Beverage Bulletin March 2015

California Beverage Retailers Association

Beverage Bulletin

P.O. Box 56686

Sherman Oaks, CA 91413

(818) 693-5561

Ron Ziff, Editor

www.cbraliquor.org

March 2015

 

 

Wine...it goes with everything I wear.” -Ralph Waldo Emerson

 

This Month's Stories Include:

Headline News Stories-Academy Award Wines, Food & Beverage Sales in Restaurants, Port Labor Dispute Ends, Genetic Engineering Without GMO, Drought Update

 

Celebrities in the Industry-Robert de Niro, Rapper E40, Ron Jeremy, Anthony Bourdain, Adley Stump

 

Popular Culture-G.H. Mumm Toasts the Kentucky Derby, CA HWY 1 Discover Route: On the Road with Jo Wemple, History Channel/Newcastle Ale

 

Books-Whiskey Women, The Essence of Wine

 

Movies & TV-AB/Inbev and Netflix's House of Cards, Fatal Attraction

 

Wine-Who's Drinking? Where are They Buying It?, States Try to Control Interstate Commerce, Wine Dogs, Wine Geese, Early Bud Break, Big 2014 Crop, Wine Exports Up, Wine Exports to Canada Threatened, Robot Predicts Crop Size, Protection Against Vine Disease, Composite Corks May Change, The Secret Sommelier, A Big Year for Provence, Wine Barrels Roll On, 1945 Wine Sale, Vandalism in Australia, Treasury Wine Turnaround, 2014 Eiswein, Russian Market Collapses, Psychoanalyzed by Gallo?

 

Beer-The 6 World's Most Expensive Beers, New Craft Beer Trend, Craft in the Air, Retailers Get in on the Craft Growler Surge, Cross Merchandising with Beer, Ukraine Crisis Flattens Carlsberg

 

Spirits-Pernod Ricard Stalls, New Smart Bottle

 

Other Foods and Beverages-Nestle Goes Natural, Healthy Replaces Frozen, Four Star Comfort Food

 

The Changing Market-Fortune 500, Costco/Amex Separate, Amex Loses Again, New Bar Code on Coupons, New Consumer Trends, Food Recalls Increase, Computer Hacking Continues, Walmart Gives Minimum Wage Employees a Raise, Sysco/U.S. Foods Merger Stalls, Grocery Changes

 

Recipes- Cranberry Raspberry Flirtini, Mocha Russian

 

Health-Lose Weight with Red Wine, Get Beautiful with Red Wine

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

 

Headline News Stories

Academy Award Wines

The wines served at the annual Academy Awards were all by Sterling Vineyards; Sauvignon Blanc 2012, Chardonnay 2012, Pinot Noir 2012. The Champagne was all by Piper Heidsieck; Cuvee Brut NV, Rose Sauvage NV, Piper Rare 2002. The food items on the Wolfgang Puck menu included lobster BLT's, tuna tartar, and chicken pot pie. (Barbra Streisand ordered the chicken pot pie) A free standing seafood bar that included 1,500 crab claws, 1,300 oysters, 7,500 shrimp, 600 Maine lobsters, as well as clams, mussels, and sushi. The movie, “Boyhood” had the distinction of having 17 scenes that showed at least one person drinking.

Food & Beverage Sales in Restaurants

The U.S. Census Bureau has been tracking how Americans spend their food dollars since 1992. Grocery stores always got more of their money than restaurants. The big news is that for the month of January 2015, for the first time, restaurants beat grocers. The totals were In 1992 consumers spent $1.62 in grocery stores for every $1 spent in restaurants. The trend has been gradual over the past 22 years and this January the restaurants won by a hair. The difference was small, but real and significant. The totals were grocery stores $50.475 billion, restaurants $50.466 billion.

 

Beverage Information and Insights Group's annual “Cheers on-premise BARometer Handbook” indicates that all three categories of alcoholic beverages are slightly down in sales in restaurants and bars. The trend that started during the recession has continued as consumers have watched their purchases closely. In 2014 Spirits were down 1.8%, Wine down .6%, and Beer down 1.5%.

 

Port Labor Dispute Ends

The 9 month labor dispute that has tied up 29 West Coast ports appears to be over. A tentative agreement was reached at the end of February. There is a backlog of thousands of containers scheduled to be shipped out, thousands more to be loaded on local trucks, and well over a thousand ships anchored off shore, waiting. The tie up has delayed exports including California wines and imports that retailers need to restock empty shelves. The stranded containers have been a problem for shippers. The ports have been charging storage fees of $300 to $400 a day per container while the containers sit and wait. It is estimated that it will take about 3 months to clear up the backlog.

