Fermentation: The Daily Wine Blog

Epicurus

As 2008 draws to a close, I've been thinking about what's happened to me over the past 12 months. In doing so, I can't seem to get my mind off of one of my favorite philosophers.

Epicurus lived in Samos, in Greece, in the 3rd and 4th Century BC. His philosophy of life, in its simplest form, boiled down to this:

In order to best honor this life, in order to best live a good life, one minimizes pain and fear and maximizes joy, love and friendship. It turns out, according to Epicurus, that one excellent way to maximize the amount of joy and love in one's life is to cultivate friendships. And about friendship, Epicurus wrote:

"It is not so much our friends' help that helps us as the confident knowledge that they will help us."

This has been a particularly complex and difficult year for me. But were it not for the confident knowledge that my friends would help me if I needed it, 2008 would have been a very bad year for me. But because of that confident knowledge that I have, 2008 turns out to be a very good year for me, despite all that has passed.

Having thought about this, it turns out that my resolution for 2009 and my wish for all Fermentation readers is the same.

THAT MORE FRIENDSHIPS ARE CULTIVATED.

Happy New Year

Unsurprisingly, Joe Has Something To Say

Famed wine importer Joe Dressner has brain cancer. That's not so much my worry as is the sorry condition the cancer will be in when Joe gets done reducing it to a pulp. Joe's not someone you screw with, particularly if all you've got in your arsenal is a bit of cancer.

For those of you who are not aware, Joe is one of the most respected importers in America, perhaps the very first wine blogger, and someone with literally no ability to hold his tongue. And these are just some of the reason the people who like him and admire him, like me, like  him and admire him. Some will know that Joe has on occasion called me on the carpet for some of my opinions, questioned my taste in wine, and pointed to some ideas of mine concerning the three tier system that he thinks are...over zealous. I've corrected him where necessary.

Unsurprisingly, Joe has decided to chronicle his destruction of the the overconfident cancer cells at his new blog, "The Amazing Misadventures of Captain Tumor Man." The blog is candid...What a surprise.

But one of the things he reveals in his new blog is something that I never expected to get out: Joe reveals that I believe wine wholesalers are responsible for planting the cancer in his head. It's true.

What he has not revealed is how I know this. And here's the story.

It was on a secret mission to infiltrate the offices of the Wine & Spirit Wholesalers Association compound when I discovered the plot to plant cancer in Joe's brain. Initially I had wrapped myself in black from head to toe, waited until all the folks left the WSWA offices, then broke in through a door after using a homemade jet pack to vault over the barbed wire fence surrounding the Wholesaler compound. I was on a mission to discover just how much gold bullion the Wholesalers had stored in their secret basement (yes they have one) for the time when the three tier system is completely dismantled and the world comes to an end. Instead, I discovered something very unusual.

At first I though I'd found a a cache of weapons. But upon closer investigation, I saw that what I had stumbled upon was an Acme Cancer-Inducing, Nuclear Powered X-Ray Gun. I found a folder that had slipped down between two cases of cheap Aussie Wine with a label on it reading, "The Joe Dressner Project". I connected the dots.

Beating back cancer into the stone age is just Joe's latest adventure. And I suspect I'll have his criticisms and insights to deal with for years to come.

Collapsing Bubbles

Regarding the apparent problems the French Champagne houses are having this year, I feel like I've done my fair share. Though domestic sparkling wine producers will be happier with my efforts, I do currently have a decent number of recently purchased bottles of Champagne. The point is that I'm not to blame for the woes afflicting Reims and its surroundings.

So now that my culpability is out of the way, I need to turn to something in this article that surprised me:

"At least 83 per cent of champagne is sold and consumed in a 600-mile radius around Reims, the Champagne capital. “There’s still a lot of potential for growth further afield,” said Mr Lorson."

Mr. Lorson is a spokesperson for the official Champagne trade group. He'd know these things. Can it possibly be true that at maximum only 17% of all Champagne produced actually leaves the France? Last year 338 million bottles of Champagne were produced. That means that 294 million bottles were consumed within a 600 mile radius of the place and at maximum 57 million bottles were exported. That's approximately 4.7 million 12 bottle cases.

