Publisher’s Page April 2015 News & Views

Posted on | March 25, 2015   Bookmark and Share
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Protect Yourself (Year Round)

Competitive pressure, changing customer habits and damaging legislation are the kind of challenges that we periodically have to face. But one challenge that demands constant attention: the responsible retailing of our products both on- and off-premise.

To help focus on that, Diageo, in collaboration with ABL and the Responsible Retailing Forum, recently distributed a calendar that is full of resources and tips. Jan. – Clearly set policy with staff. Feb. – Train on the risks of underage service. March – Tools to check ID. April – Avoiding over-service to an intoxicated customer. May – Establish clear routines for checking ID. June – Be a community. July – Monitor staff performance. Aug. – Document your training. Sept. – Avoid marketing to underage audiences. Oct. – Set clear instructions on how to handle an intoxicated patron. Nov. – Set the right tone for temporary employees. Dec. – Management responsibility is a constant concern.

Granted, most of the topics covered are applicable every month of the year. But by presenting them in a full-color, attractively designed piece, Diageo has made it way more likely that managers across the country will keep them top of mind.

William G. Slone

Chairman

Not our Pal

As you have probably heard, “Palcohol” is back. The powdered alcohol product has received TTB label approval, and now spokesmen for the producer are adamant that consumers “need to contact your legislators to tell them you don’t need the government to be our nanny.” Sorry, Pal, it’s a little late for that in this culture.

Not to stretch the analogy, but legislators are more like partners, if not always by choice, in a decades-old effort to enable the trade of products to the American consumer in a socially responsible way. Alcohol is not just any product. Never has been, never will be. This is why we live with highly supervised licensed outlets committed to controlling the appropriate distribution of our products.

Access to and potential misuse of powdered alcohol stirs up significant new concerns, especially as it could relate to young people. So far eight states have moved to ban the sale of this powdered product. Several others, including New York, are still considering such a move. Time to touch base with your legislative and association contacts if you want to help avoid creating the kind of social issues that so distract from the positive aspects of our business.

Jason A. Glasser

Chief Executive Officer

Tequila in the Fast Lane

This month’s cover story on tequila is like a case study on how quickly categories in our industry evolve. Years of competition and attention to quality have made agave practically a household word among spirits drinkers. Yesteryear’s Tequila Sunrise and Margarita have given way to tequila-driven craft cocktails. And now, acceptance of 100% agave as a baseline for tequila excellence has led numerous brands to develop high-end expressions that offer both greater complexity and compelling stories. If tequila producers and advocates have their way, bourbon, Scotch and other brown spirits are going to have some more sipping competition.

This month we are also pleased to bring some articles that can help you reboot your business for spring. Jim Clarke, for example, makes a case for restaurants to offer pairing menus (page 34). Off-premise, “Selling the Good Stuff” (page 42) shows how independent retailers are having success creating new value “sweet spots” rather than trying to compete on price.
The change of season is a great reminder to keep your business fresh. New products, new displays and new offers are among the simple ways to give customers reasons to come in, and come back.

Jody Slone-Spitalnik

Chief Operating Officer

Off Spain’s Beaten Path

Posted on | March 25, 2015   Bookmark and Share
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The Under-The-Radar Cariñena Region Offers Old Vines, Character & Value

Chances are, if you have heard “Cariñena” it was in the context of a wine grape. Which it is. But  Cariñena is also one of Spain’s oldest regions and one of Europe’s oldest appellations, awarded Denominacion de Origen status in 1932 (the second D.O. region in Spain). Yet today it remains relatively obscure in the U.S. market, even among wine professionals, as very few wines from Cariñena are imported. Many seasoned sommeliers have never even tasted one.

This will likely be changing in the not-so-distant future. A lot has changed in the region since Romans planted vines here. Cariñena had a multi-century-long reputation for excellence, but while the region survived the Phylloxera plague that destroyed most European vineyards in the 1860’s (thanks to those absurdly rocky soils—see photo), it couldn’t escape the devastating effects of the Spanish Civil War and WWII. Quality today is on an accelerated upswing, thanks to a handful of cooperatives who dominate production here and who uniformly defy the co-op stereotype of poor quality mass production.

Last month we sat down with three of New York City’s top sommeliers—Jessica Brown (The Breslin), Thomas Pastuszak (The Nomad) and Marika Vida (The Ritz-Carlton) to taste through a selection of wines from the Cariñena region and record our impressions. What we discovered pleasantly surprised us all.

The Value

“Overall, I think these wines offer a very approachable, accessible style for the larger U.S. market—especially those seeking fuller, lush wines at a great value,” Brown believes. This was a sentiment shared by all the panelists, especially considering that for a very low price, one can obtain a wine with real personality. “In most of these wines, I found terrific minerality, freshness, salinity and an appealing savory character—particularly in the younger wines—and a very judicious use of oak,” Pastuszak observed. “It’s unique to see that much character and sense of place come through in wines this inexpensive.”

A useful selling technique is “value by reference,” he continued: “If you enjoy Châteauneuf, here is a place you can get that same character and old-vine intensity for half the price. A glass of Cariñena may cost $12 on a by-the-glass list, whereas you could pay two or three times as much if you go to the Rhone.” Vida agreed: “You can’t even get AOC Cotes du Rhone for $15 a glass most places!”

Finding old-vine expressions at these price points is another critical point of distinction for Cariñena, emphasized Florida-based Master Sommelier, Virginia Philip, who was not at our tasting but visited the region last June: “To find a wine coming from 50- or 90-year-old vines for under $30 is practically unheard of.”

The Grapes

The region produces some lovely whites from Macabeo and Chardonnay, but this is undeniably red wine country, which is exclusively what our panel tasted. Confusingly, though named after the Cariñena grape, the region is dominated by Garnacha which represents 55% of total vineyard acreage. Years of viticultural trial and error revealed that Garnacha more easily achieves ripeness in the landscape’s sloping hills. The Cariñena grape remains important for blends, however, and has proven to thrive in many lower-elevation sites. Interestingly, our panel’s favorite wine was the one mono-varietal Cariñena we tasted (Bodegas San Valero Particular Cariñena 2012).

