Vol. 6 No. 2 The Morning after the Night Before

Market Update (wine follows)

TB hopes that this will not become like so many New Years resolutions and fade after a week or so as it is a good exercise for him and hope you find it useful too. As promised, today will combine economy/market news with wine industry news and thoughts of the author. Here goes:

Yesterday, the markets had a strong rally, up about 6%, and based on the overnight markets which are up 2% now, but down from 4%+ earlier, we should have a continuation today. But what is of utmost importance/concern is that it closes up again today. Why? Because Monday’s strength only took us back to a week ago, before last Tuesday’s (3/31) gap down and collapse.

Since the selloff began, the VIX (options volatility index) surged from the low to mid-20’s (to simplify meaning 4:1 calls than puts) to the mid 80’s – a total reversal! Last Friday was options expiration and a triple witching (stock market index futures, stock market index options, and stock options), thus producing enormous volatility. Overall, the market did quite well  in the first test of an expiry at end of a quarter! Note that the 31st was last Tuesday and a bad day for stocks but better than it could have been.

Sri Kumar, of his eponymous global strategies group, in Santa Monica, CA. was on Bloomberg this morning and I always listen to him. He does not see the rally as sustainable, and the risk is now that people believe a bottom is in, which Kumar feels is too early. Contrast this to the great financial crisis of 2008-09, when the market bottomed on implementation of the bailouts that were only accomplished under the Obama Administration, whereas under Bush 43, who wasn’t proactive enough to push a GOP Congress to act. Thus beginning on March 9, 2009 a rally ensued, continued relentlessly until February 2, 2020! Heed! (note: in case you think TB is a guru, he missed most of the rally and went to mostly cash when Trump was elected. Note on the night of the election the overseas markets tanked along with U.S. futures but after selling off early in Wednesday’s session, resumed the rally…ugh!

Bush 43 also left running the government to the Cheney/Rumsfeld duo that Bush 41 loathed and tried to warn his son about to no avail. The duo convinced Congress into invading Iraq in what was supposed to be an ‘in and out’ operation and that convinced the Democrats who had voted against (and were proven wrong), to vote for it…to his credit Bernie nixed it. The result was the destruction of the first balanced budget in over a decade under Clinton (like him or not), and the beginning of the monstrous deficits we are running today…along with THREE tax cuts that gave most of the benefit to the wealthiest Americans thus widening the wealth gap. Note too, that we were promised they would only go into Afghanistan to get Bin Laden. These lies along with the one Colin Powell was forced to give to the UN that Iraq had weapons of mass destruction (WMD), have put us in the longest and most costly wars in our nations history. Think what that could have done for the economy, especially with the infrastructure spending that economists were calling for, and no, Trump’s ‘Wall” does not constitute infrastructure spending!

But I digress…TB is a fiscal conservative, former Republican but can’t call himself a Democrat however that is how he will vote unless and until both parties come to their senses…along with 70% of American voters who are split evenly and both sides are wrong (IMHO). Extremism is not sexy…or useful. On a personal note, we are in the process of selling our beautiful  condo home of nine years on Lake Minnetonka. We listed it just before the crisis and rather than be under the stress of living there with prospective buyers coming on short notice, moved to a beautiful luxury apartment in nearby Edina, MN. This puts us closer to our kids and grandkids! Would have been nice if we had decided on this earlier, but ya never know, do you?

Wine

As promised yesterday, TB’s thoughts on the state of the wine industry which was already having issues prior to the virus, and is having mixed impacts since. Here goes:

