Daily Swill for February 9

Daily Swill for February 9

Gallo is launching a new liqueur. Yeah, yeah, seems like a single product release isn’t big news… but when Gallo test-markets and product and then decides to launch it nationally, they think they are on to something and that frequently leads to Gallo taking market share. It is a liqueur based on vodka, which is probably leveraging the vodka from the New Amsterdam brand. Liqueur is a category that is probably ready for some consolidation and less fragmentation – it has thrived on-premise and I am guessing Gallo will eventually makes this a retail oriented product.

There is a new AVA in Oregon. Not in Willamette but on the other side of the state. Very few people know that the Walla Walla Valley actually extends into Oregon and that some of the most critically regarded wines are from there. Specifically Cayuse has its primary vineyard in Oregon and its winemaking facility there. I wasn’t surprised to hear that the US┬áhad approved a new AVA which is named the Rocks District of Milton Freewater (which I hope everyone defiantly names the Rocks District). The Rocks District is a sub-AVA of Walla Walla. It was surprising to read that Cayuse will not use the AVA on its labels. I am not sure if they really don’t like the US process for determining an AVA or are just concerned that other wineries don’t yet meet the same quality standard.

While Rob McMillan from Silicon Valley Bank generally had very positive outlook for wine in 2015, it looks like there are some equally well-qualified naysayers. John Gillespie is predicting a tough year for wine. At the Unified Symposium, it sounds like Jon Fredrickson also warned the audience there was trouble on the horizon. So to break it down, here are the assumptions on either side:

  • If you believe in the optimistic viewpoint, you buy that the general positive trends in the economy and the increasing disposable income for upper middle class buyers will fuel more wine consumption, especially above the $15 price point.
  • If you believe the pessimistic viewpoint, you believe that millenials (especially those under 30) are not major wine consumers and that the sub $10 wine market is already trending down due to increased competition from craft beer and craft spirits.

I would bet that both sides agree on the premises of each other’s assumptions, but they disagree on the severity of the pressures on either end. To say simply, it is all guesswork at some point.