Winberis

Coffee the new wine?

This yesterday in Decanter:

Angela Mount to make coffee the new wine
April 24, 2007

Maggie Rosen

Former Somerfield wine chief Angela Mount is turning her multi-million pound palate to coffee.

Mount – who made headlines around the world three years ago when Somerfield insured her taste buds for £10m (US$20million), saying at the time that they were 'vital to her job' - will advise Fairtrade and organic coffee company Percol.

She has also set up a wine advice website with ex-Western Wines MD Mike Paul, and also consults for the food and wine division of home tastings company Taste-In.

She will advise Percol on how to raise its consumer profile by addressing the parallels between coffee and wine.

'Until recently, people have tended to have a fairly simplistic view of coffee and this was mainly geared around strength,' said Mount. 'The wine industry has played a massive part in increasing people's experience of taste. Coffee is as diverse as wine. As with wine, soil, topography and climate produce different styles and flavours.'

Percol founder Brian Chapman, who also worked in the wine industry, has developed tasting notes for several Percol coffees that draw on the similarities between coffee and wine in terms of terroir and single origin status.

'Coffee farms are as intriguing and individual as vineyards,' he said 'I've always held a firm belief that coffee was more than just another beverage you kept in the cupboard.'

Starbucks tried this a year or so ago in California in what I thought was a ham-fisted way.  They very blatantly took wine terminology and applied it to their pre existing offerings, "coffee-muffin pairing" for instance.  It had all the authenticity of Dunkin' Donuts talking about the "mid-palate" of chocolate devils food with rainbow sprinkles...

One blogger I recently discovered, and like (despite his being a wine skeptic) puts it thusly:

More recently, I’ve also noted a trend towards coffee pairings. Some of it has come from Starbucks’ consumer education ads, while more experimental forms have included restaurant dinners featuring single origin coffees paired with each course of a meal. One example is the seven course pairing recently developed as a Coffee Dinner jointly between Navarre Restaurant and Stumptown Coffee Roasters of Portland, OR. Beyond the experimental novelty value, it forces the wine comparison too literally — with a mallot. Coffee pairing integrated into a meal plan makes about as much sense as pairing cigars with each course. And unless you’re Fidel Castro, that might not be too appealing…

I hope that Ms. Mount and Percol are able to take coffee down to what it means to consumers, how it fits into their lives and most importantly, distill a language and culture that already exist around the product into something communicable.  Coffee has a strong and diverse cultural relevance and history of it's own.  By embracing that relevance and history in a strong way, and owning it as an industry, "Big Coffee" can create a communication style of its own which will begin to resonate with consumers.

Let "Big Wine" be the one to steal customer insights from a new, non-alcohol source.  It would do both industries good, they have room to grow upward, and we could use a few new ideas.

-This also reminds me that I've occasionally heard talk of a coffee flavor wheel, akin to the UC Davis Wine Flavor Wheel, a tried and true tool...  See both below (the wine wheel is broken up into red vs. white for legibility).

Watch those en primeurs

Just a bit of a heads up...

Currently on Jancis Robinson's discussion board it seems that quite a few customers are experiencing difficulty getting their futures out of 1855.com.  That is worrying, especially since the stated reason for their sluggishness is that they've been growing too fast.  Hmmm.  I know that I prefer no unpleasant surprises from a firm that has taken prepayment from me, especially given the last few years' experiences with wine company fraud/mismanagement (Mayfair, Vintage Hallmark, etc.).

In my limited experience, it's worth paying a slight risk premium by going with someone reputable... I use K&L or Wine Club in the US (I've been their customer, they've been mine), and BBR in The UK.

Happy drinking!

On box wine

I don’t like box wine. I am however a fan of box wine.

It’s not a snob thing; I just usually know something not much more expensive that will provide me with a lot more pleasure. Why not drink a low cost Sauvignon de St. Bris instead of Three Thieves? I’ll tell you why not, because 90%* of the readership of this blog has never had a Sauvignon de St. Bris, wouldn’t know where to find it, and wouldn’t recognize it if it somehow bit them on the nose (that includes my mother… An avid reader.)

