Beverage Bulletin August 2012

California Beverage Retailers Association

P.O. Box 56686

Sherman Oaks, CA 91413

(818) 788-8120

Ron Ziff, Editor

www.cbraliquor.org

August 2012

 

The British drink for pleasure, for the Scots it's a profession.” -Old Saying.

 

This Month's Stories

World's Fastest Man has Olympian Style Celebration

Olympic Gold Cocktails

London Olympic Sales Mixed

World's Most Expensive Cocktail a Smash

Liquid Refreshment and the Election

Madonna is Too Old!

Pernod Ricard Chairman Dies

New York Investigates Energy Drinks

Alcoholic Desserts

Good News/Bad News for Champagne

Price Increase Due for Port Wine

Washington To Get Record Harvest

Supermarket Shake Out Continues

Crime-Fraud in Nuits St George

Crime-Beer Smuggling

Race for a New Soft Drink

Coca-Cola Freestyle

Once in a Blue Moon

Famous Grouse Sets New Record

Marketing - The Marriage Effect

Millennials Drinking More Wine

Half of Shoppers Visit 2 or More Stores

Health-Moderate Drinking Reduces Risk of Arthritis

Red Wine Reduces Falls for Seniors

Drinking Wine Improves Overall Health

and as always Tasting Notes and the Industry Calendar

 

 

 

 

 

World's Fastest Man has Olympian Style Celebration

After taking the gold in 100 meter and 200 meter races, Usain Bolt partied into the wee small hours at night clubs across London. Accompanied by Heavyweight Boxer Lennox Lewis and Welterweight Boxer Amir Kahn. The trio started out at the Puma Club in London's East End and worked their way across the city to the Movia Club in Mayfair where they were joined by Sprinter Yohan Blake and Swimmer Rebecca Adlington. The party was seated at a VIP table where the Movida Club treated them to a Nebuchadnezzar of Armand de Brignac Brut Gold NV worth about $125,000 USD. The bottle held the equivalent of 20 750ml's. The party emptied it by 6:30 AM and left in cabs.

Olympic Gold Cocktails

Olympic gold medalists were treated to an exclusive alcoholic cocktail priced at more than $3,000. Medalists Ryan Lochte and Chad le Clos were hosted by the Chinawhite club in the heart of London. For the Olympics, Chinawhite's bartender invented a special golden cocktail, which is priced at £2,012 ($3,117.48). Gold Medalists were invited to the club's VIP area and given complimentary cocktails. The drink contains Hennessy Paradis Imperial cognac, Luxor 24-carat gold leaf Champagne, plus a set of handmade 18-carat gold rings placed in the bottom of the glass.

 

London Olympic Sales Mixed

London Pubs reported an 10% increase in sales during the second week of the Olympics while Restaurants averaged a 40% decline for the entire 16 days. The industry is bracing for the upcoming Paralympics and then hopes to return to normal after the games.

 

World's Most Expensive Cocktail a Smash

Salvatore Calabrese was scheduled to mix the world's most expensive cocktail in front of Guinness record judges at London's Playboy Club. The bottle of Cognac to be used was a Clos de Griffier Vieux 1788 valued at $78,000 USD. Before the event started a customer ordered two glasses at $7900 each. As the customer looked at the bottle, it slipped and smashed. The event was canceled and Salvatore said “I've been heartbroken...it is a piece of history that has been lost.” The bottle was not insured and the reports don't say whether the customer had to pay for the bottle.

 

 

 

Liquid Refreshment and the Election

As we approach the November Presidential Election voters are being courted by candidates characterizing themselves with their choice of beverages. On a swing state tour Obama drank a Miller Lite followed by a Bud Light. The beers were chosen to align him with white working class voters. Meanwhile Romney doesn't drink alcohol due to his religious convictions. When offered a drink, he politely asks for an orange juice; a choice that is being well publicized in Florida.

