France – an opportunity lost

This weekend the main feature is France, part of the February month-long Joie de Vin celebration at LCBO stores across the province. There is a selection of some 20 wines chosen from the wine-producing regions of France and all price points are represented.

The Joie de Vin celebration is one of the most low-key events in recent history at the LCBO.

I make this comment when I compare the Joie de Vin program to the huge splash which was the first of two California celebrations conducted at the LCBO last year.

That event started with promotional materials inserted in newspapers prior to the launch, billboards, radio slots, tasting events and media kits for critics and writers and an ongoing onslaught from agents who sent wines to professionals when those wines didn’t reach the tastings. The message in the stores was even more full-frontal in its colourful California lifestyle displays everywhere you looked. Consumers and their advisors were in the loop that something was going on with attractively-priced mid-range wines featured in waves throughout the campaign.

The overarching purpose of this blitz was to open widely the California brand to the big and informed value-buyer segment, a category that has historically always considered California wines to be either too cheap to be of acceptable quality or too expensive to be even considered.

The French event has been a sleeper by comparison.  There have been two newspaper inserts over the first two weeks of February and they have been attractive in their packaging and content. Tick that box.  There have been a few wines offered at modestly-discounted prices – tick that box.  The stores have a handful of cardboard Eiffel Towers in the window and some aisle or row-end displays that give the customer a sense that something is going. Ok, maybe we can tick that box. But, the in-store presence is otherwise subdued and appears like just more eye-noise, and there is a lot of this noise in today’s LCBO store.  As well, there have been no special professional tastings related to this campaign and the number of wines featured at the LCBO is less than half the number that were on promotion when the California event was underway.

Consider the relative positioning of France and California at the LCBO (General List): French wine sales in 2012-2103 were $115 million vs $149 million for the USA (primarily California).  Sales dollar volume for France for the same period decreased by 3.3% while the USA saw sales dollar volume grow by 26.4%. France does somewhat better in Vintages where the super-premium wines from Bordeaux, Burgundy and Champagne are offered but in 2012-2013 USA Vintages sales were still higher than those for France ($95 million vs. $82 million), despite rising prices in the Bordeaux futures category.

There is clear evidence that France continues to do a poorer job of positioning itself as a producer of value wines.  It is a country best-known for many of the most expensive wines in the world and this brand image is so firmly established it spills over into lesser categories – where the everyday wines reside – and scares off customers who don’t otherwise know about the values available in regions such as the Loire, Alsace and the Rhône. This is a problem, especially at a time when domestic wine consumption in France continues to decline and at a time when the New World continues to aggressively pursue greater market share with wines of ever -improving quality and value.

In the past California suffered under the reputation as a maker of expensive wines as it is the pricy wines which have traditionally garnered the headlines. Stories abound of long waiting lists for iconic wines that never reach the public.

The message delivered in the California campaign last year was clear: California makes very appealing wines that sell for less than $20.00 and these wines run the gamut of styles from cool-climate to hot continental climate and everything in between: California is not a monolith. The consumer got the message as the G.L. sales growth demonstrates.

If this data did not call the French marketing people into action then there is a problem.  The current campaign indicates the message has not been received in France nor by the Canadian staff of its global food and beverage marketing arm, Sopexa. This is too, bad, not just for French wine makers.  It is even more tragic as there are many consumers who would leap across the aisle to France if they only knew more about the wines and regions of France.  These wines represent exceptional value, diverse variety and are food friendly across a wide array of cuisines.

All of this begs the question: why does France not step up?  Is it arrogance: our wines are so good anybody who needs to know about them already does know about them?  Is it ignorance?  Do the French not know how to market?

I doubt it is either of these.  Rather I think it is a simple matter of culture.  The Joie de Vin has the look of a playful French marketing campaign and while it might work over there it is simply too muted to have any effect in Ontario.  It is not a  campaign that crosses generational lines and it is not a campaign that has enough North American sizzle for consumers to take notice.

The LCBO will work with agencies and industry marketing bodies to promote product.  Each year the LCBO publishes a calendar of themes and campaigns and works with its industry partners and their creative and PR people to bring each campaign to market.  The LCBO has a selfish interest: the more customers learn about the wines and the wine regions of the world, the more they will explore. The more buzz in the stores, the more frequently consumers will visit, explore and buy.

The reciprocal benefit is for the partner, be it France, California, Italy, Australia or whomever.  The more the consumer knows about its grapes, regions and wines the more likely he or she will add its aisle to their path in the store. Big campaigns are the opportunity to build brand, re-define brand, expand brand… all of the above.  Successful campaigns need investment and properly executed will pay immediate dividends.  Under-designed, under-funded campaigns are a waste of money.