Lorson says that despite the "collapse" in Champagne sales, there is room for growth. I suspect that sales of Champagne will be down significantly for the last 3 months of 2008 and for all of the coming 2009. So what can the Champagne houses do?

Well first of all, they need to get on their knees, form a circle around the town of Reims, and bow down in prayer and reverence for the support they get from those who live around them. After that, they know exactly what to do: Lower their prices.

Veuve Cliquot NV Brut, for example, costs between $30 and $50 a bottle, depending on the hopefulness of the various retailers across the country. This is silly. It's nice Champagne, but it's not THAT much better than Roederer Estate, now is it?

Getting Manhattanized

Why do my thoughts turn to cocktails this time of year more than most? It doesn't matter. They do and that's that.

Paul Clark, writing under the "PROOF" banner of the New York Times has an outstanding post about the revival of the American Cocktail Culture. It's inspiring, actually. One is left, upon reading it, with a desire to set out on the road looking for America's finest builder of Manhattans or the simple artisan behind the bar dedicated to mixing up something authentic and old and found in a book on mixing from the first decade of the last century.

Of late I have been drinking my fair share of Manhattans. Bacarin SF made a lovely one as did Mark at The Girl & the Fig here in Sonoma. The Manhattan appears to have come back into style.

The beauty of the Manhattan is that it can be used as the base for showing off a bartender's own personal style. To that point, the traditional Manhattan consists of some form of Whiskey, sweet vermouth and bitters. However, I've noticed a number of bartenders forgoing the bitters all together. I prefer the bitters included.

What I've noticed is that the way the customer tends to personalize their Manhattan boils down to the type of whiskey they order with it. I prefer Makers Mark. A lovely friend of mine prefers Crown Royal. But what's most important for me is that the Manhattan not come with a froth on top. That means stir it with ice, but don't shake it. I want my Manhattan to be clear, like my mind before it is Manhattanized.

Absinthe Any Tradition...

If the Holidays are nothing else, they are indulgent and reverential traditions wrapped around culture and imbued with great meaning for many.

I happen to like traditions very much, whether ecclesiastical or cultural. I like how they mark and illuminate profound ideas. But for someone like myself, who isn't quite as taken with the full set of traditions and meaning associated with the Christian and Jewish holidays that mark this time of year, or even with their cultural and merchandising offshoots, I nevertheless look for tradition to pull me into the Season.

Generally, it has been enough to simply be a part of other's immersion into the Holidays. Generally it has been matter of watching the smiles on children's' faces, sitting around a table with family, and even gathering where others gather, in churches or in rooms.

This season of tradition is a little different for me than most past Holidays. And I found I needed something, anything really, to mark the time of year.

Absinthe!

Having recently discovered I like the taste of Absinthe and enjoying its festive color and moody history, I've decided that Absinthe, its service and its moderate consumption, would make for a lovely Holiday Tradition.

The Tradition of Holiday Absinthe will work like this:

-There will be a gathering of close friends between Christmas and New Years.

-They will gather around the table, sitting, with their Absinthe glass.

-Upon the encouragement of the Host, they will build their drink in the manner of Prague
-Each will place their glass filled with 1.5 ounces of Absinthe in front of them

-They will proceed to soak a cube of sugar in their glass to the point before it melts

-They all will remove it and place it on their slotted spoon that sits on the glass

-A match will be struck and the Absinthe-saturated cube lit

-The room will glow from the light of the green/blue/yellow flames around the table

-After the sugar drips into the Absinthe and the fire is out, stirring begins

-Then each fills their glass with 3 parts water from a vessel each has beside them

-The Host will raise his glass and toast to friendship

-And consumption of Absinthe among friends will proceed.

Traditions need not be ancient to be special. They need only a form of ceremony and a meaning associated with them. Particularly at the end of a year when whatever moves us needs acknowledgment and cultivation, traditions, new and old, become important.

