Wine in a recession: Winners and losers

Even during a depression, people keep drinking.

This was true in the 1930s -- one of the main arguments used to repeal Prohibition was that a revitalized alcohol industry would stimulate the economy.

And it's still true today. The most recent statistics from ACNielsen show that wine sales continue to rise, and wine sales in the $12 to $15 range are rising faster than low-end sales (below $6).

But there will be more losers than usual, and not always because of sales figures. Many wineries have needs for continuing credit. Keep in mind that farm failures are often a symptom of depression, as farmers of all types operate with little safety net.

So who in the wine industry is best and worst suited to survive a true depression?

Recession winners:

Distributors: Distributors always win. They'll take less inventory and pass the pain backwards to wineries. Being a distributor is like being the house in Vegas: the only way you can really lose is if people stop playing altogether.

Box wine producers: This format has never taken off in the U.S., despite its popularity in Europe and Australia. But premium boxed wines are great value and Americans who try them will be converted. And who makes the most boxed wines? It's ...

The Wine Group: Constellation Brands basically gave up the low-end of wine to The Wine Group when it sold them Almaden and Inglenook earlier this year. The Wine Group runs a very lean operation and has wider distribution than Bronco, its main competition. That said, Bronco is privately held and vertically integrated and should be just fine as well.

Champagne producers: The expansion of vineyard area for Champagne was well-timed, allowing producers to put the screws to longtime growers on grape prices.

Consumers: There will be bargains. If the economy stays down, $20 will buy you the same quality of wine that cost $50 last year. If you still have $20 to spend, that is ...

Recession losers:

Grape growers: Farmers always lose in a recession. If wineries can't pay the grape prices they want to pay, they'll source wine elsewhere. Look for plenty of 2008 and 2009 wines that used to be single-vineyard or subappellation to be labelled simply "Napa Valley" instead.

Importers: The weak dollar was already a huge problem. A "buy American" campaign -- a real possibility -- would be devastating.

New ultrapremium wines: This is a terrible time to try to establish a price point over $30 a bottle. Discounted wine will be available all over the place.

Bars and nightclubs: People are already going out less and ordering fewer call brands. Modestly run bars will still have solid business, but the profit margins aren't going to be the same. Nightclubs will face a severe winnowing.

Specialty wine stores: Though consumers will keep buying wine, they'll be more inclined to pick it up at a discount at grocery and warehouse stores. Stores that sell only wine need to start advertising their value wines immediately.

Producers of unusual varietals: Consumers are less willing to take a chance on something new when money seems more precious.

Constellation Brands: The company is heavily leveraged after its spending spree of this decade. Constellation's strength is its many market channels, but the worldwide credit squeeze is a bigger problem for Constellation than for other behemoths like Gallo and the Wine Group.

Which presidential candidate is better for wine lovers?

Let me first stipulate that wine is not a great basis for picking a President.

That said, this is a wine blog. Let's try to gaze four years into the future to see which candidate would make wine lovers' lives better. Of course, the main issue is who makes the economy better, because a strong economy means more of us can drink more and better wine.

But let's look at some other issues strictly as they relate to wine.

Barack Obama

Strengths
* Greater support for alternative energy sources could lead to larger subsidies for solar power use -- a boon to wineries, which tend to be in sunny spots. Lower winery costs should mean more and cheaper wine.

Weaknesses
* Less of a free-trade advocate than McCain. Even in small doses, protectionism is bad for fans of European wine. Moreover, the official U.S. trade position in negotiations with the E.U. is usually what Gallo and Korbel want (like the right to call their wine "Burgundy" and "Champagne"), instead of what would benefit U.S. wine drinkers.
* Supports strengthening laws requiring equal access for disabled people -- a real expense for small rural wineries. Some will choose to not open tasting rooms.

John McCain

Strengths
* Wife is a beer distributing tycoon; bound to be sympathetic to large beverage alcohol companies
* Long history of support for deregulation; wine is one of the most regulated industries

Weaknesses
* Wife is a beer distributing tycoon; bound to be sympathetic to large beverage alcohol companies, possibly at the expense of small producers. Likely to vehemently oppose challenges to the three-tier system
* Potential for tougher immigration standards makes wineries dependent on foreign labor nervous. Say what you want about illegal immigrant labor, without it, wine prices will go up and supplies will go down
* Likely to appoint social conservatives to U.S. Supreme Court. Social conservatives frown on alcohol; this could have long-term consequences

So who's better, on balance? It's not obvious to me. McCain has both greater strengths and bigger weaknesses than Obama, who is not an obvious friend to the wine industry or the wine drinker.