  • First, the tariffs imposed on Euro countries who make parts for the Airbus (go figure on the relationship to wine), have impacts that are muted so far but have far-reaching implications:
    • the tariffs imposed were on all wines from some countries but limited from others such as Italy where only red wine with alcohol above 14.5% are subject…huh? Meanwhile, all French wines are with the U.S. being the top importer along with China,
    • one might think this would be a boon to U.S. winemakers, and you would be wrong. First, we are working off supplies of affected wines, and importers are reducing their markup on imports to offset the impact of the tariffs, thus no benefit to American producers…at least so far,
    • any benefit to luxury American winemakers is muted as demand hasn’t shifted (at least not yet), and worse, the Trump tariffs on China have increased the ones by the Chinese, thus drastically reducing the demand from China and TB is now being told that this has shifted foreign sales to South Korea which is not as strong a market, however.
  • Please note that tariffs are never a good idea: first, it isn’t the producer who pays it (except eventually in demand), but the CONSUMER..i.e. Americans! It causes enormous dislocations and now that we have the virus, shipping is being curtailed as dock space is limited and finding healthy crews is an increasing problem. No good will come from this.
    • speaking of crews, the actions of the Acting Secretary of the Navy, Thomas Modly, are inexcusable! First, he is a graduate of both Georgetown University (bet the Jesuits aren’t proud), second he is a former naval officer (helicopter pilot), and while criticizing Captain Brett Crozier, not just publicly but before the crew that respected him for his going out on a limb for them and the safety of the ship. Modly should be FIRED, just like his predecessor , who was fired for his handling of the Navy SEAL courts martial, and more importantly going against Trump, so Modly acted preemptively…and STUPIDLY. This from TB, a former Navy man.
  • There has been a ‘run’ on wine and hard liquor at stores due to fears of quarantine. This means that at least for one go round, retailers will have to restock. On a recent Sunday morning, a local wine shop TB buys from opened up and the first sale was $900 worth of assorted wines. The good news here is being offset by the slack in buying wine from restaurants who need to move that inventory due to the high carrying costs (note that they pay more than a retailer for wine)
    • some have asked states to allow them to sell cocktails and wine in bottles, but not hard liquor, to go. One innovative method is to take advantage of the law which allows purchased bottle leftovers to be taken home – perhaps take a little out of the bottle and recork it to go on demand? Hmmm. TB likes that idea and it should be allowed for the duration of the epidemic,
    • meanwhile wineries are concentrating on improving cashflow and reducing inventory in anticipation of the bottling and release of the new vintage by reducing price, offering free or $1 shipping, and even selling library wines, and donating all or part of the profit to efforts to eradicate the virus…very commendable…and wise!
  • TB is not sure where the big liquior retailers led by Total Wines & More, end up out of this. Both wineries and retailers are experimenting with virtual wine tastings…huh? How can you do this virtually There are two methods:
    • first, a somm or wine rep, or a wine lover can announce a virtual tasting where she describes the wines to be tasted, discusses them, and then goes through a tasting of them either blind or not. TB thinks there is little interest in this,
    • one idea that is gaining traction is to create a list of wines to be tasted virtually, either by a winery (their label) or a retailer who prepares a list of the wines to be tasted and allows time for those interested to pick up the wines and participate. One problem: let’s say there are six wines: what do you do with the leftovers?
      • you can drink all six bottles over the next couple of days ,or
      • you can drink them all and awake with an enormous hangover, or
      • pour them down the drain, especially if you don’t like them (not for TB!)

You decide, in the end YOU are the only one that matters, as always!

Best to all of you, and thanks for reading…if you are still with me.

TB

©traderbillonwine.com, 2020

Vol. 6 No.1 Armageddon – out of the ashes

Note: This is the first of TB’s blogs for 2020. That wasn’t his intention but a lot has been happening personally. First, we decided to sell our condo in Dec. 2019, and have moved to a beautiful, luxury apartment, in Edina, MN. Of course, we will miss our lakeside home of the past nine years but there were several reasons for the move. We are only 20 minutes away so we will be there frequently.

Until 2019, TB had another website here (traderbill.com) but as a result of his retirement is no longer active. We are in a great crisis, one that not only affects the wine industry but everything in our lives, so, rather than re-opening the financial blog, both will be here as the financial markets affect every aspect of the wine business as with everything we do!

This first blog is about how we got here, and begins with the financial markets. The next will add in observations TB has made of various sectors of the economy. TB welcomes any and all comments.

Thanks for reading and hope you find it useful,

TB

TB is not a seer…or a genius… but for his own sanity he is resurrecting Trader Bill and perhaps creating a dialogue with his friends and former followers (not in the disciple sense…just following the blog!). Whatever it takes to get us through this crisis, one of the worst mankind has endured…and as the late Walter Cronkite used to say, “you are there.”

