Tuesday, December 14, 2010

Wine Comparisons: Building Unrealistic Expectations or Making Unfamiliar, Familiar

Brad Post:

Not long ago I received a phone call from a public radio news reporter who was in the process of writing a story about an up-and-coming new red wine grape cultivar (Marquette) gaining in popularity.  Echoing an earlier comment, he referred to this relatively new wine grape as the “Cabernet Sauvignon of the Midwest” which struck me as a bit of an exaggeration, to say the least.

Great hype for a new wine grape but is it a realistic comparison?

As new wine regions continue to build it is important for us to pause to consider the consequences of short-term marketing gains over long-term brand success.  For this example, is it in the best long-term interest of a wine region to compare Marquette to Cabernet Sauvignon?  More to the point, is it a realistic comparison?  And if so, in what ways are Marquette and Cabernet Sauvignon similar?

Hyperbole aside, is the comparison constructive to building a new wine region?  Granted many wine consumers are probably familiar with Cabernet and it may be a way to bring them in to our wineries as a way of making our local wines seem more familiar.  But what about knowledgeable wine fans – they will immediately notice that our Marquette is not very much like Cabernet Sauvignon and may get turned-off in the process.

Frankly, a more apt comparison, if a comparison is warranted may be with the bracing, young wines of Italy.  Food friendly, acidic, and delicious!

Mental Short-Cuts
In our haste to build a new wine culture it is tempting to compare the unfamiliar to the familiar.  I’m guilty of that myself.  In a busy tasting room with many bellies to the bar, I’ve relied on mental short cuts to help my customers relate to our unfamiliar wines.  “If you like Muscato, you’ll like this one…If you like Pinot Grigio, you’ll like that one…and if you like Cabernet you’ll like this one”.

The ‘This is Like That’ approach to wine tasting is efficient, in terms of expediency, but does it help us build brand identity for wine grapes like LaCrescent, Norton, or Seyval if we keep comparing them to other, traditional vinifera?

Perhaps we have yet to fully develop the language to describe our wines; common sensory descriptors that allow us to share with our customers our excitement for the wines we make!  This is prime real estate for our wine science, wine service programs and state wine industry associations.

Growing Pains
The problem with building high expectations comes with fulfillment.  In other words, if we fall short in our delivery, then the disappointment is felt more potently than if we managed expectations more modestly. That’s not to say that our wines are not great – they are!  It is a matter of properly framing and shaping expectations so our customers understand our wines are distinct and to help them appreciate the uniqueness.

Not lost on me is the comparison of the potential prominence of regional wine grapes.  California is awash in Cabernet Sauvignon and maybe, one day, the Midwest landscape will be dotted with Marquette.

The “This is Like That” approach, a heuristic, does provide a short-cut way of introducing our wines to tasting room visitors.  It is particularly helpful during busy periods but probably undercuts the notion of building brand identity.  In the long-term, I’d like to see us move away from the familiar comparisons to a more cultivar/varietal-centric approach of new wine introductions.

The process of building a lexicon of common sensory descriptors for our local wines, shared among wineries, and conveyed through a thoughtful marketing program and disseminated widely should, in the long-term, bring about the kind of brand recognition we seek when comparing our wines to traditional vinifera.

We look to industry leaders: wine science programs, state wine/grape associations, tasting room trainers, and affiliated wine marketing advocates to lead the way.

Add your voice to the discussion on the Winedustry Forum:  http://www.winedustry.com/forum/viewtopic.php?f=47&t=70

Tuesday, December 7, 2010

Food, Wine and Food Again...

Terry post:

To me it is axiomatic that wine is best when paired with food. Over my lifetime the moments of dining pleasure which are closest to my heart are those which feature fine food combined with fine wine.

At Citronelle in Washington DC, I was brought to tears by a Morel bisque with seared Foie Gras served with a Sauterne.

At Restaurant 213 in Fruitland MD it was white asparagus topped with a soft poached egg and sauce b├ęchamel served with a French Montrechet.

And, in Paris so many years ago in a sidewalk bistro it was fresh local sausage, hard cheese, warm bread and a very ordinary red from Burgundy.

In these cases, and many more like them, there was an almost mystical combination of food and wine which reinforced the other creating a product far greater than the sum of the individual parts.

How is this?

Great food and great wine are often enjoyed in the company of friends which provides an additional dimension to the experience beyond the taste buds, beyond the nose and deeply and directly to the heart. There is a primal need to share food among friends and family. Why else are our primary celebrations enjoyed around the dinner table? Neither Christmas nor Thanksgiving would be so deeply ingrained in us were not the sharing of food, and wine, an integral part of the ritual.