McCain is no prude and his wife's fortune came from beer. There's certainly no reason to fear him the way wine drinkers rightly fear the teetotalling social conservatives who support him. At the same time, unless Strom Thurmond returns from the dead, there's nothing worse in Washington for the wine lover (not the wine industry) than a protectionist, and Obama is talking about reopening trade agreements to protect American workers.

I have to go back to the point in the beginning -- who's going to improve the economy the most?

Obama would seem to have a large edge here, and getting larger all the time. McCain has reacted to the economic crisis in unsettling, mercurial ways -- Fire the SEC head! Cancel the debate! -- yet as of this morning he hadn't even read Bush's proposed bailout legislation (or had it read to him, no slight intended as Obama gets briefings too.)

On balance, the wine drinkers' vote, such as it is, probably goes to Obama purely because of his superior grasp of economic issues. But it's just as close a call as the actual election is shaping up to be.

Fox News gives Palin Syrah a Threat Level Orange!

I hope this story stays up on Fox News long enough for everyone to have a good laugh.

Here it is in a nutshell. A tiny wine bar in San Francisco sells a Chilean wine called Palin Syrah by the glass.

Before Mrs. Moosekill burst onto the national scene, it was a "strong seller" at Yield, according to Fox. How strong, we don't know, but generally tiny wine bars go through less than a case a week.

Now, sales are down. Apparently the Democrats in town don't want to order a wine with the name Palin. Logical, cute, no big deal.

I found this story prominently on Fox News' home page with the headline "Stop Wining: Drinkers Pull Cork on Palin." It's front page news.

Here's the lead: "An organic wine from Chile has oenophiles in San Francisco turning up their noses. But there’s nothing wrong with the wine. It’s the name that bothers them: Palin Syrah."

I confess I never heard of Palin Syrah before this story, not that I speak for all oenophiles, those damn liberal elitists.

Here's my favorite Fox sentence from this story by Jennifer Lawinski: "Now that the wine has been unofficially blacklisted by San Franciscans, its place on Yield Wine Bar’s list is threatened."

Oh MY GOD!!!!! Forget the financial crisis, we've got a wine *threatened* with losing its place on the list at Yield Wine Bar!

Threat Level Orange! Awooo awooo! Let's get a hazmat team over to Yield immediately! If we all work together we can solve this political crisis.

No questions from reporters, please, the situation at Yield is entirely too dire.

The baseball wild card ruins September again

Once a year, the baseball curmudgeon appears from his hovel in late September to point out that the wild card has ruined the pennant race, again.

Nobody listens or cares. This is America, home of the third chance, where any moron can be President. We like a World Series that includes the 10th-best team in baseball.

We don't actually like three rounds of playoffs -- the broadcast networks aren't interested in the first round, and lower World Series ratings reflect viewer playoff fatigue.

But we like the fiction that a wild-card team keeps more teams in the race.

Let's look at the impact this year. If there were no wild card, the Tampa Bay-Boston race would be thrilling. Both teams would have thrown more resources into an all-out chase. Similarly, the Phillies-Mets race would require minute-by-minute scoreboard watching.

Unfortunately, all four of those teams appear to be in the playoffs. If the Mets blow their shot, it won't be to their fierce rival -- it will be to the Brewers, a team against which they've never played a single really important game.

How many teams had additional interest because of the existence of the wild card?

None. The Brewers were in the NL Central race and that also would have been more intense without the wild-card safeguard. The Astros thought they were in the wild-card race, and they had a few days in September of appearing to be getting close. But statistically they never had much chance, and their long-term goals would have been better served by trading down in July, rather than trading up.

So in sum, once again, we have two and arguably three great races ruined, and no real additional fan interest. Plus we're saddled with a week of games that even intense fans can't completely follow -- who can watch three 3-hour games a day for a week?

The wild card. It's bad.

Wall Street Journal wine club: Looks like lies to me

The Wall Street Journal announced today that it has created an online wine store, along with a wine club. Sadly, it looks dishonest from day one.