Crisis, panic, fear, lack of consistent leadership, denial, and loathing are just some of the adjectives that have crossed old TB’s mind. No, this isn’t his first rodeo, and perhaps that is why he, as a former bond geek for 45 years – yes, back in the last century. When he was in San Francisco, he loved going to hear Ed Yardeni speak. Ed would open up with some of the above adjectives and then gaze around the room silently. Then, a slight smile would emerge and he would say, “now that we have identified where all the bond guys are seated (they were the only ones smiling), we can begin.” Followed by laughter of course.

I bring this up as I have always admired Ed’s thinking. He only made one wrong call that I can recall: doom following y2k! But was he wrong…or did he act as a stimulus to thinkers to solve the problem?

You see, Dr. (not Mister) Ed’s premise was based on computers and the degree to which businesses used COBOL (Common Business-Oriented Language), developed in 1959 and based on the work of Grace Hopper. TB is old enough that in a finance class he took at UCLA in 1969, he can recall putting data, punching it in to IBM cards , stacking them , and feeding them into the hopper for input into a mainframe somewhere on the campus. Due to storage and ease of programming the year was simply two digits with the first two ‘19’ already in the computer. It was probably assumed (remember assume makes an ass of u and me!), that long before the year 2000, a new system would be in place but it wasn’t and thousands of COBOL programmers would be obsolete.

Soooo…back to Dr. Ed. He produced scenarios for different industries and one of them was railroads where all scheduling and locating of rail cars was done on computer. Where would those cars be on 1/1/2000? Lost, that’s where, and the entire economy would come to a halt due to this and other forms of commerce…including banking, stock exchanges, etc.

So was Ed wrong? No, but he underestimated (or did he bring it to their attention), that business would rehire thousands of COBOL programmers to take on the gargantuan job of fixing the coding. TB knows this because Kim Fawcett, wife of his partner in bonds, was recalled, and told  him about it. Unfortunately for them, they were let go again after solving the problem. They were heroes – except for Dr. Ed and his followers as y2k came without a hitch…globally, as far as we know. It is even entirely possible that Ed’s proclamation of the problem saved the global economy trillions of dollars. Ed’s  insightful thinking is still available at yardeniresearch.com.

In the mid-19‘70’s, small (computer) calculators came onto the scene. One of the most significant was Compucorp’s (later acquired by Monroe) Bond Trader and selling for around $1,500! This eliminated calculating bond prices by hand using a Basis Book, but was extremely time consuming. It meant when bids were due on a new bond offering, the data fed into the computer and could be stale due to an unexpected event…a Fed rate cut for example. By the way, COBOL-based computers are still in use today, primarily in the banking system and other areas finance such as insurance.

By the early 1980’s Microsoft had proposed to IBM that they combine and make small computers, but in what was perhaps the biggest blunder IBM ever made, the Bill Gates/Paul Allen proposal was rejected, and shortly thereafter Steve Jobs introduced the Apple computer which by no means was portable, but could be used on a desktop…the rest is history. How many desktops made by Microsoft or Apple are there today (although Apple now makes laptops and tablets exclusively) vs mainframe computers? How many, Watson? By the way, the first Apple desktop was auctioned off in 2014 for $905,000 and others are now in the $500,000 range…that for a clunky, slow by today’s standards, computing system?

The point is that the world was incapable of preventing the Bubonic Plague, and of preventing the Spanish Flu of 1917, but was able to ‘react to’ and limit the effects of the Hong Kong Flu and all the subsequent ones (while not curing Ebola, limiting its spread)– until now – to limit the effects thanks to inoculations. Even those are hit or miss, however, as scientists try to predict which strain will be the prevalent one each year. In 2020, they missed but still lessened the effects, and may even safe lives from COVID-19 – one can hope, that’s all we have but remember the phrase: “there are no atheists in foxholes.”

Lastly, as a Rotarian, TB became aware of the extent to which Bill Gates. whose father was a Rotarian, has teamed up to eradicate Polio nearly worldwide. TB can’t help but think of the damage that has been done by people – especially American politicians and evangelicals who have shunned science, many for their own benefit, to try to make vaccinations voluntary throughout the U.S., a pity. Today, even as the price of oil implodes, President Trump is relaxing emissions requirements for automakers? What kind of wisdom is that?  Beats the hell out of TB, as well as why 40% of so of American voters still approve him. (NOTE: that is the last political comment TB will be making in this series except as it pertains to markets and the overall economy.

