Wine Club Newsletter - July 2020
The COVID-19 is Upending the Alcoholic Beverage Industry
Forbes Magazine
So far, the impact of the COVID-19 pandemic on U.S. alcoholic beverage sales has been different from the experiences in past recessions. Alcoholic beverage sales have spiked significantly, but the impact has been uneven. Some producers have seen their sales soar, while others have seen them decimated.
According to Republic National Distributing Company (RNDC), a major, $20 billion revenue, wine and spirits distribution company, sales of spirits jumped by around 50% for the week ending March 21. Nationally, the overall increase for the week, according to Nielsen data, was a 55% spike in sales.
Significantly, according to RNDC, the rate of increase in sales of spirits declined in the last week of March, even though it continued to increase at a 20%+ rate. Not surprisingly, 1.75 liter sized bottles were showing the largest increase, while 375 ml bottles showed the smallest increase. Sales of economy and premium spirits were outselling sales of luxury, super-premium and ultra-premium by roughly two to one. The latter was consistent with historical trends, even if overall demand was elevated.
Ironically, Corona beer, whose name similarity to the Coronavirus many pundits assumed would crater its sales, saw its sales rise instead. According to Constellation Brands (STZ), sales of its flagship Corona beer soared 50%, well above the overall increase in beer sales
Not surprisingly, sales were dominated by off-premise retailers, especially mail order accounts. The anecdotal evidence is compelling. Drizly, an alcohol E-commerce platform operating in over 100 markets across the United States and Canada, saw a 300% rise in sales. Nicknamed the “Amazon of liquor,” Drizly allows consumers to obtain delivery of a variety of alcoholic beverages directly from local retailers. According to Nielsen, online spirits sales were up 243% during that week.
Liquor retailers have been classified as essential accounts in most states. Their sales results are mixed, however, depending on their customer profile. Remedy Liquor and Wine Cellar in Glendale is one of Southern California’s biggest wine and liquor retailers and has a sizable, national mail order operation. Its experiences are indicative of the plight of many liquor retailers.
According to Michael Issakhanian, the owner, overall sales are down considerably even though online sales are booming. Per Issakhanian, about 40% of the store’s revenue was driven by events—weddings, parties, receptions, etc. “That business is gone,” he says, since under the stay at home orders large gatherings of people have been banned. Likewise, purchases of high-end liquor as gifts “have also disappeared,” he notes, since people aren’t socializing like they used to. Internet sales have exploded, on the other hand, resulting in the hiring of four more staff to keep up with demand.
On-premise accounts, on the other hand, saw an even more dramatic decline in sales. It’s estimated that 85% to 95% of bars and, excluding fast food restaurants, over 80% of sit-down restaurants have been closed. According to Ozgo:
Since March 1, the restaurant industry has lost more than three million jobs and $25 billion in sales. Despite the aid offered by the Cares Act, Laurent Grandet, an analyst at investment banker Guggenheim, estimates that 20% of bars and restaurants won’t reopen. Overall, Moody has revised its 2020 forecast for restaurant industry sales from a 2% to 4% growth to a 10% decline.
Convenience stores are a significant outlet for beverage sales, especially wine and beer. Many of these stores are linked to gasoline outlets. Stay at home orders, now in 33 states covering over 90% of the U.S. population, have sharply limited driving. Additionally, consumer purchases have shifted to destination stores with large selections and bulk purchase options, like warehouse clubs or large grocery stores, and away from convenience stores.
Even though convenience stores were deemed essential outlets, they are still seeing significant declines in revenues. Last week, Casey’s (CASY) for example, the fourth largest convenience store chain with 2,146 outlets, reported significant declines in its store traffic and withdrew its 2020 guidance. Other convenience store chains are doing the same
Quick service restaurants (QSRs) are doing better since they are usually already set up for or drive through or in-store pickup. Historically, roughly 65% of QSR sales are drive through. QSRs, however, sells virtually no alcoholic beverages, so their resiliency has little impact on the beverage industry. Allowing a QSR to sell alcoholic beverages, even if it was just wine or beer, would be a boom for the beverage industry. It’s unlikely that state regulators would adopt that change, but it wouldn’t hurt to ask.
The changes in the distribution pattern have far-ranging implications for the beverage industry regardless of the overall increases in volumes. Craft beer producers, for example, rely on on-premise sales for around 70% on their revenues. They are seeing significant reductions in revenues, despite the spike in bottled beer purchases. Many craft beer producers do not even offer bottled beer.
Boutique wine producers are facing similar problems. An informal survey of Willamette Valley wine producers, for example, showed that on average the typical winery derived 25% to 35% of its volume from direct to consumer sales and the balance via distributor sales to on-premise and off-premise accounts. Revenue wise, however, the revenue split was 50-50, since direct to consumer sales are more profitable than sales to distributors.