Interests and Action in the American Wine Industry

In the wake of watching the Michigan Beer and Wine Wholesalers Association casually make use of their purchase of the Michigan legislature and their ownership of Nida Samona (is it legal to own another human being?), I began to ponder the political relationship between American alcohol wholesalers and the rest of the wine industry: How can it be that a key sector of the American wine industry always finds itself in a position of supporting laws and legislation that hurt the rest of the American wine industry and the American wine consumer?

WINERIES are never satisfied by the positions that wholesalers take where the politics and regulation of alcohol is concerned.

RETAILERS are never satisfied by the positions that wholesalers take where politics and regulation of alcohol is concerned.

IMPORTERS are never satisfied by the positions that wholesalers take where politics and regulation of alcohol is concerned.

CONSUMERS are never satisfied by the positions that wholesalers take where politics and regulation of alcohol is concerned.

There is an explanation for this bizarre set of circumstances:

THE AMERICAN ALCOHOL WHOLESALERS BENEFIT MOST AND THEIR INTERESTS ARE BEST SERVED WHEN THE MOST IMPORTANT INTERESTS OF WINERIES, RETAILERS, IMPORTERS AND CONSUMERS—ACCESS TO THE AMERICAN WINE MARKETPLACE—IS STYMIED.

Let me put it another way.

AMERICAN ALCOHOL WHOLESALERS BENEFIT MOST WHEN THE REST OF THE WINE INDUSTRY AND WINE CONSUMERS ARE HURT.

The reason for this is not necessarily an evil that overcomes individuals who obtain great power inside the wholesale hierarchy. It's a structural issue related to the ubiquity of the Three Tier System.

The three-tier system in place in most states demands by law that nearly all wine flow from producers and suppliers through a middle man before ending up on wine lists and store shelves. The system is a relic born of a time when only primitive transportation logistics existed in the United States and when the number of brands of wine could probably be counted on the hands and feet of a basketball team.

Back in 1933, the idea was to assure that the problems that proceeded national Prohibition—vertical integration, abusive marketing practices and the abuse of the product that flowed from these conditions—not be repeated after Repeal. The state-mandated three tier system was a creature born of the recent memory of those who built the system and born of the technology that existed at the time of its creation.

Today, the logistics of 1933 are exactly what you think they would be: 75 years old. The kind of industry abuse that brought on National Prohibition in 1933 and which informed the creators of the three-tier system simply could not take place in our age of easy regulation. And yet, both the old logistics and old problems remain the primary excuse for a system of alcohol regulation that must support an industry that has grown into something that none of the founders of three tier system could have even imagined.

But here's the interesting thing. Among the constituents of the three tier system—suppliers/producers, wholesalers, the States, retailers/restaurants and consumers—only the middle tier (the wholesalers) benefits from pretending nothing has changed since 1933.

The explosion in the number of wine brands in the American marketplace, the emergence of the American people as a wine drinking people and the remarkable, paradigm-changing evolution in the world of information delivery and hard-good logistics demands a fundamental change in the American wine industry that everyone in the industry, along with consumers, would support—except for the wholesalers since they are the only element of the three tier system that benefits from keeping the archaic mandatory three tier system in place.

As the number of brands in the American market place grow and as more and more Americans develop an interest in the diversity of products in the marketplace, both suppliers and consumers benefit by easier access to one another. With easy though regulated access to wine, consumers are satisfied. With easier access to consumers, suppliers, retailers and restaurateurs see their interests satisfied. However, easier access to brands and consumers spells financial ruin for wholesalers who seen their ranks strategically consolidated through mergers and acquisitions that have all been based on a business model that assumes little or no reform to a regulatory system that was built when FDR was was in his first term.

So with the interests of consumers, wineries, importers, restaurants and retailers arrayed against the interests of a smaller and smaller group of alcohol wholesalers, how is it that wholesalers nearly always get not just what they want, but what the rest of the wine industry and wine consumers do not want?

While it's true that the privileged place the wholesalers have been given within the three tier system serves to their advantage, this is not the answer. And while it's true that this special place in the three tier system results in unearned though extraordinary profits, this is not the answer. And while the wholesalers have been able to purchase the will of the legislatures across numerous states, this is not the answer either.

