Across the newsdesk this week from Wine Institute was an announcement that FedEx will begin direct-to-consumer shipping to Massachusetts on Feb. 1, 2015:
FedEx has informed Wine Institute that, effective Feb. 1, 2015, FedEx Express and FedEx Ground will open the state of Massachusetts for legal shipments of alcoholic beverages.
-FedEx Ground and FedEx Express will both transport legal alcoholic beverage shipments into, out of and within the state of Massachusetts starting Feb. 1, 2015.
-Please note, unauthorized shipments of alcoholic beverages destined for MA prior to a Feb. 1, 2015 delivery date may not be accepted for delivery and/or returned to shipper.
-Per FedEx policy, all alcoholic beverage shipments may only be tendered by licensed entities that have executed a FedEx Alcohol Shipping Agreement.
-All alcoholic beverage shipments must comply with all FedEx policies and federal, state and local regulations.
-Wine is the only type of alcoholic beverage that is allowed to be shipped to consumers.
FedEx does not provide legal advice to third parties. Questions not related to FedEx policy should be directed to appropriate legal counsel and the Massachusetts Alcoholic Beverages Control Commission.
(The new direct-to-consumer statute goes into effect on Jan. 1, 2015. Under the new law a winery must hold a Direct Wine Shipper license that has been approved by the MA ABCC and be registered to pay excise tax in order to ship to MA consumers.)
Have you checked out the latest issue of WBM? Here is a preview you what is inside of the December 2014 issue of WBM.
As this issue of WBM heads out to subscribers, the grapes are in, the fermentations are bubbling along, and the year is winding to a close. As they catch their breath, winemakers here on the West Coast are talking about one of the earliest and largest harvests on record, and about the outstanding quality. They really mean it, too.
As we often do at this time in Wine Business Monthly, we’ve paused to reflect on the year’s milestones while looking ahead to the future. Inside you’ll find a recap of the years’ key wine business headlines with key people moves, along with a review of significant transactions and macro-trends shaping the tightening agricultural labor market.
The year saw a huge earthquake hit the Napa/Sonoma area, and this issue includes an article reviewing some of the lessons learned, lessons that really just need to be re-learned, or at least lessons that bear repeating.
This issue also includes a look at this trend that’s going on with winemakers using concrete fermenters, and an article about bench-top labelers—the kind that smaller wineries, i.e., most wineries, can afford. Winemakers like the results they’re getting from those concrete fermenters, even if they aren’t quite sure why.
Winemaking is about the pursuit of quality and one way winemakers improve quality is by experimenting and trying new things. Doing this in a systematic way is called a trial. One article in this issue reflects on how winemaking trials are an embodiment of the pursuit of quality and includes tips for making winemaking trials more meaningful.
California experienced a third year of one of its worst droughts in the past century. It was a watershed year, the year that the state passed a sweeping law addressing groundwater regulation. As this issue heads off to subscribers, voters are poised to decide the fate of a proposed $7.5 billion California water bond. An article in this issue summarizing findings of our 2014 Vineyard Survey shows that 65 percent of vineyards get their water via wells. Most growers still aren’t using flow meters to monitor water use in their vineyards, but their use is growing and should continue to with the impending new groundwater regulations.
As 2014 comes to a close, the industry seems to be in an interesting position in terms of supply. One might think a third record-sized harvest in a row would create a state of “oversupply” but many are hedging their bets. The supply of grapes and bulk wine out there seems to be relatively balanced, in part because of a perception that the 2015 harvest could come up short if the California drought continues unabated.
Here’s to improving wine quality, embracing the future and to more rain!
–Cyril Penn, editor
Wine Spectator just broke the news that the Jackson Family purchased a vineyard in South Africa.
I think Jackson Family Wines was waiting to make the announcement but the embargo is lifted. Jackson Family Wines chairman Barbara Banke confirmed the purchase during an interview with Wine Business Monthly last week.
Jackson Family is planning to release a Chardonnay, Capensis, co-produced with Antony Beck, whose family owns Graham Beck Wines.
"That’s the latest and greatest, and it's a beautiful vineyard in Stellenbosch , very high, steep, and, it's fabulous, fabulous Chardonnay," Banke said.
Maybe the venture will help to raise awareness of Wines from South Africa in the U.S. a bit. Wines from South Africa aren't that well known to U.S. consumers.
"We’re going to bring this one over and maybe that will open the door a little bit to some of the high end," Banke said. "It’s hard, because you go to South Africa and you taste some fabulous wines and they don't really make it over here."
"There are great wines that are coming out of South Africa,' Banke said. "Some are made by my friend Antony’s company. There's sparkling wines from Grahm Beck, Savingon Blanc from Steenberg, there's Rustenburg: there are all kinds of great wines."
Winejobs.com released a report detailing wine job posting trends as of November 2014. As the wine industry’s leading online job site, Winejobs.com has a unique vantage point over industry trends. The Winejobs.com index indicates that job postings decreased 5 percent from November 2013. The index is up 14 percent so far this year.
The sales and marketing index decreased 46 percent from its level in November 2013, and is down 14 percent year-to-date.
The hospitality index increased 41 percent from its level in November 2013, and is up 27 percent for the year.
The winemaking job index rose 31 percent from its level in November 2013, and is up 26 percent year-to-date.
In this video from 2012, Champagne Jayne shares her top tips for best value Diamond Jubilee Champagnes.
Champagne Jayne is fighting the French champagne police!
Silicon Valley Bank's Financial Conditions Survey shows the industry is doing well overall with a surprising number of wineries saying they expect to take modest price increases. Results also show that wineries expect to buy more grapes in 2015, a sign of a healthy industry.
The slide below shows more wineries were disappointed with their wholesalers this year, though. What's behind that?