2017 Rossese Bianco, “Rosserto”, Manzone
Growing Region Monforte d’Alba, Langhe, Piemonte, Italy
Varietal Composition 100% Rossese Bianco
Fermentation 500 Liter Barrels for 12 Months
Alcohol Content 13.5%
Suggested Retail $20.00
WineSellar Club Price $17.99
Broad Strokes:
From the Winery: The Rossese Bianco, cited in ancient books of 17th century, is an indigenous grape coming from Eastern Liguria (Cinqueterre). This grape also spread in the Alba region, Piedmont but it disappeared from both regions because little productive.
Manzone Family saved Rossese Bianco from the extinction in an old family vineyard. Manzone Giovanni since 1982 produce an intriguing, age-worthy white with a remarkable structure. A small quantity remains in Piemonte in the Langhe district, where its presence has been certified for many years on the list of authorized grapes in the national registry of wine grape varieties. After many years of research and bureaucracy with the University of Turin, from 2012 there is a new white DOC appellation in Piedmont: Langhe Rossese Bianco
Appearance:
Kind of an “Old World” looking package, and I do like the dark tinted bottle. Not many will recognize “Rossese Bianco”, but questions will be answered by the comments above and after you try it. The wine has a golden, steely tint to it, and it is clear and brilliant.
Nose:
Nice white and fresh fruit aromatics, laced with orange and other citrus, even got a note of custard. Peach and pear nuances come forward, with red apple, a hint of herbs, chalk, mineral, Moroccan spices, vanilla, and a touch of withe vermouth.
Texture:
Great feel in the mouth, refreshing, complex, but kind of large. It takes you through the gamut, by giving signs of youthful verve contrasted by firm acid structures illustrating its aging potential. Drying finish is a perfect foil for food.
Flavors:
Fresh tree fruit of red apple and pear, are edged by the citrus notes of orange (and kumquat) and the spices of Morocco. Also got white corn, vermouth and vanilla, with the elements of chalk and minerals, and white sesame seeds.
Serving Suggestions:
Reminds me of the great aging wines from the Loire Valley, France, made with the Chenin Blanc grape. Will keep for 5 years, enjoy with all foods white wine friendly.
2012 La Veguilla Crianza, Bodegas la Cepa
Growing Region Ribera del Duero, Spain
Varietal Composition 100% Tempranillo
Fermentation French Oak for 12 Months
Alcohol Content 13.8%
Suggested Retail $24.00
WineSellar Club Price $20.69
Broad Strokes:
This is a fabulous wine from the Ribera del Duero region of Spain, where the Tempranillo grape produces some of Spain’s greatest red wines. Note this is a 2012. The current release is 2017, so this wine has some age on it, but still has many years to go. (GP)
From the winery: “The La Veguilla wine collection, which includes seven different wines, comes from our own grapes, pampered from the vine to transmit their singular personality and make uncorking our wine an unforgettable experience. We use only French Oak casks, from various cooperages, which add an elegance that distinguishes our wines. The French oak pore is finer, and transfers its properties more gradually and in a more balanced form, contributing honey, vanilla, and spice aromas, among others.”
Appearance:
I really like the contrasting white label against the black bottle. It makes the wine stand out on the shelf, for sure, and it’s quite pleasing. The back label has some nice descriptors of the wine . . . trying to take my job? Dark cherry red color bleeds out to nearly clear at the edge of the bowl.
Nose:
The nose is lovely, and gets you off to a great start on the enjoyment of this wine. Black cherry aromas give way to a sweet dose of vanilla oak, black pepper, a dash of herbs, clove, and a hint of cappuccino.
Texture:
This is just what you want to experience in a wine mid way through its term. Outstanding entry of rounded black and red fruits, with those fruit flavors expanding in your mid palate. Drying yet soft tannins (black walnut like) make for a beautiful, well-structured finish that keeps going on and on.
Flavors:
Dark red and black fruits, tasting ripe and full, balanced and delicious. They are hugged by well-rounded vanilla oak, ripe plum, roast beef, and laced with clove, nutmeg, and cinnamon. It has a lip smacking finish!
Serving Suggestions:
The winery says duck, T-Bone steak, Filet with goat cheese and port sauce. Chile con carne.