“Cariñena is a grape no region has really tried to own, and I think there is huge potential for this region to make it their signature,” said Pastuszak. “The quality of this San Valero Cariñena is really exciting, and I would be very curious to taste more.”

The Range of Styles

“The gamut of styles is really impressive,” said Philip. “One hears so much about Priorat, but the dimension of wines from Cariñena makes it a truly compelling place. Depending on the age of the vines and the blend, these wines range from light and aromatic to dark, intense reds that demand food.”

Cariñena’s 29 wineries craft everything from Joven reds, Crianzas and Gran Reservas—some in large quantities, some in boutique amounts. We tasted a range of styles, and the group overall preferred the younger examples. “I think the wines are most expressive and exciting in their younger, fresher versions, where there is terrific minerality and the terroir really comes through,” Pastuszak summarized.

The Discovery Factor

Sommeliers wade through a sea of wine daily, and most search for wines that are truly distinct and authentic; our panelists agreed that the wines of Cariñena fit the bill. “I would promote these as ‘something new by-the-glass,’ you can really go that direction with these wines,” said Vida. “The fact that Garnacha is a known entity definitely helps, and I would describe many of these wines to my customers as falling between Pinot Noir and Nebbiolo in style.” Brown agreed, adding that Cariñena is still a discovery region, which can set a wine list apart: “These wines have great appeal for a sommelier who wants to offer something truly unique by the glass that very few others have.”

A Family Distillate

Posted on | March 25, 2015   Bookmark and Share
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Heaven Hill Celebrates 80 Years Of Crafting Whiskey & Building Brands

 

Heaven Hill is marking their 80th birthday in an unexpected way, by changing their name. While the switch from “Heaven Hill Distilleries” to “Heaven Hill Brands” might not seem like a huge departure, it does reflect the dramatic way in which this family-driven company has evolved over the last eight decades.

“We are still heavily in the distillery business, but we are about so much more today than American whiskey,” says Max Shapira, President, who has worked for the company his father founded since 1970. “We have an immense range of brands which we’re building for the future, so our new name really describes what we do today.”

Betting on Bourbon

The five Shapira brothers made no small gamble in founding Heaven Hill Distilleries in Bardstown, Kentucky in 1935, on the heels of Prohibition and in the thick of the Great Depression. Their first brand, Bourbon Falls, was just up and running when they were forced to shut down, along with many other distilleries  during WWII, in order to produce alcohol for the war effort. Yet their commitment to American whiskey production paid off eventually, as Heaven Hill went on in subsequent decades to become a leading bourbon distiller, particularly with the introduction of Evan Williams in the 1950s (which remains the company’s flagship brand).

Their passion for bourbon never wavered, in spite of the fickle nature of consumer drinking habits. In the midst of the current American whiskey craze, it’s easy to forget that bourbon has “not always been successful,” reminds Andy Shapira, Director, Sales Analysis/Western Division Sales Manager, referring to the category’s steep decline in the 1970s through the early 1990s. “We survived by developing interesting offerings in many other categories. We have skin in the game with every trend in the industry, which has allowed us to compete against bigger players.”

Change, Accelerated 

The third generation of Shapiras brought a thirst for innovation and trend-setting. When Kate (Shapira) Latts, VP of Marketing, and her husband, Allan, COO, moved back to Kentucky from Cincinnati to work for Heaven Hill in 2001, she admits that, “like a lot of people at the time, I thought Heaven Hill was all about American whiskey, but quickly saw that there was so much more to the company.” Having just acquired Christian Brothers—the number three brandy in the country—the company soon embarked on a period of acquisition and innovation.

An early leader in the flavored vodka world with Burnett’s, Heaven Hill released best-seller after best-seller with offerings like Citrus, Raspberry and Orange. “I remember my dad saying we needed to try vanilla cautiously. It felt like a real risk at the time, which is funny in retrospect,” says Kate. The company was ahead of its time with Sour Apple and Coconut, too.

But the defining moment of the company’s culture shift was the purchase of  Hpnotiq in 2003. “We had to learn how to do so many things differently,” Kate recalls, as they had never before worked on “a high-energy, on-premise promotion brand with a tidal wave of momentum behind it.” In the early days, just trying to figure out how many T-shirts to order was perplexing (“Should we order four or five thousand? In 2004 we ordered a million,” Kate remembers).

“Hpnotiq taught us how to do promotions,” says Andy. “It paved the way for the future of the company. Without that brand, there would have been no Pama or Canton,” the company’s successful pomegranate and recently-acquired ginger liqueur brands. “We have been focused on a very vibrant section of the flavored liqueur category, which captures the enthusiasm and interest of bartenders, which then translates into off-premise sales,” Kate describes.

Cross-Category Expansion

With a small team of decision makers, things move quickly, giving Heaven Hill the ability to stay ahead of trends and bring new products to market efficiently. “Innovation is the lifeblood of our industry, and it usually doesn’t come from the big companies,” says Andy.

The successful launch of Blackheart Rum in 2010 inspired the acquisition of Admiral Nelson, the country’s second-bestselling spiced rum, in 2011, making Heaven Hill a major player in the rum category. Blackheart is a higher-proof rum, with a bolder flavor profile and has been propelled by the ever-strong rum-and-cola trend. “One of the most fun things we do is create a brand from scratch,” Kate shares. “When you create the name, build the equity, figure out how to best support a brand, it feels like your child.”

Bourbon Comes Full Circle

Few companies were better positioned to take advantage of the American whiskey renaissance than Heaven Hill, with its cache of historic brands and vast stocks of aged bourbon. Looking back, how did one of the worst-performing categories reemerge as the fastest growing distilled spirit today? “About 15 years ago, we in the industry got our act together with the launch of single-barrel and small-batch releases, better packaging and flavors,” says Max. “The consumer today demands all these things.” Heaven Hill helped pioneer this trend with the release of Elijah Craig 12 Year Old in 1986, the first “small batch” bourbon on the market.