What does the President really drink? Did you know there is a small brewing facility in the White House? White House Honey Ale Light and Dark is brewed there by the White House chefs and a stash accompanies Obama on the campaign trail. The beer is produced at his own expense and not billed to the taxpayers. It has been served at various occasions including a Superbowl party and as a treat to entertain Medal of Honor winner Dakota Meyer last year. Other recent presidents were known to imbibe. Bill Clinton enjoyed Grey Goose Vodka on the rocks and Ronald Reagan favored a glass of California White Wine.

 

On UK Prime Minister, David Cameron's visit to the US the two leaders exchanged bottles of brew. Obama gave some Goose Island 312 from Chicago while Cameron brought Hobgoblin from Oxfordshire.

 

Madonna is Too Old!

Diageo has tied in a promotional campaign for Smirnoff with a concert tour by Madonna. The company had to face legal complaints that the combination would encourage underage drinking. Diageo successfully fended off the challenge with the argument that “the 53 year-old performing artist has a fan base from the 1980's and 1990's and does not appeal to underage fans.” They produced market research figures showing Madonna appeals to less than 5% of youth. No comment from the lady.

Pernod Ricard Chairman Dies

Patrick Ricard died suddenly of an apparent heart attack, August 17. He was the CEO and President of Pernod Ricard from 1978 to 2008 and built the company to the world's second largest liquor manufacturer. In 2008 he gave up the position of President. The company owns Pernod, Ricard, Jameson Whisky, Mumm, Perrier-Jouet, Absolut, Wild Turkey, and Chivas Regal, as well as other brands.

 

 

New York Investigates Energy Drinks

The New York Attorney General has issued subpoenas to the makers of Amp, 5-Hour Energy Drink, and Monster Beverage asking questions on “advertising, marketing, promotion, ingredients, usage, and sale.” At stake is whether advertising claims are false and misleading and that the drinks may only be thinly disguised sources of caffeine. The FDA regulates food safety, but marketing is up to the 50 state's attorneys general. It is possible that findings will result in accusations that the drinks contain more than double the caffeine in coffee without showing it on the label; which would violate the law.

Alcoholic Desserts

Beer Ice Cream. Atlanta manufacturer, Frozen Pints, is producing Beer Ice Cream. The product is “Adults Only” with an alcohol content of 2% to 3%. The company is using artisan beers. Flavors include: Peach Lambic, Honey IPA, Brown Ale Chip, Vanilla Bock, and Malted Milk Chocolate Stout. Seasonal fall flavors are Pumpkin Ale and a Cinnamon Espresso.

 

Wine Popsicles. New Zealand winery, Kim Crawford is developing Sauvignon Blanc and Pinot Noir infused adult wine popsicles. Recipes were specifically developed to heighten those flavors using fresh local fruit as a base, the wine give the popsicles a tangy kick.

 

 

Good News/Bad News for Champagne

First the Good News: A study released Jan Hofmeyr, chief researcher at Behaviour Change indicates that Champagne and Sparkling Wine sales in the US could double. “While we can see a huge... appetite to drink more Sparkling Wine and Champagne, most people are still held back by cost. These drinks are perceived as indulgences, enjoyed mainly on special occasions. The good news for winemakers is that most people consider sparkling wines both taste better and offer greater enjoyment than other alcoholic drinks. So, if affordable sparkling wines can be made more accessible and be positioned as a drink for celebrating life rather than only special occasions, the sector has a sparkling future.”

 

Now the Bad News: The French Champagne Grape crop is short this year. Factors include a month of cold wet weather during flowering; followed by storms, frost, hail, and vine diseases. The harvest will start in late September and be 20% to 33% below last year's tonnage.

 

Price Increase Due for Port Wine

The cost of Port could rise by almost 10 per cent next year. The increase is due to the rising cost of the brandy used in the Port production. The withdrawal of an EU subsidy has resulted in the price of brandy rising by more than 25% from 2010-2011. Paul Symington, the chairman of Douro-based Port, Madeira and table wine producer Symington Family Estates, said: “the price of wine brandy, an essential part of Port making, has skyrocketed: Brandy will cost at least 60% more at the 2012 harvest in two months. Even if grape prices remain unchanged, the cost of Port will increase by at least 9.5 % early next year. Not an attractive proposition to take to the markets in the current recession. But, unless Port companies pass on this increase, they will quickly and most certainly go out of business.”