The Journal is not the first publication to try to leverage its supposed integrity into wine sales. The Times of London has had a successful wine club for years. The San Francisco Chronicle -- the only newspaper in the US with a dedicated wine section -- has been running one for the last couple of years.

Readers of the publications can wonder about how much impact the club has on editorial decisions. Will a wine get John and Dottie's approval now because the Journal managed to acquire 5000 cases at a discount?

My bigger problem with the WSJ wine site is that it gives little information about the wines and is even outright deceptive in a couple of cases.

For example, here's the front-page description of The Holdings Cabernet Sauvignon: "Smart California Cabernet 'rescued' from a Napa blend."

Now, what do you think that means? A Napa Cab-Merlot blend was going to include this wine, but the Cab was so good that the WSJ is selling it on its own?

Noper. If you view the details, you learn that this is a Paso Robles Cabernet that the WSJ claims is usually sold to Napa wineries to "beef up" their blends.

Do we get any proof of this, like the name of the vineyard? No. It appears that the venerable Journal may have just made this up.

In fact, Napa wineries do sometimes add out-of-AVA wine to their blends; up to 15 percent from another area is allowed. But rarely do Napa wineries buy Cab from Paso for this purpose, mostly for pure logistical reasons. Lake County fruit is closer and cheaper. Mendocino County fruit is closer and often of higher quality.

Moreover, the Napa wines that are "beefed up" in this manner are usually the cheap ones.

Here's another example: about Cooper Point Chardonnay, the Journal writes: "Enjoy this exclusive medal-winning Chardonnay from Hahn Family Estate."

Gold medals are a dime a dozen, but it doesn't seem as if Cooper Point has even spent this dime. Click on "View Details" and you learn that Hahn Family Estate has won a bunch of medals for other wines.

Moreover, the Journal quotes a Robert Parker review of a different, older wine from Hahn: "Offers delicious drinking and excellent value." In fact, Parker has never reviewed a Cooper Point wine.

I could also complain about how the Journal's 12-bottle mixed case offer doesn't tell you exactly which wines you're getting. But I'm not willing to spend $100 to find the details. Good luck if you do.

Let's hope the Journal cleans up its act. Deception like this builds distrust in the wine industry.

Joy of Sake gets competition

Relations between two heavyweights of sake in the Bay Area -- World Sake Imports, a major sake importer, and True Sake, the world's first sake retail shop -- have always been a little standoffish.

They need each other because True Sake sells some of World Sake Imports' products. But True Sake stopped actively participating in World Sake's biggest event, the gigantic Joy of Sake tasting, a couple of years ago.

True Sake is staging -- or upstaging, if you will -- its annual event to directly compete with Joy of Sake. The third annual Sake Day event will take place Oct. 1 at Fort Mason, a large site. Tickets are $85, which gets you some sake-paired food as well as the chance to blind-taste a bunch of sakes.

Joy of Sake is on Oct. 23 this year at Galleria Design Center -- a somewhat smaller (but more stylish) venue than in past years. Tickets are $75.

Does the Bay Area sake fancier have enough in their budget for two big events in 23 days?

I've been to Joy of Sake a number of times and always recommend it, but with reservations: there's never enough water, the food runs out early, and the crowding is annoying. That said, the food is usually great while it lasts -- a number of local restaurants usually make one creative dish each -- and the sheer number of good sakes is unparalleled.

I haven't been to Sake Day, but the description makes it sound like it's targeted at Joy of Sake's weak points. There are fewer food items, but maybe they won't run out as early. Instead of a massive number of bottles on tables, this event offers more guided tastings and even a blind-tasting experience.

On its website, Sake Day is described as "the definitive sake exploration and tasting event in the Bay Area." Clearly the organizers are trying to steal Joy of Sake's thunder.

Is there room for both? I hope so. But the timing showdown is bad for both events. If one event were to move a couple months earlier or later, more people would be likely to attend both.

Sake truce, anyone?

Wine does not go with chocolate!

On Thursday, Crushpad in San Francisco is hosting an event to create a red wine that goes with chocolate.

It's an interesting event for Crushpad, a cool business that helps people make their own wine (for thousands of dollars). It's great marketing.

But it's not going to work. Red wine does not go with chocolate.

But ... but ... but ... all the tasting rooms say, "This wine is great with chocolate." And every year for Valentine's Day, magazines do articles about which wines go with chocolate.

