Portuguese Table Wines Move To Double-Digit Growth In U.S. Market

While table wines from Portugal have long been overshadowed in the U.S. market by Old World rivals like Italy, France and Spain, the category is now enjoying an uptick in interest. Last year, bottled table wine shipments from Portugal crossed the 1-million-case mark on 7% growth, according to Impact Databank. The pace quickened through the first half of 2014, with trade group Wines of Portugal reporting an overall 21% jump in exports to the U.S. to about 725,000 cases.

“Currently, the $10-$15 price range is the sweet spot, but we see the $15-$20 tier becoming increasingly important,” says Nuno Vale, marketing director for Wines of Portugal. He adds that a good price-quality reputation in the trade and a “discovery factor” on the consumer side are driving sales.

Much of the excitement around Portuguese table wine is emanating from the Douro region, renowned as the seat of the country’s Port business. “I’d distinguish the Douro from the rest of Portugal because I think it has the highest quality potential,” says Christian Seely, managing director of wine and Port house Quinta do Noval. “The Douro, which has been known for vintage Port, is now reinventing itself as a red wine producer as well. My vision is to establish it as one of the great Old World producers for dry red wines.”

Moët Hennessy Extends Chandon Sparkling Brand In U.S., Amid Global Expansion

Best known for its powerhouse Champagne and Cognac brands, Moët Hennessy is putting new energy behind its Estates & Wines unit, which includes the globally-produced Chandon sparkling wine label, as well as Napa Valley’s Newton Vineyard, New Zealand’s Cloudy Bay, Australia’s Cape Mentelle, Spain’s Numanthia and Argentina’s Terrazas de los Andes and Cheval des Andes.

It’s been a little under two years since Jean-Guillaume Prats—former CEO of Bordeaux’s Cos d’Estournel—took the helm at the Estates & Wines division as chief executive. Prats tells SND one of his top priorities for Moët Hennessy’s wine portfolio is to continue the global expansion of the Chandon brand, focusing on Millennials in the U.S. while courting international consumers from Latin America to Asia.

With production spread across six countries—including the U.S., China, Brazil, Argentina, Australia and India—Chandon is already a truly global brand. This year, the franchise is unveiling a new offering, Delice, whose U.S. rollout begins in Texas and Florida November 1, with national distribution slated for February. Delice, which is line-priced at $20-$24 a bottle, is a Napa-sourced semisweet méthode Champenoise sparkler composed of 45% Chardonnay, 45% Pinot Noir and 10% Pinot Meunier. “We’ll be promoting it not only on its own but also possibly in cocktails,” Prats notes. “We expect to draw in more young people with the concept.” Chandon was up 2% to 400,000 cases in the U.S. market last year, according to Impact Databank, and the company expects volume to near 500,000 cases annually with the addition of Delice.

•Hubert de Montille, the retired proprietor of Domaine de Montille, one of Volnay’s top estates, died November 1, Wine Spectator reports. He was 84. The iconoclastic and cantankerous de Montille was born into a family of aristocrats and prominent lawyers in 1930 and assumed the reins of the domaine in 1947 at the age of 17. Once consisting of 85 acres, the winery’s vineyards had been sold gradually as the family needed money. By the time Hubert took charge, only 7 acres remained. Under Hubert’s management and eventually his son Etienne’s, Domaine de Montille regained its former prominence, growing from that 7 acres in 1947 to its current 86.5 acres. Hubert was a staunch defender of its terroirs, even to the point where he matched each of his Volnays or Pommards with different dishes. De Montille is survived by his children, Etienne and Alix, who co-own Domaine de Montille and Château de Puligny-Montrachet.

How Much Will Napa’s Earthquake Cost?

The dust may have settled from California’s August 24 earthquake, but Napa Valley’s wine industry is still calculating the cost, with early estimates running beyond $80 million. In the weeks that followed the 6.0 magnitude quake (downgraded from 6.1), wineries labored to clean up just as harvest was moving into high gear, all the while dealing with damaged tanks, fractured walls and fewer oak barrels than anticipated. As crush winds down, the financial impact has begun coming into focus.

Surveying nearly half of Napa’s wine industry in early September, Silicon Valley Bank estimated that businesses suffered $80 million in damages, but cautioned that their appraisal was “conservative.” The bank’s wine division, based in St. Helena, reported that 60% of the county’s wineries had some level of damage, and up to 25% sustained moderate-to-severe damage, resulting in damage to individual wineries that ranged from $50,000 to $8 million.