The family ritual regarding food may explain why there are so many cookbooks to be found in the bookstore and the blossoming of cooking show on television. But like so much of popular culture, both the books and television shows miss the mark entirely: they are focused on the visible - the production of food and that is precisely where the ritual IS NOT.

The ritual of sharing is about the "why". It is about, "why we cook", "why we share" and, "why we love".

Cook books and television shows may show us how to cook but the utterly fail to explain why we cook.

It seems simple: we cook because we love our friends and our family. And wine. Well, wine just makes it a little more special.

~ Terry

Saturday, December 4, 2010

What Keith Richards and Mick Jagger Have to Tell the Wine Industry About Endurance


Terry Post:

Mick Jagger and Keith Richards have worked together for almost half a century composing and playing music. Theirs has been a creative collaboration of enduring longevity in an industry where disagreements have dissolved many musical groups during their extended tenure.

Small wineries are not that dissimilar to Messrs Jagger and Richards in that essential element of the enterprise is creativity. Creating music and creating wine takes imagination and a lot of work.

Many small wineries are formed by a small groups of individuals who bring different qualities to the business such as winemaking and business: good teams bring complementary skills.

Mr. Jagger and Mr. Richards bring differing qualities to their creative relationship and are greater than the sum of the parts. Each has had an on-again, off-again solo career. What do you remember most - their solo efforts or their combined efforts in the Rolling Stones?

They also have a lot in common having known each other since they were boys - at aged 66 and 67 they have a 50+ year relationship. And, perhaps most importantly, they are good friends.

Ownership teams of wineries should ask themselves if they have the same sort of chemistry, background, and relationship as Jagger and Richards. Are they friends? Do they have a lot in common? Do they have a long relationship?

What then can a small winery do to engineer its management team to ensure success for the long run? Here are my suggestions:

#1: Founding members should all have "skin in the game". That is, they should all have a financial stake in the success of the business side of the enterprise. This usually means that multiple individuals put cash into the business.

#2: Founding members should bring complementary skills to the enterprise. You don't need four winemakers - you need one. There should be a sufficiently wide-array of technical and management skills on the team.

#3: Founding members should already have a long term relationship. I don't mean to imply anything intimate. They should already know one another and should have a long, and I mean LONG, relationship.

Bottom line: Long term success in the music industry or wine industry requires that the senior management team have common goals and complementary skills. If yours does not - it might be time to reform that team with the goal of sustained performance.

~ Terry

Photo credit: uncredited liner art from the 1992 Keith Richards solo album, "Main Offender"

Saturday, November 27, 2010

What New Coke Has to Tell Wineries About the Wine Tasting Process


Terry post:

It was 1985 when the Coca-Cola Company introduced a new formulation of Coke. The re-formulation was an instant failure with the public. In a matter of only a couple months the Coca-Cola Company back-tracked and re-introduced the old Coke formulation as Coke Classic while maintaining the New Coke formula. The two products existed side by side until 1992 when the New Coke was dropped from the American line-up leaving Coke Classic - the old formulation - as their primary product.

How did the Coca-Cola Company make such a huge miscalculation? How is it that they were willing to sacrifice so much brand equity switching from a reliable flavor to a new, and allegedly improved, flavor? The answer: the data told them to do so.

In 1945 the Coca-Cola brand owned 60% of the domestic soft drink market. By the beginning of the early 1980s that huge margin had shrunk to a much smaller 25%. Management saw that market shrinkage as a problem - a big problem.

Management began a review of internal processes, procedures and products. The result of that review was a decision to tweak the formulation of Coca-Cola to something less acidic and sweeter, favored by younger consumers, than the long standing formulation. One of the critical pieces of information used by decision makers was the results for thousands of "sip tests" - tests which broke strongly in favor of the new formula.

There was, it seemed, a systemic fault with the testing methodology. Consumers don't buy cola to drink it a sip at a time. What tastes good in a very small sample may grow tiresome or unappealing when consumed in larger quantities. In short, the test methodology did not meet a critical criterion of testing: representing the actual user's environment. People drink cola by the can - not the 1 ounce sip. Despite strong support for the "New Coke" in the sip tests it bombed when consumed by the can.

A few weeks ago I visited several wineries while visiting my brother in Iowa and in each location I was presented with a similar opportunity to taste the wines: a cheerful wine rep pouring small, 1 - 2 ounce, samples of wine one after another while standing at a counter.

So here is something to ponder: Do wineries provide a realistic taste testing opportunities for buyers, or are they creating their own "New Coke" problems?


The Coca-Cola Company failed by relying too heavily on the results of sip-tests which were not representative of how its customers used their products.

The overwhelming majority of wine sold in the U.S. is consumed with a meal.

Wine sampling should be more closely aligned with how wine is consumed so that the customer gets a more realistic representation of the product. This is more important for places like Iowa where the local wine varietals are not known or understood. How many times have you been asked what to serve with Foch?

