. Les Domaines Paul Mas is an ambitious family wine business rooted in the South of France. Paul Mas reminds me of Jackson Family wines in California. Jackson is best know for its high-volume Kendall-Jackson wines, especially the popular Chardonnay. But when you look more closely you see a collection of focused, high quality wineries that together explore the complex possibilities of the region’s terroir.

Paul Mas is a little bit like that. You might know it best in the U.S. for its popular Arrogant Frog wines. Labels feature a snooty but suave wine-drinking, beret-wearing frog. The wines were fine when I first encountered them, as I recall, but the marketing was the thing that caught my attention. Arrogant Frog is still with us (there is a Chateau Arrogant Frog) and better than ever, but under Jean-Claude Mas’s leadership the firm has grown and focused its attention on the specific terroirs of Languedoc and Rousillion. We tasted and appreciated several of these wines when we visited Languedoc and Roussillon two years ago. So we were pleased to get the chance to focus on the pink wine portfolio.

Three Shades of Pink

We tasted three very different Paul Mas Rosè wines. The first is the Côté Mas Rosè Aurore, a blend of Grenache, Cinsault, and Syrah with the IGP Pays d’Oc designation. You get a full liter of this fun wine for about $12.99. Full of flavor, the packaging (see image above) emphasizes casual elegance and screams “picnic.” Picnics can be rustic or elegant and this wine would work either way. You would not regret opening this bottle on a warm day in the company of friends (social distanced friends, of course).

Next came Chateau Lauriga, a Syrah and Grenache blend, AOP Côtes du Roussillon, with a retail price of about $20. Lighter, more elegant, a very different take on Rosè, which is as it should be since both the blend and the terroir are different. A bit more serious, too, if you know what I mean.

We enjoyed both these wines with early summer meals, but our favorite was the Domaine Lauriga Le Gris. I’m not sure what made this wine stand out, but we just loved it. Could be the grape variety, terroir, or maybe the older vines (43 years old) made the difference. Le Gris is 100% Grenache Gris, designated IGP Côtes Catalanes. At about $14 per bottle, it sits comfortably in the Rosè market sweet spot.

A Mind of Its Own

Do you see why I associate these and other Rosè wines with libertè and ègalitè? Speaking of libertè, there’s one more Rosè wine I want to tell you about.

liberte Our friend Caro Feely (author of several excellent wine books), invited us to zoom into a virtual tasting with members of Chateau Feely‘s wine club. Chateau Feely is a biodynamic estate in Saussignac, about an hour from Bordeaux. Caro’s books document the challenges and satisfactions Caro and family experienced as they worked endless hours to make their vineyard sustainable in every sense. I recommend the books to anyone who is thinking about buying a vineyard to winery.

The subject was Rosè and the intimate internet audience was pleased to sample two of Feely’s fine Rosè wines, an experience that might have changed how they think of Saussignac, Rosè, or both. One of the wines especially caught my attention.

It is called Libertè. Made with native yeasts from Cabernet Sauvignon grapes (one of the approved varieties for Bergerac AOP), the wine exploited its freedom by taking an unusually long time to complete fermentation, thus earning its designation. It is a wine with a mind of its own. Everyone agreed that Liberty’s taste is something special.

So please raise a glass of Rosè and join me in a toast. Libertè, ègalitè, Rosè!

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If you want to know more about Rosè you should read Elizabeth Gabay’s recent book on the pink wine revolution. Here is our review.

Two Cheers for Canned Wine

September 10, 2019 By Mike Veseth in wine, wine brands, wine markets 24 Comments

cans Canned wine has been around for a while, but has gained traction in just the last couple of years. Some observers are suspicious that it is just a fad — a flash in the pan — that won’t last for long. If that’s true, then it is an impressive flash. Canned wine sales in the off-premises channels that the Nielsen company measures were $70 million for the 52 weeks ending June 15, 2019. That’s 69% growth for the year. In a market where growth is hard to find, canned wine is a winner.

(The graph above shows Nielsen data for sales through 4/20/2019. I see more canned wine brands and SKUs on the store shelves every week.)

What’s more, Nielsen research suggests that canned wine sales are weighted toward younger consumers — the ones that many observers argue are so reluctant to engage with wine. Fad or trend? I think cans are a thing although there might be some seasonality that will distort conclusions until we have more data.

Too Much of a Good Thing?