The reason importers, wineries, retailers, restaurants and consumers are regularly kicked around and defeated politically is due to their reluctance to work together for their own interests.

Direct shipment of wine and winery self distribution (selling across state lines directly to restaurants and retailers and not through wholesaler) satisfies the interests of every sector of the industry, including consumers. Both of these logistical and selling mechanism, as well as other cracks in the three tier system, produce a more fluid marketplace. They give consumers access to what they want. They give suppliers and sellers better access to markets and goods. They expand the American marketplace for wine. They deliver more tax revenue to states.

So why haven't importers, wineries, retailers, restaurants and consumers created an alliance to work together to reform what is unquestionably one of the most market suppressing system in the American economy?

The answer, I think, is that the rapid expansion of the American wine marketplace over the past 25 years has been generous enough to dull the political sensibilities of those who have benefited most from the expansion. There has been just enough lucre produced and distributed from this expansion of the American marketplace to make the participants in that expansion believe they will continue to benefit and succeed even if they know that the three tier system needs reform.

What's interesting to note, and what American wholesalers surely know, is that were there a commitment among the rest of the American wine industry to invest in a move to reform the three-tier system, that change would easily come; wholesalers would have little defense against a united first and third tier allied with consumers; that the pool of lucre available to the suppliers, retailers, importers and restaurants would increase at a rapid pace with easier access to markets; that consumers would realize the true nature of the diversity of the American wine market.

In Michigan last week, the legislature passed a law that hurt consumers, retailers, wineries, importers and state tax coffers. They restricted the flow of goods through cynical legislation based on lies, ignorance and money. They did the bidding of the state's wholesalers who used their control of the Michigan Liquor Control Commission. A few retailers spoke up against the bill. A consumer group spoke up against it. The state's wineries chose to sit on the sidelines. Wineries and retailers in other states chose to make nary a peep when they saw their interests being slapped around.

Until wineries, importers, retailers, restaurants and consumers understand perfectly that there is no instance in which their interests align with those of the wholesalers and until wineries, importers, retailers, restaurants and consumers realize that wholesalers are precluded by their remote but privileged place in the three tier system from helping anyone but themselves, there will be no combating the stranglehold American wholesalers have on the American wine marketplace.

Important New Wine Information Source...Read It!

A new voice has come to the world of on-line wine information/reporting and it's an important one. Actually, the voice is not new.

Lew Perdue is among the most experienced reporters/publishers to work in the wine industry. Many of you who read FERMENTATION will know and remember Lew. To some of you, he's probably a new name. He founded both Wine Business Insider as well as Wine Business Monthly, two publications that remain among the most important wine trade publications in America.

Yesterday, Lew Perdue launched WINE INDUSTRY INSIGHT. Currently it is in the form of a blog but may take on another form down the road. For now, it is instantly one of the best and most provocative on-line reads concerning the business of wine.

First and foremost, Lew is an investigative reporter. If you comb through the various posts at Wine Industry Insight you'll see that is immediately true. But Lew's voice is also born for blogging. His latest entry at the new sight is a combination hands-on reporting and editorializing on the issue of the the proposed Gallo expansion of the Russian River Valley as well as the archaic way the TTB goes about considering AVA proposals and the way they provide information to the public. It's very good stuff.

I'd love to see Lew look closely at the relationship between American wine wholesalers and the creation of state regulations. It would be an important series of stories.

But there's more background about Lew Perdue you need to know.

-He worked in the wine business as both an importer and wholesaler
-He's written numerous successful novels
-He took on the author of "The Da Vinci Code" in a very credible plagerism lawsuit
-He's been a reporter for the Wall Street Journal, MarketWatch and TheStreet.com
-He's worked in poliltics as an aid to a Governor and U.S. Senator

If Lew Perdue throws himself into Wine Industry Insight, then there is an important new source of investigative wine reporting that will need to be reckoned with by a lot of different people. Lew Perdue is not the kind of person who pulls punches.

