Beverage Bulletin July 2013

California Beverage Retailers Association

Beverage Bulletin

P.O. Box 56686

Sherman Oaks, CA 91413

(818) 788-8120

Ron Ziff, Editor

www.cbraliquor.org

July 2013

This month's stories include:

Headlines - Gelsons May be Sold, Mexico's Beer Monopolies Broken, 39 Best Bars, Employees Use Class Action to Get Tips, Wholesaler Franchise Law Update, Brunello Bad Feelings Become Lawsuit, New $100 Bills.

 

Celebrities in the Industry - Ramona Singer.

 

Wine - Vinexpo Wrap up, Harrod's Champagne and a Baby, Mexican Wine, Tracking Counterfeit Wine, Starbucks Evenings, Wally's Wine Auctions, Wine Pricing Explained

 

Beer - California Leads in Craft Brewers, Miller/Coors Brews Green & Clean, Homebrewing Legal in 50 States, Cask Ale – Another Style, Find a Canadian; Get a Beer,

 

Spirits - Limited Edition Chivas, 39 California Bars Best in the Country, Two Special California Bars, Kroger Releases Alcohol Sales Numbers, Most Expensive Margarita.

 

Other Food and Beverages - Super Size Me, High Prices on Chickens & Eggs?, Coke's New Sweetener, Starbucks Adds Sodas, Glass Bottles Make a Comeback, New Soda Flavors, Governor Brown Protects Business from Lawyers, Staples Adds Food and Beverages, LA Bans Plastic Bags

 

The Changing Market - California's New Demographics, Job Growth in Foodservice, The Impact of Social Media, New Food Trends

 

Health - New Use for Beer, Green Tea Protects Against Alzheimer's, Beer Improves Artery Function.

...and Recipes for Spiked Watermelon, Sriracha Bloody Mary and the Industry Calendar

 

About Margaritas

 

When you're on your third Margarita, stay away from the phone. Never mind how I know this. - Leslie Moak Murray

 

Headline News Stories

Gelsons May be Sold

The Arden Group owner of Gelsons grocery chain has announced that it is looking at “strategic alternatives” including selling the company. Gelsons operates 16 stores in Southern California and is scheduled to open a 17th store in Long Beach later this year. Industry sources said the price tag will likely be upwards of $400 million.

Mexico's Beer Monopolies Broken

Mexico's Federal Competition Commission has issued a ruling that limits exclusive sales contracts. Brewers will only be able to have these contracts with only 20% of their retailers. Restaurants will also be allowed to sell craft beers even if they have a contract with a big brewer. It has been the practice in Mexico to have exclusive sales rights in the country's thousands of mom 'n pop bodegas. This has led to AB/Inbev's Modelo and Heineken's Cuauhtemec splitting 99% of the world's 5th biggest market. Modelo has 58% of the market and Cuauhtemec 41%. Mexico represents 16% of world sales for Heineken's and 13% for AB/Inbev. The ruling is a big victory for SAB Miller, world's 2nd biggest brewer. Miller had made a complaint to federal authorities about the monopolistic contracts. Jaime Andreu, a Mexico City craft brewer, had joined in the complaint. AB/Inbev recently paid $20 billion for the half of Modelo it didn't already own. Femsa, Mexico's largest convenience store operator, owns 20% of Heineken.

39 Best Bars

Esquire Magazine did extensive research and named the best bars across the U.S. 39 from California made the list. Congratulations to the winners! Scroll down to the Spirits section to see who was picked.

Employees Use Class Action to Get Tips

Restaurants and hotels that add a service charge or process tips along with customer checks have to give the entire amount of tip or service charge to employees unless they notify customers in advance that management will be keeping part. Some have been pocketing as much as 20% or using a portion to pay managers. Now lawyers are filing and winning class action suits to get the money back for employees. Lawsuits have been won in New York, Massachusetts, and Hawaii. One lawsuit against hotels in Kauai resulted in $10 million owed to employees with a single hotel facing a $3 million payout.

Wholesaler Franchise Law Update

Diageo, Bacardi, and their Missouri wholesaler, Major Brands, fought a legal battle that was settled by court order. Missouri law, like some other states, protects wholesaler franchises. The law locks in distillers with wholesalers. Last November wholesalers lobbied the legislature to strengthen the protection. Then, Major Brands CEO died and, according to his widow, Diageo asked her to sell out or have the brands pulled. Glazer Distributors, the other big wholesaler in the state that would have gotten exclusive rights from Diageo, had written the protective legislation and suddenly opposed it. Diageo sued Major and Bacardi joined in. Major counter sued. The fight continued in federal court and the Missouri legislature. At stake were the franchise laws in 11 states and possibly exclusive sales contracts in 21 states including California. The judge decided that Major had been unjustly terminated as a distributor. Diageo and Bacardi will have to pay damages. However, Diageo went ahead and gave Glazer exclusive distribution rights on July 1.

