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Wine Future: Brief Overview of the Morning Sessions on Day 1

banner_winefuture_enEditors note: First off, allow us to apologize for not introducing you to Wine Future  before the event. Since this morning, we have been conducting a live blog at www.catavino.net/wine-future-live, doing our level headed best to report to you exactly what we’re seeing and experiencing at one of the most important wine conferences in 2009 – well, next to the EWBC of course :-) What you see below is a summary of what we experienced this morning, written by Michael Oudyn. A summary of the afternoon sessions will go up later tonight. If you have any questions, please leave them in the comments below or on the live blog. Cheers and thank you!

First Session: The Global Economical Crisis in the Wine Industry

Speakers: David Cunningham, Matthiu Chardronier and Xavier Pages

David Cunningham of Constellation Wines pointed out that wine has been one of the most resilient industries in the crisis. Although restaurants are hurting, people are still buying wine. He warned against the tendency to obsess over price; the industry should attempt a dialogue with the consumer more about quality than price, which is not easy in times of recession. He warns against cutting research budgets and mentioned “lighter drinking” wines (an alcohol level of about 4 to 5 %) and “premium bags in a box” as possible growth areas.

Another factor aggravating the problems in the wine industry is the well-known drop in per capita wine consumption in the traditional wine-consuming countries. But we should look more closely at the statistics. For example, while consumption has gone down in Argentina from the 80 liters/year in the 1980s, the quality and therefore price of the wines has gone up. Similarly in Spain consumption is down but 72% of consumption is now in the DO’s. This is a challenge but also an opportunity at middle price points.

Matthiu Chardronier gave a vision of the crisis from one of the “the most revered” regions which is also leading improvements in France, the “google of Bordeaux.” The rebound has not happened yet and many estates are fighting for survival. Some of the aggravating factors he mentioned are excessive regulation and the fragmentation of the industry with too many small producers who produce their own competitors. Many of the cheaper wines are disappearing due to competition; they are not competive at the $5 range but still are at the premium and super-premium levels. Bordeaux has learned to make dramatically better wines in the last thirty years especially at the upper levels. They have learned to make really good wines even in off years. New generations of wine makers who have traveled extensively and are bringing an up-to-date vision of the global market are taking over.

Xavier Pages, director general of Cordoniu, proposed a “longer view”; we have survived wars, civil wars,and financial crises before. True the smaller producers are often failing but this too will pass. Like “the baby boomers” they are huge (70,000,000 in the US), unlike Generation X (only 40,000,000 in the US). As a group they see wine as more sophisticated and have a very skeptical attitude toward the traditional media and have more faith in bloggers. (We at catavino.net wondered if he was aware that as he was saying this, we bloggers were sending his message.)

Session 2: How to Improve Sales in the On-Trade

Speakers: Richard Halstead, Tim Hanni

Richard Halstead works the UK market, but there are “themes and issues” that stretch well beyond this market. In the “on trade”, he states, restaurants are quite simply not doing their job; they are failing to engage wine drinkers as a group and these are the types you want in your restaurants because of their relative buying power. The huge problem is steep prices. The most popular drink in UK is now white wine and not beer, especially since the smoking ban in pubs. But high pricing of wine cannot go on; consumers instinctively reject these prices. The confidence index is way down. This has been exacerbated by the crisis but the problems had going on for a long time before the crisis. There is a trend to eating “well” at home instead of going out. And high wine costs at restaurants clearly influence this trend. Consultants often tell what is “screamingly obvious”; here it is that wine is seen as a good value in a shop, but out of control in bars and pubs. Some restaurants such as Bob Bob Ricard in London are beginning to experiment in dropping prices of top wine.

Tim Hanni, a MW and restaurant consultant from the USA, proposes a different perspective on human behavior and sees how this works in the restaurant trade. Wine experts and sellers should “stop believing everything (they) think” and accept that people react differently to wines and that these different reactions are not a fault of education or culture but are often physiological, a simple matter of the number of buds on the tongue for example. People who hate the smell of sauvignon blanc often have grass allergies. Wine education often puts people off and may even be counterproductive; the vocabulary doesn’t fit. Shoes don’t fit all people, wines don’t either. There are no masters of shoes telling us than a shoe should feel good. But sellers leave out a large portion of the market because they are drinking things they “shouldn’t”. He specifically mentions sweet-wine drinkers. Sellers must learn to better understand the consumer. Personalize the experience, take them on the ride they want to go on not the one the wine experts think should be on.

We will be posting more information, opinion artices and photos soon. Thank you!

  • Bill

    Ryan,

    Great summaries. Enjoy the after party! :-)

    Bill

  • http://www.vinya-ivo.com ivo

    Great report.. thanks. Gracias por toda esta informacion ! Hasta pronto y que disfrutas ! IVO

  • http://vinosambiz.blogspot.com Fabius

    Thanks for the great reporting.