2016 Montepulciano d'Abruzzo Riserva, La Quercia
Growing Region Abruzzo, Italy
Varietal Composition 100% Montepulciano
Fermentation Slovenian Oak 12 Months
Alcohol Content 14%
Suggested Retail $27.00
WineSellar Club Price $22.49
Broad Strokes:
Montepulciano d'Abruzzo is an Italian red wine made from the Montepulciano wine grape in the Abruzzo region of east-central Italy. It should not be confused with Vino Nobile di Montepulciano, a Tuscan wine made from Sangiovese and other grapes. Montepulciano d'Abruzzo was first classified as Denominazione di origine controllata (DOC) in 1968. The Colline Teramane subzone, established in 1995 as a DOC in the province of Teramo, was promoted to separate Denominazione di origine controllata e garantita(DOCG) status in 2003 and is now known as Colline Teramane Montepulciano d'Abruzzo. In the late 20th and early 21st century, Montepulciano d'Abruzzo earned a reputation as one of the most widely exported DOC wines in Italy. It is typically dry with soft tannins and often consumed young. In addition to Montepulciano, up to 15% Sangiovese is permitted in the blend. Wines aged by the maker for more than two years may be labeled Riserva.[
Appearance:
I love the packaging! It is SO Italian. The whimsical flowing graphics and font style depict the Hillsides and the namesake Quercia tree. The wine is a strikingly brilliant red/black in color, looking fresh, new and attractive.
Nose:
Luscious black fruit, with spice, a hint of tar and anise. I detected fine notes of mineral, dried fruit and flowers, a touch of earthiness, spice, cherries and some smoke. It is quite pleasant and rewarding, with scents of ripe red and black fruits.
Texture:
This medium-bodied wine is nicely balanced, with the fruit exhibiting a good concentration without feeling too heavy or bold. Some tannic pucker of youth melds into the fruit as the wine smooth’s out with air, yielding a clean, dry finish.
Flavors:
The flavor profile seems identical to the traits of the Nose, and I might add wild cherry, blackberry, chocolate, fresh herbs, pomegranate, cured meats, white and black pepper and a bit of licorice.
Serving Suggestions:
I would have it with tomato or mushroom based pastas, charcuterie plates, all cheeses.
2017 Alonso Lopez de Familia Crianza, Casada Morales
Growing Region Rioja, Spain
Varietal Composition 90% Tempranillo, 10% Graciano
Fermentation New French Oak 14 Months
Alcohol Content 14.5%
Suggested Retail $38.00
WineSellar Club Price $27.89
Broad Strokes:
From the Winery: Alonso López is sourced from two plots of 40 year-old vines. These vineyards are located on the slopes of the mountains of Laguardia and Lapuebla de Labarca, between 430 and 580 meters of altitude. Due to their unique situation, the climate is Mediterranean, Atlantic and Continental. Our peculiar farming system has allowed us to develop a control system that allows us to elaborate high quality wines and discover the potential of each of our vineyards. The well-established trellised vineyards were planted in La Rioja Alta at an altitude of 650 meters, where the mild Atlantic climate prevails. Our winery lies on the path of the world-famous Camino de Santiago, nestled in the heart of Spain’s world-famous Rioja Alta wine region.
Appearance:
It has a classic looking Euro-Label, with the telltale distinct etching of the Domaine and vineyards front and center on the label. Most all of the other font is not meant for an older set of eyes to read in the dark, even though the informative back label is worth a trip to get the magnifying glass. Bright, dark red coloring on the wine,
Nose:
The nose of this wine has blackberry, herbs, forest floor, cherry and tobacco. Some flowery notes of lavender, roses and violets, with crushed herbs, raspberry, wood oak, a hint of smoke and a touch of coffee.
Texture:
Medium to full in weight, body and character, the wine has tangible tannins, with its firm acid balancing the fruit very well. It kind of makes your mouth water as you are sipping on it. The finish is pleasant and long.
Flavors:
This New World style Tempranillo is quite gratifying with its fresh fruit and solid structure, and the ripe cherry, bramble, blackberry, licorice and black pepper are delightful. Look for earthy notes, such as tobacco, forest floor, and the flower elements from the nose. Delicious!
Serving Suggestions:
This wine has a GREAT quality to price ratio! The 2014 rated 98 points. This Crianza is great with most any foods that need red wine, and by itself.
2015 Editorial Cabernet Sauvignon
Growing Region Pritchard Hill, Napa Valley, California
Varietal Composition 100% Cabernet Sauvignon
Fermentation French Oak
Alcohol Content 14.9%
Suggested Retail $45.00
WineSellar Club Price $40.49
Broad Strokes:
Winemaker Britt Nichols has more pedigree than many winemakers twice her age, with time spent at Jordan Winery and alongside legends Nicolas Morlet and Philippe Melka. Like those of her mentors, Britt’s Cabernets are deep in color, rich, and intensely concentrated. Yet unlike all too many Napa Valley Cabernets, these are also wines of great class, sleekness, and polish. There was a limited bottling of this Cabernet that was supposedly to have gone into a $300 wine (which scored 99 Points) but was not used and therefore we become the beneficiary of a beautiful, well-crafted wine at a fraction of its intended price!
Appearance:
Words wise, a pretty understated label, but it is identifiable when on a shelf. Kind of a fun back label, adds to the theme. The wine is intensely hued with dark ruby red/black core, bleeding out to magenta on the rim. No signs of bottle age at this point, some five years after the vintage.
