Beverage Bulletin February 2014

California Beverage Retailers Association

Beverage Bulletin

P.O. Box 56686

Sherman Oaks, CA 91413

(818) 788-8120

Ron Ziff, Editor

www.cbraliquor.org

February 2014

This month's stories include:

Headline News Stories-Direct Wine Sales Upbeat, Consolidation Hits Alcohol Industry, LA Plastic Bag Ban in Effect, Board of Equalization to Release Deposits, New ABC Deputy Commissioner, California Drought: A wine Industry Crisis, Trends to watch in 2014, LA CUP's

 

Celebrities in the Industry-Charles Woodson, Rapper Sean “Diddy” Combs, Savanna Samson

 

Popular Culture- Books, Movies

 

Wine-Football Bet Paid in Wine, Wine Tasting Embezzler Arrested, Arrest in Unlicensed Sales, Record Number of Wineries, Winery Chickens Out, Wine Label Dispute, Ancient Cheap Wine, World's Oldest Wine Cellar, What Makes Terroir?,

Top Wine Bars, Wine Down Under, French Wineries Fight New Temperance Law,

Robot Winemaker, Robot Vineyard Manager, French Grape Library, New Vine Disease in France, What Kind of Wine to Serve with a Toilet

 

Beer-Trappist Beer Brewed in the U.S., Miller to Compete with Wine, Record Cider Apple Crop, Jelly Belly Beer

 

Spirits-Top Food and Drink Bars, Scotch Authentication, 9 Facts about Whiskey

 

Other Food and Beverages-Coke Home Soda and Wall Street Journal Mistake, CVS Drops Tobacco, Coffee Drive Through Protests, New York Soda Size, Fiji Water by the numbers, 21 New Foods to Look for in 2014, New Sweetener, Get the Last Drop!, Spice Shortage, Blood Avocados

 

The Changing Market-In case you missed it, U.S.-European Trade Agreement, Airport Food Gets Better, Shopping Habits Change, More News on the Target Data Breach, How to Protect Against a Data Breach

 

Health-Glove Law, Tasting Notes, Industry Calendar

 

...and as always Tasting Notes and the Industry Calendar

 

 

 

 

Here in America our success is... the strength of our work ethic and the scope of our dreams... that's how the son of a barkeep is the Speaker of the House.”

-President Barack Obama, in the 2014 State of the Union Address, referring to Speaker John Boehner. (We consider a “barkeep” to be a right honorable profession. )

 

Headline News Stories

Direct Wine Sales Upbeat

ShipCompliant reports that shipments of wine direct from winery to consumer rose 9.3% in 2013 to 3.47 million cases. The dollar value increased 7.7% to $1.57 billion. The average price per bottle dropped for the first time and was $37.78. States that still prohibit direct winery shipments are Utah, South Dakota, Oklahoma, Alabama, and Mississippi.

Consolidation Hits Alcohol Industry

Suntory Holdings agreed to buy Beam for $16 billion. A 25% premium over current stock value. This gives Suntory 20% of the U.S. Spirits market; something the company needs to continue growth as the Japanese population ages. The brands purchased include Jim Beam, Maker's Mark, and Sauza Tequila. Beam sales for 2013 were up 4% to $2.55 billion. Todd Miller has filed a lawsuit against Beam's board of directors for breach of fiduciary duty to the stockholders. The suit alleges that the deal significantly undervalues Beam.

 

AB/Inbev exercised its option to buy back South Korea's Oriental Brewery from KKR for $5.8 billion. AB/Inbev had sold the brewery some time ago to raise cash and had a 5 year option to reclaim it. In a separate move the company bought Blue Point Brewing, a craft brewer that serves the eastern U.S. Blue Point produces 60,000 barrels annually. About half of that is Toasted Lager. The balance is split between 39 specialty beers. AB/Inbev plans national distribution.

 

Ivan Menezes is the CEO of Diageo, the world's largest alcoholic beverage company. He said “Our goal is to very much widen our leadership position in the industry. We will look at everything; we will look at global brands as and when they become available.” The company bought 2 tequila companies in the past few weeks. In recent years Diageo has purchased leading brands in Turkey, Brazil, and China.

LA Plastic Bag Ban in Effect

The City of Los Angeles banned plastic bags in large retail food and drug stores as of January 1, 2014. The ban extends to smaller stores as of July 1, 2014. Restaurants are exempted and can use plastic bags for take-out and take home portions. For further information you can contact the association office or call Pam Hirneisen at the LA Department of Sanitation (213) 485-2974.

Board of Equalization to Release Deposits

The Board of Equalization voted December 17 to discontinue its automatic security deposit system. They will be releasing $296 million to businesses statewide. More than half of the releases should go out in February. Most of these are not refunds or checks. Businesses have been required to keep the security deposits in a bank account earmarked for the Board of Equalization until the Board permits it to be released. The law allowed the Board to require the security deposit for 3 years. The Board usually held the funds in

the account for much longer.

