HAVING A SENIOR MOMENT.

Today I bought half a dozen bottles of Hardy's Chardonnay from Pak 'n' Save at $6.89 a bottle. This is a very good price for an OK Chardonnay. The wine is luscious and peachy and although it lacks any woody structure and backbone is at least clean which can't be said for some of the $10 NZ offerings I've drunk recently. This used to be Richard (of RBB) and Shelley's wine of choice. I think that they have moved on from it now but, if they return they won't be disappointed. No, buying this wine was not the senior moment even though I have a long history with this wine. I identified the gap in the market for Hardy's fifteen years ago for a 'consumer chardonnay', selected the label and launched the product which grew into a 2 million bottle brand, half of which was Chardonnay. It has declined in volume a bit now but I'm pleased to see that the wine is good and honest and over-delivers at this price that's for sure. No, the senior moment was paying for the wine at Pak 'n' Save, carefully packing it into a small carton (at Pak 'n' save as the name suggests you have to pack your own groceries) and then walking out with the 7 corn cobs (for $5) that I had also bought leaving the wine behind. I was almost to the car before an alert shop assistant chased me out with the wine. I made excuses and said that it had been a long day etc., accepted the wine and shamefacedly left.

WINETERRA

Hands up who's heard of problems in the New Zealand wine industry?

After a sensational entrance on to the world market 30 years ago we are now seeing some cracks. Most of these are due to poor planning and a 'rush of blood to the head' of new entrants. New Zealand still, even with phenomenal growth, only represents less than 1% of the world wine market. This in the main is represented by one varietal, Sauvignon Blanc, and from one area - Marlborough. I know, I know that we also produce some good Chardonnay, Riesling, Pinot Noir, Bordeaux blends, Syrah and others but in terms of viable export markets Sauvignon Blanc is the king. New Zealand Sauvignon Blanc has attained the reputation as the best country of origin to consistently produce the best example of the varietal. So. What's the problem? The problem is that there are nearly 700 wine companies in New Zealand a good proportion of them wanting a share of the  export market growth. Across the hundreds chasing the same markets and channels there is a great range of quality, consistency and value. Most of the new entrants will not make it having already over-stretched themselves financially to buy land, plant grapes, build buildings and then invest in bottling the final product - they have nothing left to market that product. Marketing the product in the long run is the highest cost. A lot of the 'rush of blood to the head' producers have been hell bent on manufacturing a cute product without properly planning the outcome. Put simply they make and bottle the wine and then look around for a market, an importer, a distributor, a wholesaler and customers. They are out in their planning by at least 2 years and at most 4 years. It takes that long to set up relationships, talk up demand of a brand, set in place support programmes etc. and all this has to be done way in advance of the  product being ready to ship.

There is a surplus of wine, particularly Sauvignon Blanc in the sense of there being a lot of unsold wine in wine companies warehouses and in tanks. There is in reality though a shortage of sauvignon Blanc for the world market for the right brands, the right channels and at the right price points. Why is this? Basically too many producers have tried to cash in on the opportunity and most are too small to have efficiencies of scale, continuity of supply, proper quality controls and consistency of product, access to markets and distributors and the breadth and scale to properly market a brand in distant markets. It is not sufficient to make a single trip to set up distribution nor is one trip a year enough. To properly work a market, any market, requires either someone representing the company and brand to be in market or visit several times a year. Small companies cannot afford to do this. What is the answer? Perhaps looking at New Zealand's biggest export earner might give an insight. Fonterra is a massive coop company formed by a merger of two of the largest dairy co-operatives and the NZ Dairy Board. Since the late 1800's the New Zealand dairy industry was made up of co-operatives. 

Small farmers could produce milk but could not afford the machinery and the marketing costs to take it much beyond the farm gate. Co-operatives allowed then to grow at minimal risk and at lower costs due to amortisation of processing and marketing and distribution costs. Over time the many co-operatives were swallowed up by bigger ones to the ultimate result of there being mainly one large (and successful) one. The wine industry needs to do something similar. A few strong brands, created and controlled by a Wine Industry marketing board with ownership into it by all wine producers is a common sense solution. It doesn't mean that the individual wine producers cannot still run their own brands and boutique offerings in addition at higher price points but the co-operative should be the one to drive the New Zealand proposition in all markets at the commercial price points necessary to gain volume ($9.99 US, 5 pounds UK, $12 NZ and $12 Australian. 

