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 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.
Wine Spectator story on Vietti purchase
Maker of Kedall-Jackson buys Copain
Constellation Wines buys The Prisoner for $300 million
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.
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…
And who said there’s no money in wine?
The Prisoner wine was started in 1998 by Orrin Swift and Dave Phinney as heady red blend. The wine became popular but I always find it too intense–a cold wine, if you will, because if you have a cold, the oopmh from this zinfandel-based blend varieties and 14+% alcohol will still penetrate your congested sinuses. But there’s no arguing with the market, where the wine sells for $35 and up. (find this wine at retail)
In 2010, Wine Spectator reported that Huneeus Vintners paid $40 million and production volume of The Prisoner was 70,000 cases. At the time, Agustin Huneeus, Jr. told Wine Spectator that in selling The Prisoner, Phinney “wanted someone with a larger sales organization and someone with experience with big brands, and I have that.” Saldo is one of five other labels included in the sale.
Agustin Huneeus, Sr, now 82, has had a career spanning several continents and bulk wine as well as boutique. He started out at Concha y Toro in his native Chile, then worked for Seagram, ultimately landing in California in 1977. In 1985, became partner/president at Franciscan Estates. He sold that to…wait for it…Constellation Brands in 1999 but retained a stake in one of their brands, Veramonte in Chile (later buying it outright). Huneeus Vintners now has many holdings in North America including Quintessa, which they founded in the Rutherford District of Napa Valley in 1990. They also own Faust and Illumination from Napa Valley and have a majority stake in Flowers Vineyards.
Last year, Constellation bought Meiomi for $315 million from Joe Wagner, then 33 years old and whose family is best known for Caymus and Conundrum.
Remember in the 90s tech scene, the game was to make start up and then be bought out by Microsoft? In the wine world now, I guess is it the similar, except sell to Constellation?
In separate news, Constellation reported earnings that delighted Wall Street with wine sales up 7% to $737.2 million in the most recent quarter. So the plan seems to be working for all parties.
Late on Friday, Governor Andrew Cuomo vetoed a bill that would have made wine shipping easier for New York wine retailers. The bill protects wine retailers from being penalized by the NY State Liquor Authority for potentially violating the laws of other states. That’s right: other states.
In vetoing the bill, Cuomo said that he did not want to make New York a “haven for entities intent on breaking other states’ laws, avoiding other states’ legitimately imposed taxes and regulations and selling to minors with impunity.” (see full text of the statement)
Why would the Governor veto a bill that both houses passed by 90% last summer? Your guess is as good as mine. But that language about selling to minors is usually the hallmark of wholesalers’ argument against liberalizing wine shipping–technology exists to collect taxes and provide age verification. Now it remains to be seen if the legislature will override the veto with a two-thirds majority.
The Governor also called on the SLA to hold “a series of roundtables” on how to modernize the industry starting next March. We shall see if these roundtables include any consumer representatives but since a recent SLA ad hoc committee did not, I will not hold my breath.
The bill stems from a long-running case of Empire Wine, a retailer in the Albany area that is active in internet sales. The SLA had sanctioned Empire for violating other states’ laws and the legislature saw that as overreach, thus passing the bill.
New York City is arguably the best place on the planet to be a wine consumer. A crucial contributing factor to this status is the abundance of wines available. While breadth of that bounty, from Assyrtiko to Xinomavro, and talented people making wise selections can be found in many places throughout the US, what really places New York at the apogee of the wine world is the depth of older vintage and rare wines available. These quicken the vinous pulse of the city and if you have not tried some, consider a splurge (while back-vintage Burgundies are pricey, it doesn’t always cost an arm and a leg to uncork a time capsule from the Loire, Germany or Northern Italy). Whether these flow through shops as well as onto restaurant wine lists their source remains the same: private collections.
A new proposal threatens to restrict that flow. A proposal currently before the regulatory body for wine in New York aims to effectively shut down this trove of exciting wines. Private collectors would be barred from selling wines from five (for whites or rosés) to ten years (reds) from the vintage they were made. Moreover, they could not sell any wine within two years of purchasing it. Oh, and if you don’t have the original purchase receipt then you can’t resell it.