New ABC Deputy Commissioner

Governor Brown has appointed Lori Ajax as Deputy Commissioner of the Department of Alcoholic Beverages. Ms. Ajax has served 18 years as an investigator and in other positions within the department. She has overseen the Trade Enforcement unit, Licensing Unit, and the department's grant program.

California Drought: A wine Industry Crisis

Governor Jerry Brown has declared a drought emergency and given state water agencies authority to enact stricter rules in enforcing conservation. As the state legislature convenes, water is one of the top issues. They will be considering permanent restrictions on all water use including agricultural uses. The California Department of Water Resources reports that California is still in drought. 2013 is the driest year on record. As we enter the 3rd year of drought, some areas have received less than 4 inches of rain since mid-2012. Reservoirs are at a low level with 12 at less than 50%. Farmers brace for a year of water rationing. The Sierra snow pack is only 20% of normal. The department says it will probably deliver only 5% of the water requested this year. It usually delivers 50% or more of requests. It is anticipated that the agricultural uses will be limited to providing water for permanent crops like trees and grape vines and high value crops. It is expected that a half million acres of row crops in the San Joaquin Valley will not be planted. This year's wine grapes will probably be limited in tonnage and intense in flavor.

 

2013 was the driest year in San Francisco since the Gold Rush year of 1849. The percent of normal for the 2013-2014 rain season to date is dismal: Bakersfield 16.7%, Sacramento 8.6%, San Francisco 8.7%, San Jose 9.8%, Santa Rosa 6.2%, Los Angeles 6.4%, Napa Valley 22.7% of normal. The sad truth is that California agriculture is unsustainable if this continues.

 

Bloomberg News reports that 15,000 to 20,000 acres of grapevines will be torn out and replaced with almonds and other nut trees. We have previously reported that permits to plant vineyards have been curtailed or denied in Napa and the Central Coast and disputes over water rights are in legal process in the Central Coast and San Joaquin Valley. Some vineyards are installing water tanks so they can store water while it's still available.

 

The Sonoma County Water Agency has cut the Russian River flow from Lake Mendocino by 30%. The reservoir stands at 38% of capacity and is in danger of running dry by summer. Fish that have entered the river to spawn are now trapped in pools midway upstream. A huge number of Coho Salmon are waiting in the Pacific for the surge of fresh water to start their migration. It may never come and could mean extinction for the species. A year's generation of Coho Salmon, Chinook Salmon, and Steelhead Trout may be lost if there is no rain and the spawning fish die in mid-stream. Water that might have been transferred south from the Delta will be withheld due to recent court orders protecting several species of fish.

 

Governor Brown has declared a State Drought Emergency. In response the Department of Water Resources dropped all state allocations to zero in order to preserve what water exists. Bloomberg News reports that the current situation raises the possibility of authorizing two 30 mile water tunnels under the Delta to deliver water to Southern California. Each tunnel would be the width of a 2 lane highway. The cost is estimated at $15 billion.

 

Meanwhile, the battle over scarce water may be shifting to Congress. Republicans have introduced a bill that would give farmers pumping rights that would be superior to manufacturers and consumers.

 

What is causing the drought? It's a high pressure system that has parked off the Pacific Coast. It is diverting rain north to Canada and Alaska. It is also causing the Polar Vortex that is freezing the East Coast and Midwest with record snowstorms.

 

As if we didn't need one, now, there are more complications on the horizon. Because of the dry conditions vineyards will be forced to start irrigation in March instead of June. This, just when water needs to be conserved. The warm winter means there will be an early bud break. The mild weather means the spring frosts will be a looming disaster as the fruit buds will be exposed at the worst time.

Trends to watch in 2014

Consumers are becoming increasingly aware of what they eat, and more vocal when they don't like it. The Boundaries between the Bar and Kitchen are blurring as bars add flavors from spices, fruits, vegetables, and other foods to cocktails and chefs brew and age bar flavors into foods and specialty recipes.

1) Brazilian Cuisine will be in the spotlight during the 2014 World Cup and the 2016 Summer Olympics.

2) Awareness of Food Waste and ways to use every part of fruits and vegetables and compost what isn't usable.

3) Healthier Drinks including more fresh juices.

4) Sophisticated Desserts with new flavors from herbs, spices, and exotics fruits and berries.

5) Greek Style Yogurt is being added to more sauces and recipes.

6) Re-Defining the Burger. Burgers are becoming a signature menu item as operators experiment with new toppings, buns, and patties made from chicken, brisket, lamb, and other meats.

LA CUP's

The Los Angeles City Planning Department will be holding a meeting on how to use the LA Conditional Use Permit Process on Thursday February 27 from 3 to 5PM. Location is Ronald C. Deaton Civic Auditorium, 100 West 1st Street, LA across the street from LA City Hall. For information call Pat Hermosillo (213) 978-2642.

 

Celebrities in the Industry

 

 

 

Charles Woodson, Oakland Raiders free safety, owns a 7 acre vineyard near Calistoga in the Napa Valley. He produces Merlot, Cabernet Sauvignon, and Sauvignon Blanc. The wines are priced up to $150 a bottle. Woodson became interested in wines when the Raiders came to Napa for spring practice. He saw the vineyards and people enjoying wine with their meals and decided to look into the business. In college Woodson led Michigan to a national championship in 1997 and won the Heisman trophy.

