Wine Regions

Are you building a tribe? Or just selling wine?? Lessons from our beer brewing friends…

Lagunitas Brewing Company tasting success


By SEAN SCULLY
THE PRESS DEMOCRAT

For a guy responsible for the creation of more than 14 million gallons of beer last year, Tony Magee seems curiously resistant to calling himself a brewer.

“I don’t think we’re in the beer business … we’re in the tribe-building business,” he said, standing among towering stacks of bottles ready to be filled in his warehouse at Lagunitas Brewing Company in Petaluma. “Beer just happens to be the common currency” of the would-be members of the tribe.

In this case, he’s building the tribe of craft brew fans who enjoy the beer and the quirky, iconoclastic sensibility of his 20-year-old Lagunitas Brewing. That tribe has underwritten an astonishing burst of growth that has propelled the business from a struggling local bit player to a nationally-known brewery on the cusp of full nationwide distribution.

Two years ago, his brewery, in a quiet industrial park on North McDowell Boulevard, was producing 161,000 barrels of beer, or around 5 million gallons, placing him a modest No. 17 on the Brewers Association annual list of craft brewers for 2011. A blast of growth brought that total to 254,000 barrels last year, enough to vault Lagunitas 11 places to No. 6 in 2012. It could pump out as much as 480,000 barrels this year, during which he expects to hire his 350th employee, a growth of about 100 in just 12 months. The expansion is almost certain to push the brewery even higher on the 2013 list.

And it’s hardly finished. Even as he continues to add equipment in Petaluma, Magee is preparing to join the rarified ranks of brewers with production facilities in multiple states, opening an outpost in Chicago this summer. The new brewery will start at about 300,000 barrels but eventually could produce 1.7 million, in addition to the 520,000 barrels from Petaluma when the current expansion is complete. The beer already is distributed in 34 states and the Chicago facility will allow Magee to spread to the rest in just a few years.

“I don’t know how big the company can be … The way it is is fabulously exciting, but we’re also growing this year at a 72 percent rate year-to-date,” he said. “I don’t know; there is something irrational about that, but yet it’s true.”

Lagunitas has staked out a reputation as quirky and irreverent, with a let-it-all-hang-out ethos including colorful and cheeky labels and promotional material drawn by Magee himself, featuring dogs, circus performers and burlesque dancers.

He dubs brews with self-deprecating names such as “Lagunitas Sucks,” a highly-hopped seasonal beer originally brewed as an apologetic substitute for the popular annual offering “Brown Shugga,” which the company couldn’t manage to get out on time one year.

“The packaging is unique in a lot of ways; it’s designed for intelligent people,” said Ron Lindenbusch, longtime Lagunitas marketing director. (In Lagunitas’ slightly twisted world, the title on his business card is “Beer Weasel,” while Magee’s cards often say “Imperial Warlord.”)

Another beer got the name “Censored” after federal authorities turned down the original name — “Kronik” — saying it was a reference to a popular slang term for marijuana.

Yet another beer commemorates a darker chapter in the brewery’s history: a 20-day shutdown by state alcohol officials in 2006 after undercover agents observed widespread marijuana smoking at the company’s weekly open houses in the days before the public taproom was built. Magee turned that into “Undercover Investigation Shutdown Ale,” a seasonal beer that the brewery describes as “especially bitter … unforgiven … unrepentant.”

“I really do not want the press and beer geeks and chat rooms to tell that story for me,” Magee said, cheerfully admitting that marijuana was once a major part of the corporate culture. “I’ll just tell it myself so that we own it.”

And that’s where “tribe building” enters the picture.

“Another way to put it is story-telling,” Magee said. “A tribe gets built around stories, commonly-held stories that everybody agrees on … we want to tell our story” through the beers.

The success of Lagunitas comes amid an explosion of competition, with nearly 2,400 small breweries operating in the United States today, on top of traditional behemoths such as Anheuser-Busch and MillerCoors.

For all the hectic growth at Lagunitas, Magee is a relatively little-known figure, even within the tight-knit community of brewers.

“For a few years, he’s been something of a mystery man,” said Paul Gatza, executive director of the Brewers Association, a trade association of smaller brewers. “People in the industry didn’t know him really well.”

Magee admits he has little use for the chummy world of brewers, with its conferences, festivals and collaborative beers co-created by multiple breweries.

“If you’re hanging around with the crowd, you’re going to end up making the same beers, thinking you’re all special,” he said. “Me? There is something I like about the idea of taking chances.”

Magee, 52, was born and raised in Chicago, where he studied at New Bauhaus Institute of Design. He eventually dropped out to perform in a Chicago-based reggae band (he remains an avid musician today) and he held a series of menial jobs, none terribly successful, in his retelling.

He moved to California in 1987 looking for what he has described as a “new start,” and tried to apply his art and design training as a printer in the North Bay.

That business, too, was struggling in the 1990s when his brother gave him a home-brewing kit. He soon was hooked.

His wife, Carrisa Brader, quickly evicted him from their kitchen, where he was creating a considerable mess. So despite owing tens of thousands of dollars in back taxes to the state and federal governments, he begged and borrowed enough money to buy a tiny professional brewing setup and opened Lagunitas in Marin County in 1993. He quickly outgrew the septic system on the site and began searching for new locations, settling eventually on Petaluma.

The development of the brewery, outlined in his 2012 book, “Lagunitas Brewing Company: The Story,” seems to consist of a manic quest for growth while frantically trying to hold off suppliers, bankers and tax collectors, all eager for repayment of late bills.

He writes of the first 10 or 12 years of the brewery’s life as “like being chased down the street by a pack of wild dogs.”

Brader, who now heads production and logistics for the brewery (her business cards say “Prime Minister” or “The Plant Lady,” a play on words referring both to her job and to her love of the plants in the office), credits her husband’s tenacity and sprawling intellect for getting Lagunitas through those years.

“He just has this amazing ability to learn anything he needs to learn,” she said. “When you’re starting a business, you have to wear a lot of hats. You have to wear all of them, in fact.”

As the business has stabilized, she said, he has shown a talent for bringing in the right people who have more formal business education to build the brand.

The people he attracts “are independent thinkers, but they get what the brand is about,” so they don’t need close supervision from the top, she said.

Magee expects to generate about $90 million in revenue this year and he says all of those old debts are long-since retired.

“People are like ‘how did you do it?’ and I say, ‘I’m not sure,’” he said. “You try to put it out there, put it in a way that’s honest, not the way people think you should or the way you think people expect it to happen. And you find your own voice, you know?”

Magee credits some of his success to being able to spot future trends early. His flagship India Pale Ale, for example, came out in 1994, a time when the style was in the shadow of the milder pale ales made famous by Sierra Nevada Brewing in Chico. While others dispute his claim to have pioneered the highly-hopped West Coast version of the IPA, he clearly was one of the first craft brewers to make it the centerpiece of his lineup.