Genetic Engineering Without GMO

Andrew Walker, PHD at UC Davis has developed a technique using advanced molecular genetic mapping to genetically engineer and breed new grape varieties that are not GMO. By gene mapping the desired traits of grape flavor, color, and disease resistance he can cross two varieties of grapes. Then DNA test the seedlings of the next generation by checking the DNA of a single leaf to see if they have inherited the desired traits. The technique saves years and a lot of work of trial and error from the breeding process. It cuts a generation from 16 years to 2. The first resulting variety will be ready to release in one or two years. It is a hybrid that is 97% Vitus Vinifera; including 50% Petite Sirah, 25% Cabernet Sauvignon, and resistant to Pierce's Disease. It has no name as yet but is known as 07355-075.

Drought Update

The USDA has declared all 58 counties in California, 4 in Southern Oregon, 8 in Nevada, and two in Arizona a Disaster Area. The declaration allows qualifying farmers in the area to apply for low interest loans from the USDA Farm Service Agency and gives them access to other programs. The declaration was effective February 4 and the farmers have 8 months to evaluate their losses and make application.

 

Californians used 22% less water in December 2014 than in the same month a year earlier. Water use restrictions may still lie ahead as Governor Brown called for a continued 20% reduction as we move into the Spring of 2015.

 

A team of state and local water officials are working on a set of water regulations to control unregulated water diversion in Northern California by Marijuana growers. The water use combined with the drought has caused some streams to go dry for the first time. There are no plans to destroy or pull the plants. The only aim is to stop damage to the watershed in remote forest areas. The team is led by Chris Carrigan, Director of the Office of Enforcement for the State Water Resources Control Board. Carrigan's decision is based on the possibility that the voters may approve Marijuana for recreational use in 2016 and wants to get regulations in place prior to that.

 

The State Water Resources Board is considering regulations that would require hotel guests to request new sheets and towels for multi-day stays and requiring restaurant patrons to order water rather than have it served automatically. Fresh sheets require more washing and a glass of water represents 3 glasses of water. 1 to fill it, and 2 glasses of water to wash the glass.

 

Celebrities in the Industry

Rapper, E40 (formerly known as Earl Stevens) has introduced his new line of wines, Earl Stevens Selections. There are three types: a Cabernet/Zinfandel Blend, Moscato, and a “Mangoscato.” Mangoscato is a mango flavored moscato. E40 first was part of the group, Click. Later he went solo and had his first big hit, “Tell Me When to Go.”

 

Adult film star Ron Jeremy has introduced a Panamanian Rum named Ron de Jeremy. It is a spiced dark rum and touted as having a full flavored taste and aroma. Priced at $15.

 

Celebrity Chef, Anthony Bourdain, is partnering with Balvenie Scotch to produce a series of short films about American craftspeople titled “Raw Craft.” The series will show the very best of craft skills and work from across the country.

 

Adley Stump, country singer and contestant on NBC's The Voice, has written and recorded a single “Little Black Dress.” Excelsior Wines, the owner of Little Black Dress Wines will partner with her on various promotional activities and women's charitable causes.

Robert de Niro has partnered to produce and market VDKA 6100, a Vodka made in New Zealand. De Niro says it is a quality product made to his exacting standards. The Vodka will be served in his Tribeca Restaurant in New York and his Nobu Hotel in Las Vegas.

 

Popular Culture

 

G.H. Mumm has been named the official Champagne of Churchill Downs and the Kentucky Derby. The sponsorship will begin with this year's 141st running of the race. The sponsorship will include the G. H. Mumm Winner's Circle and a pre-race Toast to the Kentucky Derby.

 

A new online travel series, CA HWY 1 Discover Route: On the Road with Jo, with host Jo Wemple, features the California Central Coast and the food, wine, craft beer, and all things delicious. Watch the trailer at https://www.youtube.com/watch?v=gko8HLiK-hU or better yet; watch the series.

 

The History Channel and Newcastle Ale will partner to commemorate the third season of the TV series Vikings. For a limited time Newcastle Vikings Amber Ale will be available in select bars in 10 states including California.

Books

Whiskey Women by Fred Minnick, Potomac Books, 232 pages, $26.95. The story of how women grew the industry and saved it from Prohibition. True stories of women of note in the industry. Includes women like Ellen Jane who built Bushmills business in the 1800's. Tells about Maggie Bailey, one of Kentucky's most important moonshiners during Prohibition. Bailey didn't want pay her taxes when whiskey became legal. She personally clothed the poor and paid for coal to heat their homes and supported churches regardless of religion. When it came time to shut her down, there was no politician willing to take the risk.

The Essence of Wine by Alder Yarrow, published independently, 167 pages $35.00. Unique in several ways: only available in e-book format through Amazon; it is a coffee table style book of photographs and essays on wine; Yarrow raised $24,000 from 180 internet investors to publish the book. Yarrow is also the publisher of Vinography, an internet blog.

Movies & TV

AB/Inbev will be the exclusive beer marketer to Netflix's House of Cards. Stella Artois, Budweiser, and Shock Top will be featured on episodes in the current season 3. Product placement will not be paid for, but the beer will be supplied for filming. Jim Holleran, AB/Inbev's Director of Entertainment Marketing has been supplying beer for use on the set since season 1.