Nose:
The aromatics jump to your senses with blackberry, chocolate, vanilla, cappuccino, with notes of mint, herbs and black cherry. Also got a bit of black olive, tapenade, with some graphite and black pepper. LOVELY!!!
Texture:
This wine has pretty much a seamless texture. It is medium to medium-full bodied, big framed, but with a soft touch. Feels beautiful in the mouth, with some firm tannins, yet a silky smooth, savory feel in the mouth. A small note of cranberry acid shows a touch of youthful bite. Lovely, fresh feel stays that way from start to finish.
Flavors:
Blackberry and blueberry fruit, with a touch of pie dough, vanilla and chocolate, with eucalyptus, coffee and toasty oak. Look for a bit of anise, currant, charcoal, roasted nuts, raspberry, smoke and black pepper.
Serving Suggestions:
This wine has a GREAT quality to price ratio! In fact, it over-delivers! Drinking a Napa Valley Cabernet that I would personally rate 90-93 points for $40 is a total steal! You should put 12 bottles in the cellar, and drink one every year. Enjoy!
2016 Mayhem Syrah, Ascension Cellars
Growing Region Cass Vineyard, Paso Robles AVA, California
Varietal Composition 87% Syrah 12% Petite Verdot 1% Roussanne
Fermentation 50-50 New & Used French Oak 18 Months
Alcohol Content 14.1%
Suggested Retail $56.00
WineSellar Club Price $49.49
Double Gold Medal: Toast of the Coast Wine Competition, 95 Points (I judge there gp)
From the Winery: Ascension Cellars is a premium, boutique winery specializing in barrel-select, handcrafted Rhône and Bordeaux-style wines from Paso Robles, one of the premier growing regions on the Central Coast of California. Our love of French Rhône and Bordeaux wines influence every wine we craft. We believe in a light-handed approach to winemaking, allowing the true typicity of each varietal and the terroir of the beautiful Paso Robles fruit to shine through as the star. We believe our style preserves and highlights the wine’s link to its place of origin and are proud that the grapes we source come from organic or SIP Certified, sustainably farmed vineyards. We invite you to grab a glass and Elevate Your Senses!
Appearance:
Just looking at this bottle tells me that there is pride, thought, and creative energy that is going into this product. I really like the graphics, the feel, the verbiage . . . and it really helps I like the wine a lot too! The color is a deep purple, and it is just about opaque.
Nose:
Fabulous fragrance!!! The winery added the sweet-scented varietals Petite Verdot and Roussanne (white wine) to elevate the aromatics, as it may be done in the Rhone Valley of France. And it does, I think I can actually detect the Roussanne. Violets, black raspberry fruit, Frappuccino, vanilla oak all make it hard to keep my nose out of the wine glass. It’s like a gloriously scented moving target.
Texture:
The Mayhem, along with our other selection this month for Gary Parker Collection (2015 Editorial Cabernet) has a special texture I dub “seamless”. No overbearing fruit, or hard acids, or any defects whatsoever, it just feels perfectly rich in your mouth.
Flavors:
The black/red fruits of blackberry and ripe raspberry are forward and powerful, lovely, especially wrapped around a countering hint of smoke, spice (clove), and chocolate/vanilla notes from the wood treatment.
Serving Suggestions:
This Mayhem was one of the top stand outs we judges deemed from the 800+ submissions to wine competition, and named “Best Syrah”. Only 100 cases produced, put in the cellar!!!
Lavender Peach Gelato
This herbal gelato can be served as an appetizer, a palate cleanser between courses, or as dessert. Great dish to have handy for the upcoming summer days.
Ingredients:
- 2 cups 2% milk
- 2 tablespoons cardamom pods, crushed
- 1 teaspoon dried lavender flowers
- 1 vanilla bean
- ¾ cup sugar
- 5 large egg, beaten
- 2 medium size peaches, peeled and finely chopped
Method:
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In a large heavy saucepan, combine the milk, cardamom pods and lavender. Split vanilla bean and scrape seeds; add bean and seeds to milk mixture. Heat until bubbles form around sides of pan. Remove from the heat; cover and let steep for 10 minutes. Strain, discarding flowers and spices.
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Return milk to the heat; stir in sugar. Cook until bubbles form around sides of pan. Whisk a small amount of hot mixture into the egg yolks. Return all to the pan, whisking constantly.
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Cook and stir over low heat until mixture is thickened and coats the back of a spoon. Quickly transfer to a bowl; place in ice water and stir for 2 minutes. Press waxed paper onto surface of custard. Refrigerate for several hours or overnight.
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Fill cylinder of ice cream freezer two-thirds full; freeze according to the manufacturer’s directions. When gelato is frozen, stir in peaches. Transfer to a freezer container; freeze for 2-4 hours before serving.