The meteoric rise of Lagunitas has come at a price. The city of Petaluma has struggled to digest the burgeoning business, which has outgrown the city’s four-year-old sewage treatment plant. Magee has to truck his nutrient-rich brewing wastewater to Oakland for disposal.

City and county officials, however, say the benefits outweigh the growing pains. Not only is the business generating tax revenue and jobs, it is drawing new business to the area. Two smaller breweries are opening within a few hundred yards of Lagunitas, with several more in the works in other parts of the city, said Ingrid Alverde, economic development manager for the city.

The brewery, along with a few nationally-known competitors in the area, including Bear Republic Brewing in Healdsburg and Cloverdale and Russian River Brewing in Santa Rosa, are drawing new beer-loving tourists to the area, said Ben Stone, executive director of the Sonoma County Economic Development Board.

The board is preparing to release a detailed report next month on the effect that the growing local beer market is having on the economy.

The dizzying expansion of Lagunitas also has forced the previously low-profile Magee out of the shadows. The process hasn’t always been smooth.

The blunt-spoken Magee, who peppers his conversations with casual profanities that are hard to reproduce in a newspaper, has riled up the beer world by pointedly criticizing several of his fellow brewers, often delivering his broadsides on his stream-of-consciousness Twitter feed.

Among other dustups, he has criticized No. 3 brewer New Belgium Brewing of Colorado for taking public financing to build a second brewery in North Carolina, funding he turned down in his Chicago expansion. He attacked the popular trend of putting high-end craft beer in cans, saying the mining practices necessary to produce the aluminum are harmful to the environment. He mocked a new beer glass co-designed by Delaware-based Dogfish Head Craft Brewery and Sierra Nevada, comparing its shape to a sex toy.

He’s locked horns with the Brewers Association, criticizing its decision to change the definition of “craft brewery,” raising the annual production limit from 2 million barrels to 6 million, a move widely seen as a way of keeping Boston Brewing Company, makers of the Sam Adams line of beers, within the ranks of “craft brew” as it expands.

“Jim Koch is NOT a craft brewer, nope,” Magee wrote on his Twitter feed in late 2011, referring to the high-profile founder of the Boston Brewing Company.

He’s also been vocal in opposing a bill pushed by the Brewers Association to slash federal excise taxes on beer, saying now is the wrong time to be taking tax money away from governments to give to well-off brewers.

“He’s a loose cannon,” said Larry Bell, head of Bell’s Brewery of Kalamazoo, Mich., the No. 7 brewer on the list last year, who has joined Magee in opposing the excise tax bill. “Tony says what he thinks, even if that goes against the mainstream.”

Other major brewery owners, including Koch and Sierra Nevada’s Ken Grossman did not return calls for comment on Magee.

New Belgium CEO Kim Jordan defended the tax incentives, saying it was an appropriate way to help reduce the risk of the huge investment in a new brewery while guaranteeing economic benefits to the city of Asheville, N.C. She declined, however, to respond pointedly to Magee’s criticism.

“Life is too short,” she said. “It’s up to us to make it sweet.”

Magee admits that he has a tendency to speak his mind, but he says he never intended to challenge or attack his fellow brewers.

Citing Ernest Hemingway’s oft-quoted line about his whole career being an effort to write just “one true line,” Magee said he is “just trying to find ways to say one true thing, through the beer, through the business.”

Not to say that he enjoyed the controversy. He compared the reaction to some of his comments to “having someone just tie you up to a stick and throw rocks at you.”

After several widely-reported Twitter controversies in the past two years, he says he’s become more guarded in his personal comments in recent months, fearing that it might reflect badly on the larger company, “because what you say has a megaphone on it” now that the brewery is so large.

Closer to home, Magee’s reputation is less contentious. Since its founding, Lagunitas has made a policy of supporting local charities, usually in the form of free beer or use of the brewery’s space for events.

“If you’ve ever gone to a fundraiser or political event in the last 20 years, you’ve probably drunk some of Tony’s free beer,” said Marin County Supervisor Steve Kinsey, who has known Magee since the early days of the brewery and recently supported him in his successful effort to get permits to build a small hop farm and distillery near his home overlooking Tomales Bay.

Although he turns down offers to join charitable boards and rarely gives cash donations, Magee has made a policy of giving nonprofit groups free access to his brewery at times it is closed to the public.

“It’s very simple: You live in a community and you need to participate in it,” he said. “Hell, you want to participate in it. You get to know people, they get to know you and the beer.”

Although Magee also opens his doors to political fundraising events, he is stridently apolitical, to the point that he says he has not cast a vote in an election in his life.

“Does that make me a bad guy?” he asked with a laugh.

He said the brewery gives away hundreds of kegs per month to worthy causes, and more cases of bottled beer, but he doesn’t keep track of the number.

Petaluma Mayor David Glass said the Lagunitas name is so ubiquitous at charity events and city festivals that “I am at the point that I am looking to see if the logo is missing from anything. And it’s not.”

Trying to maintain that sense of community is important as the business grows, to help maintain its soul, said Don Chartier, events coordinator at the brewery (“Mr. Nice Guy” on his business card).

“As big as we get, you push back against that corporate attitude and structure,” Chartier said. “But as long as Tony’s in charge, it’s not going to have that.”

Magee agrees. He said he has no intention of ever selling the brewery and he is working on grooming a new generation of leaders who can replace him eventually and carry on his quirky and stubbornly independent legacy, no matter how big the brewery may grow.

“I think we could be as big as Coors. I think we could be as big as Anheuser-Busch,” adding a shrug and an unprintable expletive. “It’s just a matter of being sure we’re in tune with people, that we’re recognizable and authentic and resonate.”

No matter how large he grows, he said, his guiding philosophy will remain the same as when he was struggling to put out 500 barrels of beer a year.

“If people like what we’re doing, they will drink it,” he said. “And if they drink it, I will replace that one so they can drink it again.”

(You can reach Staff Writer Sean Scully at 521-5313 or sean.scully@pressdemocrat.com.)

The New U.S. Wine Market

The U.S. wine market fell off a cliff in September 2008, and it is still hanging in mid-air.

Far more has changed in this market than the behavior of the American consumer: The companies that distribute and sell the vast majority of wines have dramatically changed the way they do business.

To begin to understand this new market, Stonebridge Research created its Fine Wine Trade Monitor in March 2010, with support from industry groups including Napa Valley Vintners, the Paso Robles Wine Country Alliance and South African Winegrowers, and with help from industry leaders across the country.

From March to June 2010, we conducted telephone conversations of one hour or more with more than 50 top managers in the wine trade: eight distributors, 17 independent wine retailers and 25 full-service restaurants (both chains and independents, including national accounts) in the top wine markets in the United States (New York, Boston, Miami, Atlanta, Washington, D.C., Chicago, Las Vegas/Reno, Dallas, Houston, Seattle, Los Angeles and San Francisco) and several smaller markets.