Cans have many advantages when it comes to wine. Convenience is often cited and it is true that a can of wine is easy to toss into your backpack or picnic basket if you are headed out for an adventure. But cans are more than the trail mix of wine.

Michelle Williams’s Forbes column “Is the Future of Wine in the Can?” presents an optimistic case for canned wine, giving special attention to wineries in Oregon and Texas, two regions where wine is booming, that have embraced the can.

Amber LeBeau of the Spitbucket blog argues that the traditional 750 ml wine bottle gets in the way for the growing numbers of consumers both young and old who are concerned about limiting their alcohol consumption or avoiding waste. Too much wine to consume at one time can be too much of a good thing.

Smaller bottles are one solution and cans (most of which hold about two glasses each) and premium boxed wine (where you can dispense as much or little as needed) are good solutions. Maybe that’s a reason why the two fastest-growing wine packaging categories are canned wine and premium box wine.

I appreciate the alcohol issue and the fact that smaller container fit a more sober lifestyle. But my friend Patrick the Wine Guy has the opposite worry — that consumers won’t realize that 375 ml cans hold two glasses until it is too late and they have drained a couple of them as if they were light beer. Yikes!

There’s an App for That

Cans also have potential advantages in the world of app-based food delivery. I am not sure how many UberEats orders include a 750 ml bottle of wine in areas where that would be legal (not many, I’m guessing), but I can see the potential for single-serve canned wines here. Simplified wine choices, convenient packaging, drop it in the delivery bag, and out the door.

Significantly, delivery orders are the fastest-growing part of the restaurant business, with some entrepreneurs setting up virtual restaurants and “ghost kitchens” focused just on delivery. Add a can of Pinot Noir or Sauvignon Blanc to that order and you are all set.

There is a lot to like about canned wine once you get over the initial shock of the new package. But that’s nothing new. I’m sure canned beer ruffled some feathers when it first appeared. And, switching products, I’ve read that paperback books were once seen as a threat to serious book publishing. Change is hard — even when it makes sense (Amber LeBeau’s point).

Canned wine has many advantages, but that doesn’t mean that there aren’t challenges to be confronted. Here are three problems to consider.

What Goes In Come Out

When we tell people that we are researching canned wines, they almost always ask, “how is the wine?” Well, the wine you pour out of the can is pretty much the wine that was put into it. That is one thing that canned wine has in common with bottles and boxes of wine. If lousy wine went in, don’t expect anything better to come out.

A recent study of canned wines versus their bottled twins found no significant difference is consumer evaluation. The cans didn’t change the wines in any way that these consumers could notice. can1

Some wineries such as 14 Hands use the same wine brand for both bottle and can, so they leveraging their bottle brand reputation to promote the canned product. They need to make sure that the wine in the cans is the same as the bottles since an inferior experience would reflect on both types of packages.

Many canned wine brands are priced at the entry level ($4.99 or $5.99 per can or less) and are probably filled with inexpensive bulk wine. Some of these are better than others as you would expect.

Only a couple of the canned wines we have tried so far have been “keepers” that we would drink again. Most have been under-whelming and over-priced. Since the canning process apparently isn’t the problem, the disappointing wines that we are pouring out of the cans must have been disappointing going in, too.

Our favorite out of about a dozen we have tried so far is the C’est Le Vin Rosé from Washington State producer Barnard Griffin. The label says it is “good Washington wine that happens to be in a can,” which I think sends the right message. It’s the wine that counts. The can is just a delivery system.

No (Canned) Wine Before Its Time?

I always look at the “best by” date when I purchase milk, yogurt, and a few other grocery items. Now I have started checking for dates on cans of wine, too.

Sue and I attended a presentation about canned wine packaging technology earlier in the summer and I was interested to learn about the special lining that is the key to the can’s success. Wine’s alcohol and acid don’t get along very well with aluminum, so a special liner is needed to make the can work.

These linings are typically approved for 6 to 9 months, we were told, depending on the chemical analysis of the wine. The wine might be OK at 12 months or longer, but they are intended for shorter shelf-life situations. You really don’t want cases of canned wine to sit a warehouse for months waiting to be delivered to a retailer.

Many (but not all) of the cans I have seen have a “canned on” date or equivalent code printed on the container and from now on I am going to check that out just as I would a quart of milk and look for wines with less than 6 months or so in the can.