 

 

 

 

Rapper Sean “Diddy” Combs has partnered with Diageo to buy luxury DeLeon Tequila. The tequila is currently available in 20 marketing areas and has types that range in price from $120 to $1,000 per bottle. He is a rapper, singer, and record producer. Combs also appears on stage as “Puff Daddy” and “P. Diddy.” Separately, Diageo also bought Peligroso Tequila this month.

 

 

 

 

 

 

 

 

Adult movie star Savanna Samson, who has appeared in more than 90 sexually explicit films, is producing a wine in Brunello, Tuscany. She was voted Best Actress twice by Adult Video News. Her real name is Natalie Oliveros. There are 2 types of wine; Sangiovese and Merlot from La Fiorita Vineyard. Each is labeled with a picture of the winemaker in a bathing suit.

Popular Culture

Books

Whisky Wars, Riots and Murder by Malcolm Archibald, 279 pages, $18 or Kindle edition available online $7.89. The book chronicles 19th century history in the Scottish Highlands. Distillers played cat and mouse games with tax gaugers. Sometimes they were able to avoid being caught. Sometimes they had to pay off crooked tax collectors. Avoiding the taxes led to smuggling, gun battles, military reinforcements, and embezzled liquor. Even the legitimate distillers hid some of the gallonage from the tax collector.

American Whiskey Bourbon & Rye by Clay Risen, available late February, $24.95. Clay Risen is an editor for the New York Times. He examines the produce of American distilleries and treats the range of whiskey as something that needs to be cataloged and edited. That is a good thing. The end product is a pretty complete guide to the brands and types available today.

Pickles, Pigs, and Whiskey by John Currence, $40 or $9.39 for Kindle. John is an award winning chef. This book takes you into his world. You learn how to cook his favorites and read about all his likes and dislikes in of food and drink. He gives recipes for stirring, shaking, and muddling whiskey; recipes for pork, ham, and sausage; and finally tells you how to pickle just about anything.

Why You Like the Wines You Like by Tim Hanni, 238 pages, $25 or Kindle edition $19.99. This book analyzes how people perceive tastes, divides people into tasting groups, and tells how to sell to each group.

 

Movies

A year in Burgundy” is a currently available documentary DVD. The film follows U.S. Importer, Martine Saunier, as she drives through the region visiting with growers. It gives the history of Burgundy and features scenes in the vineyards and the wine at formal banquets in Europe and the U.S. It stars Marion Cotillard and Albert Finney. The movie will be shown in theaters early this year. Director, David Kennard, is already putting the finishing touches on a second film, “A Year in Champagne.”

 

Tu Seras Mon Fils” (You will be My Son) 2011 Universal Pictures is set in Bordeaux. It is the story of a stern father dealing with the generational problems of passing his vineyards and wine business to his son. Should he give his business to his son or someone else's son?

 

Director Jerry Rothwell is starting production on a documentary tracing the rise and fall of Rudy Kurniawan, the just convicted maker of fraudulent wines. The film is titled “Sour Grapes.” Part of the film will be shot in Laurent Pontsot's Burgundy winery. Pontsot's testimony helped convict Kurniawan. Distribution has already been booked in the UK and is in negotiation in the U.S.

Wine

The Winner:Jay Inslee

Football Bet Paid in Wine

California Governor, Jerry Brown, lost a football bet with Washington State Governor Jay Inslee when the Seattle Seahawks beat the San Francisco 49ers 23-17. The losing governor had to give the winner a case of the state's wine.

 

Wine Tasting Embezzler Arrested

Wine Executive Martin “Chris” Edwards was arrested in Puerta Vallarta, Mexico and extradited to the U.S., where he will be arraigned and tried in San Francisco. Edwards ran the Wine Tasting Network. He is alleged to have written $900,000 in phony invoices to Dufrane Compliance Trust and taken the money for his own use from 2010 to 2012. He was indicted on 23 charges of mail fraud, wire fraud, and money laundering by a federal grand jury in May 2013. He was originally scheduled to appear in court last June 17. Instead, he jumped bail and fled to Mexico.

Arrest in Unlicensed Sales

Pennsylvania attorney, Art Goldman, was arrested by the Pennsylvania Liquor Control Board (PLCB) for illegal wine sales. Goldman sold wines from his “personal collection.” He is supposed to have taken and filled orders for out-of-state wines ordered by undercover agents. The PLCB claims his collection was continuously replenished with big shipments from out of state. Along with the arrest, PLCB took custody of $150,000 worth of wine.

Record Number of Wineries

At the end of 2013 there were 7,762 wineries in the U.S. And 629 in Canada and Mexico for a total of 8,391 in North America. 3,674 of them were in California. 56 of the US wineries were large and produced more than 500,000 cases, 253 medium sized with 50,000 to 499,000 cases, 1,436 small 5,000 to 49,999 cases, 3,189 very small 1,000 to 5,000 cases, limited production of less than 1,000 cases 2,828.

