Altaneve Prosecco

October 22nd, 2014 No comments

A distinctive product deals with marketing challenges

Sparkling Wine in the US has grown twice as fast as the overall wine category over the past five years. Within sparkling wine, the non-champagne segment accounts for over 90% of sales (See earlier post on Booze Business) with prosecco leading the charge.

In fact, in a recent article in Shanken News Daily:

“The Prosecco DOC Consortium recorded a 34% increase in exports to the U.S. market in the first half of 2014, with volume reaching 1.27 million cases.” 

In effect, prosecco has challenged champagne for the top of the sparkling wine domain. In so doing, prosecco has changed the occasions for drinking sparkling wine. While champagne is for celebrations and special occasions, prosecco is for everyday and any time. Further, at $12 to $15 per bottle, prosecco has an advantage for everyday use.

But, just as there are $12 bottles of wine as wells as $20, $30 even $40 still wines, can an upmarket prosecco capture a significant share of that market?

Enter David Noto with Altaneve Prosecco

David Noto

David Noto

It’s quite an interesting story. David’s family has been making wine for 10 generations in Italy and he grew up with a passion for prosecco, particularly the high quality end. So he changed his career from engineering and finance technology and brought this product to market a few years ago.

According to David, “The US market is not deeply familiar with the broad range of prosecco, so we felt it was time to introduce the best.”

In addition, the brand has an interesting story to tell. Altaneve means high snow in Italian and is a reference to the snow capped peaks of the Dolomite Mountains that can be seen from the vineyards in Valdobbiadene where the prosecco is produced. The production facility is the second oldest in the town where the production of prosecco dates back to 200 BC.

In short, Altaneve has it all, provenance, terroir, heritage and high quality. Taste? I’m a huge prosecco fan and, while I’m far from a connoisseur, I think it’s the best tasting prosecco I’ve ever had. It’s versatile (any occasion with or without food), and unlike other

Presecco production area

Presecco production area

prosecco I’ve had, it’s consistent from bottle to bottle.

Altaneve sells for roughly $29.99 a bottle and therein is the problem.

The marketing challenge

I suppose it’s because the prosecco category in the US market is still in its infancy. Or, maybe the current image for the category is that it is generally low in price. As a result, David faces an uphill battle getting the message across that high end prosecco is worth the price. After all, all wine categories segment by price, why not this one?

I can understand the consumer reluctance to trade up. The category is still evolving and they came to it originally for an inexpensive alternative to champagne, so why pay for top shelf. That perception will change gradually over time but for producers like David Noto, accelerating a change in perception will take marketing muscle and lots of money. Altaneve is a startup brand.

The hesitation by the trade (especially bars and restaurants) is baffling to me. The mark up and profitability from Altaneve would make the brand more than worthwhile. Yet, the reluctance to change, to accept a segmentation of the prosecco category, not to mention lack of knowledge, all make it an uphill battle. To me, it defies logic.

Bottle_5I guess the bright side is twofold. First, slowly but surely, better retailers like Sherry Lehmann and important chains like Capital Grille are stocking Altaneve. Then there is David Noto himself. If you’re a follower of this blog, you know I often write about startups and the entrepreneurs behind them. Add David Noto to the list of passionate, smart and committed.

As to the Altaneve product itself, try it and let me know what you think. Unfortunately, it currently is only available in NY, NJ and CT, but also online. I’m betting you’re going to love it.

While you’re at it, check out what Wine Spectator had to say about Altaneve, as well as other info from their Facebook page.

Altaneve products

Altaneve products

Larry Ruvo: A True Renaissance Man

October 2nd, 2014 1 comment

Distributor, Marketer, Philanthropist and an all around Mensch

Larry Ruvo, who runs Southern Wine and Spirits of Nevada, in my opinion, is the most extraordinary person in the booze business. He’s a distributor, an outstanding marketer and a philanthropist. If you Google Renaissance man, it might just as well show his picture – a person with many talents or areas of knowledge.

He started in his family owned restaurant in Las Vegas, worked as the GM of the LA Playboy Club, ran the Sahara and The Frontier, opened Caesar’s Palace and joined with Steve Wynn in starting a wine and spirits distribution company. That company became SWS of Nevada. So, most people think of him as Mr. Las Vegas.