I could easily imagine a winery providing small, 1 ounce, serving of a food (pasta, slivers of meat, cheese, vegetables, etc) which pairs well with the wine being sampled.


Yes, it would cost more. Yes, it would take more time. Yes, it would be more representative of how the wine will be consumed at home. Yes, it would lead to more satisfied customers.

Bottom line: Absent silly local laws against this common sense approach wineries should make their sampling process more representative of how it is consumed at home. Sample wine with food.
~ Terry

Saturday, November 6, 2010

Seven Springs Vineyards, 2010 Sauvignon Blanc


Brad Post:

I live in a small town in Iowa.  Simply and practically designed, my home was built in the mid-1800’s in what might be considered the old farmstead style, where utility trumped sophistication.  The kitchen area, built as an afterthought, an addition on the south side of the home sits just beyond my dining room where my wife, Jill and two friends and I sat a few evenings ago.

Nine months ago I couldn’t have imagined this night.  Nine months ago, February 15th to be exact, an innocuous note arrived in my LinkedIn in-box from Tim Pearson.  Earlier I had asked to connect with Tim on LinkedIn, a professional networking website.  His friendly tone and welcoming approach, an asset to any entrepreneur, didn’t feel forced or phony.
 
Tim and Vaughan Pearson

In some places in the wine world, where egos soar, here a man from England with a passion for wine and a newly developing winery and vineyard in South Africa took the time to make a connection with a wine geek in Iowa, USA.

While his winery was being built I got to know him better though Twitter chats, Facebook conversations, and during a Skype call.  Some people just have a special ability to bring people in and to lift them up.  Although promoting his new business, Tim’s genuine approach and zest for the South African wine industry always struck me as sincere.  So much so we (The Two Wine Brothers) asked him to be our first online interview back in April.

Two Part Interview – Links:

A couple months ago, before Tim’s winemaker Riana left for Oregon to learn the Pinot Noir trade, he let me know he was planning to send Two Wine Brothers a couple bottles of his first release of Sauvignon Blanc.  We were to be some of the first wine writers to have an early taste of his new wines.

Early this week I received the shipment of two bottles of Sauvignon Blanc from 7Springs Vineyards.  And on Thursday we invited our two friends to share this bottle while I critically tasted for this article.  In addition, I bought a different bottle of Sauvignon Blanc from California to taste, as contrast, after our initial session.

Wine Geek Disclaimer:  We tasted the wines in the open, not blind, but I did apply my WineSmarts™ - Wine Descriptive Sensory Analysis worksheet to assess the wines using the four step process: Step 1: Visual analysis, Step 2: Aromatic analysis, Step 3: Palate analysis, and Step 4: Conclusions.

After months of anticipation the four of us gathered around our farmhouse dining room table, covered with a white cloth, and began our tasting. Here are my notes:

Seven Springs Vineyards, 2010 Sauvignon Blanc, South Africa.


The new Sauvignon Blanc was packaged in an attractive dark emerald Burgundy bottle with punted base and screw top.  The cream colored label with gold 7Springs brand and easy to read text evokes a somewhat sophisticated impression.

After traveling half a world, resting for a few days, the wine was brilliantly clear, light straw colored and possessed an incredibly sumptuous viscosity.  Glass raised, wine swirled, and I took my first whiff.  BIG, HUGE bell pepper aromatics!  YUM!  Underneath and more subtle are notes of grass and citrus.  INVITING.  

A restrained fruity character of apple and pear and a suggestion of sweetness captured my attention.  The olfactory combination of bell pepper and tree fruit was a winner.  The flavor was very good but the overall sensory experience was amazing.  Approaching 14% alcohol, this wine was nicely balanced, a pleasure to drink, and has a NEVER ENDING FINISH.  The 2010 Seven Springs Vineyard Sauvignon Blanc is BIG, ROUND, and LINGERS in a long, sexy delicious finish.

Criticism:  One major criticism leveled against the Seven Springs SB by one of the tasters, and subsequently agreed by the rest of us, was the “biggest disappointment [with this wine] is that we won’t be able to have it again” – because they are not yet shipping to the USA. 

Post Tasting Comments:  We tasted the Seven Springs Vineyards 2010 Sauvignon Blanc against a leading California SB.  The taste comparison really illustrated the differences viniculture and viticulture plays in the expression of wine.  The South African, Seven Springs Vineyards Sauvignon Blanc was the overwhelming favorite!

Sunday, October 17, 2010

NV Harthill Farms Cabernet Sauvignon, California

Terry post:

Bottom Feeder Series

This begins my review of wines which are priced at $5.00, or less. These are the bottom shelf dwellers or found in discount bins everywhere: they are the wines which we generally avoid. For the next few weeks I'll subject myself to sampling these low-cost wines. So here goes.

