Beverage Bulletin January 2011

California Beverage Retailers Association

P.O. Box 56686

Sherman Oaks, CA 91413

(818) 788-8120

www.cbraliquor.org

 

January 2011

In this issue

UCLA finds ancient winery

Governor Brown names wine industry veteran to lead Agriculture department

California Wineries to market sweet red wines

European Bud shows sales growth

U.S. Bud extends Super Bowl contract to 2014

Constellation Brands to sell Blackstone Winery and foreign wines

Andrew Lloyd Webber's wine collection sold

Medical Marijuana Users Getting Pot Soft Drink

Restaurants continue to struggle while retail prospers

Oregon winery sales grow

Santa Monica outlaws plastic bags

Pernod Ricard turns the corner on profits

Brown Forman to sell wine business

Industry Event and Tasting Calendar for 2011

Legislation

 

A UCLA-led team reported that it had discovered a 6,000-year-old facility in an Armenian cave that contained everything necessary to produce wine from grapes, including a grape press, fermentation vats, storage jars, wine-soaked pottery shards and even a cup and drinking bowl.

The ancient winery is at least 1,000 years older than any similar installation previously known, and it was found in the same cave where researchers in June announced the discovery of the world's oldest leather shoe.

The cave was abandoned when the roof caved in. All the organic material was preserved by a concrete-like layer of sheep dung that sealed everything in and prevented fungi from destroying the remains.

Patrick McGovern of the University of Pennsylvania, who was not involved in the research. "The fact that winemaking was already so well developed in 4000 BC suggests that the technology probably goes back much earlier."

 

SACRAMENTO, Calif.—January 12 Gov. Jerry Brown named Karen Ross to lead the California Department of Food and Agriculture. Farm leaders around the state hailed the selection of Ross, who has been chief of staff to U.S. Agriculture Secretary Tom Vilsack for the past year. Ross served for 13 years as president of the California Association of Winegrape Growers. She also has worked for the Agricultural Council of California and served on the California State Board of Food and Agriculture.

 

Fresno. California wineries, which have responded to a growing consumer interest in sweet white wine, are adding something new to the mix: a sweet red wine. New bottles of sweet red wines were released last year and others are waiting in the wings. California wineries including Barefoot Cellars, Bronco and Delicato have jumped in with new sweet red wines. And foreign winemakers have hit the market with their own sweet red, including Cape Classics of South Africa with Jam Jar Sweet Shiraz.

 

PRAGUE — State-owned Czech brewery Budvar, which has been fighting a long legal battle over the Budweiser brand, said Wednesday its 2010 exports rose by 4.3 percent to reach a record high.

 

LOS ANGELES - The owner of Budweiser says it has locked up its position as the only national beer advertiser in the Super Bowl through 2014. The brewer, which became Anheuser-Busch InBev NV in 2008, has had a presence in the NFL's championship game as the exclusive beer advertiser for 23 years. This year, it will keep its spot as the game's largest ad buyer by buying seven 30-second spots. The week of the Super Bowl, which will be played on Feb. 6, is a busy one for brewers with beer sales rising as much as 20 percent above a typical week in January or February.

 

Kenwood- Constellation Brands is closing its Blackstone Winery tasting room and winemaking facilities in Kenwood this March and will put the property up for sale. Constellation, the world's largest wine company, moved the production of its Blackstone Sonoma Reserve wines last summer to the Ravenswood Winery outside Sonoma. The Kenwood tasting room on Sonoma Highway remains open, but the winery was last used in 2009. Constellation is also reported to be selling all its foreign wine business to an undisclosed buyer.

 

British composer Andrew Lloyd Webber's wine collection sold for more than expected at a Hong Kong auction, raking in $5.6 million, one of several weekend sales in the fast-growing auction hub.