Heaven Hill’s flavored whiskies continue to grow double digits, and the company has released a steady stream of premium extensions: Elijah Craig 21 and 23 Year Old, Parker’s Heritage Collection, Rittenhouse Rye—“the darling of the mixology community,” Kate says—a wheated bourbon, Larceny, even unaged whiskey, TryBox, among others. For Kate, the most exciting part about today’s boom is that growth is hitting every segment, not just the premium end, and boosting tourism. “It’s fascinating to see the types of visitors we get at our Bourbon Heritage Center, from legal drinking age college kids, to young women on ‘girl’s weekends’ to longtime aficionados.”

Size—and Family—Matters

The Shapiras at the helm today navigate a very different industry landscape than that of their founders. “You have to be so much quicker to market,” says Max. “And pay more attention to carving the marketplace into multiple pieces, it is much more segmented.”

Being smaller than the big suppliers, and family-run, puts Heaven Hill in an advantageous position, believes Andy: “We are nimble, and we don’t have to focus on the quarter—we can think long term. It also allows us to have consistent pricing strategy; our distributors and retailers like the fact that they don’t see end-of-quarter pricing activity with our brands that they do with many others.”

David Sparrow, VP at RNDC in North Carolina/Virginia, has worked with a vast array of suppliers in his 40-plus years in the industry, and never met one that cared more for the people they work with. “The Shapira family treats everyone like family. They possess an unusual amount of character and integrity,” says Sparrow. “For example, when they run sales incentive trips, the winning sales reps’ entire families are invited, including children. I have never seen any other supplier offer something like that.”

The More Things Change…

As different as today’s Heaven Hill portfolio might appear from the original (and payroll, which has ballooned from 12 employees to 600) the company’s culture remains essentially unchanged. “We have always tried to make sure that our employees have jobs that are challenging and interesting day in and day out,” says Max. “And that our products are the highest quality. We are still using the same mash bills from 80 years ago, and have some of the original stills.”

Presiding over the country’s largest independent, family-owned producer and marketer of distilled spirits in the country, Max has a considerable amount to be proud of. Yet he is absolutely certain about his greatest accomplishment: “Enticing the third generation of the family to leave their careers and join this business has been my most significant contribution. I believe having my son, daughter and son-in-law working at Heaven Hill, bringing the same passion and commitment to excellence, has ensured our future like nothing else.” 

Tequila Double-Shot

Posted on | March 25, 2015   Bookmark and Share
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Pernod Ricard Brands Avión & Altos Make A Powerful Pair

 

Dominic Alcocer’s title says it all: Director of Tequilas, Pernod Ricard USA. The French-based company is betting big on the continued ascent of Mexico’s national spirit with not just one, but two high-quality 100% agave tequilas that complement each other in advancing market share and the overall tequila category. “The tequila age is just beginning! Our commitment as a company is ensuring we are competing with extremely well-crafted spirits that are in the fastest-growing categories,” says Alcocer.

Figures from the Distilled Spirits Council of the United States affirm that position. High-end premium and super-premium tequila, the exclusive domain of 100% agave offerings, have registered impressive growth over the past decade. For the period beginning in 2002 and ending 2013, the super-premium segment of the U.S. tequila market, virtually unknown a decade ago, soared 481% in volume, while high-end premium tequila attained a 178% increase. It’s an impressive run by any measure, especially for a spirit that has relied almost exclusively on sales of shots and a single signature cocktail—the Margarita—since making a splash in the U.S. in the 1960s.

Tequila Avión, created by entrepreneur Ken Austin in 2009 and majority owned by Pernod Ricard since 2014, is a perfect poster child for the changing opinions and perceptions surrounding tequila. Through Austin’s friendship with Doug Ellin, creator of the HBO series Entourage, Avión landed a starring role in two seasons of the hit series soon after its launch. Avión’s appearance in Entourage’s fictional Hollywood fast lane gave rise to an interesting challenge: viewers weren’t sure if Avión was real. “Ken was pleased, but also pained because he was approaching tequila from a purely flavor perspective, and for people to say it was a marketing brand was simply not true,” recalls Jenna Fagnan, President of Tequila Avión. The company responded with a “Yes, it’s real” campaign and saw demand soar. Whether choosing Avión Silver, Resposado or Añejo, tequila lovers, who tend to favor the spirit on the rocks, quickly learned that Avión had the quality to back the buzz. At the 2012 San Francisco World Spirits Competition, Avión Silver took the honors for not only World’s Best Tequila, but also World’s Best White Spirit, beating out hundreds of vodkas, gins and rums. Fagnan quickly recognized that Avión had the hallmarks of a lasting luxury brand: “Tequila has to be fun and lifestyle. But something I learned in my time at LVMH, working on not just Champagne but watches, is that you can’t have a quality brand that lasts without quality first.”

Much like the best wines, Avión is not made delicious by doing anything drastically different, but rather through incredibly meticulous attention to the smallest details. “Ken is such a stickler, every step of the way,” she says, noting the agave for Avión comes from 7,000 feet above sea level, where deep-rooted plants result in deeper concentrations of flavor. After being hand-harvested at the peak of maturity by exclusive jimadors, these agave piñas are slow roasted in a brick oven to develop flavors that can’t be created in a modern autoclave. After three days, the sweet, baked piñas are allowed to rest to re-absorb their juices, much like a sizzling steak.

During distillation in a copper pot still, Master Distiller Alejandro Lopez takes a very narrow cut of only the best distillate, followed by a proprietary filtering to create Tequila Avión. “In the end, each bottle takes about 30% more agave than other tequilas. Ken is more about the finished product than cost. That entrepreneurial spirit of not cutting corners is a philosophy that guides the whole team,” says Fagnan.