Shame on France.  I hope the Joie de Vin campaign is a success by whatever measure the marketing folks have embraced.  Regardless, it will not move the needle very far.

à bientôt…

Copyright© W. John Switzer 2003 – 2014.


Holiday reading

Over the holidays I did a lot of reading.  Steve Jobs, pensions and investments, old Globe and Mails and…wine: books, magazines, and blogs – I consumed them all.

Many of the wine pieces I read were reviews of the past year.  As many other pieces on my reading list were forecasts of the coming year.  It was odd that most of the past trends seemed to be trends for the future. Perhaps this is because few writers covered both the past and the future…

Some highlights:

Natural wines seem to be the next big thing.  These are wines made naturally (duh!).  I thought wines made with little or no intervention were already mainstream.  In fact, these are the wines I generally seek when making my recommendations.  These wines may be organic or biodynamic, they likely have experienced little in the way of cold maceration, they may be cool-climate in origin, they will express more fruit than wood, etc. etc. The over-riding characteristic of these wines is they are fresh, juicy and show all the elements, sometimes with rough edges. In any case, watch for it: natural wines.  Now available at your local LCBO.

Wine books were recently considered to be a breed near extinction.  Many pundits, including your always-reliable WVN correspondent, wrote a couple of years ago about the threat to wine publishing brought on by the ubiquity of wine bloggers. Well, bogging does seem to be evolving.  Yes, there are some outstanding bloggers who have developed well-earned reputations for sound content, consistently delivered.  The self-consumed angry ranters who took their soap-boxes online seem to come and go with increasing speed as they lose interest when they realize no sane reader has the time or interest to follow their rants. Despite the good-blog threat, 2011 has been a banner year for traditional publishing of wine books with the release of a number of exceptional books during the year.  I will cover some of the best of these over the coming weeks, along with reviews of some exciting, anticipated titles to be published in 2012.

Quality wine has been an elusive commodity for centuries.  In earliest times wines didn’t survive long sea voyages so fortified wines were invented.  In these early times wines were often adulterated with substances to veil faults and lesser wines were labeled fraudulently to ensure they would sell. One observation frequently found in my holiday reading is there are few bad wines nowadays.  To some extent this is the result of the un-natural wine phenomenon; namely, that wine technologies can make even average wines acceptable to most palates. A more positive view is that wine-making and viticulture are now consistently practiced at high levels around the world, simply because the wine market is so competitive, you have to deliver quality or you die. This is good news for consumers.  There is still a need to seek value – if all wines are not bad, this does not mean all wines are good – to ensure your wine dollar gets the best mileage possible.

Australia continues to be a whipping boy in the wine press. The value of wine exports from Aus is in decline, the number of wine lists that feature big, hairy Barossa Shiraz and MacLaren Vale Cabs seems to be in free-fall, etc. The sale or pending sale of some of the big Australian wine conglomerates is the source of ongoing trade coverage.  I think enough is enough. There are an incredible number of exceptional wine regions and wine operations throughout Australia and we will see more and more of the issue from these places and people over the coming months.  When I make my recommendations I seek the wines of the cool-climate zones such as Yarra Valley, Mornington Peninsula, Frankland River and Adelaide Hills.  These wines can be wonderfully-balanced with expressive fruit and crisp acidity.  Let’s back off the Australia-bashing and focus on boosting the wines that display the best Aus can offer.  They are still great values.

France seems to be renascent, at least among New World commentators (this warrants another WVN duh!).  Despite a consistent track record for many years of quality and value, France  has been rediscovered. I think this is a natural consequence of evolving palates among Gen-X and early-adopter Gen-Y wine lovers.  As these palates mature they seek finesse, character and wines that match well with food.  This is not a conscious search, it is something that simply happens and I suspect we all can relate to similar experiences in our personal wine journey. Regions of France that get special attention are the valleys of Loire and southern Rhône, along with Alsace and the Languedoc.  These regions are coming under greater consumer scrutiny as most wines sell in the $20 range and show the natural-ness and food-friendliness that is now in growing favour among younger buyers.  Now, if Bordeaux can get its act together at the low-end of the price spectrum…

This is a high-level distillation of my holiday reading.  There is a lot happening in the wine world but these are the consistent themes I came across over the past four weeks. May all your wishes come true in 2012!

à bientôt…

Copyright© W. John Switzer 2003 – 2012.

Book review – Reflections of a Wine Merchant

I have mentioned in past newsletters the frequently-asked question I receive from readers and students: how do I get started in the wine trade?