Tomorrow: thoughts on the markets (finally!)

Thanks for reading and God Bless Dr. Fauci,

Trader Bill

©Traderbill.com 2020

 

 

My remembrance of 9/11/01 – a day of infamy

At 9:06am EDT on 9/11/01, the first plane flew into the North Tower of the World Trade Center. I had come into the office early on the West Coast and a trader said that a plane had flown into the North Tower. I said it had to be a private plane as no planes are allowed to fly over Manhattan. She had heard from Cantor Fitzgeralds’s office in L.A. and that it definitely was a commercial jet. In disbelief, I switched my screen to Bloomberg TV. Almost immediately, I saw the second plane bank and come around and into the South Tower. It was horrifying and mesmerizing.

Later, we heard about the Pennsylvania crash thanks to the heroics of a few passengers, and then the one that hit the Pentagon. It was a horrifying day. I watched a trading screen go blank and a woman who covered me from the firm was not heard from for two weeks. Unlike Cantor, on the 102nd floor, that lost 658 people that day, TradeWeb lost none due to being lower in the building and a manager who told them to leave immediately. She said she could see the building from her apartment and it was a beautiful day which ended with her walking home across the Brooklyn Bridge with the WTC behind her. Every morning she had to look at the rubble of a once beautiful skyline. She was suffering from PTSD.

Last Sunday, I heard a man saying he and his family were on the way to Windows On The World for breakfast and close to going in the building. He could hardly finish his statement.  Last year, I had breakfast with Kevin Zraly who managed WOTW. He was late to work that day and arrived shortly after the plane struck. He was in charge of the wine cellar and is one of the most knowledgeable people I know on wine. He suffered PTSD from his guilt that all of his employees died that day and he should have been with them. It took years of therapy during which he couldn’t even look at a glass of wine. He is better now but still has flashbacks.

This is one of the events I remember vividly. I also remember JFK’s assassination, then watching Jack Ruby assassinate Lee Harvey Oswald while in custody, the assassination of Bobby Kennedy. Some things just stick with you…sadly.

Make the most of each day…it might be your last!

Trader Bill

Copyright 9/11/19

He is not dead but sleepeth

First, my sincere apologies to my readers (honk, if you’re still here!), for my lack of writing. A lot has been going on and I have been focusing on my book project, Wine and Passion. The book is not so much a wine book as a look at the passion of the winemakers I  have met over the past five centuries…oops, decades! I would hope that people consider them rather than the critics ratings but that is up to you, dear reader.

I also must admit to writer’s block and the evil: procrastination. But there was one more event that sidetracked me from mid-July to late August: our 50th anniversary (yes, it coincides with my serious interest in wine!), which consisted of a 5,000 mile driving trip to Portland (mostly along Hwy 12: the Lewis and Clark Trail; then down to Southern Oregon where, along the way we drove right through a forest fire on I-5, halfway to Jacksonville; then down to Reno where we lived for five years in the late 70’s and early ’80’s. Hot August Nights, the largest street car show in the country was going on! From there we drove to Lake Tahoe and stayed at a friends place at Fallen Leaf Lake, at the southern end of Tahoe. There we celebrated our 50th along with most of our relatives.

Driving back we drove across Nevada on I-80 stopping at Wells. We had planned on staying in Wendover on the Utah border but room rates were $200-300 a night! In Wendover? You have to be kidding, right? Wrong, it was the beginning of Bonneville Speed Week, so we stayed in a very nice ’50’s style motel in beautiful downtown Wells.

The next day we stopped at Bonneville then drove across the beautiful mountains of Utah and finally stopped in Gillette, Wyoming, and after a long 700 mile drive home to Excelsior, MN, on beautiful Lake Minnetonka, the next day. Four days and three nights out and three days and two nights home.

Our drive on scenic Hwy 12, the only road maintained by several states that is funded by the federal government, reminded us of how we have lost something in an era of 70-80 mile speed limits on the interstate where the goal is simply to get from point A to point B as fast as possible. Think about that the next time you take a trip and take at least a few side roads.