We tried a can of a carbonated orange-flavored white wine spritz and it was a big disappointment. It sounded refreshing (I was hoping for an Aperol spritz kind of experience), but there was no one home, as Sue said. Not much orange. Not much wine. Plenty of bubbles. Was it the product or was it the fact that it was canned a year prior to our purchase and the can liner had failed in some way?

Confusion Corner

Wine is a famously confusing consumer category, with so many brands and varieties and with such an enormous range of retail prices. Canned wine is not much simpler based on a few retail shelves we’ve studied. There are several can sizes, for example, some sold as singles and others in packs. You’ve got to pay attention to know just how much wine you are buying and its cost per serving.

Some of the wine is labeled by grape variety, but this is less common than with bottled wine. And I don’t think I have seen a vintage date (yet) although, as noted above, the canning date may be more important. This may change if the premium canned wine trend picks up steam.

A lot of the wine is red or white or pink or bubbly. So what’s in the can, Sue asks? What variety or blend of grapes went into the red or white? What should she expect when she pops the top?

At this point, I suppose, the wines are targeting consumers who might find grape blend and vintage date TMI, but that should change if this category doesn’t fall victim to arrested development.

Two Cheers!

Canned wine isn’t going to revolutionize wine, but it seems to have the potential to evolutionize it — to help it evolve in ways that are relevant to today’s consumers. That’s worth a cheer or two in my book.

Why not three cheers? Maybe I am being stingy with my ratings, but it looks like it is still early days for wine in a can and there is a lot of headroom left in all areas including wine quality. I think canned wine has the potential to grow up in ways that will please a broader audience. When that happens, I’ll be the first to add the final cheer.

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Thanks to Danny Brager and Genevieve Aronson of Nielsen, Michelle Williams, Amber LeBeau, and Robert Williams for their insights on canned wine. Go to WICresearch.com for updated canned wine market research.

Precept Wine and the Willie Sutton Recipe for Market Growth

March 19, 2019 By Mike Veseth in wine, wine brands, wine markets 2 Comments

pinkbubbles At the conclusion of the State of the Industry session at the Unified Wine & Grape Symposium each January Nielsen’s Danny Brager announces his Bronze, Silver, and Gold medal wineries. The medals aren’t for the best wine or even for the most wine (Gallo would win that one every year). The prizes are for market success as measured by sales growth. Here are the 2019 winners.

GOLD – Delicato Family Wines, Riboli Family Wines, Precept Wine

SILVER – Deutsch Family Wines and Spirits, Jackson Family Wines

BRONZE – Duckhorn VIneyards, O’Neill Vintners and Distillers, Zonin USA, Delegat, Winery Exchange, Jam Cellars

Growth was difficult in the U.S.wine market in 2018, when many categories experienced falling volumes or stagnating revenues. To excel in this environment is noteworthy. The Gold medal is especially difficult to earn because Brager’s criteria require both high absolute growth in terms of thousands of cases and also high percentage growth rates year on year.

Gold medal producers have to have some secret sauce that powers them ahead. Delicato has Bota Box, for example. Riboli has hot-selling Stella Rosa.

Precept Wine‘s recipe for success is a bit different and so worth a deeper look. Precept, founded in 2003 by Andrew Browne and Dan Baty, is the largest private wine producer in the Pacific Northwest. Wine Business Monthly rates it as the 13th largest wine firm in the U.S. and, clearly one that is growing quickly.

I like to say that Precept has implemented the Willie Sutton recipe for growth. Sutton, a notorious criminal, was famously asked why he robbed banks. I rob banks, he said, because that’s where the money is. Pretty simple logic, don’t you think?

Precept Wine has grown so rapidly by moving decisively into the market segments where the growth is. This sounds simple, too, but it is not. Anticipating growth opportunities requires close analysis of changing market conditions. And then you must have the resources, flexibility, and determination to seize them. Not easy at all, but when you get it right the results can take your breath away,

If you made a list of growing wine market segments in 2018 it might look something like this.

Sparkling wine
Rosé wine
Alternative packaging (especially cans)
Private label wines
Low calorie / low alcohol wines
Super premium wines
Direct-to-Consumer sales

Precept has made important investments in each of these categories starting with its acquisition of Gruet, the New Mexico-based sparkling wine producer, which has experienced dramatic growth during the recent Prosecco-fueled sparkling wine boom. Gruet sales increased by 25% by value in 2018. Amazing.

