A recent Nielsen Company report finds that “despite a fragile economy, consumers continue to see alcoholic beverages as an affordable indulgence.” Online alcoholic beverage shopping is expected to continue to increase and will be especially evident in the wine sector.
According to Richard Hurst, Sr. VP of Beverage Alcohol, The Nielsen Company, “Many stores are adding alcoholic beverages to their assortment, providing more opportunities for consumers to purchase alcoholic beverages at competitive prices,” said Hurst. “And as we’ve seen in the past, some states may experiment with extended hours for alcoholic beverage purchases, such as Sunday sales, for an additional boost. Given that fewer consumers are likely to be able to afford luxury wines and spirits in their holiday budgets – – and there is evidence of trading down — stores would do well to ensure that they offer products across a variety of price segments.”
Another key finding: with exchange rates continuing to be unfavorable to the American dollar, imports have had to increase their prices, affecting their growth rates in favor of domestics. A few other key take-aways from the study:
- During tough economic times, consumers are often biased toward national or local products, further enhancing the prospects for domestic brand growth, whose prices have remained relatively stable through the year.
- The weak dollar helps tourism, especially in major cities.
- Wine and spirits are popular gift items and there will be a tendency toward value-added packaging and “retailers should consider multiple store display locations to capitalize on impulse purchasing, as well as providing gift accessories nearby, such as bottle openers, gift bags, mixed drink party pack ingredients and glassware.”
- “While there is evidence of consumers reducing on-premise consumption, as well as trading down to less expensive beverages, they are reluctant to cut back significantly on beer, wine and spirits, especially for at home consumption and entertaining. With the prospect of limited economic recovery in 2009, consumers are likely to consider alcoholic beverages as an affordable indulgence during the holiday season.”
Overall, this study indicates opportunities for growth of the domestic wine segment with consumer mindsets in favor of American and local wine products (if you like Riesling from Mosel, Rheingau or Alsace, have you tried a Riesling from the Finger Lakes?)
With the consumer mindset toward at home consumption and entertaining, are you catering to wine lovers who are pressed for time and looking for items to enjoy in the comfort of their homes? Do you have attractive displays of items and wines that deliver a high quality-price ratio? (Think Target’s popular and lucrative “cheap chic” trend.) A favorite example from here in the Finger Lakes is Ventosa Vineyards’ Tocaice Dessert Wine, one of the nicest dessert wines I’ve tasted, and at a very affordable $27.95 for 375 ml bottle, it is sure to fit most gift-giving budgets.
As I’ve come to understand more about the present state of the Finger Lakes wine industry, a few key topics seem to bubble up to the top consistently. One that I find to be important is the question of whether or not there is a divide or segmentation of the wine producers here based on the types of grapes being planted and produced by each winery.
The Finger Lakes wine industry has a history steeped in plantings of native varieties such as Concord and Catawba and some of its best-selling wines still reflect a significant demand for these wine varietals as well as for hybrids. It seems that there is a bit of a divide amongst those producers who are catering to this sweet wine-drinking consumer, in some ways the lifeblood of the region, and those who are throwing themselves into producing vinifera varietals such as Riesling, Gewürztraminer and Cabernet Franc in a dry style that are attractive to a more sophisticated palate, for those wine geeks and foodies among us.
And I’ve seen wine lists at wineries that incorporate both sweet, native varietals and vinifera. Where is the future of the Finger Lakes in regards to native vs. vinifera? Do you feel a divide amongst producers with one side all for producing the sweeter style wines vs. those who are much more interested in perfecting their vinifera offerings? Will vinifera varietals continue to put the Finger Lakes “on the map” as a serious world-class wine producing region, overshadowing the image that clings to the region because of its history of producing sweet wines? I wonder if there should be a separation in marketing efforts for the two segments. Are the sweet wine-only producers dragging the vinifera producers down in terms of the perception of Finger Lakes Wine Country? Or is there some way to use the diversity of wine offerings available in the Finger Lakes to our advantage and tout the region as one that offers both ends of the spectrum, appealing to many types of wine palate?
Morgen McLaughlin, President of Finger Lakes Wine Country Tourism Marketing Association, offered these observations on the topic, “I think the reason that many wineries still produce sweet wines is because they sell better in tasting rooms. The drier, vinifera wines do well with journalists, restaurants, retailers, and with certain consumers. The wineries in the Finger Lakes rely heavily on tasting room sales (over 80% of sales for many wineries) and at the end of the day the wineries need to stay in business. Even those producers who focus on dry-style vinifera wines have at least one “cash cow” wine. Maybe not always a native or hybrid blend, but something with residual sugar. Most people talk dry but drink sweet. Why do you think Kendall Jackson has sold so much Chardonnay. They added some residual sugar and saw their sales skyrocket.”