10% of the readers of this posting can rest easy in their knowledge, find great wines at great prices in odd places, and cash in on years of hard study and studious tasting… “We band of brothers, we lucky few.”

30% of my readers will happily spend their way out of their indecision; with $40 a blind monkey can find a great wine (at retail) in any city in the world. Even if you weren’t to know the punt from the foil, there will be plenty of shopkeepers happy to help you part with your money… “Many Americans equate cost with quality, and believe that more expensive wines are better, simply based on their price. Consequently, many believe that enjoying wine by its very nature is an expensive endeavor, since the best wines are the most expensive.”**

 40% of the rest will walk into a Trader Joe’s, or other retailer, look for a pretty label (I mean that in a nice way) at their price point, take it home or to a party… Taste it and be either 1) happily surprised, or 2) disavow having brought the wine to the party, or 3) blame themselves for “not liking wine”. In any case, not an auspicious start to a lifelong love affair.

Everyone else (20%) will just say “Screw it, where’s the beer case?”

Enter modern box wine. I see box wine as an easy, safe bridge to the world of wine. Buy it at Target and Walmart. It’s cheap. With a Mylar bag insert, it will last in the fridge. Many of the wines are better than “Two buck Chuck”, and serve as an easy and confidence inspiring alternative to beer. I am all for the bigger wine companies flexing their economies of scale, and reviving the flagging >$6 wines category with a new, sensible range of offerings. We know that Kendall Jackson can produce reliable, value packed products in obscene quantities, day in, day out. The challenge now is to bring that same quality brand promise to a new consumer, one who considers the $14 “premium category” premium.

One of the more persistent trends in recent years in terms of wine sales was the growing popularity of box wines, in particular more upscale brands. Traditionally, box wines were seen as a cheaper way to buy more volume for less price, popular with consumers unconcerned with presentation or quality. But in 2005, upscale labels such as Black Box wine and Block Wine from Kendall-Jackson made strong sales gains. Box wines typically have airtight plastic bags inside lavishly decorated cardboard boxes. The packaging limits the amount of air that gets inside, prolonging the life of the wine. Box wines are also convenient to carry and store in refrigerators. Wine consumers do not have to deal with corkscrews or open bottles, and the packaging also costs less for producers, keeping prices lower. As wine producers look for new ways to soften the elite image of wine and make it more palatable to the mass consumer, box wines are poised to increasingly become an option for wine labels, both economy and premium.**

*certainty within 1σ

**Euromonitor International : Country Sector Briefing, “Wine – US”, April 2006

Sonoma County Showcase

My friends over at Sonoma County Vintners are putting on this year's wine and food showcase.  I went last year and thought it was great...  Filled with old friends and new faces.  The thing I like best about Sonoma events is the refreshing lack of rediculous over the top-ness.  If I'm in the 'States over that weekend, you'll probably see me there.  (Ah yes, this is an unpaid testimonial...)

Usually when you hear the word "gala" in Sonoma you should think of apples, not limos...

Event: Sonoma County Showcase Weekend of Wine & Food

 

Dates: July 12-15, 2007

 

Description: Don't miss the 28th annual Sonoma County Showcase Weekend of Wine & Food, the ultimate Wine Country experience, held July 12-15. This gala event features four days of fantastic wine and food presented by world-renowned wine makers and Sonoma's top chefs. Indulge in exclusive all-access luxury packages of spa, golf, and wine safari experiences, or enjoy events a la carte, including private winery lunches and dinners, an extraordinary Sonoma Family Style gala dinner, and Taste of Sonoma, a two day grand tasting with over 100 wineries, 50 chefs, wine seminars, chef competitions, and more. For more information or reservations, visit www.sonomawine.com/showca se or call 800-939-7666.

On opportunity...

I know this may seem like a strange post considering the typically focused nature of this blog, but I've been thinking alot recently about the nature of obstacles and opportunities. 