With unaged Avíon Silver (averaging $40/750 ml retail) as the flagship, Fagnan notes that they also sell “an unusually large amount of Resposado and Añejo,” aged six months and two years respectively. It’s not surprising given the excellent value of these expressions, priced only about $5-$10 more than Silver at retail.

Olmeca Altos: More than a sidekick

Olmeca Altos has joined Avión at Pernod Ricard, created by two bartenders who envisioned an authentic tequila that skews younger, while offering exceptional value. “Altos,” as fans know it, relies on some of its agave crushed by a two-ton stone tahona wheel, one of only seven distilleries in Mexico to retain the traditional method. Also like Avión, it is brick-oven baked. Priced around $25 at retail, the Altos Plata (a blanco style) and Resposado offer incredibly affordable introductions to authentic 100% agave tequila.

“Altos is a younger consumer, often coming from mixto [tequila] or other spirits. They are ready to leave spring break behind. These are the same folks who are starting to explore the nuances of bourbon or Scotch and want to explore other authentic quality spirits,” says Alcocer.

While co-founders Dre Masso and the late Henry Basant brought star bartender pedigree to the brand, the original vision of a quality Tequila with a compelling price and a robust flavor profile that excels in cocktails is in good hands with co-founder and Maestro Tequilero Jesús Hernández. “Henry’s life force is present in the liquid itself,” says Alcocer. “When we work with bartenders and mixologists and the trade community, I love to see the playfulness and creativity, all the ways they bring
Altos to life.”

Pernod Ricard also brings Altos to life by connecting directly with consumers. At altostequila.com, consumers are inspired to go beyond the normal margarita, with cocktails beautifully photographed in martini glasses, teacups, mason jars and flutes. In fact, most of the marketing spend for Altos is in digital. “YouTube has more of our target consumer than all the networks combined. It’s hypertargeted and very efficient,” says Alcocer. Inventive on-premise promotions include a bicycle handing out free tacos street-food style.

With two progressive tequilas, united by their pursuit of quality, Alcocer sees only great synergy for the future: “I love having both these brands. It is exactly where we need to be to meet the needs of where consumers are going.” 

Selling the Good Stuff

Posted on | March 25, 2015   Bookmark and Share
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Independents Find Reward in Value Sweet Spots, Avoiding Lowest Price Tier

 

Grocery stores sell $3 wines. Convenience stores have wines at $5. What about independent wine retailers? How low in price should a wine shop go?

I called a selection of wine retailers around the country, and I didn’t find any independent shops that carry bottles of wine under $6. Some carry jugs and boxes of wine that cost the equivalent of less than $6 per 750ml. But ultra-cheap wine in a bottle doesn’t seem to be a good product for wine stores.

Even $6 was on the low side.

“The lowest we’ve had was $6.99. We’ve got two or three SKUs,” Julia Cochran, store manager for The Wine Club in Santa Clara, CA, told me.

Most every wine shop I spoke to, even the most exclusive, carries at least one wine under $10. So the bottom tier in 2015 for independent retailers is somewhere between $6 and $10.

I was curious about the dynamic at work here. In discussing their stocking principles, I learned there are a number of reasons that savvy independents are deliberately avoiding the lowest of the price rungs:

 

£ Super-cheap wines in grocery stores, like the infamous Two-Buck Chuck (now $2.50 even in California) are loss leaders for stores whose main business is not wine. “Trader Joe’s sells Two Buck Chuck because they sell other things,” said Ken Irving, Director of Fine Wine at Westchester Wine Warehouse in White Plains, NY. “They bring people in to buy $2 wine and make very little margin, but they’re also selling chicken and making 100% margin.”

 

£ In states where grocery stores are allowed to sell wine, people looking to buy $5 to $7 wine usually pick it up while buying pork chops and applesauce. “My consumer base is basically the $10 to $20 people,” noted Ken Maykut, a wine manager at Coastal Wine & Spirits in Branford, CT.

 

£ The U.S. wine market is divided. Sales of wine under $10 have been falling, but over $10 have been rising, and over $20 is the hottest of all. Thus, even if stores find a great $7 wine, it may be too cheap for their clientele.

New Sweet Spots

This fundamental rising price point represents a big change from five years ago, when consumers were trading down after the economic crisis. Now, they’re trading up. “The premium wine business is strong and prospects are good,” says wine industry analyst Jon Fredrikson. “All the big wineries—Gallo, Constellation, the Wine Group, DFV—are moving into the $10 to $14 segment.”

In contrast, Fredrikson says wines priced below $9 began steadily dropping in sales in late 2011. In food and drug stores measured by Nielsen, sales of wines under $10 dropped 816,000 cases in 2014, while sales of wines priced $10 to $14 rose by just over 1 million cases.

It appears that the economic or some stores, carrying $8 wines would hurt their image. “We are a boutique, artisanal producer-oriented wine store,” says Mark Mazur, operations manager of Best Wine Purveyors in Pleasantville, NY. “We do not go below about $10 a bottle. We can’t find wines that are good enough to sell that represent the store that we are. The fighting range for us is $14 to $19.”

New York, of course, is a special case because grocery stores are not allowed to sell wine. Given that context, there is a need for stores like Westchester Wine Warehouse. It’s in a relatively affluent area, but it still carries Glen Ellen and jugs. Ken Irving employs “stores within the store” to service multiple different types of customers that come in: “Some are coming in because they want the jug wine, they know they can get it here, and it’s reliable. Then you’ll have the everyday consumer who’s looking for something $8 to $25. Then you’ll have the higher-end collector who wants to buy Mouton-[Rothschild].”

Even with some clients that might be interested in very cheap wines, though, there is an important factor limiting Westchester Wine Warehouse’s purchase of them: margin. “If you could sell $6 wine and you paid $1 for it, you would want to sell it all day,” Irving says. “The margins make it worthwhile.”

