Can You Sue A Wine Writer?

I go crazy hearing about all the idiotic lawsuits that get thrown out there. One such suit was Overton vs Anheuser-Bush in which the plaintiff accused Budweiser of false advertising by using suggestive imagery like "scenic tropical settings, beautiful women and men engaged in endless and unrestricted merriment" ... ostensibly because they were drinking Bud Lite beautiful women would just come to life from their imaginations. I know every time I pop a bud open, I get a door knock. Doesn't everyone?

Then I saw [this story] about a critical on-line review of a doctor. Apparently the defendant didn't like the doctors bedside manner amoung other things. The good doctor didn't like the review and wasn't going to take this lying down, so he sued to have it removed. Of course the brilliant doctorended up promoting the review more than the patient ever could have hoped. But the whole things got me to wondering if anyone has ever successfully sued a professional wine writer over a scathing review?


While I'm not an attorney, I believe a suit could be brought for monetary damages if a review like that were proven untrue, the writer knew it wasn't true, and it established a loss in brand or current sales. Of course proving someones own subjective opinion was knowingly wrong isn't easy.

And while we're on the subject, what about all the consumer reviews in Blogs YELP and other on-line consumer sites? Has anyone been sued for saying bad things about a wine in the Wild West of the Web? And a related question: What should you do about those types of reviews?

The Best President for the Wine Business is ....

I Lied .........

Think Its a Tight Race?

I admit it. I said last week that SVB on Wine would be going on hiatus until January while we are producing the Annual State of the Industry report. Well .....I guess I lied. Shocking! A banker who lied? I guess that makes me eligible for public office though. ....hmmm....upon further reflection ....nope .... unlike President Clinton who never inhaled but he did lie, I did inhale ... once ... as an aspiring musician but it was a job requirement. Nonetheless, that makes me unfit for public office and as a colorful Senator once said, "If nominated, I shall run to Mexico. If elected, I shall fight extradition." I mean really, who would want to run for public office these days and endure the mud-slinging and digging into the mistakes in your life? We've made office fit only for people who never made a mistake, or were never caught in a mistake.

Moving on to the topic at hand, many people seemed pretty engaged on the piece we wrote last week that discussed Argentina and the negative impact their Government has on the wine business. After watching the feisty Presidential debates this past week, I said to myself .... "Self? Which of the two candidates is best suited to help the wine industry for the next four years?"  'Myself,' predictably didn't answer me, so I've decided to go against my better judgment and toss it out for a discussion topic this week.

Argentina: Why Malbec doesn't Flood the US

There's no substitute for visiting a wine region to get a true sense for the business. Tasting doesn't tell you strategy. Reading won't describe scents in the air. A travelogue gives you no indication of the heart of the people or the quirks in customs. For that you have to visit the region.

A few months ago I was given the opportunity to speak at the VIII Foro Internacional Vitivinícola in Mendoza Argentina. It didn't take long for me to accept the invite. In the U.S. I've tried many of their wines but wasn't that impressed, probably because I've never focused on the region and generally was drinking wines in restaurants that were over priced. But the buzz over quality Argentinean wines has never waned. Some of my clients even have vineyards there. So I saw this as an opportunity to broaden my understanding of the Argentina and get first hand knowledge. What I came away with was inspiring and mind altering.

Part II: Planting Decisions Are Different This Time

Changing Patterns: You're Mad if you Don't React.

The wine industry is made of family owned companies. Family owned companies seldom last past the 3rd generation in part because the family and business conditions that support the start of a business evolve over the years. Watching the clip above from MADMEN, you see the founder ask the question, "Why can't I just build on what I have?" The answer is a reminder that your customers needs and wants evolve, and you have to recognize and predict those pattern changes. 

To survive and adapt, a leader has to get out from behind the day to day world of running the business and ask tough questions about change. Today whether you are first or 4th generation, it's time to review the horizon because while the business continues to rebound, its not and wont continue in the same way it did in past recoveries as we discussed in Part I: The Long Term Future of US Wine Sales last week.

Just what specifically will be different in this recovery for the wine business? Its too long of a topic to discuss on a Blog so much of this I'll reserve for the State of the Industry Report due out in January of 2013. But for now lets just start with one segment: planting .... and maybe a little on pricing because they are related.