Finally, what wine did we have for our 50th? First, I brought over a case of wine with us but the gem was a magnum of Bonny Doon 2012 Le Cigare Volante by my friend and one who will be featured in the book, Randall Grahm, one of the great California winemakers! It was fantastic and enjoyed by all.

Well, tomorrow is 9/11 and I will have a different kind of column for it.

Until then, go drink some wine!

Trader Bill

Copyright, September 10, 2019

Vol 5 No 1 Take your rating and shove it!

(Postscript added. Also correction on The Wine Gourd link. See below)

Okay, that’s a bit strong but what does a single point score (or from several critics) mean? That THEY liked or disliked it which doesn’t translate to YOU liking it! Why do Americans have so little confidence in their ability to discern quality in a wine while Europeans trust their palate? Have you ever bought a wine with a high (90) rating and just thought it was okay after plopping down $50 or more (since Parker left the Wine Advocate more 90’s are being awarded and for wine priced down to the $25 range). Then there is the WIne Spectator who recently listed 400 Oregon Pinot Noir’s with an amazing number at 90 or higher. TB won’t get into comments I have heard from several sources on how many of those ratings were achieved.

With so many raters, it seems that if you can’t get a 90 rating from one of them, you might as well get out of the business. TB has discussed ratings several times over the four years since he started the blog, and they have all been less than positive.

Did you hear about the guy who went into a wine shop during a tasting. He said, “this wine tastes terrible.” The clerk replied, “really? Parker gave it a 90!” To which the guy said, “I’ll take a case!”  While I haven’t experienced a terrible one, I have had some with that I regarded as mediocre. As an author friend titled one of his books, “you don’t have to be wrong for me to be right.” We all have different tastes. Do you prefer Coke or Pepsi? Seven-Up or Ginger Ale…you get the picture.

Remember too that these ratings are not on how well they pair with food, and how many of you take the time to check what pairs well with your special eggplant? When we travel in Europe outside the major cities, we always drink the local wine. Several times I have bought the wine and later wondered what the hell was I thinking. In many areas of the world they have only one or two grapes varieties and thus can do little to the flavor of the wine, especially with primitive equipment and no temperature controls. If you can’t make the wine go with the food, make the food go with the wine. Adding certain ingredients, spices, and others can make most any wine go with it…well, usually.

Rather than rehash my prior articles on ratings, I would like to call your attention to a very different type of wine blog: The Wine Gourd (www.winegourd.blogspot.com). I highly recommend it. The author is very quant oriented but in a good way. His posts take a topic and then graph the variables to prove whether the reporting is accurate.

The last three posts have been of particular interest to me. The first discussed a fundamental problem with wine scores. To simplify, imagine a 20-point system (like UC Davis uses). The purpose of this is to break down the wine into characteristics such as color, clarity, aroma…you get the picture, with just two points for overall quality. Let’s say two wines each scored an 18. Doesn’t it matter which categories got the maximum scores? You bet it does. What if one wine had one point each for clarity and aroma but scored higher than another wine in two other categories? Now that we have seen it in basic form let’s consider the Parker created, but widely differentiated scales. Specifically, Parker has 20 points for subjective evaluation while some have 25. So just in this one category there could easily be a 10-20 point difference…let’s say from a 70-90!

Ah, but it gets worse. You can take your wine to a lab that specializes in telling what you have to do to make it a 90-point wine. Is that what you want? All cabs, chards, or pinot’s, to all taste the same? Not for me or the winemakers I admire. They want a ‘sense of place’ or terroir. Now it is different for a 2,000 case winery from a 100,000 case winery, the latter where people are expecting the wine to taste the same from vintage to vintage. But, as my friend, Carlos Pastrana of Priorat, says, “then why put the vintage on the bottle?” I, and many others feel the same. But for most, given that the average life of a wine is less than an hour: the time to get from the grocery store to the dinner table.