Brunello Bad Feelings Become Lawsuit

In February we reported that Case Basse lost a huge amount of wine when a disgruntled ex-employee opened the taps on 10 aging tanks and dumped the wine on the ground. The story doesn't end there. Andrea di Gisi was sentenced to four years in prison. The other wineries in the area, members of the Brunello di Montalcino Consorzio decided to come to the aid of Case Basse owner, Gianfranco Soldera. They offered to donate wine from their own properties that Soldera could blend and bottle as a special “Solidarity Cuvee” of Brunello wine and make money to tide himself over. Soldera rejected the generosity of his neighbors and resigned from the consorzio. In an interview he said “I was supposed to bottle it as if it were mine ...an unacceptable and offensive proposal, a swindling of the consumer.” Now the consorzio is suing him for defamation.

New $100 Bills

New $100 bills will start circulating in October. The bills have a number of features designed to thwart counterfeiters. The easiest to spot are a security strip woven into the paper. It has a line of bells that change to 100s as the bill is tilted. There is also a bell in an inkwell that changes from green to gold as the bill is tilted. Other features can be seen when the bills become available.

 

Celebrities in the Industry

Ramona Singer, of Real Housewives of New York City, is making wines in Italy. Pinot Grigio and a red blend of Sangiovese and Merlot will be distributed in 20 states by Vision Wine and Spirits LLC. The wine are expected to sell for about $12.99.

 

Wine

Vinexpo Wrap up

Bordeaux's Vinexpo is over, and it set records. The show had 2400 exhibits from 44 countries covering over 430,000 square feet. Nearly 49,000 people from 148 countries attended. Most were French but the largest contingent of foreigners was from China with 3388. U.S. was second with 1433 and U.K. Was third with 1418 visitors.

Harrod's, Champagne, and a Baby

Harrod's of London has laid in a big backstock of Champagne. Wimbledon accounted for extra sales. But the retailer anticipates the Champagne will flow to celebrate the Royal Birth of Prince George Alexander Mountbatten-Windsor.

Starbucks Evenings

Starbucks will be expanding the number of Southern California outlets with beer & wine this fall. Along with the expansion it will be promoting “Starbucks Evenings” to increase traffic and alcohol sales.

Wally's Wine Auctions

The new owners of Wally's have announced the opening of an auction house. They have hired Michael Jessen, an experienced auction executive to run the operation. Plans are to start holding wine auctions within a year.

Wine Pricing Explained

In a study, The Journal of Wine Economics found that consumers “on average enjoy expensive wines slightly less than cheap ones.” They went on to conclude (as only an economist could) “In sum, we find a non-negative relationship between price and overall rating for experts. Due to the poor statistical significance of the price coefficient for experts, it remains an open question whether this coefficient is in fact positive.” In case you were wondering how wine is priced, you now have the answer!

Tracking Counterfeit Wine

Italy has hired Andrea Battistella, a special investigator, to track down counterfeit Prosecco. Along with its growing popularity the wine has attracted imitators. Real Prosecco should carry DOC and DOCG labels. Wine counterfeiters caught in Italy face fines of about $25,000.

 

 

 

 

 

Mexican Wine

Mexico's wine growing region is right on our doorstep; in Baja California. The area has over 60 wineries producing 90% of Mexico's wine. The largest is owned by Domecq. White wine grapes grown are Chardonnay, Chenin Blanc, Colombard, and Sauvignon Blanc. Red wine grapes are Barbera, Cabernet Franc, Cabernet Sauvignon, Carignan, Grenache, Merlot, Nebbiolo, and Zinfandel. There is a wine museum located between San Antonio Valle and Valle de Guadalupe. The museum has wine artifacts dating to the Mission days. The wine industry in Baja has operated continuously since the Catholic Padres started their vineyards. At one time the Spanish government forbid wine production. The fathers kept it up anyway because the government couldn't enforce laws from half a world away. The Baja Wine Route offers a great working vacation opportunity. For more info go to www.vinofrommexico.com/information/baja-wine-country .

