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October 15, 2007 | Wine Industry Trends | WineDirect Admin

The definition of Insanity

The most enduring constant in the wine industry (and American business in general) is change. I was recently talking to a friend who started in this business with me thirty years ago, and we marveled at the changes we could recall.

In the early 70’s Italian Swiss Colony was a major brand in the U.S. Their TV ads featured “the little old winemaker, me”. Almaden was the #1 selling brand in San Francisco. Almaden was started by Charles LeFranc in the late 19th century. LeFranc, a Frenchman, came to the U.S. to work for Paul Masson.

In 1980, Almaden was owned by National Distillers, who sold the brand to Heublein, who sold it to Canandaigua wine, which became Constellation. Paul Masson was owned by Seagrams, (which was sold by the Bronfman family to Diageo) who sold the brand to Vintners International, who sold the brand to Canandaigua wine, which became Constellation. Vintners International was created when they bought Taylor California Cellars, Great Western, and Taylor New York , along with a winery in Gonzales from Coca Cola, who thought they should get into the wine business. VI sold everything to Canandaigua wine, which became Constellation.

Along with Coca Cola, Phillip Morris, Schlitz brewery, and even Anheuser Bush put their toe into the wine industry ocean, only to draw it back out when they saw how turbulent the waters could be.

Consumer tastes have changed. You could not go onto a college campus in the 60’s and 70’s without seeing bottles of Lancers and Mateus being used as candle holders. Then came Riunite Lambrusco, followed by two beer drivers from Northern California who launched the wine cooler fad. Who can forget Ed and Frank thanking you for their support. About that same time we discovered another easy drinking potable, Sutter Home White Zinfandel.

As the consumer started drinking more table wine, they pushed for better quality at lower prices. In 1980, less than 3% of the table wine drunk in the U.S. came from a bag in the box. By 1997, the number had risen to 20%. This addressed lower prices, not better quality.

Prior to the mid-1980’s, there were no value priced varietals, then the Benzinger’s launched Glen Ellen and the fighting varietal category was born.

The meanderings above are only a small sampling of the changing landscape in the wine business. Today we are faced with the impact of the internet and changing regulations as we continue to refine our business models. A winery’s ability to thrive in this market will be significantly based on their ability to embrace and respond to the changes foisted upon us.

A quote I have heard attributed to Einstein best sums up the current state of the wine industry for me; “the definition of insanity is doing the same thing over and over, and expecting a different result.” The question to ask yourself is obvious, what I am doing differently today than I did yesterday? If the answer is not enough, perhaps it is time to rethink your actions. We will be glad to help.


 

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