Now let’s look at the tastings held at state and county fairs with perhaps six tasters. The wines are usually tasted ‘double blind’. In other words, after tasting the all the wines of a class they are tasted again in reverse order and the scores of each judge are averaged. What could be fairer than that? Well, it is fair but it usually results in a wine of good overall quality exhibiting the characteristics of a given varietal getting the gold, while the outliers may have characteristics of the others may turn off some of the judges. Again, we would like to know how the individual wines did in each category scored. But get a gold and the world will beat a path do your door, so that is what you should shoot for if volume selling is your bag.

That is why it is important for a small winery to develop a group of loyal followers who will buy the wine for its merits and because of warm feelings they have for the staff, the winemaker, the blend, etc.

Next comes descriptors…something every somme can provide you in great detail. Some of them are freshly cut garden hose, cat pee, a broad range of fruits and berries (I don’t believe grape is one of them), and I have always been embarrassed that I can’t make those descriptions, but then I learned neither can a lot of winemakers. TB once took a winemaking course from a man who later became a Master of Wine…one of the few in America. We nervously brought our finished product to class, and if he liked them he would say, “that’s wine”, if not, he just passed on by.

In  1981, having recently moved to the San Francisco Bay Area, I was fortunate enough to attend a Bordeaux tasting at the Clift Hotel, hosted by Anthony Dias Blue, and “the maestro”, Andre Tchelistcheff. A fantastic experience for the paltry sum of $25! In every case, Tony’s comments were more elaborate than Andre’s. After tasting one of the wines, it was Andre’s turn to go first, and he said, “this wine is mousey”.  Tony quickly jumped in to add,”what Andre is trying to say is it smells like a room that has been closed up for awhile and a mouse was in it.” Andre immediately cut him off with “no Tony, this one had his whole family with him and stayed there for a long time.”

Andre hated descriptives…well, unless they related to the feminine. He once listened to a young well known winemaker describe a wine breaking it down into its components, and interrupted with “that is disgusting…who would want to drink that? When I taste it I think of the breast of a young woman in winter, surrounded in fur.” That, my friends, is sensual wine tasting, although few could get away with that today.

As for me, I love wines that bring back a memory of a dinner, event, or a great wine I once tasted. Isn’t that what we all want…really? Do you want a somme to tell you what you are about to taste? Doesn’t that just eliminate you? Perhaps you should just say, no thank you, that provided all I need from that wine.

The latest Wine Gourd ended with a survey of wine buyers on what influences their purchases. Basically, it asked what influenced their wine purchases the most on a scale of 1-7 . The results are the percentage in each category who gave it a 7:

Advice from a knowledgeable family member: 42%!; 90+ point score: 25%; recommendation from store staff: 31%; tasted wine in store 60%!; wine from a country or region they like 45%; positive review read in print or online: 21%; wine on sale for 10% or more off 13%; recommendation from a wine ap 8%; wine is on display 5%.

With only 25% relying on a 90+ rating, it seems like use of descriptors and numerical ratings might just be spinning wheels. TB will close with a comment from a wine retailer:” I can get all the 89 point wines but I can’t sell them, and I can sell all the 90 point wines but I can’t get them.” Are you capable of discerning a one point difference?

Whew…TB is exhausted…needs a glass of one of his 89 point wines. Maybe even an 88!

Happy Wine drinking…why taste when you can enjoy a glass instead?

TB

Update 1/30: Would you go to a museum with a pencil and paper and rate artists? Hmmm, Rembrandt is an 89; Picasso 92. Stupid, unfair, and downright silly. Yet, a small group of people believe they can do that with wine. So? There is a cost: do you want all cabs, or chards, to taste alike? Doesn’t technique or terroir matter? Perhaps not to you, but TB says: no, and hell no!

 

(c) traderbillonwine.com 1/29/2019

 

Vol. 4 No. 10 My wine resolutions for 2019

I run across lots of stories and facts while working on my book project: Wine and Passion. So, in keeping with that theme, I will share some thoughts I have about what wine to buy, where to buy it, and some shocking data. Here goes:

For the past five years or so, the only price group for wine that is growing is the $10-20 range. If I had a winery and it was economically feasible I would set a list price of $19.95. According to website Morning Consult, and reported on Wine Industry Insight, 62% of Americans spend between $8 and$15 on a bottle of wine and only 6% spend more than $21!!! It breaks down this way: 18% spend $3-8; 35%  $8-12; 27% spend $12-15%; 15% $16-20; and only 6% spend more than $21. Think about that. One of my tips is this: one night a week if you are drinking Two Buck Chuck, try a $10 bottle of wine; if you like it better start drinking that, and now try a $20 bottle of wine. Again, if you like it more, make that your regular wine, but next try a $30 wine, and so on. My guess is you will max out around $35 and if you can get one of those on sale for say $25 Voila!!!