Part I: The Long Term Future of US Wine Sales

Don Draper, the Middle Class, and the Mad US Wine Consumer

Economically speaking, a luxury good is one with a demand curve that's straight up and down and a commodity has a horizontal demand curve. Practically speaking there's a lot of gray between the two and Luxury for American's is easier to segment into "need to have" (a vacation camping close to home) and "want to have" (a vacation at the Hilton in Rome).

There was a time when luxury goods were that: Custom goods manufactured for the wealthy. Mass Luxury? At best that was just an oxymoron. Back in the day, lettuce was not a luxury good. It came in fresh iceberg or older iceberg. There were no field greens mixed in a gas sealed bag replete with mustard greens and escarole. But when the boys came home from a World War and the Boomers started popping out and growing up, America grew a large appetite for something more than 'need to have' products. We desired, wanted and coveted the Jones' stuff next store. An exploding middle class was the catalyst that gave the Mad Men out there license to pitch our wildest needs and wants, and we consumed our way to prosperity.

Today with a shrinking middle class, displays of wealth politically incorrect, a waning Boomer, and a $9 trillion dollar hit to the net worth of America's consumers in real estate losses, can we still have Mass Luxury goods like we used to and more important, will we be able to afford them, and even more important still, what does that mean for wine?

How Will You Keep Up With Changes In DtC?

MJ Dale, KLH Consulting

This is part II of a piece on DtC by that most awesome of awesome women, Mary Jo Dale of KLH Consulting in Santa Rosa. (Check out the link attached to her name if you want to see what I mean by her awesomeness.)

Yes, you came to the right place. This is SVB on Wine, but as you know from last week, "A man has got to know his limitations," and MJ is leaps and bounds smarter than me when it comes to Direct Sales, CRM, Club Management, and current technology supporting all of that. Every time I hear her talk, I come away with something new. You have an opportunity to ask all the questions you want and not get charged her $5,000 an hour rate. (You just wasted $176 reading this.)

Enjoy Part II of Trouble in Paradise.

Is your Direct Program Punky?

Do Ya Feel Lucky ... Punk?

As Dirty Harry said, "A man's got to know his limitations." I know mine. I also know the importance of client acquisition, retention, and state of the art technologies that are available to retail wine operations and current thinking on integrating experience and product in DtC trade. But I’m no expert.

In a recent blog about CRM, tasting room, and DtC, I took a run at the topic and within the post tried to shame one "unnamed" expert into guest blogging for me to give you some street-level information. That shamed person is M.J. Dale of KLH Consulting in Santa Rosa, CA and she is one of the sharpest people I've met in the wine business.

So in a departure from the norm, while I'm away in Argentina MJ has graciously accepted my invitation to guest-blog and will offer a two-part piece on Direct Sales. I've handed her the keys to the car and she will be moderating the discussion, offering expert advice, and policing the rowdies... so you just watch yourself! 

Since Mary Jo makes a fair wage, it’s worth your time to get some free consulting out of her with your questions on the topic. You only have to ask yourself one question before you comment though: Do I feel lucky? Well, do ya.... punk?

2012-2013 Predictions on the Wine Business

Each year I take out my crystal ball, put on funny clothes and after my eyes roll into the back of my head for a sufficient amount of time, write Silicon Valley Bank’s State of the Wine Industry Report and make some predictions. I am a most fortunate soothsayer to be able to see so much of what is largely a private industry. Silicon Valley Bank has it's own data base of financial information, I produce various surveys throughout the year with more than 500 respondents, have direct contact with clients, prospects, suppliers to the wine business, relationships with distributors and large scale farmers, academia, media and I’m sure I’m missing an angle or two. That all helps to clear up the cloudy crystal ball.

Is The Wine Business Sustainable?

There is a lot of talk around the concept of 'sustainability' so much so that it loses its meaning. What makes a business - any business sustainable?

When you work in the wine business, you soon discover the reality is not the vision guests to wineries have. When a guest comes to a winery, they are greeted by owners and tasting room workers poised for hospitality. They have their best foot forward. And just like all of us, what you present to guests invited for dinner isn't reflective of the struggles you had during the day. In the same way, the wine industry puts out an image of a gracious lifestyle, but that's not the heart of the business nor is that what makes the business sustainable. This is a business that has its makeup and culture rooted in the reality that you really can't do this alone. At a minimum, you have to depend on God, Mother Nature, and luck to make a year. You have to depend on farm workers to execute and harvest on time in the right way. In fact its really harvest when that all comes together. That short window is all you get. That is a whole year's worth of sales and that intense period is the canvas that underpins the true culture of the community and in the end makes the wine business sustainable.