 

In an interview about the making of the movie, Fatal Attraction, Director Adrian Lyne, said that it was difficult filming the hot scenes. Michael Douglas and Glenn Close had to drink Champagne and Margaritas to get in the mood before the shooting started.

 

Wine

Who's Drinking?

13% of the adult population are high frequency wine drinkers, 27% are occasional wine drinkers, 24% don't drink wine (but do drink alcohol), and 36% abstain from all alcohol. The figures are from Nielsen's Beverage Alcohol Team.

Where are They Buying It?

The Wine Market Council has issued its annual report on wine trends. The report showed 41% of frequent wine drinkers were Boomers, 29% Millennials, 18% Generation X, and 12% older people. Most were willing to buy their wine at a variety of store types. 58% bought wine at wine specialty stores, 53% at supermarkets, 52% at restaurants, 34% at mass merchandisers, 32% at warehouse clubs, 29% at the winery, 25% at a specialty food store.

States Try to Control Interstate Commerce

The Illinois Liquor Control Commission has issued over 100 cease and desist letters to retailers, wineries, and others. The letters say that wine is being shipped into Illinois without an Illinois license. Many of the letters were received by shippers in California. Enforcement in various forms of similar regulations are taking place in Iowa, Michigan, South Dakota, New York, and New Jersey.

 

Wine Dogs

Some of our best friends are dogs. And some of California's best wineries love dogs too. Some even prefer dog visitors to people. But that's another story for another day.

Alexander Valley Vineyards. Dogs are allowed to visit the winery. A dog is allowed to bring up to 4 people.

Frenchie Winery, St Helena. The French Bulldog, Frenchie, is in charge. His painted portraits line the walls. His best friend, Jean Claude Boisset goes along with it.

Mutt Lynch Winery, Windsor. The winery has a Yappy Hour the second Friday of every month. Money from the event is donated to animal charities.

Saracina Vineyards, Hopland. The winery sponsors a Dog & Person hike on Earth Day followed by a picnic at the winery.

Tablas Creek Winery, Paso Robles. The winery dogs invite other canines to bring their people and take a winery tour.

Temecula Wineries. There are 25 dog friendly wineries in Temecula. Before visiting look up information at http://www.temeculadogfriendly.com/wineries_tdf.html.

Wineries all over California. There are 48 dog friendly wineries in the Mendocino area, over 100 in Napa; find a list at http://napavintners.com/wineries/wineries_dog_friendly.asp, and more throughout the wine country. Look them up by county from Lake County in the North to Santa Barbara County in the South at

http://dogtrekker.com/Destination/California_Wine_Country. The website also lists dog friendly motels and restaurants statewide. The Wine Institute also lists California dog friendly wineries at http://www.wineinstitute.org/files/pet-friendly_wineries_in_ca.pdf or at OC DogFriendly you can find all kinds of fun places to go with your dog http://www.ocdogfriendly.com/dogfriendlywineries.html.

Wine Geese

Did you ever hear of a Wine Goose? That's the name for an Irishman in the wine business. It all started in 1691 when the Irish first started fighting as mercenaries in foreign armies. An Irish mercenary was called a Wild Goose. Later the Irish took up wine production in foreign countries. The name Wine Goose caught hold. Today their descendants are still in the wine business running some of the world's greatest wineries and belonging to an organization called The Irish Order of the Wine Geese. The wineries include Bordeaux's Chateau Lynch Bages and Chaeteau Leoville Barton, Australia's Jim Barry Wines, South Africa's Hamilton Russell Vineyards, Chile's Undurraga, and California's Concannon and Chateau Montelena.

Early Bud Break

Vineyards in the Santa Cruz area experienced an early bud break this year with grapes vines coming to life in mid-January to the 1st of February. This is the second year in a row to see this happen. Bud break usually occurs in Mid-March.

Big 2014 Crop

After two record crops, the 2014 grape harvest was big, but not a record setter. The crop came in at 3.91 l million tons, 7.91% less than the 2013 crop of 4.25 million tons and slightly less than the 2012 crop. 17% of the tonnage was Chardonnay and 12% Cabernet Sauvignon.

Wine Exports Up

The volume of California wine exports was up 2.8% in the first 11 months of 2014 to 413 million liters. The value was down 3% to $1.38 billion. The conclusion is that prices are slightly down. The causes could be the rising value of the dollar, the west coast port slow down, or a combination of the two. The figures are from the Wine Institute, which administers an international export program with 170 wineries participating.

Wine Exports to Canada Threatened

The Canadian Minister of Agriculture, Gerry Ritz, has threatened tariffs on California Wine. The threat is part of the ongoing dispute over country of origin labeling on beef. The U.S. had required the labeling of Canadian and Mexican beef. The two countries had received a ruling from the World Trade Organization that the labeling violated North American Trade agreements. The U.S. is now appealing the decision. The Canadian minister reacted with the wine tariff threat. Canada imports $400 million of California wine a year. The Canadian wine market is 6th largest in the world at 32.7 million cases of wine a year.