 

Washington to Have Record Harvest

Washington's Yakima Valley is on track to produce a record harvest of wine grapes due to the warm summer. This year's crop will be about 200,000 tons; up 25% from the previous record of 160,000 tons in 2010.

 

Supermarket Shake Out Continues

Albertsons. The Board at Super Valu, owner of Albertsons, fired CEO Craig Herkert and replaced him with Board member Wayne Sales. Volume and profit for the most recent quarter continued the decline. Mr. Sales confirmed that he will continue exploring the possibility of selling all or part of the company. Buyers being solicited are Cerberus, KK&R, TPG Capital, and C&S Wholesale Grocers. The companies handling the offering are Goldman Sachs and Greenhill & Co. The company reported weakening sales and declining profits at Albertsons as well as the companies other divisions; Save-a-lot, Shaws, Acme, and Jewel. Key executives have started leaving for other opportunities.

 

Tesco. Tesco's Fresh & Easy has laid off 40 positions at headquarters in El Segundo. Most of the jobs were in the Real Estate Department and support for new store openings. The company issued a statement “We are always evaluating the objectives of the business and assessing our programs. Many of our stores are moving into profitability, but since economic conditions continue to be challenging, we are taking a more cautious approach to expansion plans to focus on ensuring our existing stores are profitable.” The Financial Times of London carried a quote from Tesco saying that the layoffs are not an indication that it plans to “close or sell the business.” Profitability: A loss of $245 million on sales of $1.02 Billion in the year ending February 28. Plans to sell: At the annual stockholders meeting CEO Phillip Clarke said the company may do the same with its US division that it did in Japan. In Japan it paid a competitor $100 million to take over its stores.

 

Change in Market Share. U.S. Supermarkets had a 66% share of grocery sales in 2000. By 2011 that fell to 51%. The slide is caused by shoppers being lured by major discounters like Walmart and Target to buy groceries in hopes that they will buy other things on the same trip. It is also caused by shoppers searching for cheaper prices and finding them in other channels.

 

Crime

Fraud in Nuits St George

Wine negociant, Laboure-Roi, Burgundy's third largest shipper is involved in a huge fraud. More than 2 million bottles of Nuits St George Burgundy were allegedly topped with cheap wine from 2005 to 2009. Company executives Armand Cottin, 82 and his brother Louis, 83 have been arrested and questioned by police but have not been charged as yet. At a press conference Dijon Police said the fraud involves millions of dollars. Police have seized a quantity of the wine. There is no indication how authorities learned of the fraud.

 

Beer Smuggling

Beer smuggling and bootlegging has become a major problem in the UK this summer. Beer taxes in the UK are high enough to make criminal activity in the supply chain highly profitable. Organized gangs are soliciting sales to retailers of non-tax paid suds. Sales of lager have been particularly hard hit with as much as 30% of volume being lost to illicit channels.

 

 

 

Race for a New Soft Drink

Coca-Cola and Pepsi are in in a race to make a soft drink with no calories and no artificial sweetener. This Holy Grail of soft drinks would end the question of whether soft drinks are bad for your health and reverse sales declines. Currently both companies use High Fructose Corn Syrup to sweeten drinks. HFCS also has lots of calories. Artificial sweeteners carry the stigma of being chemicals. The trick is to find a sweetener that doesn't affect flavor. The companies are experimenting with organic compounds like Mogrocide, a berry extract; and Stevia, a leaf extract. Coke is test marketing Stevia sweetened drinks. Whichever company gets there first will have a huge advantage.

 

Coca-Cola Freestyle

Coca-Cola a new soft drink machine. Instead of the usual half-a-dozen choices at the self-serve soda fountain, the Freestyle allows customers to mix more than 100 combinations. The concept is being accepted by fast food chains including Wendy's.

