Happy Holidays

A toast with a nice glass of California chardonnay to you and yours and best wishes for the holiday season and the new year

Half-full? Bah-humbug!

For an industry whose mission is filling glasses, we tend to look at our world with a "glass half-empty" perspective. It is never as good as it can be, there are always hurdles lurking around the next corner to jump and we constantly create hurdles for ourselves.

The facts tend to indicate we have a vibrant industry. We are increasingly responsive to our customers. We are world-leaders in quality, consistency, packaging, marketing and promotion, cultural practices and more.

We have consistently been an early adopter of new innovations and our leadership has been world-class.

This track record should be applauded, celebrated and cheered on toward greater accomplishments. This is not a time to look at the glass being half-full, wherein we have seen our best days, but rather the possibilites we can achieve if we continue to stretch our imaginations, increase our creativity and maintain the bold, "can-do" attitude that senior members of our leadership avowed in helping build the industry we all enjoy to this day.

Falling Dollar Rising Wine!

The buying power of the American dollar in foreign markets reached new lows against some of our biggest wine exporters such as Italy, France, Australia among others. Conversely, the low value of the dollar means their goods are more expensive for US consumers to purchase or import. That's great news for the wine industry.

After several years of providing an umbrella under which the US dollar was historically high, meaning the imports were very cheap, we are headed back to some level of equilibrium wherein quality, price and value will likely favor US producers and California wineries specifically.

This is good news for vintners, first because they can reduce inventories and begin improving their profit margins. Improved profit margins mean there may be additional marketing and promotion which means more wine may be sold. More wine sold may mean demand for winegrapes from growers will see excess production capacity absorbed followed by rising prices.

Unfortuneately, this process is not overnight. It is underway, however it is possible to derail this progress and delay a full recovery.

At this point, lower interest rates, a lower dollar and a recovering economy are good indicators for the future of winegrape production.

Negociant
(Nee-Go-Sea-Aunt)

In times of plenty, the wine industry's equivalent of the high-tech entrepeneur is the negociant. This relatively little known player outside the industry, becomes a big player when there are bountiful supplies of bulk wine. Operating from a stable of little known or newly developed labels, many function as "virtual wineries".

Buying bulk wines for their value, packaging and marketing the casegoods, distributing the product, many operate with little more than a telephone or an internet connection. Others operate from within fully integrated wine powerhouses, deft enough to see an opportunity and possessing the capability to capitalize. Think Charles Shaw? (two-buck chuck)

Many of the labels are only in the marketplace for the duration of a surplus, while others become full blown brands and major labels of their own. Many of the labels become house brands at various restaurants or other stores. These guys are the nursery for new tastes, styles, packaging, labeling, pricing or any combination which they think might get a consumer to buy. Their successful efforts are copied many times by the staid traditionalists of our industry once they are proven to work.

These guys help clean up what prosperity can bring-excess inventories, excess supplies, unsold casegoods and so on. Their success ultimately brings prosperity back to the industry and the cycle revolves.

These guys are needed. They are good guys and we salute their efforts.