Wine is recession proof

posted by philip in Wine Industry

Its been a busy month for wine industry research reports and forecasts. Yesterday Vinexpo, in conjunction with the IWSR, released their 12th Global Study on the Wine and Spirits Market, which forecast that the US was poised to become the world’s largest consumer of wine by 2012. Additionally, Gomberg, Fredrikson & Associates spoke at the Unified Symposium in Sacremento this week and said that wine sales in the US grew to 316m cases in 2008, representing a new record level (however the growth rate was lower in 2008, than 2007).

We’ve heard so many tales of doom and gloom across so many industries its nice to have some good news for a change.  Firstly, as I’ve followed the Vinexpo research for years, its nice to see that they drastically revised their data upwards since 2007. Specifically, their ‘07 prediction for the year 2010 was for a global wine and sparkling wine market of $117 billion. In yesterdays report they announced that the 2007 historical figure was $150 billion!

As an entrepreneur, its extremely satisfying to be able to go back and revise numbers upwards.

There’s clearly huge variance in how individuals even in the wine industry will fare in the coming years. Yet, some of the issues are clear: many winery founders are reaching retirement age and are preparing to step aside and have no successors in place (equals a buyers market); restaurants are suffering, with many seeing a 30% drop in sales, yet at the same time off premise (ie. wine store) sales are strong (equals people increasingly entertaining at home); people are turning to the web for research, even if they still intend to shop offline (equals opportunity for wineries and stores to differentiate their brand, and to put their inventory online to serve their users better); and then the unequivocal “wine is recession proof”.

One of the most incisive articles I’ve yet to read on this subject comes from Grocery Headquarters. There are some quotes in the linked article with very clear meanings:

• Wine is “a relatively recession proof industry”
• “People are choosing to entertain inside the home” more during these recessionary times (which means more wine purchased “in-store”), and that the “increase in home entertaining presents a strategic opportunity for retailers to capitalize on shoppers’ increasing desire to create restaurant-style experiences at home”
• “With new and attractive varietals popping up on store shelves, insiders say that retailers need to make it a priority to educate consumers about individual wine characteristics. Although it is clear that the average level of knowledge about wine has increased amongst consumers, there is still plenty of opportunity to demystify the category for the wine enthusiast and novice alike.”
• “Insiders add that with restaurant sales declining, grocery stores can offer a valuable service by cross merchandising wine with inexpensive yet upscale meal solutions.”
• “Analysts predict the wine industry to continue to grow, with movement particularly fueled by a rapid pace of adoption among consumers ages 21 to 25. Online outlets for wine, although not traditionally used by supermarket operators, are predicted to be a main attraction for younger drinkers.”
• “Even if a retailer does not wish to sell their wines online, they can still post information about their wines, so shoppers can discover and peruse them; if done right, traditional retailers can offer the best of both worlds:  the ability for consumers to get information online and the convenience of purchasing the wine at the store in order to have it right away.”

The Brandy Library in NYC

posted by philip in Spirits

A couple of weeks ago I went to the Brandy Library. I was about to call it a bar, and legally it is, but it looks more like a library, even down to the ladders on wheels. It also has one of the best selections of brandies, scotches and rums in the world.

I was a little confused by the term “library” until I got there, but it really is the best description for the venue: scattered reading chairs and couches fill the room and the recommended reservation policy ensures that there’s no overcrowding / drinking while standing. The lights are dimmed, and you can faintly hear 30’s jazz over the speakers. But back to the ladders on wheels - lining the walls are floor to ceiling recessed bookshelves, filled, not with books, but, as you may have guessed the bottles of spirits. If ever there was a spirit collection I wanted to “go Viking” on, it was this one.

Clearly, me running amok through their treasured collection wasn’t going to be tolerated, so instead I settled for a tasting flight. I went for the American Pride series of Bourbons and Ryes, while one guest had the Malt Master series of Single Malts from Scotland, and the other two settled into an evening of French 75’s - a highly recommended Champagne cocktail named after a French artillery piece.