I usually have to think before I reply, as there is not an easy answer to the question.  First, the wine business is neither easy nor glamorous.  Further there are more poor people in the business, than wealthy.  There are many people who have eminently-regarded qualifications whose knowledge and experience are grossly underutilized.  There is intense competition from established big firms and from successful niche players, making it extremely challenging for newbies to get commercial traction.  The buy-side is nowhere near as adventuresome as it was a few years ago, before the collapse of 2008.  And, as I have often-observed in the past, the LCBO – and monopolies in general – is a challenging buyer to deal with, so don’t expect big (or any) volume unless you carry known brands with scores.

Perhaps most-importantly, there are more people looking for career opportunities in the wine business than there are opportunities that will lead anywhere.  As an example, I spoke to some students after one of my classes earlier this week and heard of the working arrangements many bright young people have to accept to get part-time positions in front-line jobs at the LCBO.  Many of these people need to hold other jobs to carry their financial obligations.  They start at the bottom of the front-line staff ladder stocking shelves, with limited prospects for medium-term promotion to a product consultant.  The jobs are very physical, involving (literally) heavy lifting of cases of wine – a reality wherever you work in the industry. Front-liners take courses such as WSET certifications to position themselves for future candidacy. Overall there are more people seeking Product Consultant roles than positions available and the wait times for promotion are in double digit year terms.  These people have excellent undergraduate qualifications and since they have decided they want to work in the trade these are the conditions they accept to gain entry.

Observing the current scene in the wine trade – living in a regulated, monopoly market as I do – makes me hanker for olden times in markets that were untapped and un-regulated.  People who loved wine, who wanted to make a career in wine had the world in the palm of their hand, or so it might seem, looking back.

The wine world was simple in the 1960’s and 1970’s, especially in North America where old world cultural influences were limited in number and variety.  Wine wasn’t on the consumer radar screen unless you where a wealthy collector or had experienced European traditions in your travels.  These were the days of foxy, sweet wines often made locally with grapes from the vitis labrusca species.  These wines did not encourage consumption so there was no incentive to explore, even if wines of better quality from France, Germany or Italy were available in your market.  Chile, Australia or New Zealand?  These countries were literally not on the wine map 40 years ago.

It is hard today to imagine these simple, and often frustrating, times of the past but this was when young people had every opportunity to carve their own path in the wine trade with little or no competition…and to make a very successful and fulfilling career in the process.

This is the story of Neal Rosenthal, author of Reflections of a Wine Merchant.

Rosenthal retired as a young man from his law practice to open a small wine shop in the late 1970’s. This store, in his father’s former pharmacy, was located in an affluent Upper-East side neighbourhood of Manhattan and eventually grew to what is now a wine merchant operation with business in 35 states of the Union.   The store is still in operation and it has become a mecca for wine lovers who seek wines made by craft producers in France and Italy.  Rosenthal has built his name by finding wines that express local terroir in distinctive and correct ways.  He has built long-lasting relationships with his roster of producers and he works today with some of the producers he first found over 30 years ago.

This book is the story of how Rosenthal grew his little operation to become a big operation and how he stayed true to his basic principles of integrity, hard work, consistency and fairness – in his dealings with suppliers and customers, both.

The book is a little gem.  It doesn’t take long to read and, while it is slow to start, it picks up quickly and travels as fast as Rosenthal travelled on his regular journeys to find new makers and foster relationships with existing suppliers.

The theme of the book is not stated but it is woven consistently throughout each chapter: success in starting, growing and maintaining a business is built on a foundation of hard work.  Rosenthal never discusses this aspect of his journey and because of this omission he makes the success he has achieved look easy.  I don’t think the omission I describe was willful or mean-spirited.  It was simply a fact of Rosenthal’s life that he was going work as hard as he had to to successfully achieve what he wanted to do: to find and sell wines that expressed their place naturally and without artifice.

In some ways this book reminds me of one of my favourite books, Adventures on the Wine Route, written in the late 1980’s by Kermit Lynch, the Berkeley, CA wine merchant. Both men were storekeepers who found their own wines by travelling to the lands where they were made.  Both men were solitary in their early efforts and focused on the people, then the wines. Both men made it a core aspect of their business t0 taste locally before buying: they sought wines that were pure in their expression, not wines that had strong brand identity, cute labels or which came from trendy regions or varietals.  These similarities aside, Rosenthal’s story is more focused on business values and the importance of staying true to these when suppliers might otherwise want you to compromise for their purposes.

This is not a new book; it was first published in 2008.  It sat on my bookshelf, unread, because it was hidden behind some bigger books.  Now that I have read it, I commend this story to anyone who wants to pursue a career in this fine business.  This book will teach you the importance of relationships, principles, persistence and hard work.  In simpler times you needed these to be successful. I believe in the more complex and competitive times we now toil, these same ingredients are even more important for success.

Now I have an answer to the question. These are the content of the answers I will give to the “how do I get started in the wine trade” questions I field in the future.

You can learn more about Neal Rosenthal and Rosenthal Wine Merchant here.