Rosé is the fastest growing wine category in the last year and Precept has taken advantage of this with pink wines throughout their portfolio and leveragde for even higher growth by combining pink with bubbles, putting pink in cans, and even putting sparkling pink wine in cans as shown in the image above.

Precept has made a very serious commitment to the canned wine space and I see their House Wine cans in nearly every supermarket. The House Wine cans and Ste Chapelle wine spritz are two of the three top brands in this category.

Private label wines are another area of growth. Many wineries make their own products and also private label brands for retailers. Precept took a major step into this arena last year by acquiring Truett-Hurst’s business. The plan is to ride the wave of private label growth so that it represents 50% of total sales by 2020.

The Truett-Hurst acquisition included a wine brand called Cense, which is endorsed by WW (formerly Weight Watchers). Low calorie, low carb, and low alcohol wines are still a small slice of the total market, but one that seems likely to grow rapidly as production technology and product quality improve.

The Cense line includes a Rosé (of course), a sparkler, and a Marlborough Sauvignon Blanc. Alcohol is around 9 percent. Look for Cense wine spitzer cans in time for summer. You have only to look at the investments that major brewers are putting into low/no alcohol beer to get a sense (or cense) of the potential for wine.

Precept is also experiencing impressive growth in the premium and super-premium wine categories with their lineup of brands that includes Browne Family Vineyards, Canoe Ridge Vineyard, Pendulum, and Waterbrook.

Can the fast growth be sustained? Prediction is difficult, especially about the future, but I would argue that the particular category growth waves that Precept is riding are trends and not fads, and unlikely to suddenly disappear. Times will continue to change, however, so Precept’s challenge (and a challenge for the rest of us, too) will be to remain nimble and entrepreneurial even as scale increases.

The Changing Face of Wine in America: The Cooper’s Hawk Phenomenon

April 10, 2018 By Mike Veseth in wine, wine brands, wine markets 12 Comments

As I noted last week, wine is everywhere in America, or nearly so, and while it is common knowledge that the U.S. is the world’s largest wine market and that wine is produced in all 50 states, the diversity of the wine experience here sometimes comes as a surprise. Case in point …

What if I told you that one of the largest wineries in the U.S., home to what is probably the largest direct-to-consumer winery club program in the world, is based in Illinois, not California?

Illinois? (I can hear you saying this). No way! You’ve got to be kidding? Well, Cooper’s Hawk winery is no joke and learning about it helps us understand how wine is changing in the U.S. and where it could be going.

Top 50 U.S. Wineries

Wine Business Monthly‘s February 2018 issue lists the 50 largest wine companies in the U.S., from #1 Gallo (estimated production 70 million cases) to #50 McMannis Family Vineyards (340,000 cases). Most of the wineries are located in California as you would expect with a few exceptions such as Washington-based Ste Michelle Wine Estates (#8), #13 Precept Wine, and #36 Mesa Vineyards of Fort Stockton, Texas (550,000 cases).

Number 34 on the list with 570,000 case annual production and a wine club that is approaching 300,000 members is Cooper’s Hawk Winery and Restaurant of Woodridge, Illinois. All that wine is sold directly to restaurant patrons and wine club members. It is an interesting case study of wine’s growing (and changing) place in American culture.

A Wine-Centered Lifestyle Brand

The first Cooper’s Hawk location opened in 2005 and the chain, which identifies itself as a “lifestyle brand centered around wine” has grown to 30 stores in the mid-west (Illinois, Indiana, Ohio, Michigan, Missouri, Wisconsin) plus Maryland, Virginia, and Florida. Five new locations are scheduled to open in 2018. A total of 4.4 million guests visited Cooper’s Hawk last year.

A Cooper’s Hawk experience combines several elements. It is a restaurant, of course, with a wide-ranging upscale menu that encourages patrons to think food and wine with a suggested pairing for each dish. Bin 70 (Cooper’s Hawk Pinot Gris) is the suggested match for pan-roasted Baramundi, for example, and red wine braised short ribs are matched with Bin 04 (the Cooper’s Hawk Red, a Cab-Merlot-Syrah blend).

Ordering wine by the numbers rather than listing the wine names on the food menu is a way to keep things simple, rather like many people order by number from an Asian restaurant menu. You don’t necessarily need to speak wine to enjoy it at Cooper’s Hawk.

Each restaurant features a “Napa-style” wine tasting room and an “artisanal retail market,” where various food and lifestyle items are sold along with the Cooper’s Hawk wines. The idea is to bring the feel of a wine-country tasting room and restaurant to customers who are attracted to wine lifestyle experiences.