There is something called the "halo effect". Wikipedia describes the effect thus, "The halo effect is a cognitive bias whereby the perception of one trait (i.e. a characteristic of a person or object) is influenced by the perception of another trait (or several traits) of that person or object. An example would be judging a good-looking person as more intelligent."

I point out the "halo effect" as I sampled this Whole Foods wine one Saturday evening as I watched my Auburn Tigers dis-assemble the Arkansas Razorbacks.

My impression: Light red in the glass - quite pale for a Cabernet Sauvignon. Cherries on the nose when sloshed in the glass but nothing else. No acidity. No tannins. The wine is one-dimensional offering with cherries standing alone without any backbone. Unappealing. Not recommended.

Okay. "Halo Effect" wasn't an issue with this low-priced offering from Whole Foods, but I'll be mindful of the issue should I sample more wine during the remainder of the college football season.

$4.99 at Whole Foods, Reston Virginia

~ Terry post

Thursday, October 14, 2010

Wine Bonding

This past weekend my brother, Terry, visited Iowa to see mom, who for the past year has lived near us in Vinton, and to spend some quality time wine-bonding with me.

As we were preparing a taco feast for a house full of my sons friends on Friday night I opened a bottle of Traminette I made in 2009. Some may know Traminette as the signature white wine grape of Indiana. Traminette, like its Gew├╝rztraminer cousin, is spicy and floral and delicious and grows well in parts of the Midwest. This particular Traminette is a lightly sweetened (about 1% residual sugar) and was cool fermented in order to bring out its floral and tropical fruit qualities. We bonded over two bottles.

Crystal blue skies, and near record warmth, welcomed us on Saturday and after removing my Wrangler soft top we headed off on a winery road trip. We planned to make four stops: Sutliff Cider, who makes some of the very best hard ciders I’ve ever had, ultimately was scratched from our list because of time constraints. So our first stop was Cedar Ridge Winery and Distillery, located between Cedar Rapids and Iowa City.

Not long ago Cedar Ridge Winery and Distillery was located in downtown Cedar Rapids but because of the devastating floods of 2008, they moved their operations to their nicely situated vineyard location. From the highway Cedar Ridge is a beautiful building surrounded by vines and situated atop a hill. Once inside we were greeted by the tasting room manager, who was multi-tasking tastings for a full tasting room.

The tasting room was nicely adorned and we were treated to a full tasting, including a few sips of three of their spirits: bourbon, brandy, and a lamponcello. The red wines were a combination of California sourced and locally grown grapes. The St. Croix was one of my favorites – a challenging grape to make into good wine. Their locally grown white wines were all pretty good. My favorite was probably the Brianna, although it was a little sweet for my taste, but a nice wine.

Our second stop was going to be Ackerman Winery in the Amana Colonies but the town was so busy on this beautiful day that we couldn’t find a parking spot. Generally, when people think of Iowa wine they think of Amana wines – meaning, sugary fruit wines. Much has changed throughout the state but in Amana there are still fruit wines. And if you want to taste spectacular fruit wines, wines whose essence captures the fruit it was conceived from, then you need to taste Ackerman wines. The Raspberry wine is a perfect example of how to make fruit wine and was a 2010 Gold Medal winner at the Iowa State Fair.

The final stop of the day was at Fireside Winery. (Disclaimer: I am the winemaker assistant at Fireside Winery). I wanted to take my brother to the winery where I work and give him a thorough tasting and a tour. We ended up sitting on the back porch area with a bottle of Vignoles and appetizer.

Cassie, the marketing manager, was our tasting room attendant during our visit. She provided us with a full tasting of their wines. Terry said he really liked the Seyval Blanc and Vignoles. After our tasting I took my brother on a tour of the winery and gave him a barrel sample of the, soon to be released, Zinfandel. It was very good!

After a day of Jeep driving and winery-hopping we finally got back home, dry-eyed, sunburned, and pooped-out! Dinner was simple, we were tired, and as we sat on our back porch we waited patiently for the clock to reach 9pm so we could, with some degree of dignity, say it was bed time. 20 seconds after the top of the hour we were all headed to bed!

What a great day of wine bonding!

Tuesday, October 12, 2010

It’s What You Don’t Know That’ll Hurt Your Wine Business.

Brad Post:

Ask most winery owners how much they know about their customers and you’ll likely get the same response I frequently hear: “I know my customers pretty well”. Moreover, most winery owners also claim they know the preferences and kinds of experiences visitors have at their winery.

Or at least they think they do.

Blockbuster, the now defunct video store, once thought the same thing. All it took was one disgruntled customer, who later built another more responsive enterprise (i.e., NetFlix), to run the former video rental business into the ground and out of business.

