Tag Archives: Wine Trends

Trends Changing the Wine Industry

GallowinetrendsMillennials

Silicon Valley Bank has been producing state of the beverage industry reports for years. I try to make sure I read the formal report every year, but they also write a blog for the wine industry that I check-in on occasionally. The data can deliver insights that bring an interesting perspective to market trends.

Data is Predicting Changes

The U.S. wine industry has been on a steam roller building big gains in revenue and beverage market share drawing in new consumers from younger generations of social drinkers. The recent data is showing significant slowing of that growth, even in areas that have been hot in the past, such as: Napa Cabernet Sauvignon, Super Premium Wines, Direct-to-Consumer Sales and On-Premises (restaurant) Consumption. Unfortunately, the growth in the number of small growers and producers is not slowing to match pace. Many of these producers are being drawn to the lifestyle, not the business opportunity and the industry is reaching a tipping point for several reasons.

TRENDS

Restaurant Wine Sales is Slowing

Distribution is their own worst enemy here. In an effort to control local beverage markets, they are actually causing irreparable harm to their dealer’s ability to respond to market trends. Destructive strategies, such as:

  • Withholding well-known brands of beer and spirits, if specific high-profit wines being promoted are not purchased.
  • Extending credit limits, or terms to obtain leverage on buying decisions.

A successful restaurant wine inventory should have wines covering well-known lower priced labels, lesser-known value in the middle range and highly scored, high priced wine that garner recognition. This approach tends to satisfy a much wider range of consumer, offer a selection all can explore/enjoy/afford and provide up-sell opportunities for the staff when the occasion calls for it. Instead, distributors in many states are preventing this type of responsive approach. Read the piece at this link for additional info:  Restaurant Wine Sales

Fruit/Wine Supply Exceeding Demand

Wine travel in Europe teaches you one thing: don’t be afraid to order cheap table wine with a meal there. Even table wine in Europe can be very good. The growing over-supply issue may change the landscape in the U.S. For many years now, the $10-15/btl retail price has delivered poor quality in the U.S. I am hoping this market trend will bring more, better quality fruit and wine to the market at reduced prices, instead of vineyards dropping the excess fruit to rot in the fields. See information on this at this link:  Wine Supply

Premium Wine Sales are Flat

The continued growth in this category is coming primarily from price increases, not the volume of wine. Interestingly enough, consumption of premium craft beer has also weakened. This is very likely being caused by an aging Boomer generation drinking less wine, without Millennials filling the gap. The younger generation seems to be moving towards exploration and looking for value, rather than committing to older high-priced labels. See information on this at this link: Premium Wine Sales

Direct-to-Consumer Beverage Sales Continues to Grow

As long as State legislatures and the Supreme Court continue to keep their hands off this segment of wine/beer/spirits distribution… this will likely be the savior of the small producer… for those that get it right. With the extensive consolidation in the beverage distribution industry in the last few years, there is just not enough room on the shelf for the growing number of labels, especially for smaller producers without a sizable marketing budget. The continuing growth in the number of small producers will force an understanding of how to connect and maintain a relationship with a clientele, or fail. Wineries must continue to move towards improving the wine experience for potential customers, rather than provide a traditional tasting room as the only engagement. This is the only segment left in the wine industry that offers a solid business opportunity, but selling out each vintage will increasingly become a challenge, without the bulk purchasing distribution can offer. The trick will be how to build the DtC channel for each producer. With most small wineries being about the farming, or the winemaking… there will need to be a newly developed understanding of marketing and customer engagement. It will be a matter of survival. See information on this at this link: Small Winery Sales

Changes are Coming

The U.S. wine industry is likely to look quite different five years from now. There is a good chance, with the Millennial penchant for exploring new wines, that imported wine sales will grow faster than domestic in the future. This pressure may actually force the U.S. wine industry to get better at producing quality in that $10-15/btl range that typically does not exist today. An outcome I am looking forward to…

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Filed under Wine Education, Wine Industry, Wine Marketing, Wine Tasting

2014 Napa–Sonoma Winemaking Trends

'I'm not putting it out. There's enough oak in this Chardonnay to keep this fire going all night.'

Source Material

I have interviewed 12 winemakers from the area by phone and in-person over the past few months.  Many have been from very well-known, high-profile producers. The material has provided a few new perspectives.  Some of these observations may only apply to estate wineries where there is more control over wine growing strategies, while others are specific to the winemaking.  I will not compare individual winemakers, or wineries.  It would be an injustice to each of them.  Although, I will be making an effort to tell each of their stories in separate pieces later.

Recent Winemaking Trends in Premium Wines

More Block Harvesting and Corresponding Small Lot Fermentation

I am running into this strategy at more estate wineries and if they are not already doing it, they are thinking about it.  Separately fermenting smaller, individually harvested, vineyard lots is happening more in this region than ever before.  Wineries are making a major investment in large numbers of smaller fermentation tanks, moving away from the full harvest approach and much larger tanks.  This trend is allowing winemakers to more effectively capture the individual character of fruit grown within differing micro-terroirs in individually fermented batch lots used for later blending.

Impact on the Wine –  Improved complexity and structure. Isolating individual characteristics from the fruit to bring a greater sense of unique “place” to the wine.