 

 

Once in a Blue Moon

Keith Villa has a PHD in brewing. He was hired by Coors to create a microbrewery at Coors Field in Denver. He went to work to create a Belgian style wheat beers Using barley malt, wheat and coriander, but instead of mixing in tart Curacao orange peel, he used a Valencia, to give it sweetness, and added oats to make it a creamier. The brew is unfiltered, which makes it cloudy. His assistant said beers like this only come around "once in a blue moon." The name stuck. Blue Moon began growing slowly after Coors tried to kill the project five times. Last year, shipments shot up 19%, making it the 18th largest U.S. beer, according to Beer Marketer's Insights. The brand is now a major priority for MillerCoors, and as a result, Mr. Villa is now creating seasonal offerings.

 

 

Famous Grouse sets New Record

The Famous Grouse Scotch Distillery filled a 228 Liter bottle and set a record for the World's Biggest Bottle of Whisky. The bottle took 3 hours to fill and holds about 9,000 shots. It will be displayed (and not poured) at The Famous Grouse Experience Museum. The record was certified by Guinness and replaces the former record holder, a 184 liter bottle of Jack Daniels.

 

Marketing

The Marriage Effect

A new study by Corinne Reczek of the University of Cincinnati indicates that after marriage men drink less and women drink more. The heaviest drinkers were single and divorced men. After marriage couples seem to change as women control and reduce men's drinking while men seem to encourage their spouses to partake.

 

 

Millennials Drinking More Wine

More Millennials than ever are drinking wine at least once a month, according to new research presented by interactive marketing agency, Invictus Marketing. Research shows 35% of older Millennials between the ages of 25-34 drink wine at least once a month, representing the second largest age group of wine drinkers. This young group of wine drinkers is only 0.2% behind their boomer counterparts (55-64) wineries have not engaged this powerful demographic. As Millennial wine drinkers are an emerging market, this is a prime opportunity to promote educational opportunities, wine specials, tastings and events. Since social media and mobile technology are important in the lives of Millennials, these marketing channels can be a cost-effective way of influencing them.

Half of Shoppers Visit 2 or More Stores

According to findings from an intensive, Hartman Group study of the purchase, decision, and shopping habits of U.S. consumers. "The days of shopping trips to one store just to fill the pantry are long gone," says Laurie Demeritt, The Hartman Group's president and COO. "For today's consumers, shopping is very much in constant motion; it's a virtual 24-hour, seven-day-a-week activity. The consumer is now in total control of the shopping process, not the manufacturer or the retailer."

 

Health

Moderate Drinking Reduces Risk of Arthritis

New research published on bmj.com indicates that women who drink in moderation are less likely to develop rheumatoid arthritis than those who don't drink. Three glasses a week over a 10-year period cuts the risk of developing arthritis by 52%. The reasearchers studied the drinking habits of 34,000 Swedish women between 1987-1997. Several health factors including alcohol consumption, smoking, diet, physical activity, and education were considered.

 


Red Wine Reduces Falls for Seniors

Dr. Jane Cavanaugh of Duquesne University has released a study that shows Resveratrol, found in red wine may help seniors maintain their balance and reduce falls. The finding was presented to some 14,000 scientists and others gathered at the 244th National Meeting & Exposition of the American Chemical Society.

This report, based on studies of laboratory mice, could lead to the development of natural products designed to help older Americans live safer and more productive lives. “Our study suggests that a natural compound like resveratrol, which can be obtained either through dietary supplementation or diet itself, could actually decrease some of the motor deficiencies that are seen in our aging population,” said Jane E. Cavanaugh, Ph.D., leader of the research team. “And that would, therefore, increase an aging person’s quality of life and decrease their risk of hospitalization due to slips and falls.” Cavanaugh notes that falls are more common with advancing age and are the leading cause of injury-related death among people older than 65. In addition, about one in three older Americans have difficulty with balance or walking, according to the American Geriatrics Society.

Drinking Wine Improves Overall Health

Research at Boston University School of Medicine showed that drinking a few glasses of wine a day helped middle aged adults perform better on tests of dexterity, mobility, and made them feel better physically and mentally. The study involved more than 5,000 adults over the age of 50.