Paying attention to our customers and understanding their experiences is crucial to keeping a business running effectively. We know our customers – or at least we think we do, but more accurately, we know our “regular” customers.

What do we know about those visitors who never return?


When I was living in Seattle and working at a marketing research company, as research analyst, a challenger to the prominent Seattle coffee giant asked us for help. This new coffee business surely understood the market, just like winery owners do, but they asked us to delve a little deeper and to help identify possible unmet needs.

They understood the business of coffee. They understood they didn’t know everything about their customers. They understood there was a possibility of an untapped market segment they might fill. They asked for research help because they weren’t market research experts.

Ultimately this new business challenger successfully invaded the market space formerly held by the coffee giant and has seized market share. Using qualitative and quantitative research methodologies we were able to uncover dissatisfied customers and key into a new, formerly untapped segment.

It’s what you don’t know that’ll hurt your business.


The danger of believing we know everything about our customers may be our biggest potential pitfall. In the winery business we do everything: we grow and harvest the grapes, run the fermentation operations, do our own bottling, and transport and sell our wines.

Focus on the Fundamentals of Wine.

Wineries should focus on winery related activities not on research. In the computer programming trade there is a maxim that goes like this: garbage in, garbage out. The same adage works for the research business: poorly designed research yields and questionable findings.

Professional researchers understand the complexities of conducting social research. Consumer behavior research requires a comprehensive set of tools that include qualitative methods: interviews, observation, and focus groups; and quantitative methods: survey research (mail or Internet), and even experimental designs (e.g., which communication program is most effective or which label design will sell more wine).

Building a long term research program to assess consumer satisfaction is fundamental to a winery business. Knowing what your customers love and sometimes more importantly, what your visitors do not love, can make the difference between success and failure.

Just ask Blockbuster.

Saturday, October 9, 2010

Two Easy-to-Use Financial Analysis Tools for Mid-West Wineries

Terry post:

Over several glasses of Traminette the other evening my brother and I discussed the decision-making process that is used by winemakers: What grape to plant? Should I buy more hardware? Do I host social events in the vineyard?

That conversation got me to thinking about the low-cost tools which are readily available to assist the winemaker in making business decision.

Two powerful tools are Net Present Value (NPV) analysis and Return on Investment (ROI). Both are quite simple to create and evaluate but don't let their relative simplicity stop you from using them.

Net Present Value is a good tool when you need make one choice from a series of options. Let's compare a situation where you have three options: Option 1 provides for a uniform series of increased profits. Option 2 provides for a large immediate profit followed by no additional profits and Option 3 provides for no profits in the near term with a large profit in the out-years.

Net Present Value does not simply add up the values in the cell - it discounts the value of future cash flows by a user-defined discount rate. (Note: I always use 4.25% in any NPV analysis as this rate is a historical average from 1929 to the present.)

Using the NPV workbook function in MS Excel (=NPV(Interest Rate, Value1, Value2, Valuen)) you are able to evaluate the PRESENT VALUE of all three cash flow streams. In this case, Option 1 turns out to be the most profitable choice among the three choices. Option 3 is the least advantageous as its payout is deferred the longest and the impact of the discount is the greatest.

Return on Investment is a way to calculate the profitability of an investment. In order to calculate the ROI you need two pieces of information: 1) Total Return, and 2) Cost of Investment. Let's use the numbers in the NPV calculation and add the following information: the cost of investment for all three choices was $450.

The ROI calculation is as follows: ROI = ((Total Return - Cost of Investment)/ Cost of Investment).

The total return for Option 1 is $552.75 and the cost of investment is $450. Working through the equation we have ROI = (($552.75 - $450)/$450) or 22%. For Option 2 it is ROI = (($525.68-$450)/$450) or 16%. For Option 3 ROI = (($448.60-$450)/$450) or -.03%.

In this example Options 1 and 2 provide a positive rate of return with the ROI with Option 1 having the best return over the 5 year period. Choose Option 1.

Bottom line: Both NPV and ROI provide powerful insights into business decisions with a few simple steps.


~ Terry

Wednesday, October 6, 2010

2009 Morgan Sauvignon Blanc, Monterey California

Terry Post:

Summer Wine Series

Okay. Okay. Technically I shouldn't be including this Morgan Sauvignon Blanc in the summer wine series as it is no longer summer. But, I bought this wine a few weeks back with the intention of writing about it when it was summers. So, I'll include it under that technicality.

I have a slight bias here as one of my all time favorite wines is the 2005 Morgan "Double L Vineyards" Pinot Noir, Santa Lucia Highlands, California: it is nearly a perfect pinot noir. But, I digress...