Robot Predicts Crop Size

Scientists at Australia's University of South Wales have developed a robotic car equipped with television cameras to help vineyard managers predict harvest quantities. By driving the car along grape rows and pointing the cameras at the vines, the robotic programs are able to accurately predict the tonnage to be harvested from a vineyard. The information allows vineyard management to schedule resources including transportation, use of steel tanks and barrels as well as labor before the harvest starts.

Protection Against Vine Disease

A fungus vine disease known as Esca or Vine Decline attacks grape vines through the cuts made by pruning. Growers have protected the cuts by sealing them with wax or tar. But, that slows the healing process and contaminates the soil. Now a team of scientists at the University of Illinois have invented a patch that is placed over the cut. The patch allows the cut to breath and seal itself while keeping out the fungus. Dr. Alexander Yarin gave an interview about the patch to the website, Chemistry Today. The patch is made from non-toxic adhesive on biodegradable soy fibers. The patches are made from waste materials from soybean processing. A quantity of patches will be field tested this year in California.

Composite Corks May Change

Agglomerated cork manufacturers have been under investigation by the FDA and the EPA. Agglomerated or composite corks are made from bits of cork that are bonded together to make a bottle sealing stopper. The problem is the chemical adhesive, tuolene diisocyanate polyurethane (TDI) used to make the bits stick together. Some groups consider it a carcinogen. The FDA issued a statement on February 5 saying that they found no problem in the use of the corks or the adhesive. The EPA has not ruled as yet. The U.S. wine industry uses 350 million of the corks a year.

 

Labrenta, an Italian company, has developed a new agglomerated cork closure that does not contain adhesive. Ten years of research and development seem to have paid off at exactly the right time. The stoppers are made from bits of cork suspended in a thermoplastic polymer. The product is non-toxic, biodegradable, and fully recyclable.

The Secret Sommelier

An anonymous woman, who is rumored to have made a lot of money in the tech industry, has been visiting restaurants in the Danville and Pleasanton area and sending bottles of wine to diners tables. She is known as the “Secret Sommelier.” During January she gave diners over 50 bottles worth about $2,000. The wines given are local to the area and include Wente Brothers Chardonnay, Concannon Chardonnay, and Nottingham Cabernet. The rumor is that she is grateful for what the area has done for her and is giving back by promoting local wines.

A Big Year for Provence

Vins de Provence reports that dry Rose' wines grew 29% in volume and 38% in value during 2014. This marks the 10th year in a row that the wines have shown a double digit increase. As a category premium imported Rose's over $12 in the U.S. market increased a total of 53% in 2014. The average price of premium Rose' hit a new high of $16.83 a bottle.

 

Wine Barrels Roll On

Indigo Greenlaw and Wills Rowe have a thriving business recycling used wine barrel staves into extra long skateboards. The boards are made from French Oak that was milled, made into barrels, then aged along with Pinot Noir and other fine wines. By the time they get the barrels, they have been used for several vintages of wine. The couple live and work on his parents cherry orchard in New Zealand. Indigo grew up in Scotland. They first met in Christchurch, New Zealand where she was studying at Canterbury University and he was selling unfinished skateboards. They combined their careers in their business, “The Paper Rain Project.” She does art work and design, he refashions the staves as extra long “Cruising Skateboards.” Aging the boards in wine gives them character and color; something they couldn't get any other way. The boards range in price from $100 U.S. to $285 U.S.

1945 Wine Sale

At Bonhams Wine Auction in London during February a 12 bottle case of Chateau Latour 1945 sold for $32,500. A single bottle of Chateau Mouton Rothschild 1945 sold for $8,800.

Vandalism in Australia

The Kellermeister Winery in Australia's Barossa Valley was struck by vandalism similar to recent incidents in France and New Zealand. On a recent Sunday night a man entered the aging area and opened the valves on tanks of Chardonnay from the 2010 and 2011 vintages. 25,000 liters of wine that was scheduled for bottling flowed down the drain. The 57 year old man (name withheld) was caught and identified on several security cameras. He is scheduled to appear in court on March 31.

Treasury Wine Turnaround

Treasury Wine's CEO, Mike Clarke, announced that the company has returned to profitability. Profits were up 86% to $85.2 million AU for the first half of the 2014-15 fiscal year. He went on to say that the company was facing tough competition on lower end products in its home market from private label brands sold through grocers and other mass marketers. He said Treasury would be stripping out costs at the low end of its line to stay competitive without compromising quality.