I was sitting down for lunch on Friday at my friend Filipe's 30th birthday.  There were about 20 of us outdoors under dappled sunlight on the bank of the Seine celebrating, laughing and drinking cheap wine.  Hardly a place where I'd expect cynicism to raise it's ugly head...
At some point during lunch, the conversation turned to wine and the business of wine (not my fault, I swear!).  The fellow across from me, a Swiss MBA/ICRC operative who has lived all over the world doing good works in rough places said, "wine is a dying business... you said yourself that consumption in Europe is flat, and that consolidation is making the industry more competitive... why on Earth don't you do something easier, with more of a potential upside?"

It is a good question, one that I answer with a quote from Machiavelli's The Prince:

“Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage.”

The wine industry as we know it is at its core, a centuries old system for moving a locally manufactured perishable good to market.  Nothing more, nothing less.  It is a simple system which we have complicated amazingly through layers of tradition, legislation, and clever business-iness.  I won't say that the system has become unwieldy and inefficient, but I won't say anything else either.

I have been auditing a class at INSEAD taught by Professor Cool (real name) called Industry and Competitive Analysis.  One of his core tenets is that strategic opportunity lies in identifying and correcting market inefficiencies.  If that is true, and I believe it is, then few businesses are as exciting and opportunity filled as the one in which I find myself. 

Every time I see one of our tried and true models suffering (traditional wine importers vs. grey marketers), I am seeing a correction of an inefficiency... Market Darwinism?  I'm not saying that there is no place for traditional models in wine, I just believe that businesses should look honestly at themselves from the customer's perspective and then steal their own lunch before someone else can.

Look for obstacles, inefficiencies and things that you accept with blind faith.  Ask why.  Find opportunity.  Repeat.

Time Out Article

Being that I put some thought into this, I'll recycle it into a post...  When Leo Mirani was writing his article on the wine industry for Time Out, he sent me a questionnaire about my findings regarding the Indian wine market.  I sent him the following, which I think sums up some of my thoughts and so on (after all I did write it...).

1)     What is your day job?

At the moment I work in France and the United States as a wine business strategy consultant.  I have been a sommelier and restaurant buyer, retailer, importer and distributor.  I have worked on four continents and although I have studied many of the world's wine regions, my expertise is in the wines of France and California.

2) What is it about the Indian wine industry that interests you enough to want to start your own brand? and what is it about the market that makes it a good business plan?

There are a pair of elements which make the Indian market so exciting:

The first is a single number; 30%.  That is the rate of growth of the Indian wine market for the last five years, and is projected by Euromonitor for the next ten years.  Compare that with a global rate closer to 3% for context.  The factor which keeps larger global competitors relatively uncommitted to this market is the fact that volumes are still quite small, and the market is largely concentrated in Mumbai.  This is no "billion person market".

The second element, the one that makes Mumbai more attractive than a dozen other opportunities is the people.  Mumbaikers are a wonderfully cosmopolitan group, they are well travelled, well educated, and have an instinct for quality.  One trip around Mumbai will take you to half a dozen restaurants and lounges that would shame my favorite haunts in San Francisco, New York, and Paris.  Mumbai may be a small wine market now, but industries like mine will ignore it at their peril… It is a waking cultural powerhouse.

3) What exactly are you plans regarding this? Do you plan to set up a winery in India?

I don't plan on setting up a winery in India for a couple of reasons:

There is already a booming wine industry in Nashik, Grover near Bangalore and interest in other areas to boot.  The last thing I would want to do is add MORE capacity and noise to that new business!  I appreciate all of the investment being made by these guys, their equipment is second to none, but they are still sorting out basic quality issues and will be for another ten or twenty years.  If/when the crazy excise and "special" tariffs come down and Indian wines are asked to compete on a level pitch with the very good offerings from places like Australia and South America, all of that infrastructure could start to look like a very big liability.  On the other hand, they have done a wonderful job of building awareness and getting consumers excited about wine.  If it weren't for their groundwork there might not be a market to speak of.