I predict that this model will develop in say 10 to 20 years time but there will still be a lot of pain to go through before then.

UNCOMMON

We went to The King's Speech last night. Man what a good film this is and it is good to see that the film industry can still make stuff like this as a counterpoint to all the Bruce Willis, Angeline Jolie and Tom Cruise trash that Hollywood churns out. Colin Firth's acting is so good you don't see him as Firth the actor. It is totally riveting. At one point in the film his character the Duke of York (later to be George VI) says, when Logue the speech therapist challenges him to a shilling bet "I don't carry money actually".
This reminded me of years ago when I went to a week-long conference (in Bali of all places) with Remy Cointreau Group the French drinks company. At one stage I was shopping with Dominique Heriard Dubreuil the daughter of the company's leader who was later to become CEO and is now Chairman of the group and rated apparently the 42nd most influential woman in the world. She is a nice and very smart woman but I was struck at the time at how unworldly she was. She was looking at some gold jewellery and asked me if the price they were asking for a necklace in a boutique was correct or not. Me! I said that I don't usually buy gold, what would she normally spend. She said that she never carries money, the bills for what she buys are always sent on! How the other half live eh?

CATCH A FALLING STAR....

A giant who was used to having his own way had, over most of his adult years, consumed as much as he could get his hands on to become big and strong. The bigger and stronger he became allowed him to walk over people who, out of either awe or fear would bow to him saying, “you are strong and masterful giant. We love you” The giant, feeling well pleased by his engorgement and inflated by the adulation set off further afield to plunder and consume. With more eating his appetite increased so that he wanted to consume bigger things. All the things he wanted to consume were not easily for the taking and the giant had to trade his possessions and valuables for them. He didn’t mind this as he believed that as he got bigger he would acquire more possessions and valuables from the little people who adored him. One day, far from home he bought one of the biggest and juiciest meals he had ever seen. It cost him most of his valuables but he was happy. When he sat down to eat it however he found that it was too large to ingest at one sitting . He chewed and swallowed, chewed and swallowed but,  after consuming large chunks he found that his body, either unused to such large amounts or tired of being stretched so much would rebel and purge out the extra and unwanted sustenance. The more he ate the more he purged. The more he purged the smaller and weaker he became. As he became smaller and weaker the little people learned not to fear him as much and, as he was becoming saggy, to not be in awe of him so much.

OK, this is a fairy story I created but there are companies today that could be the greedy giant. I'm sure that everyone who is interested in the phenomenal growth of wine companies (and their falls) over the last couple of decades will recognise something of the above. The woes of Fosters springs to mind with their overambitious purchase of Wolf Blass and Penfolds (Adelaide Steamship Company/ Rosemount etc. conglomeration of companies) and subsequent hundreds of millions of dollars write-downs, loss of brand equity, closure of wineries and subsequent job losses. Closer to home in New Zealand we witnessed the rush of blood to the heads of Lion Nathan leaders who purchased Wither Hills and other wine companies at outrageous prices before writing millions off the balance sheets (to balance their books they just might have scored the deal of the century in picking up Lindauer and other brands from Pernod Ricard at a bargain price). The most recent fiasco and the one most fitting the greedy giant is Constellation, the enormous American wine company, second only to Gallo in USA and, previously touting themselves as number one wine company around the world due to their acquisitions who have just this Christmas dumped most of their Australian acquisitions, all of their South African acquisitions and half of their UK acquisitions at a fraction of the price that they paid for them progressively over the last few years. We are talking of hundreds of millions of dollars here. More importantly we are talking about the loss of brand image and integrity of some brands that are many decades old and trusted by wine drinkers. Much more importantly is the loss of jobs. Greedy giants may well have been popular heroes in the 1920's, the 1980's and inexplicably the early 2000's but I think that with experience (bad) their time is up. Come in number one (or is that two?).

SIEG!

