Issue link: http://winesandvines.uberflip.com/i/400294
106 p r a c t i c a l w i n e r y & v i n e ya r d n O v e M B e r 2 0 1 4 w i n e b u s i n e s s from beer. Spirits with mixology and cocktails are going to be competitive— where wine took a share from spirits be- fore, this younger generation really likes spirits. Spirits are going to be fine. The interesting thing will be that big beer will really be in trouble. ■ America is going to become a great wine-consuming nation. Young people are drinking more wine, they are very interested in learning about the wines of California. ■ Private labels or brands that are only in certain retailers. The retailers are get- ting stronger, and they all have plans for how much of their business they like to be in private label so they can make more money. We have already got an incredibly fragmented category in wine, but you know, you get retailers saying they want 40% of their wine to be private label and currently they are at 5% to 10%. That will be really interesting. ■ Sooner or later the whole idea of actively managing real estate is going to really catch the retailers' attention, and they will say, "Why do I have 2,000 wine SKUs when I have five ketchup SKUs? Does a consumer really, really buy that? Now, with beer and everything else fragment- ing, retailers can take the data and deter- mine what they really need. It will be interesting to see what happens there. This whole digital consumer engage- ment model and its evolution. The tech- nology is there for us to know when Bob is within five feet of a brand we really want to sell, and maybe his wife's name is Chloe and you are within five feet of a brand called Chloe. Can we get the right to ping you and tell you that? That is going t o b e i n t e re s t i n g t o s e e h o w t h a t develops. ■ The indices are going to look good. The bigger brands are going to have a tougher time as people move into local/ artisanal. The industry overall is going to be very healthy. ■ How can we get people up and down the Napa Valley highway? Whether it is our employees, employees of other in- dustries like colleges or hospitals, or whatever, how to get them up and down Napa Valley efficiently, and our guests. So that the valley stays healthy and sus- tainable in a lot of different ways, and it always remains the head of the pack and cutting edge so it fits in with Napa Valley and Napa Valley's image. Supporting other ways to get people up and down, maybe light rail or other ways to get people up and down so it does not take an hour to get from Ruther- ford to Napa at 3 p.m. in the afternoon. ■ If there are wineries running up and down Highway 29 like there are, similar to what already exists in the Oakville- Rutherford quarter, eventually we will turn Highway 29 into El Camino Real. There is going to be a lot of pressure from locals to stop growth along Highway 29. ■ Continued consolidation seems to have been going on for decades with Total Wines, Costco, Southern, and all of the alliances that are competing against them. Nobody has a dominant share yet; they continue to seek a bigger share in a never- ending battle to get this thing rational, but that hurts the little guy. We just have a real tough time getting share of mind with our distributors. ■ Shelf competition will intensify: access to important customers, the capability to get on the shelf with new products, gain- ing retail displays, the breadth of product today is extraordinary. From our view- point, it will be tougher to get shelf space in the future, even harder than it is today. ■ This is such a unique business category, unlike spirits where you have dominant players. Wine will continue to be evolu- tionary with some hot wine companies going up, and with strong brands and consumer franchises, and then the reverse. Where you have people that really are not producing high quality at great value, they will fade away. ■ It is becoming apparent that if you have these very large wine brands, you know top 100-type wine brands, it is going to get harder to manage those in this hyper information era where people can share opinions and data and communicate rap- idly. It is going to be trickier to manage a brand like that and those brands are going to have shorter life cycles if they are not managed correctly (sort of like a Yelp effect). You better have your wine quality buttoned up and make no mistake, because the minute you do, you know things move so quickly today you are just gone. ■ The big hidden one that could creep up on us is consumption, having lived through it before and through the "60 Minutes" broadcast and all that. The fore- cast points to increasing consumption, and I do not see necessarily that is true. We certainly saw it before where we had increasing consumption in the 1960s, where they said we are going to be there, then suddenly it crashes in the 1980s con- sumption goes way down, and then it goes back up. What happens if we get another series of broadcasts linking alco- hol with breast cancer? ■ I am still really optimistic that we are in the right category and we have a bright future ahead of us. PWV Hibernia Business Solutions EQUIPMENT LEASING Leasing is the Smart Financing Alternative • Conserve Working Capital • Lease Used Equipment • Potential Tax Benefi ts www.hibernialeasing.com (925) 356-1386 kenr@hibernialeasing.com SERVING THE WINE INDUSTRY FOR OVER 20 YEARS! Contact info Ph: 201-599-0909 Fax: 201-599-9888 Web Page www.labelsolutions.net East Coast 151 W Passaic St, 2nd Fl Rochelle Park, NJ 07662 West Coast 854 18th Street #3 Santa Monica, CA 90403 We provide our customers with what they need not what we have to sell We are an independent solutions provider for pressure sensitive labels. We research your requirements and find the perfect solution. We match your design, printing process, stock, delivery schedule and manufacture to your needs. Spirits with mixology and cocktails are going to be competitive—where wine took a share from spirits before, this younger gener- ation really likes spirits.