My impressions: Light straw color in the glass. Typical Sauvignon Blanc impressions on the nose including citrus, pears, grass and more than a little minerality - most noticeable on the finish. Minerals, acidity and grass on the finish. Very nice.

I paired this with a filet of salmon, which I poached in the wine with sliced oranges. It was wonderful.

Second thoughts: Like a lot of people I have grown weary of pedestrian Chardonnay's and am sampling other white wines to find something else to take it's place. Sauvignon Blanc's, such as this offering from Morgan, provides a more interesting interpretation of the dinnertime wine. With a strong acidic backbone, a stony minerality and a pleasant nose this Morgan is pretty much dead-on as the sort of dining partner with which I could become accustomed. Highly recommended.

$14.99 at The Wine Seller, Herndon Virginia

~ Terry

Saturday, October 2, 2010

What Blockbuster has to tell the Wine Business about the Frailty of Market Dominance

Terry post:

Blockbuster, the movie rental company, recently filed for bankruptcy protection. This is something which seemed utterly
impossible for a company once valued at over $8 billion dollars. For those of you who were napping here is a quick summary of Blockbuster's decline:

1985: First Blockbuster store opens in Dallas.

1994: Viacom acquires Blockbuster for $8.4 billion.

1997: Reed Hastings returns Apollo 13 to Blockbuster six weeks overdue, and is dismayed by the $40 late fee.

1998: Reed Hastings founds Netflix.

1999: Viacom holds Blockbuster IPO, valued at up to $4.8 billion.

2000: Blockbuster declines several offers to purchase Netflix for a mere $50 million. Instead, the company signs a 20-year deal to deliver on-demand movies with Enron Broadband Services, a subsidiary of Enron.

2001: Enron files for bankruptcy amid accounting scandal.

2003: Netflix posts first profit, earning $6.5 million on revenues of $272 million. Redbox launches a kiosk rental service.

2004: Blockbuster enters online DVD rental market. Netflix CEO Reed Hastings tells analysts in an earnings call, "In the last six months, Blockbuster has thrown everything but the kitchen sink at us." The following day, Hastings receives a package from Blockbuster. Inside: a kitchen sink.

2005: Blockbuster launches a marketing campaign touting its new "No Late Fees" policy. Subsequently, 48 states launch investigations into the program, charging Blockbuster with misrepresenting its late fee policy to customers. Blockbuster settles for $650,000.

2006: Blockbuster, now valued at $500 million, surpasses its goal of two million subscribers for its online platform. Netflix reaches 6.3 million subscribers by December.

2007: Blockbuster hires new CEO Jim Keyes, formerly of 7-Eleven. Keyes decides to roll back the company's Total Access plans. "Clearly our spending on that one channel was exceeding our returns," he said during a company earnings call. After losing a half-million subscribers in the third quarter, Blockbuster announces it will no longer report its subscriber count.

2008: Blockbuster CEO complains about Netflix in an interview: "I've been frankly confused by this fascination that everybody has with Netflix...Netflix doesn't really have or do anything that we can't or don't already do ourselves."

2009: Blockbuster rolls out Blockbuster Express, its kiosk system designed to compete with Redbox.

Looking at the summary one thing jumps out at me: distribution channels - let me explain. Blockbuster, Netflix and Redbox are all about distributing the same content via different channels. Each company sells essentially the same product (movies) via different means to the same end user. Blockbuster's wildly high valuation in the 1990's was a reflection of how dominant they were at brick and mortar distribution at that precise moment in time.

Blockbuster
was the brick and mortar channel leader, followed by Netflix which dominates the on-line channel (or electronic distribution) and Redbox which is smaller (less costly) footprint version of Blockbuster.

So with a 1000:1 advantage over Netflix or Redbox why did Blockbuster fail to innovate?

Most wine reaches the consumer via a three-tiered distribution system: distributor, wholesaler and retailer. Each layer of the distribution system adds a pass-through cost of some sort to the product without adding perceptible value. Moving a case of wine can easily be done from the winery to the consumer without benefit of costly distributors or wholesalers.

You need only consider how Amazon web services are changing distribution for many small to mid-sized companies.

Amazon Small Business Services has become, effectively, the market maker for many smaller companies acting as retailer and distributor. "Amazon allows businesses to use Amazon’s own order fulfillment and post-order customer service infrastructure, and allows Amazon.com customers to receive the benefit of Amazon.com shipping offers when buying from third-party sellers who use Fulfillment by Amazon." So who needs a distributor and wholesaler when Amazon can do it all?

Well maybe. The Federal and State governments see the sale of alcohol products as a revenue generator and while, currently, wine products don't fit the Amazon model there is no saying that in 30 days or in 2 years that the political landscape will be more supportive of small business - even ones which sell wine.