Winery Chickens Out

Philippe Boucard, a grape grower in Loire has fenced in his vineyard and put 250 chickens there. The chickens are free range and allowed to roam about the vineyard. “The chickens scratch and aerate the soil, mow, eat grass and insects. They will be doing a lot of work for me.” A side benefit is the free range eggs Boucard sells to local restaurants. He intends to keep the chickens in the field until the grapes are near ripe and become a tempting meal for his feathered workers. Then the chickens will be sold and sent to the oven.

 

Wine Label Dispute

Veuve Clicquot is suing Italian winery, Ciropicariello, because the labels are too similar and Clicquot feels its brand image could be damaged. Veuve Clicquot sells 18 million bottles a year. Ciropicariello sells 3,500 bottles a year. We don't know what the court will decide, but we can understand that a winery like Clicquot wants to protect its reputation. How similar are the labels? You judge for yourself. They are pictured below.

 

 

 

Ancient Cheap Wine

Dr. Eilat Mazar, of Hebrew University, working in Ophel south of the Temple Mount has uncovered a wine jar labeled in the time of King Solomon. The inscription on the jar was translated by Dr. Gershon Galil of the University of Haifa. It reads “Wine of the twentieth year of the reign of King Solomon.” At that time wine was graded “good wine”, “not good wine”, and “halak”; which was the lowest quality. This wine is labeled “halak”, it was probably cheap wine kept for servants or slaves to drink.

World's Oldest Wine Cellar

Archeologists have found a 3700 year old wine cellar, the world's oldest ever found, in what is now Israel. 40 jars were discovered with traces of wine. The cellar was located in a storage room near a hall where celebrations were held. It is located in Tel Cabri, a city of the Canaanites, a culture that preceded Jewish settlement in the area. The jugs contain traces of wine. Originally, they held about 2,000 liters of liquid. The cellar and adjoining buildings were destroyed by an earthquake in about 1600 BC. The finding was announced at a meeting of the American School of Oriental Research. Team members included Andrew Koh of Brandeis University, Eric Cline of George Washington University, and Zach Dunseth of Tel Aviv University.

What Makes Terroir?

Scientists have studied the fungi, yeasts, and other microbes that live on the surface of grapes. They have found that the combination of microbes differs at every growing site. When the grapes are crushed, the microbes become part of the must and the wine. It has been known that the soil, sunshine, rainfall, and other physical factors make up the “terroir.” But that is only part of the explanation for wine differences. This would appear to be another factor. The study was done by David A. Mills and Nicholas A. Bokulich at UC Davis.

Top Wine Bars

Eater.Com has named the top wine bars in the country. California wine bars that made the list include Fig & Thistle Wine Bar in San Francisco which serves California wines, Ordinaire in Oakland serves small production California wines, San Diego Cellars sells its own wines and will refill jugs, South End in Venice sells pizza and International wines under $100.

Wine Down Under

At the Australian Open Tennis Tournament, Jacobs Creek was the official wine of the tournament. Also Warinka beat Nadal 6-3, 6-2, 3-6, 6-3.

French Wineries Fight New Temperance Law

France is considering a new law to reduce alcohol consumption. It would add a tax based on alcohol content and require bottles to be labeled “Alcohol is dangerous to your health.” French wine producers are organizing to defeat the law. Moet-Hennessy points out that if French wines are labeled as dangerous to health, it will seriously reduce sales in the U.S., U.K., and China. They point out that in 2012 the wine industry had exports of $10.6 billion which brought in $1.3 billion in taxes, attracted 12 million tourists, employed 500,000 people, and is made up of 87,000 small businesses producing wine.

Robot Winemaker

Wineries have to sort bad grapes from a batch before crushing to make wine. Sorting is skilled work that has to be done by hand. It takes 15 workers an hour to sort 2 tons of grapes. Hall Winery in Napa Valley is now using a robotic sorter that takes 10,000 photos of grapes a minute and compares the photos to a standard. Then sorts the grapes. It can sort 2 tons of grapes in 12 minutes.

Robot Vineyard Manager

Some of the vineyards in Germany's Moselle are located on steep hillsides that are mostly made up of fractured slate. The near vertical hillsides are very slippery, unsafe, and expensive to farm. The University of Geisenheim has developed a robot named “Geisi” that uses the same technology used in the Mars Rovers to climb the hillsides and tend the vines.

French Grape Library

France has a living library of 7,000 grape varieties farmed in a vineyard outside Montpellier. The collection was started by the University of Agriculture in 1876 to protect against the phylloxera that was ruining French vineyards at the time. The vineyard was moved to its present 66 acre location in 1949. Protesters are fighting against the plan because they fear some varieties won't survive the move. The university says it is moving the vineyard to protect it. Rising sea levels threaten the current location. The 420 acre new vineyard will also provide much needed extra space. 50 new varieties arrive every year. Currently, grapes from 40 countries are represented in the library. None are grafted.

