Veni, vidi, Vietti – Vietti winery sold to Americans

vietti_winery
Vietti, the Barolo winery founded in 1893 and known for its single-vineyard wines, has been sold to the American Kyle J. Krause. According to Wine Spectator, the sale includes the winery in Barolo’s Castiglione Falleto, the brand and 84 acres of vineyards. Luca Currado, enologist and current head of the winery, will be staying on as CEO. The parties did not reveal the price paid.

The story is a curious since top vineyards in Barolo generally get sold to…people in Barolo. Perhaps the increased interest in the wines of Barolo is driving international investor interest in seeking real estate plays or trophy wineries. In any event, the recent dollar strength certainly helps American buyers. And the prices they are willing to pay are now high enough to pry the keys to the cellar out of the hands of some locals. Either way, Vietti seemed to really be on a roll with their wines and I am surprised to learn that they have sold.

Kyle Krause owns a chain of convenience stores based in Iowa known as Kum & Go. (The corporate umbrella of Krause Holdings includes Solar Transport, a hauler of refined fuel and the Des Moines Menace, a team in the fourth tier of the American pro soccer pyramid). It’s hard to imagine Vietti on the shelves of a convenience store but if that happens, it will certainly give Kum & Go a leg up over 7-Eleven’s wines! With 400 stores in 11 states and $2.1 billion in revenue, Kum & Go ranks 163rd in private companies in the US according to Forbes. It was founded in 1959 by William Krause as Hampton Oil Company.

krause-kyle-viettiKrause and has wife Sharon have five children. Krause told Wine Spectator that “My mother’s family is Italian and I have always had a passion for Italy and for Barolo.” He has been acquisitive in Barolo, purchasing some 30 acres of vineyards last year, though not always emerging as a successful bidder. The other sites Krause owns in Barolo will now be folded into Vietti. Currado says they will increase the quality of Perbacco, their Langhe Nebbiolo. Hopefully it will remain the great buy that it is today. The Barberas are also excellent values.

Related:
Wine Spectator story on Vietti purchase
Maker of Kedall-Jackson buys Copain
Constellation Wines buys The Prisoner for $300 million

Brexit will give UK wine a hangover

brexit_wine
Tumult (anarchy?) is the current state of the main political parties in Britain after the Brexit referendum. Will the vote to exit the EU leave the British wine trade in any better shape than the political parties?

By way of background, the UK was, pre-Brexit vote, one of the bright stars in the wine world. While consumption has been slowing in the main producing countries of France, Italy and Spain for some time now, the UK was heading in the opposite direction: the wine market is vibrant, diverse, growing and by some measures, the second still wine market to the US. Somewhat astonishingly, a recent survey by the wine trade group WSTA showed wine as “the most popular alcoholic drink in the country.”

Post-referendum, the pound Sterling has fallen to 35 year lows against the dollar and tumbled nine percent against the euro (and even more as jitters about Brexit gripped the currency market earlier in the year). Historically, wine was one of the things par excellence that the British traded for: Adam Smith observed this in his example of “wine for wool” highlighting the comparative advantage of nations. (More recently, England has seen a domestic wine industry emerge but it is still not enough quantity at low enough prices to slake the thirst of British.) So the quick take is that Riojas, Burgundies, Baroli, and all other euro-denominated wines just got nine percent more expensive. (The currency-related price increases may take several months to filter through until existing inventories need to be refreshed at the new currency levels but preliminary reports indicate it is already being felt in France.) With 80% of wine in the UK sold at retail and much of that at thin margins, the consumer will feel the brunt of the currency impacts.

Over half of the price of the average bottle of wine in the UK is tax, so the government could conceivably cut the wine tax to offset the currency effect. But since HM Treasury is as desperate for revenue as most treasuries, that is highly unlikely especially since wine brings in £8.6 billion to the public purse.

There is, of course, the human element too and many non-British EU citizens live in Britain and work in the wine trade. London is a hotbed for restaurants and there are many non-British EU citizens who work as sommeliers. Their futures are all up in the air now.

