Quite a bit of press about social media in general and Facebook in particular this week. All of which, of course, relates to the booze business.

First, in the US, DISCUS (Distilled Spirits Council of the United States) has rolled out new guidelines for marketing on social media sites and digital platforms. According to what I read in Wine and Spirits Daily, the European Forum for Responsible Drinking has joined DISCUS in that initiative. Among other things, the DISCUS code requires that 71.6% of the audience be of legal drinking age.

Guess what? Nielsen data shows that Facebook, Twitter and YouTube have legal drinking age audiences in excess of 80%. Nevertheless, the DISCUS guidelines (code of responsible practices) are clear and push hard in favor of responsibility. Those of us in the industry understand a basic principle in such matters – the appearance of impropriety is as bad as the impropriety itself. There are steps including “age gating,” monitoring of content and other restrictions. Good for you, DISCUS.

Next, we learned this week that Diageo and Facebook have worked out a multimillion-dollar deal to work together and share skills and resources for mutual benefit. The Guardian quotes a Diageo spokesperson as saying the deal will “drive unprecedented levels of integration and joint business planning and experimentation between the two companies.”

Translation – this is still a new medium and we can learn a lot from each other.

(This is one of those rare moments when I tip my hat to Diageo and applaud their initiative. Although, there was one item in the press that caught my eye and made me laugh. It was something like Diageo wants to tap Facebook’s large audience in markets like Brazil, where the two companies occupy the same office building in Sao Paolo. Oh, and if they were in a different part of town, no deal?)

In any event, in the UK, this new relationship did not go over well. From what I read online, the negative reaction ranged from “serious concerns” from the British Medical Association to “torches and pitchfork” rants from the anti-alcohol forces.

Come on people, Facebook and Diageo can target legal drinking age consumers and put up safe guards to keep young people out. You can’t do that with billboards or newspapers. Perhaps manufacturers should hand out blindfolds in front of every billboard in the UK where a young person is likely to walk past.

Finally, Facebook announced new features this week that include sharing more than just informing. They hope to become a “taste maker” and influencer of products and services. The reaction has been mixed with pundits and bloggers weighing in on both sides. An unscientific poll among Mashable readers indicates as much as 75% hate the news feed changes.

Time will tell whether the relationship between Facebook and Diageo is a smart move for both, or, Facebook will become the next social media darling to wane in its appeal. But with well over 300 million users worldwide, I continue to think that Diageo’s move was right on the money – despite how much it pains me to say that.

In my constant search for interesting/entertaining news about the business of alcohol, I came across a posting titled World’s Weirdest Spirits at The Daily meal. You can find it here.

The list includes a mishmash of strange booze where “logic” caused the creation of a bottled concoction. For example, people love bacon so there is Bakon Vodka; how about smoked salmon flavored vodka? The logic applies to a Yogurt liqueur as well, called Yogurito.

What would a viable spirits brand be without a story, a legend or an “inspiration?” There is Copil Licor de Tuna – no, not fish tasting, that’s the salmon vodka. This one is distilled from cactus pears and has something to do with an Aztec legend about blood and the creation of the cactus. (I couldn’t make that up, folks.)

There is also a spirit called Root that includes botanicals, birch bark, wintergreen and a bunch of other stuff. The story is that the recipe was Native American, passed down to colonial settlers and was served to Pennsylvania coal miners. Might have to take this one seriously – it’s gotten some hype and seems to have a potential following.

Now we come to my two favorites… drumroll please… Products I like to call “purposive” – spirits with a purpose and that help to “make things happen.”

One of them is Mamajuana, apparently also known as Dominican Viagra. It’s made from herbs, sticks, wood, honey, wine, rum and who-knows-what else. All the ingredients are steeped together for a few weeks. Don’t ask me how you drink it but I suspect it comes with tweezers to remove the splinters. But hey, it’s an aphrodisiac.