New Vine Disease in France

Vineyard owners in Burgundy are fighting a new problem. Flavescence doree is a bacterial disease that can effect grape vines. There is no cure. It is spread by leaf hopper insects. Vineyards are being inspected vine by vine to find those affected. Due to quick action only a handful of sick vines have been found in Mersault, Mercurey, Vire, and La Chapelle de Guinchay. When an infected vine is found, it is pulled out and the ground is treated with hot steam.

 

 

 

 

What Kind of Wine to Serve with a Toilet

Paul Saums, who has been selling wine in Brooklyn, N.Y. for 20 years has come up with a simpler, cheaper, way to chill a wine for a party. He puts it in the toilet. Actually Saums stores the wine in the water storage tank above the toilet. The cold water can chill a bottle of wine to the perfect temp in just 20 minutes. As guests flush the toilet, fresh cold water speeds the process.

Beer

Last November the Bear Republic Brewery gave the town of Cloverdale $466,000 to dig 2 wells that will keep the town supplied with water. The brewery is also the water district's biggest user at 8 ½ million gallons a year. The brewery does as much recycling as possible. It uses 3 ½ gallons of water to make 1 gallon of beer. Most breweries use 6 gallons for every 1 gallon produced. Without the new wells the town would have gone dry in 3 months. Many northern California towns have been so rich in water that they had no wells and no water meters. Now, that has all changed.

 

 

 

 

 

Trappist Beer Brewed in the U.S.

Trappist Monks run 6 breweries in Belgium, 1 in Holland, and 1 in Austria. Now, the monks at St Josephs Abbey in Spencer, Mass. are brewing beer with the centuries old recipe. For 60 years they have supported the Abbey by selling jam and jelly. They can no longer meet the expense of keeping up their buildings so they turned to the same business that supports their European brothers. They have set up a state of the art micro-brewery that will brew just one type of beer for the first 5 years.

Miller to Compete with Wine

SAB/Miller is going on the offense against cocktails and wine. The weapon is a new super premium beer; Miller Fortune. It has rich malty, complex flavor with a hint of bourbon, and a dark amber color. Miller is introducing it across the country, one market at a time. In each market the company trains bartenders to pop the cap with a showy flourish and pour the brew into a stubby rocks glass.

Record Cider Apple Crop

The New York apple crop is coming in at record quantities. The reported number is 12 million bushels fresh or in storage for processing. The New York Apple Association says this number is “grossly underestimated” and the crop could run as big as 32 to 35 million bushels; the biggest crop in history. There are a number of reasons farmers are under reporting. There is a fear of prices dropping. The apples are also much larger this year which means it takes fewer apples to fill a box. With such a large crop, look for heavy promotions on hard cider.

 

 

 

 

Jelly Belly Beer

Jelly Belly has introduced a new Draft Beer Flavor Jelly Bean. It is reported to taste “wheaty” and smell “yeasty.” The new flavor was inspired by Germany's Hefeweissen

beers. It joins the 50 plus flavors selling more than 37 million pounds a year.

Spirits

Top Food and Drink Bars

Food and Wine Magazine has listed the top 18 bars in the U.S. For drinks pared with great food. 5 are right here in California. The Goose and Gander in Napa Valley, The Alembic San Francisco, The Lion's Share San Diego, Craft & Commerce San Diego, The Parish Los Angeles (Too bad it closed recently).

Scotch Authentication

The Scotch Whisky Industry Association has announced a new system called The Spirit Drinks Verification Scheme. Under the program, every company involved at any level of Scotch Whisky production and distribution will register with Her Majesty's Revenue and Customs. Then the whisky will be tracked from distillery to consumer to ensure that it is genuine. The system will cost 350,000 a year; which will be shared by the industry.

 

 

 

9 Facts about Whiskey

  1. Whiskey is low-carb and fat free.

  2. In Pennsylvania in the the 18th century whiskey was used as currency. It was used for cooking, medicine, and drinking.

  3. The Whiskey Rebellion, in 1794, was fought between Pennnsylvania farmers and the federal government over taxes on whiskey.

  4. Whiskey may be good for you. Dr. Jim Swan presented a study at the EuroMedLab Conference in Glasgow in 2005. The study showed that whiskey contains the anti-oxidant, ellagic acid. Ellagic acid is present in fruits and absorbs rogue cancer cells.

  5. Moderate drinking, having 1 drink per day, reduces the risk of ischemic stroke.

  6. A study by Beth Israel Deaconess Medical Center in 2003 indicated that drinking 1 to 6 glasses of whiskey a week can prevent dementia.

  7. Winston Churchill drank whiskey to start the day after eggs and toast. He led his country through World War II.

  8. A well sealed bottle of whiskey will last 100 years. An opened bottle of whiskey will last a very short time.

  9. In 16th century England only monks were allowed to distill whiskey. King Henry VIII removed the monks monopoly on distilling.

