A short note from Michael Fragos, winemaker at McLaren Vale-based Chapel Hill, shows optimism in what have become difficult markets: “I’m just back from Canada and the USA. There is plenty of work for us all still to do, but it is encouraging to see that there is not the previous level of baggage with Australia. The trade are listening and tasting again, which is a good start. There is also definitely a desire to reintroduce themselves to Australian wine via more textured and balanced styles.”
Drink alcohol and be considered weak, degenerate and a drain on society’s collective coffers. This statement may appear to be an exaggeration today but the time is rapidly moving closer when it will be considered the norm.
What is frightening is the increasingly black and white approach. The accepted units of safe drinking are being overlooked. The growing attitude from various agencies appears to be there is no safe limit.
The Foundation for Alcohol Research and Education (FARE) 2012 report is damning. On reading, the results are quite disturbing. For instance: “Australians perceive illicit substances as the most harmful drug in Australia (46 per cent) followed by alcohol (30 per cent) and tobacco (21 per cent).” The fact that alcohol is perceived to be a bigger danger than tobacco does not bode well.
The business of wine in Australia can be divided many ways: growers/producers, large corporate/family firms and the multitude of small independent producers. There is also cask and bottled and it looks as if cask is a major factor in the crusader attacks.
It really doesn’t help when a company such as Accolade Wines brings out a range of Banrock Station fruit-flavoured cask wine. Others have introduced fruit flavours before and Australian Vintage does very well with Passion Pop, though it manages to keep it under the radar.
Professor Mike Daube, who acts as if he sits at the right hand of God but works on earth for the National Alliance for Action on Alcohol, has gone into full battle cry, giving Accolade a broadside on aiming the casks at youngsters, especially young females. Naturally, Accolade denies the accusation, saying: “We refute in the strongest terms that any of our products are targeted at children or teenagers.”
TKR is not Mike Daube and admits to being on the side of wine, but when a company brings out a cask of rose infused with strawberry and lychee and a sauvignon blanc with peach and mango flavours, it is not pitching to the established wine drinker.
If the wine industry continues to give people like Daube primed bombs it must not be surprised when he lobs them back.
Long range forecast
The wine industry often boasts of its tradition, father to son and nowadays daughter and son/daughter-in-law as well. Whatever the configuration of family members, future planning is becoming ever more important if survival is expected. Handing over the business in a mess is not an option. Nor is ignoring what is happening in a global sense.
Closer to home, the majority of wine businesses appear to be ignoring the issue of carbon tax. TKR has had conversations with a few players in the industry who are concerned, and it is from these conversations TKR deducts the majority are avoiding the issue. Apparently ACI Glass is warning of price increases. This will lead to more bulk shipment and bottling overseas, hence loss of jobs on Australian bottling lines.
Wild weather warning
TKR has heard that Treasury Wine Estates (TWE) is to move its UK bottling requirements to Accolade Wines’ facility at Bristol in the west of England. As told to TKR, this is mutual back scratching, as Accolade Wines is said to be transferring its packaging requirements to TWE facilities in Australia.
This is unsubstantiated information, so TKR went to both Accolade and TWE to seek confirmation, denial and/or opinion. Accolade was direct, with a spokesperson saying: “Thanks for the opportunity to respond but Accolade Wines has a policy of not commenting on industry rumours.”
It’s a statement that says nothing but it’s a statement heard many times in or out of the wine industry, and invariably indicates something is afoot.
The TWE spokesperson replied: “I’ll have to look into this and get back to you.” The getting back line; again often used but not always acted upon.
Accolade Wines’ UK bottling facility is world class and it would make sense for TWE to take advantage of it. It appears as a bolt-on to the main Accolade business but TKR suspects it may come into its own as a very profitable part of the business that Accolade owner CHAMP Private Equity can hive off or keep when other parts are disposed of.
As more bottling goes overseas Australian bottling lines will either become under-utilised or redundant. It makes sense for Accolade or any other company to consolidate. The downside is jobs will be lost. This is all TKR speculation, which could be righted if either company would front up.