In each conversation, we asked:

  •  How has your wine market been, over the last 24 months?
  •  How have you adapted your business?
  •  What is selling and what isn’t?
  •  What moves wine in this marketand what doesn’t?
  •  What notable trends have you seen in consumer behavior?
  •  What has been the impact of changes in distributor business?
  •  What can – and should – producers do?
  •  What worries you about the future?In the process, we learned what exactly this new market was and how the trade – wholesale, retail, restaurant – has changed to adapt to the new economy.

BEYOND GROCERY STORE DATA

We know that Americans are still drinking wine. They are just paying less for it. Consumers have changed what they buy, what they are willing to pay for it, and particu- larly, where they buy it – with consequences for everyone in the wine business.

You may have read that not only are retail wine sales rising, so are wine prices at retail. But that is InfoScan data, which is primarily grocery and drug store data, in the states where wine can be sold in those channels. In late 2008 and early 2009, grocery stores closed out – at huge discounts – most of the higher-priced, small-production wines on their shelves. Pretty much everything else has been heavily discounted.

So what does it mean if those prices appear to be increasing? Either that discounts may be some- what smaller or that consumers are taking advantage of better wines being discounted.

So, wine prices are rising…from what?

Are wine prices recovering?

What is really going on out there?

RETAIL

Here are some basics on wine sales. In the “normal” market, before the recession, it would take about three months to move an inventory of wine at retail (described in the trade as a “turn rate” of four times a year). Some lesser-known or more expensive wines might take longer to move. Thus, much of the cost of wine in all parts of the market is the cost of holding inventory. That inventory turn rate for wine has now slipped to once a year: 12 months to move all but the strongest brands and biggest values. This happened at a time when credit was becoming scarce and more expensive.

From the third quarter of 2008 through the spring of 2010, retail wine sales revenue declined 15%- 20% in most parts of the country, while sales volume – the number of bottles sold – rose. Many retailers found they were “working twice as hard for less money.” Wine would only sell with large discounts – 30% being the norm – or a special event. Many retailers cut staff by as much as 20%. “Hand-selling” of wine was an expense few could continue to afford.

Retailers also responded by cutting inventory, by 20% or more. They swapped out wines costing more than $50 for wines under $20. Anything that didn’t move quickly was closed out. Imports were the first to go, then smaller producers, library wines, multiple vineyard-designates, all those “new varietals” – all gone. And if they haven’t seen you lately, you are probably one of the brands they cut.

If it looks like retail shelves became filled with large-volume brands, they were. Risk-averse consumers were reaching for not only less expensive wines, but familiar labels from large producers able to fund the promotional allowances and discounts needed to sell wine.

The only alternative to discounting that seems to work has been special events with winemakers. Vintners’ travel is up 30% or more.

We do a lot of consumer research at Stonebridge. A few years ago, price was a factor in wine purchases – one of several, along with brand, variety, ratings, the occasion when the wine would be served, etc. Wine was, to use a wonderful phrase from Yankelovich Partners’ study for the California Wine Institute in 2005, a “safe adventure” – consumers were excited about trying something new, even dangerous, in wine. Well, that’s over.

Today no one is quite sure what consumers want, other than price. At least at retail, they are not being adventurous. Not that they are being given much of an option, either, because there is less and less adventurous wine on the shelf.

RESTAURANTS

Restaurants have been much more creative in responding to this economy.

The year 2009 was the worst for U.S. restaurants in almost 40 years. Full-service restaurants were the hardest hit, with particular pain coming from the loss of corporate and expense-account business. The average check was down 15%- 20%, but the average wine sale was down 20%-50%. Wine sales were down far more than spirits or beer, which were seen as more economical alcoholic beverages.

Restaurants responded by adapting their menus to allow customers to “manage their spend” through increased choices in more price categories and flexible portion size, prix fixe meals, special offers, food sharing and small plates. And they have adapted their wine lists accordingly.

Customers have been turning toward wine by the glass for several years, but in 2009, the shift was drastic, from bottle purchases to a cocktail, followed by a glass of wine with dinner. Restaurateurs described their new business as “selling more wine to fewer people at lower prices.”

The “sweet spot” for wine bottle sales dropped to the $40-$60 range from $90 or more – and it hasn’t improved. We even began seeing “house wine” again, albeit of better quality than in years past. With wine sales slowing, restaurants began cutting new purchases, cutting lists and selling from inventory. They put the expensive wines on special and when they sold out, they were replenished with wines they could sell for $40 or less.

Inventory levels were cut, long- term, to reduce costs. Individual orders got smaller – cases became six-packs and six-packs became two bottles – to limit inventory exposure.

Restaurants have long expected to be able to re-order regularly, monthly or bimonthly, for their more active wines, which became more important as individual orders dropped in size.

With the wines they do offer, restaurants have taken a different road than retailers. They are looking for “esoteric” imports, new wines, small producers, wines not available at retail. The last thing customers need to see on a restaurant list is a wine they could have bought in the grocery store or (horror of hor- rors!) at Costco at a fraction of the price.

Thanks to creative wine lists and support from energized sommeliers and trained servers, consumers have regained some of their cour- age to experiment with wine, seeking new, affordable alternatives to the more expensive wines they used to order in restaurants. Thus, wine sales on premise have been shifting toward small-production imports: particularly Veneto whites and Rhône reds. Restaurant traffic was revived in much of the country in 2010. Corporate and private dining business is coming back — yet wine lists have not returned to their glory days.

With restaurants and retailers heading in different directions, how do you build a brand today?

DISTRIBUTION

Now we get to the distributors.

Think about it: The whole structure of the three-tier system depends on distributors holding inventory. Inventory costs have multiplied as turn rates collapsed. Restaurants cut their purchases by as much as 50% and many closed. Retailers cut orders. Inventory credit costs rose and conditions tightened.

Starting in late 2008, most dis- tributors started trimming everything that had not moved in 30-60 days. During the past 18 months, there were hundreds of closeouts, if not more, flooding the market at discounts to retailers and res- taurants of up to 80%. Accounts often could not find out where to buy many of their usual wines.

Distributors have since cut 20%-30% of brands from inventory, primarily slower-moving small producers, library wines, new brands and imports.

One sales director described distributors as “triaging” customers, with major national brands at the top and smaller brands on the third level, described as the “if you are lucky, we might return your phone call” customer group.

Distributors have targeted inventory for no more than 30-60 days, even if it means out-of-stocks. They are not holding inventory for mid- season re-orders. Allocations go out once or not at all.

In the long run, long after the consumer starts shopping again, it is these changes in distribution that will have the greatest impact on the U.S. wine market.

WHAT DOES THIS MEAN TO PRODUCERS?

First, few, if any, producers will be able to depend on wholesalers to simply take their production off their hands and find a market for it. This situation has been coming for several years, and producers have largely been in denial.

The most immediate impact is on producer cash flow.

Distributors are decreasing what they are willing to buy, and completely eliminating some brands. In September 2009, wineries began dumping inventory to distributors with discounts as high as 60%, after spending much of the year insisting they could not even moderately adjust the pricing they had built up during the boom years.