 

 

Beer

 

 

 

California Leads in Craft Brewers

New Yorker Magazine tracked the Craft Beer movement and found that California has 316 Craft Breweries; the most of any state. California also ranked #1 in production: 2,453,793 barrels up 21% in 2012.

Miller/Coors Brews Green & Clean

Miller/Coors announced that its Golden, Colorado brewery is now “Landfill Free.” When the company started the program in 2011 it was sending 135 tons of waste to a landfill every month. It now sends absolutely nothing to the landfill and recycles 100% of waste glass, paper, plastics, and spent grain.

Homebrewing Legal in 50 States

Homebrewing is now legal in all 50 states. Congress passed federal legislation allowing it in 1978. Alabama and Mississippi became the last two states to authorize the hobby. Gary Glass, President of the 38,000 member American Homebrewers Association was delighted with the news. He estimates that more than 1 million Americans make wine or beer at home.

Cask Ale – Another Style

Cask Ale is another distinctive style of beer that is just starting to be accepted in the U.S. The style is common in the U.K. But is just gaining a foothold on the East Coast where about 75 bars are tapping it. Cask Ale isn't pasteurized, carbonated, or contain any preservatives. It is kept at “cellar temperature” of about 54 degrees, goes through a secondary fermentation that gives it a very light, fine, carbonation. It is brewed in a 10.8 gallon, wooden cask, called a “firkin.”, The firkin has to be drained fast before the beer spoils.

Find a Canadian; Get a Beer

As part of a promotion, Molson set up refrigerators filled with free beer in Canterbury, London, Dover, Brussels, and northern France. The catch was that in order to get the free beer you needed to find a Canadian to open the refrigerator. There was a mechanism on the door that only unlocked if a Canadian passport was inserted in an electronic reader. The promotion successfully got Molson lots of notice; and it also made Canadian tourists very popular in Europe.

 

Spirits

Limited Edition Chivas

Chivas Regal is releasing 45 year old Tribute to Honour, a blend of whiskeys in bottled special French porcelain. Only 25 bottles were filled and numbered. The Whiskey Shop in downtown London is offering #17 for sale at ₤150,000.

39 California Bars Best in the Country

Esquire Magazine listed the best bars in the country. 39 from California made the list. They didn't say who was sent to do the research, but they did an excellent job. We admire their dedication. Here they are:

San Francisco (10) – Zeitqeist, Vesuvio, Tosca Cafe, Toronado, Tommy's Mexican, Smuggler's Cove, Cantina, Bourbon & Branch, Alembic, 21 Club.

Los Angeles (13) – Veranda Bar, Varnish, Edison, Broadway Bar, Redwood, Red Lion Tavern, La Cita, J Lounge, Golden Gopher, Bordello, Birds, Bar 107.

Sonora (1) Sportsman; Tiburon (1) Sams Anchor Cafe; Hermosa Beach (2) Mermaid, Hermosa Yacht Club; Laguna Beach (1) Sandpiper Lounge; Tahoe City (1) River Ranch; Beverly Hills (1) Polo Lounge; San Diego (2) Bar at the Red Fox Steakhouse, Noble Experiment; Hollywood (3) Musso & Frank Grill, Jumbo's Clown Room, Chateau Marmont; Marina del Rey (1) Brennan's Pub; Newport Beach (1) Beach Ball.

Two Special California Bars

Two of the most interesting bars in California are Soho House West Hollywood and Trick Dog in San Francisco.

 

 

 

Soho House West Hollywood is on the top two floors of the 14 story 9200 Sunset Blvd. The bar in the penthouse offers views across L.A. The terrace has a retractable roof over an outdoor dining area with olive trees and candlelight. There is a members only bar and dining area with a room for members events and private screenings.

 

 

 

The Trick Dog tries hard to be the best neighborhood bar there is. Bartenders are friendly and not snobby. The bar has attention to detail that includes antique glassware, Japanese barware utensils, unique drinks (Grandma's Sweater, Polar Bear, Negroni), “elevated” bar food (cracklings, radishes, pimento cheese, fries, and a Vietnamese rice plate).

Kroger Releases Alcohol Sales Numbers

Kroger, U.S. second largest retailer released figures on alcoholic beverage sales. In California Kroger operates Ralphs, Foods Co., and the Southern California Food 4 Less stores. Total sales of beverage alcohol in 2400 stores over 34 states was $3 billion. That broke down to 47% Beer, 36% Wine, 17% Spirits. The company has a goal of increasing private label sales to 15% within the next 5 years.