The uncertainty following the referendum has sent the pound plummeting and many economic forecasters now see a recession looming for Britain. In the end, since the referendum was only advisory, and there’s been a wave of resignations among the political class, there’s a fair chance that no politician will actually trigger Article 50, which starts the clock and makes inevitable Britain’s departure from the EU. And if, in the delay, the economy suffers, British unity itself is under risk, new leadership emerges that can better articulate the cause for “remain,” there could be calls to rethink and “Bremain.”

With all the uncertainty, the Brits could certainly use a glass or two of wine. But whether they will continue to reach for it with such enthusiasm remains to be seen.

Billionaire Bill Koch’s cellar on the block

koch_wineBillionaire and famed wine collector Bill Koch’s wine cellar is up for auction at Sotheby’s in a three-day sale happening now. Koch is selling about 20,000 bottles with an estimated range of $10-$15 million. But don’t worry, he’ll still have plenty to drink since he’s only selling about half his famed collection.

koch_wine_petrus_1982I attended the live auction at Sotheby’s in New York yesterday. In the large auction room where numerous famed art pieces have sold, bidders turned out in person and online/phone to get a piece of the action. Jamie Ritchie, president of Sotheby’s wine Americas and Asia, and Eli Rodriguez, vice president, called the 914 lots starting at 10 AM and continuing without interruption until bidders had a crack at them all. Even though the bidding took place in dollars, the current bid was displayed in no fewer than six currencies that ticked higher with each increment.

The most celebrated lot of the day was 10 bottles of 1945 Mouton Rothschild, which sold for $343,000 (including buyer’s premium). To convert that into something other than the six currencies on the board, that’s about the price of three Teslas, or $1,372 per ounce. Swirl that in your mouth for a minute–but please, don’t spit.

Other notable wines yesterday included ’59 Haut-Brion and ’61 Palmer. There will be over 2700 lots during the three days; check out the lot listing online but the hard-bound, 500+ page catalogue is a work of art itself. Interestingly, the write-ups rely exclusively on Serena Sutcliffe’s comments about the wines and eschew point ratings of any kind from any critic.

The cellar has tremendous breadth and, given Koch’s litigious and crusading ways, bidders seemed to be enthusiastic, with many lots making a mockery of the estimates even in some of the lower-priced lots (yes, some Bordeaux lots sold in the $1,000 range). There’s something for everyone: perhaps the lowest-priced lot yesterday was a 12-bottle case of Gibson, Barossa Vale Shiraz 2002 for $368 (including buyer’s premium). And, yes, the wine comes under screw cap. Read more…

Freeze and flood: a rough start to the Burgundy 2016 vintage

burgundy_flooding

April frosts bring May floods?

Weather at harvest used to be dicey with rains. But now severe and unusual weather events are buffeting the Burgundy region throughout the growing season with shocking and disheartening regularity. Devastating hail storms pounded vintages 2012, 2013, and 2014.

Last month, there was some bitterly cold weather overnight on April 27, which led to frost damage. By the BIVB’s estimates, 46% of vineyards in the region were badly damaged. Jasper Morris, the Burgundy Director at London’s Berry Bros & Rudd, wrote about the frost damage on his blog:

The Beaune vineyard I partly own, Les Pertuisots, seems to have lost everything, as do neighbouring plots, while a few yards down the road the Clos des Mouches was much less affected, according to the Drouhins. There is no rhyme nor reason, and even vineyards which have not been affected in living memory, such as Le Montrachet, have been badly damaged this time round.

Bill Nanson writes this week on his blog:

Honestly the vines are ‘all over the place’ you can really see the lack of consistency when you walk in the vineyards; there are big sprouts of growth here-and-there, surrounded by a much smaller average growth of leaves. The first, larger shoots, are those who survived the frost, the latter is the new growth (recovery) from the previously dormant buds. I’ve never seen such higgledy-piggledy growth in the vines.

burgundy_2016_frostAnd then there is flooding and hail this week in Chablis, as seen in the photo above with more on Bill’s blog.

What does all this mean for the region? Well, a final judgement of the Burgundy 2016 vintage will be best rendered when tasting the wine in the glass–quality has been snatched from the jaws of defeat in several recent, difficult vintages. But it certainly looks as if yields will be down with the resulting wine volumes, which, of course, means…higher prices for consumers and possibly declining revenues for producers.