The idea was presumably to clear out inventory to enable a healthier market with the new vin- tage, yet the discounts continue.

The expectation that pricing would return to old levels is unlikely to be met. Trade and consumers who purchased wines earlier in the year, at higher prices, felt betrayed, and those brands are likely damaged for the long term with these customers.

Next is the realization that producers are indeed responsible for generating their own demand.

Vintners need to nurture their relationships with their accounts, understand what they can sell and be out in the market to provide the training and support sales.

Independent sales and marketing companies are proliferating, assisting producers who can’t afford a sales force, yet this also adds another layer of costs.

Wine companies are learning they need to manage their distributors, monitor their inventories to avoid out-of-stocks, keep an eye on pricing to avoid closeouts, keep tabs on warehouse situations and check on deliveries.

They must work harder to make sure they get paid, and to ensure their wines are valuable to their distributors.

Finally, it comes down to more rigorously managing the business of wine: building sales planning and inventory management capabilities, and understanding and controlling costs.

Most important is to protect and improve quality while tightening business practices.

There is already concern that wine quality may be compromised as vintners try to protect margins, a counter- productive strategy when consumers are discovering that good wine can be found at every price level.

Cost savings will have to come from improved business, financial and operations management, with retaining and improving wine quality a top priority. Or, in the words of one former large-company executive, “taking money out of process to put into quality.”

What other options are there for producers?

Consumer-direct sales have revived in some regions, making up for some of the lost trade markets. But as ShipCompliant data has shown, consumer-direct is still a small segment of wine sales. Most wine will continue to be sold through retailers and eating-and- drinking establiishments.

Attention is gradually focusing on the opportunities for direct-to- trade sales, through so-called clearing distributors. There is anecdotal evidence of distributors setting up clearing divisions to process three- tier paperwork for a fee, leaving actual sales and physical distribution to wine producers. Many of the new sales and marketing companies and brokers, started by distribution veterans, are developing comparable services.

Restaurateurs report that distributors are proposing to take orders for smaller wines they do not usually stock, if the trade commits to pay in advance and to take immediate delivery, so that no inventory costs are incurred.

I had a conversation several months ago with a friend in the industry who remarked, with a startled expression, that he had just realized that he usually said “supply and demand” and I say “demand and supply.” Perhaps, he suggested, that says something about the industry and the market today.

Sadly, selling wine has always been more difficult than making it. Today, it is definitely what a vintner needs to think about first.

Barbara Insel is president and CEO of Napa-based Stonebridge Research Group LLC, a leading strategic advisory and research firm servicing the wine industry. Insel has led major projects for the French Trade Ministry, Wine Institute, California Association of Winegrape Growers, Napa Val- ley Vintners and many others. To learn more about Stonebridge Fine Wine Trade Monitor, visit www.stonebridgeresearch.com or contact Insel at binsel@stonebridgeresearch.com. 

Drunk with Power

Drunk with PowerStanding in the low-ceilinged basement of a rundown Seattle bungalow, among the shiny steel vats and plastic tubing that constitute Animale winery, the wine merchant Jon Rimmerman swirled his glass, sniffed its bouquet, took a sip and moved his mouth around as if chewing. A fair-skinned, dapper and somewhat elfin man, Rimmerman wore Kelly green jeans, a lavender sweater and a black-and-white plaid sportcoat. Salt-and-pepper curls bushed out from under his Greek fisherman’s cap as he bent over a white plastic bucket. Spitting out a great purple jet of wine, Rimmerman signaled to the winemaker Matt Gubitosa that he could taste exactly one more vintage before leaving.

From the outside, Animale — named for Gubitosa’s dead but still-beloved cat, whose image has appeared on many Animale bottles — looked more like a methamphetamine lab than a winery, with an overgrown lawn, a faded gnome statue and reflective insulation covering all the basement windows. On the inside, Animale was clean and well lighted, with all proper licensing, classic R. & B. on the radio — “a little bit louder now!” — and a sleepy kitten.

“That’s the Dolcetto?” Rimmerman asked, as Gubitosa poured.

“Two thousand ten, yes. You need some pizza with that. I use cultivated yeast, but no mechanical anything.”

Rimmerman is the founder and sole owner of Garagiste, the world’s largest e-mail-based wine business. With 136,000 subscribers, Rimmerman says that Garagiste does, on average, $30 million in annual sales offered exclusively through his long, florid, self-mythologizing daily e-mails. “Dear Friends, somewhere along the path to wine-related enlightenment” began a recent one, which later evoked “the incredulous 1970s chemical salesman, dumping buckets of toxic pesticides” onto the vineyards of poor Chambertin, Margaux, Latour. “At some point, the land gives up. It must be resuscitated over decades to fully escape the poison (similar to smoking — the body eventually cleans itself and regenerates, but a certain scarring remains).” He then conjured lovely Sardinia, Europe’s “truest untouched terra firma,” source of the obscure 2011 Rigaterri Mirau — “Djarum cigarette in your glass . . . massive pine forest, clove, resin,” a “once-in-a-blue-moon” steal at $18.61 a bottle.

Despite Animale’s admirable smallness, Rimmerman was skeptical going in: only months earlier, Robert Parker’s Wine Advocate gave Gubitosa’s 2009 Petit Verdot a stellar 92-point rating; Rimmerman has built his reputation by differentiating his tastes from those of other critics, favoring the austere, eccentric and putatively authentic over what you might call the merely delicious. But now Rimmerman spit out another purple mouthful and said, with evident surprise, “That’s the most unusual wine.” He looked Gubitosa in the eye. “I mean, not to say whether it’s good or bad, like or don’t like.”

Gubitosa, a burly, thin-haired 50-something who works for the United States Environmental Protection Agency when he’s not cranking tunes, petting kittens and making fine wine, nodded. Point taken.

“But it has a personality.”

“Yeah, it’s not for everybody,” Gubitosa conceded.

“The pepper, it’s incredibly crushed on the nose and through the palate, with those hard tannins,” Rimmerman said. “There’s nothing fun about that.” This was a backhanded compliment. Wines of integrity — wines of “character and terroir,” to use Rimmerman’s term — aim not to please but to express what Rimmerman calls, in all seriousness, “vinous truth,” meaning the honest expression of a particular grape varietal, grown in a particular place, in a particular year. “People have distilled my life down to, He’s in pursuit of the truth, more broadly, in all things,” Rimmerman says.

Rimmerman shook Gubitosa’s hand, explaining that he had a flight booked for later that evening, over to the wine country of southeastern Washington, for a few more days of tasting. From there, Rimmerman had a flight booked to Washington, D.C., where his first East Coast warehouse is under construction. Rimmerman says he has spent about half of the last 15 years on the road, hunting wine and story in Europe, Australia, New Zealand, South Africa, South America, Turkey, Israel, three Canadian provinces, northern Mexico and 13 American states.

The vineyards of the Savoie, in the French Alps.