“I suspect those figures will go higher,” said Rob McMillan, executive vice president of the wine division. “Once everybody gets the contractors out there, the costs will likely go up.”

New York State Cracks Down On Top Wine Merchants, Reports Wine Spectator

Business is getting tougher for wine merchants in one of America’s biggest markets, and consumers may pay the price. The New York State Liquor Authority (NYSLA) is taking a dramatic new tack in its role as regulator of alcohol sales in the state, reports Wine Spectator. The independent agency, created after Prohibition, is expanding its reach and heightening enforcement as part of an initiative by NYSLA chairman Dennis Rosen to reform what he sees as an unfair marketplace. To ensure those rules are followed, Rosen’s team has imposed more than $3 million in fines on wholesalers and retailers in the past three years.

According to Rosen, first appointed in 2009, the rules are designed to make sure wholesalers and retailers aren’t engaged in sweetheart deals. They are the latest tactic of this former assistant attorney general’s multi-year campaign to improve efficiency and oversight at the agency.

Several merchants, however, say that the chairman has now gone too far, that the NYSLA is just making business more difficult and that Rosen’s rules may make it harder for consumers to buy the wines they want at good prices. “[The NYSLA is] trying to level the playing field, but really what they’re doing is limiting business from taking place,” said Daniel Posner, owner of Grapes the Wine Company, a White Plains, N.Y.–based retailer. “Why is the state interfering with business?”

Before the new regulations, it was standard practice for wholesalers to offer discounted wines or rare wines to retailers who were loyal customers. The new NYSLA rules forbid those kinds of deals, mandating that wholesalers post prices with the state in advance of all sales and that all retailers have access to discounted and limited-availability wines.

“If I have a client that wants 10 cases of Rombauer Chardonnay for a wedding in two weeks, I have to tell him, ‘Sorry, I cannot get you 10 cases in time,’” said Posner. “How many states are limiting how much Rombauer Chardonnay you can purchase?”

Rosen says it’s about leveling the playing field. “There were some large retailers who would get special deals because of their size,” Rosen told Wine Spectator. “The same retailers time after time would get the great deal, and it’s called a closeout, but it’s pre-sold to them, or an item that is of limited availability, they would get it all. That hurt the marketplace.”

The new rules impact business in what is already a highly regulated market. “Where do they come off dictating everything to us?” asked Rona Vesce, wine and spirits manager at Peekskill-based distributor D. Bertoline & Sons. “Their guidelines are absolutely ridiculous. How do you not allow us to keep beer and wine in the same warehouse? It’s alcohol!”

Other members of the industry, however, are taking the new regulations in stride. “In one or two cases, we’re getting significantly less wine than we would have,” said Jamie Wolff, partner at Chambers Street Wines. “But I’m hoping in the long run that this is balanced out.”

Who Buys Wine Online?

Online wine sales have been increasing in the United States at double-digit rates for the past five years. But that doesn’t mean they’re a major part of the industry yet. More than 80% of wine is sold in grocery stores, wine shops and other brick-and-mortar outlets, according to Nielsen. “Wine remains under-penetrated online at less than 2% of all U.S. wines sales,” said Michael Osborne, founder and vice president for merchandising at Wine.com. A new study by researchers at California Polytechnic University in San Luis Obispo sheds some light on the small but growing community of online wine consumers.

Based on a survey of consumers, researchers discovered that online wine buyers are more likely to be male, over the age of 40, married with children and have a higher household income. They also tend to be wine connoisseurs or enthusiasts and spend more on wine than non-online buyers. (An e-mail survey was sent to 3,000 wine purchasers with a 31% response rate; 23% of respondents had purchased wine online.)

When these consumers buy wine online they are generally seeking higher quality wines from recognized appellations and have a preference for family-owned or small wineries. They are also quite tech savvy and are more likely to use phone apps or tablets to research wine information. But these online wine consumers do not use Facebook, Twitter or blogs any more than non-online wine consumers. Surprisingly, Millennial consumers of legal drinking age currently purchase very little wine online, even though they grew up with the Internet. The researchers discovered the main reasons were that Millennials think shipping costs are too high and would prefer not to wait for a wine shipment.  Though online wine sales currently constitute a small percentage of industry volume, most experts agree that the channel will continue to grow, especially with Amazon entering the arena in 2012 and large wine retailers such as Total Wine and BevMo expanding their web presence.