For the most part, distributors in New York don’t, and can’t, offer bottles of wine at such low wholesale prices, which means that selling a $6 wine at 20% margin just isn’t as attractive as selling a $15 wine at 20% margin.

States like California don’t have that issue. Retailers can buy direct from many sources, which means theoretically it’s possible to get a wine very cheaply and charge a decent margin on it. However, such a deal would almost certainly have to be exclusive to a single store.

“If I saw a great $5 wine, I might be interested but I’d also be interested in a nice mark-up on it,” says The Wine Club’s Cochran. “We’d look at Wine Searcher and see what kind of mark-up we could get. The effort to bring in the wine, and put it in the system, wouldn’t be worth it for a 20% mark-up.”

The Quality-Price Conundrum

I’ve skipped over a crucial issue about cheap wines in fine wine shops: Even with the worldwide advances in winemaking and hygiene, wines under about $7 usually just aren’t very good.

This has become a huge problem in the United Kingdom, where years of ruthless price competition among the five big supermarkets that dominate wine sales have taught British consumers that wine can be had for 5 pounds sterling. At current exchange rates, that’s about $7.50, so it’s not as cheap as the cheapest wines in U.S. food stores.

However, these supermarket wines have developed a terrible reputation and, rather than nudging customers upscale, as has happened in the U.S., they have begun to drive consumers away to other alcoholic beverages.

For smaller American shops that emphasize a curated selection, it has become very difficult to find wines under $10 that fit the bill. “The less-than-$10 segment is made of world surplus bulk wines,” says Jeff Bitter, Vice President of Operations at Allied Grape Growers in California.

At Best Wine Purveyors, Mazur and his staff write information cards about every wine. They’re not averse to large producers. “We have La Vieille Ferme blanc. That’s our lowest-priced wine,” Mazur says. “It’s a fairly widely available brand, but it’s the Perrin family and it is well made. We’ve also got Thomas Hyland Cabernet from Australia, from Penfolds. I can tell customers the story of Penfolds. And we’ve been able to find small Bordeaux producers that fit in the $10 to $12 range.”

But drop below $10 and that kind of wine with a story behind it tends to drop away, replaced by generic varietal wine from whatever country currently has the cheapest currency.

There is a customer for that kind of wine, and you can see them, state laws permitting, in Trader Joe’s, buying commodity wine by the case. However, as long as the economy remains strong, when customers come to your independent wine shop, chances are good that super-cheap isn’t what they’re looking for. Which means less time and energy invested at that low-margin low end, and more invested in developing a value “sweet spot” that works for your clientele.

Times change, people change, budgets and behavior change. “With gas prices being so low, I’m getting people to step up out of their $20 range and buy a $25 wine,” says Coastal Wine & Spirits’ Maykut.

Brown-Forman Rolls Out Newest Jack Daniel’s at Citifield

Posted on | March 25, 2015   Bookmark and Share
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The Brown-Forman team presented the new Jack Daniel’s Tennessee Fire to the Empire Merchants sales force at Citifield on February 26th. A firetruck greeted each guest upon arrival, and the Brooklyn Vipers Dixie Band played for the audience.

Jennifer O’Connell; Michael Accorsi; Don Leone; Suzanne Orlando; Ashley Carespondi; Jenn Leslie; Danielle Goodson; Colin Campbell; Rhiannon McCollum; John Morrison; Suzanne McGonigle, all Brown-Forman

Don Leone, Brown-Forman, with “Captain Jack’s” Tennessee Fire crew

When Wine Is On the Menu

Posted on | March 25, 2015   Bookmark and Share
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With pairing menus, wine makes culinary artistry more profitable.

 

There are wine pairings, and there are Wine Pairings. Selecting a wine to accompany a steak is one thing, but what about pairing all three, seven or 26 courses of a meal? “Our menu ends up being 20 to 30 courses,” says Scott Cameron, Beverage Director at Atera in New York. “The pairing is the best option to accommodate the guest and provide the best experience.” Guests seem to agree; Cameron says a third to a half of Atera guests opt for the pairing, up from one quarter a year and a half ago.

The Umstead Hotel in Cary, NC, offers a three-course prix-fixe and a seven-course tasting menu, and Head Sommelier Hai Tran says sales of pairings have quadrupled in the past year.

Creating a successful pairing menu doesn’t come easy. To start with, there’s a need for variety. Tran says a good menu will inherently call for different types of wines in the first place, but he still makes an effort to draw on wines from different parts of the world. One need not stop at wine, either. “I use beer, cocktails,  saké, non-alcoholic drinks…” says Cameron. Tran does the same, though he usually steers away from cocktails to make it easier to control the overall amount of alcohol being served.

Logistics are another imperative. During service, Tran says communication is key to make sure the pairings go smoothly; the kitchen’s timing needs to align with that of the server and sommelier, both of whom need to know which wine goes with which course in case the sommelier is stuck at another table. “We always have two glasses staged, the bottle on display and the next beverage,” says Cameron. He’s also careful about glass placement, so “the guest doesn’t feel obligated to pound leftovers, and the table’s not getting cluttered.”

Portions & Pricing

Portion size can be an issue when serving so many courses. Some guests will balk at ordering “20 glasses of wine” while others will look askance at a 2oz pour, so it’s important to set expectations. “I make sure they have enough to enjoy with what’s on the plate,” says Tran, “so as plates get bigger the pours get bigger. I may start off with two ounces and move up to three or four. They drink a total 3–3 ½ glasses by the end of experience. I’m not averse to topping them off if needed.” With a longer menu, some wines may do double duty. “Our menu has a span of snack courses which I pour a really great Alsatian Riesling with,” says Cameron. “One bite snacks—all smoky, rich, and fatty; all great with a bit more savory style of Riesling.” 

Portion control can also mean price control. “An equilibrium can be reached,” says James Tidwell, MS, Beverage Manager at the Las Colinas Four Seasons Resort in Dallas. “You put together the pairing as a grouping, but based on individual pricing. The highest expense wines are balanced by unexpected, cool, fun wines that are still inexpensive.”