2014 Eiswein

Many German vineyards purposely left a portion of their 2014 harvest on the vine in hopes of an end of season frost. The Fall season had been mild and the harvesting of this year's crop went with ease. The gamble paid off. The last week of December their wish was granted. Freezing temperatures hit the areas of Kaiserstuhl, Moselle, and Franconia. The result was a bumper crop of Eiswein. Grape pickers were out in the pre-dawn darkness on December 30 picking frozen grapes. The frozen grapes create a sweet concentrated wine that is unmatched in flavor. German vineyards have been making Eiswein since Roman times.

Russian Market Collapses

Russian wine imports have fallen drastically. December 2014 imports were down 44% from a year earlier. The causes are the falling value of the Ruble, economic sanctions, and the government campaign against drinking. Last summer the rate of exchange was 47 Rubles to a Euro. In December it was 77 Rubles to a Euro.

Psychoanalyzed by Gallo?

E&J Gallo is inviting consumers in the UK to participate in a program that analyzes the personalities of Apothic Red wine drinkers Tweets. The program uses a psychoanalysis tool developed by British Dr. Sandra Scott. The tool uses computer algorithms to analyze key words and sentiment. The results put the test subject into one of four “darkside persona” categories; passionate, egoistic, materialistic, and mischievous.

Beer

The 6 World's Most Expensive Beers

  1. Samuel Adams Utopia, 28% ABV, 750 ml $150. U.S., Non-Carbonated, aged 18 years in wood, released in limited quantities in even numbered years since 2002.

  2. BrewDog Sink The Bismarck, 41% ABV, 375ml $80. Scotland, Quadruple IPA.

  3. Schorschbrau Schorsbock 57, 57.5% ABV, 375 ml $275. World's strongest beer, Germany, at 110 proof it is the strongest allowed under the German Purity Law, only 36 bottles were made in 2011.

  4. Carlsberg Jacobsen Vintage #1, 10.5% ABV, 375 ml $400. Denmark, Barley Wine, 600 bottles produced in 2008.

  5. BrewDog The End of History, 55% ABV, $765 333 ml. Scotland, Belgian Blond Ale, infused with Nettle and Juniper Berries, each bottle is packed in a stuffed squirrel that was roadkill. (No comment)

  6. Nail Brewing Antarctic Nail Ale, 10% ABV, $1850 500 ml. Australia, Pale Ale, made from an Antarctic iceberg towed to Perth, Australia by the Sea Shepherd Conservation Society and used to make 30 bottles. Proceeds from the sale were used to protect marine life.

New Craft Beer Trend

The Sterling Rice Group has identified a growing trend for 2015. Craft Beer makers are brewing beers without hops and using herbs, spices, and other plant materials. The results are beers with lower alcohol content and flavors that haven't been tasted since the Middle Ages. The flavorings include coriander, anise, cinnamon, cardamom, spruce, myrtle, yarrow, and rosemary. The brews appeal to two groups of consumers; those that want to try new experiences and those that want to enjoy quantities of beer without the side effects.

Craft in the Air

Boston's Harpoon Brewing has announced that its UFO White Ale will be available in cans on Jet Blue nationwide. UFO stands for UnFiltered Offering. The ale is made from 3 varieties of hops and flavored with coriander and orange peel. It is slightly sweet with a delicate spicy aroma.

Retailers Get in on the Craft Growler Surge

Albertsons has installed and is trying out growler dispensing bars in 6 stores. The bars fill the customers' growler jugs in the same way they would be filled at a micro-brewery. The program is a win-win-win situation. It allows the retailer to get in on the bulk sale of several brands of craft beer. It gives the small brewer that can only sell in kegs access to the supermarket's traffic and individual customer sales. It gives the consumers the ability to buy bulk craft beer as part of a one stop shopping trip and gives them a choice of several kinds of beer. The craft beer dispensing stations are set up by The Growler Station, an Irvine company. The company has already installed 100 supermarket dispensing stations; 50 of them in 2014 alone.

Cross Merchandising with Beer

Greg McLeod, VP of Grocery and Mass Channels at AB/Inbev has been developing techniques for distributors to use in cross merchandising at retail outlets. Retailers have been using cross merchandising for decades. Now, a major producer is working on cracking the codes that turn customer sales. McLeod says “We know 40% of consumers are looking for beer to complement their food occasion... 60% of shoppers are buying beer to share with others... so positioning beer helps drive basket size. If you cross merchandise displays beer with food, shoppers will be three times more likely to buy beer to complement their meal.” If it works for AB, it can work for retailers. For foodservice cross merchandising can be as simple as using menu clip-ons or suggesting a beer or wine with the daily feature.

Ukraine Crisis Flattens Carlsberg

Carlsberg CEO, Jergen Buhl Rasmussen, will be leaving the company in June. Profits at Carlsberg were down 78% in the last quarter of 2014. He had bet the company's future on sales in Russia. 27% of its sales come from Eastern Europe including Russia. Russia's moves to reduce beer drinking by curtailing sales in street corner kiosks had been a drag on volume. East-West tensions and the Ukraine crisis further eroded sales. The brewery has tried to raise prices and cut costs in an effort to maintain profits. In January the company announced that it was closing 2 of its 10 Russian breweries.