I think the future of wine in India lies in the creation of wines especially for the Indian market and consumer.  You aren't like everyone else in the world, yet all of these international brands arrive with a product made for places like Sweden and expect to be greeted like conquering heroes.  These international players have a chicken and egg dilemma, they won't commit themselves to the Indian market because the volumes are too small, and consequently without commitment they'll have a tough time increasing their market (hundreds of import brands share just 28% of the wine market)

I think the bottom line is that whoever treats the consumer best will be wildly successful.  If Nashik brings a higher quality product to the table, they'll write the rules.  Conversely, when the international players get their heads in the game, and start valuing India's potential, Nashik might begin to look like an old Maruti…

4) How old are you?

I turned 30 in Mumbai on my last trip!

            5) Where do you see the Indian wine industry?

The Indian wine industry is the most exciting, dynamic wine industry in the world.  Great growth, great potential, with an ideal group of food savvy, quality of life aware consumers.  Domestic producers are doing a great job of spreading the word about wine.  Independent restaurants like Indigo, etc. and those at the big hotels are creating great wine lists, plush with top quality imports.  Foreign producers are beginning to notice; Angelo Gaja (the brilliant Italian winemaker)was in Mumbai last week, and Ernst Loosen (Decanter Man of the Year 2005)will be here this week or next. 

This is a very exciting time!

What I would like to see going forward:

Top hotels which are such a lynchpin of Mumbai's wine experience should begin using their tax free status to drop their heady margins on imported wines.  They would more than make up in volume what they lose in margin.  They have an opportunity to drive growth in the high end and make wine much more relevant.

I would also like to see a new commitment to education of the consumer.  The more we know and the more comfortable we feel in the world of wine, the more likely we are to make it a part of our lives.  That is after all, the whole point.

An anniversary...

It is now almost a year since my last post on this blog, so let's see if I can get it restarted...
I am living in France while my wife attends INSEAD for her MBA.  I have been spending an inordinate amount of time in Burgundy and Champagne... not a bad thing considering Burgundy is supposed to be my specialty!
I hatched a business plan to develop wine brands for the emerging market in India, got offers of funding, got customers, got everything lined up, and spent weeks there proving my model and the market.  After all of this, I found that for lifestyle reasons I was unprepared to move to Bombay for the 3-5 years that it would take to get the idea off the ground...  Anyone want to buy a ready-made business?  I'll sell it for an equity stake!
Actually, I was mentioned in "Time Out Mumbai" in the cover article of their wine issue.  It was Seagram, Vijay Mallya (Indian brewing billionaire), Rajeev Samant (the most modern of Indian wine producers) and yours truly.  Pas Mal!