Having multiple wines open for a pairing can lead to waste, but the more popular the pairing, the easier that is to control, since turnover is faster. “We are lucky that the majority of our wine sales are from the wine pairing, so we rarely end up with wine that is open more than one day,” says Brooklyn Delmont, Wine Director at Forage in Salt Lake City. The Forage tasting menu may change daily; if a wine can’t be used with a new menu, Delmont temporarily offers the remainder of the wine by-the-glass.

But why dwell on negatives like waste? Tidwell says pairings can be a plus in managing other aspects of one’s product mix. “Pairings offer opportunities for inventory control, especially where you have excellent wines that people don’t know about. It introduces people to those wines, and then they enjoy them on return visits,” says Cameron.

Turning Expectations into Opportunity

Guest expectations for pairings may go beyond the interplay of fats and tannins. “People who ask for the pairings are people who want more engagement with the service staff,” says Tidwell. “That added enjoyment is a PR and marketing opportunity.” But don’t assume they’re studying for an MS exam. “Unless a guest shows an increased interest in wine we do not elaborate too much on it,” says Delmont, “since we are already at their table often and would still like to allow them some private time. Typically, it is after the wine is served and eaten with the food that I receive questions about it because it is a wine that either surprised them or they really enjoyed.”

Sometimes one goes to all that trouble to create a pairing menu, and the guest asks you to change it. “The pairing is set,” says Cameron. “That’s what we do. It doesn’t do justice to the food to just throw another beverage in there. I steer guests who ask for changes toward the by-the-glass wines or a bottle.”

Delmont often does much the same, but also encourages guest to try the pairing as is. “We have a lot of people, at the end of the pairing, say they were not big fans of white wine but have enjoyed seeing how the wine is very different when it is put with food. This is what I believe the point is to a wine pairing. The wine and the food changing each other into something greater.” 

 

‘SET’ OPTIONS


Even if you don’t have a standing tasting menu, there are plenty of occasions for a set menu where wine pairings can be part of building your revenue:

 

£ The Prix-Fixe. This old-standby is a three-course seat-filler, often only offered at certain times of day: (lunch or Pre-Theater most typically). If the guest feels they’re saving money on the set menu, the wine-pairing option becomes an affordable indulgence. Since guests have options for each course, pairings can either be broad—a wine that suits the course, more-or-less, regardless of choice—or a wine paired with each potential choice.

 

£ The Chef or Tasting Menu. These are longer menus—seven or nine courses, perhaps—meant to highlight the range and quality of the kitchen. They give a beverage director a chance to show off the wine program’s range and quality.

 

£ The Seasonal Menu. Often focusing on seasonal ingredients; when those ingredients are pricey—white truffle season, for example—you’re attracting guests who are ready to spend. If it’s built around a single ingredient, like truffles, just as the kitchen needs to find variations on that ingredient, so will the pairing, to ensure a progression that’s interesting enough but stays true to that component.

 

£ The Holiday Menu. Valentine’s Day, New Years Eve…whatever it may be, people are looking for a special experience. The pairing needs to be highlighted and special, though; for many people, a special occasion means a bottle, so you may find yourself working against that mentality. 

On Call: Tapping Into Beam’s Sweet Side

Posted on | March 25, 2015   Bookmark and Share
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Jim Beam Honey is right at home in Whiskey cocktails.

 

Few bars pour as much whiskey as Manhattan’s American Whiskey. Bartender Joey Vargas offers 150 American whiskies, along with 50 others from around the world, and estimates that whiskey in some form makes up close to 70% of what people drink at this establishment.

Just what role do flavored whiskies have in a hard-core whiskey program like his? “There are some flavors that are far better than others,” Vargas shares. “When it comes to cocktails, I prefer those that offer an authentic flavor and aren’t too sweet.”

For his “Friends With P” creation—inspired by the classic Gold Rush cocktail, a mix of bourbon, lemon and honey—Vargas uses Jim Beam Honey along with Beam’s Rye and gives it a grapefruit twist (“I love the aroma of grapefruit, so I shake the drink with a grapefruit peel”).

“We use honey in a lot of our cocktails here, and using Jim Beam Honey is so much easier than stirring in real honey. In a high-volume account like ours, that is a huge asset,” Vargas explains. Most importantly: “It actually tastes
like honey.”

Jim Beam Honey is a classic shot (in fact, Vargas offers it as part of a beer-and-shot special at Happy Hour, rotating the beer with the seasons), but Halley Kehoe, Senior Brand Manager, Jim Beam, reports seeing a lot of recent interest from bartenders in mixing with it, too: “We’ve seen a lot of excitement around Jim Beam Honey in the basic “plus 1’s” (cola, ginger ale, etc.), and also with citrus (lemon, grapefruit, orange) as well other unique pairings such as hazelnut or amaretto liqueur. The fact that it is infused with real honey, not artificially flavored, really resonates with the mixology community.”

Bar Talk: Destination: Clover

Posted on | March 25, 2015   Bookmark and Share
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Travis St. Germain, Clover Club, Brooklyn, NY

Bartender Travis St. Germain spends his nights at Brooklyn’s famed Clover Club, working alongside owner Julie Reiner and head bartender Tom Macy. When he’s not slinging drinks, he consults for new-to-the-States cachaça brand Yaguara, spreading the gospel of an on-the-rise spirit.

The Beverage Network: At a bar like Clover Club, where the classics and modern originals are both so important, how do you stay creative?

Travis St. Germain: Julie and Tom go through the old menus and decide which classic drinks and authors we still haven’t paid homage to. Then, seasonal drink categories are chosen. Once all this is done I, along with the rest of the bar team, look at a sort of skeleton of a menu and we talk about how best to fill it in. The hardest part is deciding who gets to make which styles of drinks. After that’s done, we start working on our assignments.

TBN: Clover Club is a beloved industry den and, as revealed on hectic Saturday nights, attracts a more mainstream crowd as well. How does it lure in both demographics?