Blockbuster failed to innovate when they had every opportunity to do so. They had size and market dominance but failed to innovate as business conditions changed leaving the door open for Netflix and Redbox to eat them alive.

Bottom line: Companies with overwhelming market share can become complacent and fail to innovate. Small businesses must innovate and take market share when market conditions change. The challenge for small wineries is to determine what market conditions benefit small, nimble business and to maneuver themselves to exploit those conditions.

~ Terry


Tuesday, September 21, 2010

2008 Chateau Grand Traverse, Dry Riesling, Michigan


Terry post:

Summer Wine Series.

Tomorrow marks the last day of summer, so it is time for me to squeeze in two more reviews before I start digging into my reds and ports as the nights grow longer and darker.

Over Labor Day weekend I had the privilege of driving from DC to Detroit to pick up some furniture which had belonged to my wife's grandmother. This isn't the sort of thing one passes on, particularly if domestic tranquility is important.

While there we visited a Meijers. Note to non-Michiganders: Meijers is a big box retailer along the lines of Target and Wal-Mart. We tolerate Meijers as Fred Meijers - the founder - opened his first store in Greenville, Michigan. Enough history.

I found the Michigan wines and almost everything there was a "late harvest" this or that. I did find one label which looked promising: a Dry Riesling by Chateau Grand Traverse.

My impressions: Pale yellow in the glass. Thin citrus on the nose is found after vigorous sloshing about in the glass. Citrus is prominent first across the palate with pear following closely. It finishes with an assertive acidic backbone. Very nice.

The Chateau Grand Traverse Dry Riesling is a wonderful offering from Michigan and worth a try if you can find it. With only 1,600 cases produced it is unlikely you'll find it outside of Michigan. But, if you do find it - you'll find it a pleasurable partner at dinner time.

$10.99 at Meijer "Shifty" Acres

~ Terry


Monday, August 30, 2010

NV Muscat de Beaulieu, Beaulieu Vineyard, California

Terry post:

What is a dessert wine? The obvious answer is that it is a wine one enjoys as dessert and I would speculate that very few people have enjoyed dessert wine for that purpose.

My personal preference for after dinner sipping is a vintage Porto (along with a good cigar if at all possible). That said, there is just something classy about ordering a small glass of dessert wine in place of that slice of double chocolate cake.

My impressions: Medium bodied with a strong alcohol presence - almost overpoweringly so. The alcohol is the predominant characteristic of this wine. Not well balanced. It is a simple sweet wine giving apricots and raisins to those with patience. Needs to warm up a bit to get the most out of this wine - it is far superior at room temperature than when slightly chilled. A hint of oak on a surprisingly brief finish.

Perhaps I expected too much from this wine: Always been a fan of the BV brand. Rather like the Porto's that my brother and I sampled earlier this year with far too many clunkers found en-route the fantastic 2007 vintage.

Is it a bad wine? No. Is it a great wine? No.

Like so many other wines I have sampled, it is a competent offering from a dependable winery which will reward the drinker with a few moments of pleasure - but is not the wine dreams are made of and its pleasure is short lived.

18% alcohol

$11.99 for 375 mL bottle from The Wine Seller, Herndon Virginia

~ Terry

Sunday, August 15, 2010

Busy Summer - Updates

Brad Post:

It’s been a very busy summer and the frequency of my postings has stagnated, much like the hot and humid weather we’ve experienced in Iowa, for the past few months. The passing of a cold front today is giving us the opportunity to open windows to air out the house and feel a hint, a promise, of the upcoming season change.

Harvest
Yesterday, almost a month earlier than previous years, the harvest season began in earnest with a full day of crushing and pressing Brianna, a cold-climate white grape. The Fireside Winery owners decided to upgrade their crush pad equipment with new separate destemming machine, a vibrating sorting table, and a crusher (really doesn’t crush but actually just splits the berry to release the juice) and a wonderful new positive displacement pump (gently moves the must).

Fireside Winery Family Sorting Brianna Grapes
High quality equipment combined with sourcing the best possible grapes and keen attention to detail, via sorting out the stems and bad berries will yield an even better wine product. We ended up processing about 1,000 gallons of Brianna! If you haven’t had Brianna yet – seek it out!


Road Trip
Maiden Rock, Owner & Winemaker
We took a long weekend to see a Jack Johnson concert near Minneapolis a month ago and visited wineries along the way in Wisconsin and Minnesota. Crossing back and forth across the Mississippi a group of four of us enjoyed good and sometimes excellent wines.

With map in hand we began in Marquette, Iowa visiting the Eagles Landing Winery downtown and were treated to excellent service and amazingly well-crafted wines. This winery is establishing a strong reputation of creating award winning wines! One of our very favorite stops and one that we were sort of reluctant to visit were Maiden Rock Winery and Cidery near Stockholm, Wisconsin.