Most Expensive Margarita

The Bar at 230 Fifth in downtown Manhattan has created the World's Most Expensive Margarita. The $1200 drink is made with 1800 Coleccion Extra Anejo 2010 Limited Tequila ($1800 a bottle), Quintessence Grand Marnier ($800), and ice made from Louis Roederer Cristal Champagne($450). It is served in a hand blown Ralph Lauren crystal glass ($125). You get to keep the glass!

 

Other Food and Beverages

Super Size Me

A Gallup poll taken June 15-16 found that Americans said they would vote against a ban limiting soda drink sizes to 16 ounces. The count was 69% would vote against, 30% would vote in favor.

 

 

Which Came First? High Prices on Chickens or Eggs?

Chicken and Egg prices are hitting new highs in a tight market. The reason: Avian flu wiped out much of the breeding flocks in Mexico. A large quantity of U.S. breeding quality chickens were sold and shipped to Mexico. The current hatch here is short of normal levels and creating a shortage of broilers and egg laying hens.

Coke's New Sweetener

Coca Cola and PureCircle have filed a patent on a new Stevia extract that can be used to sweeten zero calorie soft drinks.

Starbucks Adds Sodas

Starbucks is experimenting in select stores with new handcrafted soft drinks made on premises. Spiced Root Beer, Ginger Ale, and Lemon Ale are being offered. The company is looking for ways to keep the stores selling during the afternoon hours. Starbucks is already rolling out wine service to a number of stores across the country.

Glass Bottles Make a Comeback

Glass bottles are making a comeback as consumers look for retro packaging, retro flavors, and just plain old nostalgia. Sales of soda in glass bottles were up 2.6% for the 52 weeks ended April 13. During the same period plastic bottle sales were off 1.4% and aluminum cans off 1.9%. Overall, soda sales were down 1.4%; largely due to concerns over health issues and cool weather. Mexican Coke continues to be a star in the marketplace because it has a lot going for it; glass bottles, hour glass shape, larger bottle, and it has traditional flavor made with cane sugar instead of high fructose corn syrup.

New Soda Flavors

Innova Market Insights predicts the North American beverage market will see the introduction new flavors this year from Herbs and Super Fruits & Vegetables. Pomegranate is still a strong leader. It accounted for 40% of the new beverage launches during the 5 years from June 2008 to May 2013. Acai and Lychee each accounted for about 12%. New flavors to look for include Guanabana, Prickly Pear, Marula, Nopal, Chipotle, Habanero, Jalapeno, Celery, and Kale.

 

 

Governor Brown Protects Business from Lawyers

California Governor Jerry Brown has assigned the Environmental Protection Agency (EPA) to come up with improvements in Prop 65 rules and enforcement. His concern is that lawyers motivated by profit rather than public safety are extracting money from businesses under the current rules.

Staples Adds Food and Beverages

Office supply retailer, Staples, sales were down 5% in their most recent quarter. The company is fighting back by offering food, beverages, and related products to try to get a nudge in sales. Items include Soda, Ketchup, Mayo, Mustard, BBQ Grills, Coolers, Salty Snacks, and Patio Furniture. The company hopes to make up for what it is losing in computers, business machines, and stationery.

L.A. Bans Plastic Bags

Los Angeles City Council has passed a plastic bag ban. It will go into effect January 1 in supermarkets and drug stores. Smaller stores will be banned from using plastic bags 6 months later. Paper bags may be used, but will be sold at 10 cents each. Customers are encouraged to use cloth bags. The new ordinance does not apply to WIC customers or sales of fast foods.

 

The Changing Market

California's New Demographics

California reached a milestone in June 2013. The number of Hispanics in the state is now equal to the number of non-Hispanic whites. In addition the Hispanic population is no longer concentrated in the inner cities. Some suburbs are now majority Hispanic.

Job Growth in Foodservice

Figures from the Labor Department show that nearly one out of 10 American jobs is in a bar or restaurant. June 2013 showed the fastest growth in restaurant jobs in 18 years. During April, May, and June more than 25% of new jobs were in bars and restaurants. The figures show a few things: 1) The growth in jobs in this economy is in unskilled, lower paying jobs 2) As the economy is improving consumer spending on eating out is growing 3) The current economic trend is good for foodservice and beverage sales and that is good for alcoholic beverage sales in general.