Why not more? Mainly because over 80% of wines are consumed with 48 hours of purchase! So you won’t get the higher quality you are paying for without letting it at least ‘rest’ for a month or so before drinking, and the highest priced wines are made to be cellared (temperature controlled or at least a stable passive), for a year or more.

I discussed this with Kevin Zraly, author of The Windows on the World Complete Wine Course and he shared his formula with me: I want to drink a $10 bottle of wine that tastes like a $25 bottle; a $25 bottle that tastes like a $50 bottle; and a $50 bottle that tastes like a $100 bottle. It can be done!

There is also a saying: we drink white wines too cold and red wines too warm. It’s true! A cold rather than chilled white will not release its aromatics fully. That is why it is generally recommended that you chill them for no more than twenty minutes. As for reds where cellar temperature is normally 54 degrees, somewhere around 60 is better but they should also be decanted to let them open up. Older vintages if decanted for too long with lose most of their characteristics.

Next, is buying wine from dedicated wine shops rather than the supermarket. You have no idea how long the wine has been on the markets shelf and most people pick the varietal and then a nice label. A wine shop will have people who will listen to what you like in a wine and steer you (hopefully) towards one that you will love or at least like. You are likely to pay a little more in these shops unless they are having a sale but you will know you are getting a quality wine. Large ‘big box’ wine stores like Total Wines or Beverages and More may offer a better price but does it matter that much if you are buying a single bottle? Perhaps for a case where it might equal a free bottle, but don’t we want to support our friends and neighbors? I think so!

Then there is buying wine from a big winery that might produce 50,000-100,000 cases vs a small one that might make 15,000 or less. You may pay more but you will again be supporting a small producer who likely pays more attention to details. A corollary to this is visiting the wine country and choosing one of the big name wineries to visit. There, you will likely have a student or other part-time worker pouring as opposed to a small winery where you will meet a full-time employee who isn’t reading from a script, and you might even meet a winemaker or owner. Their passion will vastly improve your impression of the wine you are tasting.

Following that thread, consider that just two distributors (Southern Glazer Wine Distributors which represents 1,178 wineries sells and Republic National Distributing  which represents 7,581 wineries, and have revenues of $16.5 billion and $6.5 billion respectively according to Forbes Magazine and represent over 50% of all wine sold in the U.S.! Pity their small wineries who get lost in the shuffle as happened to a friend of mine’s wine. State laws are restrictive too, one of which says that you can’t ‘fire’ a distributor if he has any of your wine in inventory…so keep ONE case and you’ve got the winemaker…how unfair is that to both the winery and customers.

For this and other reasons, small wineries are trying to sell more of their wine thru wine clubs or the tasting room. Unfortunately, they have to sell to you at the retail price they listed, but at least you know the wine has been stored properly. Shipping can be expensive, even prohibitive but at times like the holidays, many offer free shipping, a way to get around the selling at retail laws. Only when a wine is in short supply and not being offered to distributors can they reduce the price to clear inventory. This is the trick with Total Wine’s ‘winery direct’ program. They buy up all of the wineries inventory of a varietal or vintage at bargain basement prices, then offer them to their customers at a low price but with a huge markup! Again, you don’t know how the wine has been stored or if it is fading (aka over the hill).

Here is one last statistic for you: three big wine companies, Constellation Brands, E. and J. Gallo, and Vintage Wine Estates, represent 70% of all wine purchased in the U.S. Combine this with the price profile and the future is not bright for small producers, and that is a tragedy.

Lastly, millennials price preferences are lower than their baby boomer parents who are retiring and therefore not spending as much for a bottle of wine. 2019 will definitely be an interesting year for the wine industry.

TB wishes you all a Happy New Year and a prosperous 2019.

(c) traderbillonwine.com