Recent changes in the way super high-end wines are allocated by NY wine distributors mean that shops and restaurants receive and ever-smaller amount of top wines. Thus buying some younger wines as well as older can help round out a wine list or a shop’s offerings, making them the objects of a wine geek’s eye.
Levi Dalton has a good piece on Eater about the effect of this on restaurants. Check it out.
Most other states prevent shops and restaurants from buying directly from consumers. So New York will still have wine even if this goes through. But it is a big step in the wrong direction; no wine consumer anywhere in America wants to see fewer choices in the marketplace.
What’s particularly galling to consumers in New York is that there is no consumer representative on the working group that put together the proposal. (Full list follows below–note there are no retailers present either). And the new Chairman of the State Liquor Authority, Vincent Bradley, applauded Governor Cuomo for his selections. So make your voice heard by writing the SLA about private collections at: Secretarys.Office@sla.ny.gov January 14 is the next date for discussion.
Today, it’s Blue Apron who is adding wine delivery. The Brooklyn startup offers “fresh ingredients, great recipes delivered weekly to your home.” Although I haven’t tried it, lots of people have since the company says they deliver three million meals-in-a-box per month now. Started in 2012, the company closed a $150 million round of funding at a $2 billion valuation.
They have just announced that wine will now be able to be delivered with the ingredient boxes. Sounds great! But which wines? They are mum on that. The only option is to sign up for the $65.99 monthly sampler, which includes six bottles. There’s a catch: the bottles are only 500ml, or two-thirds the size of a regular bottle. This unusual size means that they are not buying wines off the shelf but rather having a (domestic?) winery source the wine and put it in their unusual bottle size.
This particular arrangement could be a good thing–it could reduce prices to the consumer by some form of buying directly from wineries. But without knowing any producers going into the subscription, I’d be leery. Once bitten, twice shy–good thing you can cancel any time. An email to Blue Apron seeking further clarification of sourcing and how they are navigating the regulatory red tape was not returned.
But wait: The story is not over! In their piece on the news, Reuters quotes the Blue Apron CEO, Matt Salzberg, as saying “We think because we already have our large customer base already cooking meals with us on a regular weeknight basis, over time we can be the largest wine e-commerce company in the country.”
Wine e-commerce is mostly a snarl of red tape, and most companies in the space are private so it is hard to get information on revenues. Wine.com’s CEO posted that they had $75 million in sales in 2013. Further, Amazon is testing wine delivery in several markets and they are a formidable competitor in any area. Fresh Direct sells and delivers wines now. Some wine stores do tens of millions of dollars of e-commerce business. So Salzberg must have had a double shot of ambition in his coffee this morning to think Blue Apron wine is going from $0 to $75 million+ with (possibly) unknown wines in 500ml bottles!
Have you gotten wines from them? If so, how are they? Hit the comments!
The Albany Times Union has a detailed account of the wrangling that has led to the suspension (indeed, on the NYT wine club site, New York is not even an option for sign-ups–the wine club continues in other states). The NYT wine club is run by a group called Global Wine Company and does not, as the Club’s web site states, make selections with the NYT wine critic or members of the newsroom. The Club offers six-bottle shipments for $90 or $180 on various monthly schedules. Global Wine Co also fulfills the club shipments for the Williams-Sonoma, the Washington Post and Food & Wine.
The Times Wine Club told its New York subscribers last week that it would have to suspend shipments until July because of uncertainty over New York’s rules and regs about shipping. However, the State Liquor Authority spokesperson told the Times Union that the Club’s local retailer had stopped doing business with them since Global Wine Co, based in California, had received cease-and-desist letters.
I’m not a huge fan of wine clubs in general–I’d opt for spending a monthly budget at a local store where the wine discussion is free and you have more choices to get exactly what you want. But there’s no reason that New York consumers should not be allowed to subscribe.
While this particular incident revolves around the Gray Lady, what consumers and businesses need is to get out of a gray area: hopefully the new head of the NY SLA will clear the air and issue understandable guidelines for businesses to ship into and out of the state.