Fires, the FDA and Wine Sales

A look at Wines & Vines' top 10 news articles from 2017

by Andrew Adams
wine winery nuns fire vineyard
A fire crew notes debris flow gathering at the base of wine tanks in Sonoma County following the Nuns Fire. Photo: Cal Fire

San Rafael, Calif.—A look back at the most-read news articles posted at winesandvines.com in 2017 includes the major industry events one would expect (such as the massive Northern California fires) and stories that show how key issues like compliance and sales in the three-tier system are never far from our readers’ minds.

The following list is based on just the most-read daily news stories as indicated by pageviews tracked by Google Analytics.

1. Wine Industry at Center of Raging Fires
Hundreds of properties burned as flames exceed 80,000 acres
By Kate Lavin
At least two wineries were destroyed and hundreds of structures burned as nine fires ravaged more than 80,000 acres in the winegrowing regions of Napa, Sonoma, Lake and Mendocino counties when this story was published Oct. 9. The four counties represent Grape Pricing Districts 1 through 4, which in 2016 crushed 504,000 tons of wine grapes worth more than $1.5 billion. Many vineyards still had fruit hanging on the vine.

2. FDA Begins Winery Inspections
Wine-production facilities must have current registration, comply with Food Safety Modernization Act
By Kate Lavin
Wine law specialists have warned since 2011 that the U.S. Food & Drug Administration (FDA) would eventually start inspecting wineries for compliance with the Food Safety Modernization Act. One June 22 we reported those inspections had started in earnest. According to Barbara Snider, senior counsel for the California-based Hinman & Carmichael law firm, wineries from Washington state to Napa and California’s San Joaquin Valley reported unplanned visits from the FDA. Snider told Wines & Vines that industry members expected the FDA to start inspections with the largest wineries, but that had not been the case.

3. Six Misconceptions About Smoke Taint
What research has shown about making wine with smoke-affected grapes
By Jim Gordon
Grapegrowers in Northern California wine regions struck by wildfires found it difficult to get the last of their crops off the vines and delivered to wineries, due to road closures, evacuated employees, power outages and other challenges. Winemakers had an additional worry: How widespread smoke may affect the quality of wines made from those last loads of grapes. An Oct. 16 dispatch tackles smoke taint, a consequence of smoke seeping into the pores of grape skins and grapevine leaves and becoming bound up in the juice and wine chemistry. The taint shows up later in smoky or ashy wine aromas and can taste smoky, bitter and charred.

4. Top Wine Brands Reveal Market's Momentum
Barefoot, Sutter Home and Franzia take top three spots for off-premise sales
By Peter Mitham
A trio of familiar names headed a list of the top 20 table wine brands for the 52 weeks ended Jan. 22. Based on off-premise sales data collected from multiple-outlet and convenience stores, Chicago, Ill.-based market-research firm IRI reports that Barefoot topped the chart, followed by Sutter Home and the box brand Franzia. While hardly the most expensive wines, prices per 750 ml for each of the three leading brands either held steady with the previous year, according to the Feb. 15 report, or increased from a year ago. Where sales slipped elsewhere in the top 20, the shift was attributable to lower volumes and the ascendance of other brands.

5. Wineries Consider Next Steps Amid Flames
Acreage from nine North Coast fires steady at 85,000 acres
By Kate Lavin and Jim Gordon
Firefighters working to control a series of wildfires in California’s North Coast region were able to hold the acreage on all but one of the blazes Oct. 10, but that was small consolation to winery and vineyard owners whose homes and livelihoods remained threatened by flames. While the 5,000-acre Nuns Fire, 2,000-acre 37 Fire and 1,000-acre Partrick Fire continued to burn in Napa and Sonoma counties, the larger Atlas and Tubbs fires caused the most damage after starting late Oct. 8, and smoke was significantly worse upvalley.