TS: Clover Club has always done things the way that Julie wants them to be done. I think that her style of hospitality and service is appealing to a lot of different kinds of people; whether they’re in the industry, neighbors or cocktail enthusiasts. Lucky for both of us, we serve food until 3:00am and get to see a couple of our favorite neighborhood industry pros for their dinner and nightcap.

TBN: Clover Club has such an esteemed reputation. Are patrons especially curious?

TS: Most people going to a bar like Clover Club will ask you if they have a question. Then some will try to stump you with a question, when it’s obvious they already know the answer to it. If it’s slow, and a guest looks interested, I’m happy to nerd out about the drink in front of them and all the ingredients in it, but for the most part people who are drinking would rather talk about something that is going to make them laugh rather than the tedium of mash bills, brix levels and char numbers. The staff is constantly going through trainings put on by distillers, liquor conglomerates and brand ambassadors. We try to take in as much as possible and spare our guests the painful details.

TBN: Now that you’re working with Yaguara, what cocktails are you turning guests onto at the bar to try cachaça?

TS: Everything but the caipirinha. The beauty of artisanal cachaça is in the aromatics. It also has a relatively low acid level due to the distillation of sugarcane juice. This gives it enough versatility to throw a ton of lime juice at it without losing balance —or even amari and vermouth for much more interesting and fun results.

TBN: Having traveled to Brazil, what are the biggest differences you encountered in their bar culture?

TS: In both Rio and in Sao Paulo I immediately saw the emphasis on fresh fruit. In Brazil everything revolves around the indigenous tropical fruits, most of which are not exported. My favorite, and one I hope to see here in the States, is caju, which the cashew grows off of. It tastes similar to the nut, however it has the texture, sugar and acid level of a peach. Some of the fruits are highly unusual, but in Brazil bartenders utilize many of them with the utmost care and skill.  

Tequila on Fire

Posted on | March 23, 2015   Bookmark and Share
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There’s no arguing with the numbers: high-end and super-premium tequilas have never before been as popular and successful in the U.S.

 

 

Just-released 2014 sales data compiled by the Distilled Spirits Council (DISCUS) reveal what most retailers and many marketers already knew: higher-priced tequilas have caught fire. Super-premium (SRP $30+) brands shot up nearly 15% in volume, while high-end premium ($18-$30) and premium ($12-$18) grew at the same healthy but more modest 3.7% rate. So strong is the top end of the market now that super-premium accounts for about 40% of supplier revenue in the tequila category.

Brian Bowden, a VP overseeing spirits, beer, beverages and tobacco for the California-based BevMo! stores, notes that customers are more often open to higher-priced tequila expressions. “We’ve seen an increase in our price points toward more of the premium and super-premium and a decrease in mixtos. During the holidays, for instance, whether for gifting or personal consumption, some of our best SKUs were between $75 and $125 in terms of sales.”

Those people in charge of producing, branding and packaging tequila have a few ideas why the market is changing. “Different expressions, premiumization and personalization—those are the trends, along with craft cocktails, that can be said to be driving the discovery of quality tequila,” says Ann Stickler, SVP, Managing Director for Brown-Forman’s Herradura, El Jimador and Antiguo tequilas.

“Overall, consumers want to drink better,” says Andrea Sengara, Director, Tequilas at Diageo, where Don Julio was joined last year by ultra-premium DeLeon. “They’re more interested in a quality story and brands that have credentials. We see that across Scotch and whiskey and we see it in tequila. It’s truly a beautiful spirit to be appreciated.”

PRICEY, BUT LED BY QUALITY

DeLeon is a prime example of how tequila’s price limits are being pushed. Now with two lines priced at the top of the category, there are the three expressions in the ultra-premium line retailing for $60 – 70, and three in the the Luxury line; a joven mixture of blanco and añejo at $150, a cask-strength extra añejo at $350 and the $850 Leona, finished in Sauternes barrels.

Other high-end brands have joined the fray. Not surprisingly, with every upscale expression sharing a common denominator of being 100% agave, communicating points of distinction often involve other aspects of production, notably piña preparation and distillation techniques, blending, aging and wood treatments.

For example, Terlato Wines recently added the $45-$65 super-premium Riazul to their Artisan Spirits portfolio. The añejo spends two years in French Limousin oak, teasing hints of caramel, honey and vanilla out of the barrels. Lunazul’s  Primero añejo is aged 18 months in American white oak. Tres Agaves ages their añejo in Woodford Reserve barrels for 18 months.

Corzo points to triple distillation as crucial to their añejo being “the fullest, most complex expression of modern tequila.” Baron “Platinum” is another tequila brand that is distilled three times, “resulting in an extract that gets cleaner and cleaner,” eliminating any off odors or tastes.

Casa Dragones Joven takes a different route to distinction, employing creative blending on top of multiple distillation and “ultra-modern” filtration. Their twist: hand-finishing their silver tequila with five-year-old extra añejo. Casa Dragones then goes into a handmade bottle of lead-free crystal, individually engraved with the brand’s “pepita” signature design element.

As packaging goes, extra credit is surely due to 1800 Tequila, whose newest offering, 1800 Colección, an extra añejo, comes in hand-numbered bottles, within a custom-designed pewter decanter designed by artist Gary Baseman. The design is inspired by the tragic love story between a Mexican warrior and a magical mermaid. Only 40 bottles have been made available—at a suggested price tag of $2,000.

 

Two-grand is a bit steep for most aficionados, but a sure sign that consumers are in fact willing to trade way up came last year with the launch of Patrón Spirits’ Roca Patrón line, with a 90 proof silver, 84 proof reposado and 88 proof añejo, Roca retails between $69-$89 and is made using the traditional “tahona” stone-ground as well as aging in single-use bourbon barrels, unlike the standard Patrón which uses a mix of new and used barrels.