(Full disclosure: I work with Morgen and Finger Lakes Wine Country Tourism Marketing Association on projects on a regular basis)
As you know, I recently returned from the first North American Wine Bloggers Conference in Santa Rosa, CA in Sonoma County. This was my first trip out West and only the second wine region I have visited. One of the reasons I was anxious to explore Sonoma was for a new perspective on both the offerings and challenges of our region here in the Finger Lakes AVA. Realizing that one can become jaded by not looking outside of the wine country landscape that has become home, I ventured forward excited and looking for new perspective.
Although a good bit of our time during the conference was spent at the Flamingo Resort and Spa, the opportunities to explore bits of Sonoma were good ones. Saturday included our choice of Zephyr Adventures vineyard walks that I previously posted about. Here’s what I took away after visiting and experiencing Michel-Schlumberger.
Beyond the amazing experience that Zephyr Adventures provided on these vineyard walks, I immediately noticed how down-to-earth and friendly winemaker Michael Brunson and General Manager Judd Wallenbrock are. I felt as if we were old friends invited to spend an afternoon in the vineyard with them. The people I encountered in Sonoma overall reminded me of the friendly, warm folks who make up the Finger Lakes Wine industry. To me, this is one of the reasons I fell in love with our wine country when I first started visiting tasting rooms in the Finger Lakes just two years ago. More than anything, in my mind, the people and the way they make you feel when you visit a new place create a connection to the region that you want to bring home with you (in several bottles!) and tell your friends and family about. And of course return to visit again.
Remember this coming from a wine lover who has a discerning eye for detail and who is looking at the numerous choices of wine to drink and wineries to visit, in hopes of adding a new favorite to my list. What are you and your staff doing to capture your new visitors hearts and create a memorable experience that will assure repeat visits and purchases of your wine? Do you have programs in place to excite your tasting room staff each day and make them feel special so that they in turn can project that feeling to your tasting room visitors? Are they personally consulting on wine purchases for visitors (when possible) or just letting them walk around the tasting room after finishing their tasting, possibly without purchasing any bottles? I’m not suggesting that your staff hard sell anything, but rather take a few extra steps to direct and help select wine that could lead to interest in your wine club down the road and return visits to your winery. Remember, people connect with people and this could make a difference. Visitors will walk out feeling special, more so than at the tasting room where they were not given that bit of personal attention.
Am I missing anything? Feel free to chime in.
More ideas to come…
Week of 10/27/08:
These are just a few of the exciting recent developments in the Finger Lakes. I have a feeling that I’ll be kept very busy keeping up with news to come…
Cheers until next week,
One of the items on our itinerary for the Wine Bloggers Conference was a Zephyr Adventures vineyard walk. The vineyard walk I chose after a recommendation from my friend, Tom Wark at Fermentation was the vineyard walk at Michel-Schlumberger. I have to admit that this was one of the highlights of the weekend itinerary for me. I was excited to see a vineyard in another wine region, especially one in Sonoma County which has been on my hit list of wine regions I have been dying to visit.
First let me tell you that I was impressed with Allan Wright and team from Zephyr Adventures for our vineyard walk. They kept us on schedule but were unobtrusive during the walk. I appreciated many things about this experience. Of course the beauty of the vineyard, but also the intimate experience of a small group walking and hearing about the winery and vineyard from Michel-Schlumberger’s Sr. VP and General Manager Judd Wallenbrock and winemaker Mike Brunson. Both are down-to-earth and friendly and clearly passionate about the wines of Michel-Schlumberger. We wound through 4 miles of vineyards and ended our afternoon with a true vineyard lunch complete with long table for our group in the most beautiful setting. After watching many episodes of Michael Chiarello’s NapaStyle on Food Network, this setting was Heaven on Earth for me. (I realize that I was in Sonoma and Michael films from Napa) The attention to detail, gorgeous plates of Tuscan-inspired dishes from nearby restaurant Santi’s Chef de Cuisine, Liza Hinman included family style braised pork with fresh greens and farro with a mixed greens salad of fresh figs, grapes, and goat cheese. YUM!
Here’s what made my experience at Michel-Schlumberger so special and one I will remember until I’m a very old lady: it was an intimate experience with Judd and Mike and their entire staff, the setting was absolutely beautiful and we were treated like gold during our visit. I’m impressed with all of the people I met while in Sonoma and will surely return to visit on a leisure trip sometime in the future.
I hope you enjoy this video of our halfway stop and wine tasting with Michel-Schlumeberger’s Mike Brunson. Listen in as he explains the unique qualities of the Cab 6 grape. Enjoy!
For another blogger’s post on our experience at Michel-Schlumberger, see this post from AnotherWineBlog.com.