Spirits

Pernod Ricard Stalls

Alexandre Ricard, was named the new CEO of Pernod Ricard. In a statement following the Board meeting, he targeted growth in its top two markets as his primary focus for the company. Business in the U.S. and China has stalled the world's second largest beverage alcohol company. In the U.S. a shift away from Vodka has drained the prospects for a flagship brand, Absolut. In China the austerity program has lowered sales of Martel and the late calendar for Chinese New Year has lowered all sales. These factors have combined to make the first half profits flat.

New Smart Bottle

Diageo is experimenting with a thin film label on Johnnie Walker Blue Label. The label contains a sensor tag. The sensor tag has a wide range of uses. It can be read by a smart phone and give the consumer product information, recipes, and serving suggestions. It can allow the manufacturer to track an individual bottle from the point of filling, through the supply chain, and to its final purchasing consumer. It can assure the authenticity of the product and tell if the bottle has been opened or tampered. Each tag can be unique and give every consumer a different experience. The result has been dubbed a “Smart Bottle.”

Other Foods and Beverages

Nestle Goes Natural

The Nestle company has announced that by the end of 2015 it intends to eliminate all artificial colors and flavors from its products sold in the U.S. 250 products, 10 brands, and 75 recipes will be affected. There are several reasons. Nestle is reacting to consumer concerns. The company wants to simplify its product lines. Currently, the same brand and product has different recipes in Europe and the U.S. Keeping track of ingredients forbidden in different countries has become a nightmare that can be solved by making all ingredients natural.

Healthy Replaces Frozen

Frozen food sales have been in a steady decline since 2009. Total sales are off 5% in the past 5 years. The decline seems to be caused by consumers interest in nutrition. Sales of fresh produce have been increasing because it's viewed as healthier and it's no longer seasonal due to global movement of goods. At the same time prepared entree's like Lean Cuisine and Healthy Choice are losing out to takeout from the deli counter. The one exception to declining frozen sales is frozen fruit. In the same time period it has increased 67% in sales. Frozen fruit is convenient and easy to use in making those healthy drinks: smoothies.

Four Star Comfort Food

Four Seasons Hotels finds that weary travelers arriving at night often order comfort food from room service. What is comfort food? That varies by location. Here are the top late night room service items by location. Prices are in U.S. dollars:

London, Canary Wharf – Fish and Chips $29

Beirut – Club Sandwich $17

Mumbai – Chicken or Lamb Biryani $21

Silicon Valley – Burger $21

Hangzhou, China – Chicken Rice $25

 

The Changing Market

Fortune 500

In 1955 Fortune Magazine listed the top 500 U.S. companies for the first time. By 2014 88% of the companies on that first list were gone and only 61 still exist. Most have gone bankrupt, been acquired by other companies, merged, or gradually fallen to non-entities. Do you remember Armstrong Rubber, Armour, Swift & Co., Esmark, American Motors, Zenith Electronics, Montgomery Ward, and Gulf Oil? All gone! It's called creative destruction. We are better off for the last 59 years of change. In 1955 no one could have imagined a clipboard size object that could play music, make telephone calls, show movies, and get us any bit of information in the world. Hang on to your tablet. It's the antique of 2074.

Costco/Amex Separate

After 16 years of partnering, Costco and American Express have ended their credit processing agreement. Analysts estimate the agreement produced $80 billion annually in billings for Amex. Costco represented 1 in 10 of the Amex cards in use. Am hopes to retain a good portion of the non-Costco business that customers charge on the cards just as it did in Canada when the two separated. About 70% of the charges are at businesses other than Costco. Meanwhile Costco has reached an agreement with Citi to co-brand Visa cards that will serve as Costco membership cards. Costco members will have the option of using other Visa cards. Citi will have to offer Costco members incentives good enough to make their card the card of choice. The change will be effective April 1, 2016.

Amex Loses Again

American Express has lost a key court case on anti-trust grounds. Amex had forbidden merchants from attempting to switch customer purchases to other, cheaper, charge networks. U.S. District Court Judge Nicholas Garaufis ruled that the policy prevented merchants from lowering their credit processing costs.

New Bar Code on Coupons

As of June 30 this year, manufacturer coupons will not be coded with the familiar UPC digit 5 bar code prefix. The replacement is the newer GS1 databar. Most retailer systems are capable of reading the new code, although they made need activation, or software updates. The databar allows the coupon to have more information embedded including expiration dates, complex deal specifics such as buy one item and get a different item free, value limit to item price, reduction of cashier intervention, and dealer specific coupons. Retailers that do not have updated point of sale systems after June 30 will have delayed checkout due to cashiers having to manually enter codes and will pay for losses from for expired and fraudulent couponing. The new system was announced in 2007 and started phase-in during 2011.