But that doesn’t begin to describe the kind of man he is.

An intuitive marketer

The myth that suppliers (manufacturers) would have you believe is that distributors/wholesalers are a necessary burden. The law mandates them, they’ll tell you, but all they really do is move your box from their warehouse to the trade. Let me tell you, folks, in Larry’s case, nothing could be further from the truth.

When I was running US marketing at Seagram, the senior executives made biannual market visits. On the tour were the top brass, the sales guys, the finance folks and the marketing guy – me. Truth be told, I never really learned anything on these Tunnel of Love tours that I didn’t already know. That is, except for the visits to Las Vegas and the opportunity to talk with Larry about his brand building and marketing ideas. He was willing, no make that eager, to talk about what motivates consumers, bar owners and bartenders and the best ways to get a brand featured and showcased. I learned a ton from Larry Ruvo.

Did I mention gracious and warm?

I can’t remember how many Seagram sales incentive and achievement trips my wife and I took when I was with the company. But, whenever Larry and his wife Camille (whose birth date I share) were on it, we knew it would be special. Whether it was a dinner in the kitchen of an amazing restaurant in Bilbao, best places to shop in Hong Kong, lunch on the Amalfie coast – Larry knew the places to go, what to see, where to eat, how to make it more enjoyable. And, he delighted in sharing them.

Philanthropy

Larry Ruvo

Larry Ruvo

Larry Ruvo does things with passion and total commitment, so when he turned his attention to fighting brain-damaging illnesses, it’s not surprising that wonderful things began to happen.

He is the founder and chairman of Keep Memory Alive, a foundation that built and supports the Lou Ruvo Center for Brain Health in Las Vegas (also known as the Cleveland Clinic Lou Ruvo Center for Brain Health). Its mission is to treat patients with such brain disorders as Alzheimer’s, Huntington’s, Parkinson’s, ALS, and Multiple Sclerosis. Since its inception, the foundation has raised over $235 million and treated over 23,000 patients.

It all started in 1995 on the one-year anniversary of his father Lou’s death from Alzheimer’s. Larry gathered 35 friends for a private dinner at Spago to “laugh, reminisce and tell Lou Ruvo stories.” As the night wore on, it turned from an event to honor his father to a call for action to defeat the disease that took his father’s life. They raised $35,000 and the foundation was born.

The biggest challenge was being taken seriously since Las Vegas is not top of mind for world-class health and wellness facilities. But, in the last 10 years, thanks to Larry’s marketing, packaging and brand building skills, it has become just that.

Clinic

Cleveland Clinic Lou Ruvo Center for Brain Health

To meet the challenge, he created the Power of Love Gala in Las Vegas and raised money to fund his plans. He convinced Frank Gehry to design the building and it is  truly amazing. Next he signed a deal with Cleveland Clinic to operate it. But, he also needed a super star to run it. So he turned to Cleveland Clinic and said, “I’m giving you Yankee Stadium… I want Babe Ruth.” What he got was Dr. Jeffrey L. Cummings, a world-renowned leader in research and treatment of brain disorders.

That’s what happens, my friends, when you mix determination, passion and marketing skills.

His foundation, Keep Memory Alive and the Cleveland Clinic Lou Ruvo Center for Brain Health, holds an annual fundraising event in Las Vegas. It’s called The Power of Love and in the past has honored Mohammed Ali, Quincy Jones, Sir Michael Caine and many others.

This year’s event is on October 11 and is billed as an evening with Michael Bublé. You can find out more at here.

When Larry Ruvo sets his sights on something, great things happen.

LR 2

The Columbian Exchange Part 2

September 12th, 2014 No comments

What influence has it had on international alcohol beverages?

(The earlier posting on the Columbian Exchange generated a great deal of comment and emails and I invited Mr. Desmond Nazareth of Agave India Industries Pvt. Ltd to share some further thoughts on the subject. So, here is a guest blog posting from him. In this article Desmond introduces a wide array of local alcohol products from around the world, some of which were new to me.)

The Columbian Exchange between the so-called ‘Old’ World (mainly Eurasia) and ‘New’ World (the Americas) was more than an ‘event’ – it was a ‘process’ that started in the 16th century and continues in a more generic sense even today.