 

Tasting Notes

 

One of this year's outstanding events was the Long Beach Grand Cru. The tasting offered the opportunity to taste wines from across the country. Among them; the usual great wines of California; as well as wines from New Jersey, New York, Texas, Ohio, New Mexico, Washington, Oregon, Indiana, Nebraska, Michigan, Georgia, and Virginia; as well as international offerings from New Zealand, Argentina, Mexico, France, Canada, Spain, and Australia. The choices were overwhelming. The wines ranged from good to great. None below par. We did not pick “best buys” because most are not available in California. The event provided a once in a lifetime opportunity to compare the fine points and differences of wines from many regions. It also showed how new production techniques have spread to many areas that were not previously thought of as wine regions.

 

The North American Sommelier Association hosted a unique tasting in collaboration with Donnafugata Wines of Sicily. The tasting was held simultaneously at sites around the world. Our hosts tasted along with the night harvest of Chardonnay grapes, while others tasted in Asia, Europe, and we tasted in Southern California at Osteria Mamma in Hollywood. It was streamed over the internet from Contessa Entellina in Italy. First was Anthilia 2011; a white with pleasant complexity and crispness. Notes of peach and plum with a mineral background. Next Chiaranda 2008; another white with a golden yellow hue, with pleasant tastes of apple and peach. This wine was still creamy and crisp at an age of 4 years. It is reputed to age well for at least 10 years. Quite unusual for a white. This was followed by Tancredi 2008, an elegant red made from Cabernet Sauvignon, Nero d'Avola, and finished with Tannat. The wine is deep and velvety with spice and tannins that that will make it age well for many years. Finally, we tasted Mille e una Notte 2007; a red made from Nero d'Avola grapes. It was elegant and complex, deep ruby color, a full fruity nose, and a well rounded taste that owes its structure to strong tannins. This wine can age for at least 12 years. The wines are all available from Youngs Market and retail under $20.

 

Industry Calendar

9/3 Labor Day

9/6 California Wines Road Trip – Beverly Hills

9/9 Grandparents Day

9/12 Sysco Fall Show – Anaheim

9/15 Temecula Valley Showcase - Temecula

9/16 Mexican Independence Day

9/17 Rosh Hashanah (starts sundown 9/16)

9/17 Sta Lucia Highlands Tasting – Thousand Oaks

9/18 Sta Lucia Highlands Tasting – San Diego

9/19 Tasting Panel Tour - Los Angeles

9/22 California Wines Road Trip – San Francisco

9/26 Yom Kippur (starts sundown 9/25)

New Legislation for 2012

Our industry has more laws controlling it than most industries. The State Legislature and the ABC give us license privileges and can take them away. 2012 has several new laws that you must follow. New alcoholic beverage laws are being introduced that will be effective in 2013. Many critical issues are pending. Is your business safe? Members are encouraged to look through the Legislative Bulletin. If there is a new law that is a problem for your business, call the association office now. The CBRA is your voice in Sacramento. If you are not a member, join today. The CBRA is your only voice when it comes to new beverage laws.

Brands and Comments

The CBRA Newsletter has not accepted any payment from any of the brands mentioned in this edition. The editor, Ron Ziff, welcomes comments at ron@cbraliquor.org

 

CBRA Membership Remains Open

Now, more than ever, access to your industry is important. The CBRA is California's only statewide association of licensed retailers, and our membership continues to be open for the first time in 20 years.

At CBRA we deal with licenses and regulations that affect the beverage business on a daily basis. That's why CBRA offers practical solutions, unique products, services, information, and timely advice for both large and small beverage businesses. With reasonable fees, superior service, and associates that are easy to reach, CBRA helps you to run your business better and easier. One of the most valuable services we offer is that call to the ABC to ask your question. We can ask that question and keep you anonymous. That's something you just can't do yourself.

Join or renew your valuable membership today. You can't afford to delay.

California Beverage Retailers Association – California's Only Association of Licensees. We're #1!

 

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