Nakedness & Wine

As some of you may be aware, I'm a big fan and big advocate of combining nakedness and wine. So, you can imagine how disappointed I was to ONLY LEARN TODAY about a videocast called "The Naked Wine Show."

Produced out of Canada, The Naked Wine Show stars Susan Sterling doing...well...wine reviews in the nude. (I can't believe Gary Vaynerchuk hasn't thought of this, though I'm somewhat relieved he hasn't). Here's what has me wondering. In a press release about the launch of the Naked Wine Show, it is revealed that the Naked Ms. Sterling obtained her position after, “We spent a lot of time trying to cast the right person, and we must have interviewed about 300 local sommeliers, wine experts and comedians to finally find Susan."

Now I wonder just how those interviews went.

Producer: Ah, Mr. Smith, thank you for coming in. Tell us about your experience with wine.

Mr. Smith: Well, I've always loved wine and have been in the wine retail business here in Toronto for a decade. I've taught numerous wine classes and think I have an engaging way of telling the story of wine.

Producer: Very good. Please take off your clothes

Mr. Smith: Pardon me?

Producer: Your clothes. Please remove them. It is called "The Naked Wine Show"?

Mr. Smith: Huh? I thought "Naked" referred to reviews that were unusually revealing?

Producer: Just take off your clothes, Mr. Smith.

Mr. Smith: Well...OK (removes shirt, trousers, undergarments)

Producer: Ah...Well, thank you for coming in Mr. Smith, but it appears you have a penis. That won't do.

Mr. Smith: Huh?

Producer: NEXT!!—Again, thank you Mr. Smith. Please put your trousers back on.

Ms. Sterling: Good Morning, thank you for the chance to Interview.

Producer: Good Morning Ms. Sterling. First things first. Tell me, do you have a penis?

I recommend this new video wine review show very highly. I can't really tell you what wines they review on the show. Nor do I know what price range the wines they do review fall into. I'm not even sure if they review wine at all. However, there is a Naked Girl in the show.

Predictions For Direct Shipping of Wine in 2009

I think the development of the direct shipping channel is still in its early stages. I think a great number of changes will come to this channel. Issues of access, technology, legality and logistics are still in flux. The profit upside for committed and smart players in the business of direct shipping of wine is pretty big, be they wineries, logistics companies, service providers or tech companies. And I think that 2009 will be an important year in the development of this channel.

With that said, here are my predictions for what will happen in 2009 around the issue of the direct shipping of wine:

1. Michigan, Illinois, New Mexico, Iowa, Florida, Massachusetts, New Jersey and Washington State will all alter their legal posture toward direct shipment of wine.

2. A major expose will be written in a large daily newspaper about the excessive and inappropriate control wine distributors have over consumer access to wine.

3. At least 2 Circuit Courts of Appeal will rule that states may not discriminate against out-of-state wine retailers where the direct shipment of wine is concerned.

4. The Supreme Court will not accept a case in 2009 regarding wine shipments

5. Consumers will begin to become much more vocal about their desire to have access to wine via direct shipment and will become more involved in the political process that revolves around direct shipments of wine.

6. Importers will begin to question the wisdom and legality of their exclusion from the direct shipment channel

7. The entire online wine shipping sector will find a higher profile as more, larger entities finally enter the market and begin marketing wine nationally.

8. "Manager of Online Marketing and Hospitality" will be a position that wineries across the country begin  to aggressively recruit for, bringing into the wine industry individuals previously unassociated with wine.

9. Wholesalers will make another set of creative and last ditched efforts to impose self-serving regulations on the direct shipment of wine in states where regulations are set to change.

10. By year's end, the issue of Winery Self Distribution will become a critical issue for wineries in numerous states, leading to more lawsuits and severe political battles.

11. FERMENTATION will publish an editorial condemning the cynical, self-serving and anti-consumer elements of the wholesale tier.

Fermentation's Top Online Wine Influencers

What is "Influence" and what makes an individual "Influential". Let's not over think this. Isn't "Influence" the power to make other people act and think differently...or at least to act and think? And isn't one MORE influential if they can provoke MORE people to act and think?