In this guest blog, I would like to discuss the impact of this Exchange process on international alcoholic beverages and, make some suggestions for ‘opening up’ alcobev categories.

Fermented beverages across the world

business_1100010245-012914-intContemporary scholarship tells us that up to the 12th century AD or so, most cultures around the world consumed various forms of naturally fermented beverage. These were typically what we today call ‘wines’ (fermented grapes, fruit and berry juices), ‘beers’ (assorted cooked and fermented grains), and fermented natural sweet liquids (fermented palm sap, agave sap, nectar from flowers, honey).

The introduction, and role, of distillation

In the Old World, using various fermented beverages as their substrates, distilled (and infused) potable alcohol began around the 12th century AD, giving rise to the plethora of ‘spirits’ and ‘liqueurs’ of today – the technique used initially was ‘pot-still’ distillation and later included ‘column’ distillation.

The New World knew nothing of distillation techniques until the 16th century AD, when it was introduced there by Old World colonizers.

With distillation being part of the technology that featured in the Exchange, it was applied to the variety of fermented beverages in the New World, including those made from ‘dramatis botanae’ that were local, and others that came with the Exchange.

Among the botanical species introduced to the New World, sugarcane (and the by-product, molasses) was by far the most important – the basis for light and heavy rums. Grapes, of course, became the basis of countless ‘local’ New World wines and spirits.

Species introduced to the Old World included cashew, potatoes, sweet potatoes, cassava, agave and corn – cooked and fermented, either alone or in combination with other local substrates (and sometimes a substitute ingredient), these became the basis of so-called ‘local’ distilled spirits.

Cashew fruit

Cashew fruit

The advent of claims for ‘local’ beverages: GIs, AOs…

In today’s world, various regions and countries lay claim to a ‘privileged’ status for a variety of  alcoholic beverages, with the recent introduction of ‘international trademarks’ in the form of Geographical Indications (GIs) and Appellations of Origin(AOs), which are protected by the WTO and affiliates. Examples of these abound: Scotland’s ‘Scotch’, USA’s ‘Bourbon’ , Mexico’s ‘Tequila’, Brazil’s ‘Cachaça’, Goa’s ‘Feni’, etc.

 

 

Consider some ‘local’ alcobev that resulted directly from the Columbian Exchange:

Cassava plant, an edible starchy tuberous root.

Cassava plant, an edible starchy tuberous root.

  • grape based ‘pisco’, with Chile contesting Peru for ‘ownership’
  • grape based wines in California, Chile, Argentina etc.
  • grape based spirits like ‘singani’ in Bolivia
  • cashew apple based ‘feni’ in Goa, India
  • agave based spirits in India
  • molasses and sugarcane based rum and cachaça in the Caribbean, and South america
  • cassava based spirit in sub-Saharan Africa
  • single-malt whisky in Brazil, Japan and many other countries
  • potato based ‘horilka’ in Ukraine, vodka in Poland and Germany, ‘akvavit’ in Scandinavia, ‘poitín’ in Ireland, ‘tuzemák’ in the Czech Republic
  • rye based whisky in Canada
  • sweet potato using ‘soju’ in Korea & ‘shōchū’ in Japan
  • the list goes on…

Now, in none of these countries or regions can one say that they produce only the product whose ‘localness’ they are trying to protect – in general, a variety of alcoholic beverages ‘originating’ from all over the globe are made ‘locally’ in most other parts of the globe.

In an increasingly connected, globalized world, does this sort of ‘protectionism’ make sense?

The question raised by Agave India

India -- Deccan Plateau

India — Deccan Plateau

A case in point is the artisanal, small batch agave spirit that Agave India officially makes in India (since 2010), from blue-green agave that has been growing ‘locally’ on the Deccan Plateau for at least one hundred years. We would like our agave spirits to compete internationally with agave spirits made in Mexico – but the international competitions recognize only ‘Tequila’ or ‘Mezcal’ and do not allow us to compete within those ‘protected name’ categories. We’ve tried to make an argument for a larger category, ‘Agave Spirits’, in which ‘Indian agave spirits’ can go up against ‘Mexican agave spirits’, but so far to no avail.

We also make an artisanal, small batch sugarcane spirit in India, that we call ‘Pure Cane’ – but we cannot compete with ‘Cachaças’ in their category for the same reasons – should we not have an international category of ‘Sugarcane (or Cane) spirits’? It would make the many international producers of fine cane spirits happy to be recognized.