Winemakers Exerting Greater Influence on Viticulture

Estate Winemakers are insisting on more input into the decisions in the vineyard.  They are investigating different micro-climates and soil types on a much smaller scale than ever before.  This trend is increasing their influence with viticultural decisions that affect the final product such as:  separate farming and harvesting of individual vineyard blocks, row orientation, irrigation and pruning strategies (or lack of), etc.

Impact on the Wine – Better planning to accommodate vintage variation.  Ability to experiment with vineyard practices that can compliment the style of wine being made.

Varying the Harvest Timing with Small Block Harvesting

This is a bit controversial, but I am hearing it being discussed more.  Harvest timing is one of the major decisions affecting the wine.  It can effect tannins, acidity and phenolics… blending individual lots harvested at different times can change many characteristics of the final product, for example:

  • Tannins – Earlier harvest can make tannins more rustic.  Also, the ripeness of the pips can have a huge impact on the texture of the tannins (dusty, grainy, rounder, etc.).
  • Acidity – Earlier harvest can often provide increased acidity.
  • Phenolics – This is the touchy-feely area of this practice.  Identifying the preferred level of phenolic development is as much art, as science, but there is no doubt ripeness affects this category too.
  • Sugar – Harvest timing will effect the amount of sugars in the juice.

Impact on the Wine – Virtually all aspects of the wine’s character are potentially affected by this.

Less Interaction with the Wine During Production

This philosophy is leading to experimentation. Here are a few techniques that are being used, or discussed more frequently:

  • More wineries are moving to automated pump-over closed tank fermentation, versus open container punch-down.  Some industry folk say punch-down “shocks” the wine.  I have been paying closer attention to this in the past year, after seeing its widespread use during a trip to Italian wine country last year.
  • Lots of discussion going on regarding the need for extended cold-soak prior to ferment to extract color.
  • More natural yeast fermentation, instead of inoculation.
  • Lighter pressing of the fruit. One winemaker talked of just using gravity to press the first-run juice.
  • Skipping removal of the lees after ferment and waiting until a later date to separate the wine.
  • Controlling temperature to slow down the duration of the ferment.
  • Less fining and filtering, which reduces the amount of pumping and moving of the wine.

Impact on the Wine – The intangibles seem to be most affected by this approach.  These techniques may soften the attack of the wine, add elegance and affect mouth-feel.

Extended Maceration for Red Wine

This relates to extending the contact of the wine with the skins and sometimes the lees and/or stems. I actually spoke to one winemaker that talked of 60 days for ferment and maceration.  The more traditional thinking is 10-15 days…  This is expensive for wineries.  It requires either investment in more fermentation tanks, or reducing capacity for production.  Several winemakers spoke of wanting to experiment with this for whites too.

Impact on the Wine – Differing opinions on this, but for my palate, it changes the character of the tannins substantially and at the same time adds complexity.  I am not sure there is more extraction, but it definitely affects the texture.

Whole Cluster Fermentation for Red Wine

This technique requires using the whole grape cluster (stems and all) for the ferment, rather than the usual de-stemmed berries.  Almost all winemakers I talked to were including a percentage of their blend with wine fermented this way.  Several winemakers claimed that a whole cluster ferment by definition will add natural carbonic maceration to the mix.  Some of these wines do appear to be more aromatic…

Impact on the Wine – It may add more of a mid-palate to some wines.  Often, these wines seem to have a fresher, fruitier character (carbonic maceration?).  Bottom line, these wines ARE more complex, but better complex?  Some winemakers claim it has much to do with the terroir.  Apparently, some terroirs do not produce fruit that works well with this process.

Focus on Balance

Ah, the holy grail of wine!  For so many years Napa producers have been known for their big, extracted, high alcohol cabs.  I think the pendulum is finally starting to swing back a bit.  While these producers will never move back to the true French Bordeaux style, more winemakers are talking of balance and I am starting to taste it in more Napa wines.  A beautiful trend!

Conclusion

It is so good to see sophisticated wine palates (winemakers) changing the decisions being made in the vineyard.  While vineyard management is certainly farming, having a trained palate influencing the approach for each individual block and making adjustments for each vintage… is a very, very good thing for the industry.

Many of these techniques and ideas have been around the industry a very long time, but tend to be newly adopted in areas of California.  To be fair, not all winemakers are fans of this direction and produce fantastic wines anyway.  A clear indication of how much there is still to learn, about growing and making wine.

Why are following these trends important?

  • For Wine Enthusiasts – It may help you:
    • Identify techniques that produce wines you prefer
    • Build a dialogue with your favorite wineries
    • Understanding a winery’s approach, may help you to understand which labels match your palate
  • For Industry Professionals – Understanding how influential wine producing regions are changing their thinking is important to:
    • Wine pairing decisions
    • Building context for a strategy to develop a commercial wine list representative of a broad range of styles
    • A glimpse into the future of where the industry is headed

 

P.S. – I hope folks are enjoying these kind of pieces.  I don’t see much written that tries to make the technical more accessible and relevant to the public audience.    HAPPY HOLIDAYS AND BEST WISHES TO YOU AND YOUR FAMILIES!

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Filed under Wine Education, Wine Industry, Winemaker Interview