It was a slower news day. Just a couple worth calling out:
For the first time in 165 years, San Francisco didn’t get any rain in January. A little scary. Even after plentiful rain in December, this probably has wineries nervous. There is wine in the forecast for this weekend, so that will help a little. The risk is in earlier bud break, lower fruit set, and less water for frost protection.
Accolade and Grant Burge completed their transaction. Grant Burge is a top-notch brand so Accolade is doubling down on Australia and betting on the higher end of the market. They must believe that there is potential for growth in the $15+ Aussie market.
There is a chance that the cork alternative where they chop up cork and glue it back together contains a carcinogen. FDA may be looking into it. No evidence that any specific micro-agglo corks are violating FDA rules but based on the number of bottles out there using these closures, it could be a major story.
The Wagner Family wants to build a winery on a bucolic stretch of land. While this type of news seems to come out at least weekly, the interesting part to me is that the Wagner Family is definitely in serious growth mode. Considering the buzz and heat around the Meiomi brand, that isn’t surprising.
Is there a correlation between the drought and wine pricing? The CEO of Naked Wines thinks so. Considering they a fair amount of bulk wine, I am inclined to believe him. That said, I think the drought will impact the 2014 vintage and I am guessing that the true economic impact hasn’t been felt in the bulk wine market (maybe in the bulk grape market?) I did just receive an offer from a high-end winery indicating that their vineyard yields were lower partially due to the drought. It will be interesting to watch the impact if we have a long-term drought because it will have a larger impact on plantings and vineyard management.
Utah… oh Utah, one day you will embrace the sinners that provide revenue to your state budget. If you ask producers that do business in all 50 states, they will likely say Utah is the hardest state to do business with. It is too bad because there are wine consumers that want to buy wine and it is a robust economy.
Is now the time for consolidation in the wine industry? This M&A advisor (self-interest?) thinks the UK drinks business is ready for consolidation. The analysis says that ~15% of beverage businesses are having financial issues. My question would be, isn’t that normal for this industry?
CA wine industry calls out British Columbia on its new grocery wine-selling laws. If you read the laws in more detail, it is just a win for the BC wine producers, not the wine industry as a whole. That said, even if CA wines were allowed on the grocery shelves, they would not do as well as they do in other markets because of the onerous import tariffs. Protectionism.
Strike and Techtel shares the results of the TTB’s 2014 review. What I found interesting is that the rate of non-compliance appeared to be lowest for wine. I wonder if that is based on higher tax consequences in liquor/beer or some other reason.
The Distilled Spirits Council put out a press release highlighting its growth. Surprises: they are taking share from beer even with the growth of craft beer. Not surprises: whiskey is driving the growth.
Chinese investors own 100+ chateaux in Bordeaux. What is interesting: most of the wine is going back to specific areas of China. Much like the Chinese domestic wine production, it sounds like the distribution and retail game is regionalized.