Amazing apple wine and hard ciders and warm and thoughtful owners made the experience exemplary! If you have a chance to make the trip – don’t hesitate and buy more of the hard cider than you think you’ll want – we ran out too soon.

Business
My wife and I launched an online, daily news magazine for the wine industry this summer, called Winedustry – wine news for the “other” grapes. During the past couple of years I have grown increasingly frustrated by the lack of attention given to the non-traditional (non-California) wine industry. Most wine industry journals focus almost entirely upon this market.

After months of preparation, on August 2nd we launched Winedustry! Building awareness among the professional wine industry community is taking a lot of my time but is incredibly rewarding. We’ve been fortunate to find State Field Editors for several states and as of today we have Editors for these states: Iowa, Nebraska, Minnesota, Illinois, Ohio, Maryland, and Virginia. Our State Field Editors are responsible for reporting the news about their states wine industry.

Upcoming
In the upcoming months I am sure I’ll get back to posting stories about the harvest, new wines, and my experiences judging wine competitions, and visits to wineries across the country.

Thanks for reading and supporting Two Wine Brothers. And I hope you take a moment to check out Winedustry - www.winedustry.com

Cheers,
Brad Johnson

Saturday, July 24, 2010

2006 Willowcroft Farm Vineyards, Cabernet Franc, Virginia

Terry post:

There are nine grades of cork exported from Portugal for the purpose of stopping wine in bottles. Those grades are:
  • Flor

  • Extra

  • Superior

  • 1st

  • 2nd

  • 3rd

  • 4th

  • Agglomerated

  • Colmated

I bring the grades of cork up for discussion because corks are so very important when it comes to the health of a bottle of wine. A good cork retains the labor of the winemaker while a bad cork provides a route for oxygen to invade and destroy.

The truth of the matter that bad corks are rare. Really rare. I have not pulled a bad cork in ages, until this evening. When I pushed my corkscrew into the 2006 Willowcroft Cabernet Franc, the cork moved down the neck of the bottle - I was able to retrieve the cork, but I had my concerns about the poor seal.

My impressions: Light ruby in the glass. Almost nothing on the nose, with repeated sloshings being necessary to release a hint of cherries. Moderately tannic. Short dry, herbal finish.

Second thoughts. It is my belief that a 2006 Cabernet Franc is is an old wine - likely past its prime. So, I should not be too disappointed with the results - cork problem or not.

My first bottle from Willowcroft was a surprisingly approachable Riesling with food friendly characteristics.

I has hoping that this Cab Franc would be equally pleasant. It brings me no pleasure to observe that is was not.

~ Terry

Tuesday, July 13, 2010

2008 Willowcroft Farm Vineyard, Riesling, Virginia

Terry post:

Summer Wine Series

According to the maps app on my Droid phone, Willowcroft Farm Winery lay at the end of a three-mile dirt road. As my wife and I bounced down the narrow dirt road I seriously questioned whether my navigation unit had lost its digital marbles.

Fortunately for me Willowcroft is three miles down a dirt road and after the trip I can report that the wines are very much worth the bumpy ride.

We arrived around 2:00 p.m. this past Sunday afternoon and were struck by the beauty of the site. A lot of wineries are beautiful to view but a scant few have a gorgeous view across an adjoining valley and the Blue Ridge Mountains from its hillside location. Willowcroft does.

Working behind the counter, Chuck (very helpful) provided us samples of eight wines: five whites and three reds. We tasted an un-oaked Chardonnay, Seyval, Albarino, Riesling, Vidal Blanc, Red blend, Merlot and Cab Franc for only $5 per person. The Riesling and the Cab Franc were far and away the most interesting. I would note for my friends in Iowa that Willowcroft is offering a Traminette this year for the first time - while I wasn't able to taste it, Chuck thinks that it is a good wine. Maybe next time...

My impressions: Pale in the glass. Green apples and citrus profoundly on the nose. Medium bodied with sufficient acidity acidity to stand up to more than the typical Riesling pairings. Best when cold. Flattens out a little when it warms up. Ever so slight hint of tannic astringency at the end - grape seeds maybe? Moderately long citrus finish. Recommended.

Second thoughts: The typical pairing for Riesling is with spicy curry dishes, Chinese take out and other entrees which don't seem to fit any other wine. At 1% RS this is not a typical Riesling and combined with an almost Sauvignon Blanc like-backbone it is deserving of more upscale dining considerations than "take out". I think this wine would stand up very well with pasta dishes with butter or cream based sauces - particularly were seafood in the mix. Don't get me wrong: this is not a razor sharp Chardonnay. But it is balanced so nicely it would be a shame were not its full potential realized.

$15.99 at the winery.

~ Terry