Can Wineries Increase their Bottle Prices?

Middle Class Mashed

Middle Class Wealth Back to 1983 Levels

That is a question all wineries are asking: When will they be able to meaningfully raise bottle prices and recover their margins? To get at the answer, you have to start by answering the question, what drove the prior pricing increase in the 90's into the 2000's? The answer is the middle-class and the Boomers.

The Great Recession wasn’t that great for anyone but it outright sucked if you were in the middle class. The middle class is that section of the population that was more likely to have lower savings, lower stock market exposure, and a higher percentage of their net worth centered in their homes. Since 2000, the middle class has shrunk in size, wealth, income and optimism about their future according to a recent report from The Pew Research Center. The impact of the weakening of the middle class will continue to linger and impair the wine industry's ability to pass on the higher costs of grapes for many years to come.

Can You Succeed in the Wine Business Without CRM & SM?

You are a with-it kind of person so you probably recognize the acronyms in the title stand for Social Media and Customer Relationship Management. You are so together, you probably have your Facebook and LinkedIn accounts with more than 500 of your closest friends and colleagues connected. You have a Klout score. You have a smart phone and check in with Foursquare at every occasion. You’ve even started tweeting twice a day about such fascinating things as, "Happy #FF" and "Isn't it a beautiful #DAY all my peeps." And the result of your social dalliance with SM on growing your sales is?..... Absolutely Nothing. Nada. Zip. Zilch. Zero. What is going on? Where are all those Millennials who are supposed to be Tweeting up a storm and rushing to your door. If you do Social Media, they will come! ...... won't they?

Is it Politically Correct to make a Profit?

What is the long-term outlook for the US wine business? Having been around the business for more than 30 years now, I can remember different phases in our industry's evolution and I'm constantly thinking about just what was happening to shifting demand and why, because those patterns can predict the direction we're heading next. I remember when there were 13 states that had reciprocal shipping laws and wineries shipped only to about 30 of them.  I remember when drinking was bad for you. In fact when SVB began in the wine business in the early 90s, we were just moving out of a time of a structural change that led to declining demand both in gallons consumed and per capita consumption as you can see in Figure 1 above.

Is California Wine At a Pricing Inflection Point?

 

 "Better to remain silent and be thought a fool, than to speak out and remove all doubt"

It's not easy deciding on a presidential candidate. The debate between Mitt Romney and George W Bush didn't help me. ......but that's not important.

What IS important is the Gomberg-Fredrikson Report for May shows cumulative bulk imports accounted for 19.3 million case equivalents shipped into the US in 2012; a whopping 167% increase. That's the equivalent harvest of 27,000 acres of US winegrapes calculated at 12 tons per acre.

The Mystery Surrounding Lot18's UK Closure

The past week's change in strategy announced by Lot18 to close their UK efforts was curious, particularly when you consider they have been there only four months. Its a mystery worthy of Scotland Yard if you ask me. Repeated calls for an investigation have fallen of deaf ears. There are some clues however: The closure follows a couple small rounds of layoffs and the abandonment of some early initiatives directed at other luxury areas. In their press release, Lot18 suggested the reason for the closure:

‘Unfortunately, the supermarkets’ stranglehold on the UK market proved too powerful for us to compete with and we have not experienced the anticipated growth rate.’

A likely ruse it is. The supermarkets did it! They strangled Lot18 and I'm guessing the deed was done with a rope in the produce section by Colonel Mustard! Seems very suspicious to me. I called their CEO Philip James for comment on Friday but at press time there was no response so we are on our own to solve the mystery. What's the real reason behind Lot18's U.K. closure? Elementary my dear Watson.

Is There Really a Grape Shortage?

Women's Syncronized Swimming Team Drowns Trying
To Signal Help with their Legs

I thought I'd tip my lid to the upcoming Olympics in London and in this weeks edition of SVB on Wine, share a story and a revelation about market bubbles and tie that into an observation about year-end grape supply and grape market dynamics.

Let The Games Begin!

Is 7%-11% growth in US Fine Wine disappointing?