Some producers have recognized this double whammy and made long-term plans to diversify, buying properties in lower cost areas such as the Jura or some cru Beajolais.

Burgundy…a wine that can bring so much pleasure yet also so much pain–on consumers’ wallets and producers’ balance sheets.

The latest in consolidation: Copain sells to Jackson Family

Copain winery has been sold to Jackson Family Wines for an undisclosed sum the wineries announced today.

Copain has taken twists and turns to end up at the winery perched above the Russian River Valley floor. Co-founded in 1999 by Wells Guthrie as winemaker, Read more…

State dinner wines for the Nordics!

nordic_state_dinner_wines

Tonight at the White House, President and Michelle Obama will welcome not one Nordic leader–but all five! What will they be drinking out of horned helmets in the viking style? Actually, it will be out of crystal glasses but we have the deets for you on the Nordic state dinner wines. Read more…

Our robot overlords: Whole Foods store replaces wine specialists with iPads

365_whole_foods

Algorithms: 1. Humans: 0.

So it will be in the wine aisle when the new 365 store by Whole Foods opens in two weeks. The store aims to target millennials by delivering foods in the Whole Foods ethos but with out the Whole Foods price tag (insert your own Whole Paycheck comment here). There will be fewer products in the stores and fewer employees. In an article in today’s NYT business section, the author compares the new 365 stores to Old Navy with Whole Foods being the Gap. No word on what that means for the wine section, but I’d bet on lower-priced offerings in a variety of formats.

The first 365 store will be opening in Silver Lake, ground zero for hipsters in LA (Moby has a vegetarian restaurant there). Hilariously, some Silver Lake residents had been hoping their neighborhood would be served by a “regular” Whole Foods and at some even mounted an online protest derisively calling the forthcoming 365 store “Half Foods.”

The NYT story provides more details on the store and its robots. There will be a tea-dispensing robot. But more to our purposes, the staff that linger in the wine aisle in Whole Foods that sell wine will be 86’d. In their place will be iPads.

The iPads will run an app developed specifically for 365 stores by the engineers and designers of Banquet and Delectable. Here’s how spokesperson Julia Weinberg put it in an email:

What we built for Whole Food’s new 365 stores draws upon the Banquet foundation, but is actually an independent product we are launching with them. It is an iPad-based in-store guide that is a hybrid of Banquet and Delectable. For their new 365 concept stores, Whole Foods approached us to help reinvent the way store guests experience and navigate the beer, wine and spirits section. The genesis of the project was the goal to find a better solution to the antiquated retail hang-tag model.

Since Banquet and Delectable have the ability to purchase wines from various retailers, that feature will not appear on the new 365 iPads, which will favor navigating the in-store inventory. Customers will also be able to scan any wine and info from the Delectable database will appear, including user reviews.

While the human touch is always nice for consumers, this approach actually sounds promising. I like Delectable, so the 365 team made an astute selection. The hardest thing may be actually getting the consumer to engage with the iPads instead of just judging wines by the label art, a common supermarket shopping strategy. Now all the store needs is a machine to spit out wine samples and the wine aisle will be the most happening spot in the store.

World’s best sommelier 2016: Arvid Rosengren

worlds_best_sommelier
As of yesterday, the world has a new “best sommelier”! The winner of the 2016 ASI World’s Best Sommelier competition in Argentina is Arvid Rosengren!

Rosengren is the popular sommelier at Charlie Bird in NYC. Although he lives in SoHo now, he studied nanotech engineering in his native Sweden before switching to hospitality school and eventually working for a number of years in restaurants in Copenhagen, both on the floor and as a buyer.

On his blog bio, he talks about this recent competition:

I have spent considerable effort and time bettering myself by competing as a sommelier, which involves hard theoretical study, blind tasting of wines, spirits and other beverages and practical tests. My next (and final) challenge is to compete for the title of Best Sommelier in the World in Mendoza, Argentina, a competition put on by ASI (Association de la Sommellerie Internationale) every three years. This year there will be 58 competitors, each having won the title of the best of their country.

He also wrote about the 2013 competition for Europe’s best sommelier on his blog.

While in Mendoza, his girlfriend Line “took over” his instagram to post updates. Very cute. Read more…


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