Folks, I have sat in on some really long chocolate-wine pairing sessions: dozens of wines, dozens of chocolates. And I'll tell you, red wine and chocolate just doesn't make either one taste better. The chocolate taste gets more abrupt; the wine tastes sour and hotter. Red wine and chocolate are two great tastes that need to be enjoyed separately.

So why are so many people obsessed with it? I blame wine marketers, particularly at tasting rooms. People like the taste of chocolate and don't understand wine. You put chocolate in their mouth and they taste chocolate, and convince themselves the wine helps.

If you really want a wine to go with chocolate, you need something sweet, because sweets (chocolate or any candy) will make a dry wine taste sour. Try vin santo, the Italian dessert wine. I had an Israeli pomegranate wine that was excellent with chocolate. I've had low-alcohol sparkling muscat that was decent with chocolate.

But I'm still mystified by the whole exercise. Finish your wine. Then eat your chocolate. What's wrong with that?

Best QPR red wine? Syrah

This week I had a conversation with an East Coast wine broker who told me, "Syrah is dead." People will buy Yellow Tail, and they'll buy Central Coast Syrah at $7.99, but sales are flat for higher-end Syrahs. Red wine drinkers are much more willing to buy Cabernet at all price points.

This is crazy, folks. Syrah is the best red-wine value out there right now. If you like Cab, you can always find a Syrah you'll like better at a lower price.

Just for fun I ran a list of 2005 California Syrahs rated 90 to 94 points by Wine Spectator. There are 66 wines in this group. Of them, 39 cost $50 or less; 13 cost $30 or less.

I ran the same list on Cab: 2005 California Cabernet Sauvignons and blends rated 90 to 94 points. There were nearly twice as many wines on the list -- 125.

Of those 125 well-rated Cabs, only 16 cost $50 or less, and just 1 wine sold for $30 or less.

A Cab defender could point to the fact that twice as many Cabs get high ratings. But there's a reason for that: There are simply more top-of-the-line Cabs made. Many wineries issue multiple single-vineyard and/or reserve Cabs. Few wineries have more than one top of the line Syrah.

What I'm looking at is the price performance. I might disagree with Wine Spectator on an individual wine, but in the aggregate, they're a good benchmark of quality. I believe their group of 66 Syrahs is about as good as their corresponding group of 125 Cabs with similar scores.

So why spend more than $100 for a Cab when the same winery's Syrah, at $35 might be just as good?

Folks, if you're spending $300 a bottle, go ahead and buy Cab. But if you're not in that price range, Cab's QPR (quality-price ratio) just isn't very good. Switch to Syrah and you'll be happier -- wealthier too.

What wine goes with moose?

With Sarah Palin on everybody's mind, the wine geek's question is, naturally, what does one serve with moose meat?



Moose is often compared to beef, but a more apt comparison is buffalo, which like moose has a much lower fat content than beef. Moreover, even farm-raised buffalo graze naturally, as does moose, whereas most commercial beef that you buy has been raised and fed in an entirely different, less natural way that changes the taste of its meat.

As always, preparation is key. Moose can get tough fairly quickly because of its low fat content. If eaten as a steak, it's should be better rare, but this is not a popular way to serve it. Burgers are a better way to eat moose (and the Palins apparently like them) because chopping the meat prevents it from toughening prematurely. Long-cooking, especially braising, is another good way of tenderizing the meat.

With a moose steak, I recommend a good Cabernet or Merlot. These are of course classic steak pairings and they're as good with moose as they would be with buffalo or beef. I might prefer Merlot slightly purely as a food pairing because of its gentler tannins and rounder taste profile, but I prefer drinking Cab and I think either would be just fine.



A moose burger, to me, calls for a Zinfandel. Don't overdo the hot sauce, though, because that will make the Zin taste hot. I also wouldn't overwhelm the more-delicate-than-you-think moose meat with blue cheese or other other strong flavors. And as much as I like pickles on a sandwich, they are death on wine. Serve your mooseburger with a nice slice of cheddar (mmm), perhaps some grilled onions and a glass of Zin, and you're good to go.

Moose stew is a bit trickier, depending on what's in the stew with the meat. If it's a meat-and-potatoes dish without a lot of adornment, you might try a nice Syrah. But if it has some peppery spice and fresh herbs, you could go with a Grenache-based wine, perhaps something from Spain or southern France.