Perhaps, one day, globalization will remove meaningless barriers and productive exchanges of all kinds will take hold – some of which have very ancient geological and human histories.

(Acknowledgements: to the amazing, globalized and free resource that we know and love: ‘Wikipedia’)

Thank you, Desmond.

Desmond Nazareth and an Indian Agave plant.

Desmond Nazareth and an Indian Agave plant.

Vodka’s Journey: The Bumpy Road Ahead

September 3rd, 2014 2 comments

Is the largest spirit category in the US heading for tough times?

15663595_mlDespite the massive size of the vodka market at 70 million 9-liter cases, there are signs that the rate of growth will steadily decline in the years ahead. If nothing else, all products have life cycles (think bell-shaped curve) and tastes and preferences are subject to change over time. After all, what got vodka to its height in the first place were the changing preferences away from whiskies. Now, it’s Whiskey’s turn to move back into favor. But, that’s only part of the story.

Vodka History

Who invented vodka is the subject of some debate – the Russians, Swedes or Poles – it really doesn’t matter for this analysis, so let’s fast forward to the US and the post WWII period.

Prior to the 1960s, whiskies (imported or domestic) were dominant with a smattering of gin preferences. Many distillers at the time looked down their noses at vodka, partly because “odorless, colorless and tasteless” was not in the distiller’s blending art and, partly because it was seen as the alcohol preference of excessive drinkers. Maybe I’m wrong, but I think the Smirnoff (or was it Popov) ad slogan “leaves you breathless” was a signal to have a drink anytime/anyplace and no one will know.

By the 1970s preferences among drinkers began to change in favor of vodka thanks to: James Bond, changing tastes of women (preferring mixable, sweet drinks), drinkers who wanted the effect of alcohol without the “silent shudder” and the emergence of interesting and fun concoctions (cocktails, such as the Moscow Mule).

The 1980s and 1990s brought further accelerated growth with vodka cocktails (think Sex and The City) and the advent and growth of imported 9924372_mlbrands led by Absolut and it’s advertising. At the beginning of this period there were only a handful of imports, most notably Stoli, Finlandia and Absolut. But, a number of important factors changed the picture.

In the 1980s, based on Russian misadventures (Korean Airline, Olympic boycotts, etc), Absolut benefitted from the Stoli boycott and the door was open to other imports. In the mid 90s, brands like Ketel One and Grey Goose taught the consumer that super and ultra premium vodka brands were worth paying for. At the same time, flavored vodkas began to make their presence known and further changed the category.

The Flavor explosion

At first, the flavors had some meaning and a strategic role to play. Want to enhance the flavor of a drink, choose citrus vodka; make that Bloody Mary zing, choose spicy vodka; and so on. Gradually the ‘simplistic’ flavors gave way to the exotic – mango, strawberry, apple, peach, vanilla and so on.

By the 2000s, the flavors took hold and gradually moved from exotic to the ridiculous – marshmallow, whipped cream, sorbet, cake, candy, bacon, salmon and other flavors that, as the saying goes, I wouldn’t drink with your mouth.

While this senselessness was going on, another factor entered the market – the low priced imported segment. Brands like Svedka, Sobieski, Wodka and others basically said to the consumer, “Hey, you’ve been overpaying; here’s imported quality at a low price.”

The net result of the “tutti frutti” flavors and inexpensive brands has been to churn the market and create confusion. Both among the trade, stuck with dozens of fad flavors and brands, and consumers, who face a dizzying array of choices.

Where is it all heading?

The storm clouds on the horizon are coming from two main directions – craft products and whiskey and even a combination of the two.

Ironically, whiskey (particularly American) originally defeated by vodka, has come back and with a vengeance. From 2012 to 2013, the rate of whiskey’s growth was two and a half times faster than all vodka including flavored. Leading the whiskey charge were flavored whiskeys (the sweetness factor again); interest in unique cocktails (traditional and new) and mixologist skills; and the craft, small batch explosion.

Whiskies of all types have begun to capture the drinking imagination of consumers regardless of age or gender. They’re fun to talk about, to drink and to identify with – whether bourbon corn, rye, or malt – they represent serious products and an understanding that, unlike vodka, they require skill that is more than turning on a tap.