 

Other Food and Beverages

Coke Home Soda and Wall Street Journal Mistake

Coca-Cola has made a deal with Green Mountain Roasters to supply syrup cups for a home soda system. The deal is inked for 10 years. Coca-Cola also is purchasing 10% of Green Mountain and has the right to up its stake to 16% during the first 3 years. Cost: $1.25 billion. The deal will put Coke and Green Mountain in direct competition with SodaStream's home soda system. The system works with a 2 part pod. One section contains the syrup. The second section has carbonation and instantly chills the beverage. Now, the second part of the story: The Wall Street Journal covered the story on February 6 page B1. If you can get a copy, it shows a rare WSJ error. The picture that accompanies the Coca-Cola story isn't Classic Coke. It's something very different and very popular in California: Mexican Coke.

CVS Drops Tobacco

CVS has announced that it will discontinue tobacco sales in all of its 7600 stores across the country by October of this year. The announcement was made jointly by CVS CEO, Larry Merlo, and the Journal of the American Medical Association. CVS views its mission as part of the nation's health care industry. Merlo said “Ending the sale of cigarettes and tobacco products at CVS/pharmacy is the right thing for us to do for our customers and our company to help people on their path to better health. CVS not only has thousands of retail pharmacies, it also has a major mail order prescription pharmacy, has in-store health clinics, and is a major factor in negotiating pharmacy pricing with manufacturers and Medicare. The company views tobacco sales at odds with that basic mission.

Coffee Drive Through Protests

Local communities in Washington and Oregon are protesting Bikini Baristas in drive through coffee shops. Starbucks and Dutch Brothers have operated hundreds of drive through shops for a number of years. But the new operators with names like Twin Peaks, Java Juggs, and XXXtremeEspresso and Stirring the Pot. They run coffee stands staffed by girls in bikinis, lingerie, or on “topless days” g-strings and pasties. Local city councils have passed regulations limiting the uniforms to bikinis. Operators complain that the rules sometimes cut business by 50%.

New York Soda Size

New York Mayor Bill DeBlasio says he will pick up former Mayor Michael Bloomberg's fight against big size soft drinks. He has appointed Dr. Mary T. Bassett to lead the effort. Dr. Bassett was Deputy Health Commissioner under Mayor Bloomberg.

Fiji Water by the numbers

The water travels 17 miles through the aquifer

The company employs 254 people in Fiji at higher than average wages

80% or $79 million of the company's sales come from the U.S.

The company is owned by 2 people; Stewart and Lynda Resnick

21 New Foods to Look for in 2014

The National Restaurant Association has released a list of foods that are trending on in the new year.

Black Garlic- It's fermented and milder in recipes.

Emu Eggs- Prepare like chicken eggs, but get more egg. It's the size of a small grapefruit.

Labneh Cheese- A full fat spiced yogurt cheese from the Middle East.

Gooseneck Berries- Actually a small octopus from Spain. Boil, add olive oil & garlic.

Fufu- An African dough ball eaten with a dipping sauce.

Liquid Nitrogen- Used to quick freeze snacks. Don't try this at home.

Raita- An Indian yogurt based sauce.

Broccolflower- This one has been around in stores and is emerging in restaurants. It is a hybrid of Broccoli and Cauliflower and tastes milder than either.

Forbidden Rice- It's a dark purple to black color. Tastes like white rice, but adds color to the plate.

Lovage- An herb with a celery type flavor.

Rutabaga- It's been around forever, but is making it onto restaurant plates.

Plumcot- A plum and Apricot hybrid.

Amaranth- An ancient grain. It's gluten free.

Shaksuka- A breakfast dish made with poached eggs, roasted tomatoes, and peppers.

Duck Fat- Used to fry potatoes. Adds flavor and cholesterol.

Donut Sandwiches- No comment.

Ginger Panna Cotta- A rich Danish pudding dessert.

Branzino- European sea bass that's good grilled.

Chocolate Bacon Torte- Just like it sounds.

Kabobs- Meat balls grilled on a stick. A Middle Eastern recipe that mixes the ground meat with onions and bulgur.

Umami Burger- Burgers seasoned with Asian fish sauce.

New Sweetener

Monk Fruit, a tropical fruit the size of an apple, may be the great new sweetener. The fruit has a good taste and no calories. It has been used for centuries by Chinese to sweeten tea. The Zevia company will be the first to introduce a new formulation with monk fruit in the near future. The company has previously used Stevia as a sweetener. The problem is that stevia has a bitter aftertaste.

Get the Last Drop!

Liquiglide hits the market this coming summer. The product is a coating that is sprayed on the inside of containers that allows the product stored within to easily slide out. It means you will be able to get the last drop of ketchup instead of seeing it stuck inside the bottle. The first products to use it will be condiments and toothpaste.

Spice Shortage

The spice, Cumin, is in severe shortage. There are only 2 sources for the product. India and Syria. The war in Syria has cut off that supply. Indian Cumin has surged 30% in price in the past year. The spice is used in Indian curries. But, more importantly for us, in the U.S. And Mexico it flavors a range of foods including tacos, fajitas, and chili.

