Issue link: http://winesandvines.uberflip.com/i/975273
18 WINES&VINES May 2018 WINE INDUSTRY NEWS N apa, Calif.—Brian Phillips, director of wine strategy for Darden Restaurants, says wineries better be sure their product is of consistent quality and well represented. Otherwise, wine risks losing further market share in the on-premise sector, especially to spirits. Phillips, currently pursuing final certification as a master som- melier, manages the wine program for Darden, which operates more than 1,700 restaurants including Capital Grille, Yard House, Long- Horn Steakhouse and Olive Gar- den restaurants. The company's total sales in 2017 surpassed $7 billion, he said. He said the company can serve about 250,000 people a day and about 25% of those order wine. Assuming all that wine is sealed with cork and 3% to as much as 12% of those corks could be tainted. "Maybe they consume it and don't go back to it," he said. "That's a big concern." Phillips' remarks came during a panel discussion that was part of the Fifth Annual Wine Conver- sations forum hosted earlier this month by French closure supplier Diam, its North American distribu- tor G3 Enterprises and Full Circle Wine Solutions. In addition to Napa, the companies also hosted the event in Paso Robles, Calif., and Newberg, Ore. "I'm not pitching anything," Phillips said, adding he just wanted to stress the importance of quality when his white table cloth diners still expect a wine to be sealed with cork. "They still prefer the romanti- cism of pulling the cork." Yet what also concerned Phillips was simply being able to source some wines. Brands he typically has relied on have become more expensive and it's harder to know who to work with when wholesale reps can change two to three times per year. "I've had to make some really tough calls in the past six months," he said. He urged the more than 100 winemakers in the audience to take great care in understanding how their wines get to market and who is representing them. As wholesale prices rise, he has to raise his wine- list prices to maintain margin. He observed that customers are skip- ping a bottle of wine and having just one glass with the meal and a cocktail before it. "We're seeing this in our restaurants. This is a grow- ing trend," he said. In December 2017, Nielsen an- nounced spirits had overtaken beer as the "most valuable on- premise category" with spirits dol- lar sales edging out beer $42.6 billion to $42.4 billion. Joining Phillips on the panel was Greg Martellotto who pro- duces Bordeaux-variety wines through Martellotto Wine Produc- tions in Buellton, Calif., owns an import company and an online wine retail website. Martellotto has also recently partnered with Vivino, the wine ranking app and e-commerce company. While wine shipments to con- sumers have opened to nearly every U.S. state, shipments by re- tailers are still closely regulated in many states. He said as consumers do more and more of their every- day shopping online, the wine in- dustry needs to confront lingering restrictions on wine shipments. "We want to eliminate the middle tier as much as possible," he said. The current system is riddled with inefficiencies that stem from just a handful of very large compa- nies dominating almost every mar- ket. He said when he wants to buy a pallet of wine from a Northern Californian winery and get it deliv- ered to the Central Coast it can take up to three weeks for that order to process. "I hope you guys realize that is totally absurd," he said. — Andrew Adams Ensure Wine Quality and Path to Market