Walmart Gives Minimum Wage Employees a Raise

Walmart has announced that it will change the minimum wage for all employees. The press has said it is raised to $10 per hour. That is not completely accurate. These are the basics. Walmart currently has a minimum wage of $9 per hour. All current employees will be raised to $10 per hour by February 2016. All new employees will have an entry rate of $9 that will rise to $10 after 6 months of training. The department manager rate will be $13 per hour, rising to $15 per hour by next year.

 

Food Recalls Increase

Food recalls by the FDA increased about 30% from 94 in 2014 compared to 75 in 2013. Tonnage increased from 13.1 million pounds to 18.7 million pounds. The number of recalls for foodborne pathogens decreased, while the number of recalls increased for undeclared allergens, labeling problems, and lack of inspection.

New Consumer Trends

In 2014 commodities of all types showed declining sales as consumers held onto their money. However, three things bucked the trend and increased in sales. #1 Protein. Consumers ate more protein and looked for foods with protein added. The trend defied reason as they bought any food with the word protein on the label. Beef consumption dropped to third behind chicken and pork. Pork sold the most and chicken sales exploded into a strong second. #2 Socks. Men led the sock trend looking for more color and design. Overall, sock sales increased 2% to $5.6 billion. #3 Scents. Prestige fragrances grew 10% to $285 million. Millennial males led the trend. They bought scented products, personal perfumes, and colognes at an increasing rate as the year ended.

Computer Hacking Continues

Anthem/Blue Cross and their insured customers are among the most recent victims of hackers. The data was not encrypted and easy to get once the hackers were inside the system. Up to 80 million records may have been compromised. Social Security numbers, dates of birth, names, and addresses were all copied. Enough data was accessed to allow massive identity theft. So far, there is no evidence that it is being used or sold. There are indications the hackers were from China.

 

Richard Bejtlich, chief security strategist for FireEye, Inc. says hackers are currently spending an average of 209 days undetected in a major company's computers. Two thirds of the time the companies find out because someone else tells them. Often it's the FBI. Now, every single CIO and CEO has to have some knowledge of computer security and how it affects their business.

 

The cyberattack on Sony Entertainment exposed security vulnerabilities at the company and also a lack of response or plan on the part of the government. President Obama has authorized a new government agency to fill the gap. The Cyber Threat Intelligence Integration Center will sort and share information between companies and government agencies on cyber threats, responses, and activity. The President made the announcement at a speech given at Stanford University in Silicon Valley.

 

The IRS 990 Charitable Organization filing system has also been accessed by hackers. The intruders were able to download organization names, ID numbers, addresses and phone numbers. The agencies involved say they don't believe sensitive data was accessed.

 

Sysco/U.S. Foods Merger Stalls

The merger of Sysco and U.S. Foods has hit a standstill. Recently, Sysco had offered to divest 11 distribution centers with a volume of $4.6 billion. The FTC is of the opinion that that wouldn't be enough to preserve competition and has sued to stop the merger. The FTC contends that these are the only two national companies to offer extensive product lines, frequent deliveries, and services including menu planning and there would be major effects in 32 marketing areas. The FTC intends to handle the case in its own administrative courts. If the merger doesn't go through, Sysco faces a $300 million break up payment to U.S. Foods. However, the deal could simply expire at its deadline in September. With the deal dragging on for over a year, U.S. Foods has been losing business at a rate that may make it a less than palatable purchase. Some customers have been moving their business ahead of the merger and making the best deal they can with Sysco. Other customers that have been finding new wholesale partners while they can. Meanwhile, U.S. Foods has been powerless to stop the erosion.

Grocery Changes

Sprouts Farmers Markets had a 21% increase in sales for the 4th quarter of 2014. The 191 store chain had an increase of 8.5% in same store sales. 4th quarter sales were $734.6 million and $3 billion for the year.

 

The Raleys supermarket chain in Northern California has announced that it will discontinue tobacco sales. The chain includes 128 Raleys, Bel Air, and Nob Hill Markets. Last year CVS drug stores discontinued tobacco sales.

 

Recipes

Cranberry Raspberry Flirtini

2 oz Ocean Spray Cranberry Cocktail

1 oz Vodka

1/2 oz Raspberry Liqueur

1 oz Sparkling Wine or Champagne

1 fresh Cranberry

 

Combine all ingredients except Champagne with ice in a Martini Shaker. Shake gently and strain into a Martini glass. Top with Champagne. Garnish with a fresh Cranberry.

 

Mocha Russian

1/4 Cup Light Brown Sugar

2 Tablespoons Espresso Powder

1 Tablespoon Cocoa Powder

2 Cups Milk

1/2 Cup Heavy Cream

1/4 Cup Vodka

 

Mix all ingredients in a pot and heat to almost boiling. Pour into mugs and top with whipped cream and a sprinkle of Espresso Powder.