Wind in the west
Australian wines are currently expensive in many of the world’s markets. The weaker American dollar can enable wines from there to meet lower price points without sacrificing margin. Accolade Wines has acquired from Ascentia Wine Estates a trio of brands: Geyser Peak, Atlas Peak and XYZin.
The irony of this change of ownership is Ascentia was established in 2008 to buy a group of wineries from Constellation Brands, which at the time owned all of what is now Accolade Wines.
Geyser Peak is based in the Alexander Valley, part of the Sonoma Valley, but an American Viticultural Area (AVA) in its own right. The winery has been around since the 1880s, when Augustus Quitzow built it to make wine and distil brandy. It has had several changes of ownership, including a spell post-prohibition when it made wine vinegar and time in the Schlitz Brewing Company portfolio in the 1970s. Financier Henry Trione acquired in 1982 and sold it to Fortune Brands in 1998. It went to Constellation in 2007 when Constellation acquired Fortune's wine division.
Atlas Peak is also an AVA and, confusingly, a wine brand, with several top quality wines from the Napa Valley within the range, but there are no vineyards or winery. XYZin is a part of Geyser Peak that concentrates on producing wines from zinfandel.
It appears Accolade’s thinking is to develop domestic/export opportunities for its American brands but more importantly enhance its Australian and South African brands distribution across the US. It also offers a full New World portfolio to take into Asia.
Accolade is owned 80 per cent by CHAMP Private Equity of Sydney, with the remaining 20 per cent still in the hands of Constellation Brands.
The tricky part is that Constellation makes wine that goes into the Echo Falls brand, however the brand is owned by Accolade.
Constellation also distributes Accolade’s Australian portfolio across America. How the new arrangement will play out is yet to be seen, especially the Constellation relationship.
Accolade says Constellation will continue to make wine for it but it’s really the distribution that is important. If Accolade can’t get the Australian brands away from Constellation and starts pitching its three American brands against Constellation-owned brands, it’s easy to see Constellation pushing the Australian brands way to the back of the sales book.
When I pitched the question of future distribution to Anita Poddar, Accolade’s national public relations manager, she replied: “Constellation are the current US distributor for Hardy’s and Banrock Station. They use specialist wholesalers to distribute the products throughout the US. In many states the same wholesaler distributes the new Accolade Wines brands.
“We will assume responsibility for distributing Hardy’s and Banrock in the US at the appropriate time but in the meantime will be assessing other brands in our portfolio for a launch into the US market.”
Diageo has been fairly quiet on the wine front in recent years but has suddenly come to market via its subsidiary, Diageo Chateau & Estate Wines (DC&E). Like other wine companies, it is taking the youthful, funky, fun approach. Three new brands are being launched in the US: Rose’n’Blum, Stark Raving and Butterfly Kiss. They’re not cheap, but mid-range at US$12-$14. Nor is the expectation low, with a sales forecast of more than 100,000 cases of each brand this year.
Butterfly Kiss is aimed at young females and has a range consisting of Californian pinot grigio, pink pinot grigio and chardonnay. A moscato from Chile is to be added later in the year.
Rose’n’Blum, is going for the same female demographic and is offering a Californian pinot grigio and pink moscato.
The boys get a look in with Stark Raving, which is opening with Californian red and white non-vintage blends. An Argentine malbec and a French cabernet sauvignon will join the line-up.
A short article on The Shout webpage on June 4 started with: “Barossa Valley winemaker Stephen Henschke has been very impressed with a five-year trial of his wines under glass cork closures.”
Glass cork... what can be said? It reminds me of the introduction of screwcaps and statements that such-and-such a wine is now being corked with a screwcap.
A snippet from The Sydney Morning Herald, June 13: “Treasury Wine Estates has triggered a global relaunch of its Rosemount wine label to re-engage with consumers and freshen up its appeal, and has signed a leading sponsorship deal with the AFL that it believes will get the brand into more customers’ hands.”
That well-known, highly respected and followed by millions global game… Australian rules football.
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