Austria is best known for producing Adolf Hitler and, whilst they vehemently denied it after WW2, a good deal of Nazi ideology. Austria also produces wine which can be superb. As they did in WW2 where they virtually ruined both their country and their reputation, in 1985 Austrian winemakers ruined their wine industry through greed and arrogance. Greedy grapegrowers (and complicit winemakers) bolstered the must weight of their grape juice by adding Di-ethylene glycol. DEG is better known as anti-freeze or, if you are in Russia, cheap vodka. This added to alcohol levels and sweetness and was a way of demanding higher prices for wine from a poor vintage. It can also send people blind and could, in large quantities, kill someone. I was marketing a leading Austrian brand in 1985 and had some very interesting midnight telephone calls with the producers who at first denied involvement in the scandal. When I faxed through the DSIR lab test results they changed their tune and blamed their suppliers. I got full credit for the stock (about 25,000 bottles) which we had destroyed and no longer imported that brand. Arrogance is an Austrian trait. One of our current guests works for a college where foreign students come for a term or two. She looks after their welfare and recently on the arrival of a young Austrian lad suggested to him that he might like to join some of the other students on a ski trip to the South Island. Adolph junior said "Why should I want to do something like that? We have the best ski country in the world in Austria". I bet his grandfather still wears brown shirts.

Anyway, why Austria? Amongst the eclectic selection of wines that we have enjoyed over the last week was an Austrian red wine. It was 2001 Umathum St Laurent. St Laurent is an Austrian red grape that has French provenance and is most likely related to Pinot Noir. Apparently it is notoriously difficult to grow and ripen as is Pinot Noir. 2001 was a 'difficult' vintage in Austria. When an Austrian says that a vintage is 'difficult' it is probably like them saying that Hitler was 'naughty'. The wine was light - a  bit more like a Cabernet Franc than Pinot Noir - but still had a nice fruitiness to it. The alcohol was 12.5% which in today's terms was light reflecting the poor vintage (and the fact that they no longer add DEG). I'd file this wine away in the "interesting' file.

CHRISTMAS WINES

We do drink at Christmas. Who doesn't? The trick is to drink elegantly and well. It is easy to quaff down buckets of the stuff given that normal eating patterns are all over the place and, given the quantity of food consumed it probably doesn't matter much but I feel, come boxing day when you are feeling a bit jaded it is better to have fond memories of something nice. Last night when we were having a BBQ I didn't feel like a wine thinking instead of traditional Christmas Eve drinks. The trouble with 'traditional' in our NZ culture is too much connection with UK and European traditional drinks which are all winter seasonal. The classic eggnog might be nice but is more suited to a bitterly cold winter's evening than a mild summer's one.

 I opted for a White Russian. I watched The Big Lebowski recently, that classic Cohen Brothers film. The Dude (Lebowski) only ever drank White Russians. This is a mix of vodka, milk and kahlua or Tia Maria with lots of ice. I was keen to try this so mixed up a good one. It fitted the Christmas Eve setting perfectly.
Today I will lay out a selection of sparkling (Deutz Methode and Champagne (Roederer)), white (Chardonnay, Riesling and Pinot Gris) and red (Pinot Noir, Zinfandel and Merlot). If all goes well and everyone is not too full I will open a 1977 port (Taylors, Warres or Grahams) to go with the plum pudding.
It will be a big day.

And one for TSB.....

Captain Beefheart - Mirror Man

I read The Curmudgeon's latest post on the loss of Captain Beefheart. Here

 He talked about a party in Wellington when the neighbours complained about the loud music. The music playing (very loudly) was Mirror Man. I don't expect you to listen to the entire clip here but fast forward it to get a feel of the jammy repetitiveness of the song which has an almost hypnotic effect particularly after a few wines or other substances. I remember this particular party (I was there) as previously we had consumed the best bottle of wine that I have ever drunk. It was a magnum of Chateau Pichon Longueville Comptesse Lalande 1953.

This was in 1976 so the wine was 23 years old but, being in a magnum size had aged gracefully. There are few times in my life that I have tried a wine at its optimum stage. This was one. It was still rich and flavoursome but the texture was as smooth as milk. Having Beefheart playing (Safe as Milk being another of my favourites) was appropriate.