47 Varieties lux

A total of 47 different Cooper’s Hawk wines are listed on the online wine menu, divided into several categories, including International, Sparkling, White, Red, Sweet Red, Sangria, Fruit Wine, Dessert, Mulled Wine, Barrel Reserve, and top drawer Lux. As the video above indicates, grapes are trucked to the Illinois winery from California, Washington, Oregon, and other regions and the wines made, aged, bottled and shipped to Cooper’s Hawk stores.

Cooper’s Hawk invites its guests to embrace wine and gives them both broad choice and attractive pricing. Bottles of wine sell for what glasses of wine might go for at other restaurants. Retail shop prices begin at under $15 per bottle and top out at $39.99 for the Lux Pinot Noir. Restaurant prices are a bit higher, as you would expect, but the mark-up is surprisingly small. You can have that $40 retail Lux Pinot for $47.99 in the restaurant.

All 47 wines are available by the glass, with prices starting at less than $7. A glass of Lux Pinot Noir or Lux Meritage will cost you $13. How you view these prices depends on context, I think. If you are used to New York City restaurant prices, these wines are incredibly cheap — so cheap you might hesitate to try them. On the other hand, if lower-shelf supermarket wines are your reference, the prices might seem a bit high. It is clear from Cooper’s Hawk’s success,, however, that there is a sweet spot for an upscale casual dining restaurant wine list and they seem to have found it.

World’s Largest Wine Club?

One of the most interesting elements of the Cooper’s Hawk phenomenon is its wine club, which has nearly 300,000 members and is growing at a 25% per year rate. Guests who join the club are offered special “members only” wines plus invitations to various exclusive programs and events. Although there is an option to have monthly wine allocations shipped to your door, the pricing structure strongly encourages members to pick up their wines at the tasting room, which obviously produces repeated visits to the restaurant and reinforces the lifestyle relationship.

I am kind of fascinated by Cooper’s Hawk, which seems to have struck a chord with many American consumers by making wine the central element of a carefully crafted experience. I am therefore disappointed that I have so far been unable to visit one of the locations. Our travels take us many places, but so far the opportunity to belly up to a Cooper’s Hawk tasting room bar has eluded me.

But I have tasted a couple of the wines. The Cooper’s Hawk Lux Pinot Noir was the featured wine at this year’s Screen Actors Guild awards (Cooper’s Hawk is the official SAG wine partner) and we received samples of this wine plus the Lux Chardonnay, which were served at the event’s gala dinner, as part of the promotion of this partnership.

The details of the wines we received are a bit of a mystery — the Chardonnay and Pinot Noir are American appellation (not California or Oregon as you might expect). The Pinot was medium-bodied with a strong oak presence on the nose and palate that eventually faded to reveal varietal character. Perhaps the wine needed more time in the bottle to pull itself together or perhaps this is a winemaking decision to feature more oak on the premium product. The oak was nicely integrated in the Lux Chardonnay, on the other hand, and the wine was very enjoyable.

No one reads The Wine Economist for tasting notes, of course, and I’ve only sampled a couple of the wines. It is clear that these wines appeal to Cooper’s Hawk customers, who order them with meals and come back for more. Very impressive.

Cooper’s Hawk has achieved amazing success by creating or expanding a market that few of us imagined could be so large. Cooper’s Hawk recently announced and growing list of collaborations with famous wineries (Francis Ford Coppola, Boisset Collection) and celebrity chefs (Tyler Florence among others) that promise to expand the brand’s lifestyle appeal.

Is Cooper’s Hawk the future of American wine? No — wine is too complicated to have a single road ahead. But the Cooper’s Hawk phenomenon does suggest several important trails to explore — direct-to-consumer sales, focus on experience not just product, innovative marketing structures, and broadening the consumer base beyond the Wine Spectator reader “usual suspect” base to explicitly include Food Network viewers and foodies more generally. I think there’s a lot to learn about the market for wine in America from Cooper’s Hawk.

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The Wine Economist will pause for a couple weeks while Sue and I are in France to participate in Terroir and Millésimes in Languedoc and Roussillion from April 15-22 and Val de Loire Millésimes from April 22-25. Looking forward to meeting fascinating people, drinking wonderful wines, and learning as much as we can. Full report to follow when we return and have had time to digest our experiences.