The Impact of Social Media

ODM Group Research reports that over half the people on Twitter talk about companies or products in their tweets. Customers feel the freedom of telling all. They will share their shopping experience, whether it was good, bad, or indifferent.

New Food Trends

Each year at the Gourmet Food Show new trends are seen. This year's trends include: 1) A move away from labeling product “Organic”. In some cases the back label tells how it was grown or produced, but leaves out the “O” word. 2) Ice Cream using only the finest basic ingredients. Price is no object! 3) New tropical flavors of all kinds. 4) Pouches. Everything liquid is now available in a pouch. 5) Awareness of Sugar and other sweeteners. Whether it's made with Cane Sugar, Stevia, HFCS, Honey, or Agave; the label touts what makes it sweet.

 

Health

New Use for Beer

Researchers at the University of Illinois, Chicago discovered that having two beers increases your creativity. It works by relaxing your brain and allowing it to stop depending on the things going on around you in working tasks. A blood alcohol content of 0.07% was found to be optimum. Two groups of men were given creative problems to solve. Those that had two beers solved 40% more creative problems but were far less able to solve normal working problems. Author, Dave Birss decided to test the results and brought together two teams of advertising directors. They were given the task of creating an ad program in a three hour period. The programs were judged by a third team that chose the best ideas. The result: four out of the five top judged ideas cam from the drinking team.

 

Green Tea Protects Against Alzheimer's

Four new studies show that Green Tea can protect the human brain from Alzheimer's. The studies were done at the University of Michigan, Leeds University in the U.K., Tufts University, and a Chinese team led by Mi Hee Lim. They all found that, EGCG, a bioflavoniod compound keeps plaque from sticking to brain cells. The Leeds study found that EGCG works best in combination with resveratrol from red wine.

Beer Improves Artery Function

A study reported in the journal Nutrition by a group of doctors at Harokopia University in Athens, Greece showed that drinking beer helped blood flow to the heart. Beer consumption improved several artery functions including flexibility of artery walls. The net result left the study subjects less susceptible to stroke. The most important result was that the effects were near immediate, taking effect within hours.

Recipes

Spiked Watermelon

This is a great party idea and will delight guests. The recipe is very easy.

Ingredients:

1 750 ml bottle of Vodka

1 large watermelon

Directions:

  1. Slice a small portion off the watermelon rind so the melon will sit flat on the counter.

  2. Remove the cap from the Vodka bottle and place it on the top center of the watermelon. Trace around the cap with a felt marker.

  3. Use a sharp knife to cut our the traced circle. Set it aside to later plug the hole.

  4. Use a spoon to clean out enough watermelon flesh to make room for the bottle neck. Put the cap back on the bottle and fit the bottle into the hole to make sure it will sit upright.

  5. Rotate the melon on its side at the edge of the counter.

  6. Uncap the vodka. Insert the bottle and rotate the melon back to its original position.

  7. Let the melon rest and infuse at room temperature for 12 to 24 hours.

  8. Remove the bottle. Plug the hole. Refrigerate until cold.

  9. Cut in slices and serve. Adults only! Eat responsibly!

 

Sriracha Bloody Mary

Ingredients:

2 oz. Vodka

4 oz. Tomato Juice

½ oz. Lemon Juice

¼ t Horseradish

2 pinches Celery Salt

3 dashes Sriracha Chili

2 dashes Worcestershire Sauce

 

Directions:

Mix all ingredients. Add Ice and stir. Garnish with a celery stick.

 

Tasting Notes

There were not many wine tastings in July, but, we were out there tasting new varieties of fresh produce at the FPFC in Anaheim. Pictured below is our editor, Ron Ziff, with retired Washington Redskins Quarterback, Joe Theisman.

 

 

 

Industry Calendar

7/24 The California Legislature ratified the 21st Amendment to the U.S. Constitution on this day in 1933, legalizing our industry.

7/26-28 PMA Foodservice Conference and Expo - Monterey

7/29 Burke Brokerage Tasting - SFO

8/16-18 Wine and Fire – Santa Rita Hills

8/17-18 Family Winemakers - SFO

8/18-20 Western Foodservice and Hospitality Expo-LA

8/18-20 Expo Comida Latina - LA

8/22-25 LA Food & Wine Festival

8/27-29 Global Wine, Beer, and Spirits – San Diego

8/29 Cabernet Day

8/30-9/1 The Taste - LA

9/1-9/30 California Wine Month

New Legislation for 2013

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 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 Statewide Association of Licensees. We're #1!

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