6. Harnessing 3.5-Tier Wine Distribution
Small and mid-sized distributors offer level playing field but require higher margins
By Paul Franson
In this era of distributor and retailer consolidation, new and smaller wineries are looking for alternative routes to sales. Many have turned to direct sales to consumers after finding it difficult to attract effective distribution. Others seek specialized distributors, some wineries are going direct to trade (where allowed), and bridge marketers are offering a way to better leverage distributors. You might call it 3.5-tier distribution. A March 2 report said these companies, often importers that grew to offering marketing and sales efforts to domestic companies as well, supplement distributor resources, allowing them to serve the original purpose of warehousing, delivery, billing and collections.

7. Costco Wine Buyer Talks Shelf Strategy
Retail giant favors dependable brands but also buys local for ‘treasure hunting’ consumers
By Andrew Adams
How does one get their wine sold at Costco? It was the question on the minds of those in the audience at the recent Wine Conversations event in Santa Rosa, and one the general merchandise manager of Costco’s beverage alcohol division, Annette Alvarez-Peters, diplomatically answered for the crowd of mostly winemakers and other winery employees. Alvarez-Peters prefaced her remarks reported Feb. 16 by saying that there are now more than 9,000 wineries in the United States (see “North America Winery Count is Now 9,872”), and the typical Costco location only carries about 235 SKUs, which also includes beer and spirits in places where regulations allow all three to be sold in the same location.

8. Wines Til Sold Out in Legal Fight
Class-action complaint claims reseller is deceptive with pricing
By Andrew Adams
One of the leading wine flash resellers, Wines Til Sold Out (WTSO), is facing a class-action lawsuit claiming it defrauded customers by offering wines for discounted prices that were not based on the wines’ true value. In a complaint filed in the U.S. District Court of New Jersey, attorneys representing customers of the website claim WTSO created wine brands with private-label companies and then offered those wines with discounts not based on any actual retail value and offered other wines with exaggerated retail prices to make the discounts appear even larger. An attorney representing the website, however, is confident the case will end favorably for WTSO and said in this Jan. 9 article that the company stands behind the quality and price of every wine it offers for sale.

9. Stagecoach Vineyard Sells for $180 Million
Gallo’s purchase of famed mountain vineyard in Napa Valley closes
By Paul Franson
E. & J. Gallo Winery’s trend of buying top assets continued April 13, when the deal closed for the Modesto, Calif.-based company to purchase the prestigious Stagecoach Vineyard property that straddles the Atlas Peak American Viticultural Area and the Pritchard Hill region. The deal reported April 14 included eight parcels at a total purchase price of $180 million, according to the deeds recorded in Napa County. The total price also reportedly included non-real estate items that would make the total price even higher. Gallo bought the 1,300-acre property from Dr. Jan Krupp, who acquired the property in 1995. The vineyard spans altitudes from 1,200 to 1,750 feet above sea level in a “hanging bowl,” a desirable mountainous valley overlooked by Atlas Peak itself. Vines are planted on 600 acres. The Stagecoach Vineyard purchase continues Gallo’s recent strategy of acquiring brands moving up in the market—and acquiring top vineyards and winemaking properties to supply them.

10. Premium Boxed Wines Are Smoking Hot
3-liter category growing at 28%, while 5-liter value wines drop 2%
By Paul Franson
Though bottles are still the most popular format for wine, premium wine in boxes is the fastest growing major format. During the Unified Wine & Grape Symposium reported Feb. 6, Danny Brager of Nielsen Co. reported that Constellation Brands’ Black Box is ranked No. 3 and Delicato Family Vineyards’ Bota Box is No. 5 in year-to-year increases among wine brands. He also said that boxes of all sizes represent close to 20% of wine volume sold. Nielsen has also reported that Bota Box’s 3-liter format is the No. 15 overall wine brand in the United States. The Bota Box brand is up 28%, growing seven times as fast as the total table wine category. Over the past five years, Bota has grown 139%, an average of seven times faster than the table wine category.


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