Grapevine: The State of the Largest Wine Consuming Nation
Whatever happened to the artisanal goods of years past? Where have the locally grown and produced products gone? With all the talk these days about farm-to-table and farmers markets, the vast majority of products we purchase and consume are controlled by mega companies.
When you walk into your local grocery store, what brands do you see? The evolution of food production and marketing changed from hyper local products through the 1960s to dominant national brands in the 1990s. Today, that evolutionary process has resulted in more store shelves dominated by private label brands. (Think ShopRite eggs or CVS toothpaste.) The economics are simple: store brands are less costly to sell, carry lower prices and are more profitable to stores than local or national brands.
Across the United States, wine shops are evolving in a similar fashion. Small producers and national brands compete for shelf space. Many stores sell wines that are private labeled, produced by mega wine producers sans a mega corporation label.
All of this change makes for a dynamic and changing wine market. As Americans consume more wine and develop brand loyalty, the wine industry is feverishly seeking to carve out its distinct niche and to capitalize on this growing market.
Here’s my view of the state of the wine industry today.
My opinion is that it is influenced primarily by two 21st century phenomena: polarized supply sources and micro-focused marketing.
Polarized supply sources:
– More so than in other industries, wine market share is a battle between small producers and industrial giants. There are less hand-crafted wines and significantly more mass-produced wines. Fewer than 2 percent of all wineries in the United States account for 84 percent of all wine production.
– Last year Americans consumed 700 million gallons of wine (13 bottles per year per capita), more than any other country. This is a huge demand, which is impossible to satiate by small producers. The arithmetic: the average small winery production is less than 5,000 cases. The number of wine companies in the United States is about 9,000. Therefore, to meet the current demand would require nearly 33,000 small producers. This huge void can only be filled by the behemoths, as noted above.
– Where do the two percenters source such a vast volume of wine? Domestic production is insufficient. Increasingly they rely on bulk wine juice purchased in the open market. Chile, Australia and New Zealand export huge vats to United States docks in mega barrels and bulk tankers; only bottling and labeling take place stateside.
Micro-focused Marketing:
– The universal tenet of marketing across all products has always been branding. Establish a name, build a reputation and then work incessantly at maintaining loyalty. In the American wine industry, consistency and price have been the benchmarks of marketing efforts.
1. Consistency. Americans are creatures of habit. They want the same fast-food burger wherever and whenever they travel in the United States and they expect no less from their wine. They expect a consistent product that is available wherever they purchase their favorite wine and a consistent taste from vintage to vintage. Mega producers go to great lengths to deliver sameness.
2. Price. We don’t like to pay a lot for our favorite wine. At the local wine shops in our home towns, 80 percent of all wine consumed is priced under $10. On store shelves many of these labels are ubiquitous whether you walk into a wine shop in Portland, Me. or Portland, Ore.
– Labeling has become the mantra for marketing wines. Cute pet names or pictures
(Yellow Tail, Dancing Bull); sexual connotations or images (Marilyn Merlot, Ménage a Trois); and sensationalized names (Fat Bastard, Arrogant Frog) all seek to tantalize consumers and stand out from the competition, regardless of quality.
We all have an image of a bottle of wine being produced in a bucolic setting by a family winemaker, nurturing each bottle of wine to perfection. We all need to change our perception.
Nick Antonaccio is a 35-year Pleasantville resident. For over 15 years he has conducted wine tastings and lectures. He also offers personalized wine tastings and wine travel services. Nick’s credo: continuous experimenting results in instinctive behavior. You can reach him at nantonaccio@theexaminernews.com or on Twitter @sharingwine.