The full report will be out soon. Meanwhile, here's the link to the slides.
* 82% of wineries reported overall financial health of "good" or better for 2014. This is up 7% over the previous year. This trend is expected to continue as the grapes from three strong harvests (2012,2013, and 2014) make their way into the market.
* Consensus view of 2014 shows 79% of respondents reporting having a good year or better. The Sierra Foothills, CA region reported the largest proportion of disappointment which correlates directly to issues felt during the California drought. Over 41% of respondents from that region reported feeling some issues from the drought.
* 60% of all wineries are projecting price increases per retail bottle with only 6% projecting a decrease in 2015. The majority of increases are expected to be small across all price points except the >$69 range. Wines with a price point >$69 are the most bullish with 45% reporting increases of moderate to strong.
* Wine sales continue to be dominated by the Baby Boomer generation contributing to 44% of all sales with Gen- X’ers coming in at 29%. Three year trends indicate little change amongst the generational buyers in the market today.
* Overall, 93% of wineries reported the quality of grapes harvested as good/excellent for 2014. Wineries in the Pacific Northwest further benefited from the 2014 harvest with 62% of Washington wineries and 85% of Oregon wineries reporting higher yields than average. The next closest region was Napa, CA with 43% of wineries reporting higher than average yields.
* Only 36% of California wineries reported a measurable affect from the 2014 California drought with the most significant issues being felt in the Central Valley, CA, Central Coast, CA, and Sierra Foothill, CA regions.
A meeting to discuss proposal for changes to the California Department of Food and Agriculture's Grapevine Registration and Certification Program is scheduled for December 18 in Sacramento.
The review process comes in response to wine and grape industry concerns about the potential presence of Grapevine Red Blotch-associated virus GRBaV, and variants of leafroll viruses in certified nursery stock sold in California.
see previous coverage
Wine Business Monthly's December 2014 digital edition is now available.
A few articles you will find inside December 2014 you will find:
Cement Tanks: Who's Using Them and Why
Year in Review: Notable News, Deals and People Moves
The Role of Trials in Improving Wine Quality
Click here to subscribe to the print edition
Selected Recent Sales of Grapes & Wines in Bulk for December 1, 2014 courtesy of Turrentine Brokerage:
Cabernet Sauvignon 2012 wine, Napa Valley, 7,700 gallons at $29.00 per gallon
Petite Sirah 2014 wine, California, 19,500 gallons at $7.50 per gallon
Merlot 2013 wine, North Coast, 12,500 gallons at $6.50 per gallon
Muscat 2014 wine, California, 6,400 gallons at $4.50 per gallon
Zinfandel 2013 wine, Lodi, 13,000 gallons at $5.50 per gallon
Sauvignon Blanc 2014 wine, Lake County, 6,400 gallons at $7.50 per gallon
Cabernet Sauvignon 2013 wine, Napa Valley, 4,700 gallons at $26.00 per gallon
Wow, the Coalition for Free Trade has shut down. That’s great news, kind of anti-climactic, actually, but of note - a sign of how far things have progressed since CFT formed in 1995 - a real milestone.
CFT, a non-profit organization seeking judicial relief from laws prohibiting direct-to-consumer
shipments, was the litigation part of the wine industry’s three pronged strategy that also involved lobbying - Wine Institute - and public relations, i.e. Free The Grapes!
CFT just announced it has ended all activities after achieving victories for wineries and wine lovers.
|Many people in the wine industry today probably don’t realize that CFT did a lot of heavy lifting|
Back in the early 1990s, the organized opposition to direct shipping by wholesalers ramped up. Wholesalers got Kentucky and Florida to pass laws making shipping wine to consumers a felony. Yes, direct shipping wine was made a felony! Felons aren’t allowed to operate wineries.
At the time, there were fewer than a dozen states where a winery could legally ship to consumers, and that was through a limited system of “reciprocity” with California and select states that had been negotiated by the California Wine Institute.
Over the next decade, CFT helped coordinate lawsuits in seven states. Cases from Michigan and New York – where the states allowed intra-state shipments from wineries to consumers but denied that same privilege to out-of-state wineries—were ultimately considered by the U.S. Supreme Court in late 2004. The court found that the practice violated the Commerce Clause.
CFT’s work wasn’t finished after the Supreme Court ruling. The wheels of litigation and state law turn slowly. In light of the Granholm decision, a number of states enacted capacity caps on out-of-state shipments that essentially banned direct shipping anyway.
Just today, there’s news about new guidelines for wineries shipping to Massachusetts. That state just opened up - a big deal for wineries - and this was made possible by recent changes to state law that are a result of litigation.
Other organizations like Family Winemakers were involved, but many people in the wine industry today probably don’t realize that CFT did a lot of heavy lifting. Between 1995, when CFT was founded, and today, the number of U.S. wineries increased from less than two thousand to more than eight thousand, the lion's share of which depend on direct sales. Think of all the fulfillment houses, compliance companies, and even software vendors that didn’t exist back then.
“We have so many positive examples of what it’s done in terms of consumer access, collecting taxes and fees,” said Dennis Cakebread of CFT's board. “(Direct Shipping) isn’t the boogie man it once was. Just think how much the internet’s grown up over the last 15 years.”
There are details involved in keeping a non-profit going. With its mission arguably accomplished, it was apparently time to dissolve CFT.
It doesn't neccesarily mean an end to litigation. Wineries could always pool resources and launch a new non-profit. Also, with retailers facing hurdles in places like New York, litigation involving consumer-direct wine shipping will likely continue. One difference with the issue of retail shipping, though, is that in-state retailers haven't suported the rights of out-of-state retailers to ship. Local wineries in various states supported opening their borders to wineries located outside of their states.