Photograph by Shira Young

Stepping into the Seattle downpour, Rimmerman trotted delicately across the sad lawn, climbed into the car and insisted that his personal preference — the question of whether or not he would drink Gubitosa’s wines in his own home — was irrelevant.

“What I’m trying to uncover is something that is culturally important or of the moment, which this definitely is,” Rimmerman said. “This is cutting-edge Washington State winemaking. So, first: Are the wines sound? And then, would people that read everything that I write, every day” — in those Garagiste e-mail offers — “be interested not just for the wine but for the story, the cats, the meth lab, the geologist, the maybe-no-woman-in-his-life. Would they like to kind of taste that story in the bottle.” The answer was maybe: Gubitosa’s wines were not “immediately crowd pleasing, but he was trying to make something real, that was not doctored.” In Rimmerman’s cosmology of the wine industry, which holds that a vast majority of wine on the U.S. market goes through industrial processing aimed at pleasing Robert Parker, this was high praise indeed.

Driving through Seattle’s streets, he rattled off various nicknames he claimed to have been given by unnamed others: “The Wine Whisperer. The Pied Piper of Wine. The Great and Powerful Vinous Oz. The (Real) Emperor of Wine. The Emperor Who Has Clothes. I’ll get you a list.”

“The Wine Whisperer” refers to Rimmerman’s conviction that he, along with his partner and their 6-year-old daughter, all have superhuman tasting powers that may or may not qualify them as what are called “supertasters,” a distinction thought to have a legitimate anatomical basis. In addition, Rimmerman will say that his daughter has a genetically enhanced tactile sense — that she is a kind of superfeeler — and that he, personally, by simply looking at a label, can recall the taste of any wine that has ever crossed his lips, a number running into the many tens of thousands. This is an aptitude that, he feels quite sure, even Parker cannot claim. “This is something that people have called a photographic memory of wine,” Rimmerman told me. “Or they’re not quite sure what it is. It hasn’t been categorized yet.”

Those two “Emperor” nicknames, playing off the Robert Parker biography “The Emperor of Wine,” evoke the doubtless pleasant fantasy that Rimmerman — despite being a salesman with no medium beyond his own marketing copy — might somehow displace Parker as the great American wine tastemaker. “I don’t think of myself as a retailer or an importer,” Rimmerman likes to say. “I think of myself as a writer and a conduit of culture.”

As we parked near Seattle’s deepwater cargo port, Rimmerman said he has also been called the J. Peterman of Wine, “being able to tell vivid stories in a catalog where people buy trunks from India they have no use for.” He tried to put all this together for me: “There is an aspect of J. Peterman. There is an aspect of Oz. There is an aspect of the Pied Piper leading people over the edge where they’ve never tasted before. But no one really knows who I am and how I do this. When other people try to copy what we do, I’m very floored by that. It’s wonderful, the admiration.”

Stepping into the rain, just then, he opened an unmarked door in a concrete wall and led me into his cavernous warehouse filled to the ceiling with countless cases of wine. His partner, Shira Young, stood nearby, a striking woman with jet-black hair, dark eyes, golden skin and a soothing and sensible demeanor that reflects well on the manic Rimmerman. She and one of their daughters, Gigi, hovered near a tall round table covered with olive oil both in bottles and on plates.

Rimmerman asked Gigi if she had tasted them.

Shira replied for her. “She tasted the entire table.”

Gigi did not look up; she was busy drawing her little hands through a plate of olive oil and then dreamily rubbing her fingers together.

Rimmerman with his partner, Shira, and their daughters, Gigi, 6, and Pip, 3, in the South of France.

Photograph by Shira Young

Garagiste, which gets its name from a French winemaking movement, has not advertised since its creation in 1996. Rimmerman built a Web site only two years ago. Before that, you had to hear about his list through a friend, copy the e-mail address, then send in a polite request to join — analogous, in some ways, to the nightclub without a name, creating desire precisely by its disinterest in attracting you. Even today, the Garagiste Web site — through which you can now sign up for the e-mail list — has no e-commerce function nor even a blog post of Rimmerman’s daily offers. You get the memo or you don’t, and Rimmerman rarely offers the same wine twice. Though he blackballs people who might buy in volume to resell — the words “no sales to retailers or wholesalers” appear in every e-mail offer — he claims that competitors skulk around the list nonetheless, under fake names, even sending him anonymous death threats demanding an end to his dangerously low prices on both inexpensive wines (he sells plenty for under $10 a bottle) and pricey ones, like his recent offer of 2009 Romanée Conti at $25,821 per 12-bottle case. (“Please limit requests to 1×12-pack per person,” said the accompanying order information, as if that were necessary.)

Rimmerman makes ordering easy enough, and also remarkably human: every offer says something like, “reply to this e-mail or send Nicki a note,” referring to his longtime assistant. But he also requires a tolerance for deferred gratification, shipping only twice a year, once in the spring and once in the fall, when Rimmerman says extreme heat or cold are less likely to destroy the wine in transit. In his wine offerings, he told me in a personal e-mail, he strives to reach his entire demographic simultaneously, “from Brooklyn ‘coolio’ (Williamsburg, Red Hook) to waning coolio (Park Slope) to Upper West Side to Scarsdale,” as he puts it, “with vastly different levels of disposable income.” Thus, obscure cheap wines for “the lowest-disposable-income group with the most cutting-edge knowledge of the wine world and the most time to spend on their computer (23-to-33-year-olds in Brooklyn, the Mission, Echo Park in L.A., etc.)” are offered in the same e-mail as wildly expensive ones, the whole thing stitched together by, say, “Beach Boys songs and bizarre, little-known facts or idiosyncrasies of Brian Wilson.”

Rimmerman was born in 1966 and raised on Chicago’s North Shore until his parents divorced and Rimmerman’s mother and stepfather took him to live in rural Wisconsin. He remained close to a father he describes, with characteristic brio, as a kind of supersalesman — claiming he invented commodities-trading algorithms “before computers,” created “one of the first pro-athlete management agencies” only to sell it before it became profitable, and helped the N.F.L. develop the whole idea of staging exhibition games overseas.

“He made millions and he lost millions and he was never afraid to go for it,” Rimmerman told me. “That’s definitely my personality and the impetus for Garagiste — no fear, believing in yourself.”

Garagiste itself emerged from an ad hoc wine-tasting club at the University of Wisconsin-Madison. After finals one year, Rimmerman and a few classmates celebrated by pooling money to buy a 1979 Krug Champagne and 1982 Dom Pérignon. “It was one of those ‘Oh, my God’ moments, there’s something of a higher order here,” he said. “I sat with those wines for 15 hours.”

It soon emerged among the group that Rimmerman had the most sensitive palate and a gift for spinning great stories about interesting wines, and it wasn’t long, he says, before he found himself faxing an informal wine letter to friends scattered around the country.

Three tips from Jon Rimmerman
for buying wine at your local shop.