“The Roca roll-out has far exceeded our expectations, and our expectations are usually very high because new products are so few and far between for us,” says Patrón Chief Marketing Officer Lee Applbaum. He attributes the success to Patrón’s brand equity and the growing consumer appreciation in general for higher-priced spirits. “The category is growing with a lot of new entrants, and the interest in artisanal, hand-crafted spirits is good for us in tequila,” he notes.

DEMAND FACTOR

As tequila consumers look to broaden their palates, brands like Roca, with a different production method and higher proof, become more appealing. Three years ago Herradura launched a limited release program that foresaw just such a level of interest, called Colección de la Casa, in which reposados are finished in different types of casks (in 2014 they used Scotch whiskey barrels).

Brown-Forman’s Stickler says the limited expressions sell out, encouraging further experimentation at the high end. “The category is really turning to more premium offerings and as consumers are rediscovering the craft of tequila, getting interested in añejo and reposado and exploring the other expressions. It’s a joy to be having the conversation about tequila and quality.”

She notes that while Herradura’s Selección Suprema extra añejo, one of the stalwarts of the category and retailing near $400, is clearly meant for the connoisseur, the Coleccion line is generally priced under $100 and allows the tequila aficionado the opportunity to step up. “But even the fact that people are regularly paying $40 for a bottle is so encouraging’” adds Stickler. “And now, whenever people start to take the next step in exploration in the category, there’s something there for them.”

“Extra añejo has tremendous opportunity to grow,” notes a spokesperson for Proximo Spirits, which now includes Jose Cuervo, 1800 and Gran Centenario in its portfolio. According to Nielsen tracking, extra añejo has grown by about 8%in volume last year. 1800 XA is fairly new to the market, but producers don’t see it as just tequila, but rather “more as a fine brown spirit for special occasions,” according to the Proximo spokesperson. That places extra añejos in competition against high-end Cognacs and Scotches, with producers consciously targeting those luxury consumers.

“This is an exciting time for the extra añejo category,” says Avion’s president Jenna Fagnan. “We launched our Reserva 44 last year and have seen an incredible reception. Both tequila consumers as well as whiskey consumers are drawn to the complexity and depth of a good extra añejo tequila.”

BARREL POWER & BEYOND

Among current initiatives, Avion is rolling out a by-the-barrel program for retailers with their reposado expression. By-the-barrel programs, quite common among whiskey producers, are fairly new to the tequila world. Herradura has for a while been inviting on-premise customers to select their own barrels, a program with a premium attached. Recently, some retail customers are asking about añejo barrels. “It’s a very personal thing that allows them to be part of the experience. What a great trend to have customers coming to us to have that experience—you wouldn’t have seen that five to ten years ago,” says Stickler.

All these evolutions are only the beginning, say many in the tequila business.

“The tequila market in U.S. was, and still is underdeveloped, especially in the higher segment,” says Jose Hermosillo, founder of Casa Noble Tequila. “In the super-premium tequilas growth is almost 500% since 2002. I believe we still have a ways to go.” The versatility of tequila fits many drink occasions, he notes—shooting, sipping, classic and contemporary cocktails.

Casa Noble, now in Constellation’s portfolio of spirits, has an edge: it has been certified organic, and also has been pushing other “green” practices. Beam Suntory’s Tres Generaciones has done well in the organic space created by high-end specialty bars and hotels since its certification in 2012. “There is a passionate and growing niche of places that are focusing on that,” says Gary Ross, Beam Suntory Senior Director of Tequila, who oversees Sauza, 901, Tres Generaciones and El Tesoro.

Ross echoes what other tequila marketers highlight: more educated consumers interested in well-crafted spirits willing to pay more for better and different. “Plus there are a lot more players in super premium using more interesting techniques,” he adds.

Sauza has increased its attention to the recently-acquired 901, focusing on the connection to brand founder and pop star Justin Timberlake. Celebrity tequila, with Sean Combs involved in, is part of the category’s curiosity factor lately, as with Casamigos, founded by entrepreneur Rande Gerber with partner George Clooney.

“When George and I decided to create our own tequila, we did it out of our desire to have the best tasting, smoothest tequila for us to drink and share with friends,” says Gerber. “Word started to spread and we realized that others were looking for something similar. Consumers know what they like and appreciate the time, effort and patience we took to create Casamigos. To us, Casamigos is a lifestyle brand.”

While many smaller brands continue to aim for the on-premise as a place to break in, the move to higher end means greater retail involvement. Diageo’s Don Julio has done very well in the on-premise, where the brand has been focused for some time, says Sengara. “That eventually set strong off-premise growth once scale was built,” she explains. “We’ve definitely seen the off-premise start to pick up in the past two years.”

The power of more pricey tequilas is just beginning to emerge, and there are still many possibilities for developing new expressions. Says Avión’s Fagnan, “We are eager to see tequila become a greater force in the spirits industry well beyond North America, and we sense it’s coming. The time is certainly right to be in the ultra-premium tequila business.”

NOT A MARGARITA

While high-end tequila has increasingly gained traction as a fine sipping beverage, bartenders are still inclined to tinker.

One of them, Chris Simmons, General Manager at The Patio on Goldfinch in San Diego, started something he now calls the Ocho Project, inspired by the makers of the unusual single-estate and vintage brand but interested in seeing how different aging techniques would alter the flavor.

Simmons connected with Tomas Estes and Carlos Camarena, co-owners of Ocho to get their approval before aging one of the blancos in five-liter new American Oak barrels. His goal: to craft a tequila with oak-driven characteristics (as opposed to original Tequila Ocho aged in used barrels). Simmons serves the two different styles of tequila side-by-side for guests to experience first-hand the differences the aging process imparts.

“I wanted to focus on one particular component, the aging process, since some producers use brand new oak and some use barrels several times, like Ocho,” says Simmons. He removed samples at 14, 28 and then 42 days, and serves them paired with reposado, añejo and extra añejo Ochos. “They show that if you start in the exact same place and change the next step, you end up in an entirely different place,” he says.

 
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