Up to the spring of 2010, I wasn't the most popular of prognosticators. Prior to the crash I started handing out predictions as I saw things, a housing bubble, large market corrections, etc. Strangely, after the first gloomy prediction my literary agent stopped getting any calls for book signings and speaking opportunities. “Call someone that's not a Debbie Downer.” I was a pariah, a leper, an outcast with the likability of an attorney from the WSWA. Then last year when I said we were at the beginning of another long-term period of growth in fine wine, the phone stared to ring. I was once again quotable and in demand for speaking engagements. What’s the old saying? Failure is an orphan, but success has many fathers? That's why it's particularly disappointing for me to throw a little cold water on the wine recovery.... but let me emphasize the adjective 'little' because its a measured mid-year course correction, doesn't change the growth forecast, and I still want to get some speaking invitations.

Finger-Pointing Our Way To Luck in America

When I graduated from college I started the on-campus recruiting process. After putting myself though college for 7 years I was flat broke and I needed a job. I thought I'd get a chance to work on Wall Street; some place like Goldman Sachs maybe? They made $10k a MONTH to start. That sounded fair to me. Sadly, I woke from my dream to discover Wall Street didn't recruit from Sac State. They only recruited from the top 1% schools and Sac State was clearly in the 99%.  I struck out on all the other interviews too. On the outside I blamed the 11.8% unemployment rate we suffered at the time, but on the inside "no-no-no" wasn't doing much for my self-confidence. I wanted to finger-point but I needed to make a living.

With one last interview scheduled, that with a company for which I didn't even want to work, I got a job offer. Even if it wasn't my dream job I can't begin to describe how good that felt. I got a job! I may not have been in the 1% but I was in the top 90%. Somebody liked me! And the job? I was a management trainee for a multinational bank getting a starting salary of $11,500.00 ..... a month year ....... $11,500 a year!

Imagine my surprise when recently a good friend with an alcohol enhanced and vocal political viewpoint got on a bit of a rant and told me <with a face that looks like he sucked on a lemon and pointing a bony finger at my nose >..... "You greedy bankers are what is wrong with America."

Now I will take credit for global warming, mid-west storming, and the sun when it doesn't come up in the morning, but this? It's not my fault. I never got my Wall Street dream job but today, with another 10,000 job cuts estimated for this year on Wall Street, I'm reminded sometimes luck is when the things you want, don't happen and things you don't want do happen.

Neo-Prohibitionists are Alive and Well

Taxing alcohol will save us from all sorts of ills, or so many would have you believe. Here's a quote that got my attention this past week:

 "Returning alcohol taxes to their 1977 levels (when the government collected $57 in 2009 dollars per gallon of alcohol) would raise an additional $18.5 billion in revenue across all levels of government -- and also lead to reductions in drunk driving, violent crime and disease."

But things aren't always what they seem. Remember the recently concussed CARE Act? ..... "To keep your kids and communities safe." Somehow I don't think that bill was about our kids or communities. I know, call me a cynic.

Rodney King & the Evolution of the Wine Consumer

The passing of Rodney King this past weekend was a sad event for me. I remember being so impressed with the man when he stood up to the cameras after the jury acquitted his attackers sparking the LA riots. He said simply, "Can't we get along?"  How many of us in that circumstance, having just been denied justice would have used that platform to complain about the verdict instead of being willing to utter even a single word to plea for a better world? It's hard to believe that was 20 years ago in April but it was, and the echos of  Rodney King's choices that day are still positively embedded in American Culture. He's left a positive mark. Time does move on though and with its passing, there is an opportunity to reflect on the evolution of events and cultures. While wine seems so far removed from the subject of Mr. King today, his appearance in the national press has given me a chance on this Father's Day to reflect on the past 20 years economically and the evolution of the wine consumer we're witnessing.

You Might Have to Wait Until 2013 to Close your Vineyard Purchase

As a native Californian, we were forced in grade school to make the pilgrimage to Sutters Mill in Coloma to see where John Sutter and James W Marshall discovered some yellow flakes in the mill tailings; starting the California Gold Rush. It was a long bus ride to look at a stream and an old log mill that we couldn't even climb on. There weren't even snack bars there. And if that wasn't a big enough rip-off, I didn't see any gold there.

As we know from history, there were some who hit it big in the Gold Rush. But the ones who probably did the best weren't the ones who dug for gold. They were the ones like Levi Strauss who sold the miners their provisions as the costs of essentials like flour and dried beans skyrocketed. It was a seller's market. What does that have to do with the wine business?