The spirit tasting flights are done very well: six 0.5oz pours, 5 named spirits and a 6th that you are meant to rate blind. The waiter spent time with us telling us about why they chose each spirit and then came back at the end to get our opinions on the sixth. Here’s what came with the American Pride flight, with my notes (I didn’t write the 6th down):

• Sazerac Rye - French vanilla and cloves with a touch of sandalwood on the nose. Fairly bright and sweet throughout, with nutmeg on the finish
• Rittenhouse Rye - Fennel, anise and acetone on the nose. Much spicier than Sazerac. Very sweet finish with anise.
• Prichards Double Barrel Bourbon - Woody nose with some clear grape tones. Smokier than many bourbons. Gamey as well, but balanced by a fruity nose.
• Four Roses Single Barrel - My favorite of a the Rye/Bourbon tasting. Candies and honey on the nose. Very rich, sweet and consistent throughout - really nice.
• Evan Williams Single Barrel Bourbon - Caramel and wood on the nose - very rich vanilla and cream notes

The Four Roses was my pick of the night - it was sweeter than many (personal preference), but, importantly had the most consistent palate throughout its length.

The Malt Master comprised the Deanston 30 years, Glenfiddich 30 years, Glenfarclas 25 years, Balvenie 21 years and the Caol. Ila 25 years. The mystery malt was one of the peatiest Scotches I’ve had and we mistakenly tied our guesses to that fact. I’ll not give away the name of the malt they use as the mystery one here, but it was a whiskey made in a style unlike many of its neighbours making it very hard to place.

Thank you

posted by philip in Snooth

I am not a fan of anything associated with “year in review” or “predictions for the upcoming year”. And, don’t get me started on New Years resolutions (if anything, they should be April resolutions, as most people’s resolutions involve things like “get in shape” or “eat less candy” which is a little hard to do when there are festive leftovers and its frigid outside).

My objection with these sweeping proclamations is that they are either pointless reminiscences or pure flights of fancy. Most lists of the “10 things that are bound to happen in 2009″ have a 20% accuracy rate, if lucky. What I would like to read, is whats actually going to happen in the coming year.

I don’t know if Facebook will IPO, or if they will acquire Twitter, or if they will simply remain independent, and so I’ll stay silent on the matter. The same with the wine market as a whole - while some are claiming the sky is falling, others are simply pointing to a mere 2% decline in consumer spending in the 4th quarter (after gas spend has been backed out) - hardly huge cause for consternation.

2008 clearly brought huge turmoil to many people, and I hope for a more stable 2009 for everyone. However, here I’m going to stick to what I know, and even better, what I can control (at least partly). And so, here’s what will happen with Snooth in 2009.

• We’ll work hard, release new features, improve those already there, make some mistakes, correct quickly and carry on.
• We’ll listen carefully to you, our users - the community that makes this site what it is. I don’t guarantee that we’ll implement everything you ask for. In fact many feature requests, unfortunately, will never see the light of day as we have to prioritize how to spend our time and have to make sure we build features that benefit the most users.
• We’ll make it a priority to provide a platform for professionals (stores, wineries, bloggers, critics etc.) to interact with our users.
• The Snooth API will be extended and you’ll see Snooth powering the wine results of some very major sites.
• We’ll grow our monthly user base to over 1,000,000 users per month.
• We’ll have over 250,000 registered users.
• We’ll generate sales for the wine industry of over $50 million.

These last three bullet points are neither wishes, nor wild hopes, but actually conservative forecasts based on our current data and our growth rates - in fact, there’s a good chance we’ll greatly exceed these numbers. In December 2008 we had 616,477 unique users use our site and over the course of 2008, our first full year of operations, had the pleasure of serving 2,508,254 unique individuals. These numbers represent a greater than 400% growth rate year over year.

And we now begin our journey into 2009, with over 70,000 registered users, 1 million wines in our database, 11,000 store inventories tracked across 50 countries and over 2 million reviews. Thanks to all your involvement, Snooth is the worlds largest interactive wine site, and poised to be the worlds largest wine site by the end of this year.

I speak on behalf of the lean, 7 person, Snooth team when I say its been an honor and a pleasure for each of us to have had the opportunity to meet, befriend and interact with so many of you. We all look forward to shepherding the site on your behalf for the many years to come.

Happy New Year to you all!