Tito's Vodka

Tito’s Vodka

Enter the craft or small batch phenomenon. Not only is it fueling the whiskey growth, it’s also impacting the vodka category. Take a brand like Tito’s for example; it’s grown by over 40% compounded in the last five years, based largely on its “Hand Crafted” claim. Although, I wish someone could explain to me how you are hand crafted at nearly 1.5 million 9-liter cases.

Nevertheless, the craft concept, claim or whatever, is also becoming a factor in vodka with micro distilleries and the anti-filtration movement that’s just beginning. (By the way, the “unfiltered” vodka approach makes me chuckle… we’ve gone from filtered over charcoal, lava rocks, precious minerals and vestal virgins during a full moon to what, straight from the still?)

Our vodka

Our/Vodka Detroit

I think the Big Boys are starting to take notice of the vodka evolution. What choice do they have other than watch their sales go down and miss their bonuses. Take Absolut’s Elyx for example. It’s billed as “the single estate handcrafted vodka.” Other than marketing hype, I have no idea what they are trying to say about the brand. I think it has something to do with copper stills and an offbeat “global creative director.”

Also, Pernod Ricard’s Absolut is going into the micro distillery business and opening local distilleries around the world including Seattle, Detroit, London, Melbourne and others. It’s called Our/Vodka and supposedly the uniqueness of the concept will return the brand to its glory days. Good luck with that.

Grey Goose VX

Grey Goose VX

Finally, Bacardi’s Grey Goose is introducing Grey Goose VX, which “contains Cognac created from grapes from the Grande Champagne cru.” It’s currently only available at Travel Retail outlets, probably as a market test of the viability. According to The Spirits Business, “Bacardi has claimed Grey Goose VX (which stands for vodka exceptionelle) is a “significant step change for the vodka/white spirits category”.

So look for more churn in the vodka market in the years ahead. The growth will decelerate as the crazy flavors are put out to pasture (or wherever errant products go) and the competition from outside the category heats up.

The response from the vodka companies will be interesting to track. I can’t help but think of the expression, “Desperate times call for desperate measures.”

 

The Columbian Exchange – Ever Heard of it?

August 18th, 2014 No comments

One of the most important events in history

The Columbian Exchange (sometimes called the Grand Exchange) was the exchange of goods and ideas from Europe, Africa, and Asia with goods and ideas from the Americas. An historian named Alfred Crosby was said to have coined the phrase in 1972, describing the exchange of crops and livestock between the New World and the Old World.

From the Savory Spice Shop blog.

From the Savory Spice Shop blog.

For example, the New World received such staples of our diet as citrus, apples, bananas, onions, coffee, wheat and rice. In exchange, the Old World received such plants as maize, tomato, vanilla, cacao and potato.

In terms of influence consider this:

Before Columbus discovered the Americas, there were no potatoes in Ireland. By the 1840s, the Irish Potato Famine caused deaths and massive emigration. Tomatoes came to Spain from the New World and from there to Italy and forever changed the culinary style of the country.

More than just food

So far as livestock is concerned, most of the exchange went from the Old World to the New World, including horses, pigs, cattle, chickens, large dogs and cats. Not many animals went the other way, with the notable exception of the turkey. Oh, and let’s not forget that when it comes to diseases, the Old World sent far more than it received – from measles to malaria.

What does this have to do with booze?

Ah, glad you asked.

A few weeks ago, a reader of this blog named Desmond Nazareth, who lives in India, contacted me to tell me about his company – Agave India Industries Ltd. Turns out that Mr. Nazareth is an entrepreneur, a graduate from the prestigious Indian Institute of Technology, Madras and is producing authentic artisanal spirit made from Agave Americana. If you look at the list of New World to Old World exchanges, the agave plant is right up there.

Desmond Nazareth and an Indian Agave plant.

Desmond Nazareth and an Indian Agave plant.

He can’t call it tequila or even mescal due to appellation requirements but if it looks like a duck, walks like a duck, swims like a duck – you get the idea – it must be a duck.

Mr. Nazareth is arranging for me to see and taste his product and I’ll get back to you. I’ll also tell you how the agave plant got to India and about his extraordinary spirits enterprise.

So stay tuned.