 

 

SOQUEL, California — A California entrepreneur has plans to market a line of medical marijuana soft drinks. Clay Butler says he plans to supply medical marijuana dispensaries with his soda pot, which contains the psychoactive marijuana ingredient THC, according to the Santa Cruz Sentinel newspaper.
Marijuana drinks are already showing up here and there, but Butler says he thinks his branding savvy will make his product a hit. Besides his flagship cola drink, Canna Cola, he will also produce Dr. Pepper-like Doc Weed, lemon-lime Sour Diesel, grape-flavored Grape Ape and orange-flavored Orange Kush. A bottle will cost $10 to $15.

 

Restaurants continue to struggle while retail prospers

In 2009, frugal became not just a necessity but the new chic, and cooking at home become a new norm; this is a big shift for the most restaurant-going nation in the world. As the recession eases in some parts of the country and in some households, U.S. consumers are continuing to cook at home more.

Historically, increased restaurant dining is a primary indicator that a recession is waning, but this time they are about a year and a half behind other retailers according to a recent report by Associated Press. .

Many consumers said they enjoyed cooking once they were forced to do it. Food retailers are well-positioned to profit from shoppers eating at home more; especially those stores that have positioned themselves in recent years as value priced. Even Whole Foods managed to turn around its “whole paycheck” image and attain a better price image and profit. Natural products stores are particularly well positioned because this growing trend of foregoing restaurants is not all about money; health also figures in. More consumers are learning that they can control sodium, fat and preservatives by cooking at home. One unknown is how the predicted food inflation prices will affect retailer food consumption and buying patterns.

 

Oregon winery sales grow

Portland-A group of wineries reporting aggregate sales of $51 million for the nine months ending last September reported an 11.4 percent increase compared with the same period in 2009, according to Northwest Farm Credit Services' new survey. Wineries with retail prices over $20 per bottle -- prices typical of Oregon's flagship grape, pinot noir -- did even better, reporting a 15.9 percent increase. Reported sales in the same categories dropped 20 percent in 2009. Although the overall outlook for the state's 400 commercial wineries remains positive, increased sales figures this year are due in large part to price reductions and other discounts offered to both retail customers and distributors.

 

Santa Monica Outlaws plastic bags.

The Santa Monica City Council passed an ordinance outlawing the use of plastic bags for grocery and drug stores. Customers will have to recycle bags, bring canvas bags, or pay a mandated 10 cents for each paper sack.

 

Pernod Ricard has been struggling through the recession mostly due to its 2008 purchase of Absolut for $7.34 billion; almost all financed by debt at high interest rates. Company sales increased in the July to September quarter by 14%. Prior quarter sales were down 2%. But more importantly, sales are increasing at the high end of its product line. Chivas Regal 18 year old grew 32% while the brand overall only rose 10%. Other premium brands in the portfolio showed big gains as well.

 

Brown Forman is looking for a buyer to take over its wine business. The wine unit had sales of $310 million in the fiscal year ending April 2010. That's less than 10% of company sales of $3.2 billion. The eight brands in the wine group include Fetzer, Korbel, Bonterra, and Sonoma-Cutrer. Total sales are around 4.5 million cases. Sales of Fetzer, the biggest seller, dropped to 2.2 million cases; a loss of 5%.

 

Industry Calendar

02/01 In Vino Unitas-LA

02/02 In Vino Unitas-Del Mar

02/1-2 Expo & Showcase of Processed Foods-Sacto

02/10 Jetro Shochu-Sake Tasting-LA

02/15 French Wine Connection-West Hollywood

02/20 Rhone Rangers Tasting-Paso Robles

02/8 Santa Lucia Highlands Tasting- Santa Monica

03/11-13 Natural Products Expo West-An

03/13 Family Winemakers Tasting-Del Mar

03/15 Family Winemakers Tasting-Pasadena

03/17-20 Pacific Wine and Food Festival-LA

03/2 Paso Robles Grand Tasting-LA

03/24-25 Brew Expo America-SFO

03/30 Fresh Produce Expo-Pleasanton

Legislation

Our industry is more controlled by laws than most others. The State Legislature and the ABC give us license privileges and take them away. The legislature is back. An old saying goes “No man's life, liberty, or fortune is safe while the legislature is in session.” Many critical issues are still 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.

California Beverage Retailers Association – We know how to get it done.