Blood Avocados

More than 208 million avocados were eaten during the Superbowl weighing more than 104 million pounds. But, that's only half the story. You may have read about vigilantes driving a cartel out of Tancitaro in Michoacan, Mexico. The cartel wasn't dealing in drugs. They were dealing in avocados in this rich agricultural area. Michoacan supplies 40% of the avocados used in the U.S. and the cartel is estimated to make $130 million a year by extorting money from farmers, packers, and shippers. The current situation was triggered when a farmer's daughter was kidnapped. The cartel demanded $600,000 or the avocado farm. The farmer could not raise the money and was in the process of giving up the farm, when the kidnappers killed her and dumped the body in the town square. At that point the farmers formed a vigilante group to fight the cartel. The movement has spread throughout Michoacan and the federal troops have come to their aid.

The Changing Market

In case you missed it

Martha Stewart Living Omnimedia lost $4.3 million in the third quarter of 2013.

 

Busch Gardens in Williamsburg, Virginia will celebrate a Food and Wine Festival for the month of June.

 

U.S.-European Trade Agreement

Negotiations have just opened on the Transatlantic Trade and Investment Partnership. This agreement has the potential to be the largest such agreement in history. For our industry it could open the export of small producer beer, wine, and spirits from both sides of the Atlantic. It would give small companies the same advantages in both continents. The difference would be 20 cents or less per bottle. That might not seem like much but it is often the difference that allows an exporter to sell in a foreign market. It is estimated that it could mean $130 billion to the U.S. Economy and the equivalent of $900 a year in extra disposable income for a family of 4.

Airport Food Gets Better

Airports across the country are adding fine dining restaurants to the menu. The restaurants are forced to retool because airport space is limited. Menus are truncated and sometimes partially prepared off site. Travelers are willing to pay more to get a good meal instead of settling for a hot dog. Boston's Legal Seafood has three airport restaurants. CEO, Roger Berkowitz says “You want to be near airlines with more delays and cancellations.”

Shopping Habits Change

More changes have been found in customer shopping behavior during the recent holiday season. Many shoppers did their research online. Then made a quick targeted trip to a brick and mortar store to buy and move on. Actual store visits were about 50% of the number just 3 years ago. Customer traffic was about 33 billion in 2010; 17.6 billion in 2013. Declines were 28.2% in 2011; 16.3% in 2012; 14.6% in 2013. What it means: a big drop in impulse sales.

More News on the Target Data Breach

The Target Data Breach continues to shake the business world as the U.S. Attorney General, Eric Holder, says the Justice Department is investigating. Homeland Security says some of the software is written in Russian. Original source was a program written by Rinat Shabaev, a 23 year old Russian student. He got $2,000 for writing the program, which was perfectly legal. The software had some unique aspects; it gathered data during the busy hours of 10 AM to 5 PM, covered its traces, then stored the data in Target's own servers for later retrieval by the hackers. The hackers initially gained access to the system by stealing a password that an air conditioning contractor in Pennsylvania used to monitor the HVAC systems via the internet. Once in, they were able to tap a server with 70 million customer credit records and the point of sale systems that served 40 million customers through the holiday season. Homeland Security disclosed that Neiman Marcus was also hacked and 3 other major retailers may also have been hit. Senators John Rockefeller and Claire McCaskill have asked Target to provide details on the situation. The hacking and data breach at Target should be a warning and wake up call for the wine and liquor industry. Target had the resources to protect itself, spent loads of money for a security system, then failed. Target was a huge mark, but, the members of this industry are easy marks. The countless small retailers, restaurants, bars, and wineries selling direct to consumers using electronic payment systems don't have the resources or security systems of Target. They can be hacked as “targets of opportunity.” A hacker can get debit card, credit card, or account data and figure out how to sell it later. Credit card data is the object; the source doesn't make any difference. In this case the breach went on for nearly 3 weeks. Target will have a lot of financial responsibility. The company will have class action lawsuits, costs from government investigations and enforcement, investigative and consulting fees, costs for future security, costs for covering its own RED card fraud, re-issuing cards to customers, reimbursing customers, and charges from banks handling transactions. But worst of all it has lost consumer confidence in its systems.

 

After the initial disclosure sales at Target were down enough to average a 2.5% decline for the entire quarter. The company can survive all this. The small companies of our industry might not survive the fallout of a data breach caused by something as simple as virus on a computer leaking credit card information to a hacker. Data theft could come at any time without warning. Below are some tips to help you protect yourself. The list is by no means complete. What is important is that you do everything possible to protect your business and yourself.

Protect Against a Data Breach

  1. Contact your payment processor or merchant bank if you need help securing your system. They should want to help you at little or no cost. If they can't, find another payment processor.