Source : Time Out Mumbai ISSUE 14 Friday, March 09, 2007

Brave new world

Maharashtra’s wine industry is raising a toast to a happy future, reports Leo Mirani.
A few weeks ago, Mint reported that Vijay Mallya’s UB Group plans to
set up India’s largest winery to produce a wine called Four Seasons and
to open a chain of wine bars across India. A few days later, Seagram
India launched its brand of wine, Nine Hills, in Mumbai. Shortly after,
France-based Christian Pillsbury held a market research exercise in a
home in Bandra to discover local taste preferences. The following day,
Sula Vineyards CEO Rajeev Samant held a press meet at Haiko
supermarket in Powai, the first convenience store in Mumbai to retail
wine.
All this hyperactivity is an energetic attempt to quench India’s enormous
thirst for value-added grape juice. The subcontinent’s wine industry is
now growing at 35 to 40 per cent a year, according to India’s largest
wine producer Chateau Indage, much faster than consumption of traditional favourites like whisky,
which is rising at a mere eight every year. For wine makers, the future looks even more delicious.
India’s per capita consumption of wine is roughly six ml, or a little over a teaspoon, compared to
nearly 60 litres in France, said Seagram India’s assistant vice president Rukn Luthra. He said that
Indians now drink twice as much wine as they did five years ago. According to Euromonitor, a
London-based market research agency, the Indian market has grown by 126 per cent in volume
since 2001. They forecast that the market will expand by 97 per cent in the next five years.
The thirst has been intensified both by social changes and by government concessions to the wine
industry. Middle-class Indians now have more disposable income than ever before and they’re
looking for new experiences. Besides, wine’s lower alcohol content (12-15 per cent compared to
40-60 per cent in spirits) means that it’s seen as a healthier alternative to liquor.
“The growth is not recent,” said Vikrant Chougule, strategy head at the
Indage Group. “It’s been a process since we started in 1982 and now all
the new entrants are doing their bit for people to understand wine better,
to realise that wine has all these benefits and is actually a nicer thing to
drink than Scotch and killing yourself.” The greatest yardstick of the
drink’s newfound popularity, he said, is the Hindi movie. Said Chougule,
“Gone are the times when they used to celebrate with Vat 69.”
Christian Pillsbury, who describes himself as a wine business strategy
consultant, plans to get into the Indian wine market by creating wines
that are specifically for the Indian market. “You aren’t like everyone else
in the world,” he said. “International brands arrive with a product made
for places like Sweden and expect to be greeted like conquering heroes.
The future of wine in India lies in the creation of wines especially for the Indian market and
consumer.”
Maharashtra is the theatre of action for the Indian wine industry. The state’s first winery was
Sharad Pawar’s Baramati Grape Industries, which started in 1975. Pawar is now tipped to be a
shareholder in Mallya’s new venture. Regions of the state such as Nashik and Narayangaon have
the right climate to produce the graps varietals needed for quality wine. Many farmers already grow
table grapes, making it easy for new wineries to persuade them to switch to cultivating wine
grapes. (Seagram doesn’t grow grapes. It has 20 farmers contracted for the purpose. Indage has
up to 1,000 farmers on contract in addition to 2,800 acres of vineyards.)
The state government formulated a policy to encourage wine growing at the beginning of the
decade after it realised that the quantity of table grapes being produced by Maharashtra’s farmers
far exceeded demand, said Jaideep Kale, technical co-ordinator of the Maharashtra Industrial
Development Corporation’s wine park projects. “When the government looked at the figures of
worldwide production and consumption of wine, they realised that if they didn’t encourage Indian
:::: Time Out Mumbai - city guide and fortnightly listing magazine :::: http://www.timeoutmumbai.net/client_coverstory/client_coverstory_detai...
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wineries then foreign players would eventually come here and set up,” he said.
The Maharashtra Grape Processing Industrial
Policy of 2001 has been vital in promoting new
wineries. The policy exempts the wine industry
from excise duty for 10 years. It simplified
licensing procedures, established cheaper
licences for bars serving only wine, allowed beer
bars to sell wine and enabled wineries to get
cheaper bank loans by declaring wine production
as a small-scale industry. At the time the policy
was passed, Maharashtra had four wineries.
Today, there are 43, with eight new wineries
coming up this year, said Kale. In 2002, the state
government helped establish “wine parks” –
special zones where the government gives entrepreneurs land and infrastructure to develop wine –
in Nashik and Sangli districts. On December 30, Haiko became the first supermarket in the state to
start retailing wine as a result of a decision in October to allow grocery stores to sell wine and beer.
The cost of a licence to sell only wine and beer in supermarkets and grocery stores is a fourth of
the cost of a regular wine shop licence.
450 Crore rupees
Value of the Indian wine industry.
650,000
Number of cases of wine sold in 2006.
24 Billion litres
Worldwide consumption of wine.
30 Per cent
Rate at which Indian wine consumption is growing.
8.3 Million litres
How much wine we’re expected to be drinking by 2010.
47 Per cent
How much of the wine we import is French.
30 Per cent
The rate at which Italian wine imports is growing per year.
1-1.5 Crore rupees
Cost of setting up a winery with a capacity of one lakh litres.