AVOID THE MIDDLE

The eye-level rack at your market is usually dominated by shelf space “owned” by local distributors. Some of the top, smaller production examples are represented by tiny distributors that cannot pay slotting or marketing fees demanded by grocers for eye-level rack space. Beat them at their own game — look at top and bottom shelves or in poor visibility areas of a display — my gut tells me you will find a number of gems lying in wait.

 

ALCOHOL CAN FOOL YOU

High alcohol does not equal high interest. Alcohol can obfuscate the true nature and nuance of a wine — even with normally high-alcohol examples like Chateauneuf-du-Pape. Alcohol levels have risen to blackout levels over the last 10 to 15 years, spurred by a variety of sparks: a certain critic’s preference and possibly global warming. Don’t give in to the rise! Challenge yourself to look for reds under 14 percent and whites under 13 percent. My sweet spot is 12½ to 13½ percent for reds, 11½ to 12½ percent for dry whites.

 

TRUST OTHER DRINKERS

Use your smartphone to create a level playing field: community-based Web sites like Eric Levine’s CellarTracker (cellartracker.com) give you the opinions of your peers, those who have actually tasted the wine in question — not the opinion of a distributor or a magazine. You can easily pull them up while standing in front of a wall of a dozen unknown New Zealand sauvignon blancs, and all will start to make sense in a jiffy.

During Rimmerman’s years at DePaul University law school, he landed a summer job in Chicago, at the first American Starbucks outside Seattle. While jerking espresso and sweeping the floors there, he happened to meet the company’s founder, Howard Schultz.

“So I was part of the whole genesis of, whoa, what Starbucks was,” Rimmerman says. “I’ll never forget the incredible passion he had for a very simple idea that he was absolutely 100 percent certain would be important to the culture of the United States in the next 20 years.” Rimmerman says he learned from his time at Starbucks “the beauty of retail marketing, of conceptual ideology with consumer goods,” an idea that can be roughly translated as defining a crystal-clear brand identity and then ensuring that everything from the product to customer relations reinforces it.

Rimmerman was living in Seattle when his own simple idea fell into place. “That was right around the same time as the whole Seattle, Nirvana, Internet, you know, boom, of incredible creative energy,” he says, aligning his own origin story with those. “I met all these incredible, smart people inventing all these things called, like, Adobe. I mean, Bezos was running Amazon out of a garage. And everybody knew them!”

He realized he had the seeds of his own start-up in that wine letter. He’d already switched to e-mail, picking up several hundred new subscribers who often asked where to buy the wines. It was a no-brainer to start selling them. All he needed now, Rimmerman decided, was a clear sense of mission — a brand identity, in other words, centered on making the world a better place instead of just making a buck. Rimmerman claims that he made two lists — things he liked about the wine business, and things he did not — and decided that his company’s goal would be to transform the industry until his “don’t like” column was empty.

He’s a little vague about what was actually on those lists — you suspect that he has, to be generous, lost the originals. But he is consistent in characterizing his primary don’t-like: an intolerable gulf between winemakers and wine drinkers caused by a legally mandated separation of importers, distributors and retailers. “It’s one of the only systems in our country — women’s right to vote, all these things that have changed over time, the whole racial thing that happened in the ’60s — that the government never wanted to look at,” Rimmerman says.

By cutting out all those middlemen, Rimmerman could offer lower prices at higher profit margins, while becoming the “Sub Pop Records of the wine trade,” scouting talent and connecting old-school vintners to discriminating consumers. He could also be “the Erin Brockovich of the wine trade,” pointing out that pesticides have been found in bottled wines at every price point including world famous Bordeaux. In addition, many wineries use additives and processing agents like egg whites, milk, fish extract, animal gelatin (sorry, vegetarians), sugar, toasted oak powder, the color-enhancer Mega Purple and dimethyl dicarbonate, a chemical so toxic that merely inhaling it can be fatal. Bringing attention to all this, and to little guys doing it the old-fashioned way, Rimmerman appeals to the moral and intellectual vanity of his subscribers before even mentioning anything as tawdry as the per-bottle price. Only a chump would buy top-dollar status-symbol wines secretly saturated with chemicals instead of the far-cheaper real stuff favored by true insiders.

Rimmerman is neither the first nor the only wine merchant to have built a brand identity around the distinction between industrial and artisanal winemaking. Kermit Lynch, for example, a minor legend in the international wine trade from Berkeley, Calif., who says he has never heard of Rimmerman, has been importing French wines of this stripe since the 1970s. Then there is Chambers Street Wines, a brick-and-mortar retail shop in Manhattan that makes a comparable commitment to selling noninterventionist wines.

But Rimmerman has discovered some of the great noninterventionist standard-bearers, like Frank Cornelissen, who was toiling in obscurity high above the snow line on Sicily’s volcanic Mount Etna, before Rimmerman found him resurrecting abandoned vineyards and vinifying the juice in the strictest of Old World methods. According to Alder Yarrow, a Garagiste fan and author of the influential wine blog Vinography: “Cornelissen just takes a bunch of grapes, throws them in buckets, stomps them, comes back six months later and puts it in bottles. They are the most natural wines in the world.” The result is cloudy with visible sediment, and even prone to refermenting in the bottle. “But when they are good, they are unbelievable!” Yarrow says. “Rimmerman likes that kind of thing, wines that to most Americans are like eeuwee!”

Rimmerman considering a cask of Sagrantino in Montefalco, in central Italy.

Photograph by Shira Young

Of all the purported nicknames Rimmerman offers, the most telling may be “the Great and Powerful Vinous Oz” — celebrating, as it does, a certain Emerald City quality in Garagiste. Rimmerman has doubtless traveled around the world seeking great wine, but he also appears to find at least some through traditional distributors and importers — one of whom, asking to remain anonymous because he does business with Rimmerman, explained that Garagiste can be a convenient way to move a lot of inventory in a big hurry.

Alice Feiring, a New York-based wine writer, claims that Rimmerman has even discovered wines through her blog posts. (Rimmerman, who considers Feiring a fellow traveler, insists the timing of their discovery was merely coincidental.) “He’s not a tastemaker,” she says. “He is picking up on a trend. He is a businessman.” Feiring adds, however, that she knows “people who are very, very, very faithful to him, and give him a lot of money all the time.” Other industry insiders have told me similar things, raising one of the greater curiosities of the Garagiste phenomenon: Rimmerman’s act seems to appeal most powerfully to people with no illusion about how it works. David Schildknecht, for example — one of the most prominent wine writers in the world and a critic for The Wine Advocate, and therefore a man deluged with free wine samples — chuckled over the phone, saying: “I buy wine from him regularly. . . . .It’s pretty amusing to me.” Michael Terrien, a boutique Napa winemaker, calls Rimmerman’s daily e-mails “wine crack,” adding that he has to unsubscribe periodically to stop the financial hemorrhage.