  2. Never store credit card information in written or electronic form. If it is written destroy, it as soon as possible.

  3. Know what information is on your system and network; where it is; and who has access to it.

  4. Control access. Only let employees get the information they need to do their jobs.

  5. Keep firewalls, anti-virus systems, updated and state of the art.

  6. Change your passwords regularly and make sure they are hard to crack.

  7. Keep your computer system up to date. Install security patches from your hardware & software vendors.

  8. Educate your employees about computer security and make sure they follow through.

  9. Work with payment partners that guard their information as well as you do.

  1. At the end of the work day shut down your system; disconnect it from the internet; back up and secure your data.

  2. Get professional help to protect your business and its system.

 

Coca Cola also suffered a data breach. This one was caused by an employee. The employee was assigned to recycle laptops for the HR department that contained the social security numbers, salaries, and payments to 74,000 employees, vendors, and contractors. The data was not encrypted as required by company policy. Fortunately the laptops were recovered. According to security experts, more than half of Fortune 1000 firms have similar breaches every year. These problems just don't get as much publicity as Target's breach.

 

Health

Glove Law

A new California law that went into effect January 1 requires bartenders to wear gloves when putting ice, limes, and cherries in drink glasses. The State Health Department is in the process of writing enforcement rules. The department says it will only issue warnings for the first 6 months. Are you up to date on all of California's new laws? If not, be sure to read through the members section on new laws. If you can't log in, you need to renew your membership. Protect your business, your employees, and yourself. Renew your membership today.

Tasting Notes

Each month we are out there looking for wines that “over deliver”; wines that offer more than others in their category and price level. We search out the wines that you can buy to help build your business; wines that make customers happy and keep them coming back. These are wines we rate as good buys and best buys. Check our notes. The opinions in the reviews are our own and unsolicited. We receive no compensation from wineries or brokers. To submit a wine for individual review email ron@cbraliquor.org for instructions. This month there were several wine tastings that showed some very nice wines available at reasonable prices. The prices shown are approximate retails.

 

Benvenuto Brunello was presented by the Consortium of the Brunello of Montalcino Wine and showed many of the fine wines of Montelcino. Most were excellent food wines. Greppone Mazzi from Ruffino DOCG 2008 had good color and nose, good acid balance, 13.5% ABV, will age well $50. Le Chuise DOCG 2009 imported by Frederick Wildman & Sons, good color and nose, good tannins, will be available soon at about $40. Rossi di Montalcino DOC Poggio alle Mura 2011 imported by Banfi had good color and nose, full body, a good food wine. We rate this as a best buy at $21. Banfi is the largest shipper from Montelcino. This is one of the reasons.

 

Grand Crus de Bordeaux is touring the U.S. and poured vintage 2011 wines from over 100 French Chateaus. It was a rare treat to see so many fine wines together in one room. And they were very fine! After this tasting we are convinced that 2011 was a truly under rated vintage. The fact that it was under rated is an advantage. Many of these wines are available at very reasonable prices. Everything we tasted had good nose, good deep color, and medium to full body. A delight! Among those we tasted were Les Carmes Haut-Brion, Haut-Bailly, Smith Haut Lafitte, Figeac,Cantenac Brown, Giscours, Lascombes, Rauzan-Segla, Beychevelle, Leoville-Barton, and Phelan-Segur. Most were classified growths. The prices will range from $20 to $50 on most.

 

Of particular note were Ch. Le Bon Pasteur medium body, good color , good nose, $40. Ch. Chasse-Spleen medium body, good color, good nose, $35. Ch. Belgrave heavy body, good color, good nose, $45. The Pauillacs were magnificent. Ch. Lynch-Bages heavy body, dark ruby color, good nose. 73% Cabernet Sauvignon, 22% Merlot, 3% Cabernet Franc, 2% Petit Verdot. A virtual bargain at $100. It will age well for many years. The Sauternes were excellent as well. Ch. Latour Blanche had a dark straw color and the sweetness of late harvest. 84% Semillon, 12% Sauvignon Blanc, 4% Muscadet, $60.

Industry Calendar

2014 is the year of the Horse. That signifies strength, energy, and an outgoing nature.

2/10 In Vino Veritas – Del Mar

2/11 In Vino Veritas – Costa Mesa

2/12 In Vino Veritas – LA

2/18 Mtns of Cheese, Rivers of Wine IIC -LA

2/19-21 NAFEM Show – Anaheim (Foodservice Equipment)

2/26 Royal Wine Kosher Wine Tasting - LA

3/4 Sonoma in the City - LA

3/6 Provence in the City - SFO

3/6-9 Natural Products Expo-Anaheim

3/9 Family Winemakers – Pasadena

3/14-16 Vintage Paso-Paso Robles

3/19 Howell Mountain - SFO

 

New Legislation for 2014

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. 2013

has several new laws that you must follow. New alcoholic beverage laws will be

introduced that will be effective in 2014. Many critical issues are pending. Is your

business safe? Members are encouraged to look through the Legislative Section. 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.

 

New Pending Legislation

 

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Subscriptions

To subscribe to the Beverage Bulletin go to https://cbraliquor.org, click on “Join or Subscribe”, and fill out the form. Non-Member subscriptions are available to the public without the “members only” sections at $50 per year.

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. Go to https://cbraliquor.org

 

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 Statewide Association of Licensees. We're #1!

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