Health

Lose Weight with Red Wine

A study at Oregon State University found that red wine or red grapes helped participants lose weight. The ellagic acid in them made fat cells shrink and kept new fat cells from growing. The same ellagic acid is also found in raspberries, strawberries, cranberries, pomegranates, pecans, and walnuts. Neil Shay PHD, a professor of Food Science led the study. The study was published in the Journal of Nutritional Biochemistry. How about a new red wine diet?

Get Beautiful with Red Wine

The beauty industry has increasingly looked to the wine industry for raw materials. Grape seed oil ingredients and extracts are high in anti-oxidants including polyphenols and resveratrol which help cell renewal and give a more youthful appearance. The industry uses grape ingredients first in cosmetics and later in massage oils, soaps, body creams, and lipstick based on Cabernet Sauvignon and Merlot. Most recently, perfumes based on Malbec have entered the market. Now Sara Goretti has developed a Winetherapy program that includes 19 products. The Esdor Line features beauty products made with Tempranillo grapes from the Matarromera Vineyards in Spain. There are day and night creams, firming serums, body scrubs, cleansing milks, ans skin care products for both men and women.

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. This month there were several wine tastings that showed some very nice wines available at reasonable prices. The prices shown are approximate retails.

 

The Kosher Food and Wine Experience was held at the W Hotel in Hollywood. It featured a wide variety of Kosher wines and spirits and had samplings of foods from seven of Southern California's finest Kosher restaurants. Many of the wines and spirits were Kosher versions of standard labels. Names like Laurent Perrier, Teal Lake, Louis Royer Cognac were poured; as well as lesser known products from Italy, New Zealand, and France. The foods also showed the range of current Kosher cuisine. Shiloh's Steak House, Pat's and La Gondola Italian, Meshuga 4 Sushi, Beverly Hills Thai, and Tierra Sur were included.

 

Among the wines we found a few exceptional selections. Teal Lake from Australia had Shiraz 2013, soft and perfumey, good color and nose, $13.99. Shiraz Reserve 2012, good color and nose, full body, mellow. $16.99. Both available through Southern Wine & Spirits.

 

Two favorites were Tabor from Israel. Tabor Thunder 2012, 60% Syrah 40% Cabernet Sauvignon, 14% ABV, from Malkia in upper Galilee. Full bodied with good color and nose, showed minerality from clay and limestone soil. $35. Tabor Storm 2012, a full bodied red made from 50% Petite Sirah and 50% Cabernet Sauvignon. From Kedesh Valley in upper Galilee, a deep purple color with tones of black cherry and raspberry. $35. Available from Contact Rob Cardella at West Pico Foods rob@westpicofoods.com or (323)-586-9050.

 

Industry Calendar

3/4 Provence in the City - SFO

3/5 Provence in the City - LA

3/6-8 Natural Products Expo West – Anaheim

3/8 Daylight Savings Begins

3/13-15 Vin Livo - Sonoma

3/15 Family Winemakers - Pomona

3/17 St Patrick's Day

3/20-21 Zinposium – Paso Robles

3/20-21 Latin Food Fest – LA

Featured Tasting

The Latin Food Fest will take place the weekend of March 20-21 at Hangar 8 at the Santa Monica Airport. There will be a Wine & Spirits Tasting Tent. Other tastings will include 100 restaurants and a Chef Culinary Showdown. The growth of Latin Foods in the California market make this an event not to miss.

3/22 Crave Expo - LA

3/25 Howell Mtn Tasting - SFO

3/26 Stars of Napa Valley – Manhattan Beach

Featured Tasting

The Stars of Napa Valley will be held in Manhattan Beach at the Shade Hotel March 26. This prestige tasting will have 40 of Napa's finest wineries pouring their best. Wineries include Inglenook, Trefethen, Alpha Omega, Heitz, Frank Family, Barnett, Bougetz, Black Stallion, Signorello Estate, ZD, Entre Nous, Kenzo Estate, Lail, and Quintess.

3/27-29 Garagiste Festival – Solvang

3/28 Rhone Rangers – SFO

3/28 Pinot Noir Shootout – SFO

3/29 Mexican-American Unveiling of Cesar Chavez Statue - Napa

4/1 April Fools Day

4/3 Good Friday

4/3 Passover Begins at Sundown

4/4-6 NCAA Final Four

4/5 Easter

4/8 Northern California Fresh Produce Expo – Pleasanton

4/9-12 Pebble Beach Wine and Food Festival – Pebble Beach

4/11 Passover ends at Sundown

4/11-12 Santa Rita Hills Grand Tasting & BBQ – San Diego

4/18 Earth Day Food & Wine – Paso Robles

4/20 Santa Rita Hills Road Trip – LA

4/22 Earth Day

4/23 Grand Cercle des vins de Bordeaux – Beverly Hills

4/25 Santa Barbara Spring Tasting – Buellton

 

New Legislation for 2015

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. New alcoholic beverage laws were passed that were effective in 2015. Many critical issues are pending. Do you know about them and are you prepared for the changes. 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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