Rimmerman’s personal theory about how it all works — how the Garagiste business model and those idiosyncratic e-mails compel such vigorous spending — fetishizes the human element, the obvious imperfections, like telling his administrative assistant to leave typos and grammatical errors in his e-mail offers — preserving the immediacy of his writing — and never including photographs. “Psychologically, it’s very important,” he says. “If I told you that story but you didn’t like the look of the label” — Animale’s cat, say — you might doubt the pitch. (“This is something I’ve carried for 18 years,” Rimmerman told me, as if confessing a terrible secret. “I’ve never told anybody this.”) He also cites a broader cultural shift working in his favor — “It’s almost like ‘everything old is new again,’ ” he wrote in a personal e-mail to me. “Or the music scene going back to turntables or . . . vintage 1960s tube amplifiers — people crave warmth, whether its auditory or in business, and eventually they come around to what makes them feel good, what keeps them warm — sensory or mentally.”

This idea of analog musical warmth is central to his thinking. In Walla Walla, Wash., after a long morning among the giant grain silos, vast wheat fields, not-so-vast vineyards, and smelly horse corrals of the area’s rural fringes, we stopped at the relatively elegant Waters Winery. Jamie Brown, a vintner who made a living selling bootleg concert CDs during the Seattle grunge scene of the 1990s, is now a sort of Falstaffian rocker/poet/artiste who has sold many wines through Rimmerman. Inside the barrel-aging chamber, Rimmerman tasted multiple vintages of Waters syrah and cabernet, free-associating toward a sales pitch: “This is cabernet sauvignon for cabernet sauvignon’s sake . . . not for oak’s influence, Napa Valley, prestige, Robert Parker.” He spat into a floor drain and took a second stab: “This is the Old World that has come to America. This is like Ellis Island in Washington State. How about that for a quote? That’s a big thing for me to say, because I’ve never found that anywhere.”

Four months later, offering a Waters syrah called Tremolo, Rimmerman instead wrote about Monteverdi inventing musical tremolo about 400 years ago. “He never could have imagined . . . Liszt would use it as a palpitating piano technique or Bo Diddley on the guitar. From Floyd Rose reinventing the double-locking wheel, to the classic blackface circuitry of early 1960s Fender Twin Reverb amps (or Vox AC30, Silvertone, etc.).” He followed this arguably absurd but possibly masterful massaging of his audience with a reassurance to all that Tremolo had an impeccable Old World anti-mainstream taste — “mineral salts . . . natural (ripe) acidity, 12.5% alcohol.” Then he took a quick detour into his global travels — “scurrying about on back roads in Turkey, Croatia, Ribeiro, Sicily” — and made a brief pause to make sure we all knew he really had been in Walla Walla, personally, shaking that winemaker’s hand. “When I first sampled it a few months ago with Jamie,” Rimmerman wrote of the wine, “I was so taken with its truth that I asked to put the offer out then and there (on my BlackBerry, in typical Garagiste fashion).”

I have no recollection of this exchange, nor of any whispered conversation between Rimmerman and Brown beyond my earshot. But Rimmerman swears it happened and, at $39.99 a bottle, it almost certainly doesn’t matter.

Daniel Duane is the author of “How to Cook Like a Man: A Memoir of Cookbook Obsession.”

Editor: Ilena Silverman

Wine Executives Reveal Optimism and Concerns

Napa, Calif.—Each year, the Wine Industry Financial Symposium presents the results of a survey of wine industry executives conducted by Dr. Robert Smiley of the University of California, Davis, Graduate School of Management. Smiley shares the results of the study, completed with graduate research assistant Nicole Pedro, on Tuesday morning. Smiley and Pedro interviewed 24 executives—most of them winery leaders including Joseph Gallo of E. & J. Gallo and Jay Wright of Constellation Brands—but also a few others including Mel Dick of the major distributor Southern Wine & Spirits and William Deutsch of WJ Deutsch & Sons. Fully 85% of the respondents are from the coastal region, with 58% from Napa and Sonoma counties. Interesting quotes from the respondents (given anonymously, of course) comprise much of the presentation, with numerical summaries included for some topics. Survey results Most respondents are observing grape shortages and dealing with them by paying higher prices for grapes, establishing and/or extending grape contracts with growers, sourcing wines or grapes from offshore and/or utilizing a broader appellation. Some are planting (and buying) new vineyards. Most survey respondents say they are observing margin compression. They are attempting to improve margins by increasing wine prices where feasible, reducing operating costs, improving operating efficiencies and emphasizing their relationships with growers. Respondents have varying opinions about whether consumers will return to buying high-priced wines at the levels seen in 2006-07. Many believe consumers will slowly increase purchases of high-priced brands as the economy recovers with an increased focus on quality and authenticity. However, others feel that the previous levels of conspicuous consumption will not return. Many respondents note that consumers have traded down and may have “reset” their wine preferences at lower price points Nevertheless, some respondents note that they already are seeing improvements in sales of high priced brands. None of the survey respondents claim to be experiencing winery labor shortages, but most respondents are observing vineyard labor shortages. In response, they are increasing wages and benefits to attract employees, using labor contractors and increasing the use of mechanization. Hottest issues for the future The executives’ top concerns (in order) include globalization and competition from imports, government regulations (especially of labor and environmental issues), availability of water and distribution and retail consolidation. Respondents also are concerned about taxes, competition for land, climate change, packaging innovation and supply cycles of shortage and surplus. Among the issues Smiley quantified, 87% of the executives predict improving growth and profitability, a decrease from 92% last year. Many (63%) think consumers are looking for values and deals, while 61% believe consumers like to try new things—varieties, tastes, regions and other brands. About half of respondents find consumers looking for affordable luxury, while 42% see less brand loyalty. Only 40% think consumers are using social media to make purchasing decisions, with the highest impact among the cheapest wines. Top varieties The respondents continue to see strong Cabernet Sauvignon sales, followed by Pinot Noir and red blends; surprisingly, red Zinfandel comes next, followed by sweet reds. Merlot and Syrah trail the pack. Likewise, Chardonnay is strongest among whites, followed by fast-rising Muscats, then Sauvignon Blanc and Pinot Grigio. White Zin is seen as the weakest among white wines. Respondents also believe the strongest growth will be in the $10-$14 and $14-$20 segments, with $3-$7 the slowest growing category. Three-quarters are focusing more on consumer-direct sales, while almost as many are investing in infrastructure, reducing costs of operations and investing in more technology. Two-thirds are increasing grape contracts, while 55% are looking for alternate means of distribution and 34% are buying vineyards. Most don’t find social media very important to their companies. Asked to rate the importance from one to five, they rate Facebook at 2.5, with Twitter and their company blog at 2.27.
Copyright © Wines & Vines

The bankers’ view of wine

Banks are important to wine companies, as they are to other businesses. How the banks see the industry is important, for it determines how much money they will lend to those companies.

In the past few months, two major bankers to agricultural companies — including wineries — have disclosed their views.