So, if we ask the question, "who are the most influential people affecting the Online Wine World", we are looking for people who, through their actions (online or otherwise), cause larger numbers of people to act, or change the way they act, in relation to wine online. So, utilizing this theory...

FERMENTATION'S TOP ONLINE WINE INFLUENCERS

Cyril Penn, Editor, Wine Business Monthly
Wine Business Monthly is the best read wine trade site on the Internet. They send out a daily list of top wine stories that LOTS of people read early in the day and then react to, if only by them reading the stories or being introduced to them. The fact that there are so many folks in the wine industry get their daily Top Wine Stories and, hence, their daily perspective on the wine industry from Wine Business Online makes Cyril, the editor of the organization, among the top Online Wine Influencers

Jeremy Benson, President, Benson Marketing
Jeremy's company does the same thing that Wine Business does with their daily Enews Monitor. Their list is very big and the people that get this list of top wine stories on the Internet read it closely to see what's new in the wine world. This is influence for the same reason that Wine Business Monthly has influence: They use the Internet to help determine what stories and issues are at top-of-mind of thousands of wine industry insiders.

Gary Vaynerchuk, WineLibrary.TV
Gary has harnessed online communications to build a significant audience of wine lovers via his WineLibrary TV, his twittering, and through garyvaynerchuk.com. They buy wine he recommends. And though I don't have hard data on this, I think Gary provokes them to think differently about wine. At the very least, Vaynerchuk has prompted people to think differently about what a wine critic is. That's influence.

Rich Bergsund, CEO, Wine.com
Despite its somewhat checkered business history, Wine.com is among the largest if not the largest wine retailer on the Internet. This means that Rich Burgsund and the folks at Wine.com do the most to introduce people to online wine sales. This is critical work. For many people, Wine.com is the first place wine is ever purchased on the net and that first impression means a lot to the rest of the industry.

Craig Wolf, CEO, Wine & Spirit Wholesalers Association
Over the past few years, few people have done more to slow commerce in wine on the Internet than WSWA and its head Craig Wolf. By using its resources to spread unwarranted fear among legislators and releasing misleading information to the public, many states have had second thoughts about opening their borders to well regulated commerce that makes sense in the 21st century.

The Inertia Beverage Group Team
Inertia Beverage Group (a client of Wark Communications) has been instrumental in evangelizing to wineries where direct sales are concerned. Between their direct sales and Direct To Trade Platform, their free compliance service and their constant involvement in the technological and marketplace development for direct sales, far more wineries have taken the leap into the online world.

The ShipCompliant TeaShipCompliant is the company that has worked harder than any to blunt the efforts of uninformed legislators and self-indulgent wholesalers who have done as much as possible to make complying with state laws difficult. ShipCompliant has given wineries and retailers the means of navigating the countless regulations that govern direct shipment of wine so that more consumers can enjoy the continually increasing diversity of wines in the American marketplace.

Tracy Genesen, Partner, Kirkland & Ellis
No single person has done more to lay the ground work for consumer access to wine than Tracy. This is the woman who devised the overall legal strategy that brought the Granholm v. Heald case to the Supreme Court, who was the first person to get a judge to rule that retailers are covered by the Granholm ruling and who most recently convinced a court to shoot down "capacity caps" on who can ship wine while working on behalf of Family Winemakers of California in a Massechussetts-based lawsuit. Tracy is the legal guru behind the rise of online wine sales.

Joel Vincent
Joel strikes me as the "Braintrust of Wine Social Media". Business focused, savvy, and industry-centered, Joel nearly singlehandedly runs the OpenWine Consortium, the most important development in wine trade networking to emerge in a decade. Through OWC, Joel played the key role in creating the first North American Wine Bloggers Conference that brought the continent's wine bloggers into the same room, face to face, for the first time. He is omnipresent in all forms of wine-related social media and commands respect for his ideas and opinions.

I suspect there are other suggestions on who I might want to include on this list and I welcome those  suggestions. But if you suggest some one for this list of Top Online Wine Influencers, please explain why they belong on the list and please note if their inclusion is based on a different criteria than mentioned above for what "Influence" means