In its 2012 Annual State of the Wine Industry Report, Silicon Valley Bank forecasts long-term steady growth in the fine wine business. It expects 7 percent to 11 percent sales growth in 2012.

Dan Aguilar, senior relationship manager for the wine division, said wine inventories are evolving into a state of shortage that will last for some time domestically. Meanwhile, prices for grapes and bulk juice are increasing as growers finally start to see recovery.

Aguilar does expect increasing plantings to feed the looming grape shortage though imports are taking larger market share in the U.S.

Bottle prices are also increasing, but he doesn’t expect a return to the price level prior to the recession. “It’s increasingly difficulty for third-party marketers that have sold with a culture of discounting,” he said; this includes competing with Internet sources that create a ‘Fifth Column’ sales channel.

He adds that so-called millennials as fine wine consumers are over-valued in their importance today.

An international banker to agricultural companies with strong ties in Napa, Rabobank reports that global wine inventories are tightening as wineries move to fill production shortfalls.

According to Stephen Rannekleiv, executive director of Rabobank’s Food & Agribusiness Research and Advisory group, U.S. bulk wine imports showed sharp growth in second quarter of 2012.

The Dutch-owned Rabobank, which bought Napa Community Bank in 2010, estimates global wine inventories are at their lowest point of the past decade. Indications are that the industry has finally moved closer to balance after years of oversupply problems. This tighter inventory arrives as consumer demand continues to grow and production remains constrained.

In the U.S., the wine grape market remains tight, with little domestic bulk wine available. Prices have increased dramatically leading many wineries to sign long-term contracts with growers or buy vineyards and other wineries.

Rabobank reports that the value of U.S. wine exports declined 2 percent last year largely due to the increasing strength of the U.S. dollar.

Imports, however, increased sharply in the first four months of 2012 as wineries sought alternative supplies in the tight bulk wine market. Bulk wine imports more than doubled with the greatest growth coming from Chile, Argentina and Australia.

Fortunately for wineries, this year’s crop looks above average.

Finally, the head of French-owned Bank of the West’s wine division, Adam Beak, notes that consumers are driven by value, and that’s not the same as cost. “A $2 bottle or a $100 bottle can be a good value to a customer.”

Beak says Bank of the West is the second largest ag lender (after Wells Fargo) and works with many wineries, specially on the North Coast.

Beak said that we are recovering slowly from the recession, but he says this downturn has demonstrated one thing clearly: Some wineries have done better than others, and it’s not necessarily due to their price, location or business model. “Well-managed companies are doing well. This is not a situation where a rising tide lifts all boats.”

The leaky ones will still sink.

Wine Industry Financial Symposium

To find out more about what’s happening financially in the wine industry, the 21st annual Wine Industry Financial Symposium is the place to be Sept. 24 and 25, at the Napa Valley Marriott.

Its theme this year is Thinking Positive – A Bright New Day For The Wine Industry.

For details, visit winesymposium.com.

The Business End by Paul Franson

Harvest

HarvestDirector John Beck’s new feature-length documentary follows five family wineries – Foppiano, Robledo, Rafanelli, Harvest Moon and Robert Hunter – along with an amateur home winemaker and a rare all-female picking crew from Mexico, through what many would call “the toughest harvest” in their lifetime.
“Harvest” could care less about vanilla oaky finishes or fruit-forward quaffs. This is a gritty film that picks up viewers and drops them in the vineyards at 2 a.m. to see dark night picks illuminated only by tiny headlamps, 24/7 machine harvesting and the impact of 3 inches of rain on a cluster of grapes.
If you love wine and want to know how the grapes are harvested, you’ll want to see this film!

Mendocino Growers Move Ahead

Dawn Bardessono Mendocino, Wine News September 12, 2012

Wine News at Benchmark ConsultingUkiah, Calif.—With name approved, articles of incorporation filed, tax ID approved and bylaws nearly complete, Mendocino WineGrowers Inc. is forging ahead. In the wake of a state-mandated election that forced closure of the Mendocino Winegrape & Wine Commission in June, growers and vintners sprang into action to find a new voice for the wine industry in this North Coast county, currently home to 102 wineries (per WinesVinesDATA.) Amid harvest, some 40 interested parties showed up for an organizational meeting in Ukiah on Sept. 5. An email invitation promised, “This is the fun meeting: We are choosing where to spend our money.” With more than 37 vineyards and wineries on board and more joining every day, there is already cash in the coffers. The formation committee established a “leap year” until the first full year of operations begins Nov. 1; leap year dues are a flat $250 per member. “It was thrilling to see so many people show up in the middle of the day during harvest,” commented Zac Robinson, co-owner of Philo’s Husch Vineyards and formation board member. “Any talk about Mendocino giving up is just baloney.” Unlike the commission, MWI membership is strictly voluntary; like the commission, both grapegrowers and wineries are eligible to enroll. Robinson calls the permanent dues structure “fairly typical” of local promotion organizations around the state: 15 cents per case for wineries, and $40 per-acre for growers, Robinson said. Members who are both growers and producers may choose which category they join based on which benefits they want to enjoy, Robinson told Wines & Vines. “Vineyard owners, for instance, don’t come to tastings to pour their wines,” he pointed out. MWI already has established a service to benefit growers under the banner “No Grape Left Behind.” The first MCI “Grape News” e-newsletter states: To help you sell every last ton, we will post all members’ unsold grapes” on the commission’s former (and still operational) website. “We will also contact grape buyers directly to let them know of each opportunity.” To establish an account, email mendocinowinegrowers@gmail.com or phone (707) 901-7629. MWI hired Ukiah firm Price Waterman to provide accounting procedures and handle funds during start-up. Because the MCI anticipates funding to be only one-third to one-half of that enjoyed by the commission, Robinson says it will remain a lean operation focused on programs deemed most popular by membership. Reality-based goals “The reality is,” Robinson said, “even if you have an effective program that works,” if it’s not popular, it’s not working for membership. Taste of Mendocino, which annually brings vintners to San Francisco to pour for trade and press, is expected to continue, as is a county tour hosting sommeliers. “We want to reach people who buy and talk about wine,” Robinson said. Reaching consumers through paid advertising will be beyond the budget. “MWI will support the efforts of existing local groups and help them build upon the successes they have already achieved. Promoting Mendocino includes promoting each appellation and region within the county,” the newsletter stated. This is not, it emphasized, “Commission Part II,” but “a new ballgame that includes new players and new rules.” The association hopes to share staffing and office overhead with other county marketing programs. Robinson predicted the start-up process would take at least six months. Next on the agenda is to nominate and elect a board of directors; a strategic committee is in formation while the formation board phases out. “The bottom line is that we are in control of our place in the market,” the newsletter stated. Meanwhile, crush goes on. “We’ve been picking Sauvignon Blanc for a week,” Robinson said. “We love average years.”

Read more at: http://www.winesandvines.com/template.cfm?section=news&content=105007&htitle=Mendocino%20WineGrowers%20Move%20Ahead&
Copyright © Wines & Vines