The other is a product called Kierewiet Liqueur – billed as a digestif, it has a green color, a bold marijuana leaf on the label and is said to be a Cannabis Liqueur. I’m told it’s served in many places in Amsterdam, of course. This was bound to have happened but I would have suggested a bit more subtlety in packaging execution.

Well, there you have it. In an industry where such products as dessert and cake vodkas, spiked chocolate milk, chocolate and cabernet products are on the ascendancy – these may well be the trends of the future.

(I’m kind of hoping the cannabis one makes it – I have a concept and marketing plan already laid out.)

A winery on Long Island, Lieb Family Cellars, has introduced a 9/11 Wine. The wine sells for $19.11 and “benefits the National 9/11 Memorial and Museum.” Apparently the foundation has approved it and a paltry amount of the sales (10%) will go to the foundation if you buy direct from the winery.

Outrageous. But I can’t decide who the moronic villain is… who gets the award for stupidity combined with greed? The winery and the fool who came up with the idea? The person on the foundation who said yes? The restaurant or retailer who stocks it? The person who buys it?

If you are shameless enough to do this why not at least give all the net proceeds to the foundation?

The answer is, no matter what lipstick they try to put on this pig of an idea, it’s still a pig.

This piece from salon.com just says it all:

On Sunday, Anthony Bourdain summed up his response on Twitter, noting, “What kind of piece of shit would create such a product?” And speaking to the New York Daily News, Ben Glascoe, whose firefighter son died on 9/11, called the effort “distasteful.”

The Gallup folks conduct an annual survey on drinking alcohol and have measured the top choices (wine, beer, liquor) since 1992.

Bottom-line: Nearly as many US drinkers name wine (35%) as beer (36%) as their most often choice in alcohol. Liquor is third at 23% and close to its highest level.

The choice of beer as America’s favorite drink has declined over the past two decades and it was accelerated this year with a five-point drop in mentions of beer, down from 41% to 36%. Among young adults, the preference for beer fell from 51% in 2010 to 39% this year.

I no sooner finished reading the Gallup poll when I noticed another ominous sign on the horizon for beer.

A number of media sources have reported a growth in wine on tap. In some of the restaurants and bars dispensing red, white and rosé, the taps have a sign saying “Warning: Wine Not Beer.” Uh – oh…is there a trend in the making?

Looks like Augie Busch got out just in time.

Here we go again.

The press about initiatives concerning the privatization of alcohol sales has started to heat up once more. Looks like the Washington initiative will be back on the ballot; Ohio is pushing across the board privatization, not just alcohol; and Pennsylvania lawmakers are expected to file legislation that would auction off the state’s wine and spirits wholesale operations and liquor stores to private vendors.

But wait a minute… Didn’t I just read that the Pennsylvania Liquor Control Board  (PLCB) just reported record sales and contributions to the state treasury?

In fact, the control board hit $1.9 billion in sales (up 4%) and claims to be the largest buyer of wine and spirits in the US. The sales volume generated some $500 million in sales tax and profit transfers.

It seems to me that, in addition to being a monopoly, they have tried to use marketing efforts more like a private enterprise than government. They run ads (print, billboards and even radio); lots of price promotions; and have initiatives like an online store and supermarket wine and spirits kiosks.

But it’s a government enterprise and, as such, I’m not sure they speak marketing. Their ads are okay but hardly comparable to those run by large private enterprise retailers. Despite the blasé nature of their communication, the PLCB still gets criticized for running ads. Imagine how much louder the criticism would be if the ads were compelling.

Their retail initiatives are worth applauding even if Wegmans ultimately rejected the kiosk idea because of customer complaints.  According to Bloomberg Business Week, “customers who use the kiosks insert their identification, and a state worker at a remote location verifies it. The wine buyer must then use a breath machine to prove their blood-alcohol level is below 0.02.”

Where I come from all of this is referred to as “close, but no cigars.”

I don’t mean to be harsh, but government running a private enterprise – no matter how well intentioned and creative the employees are – just doesn’t measure up. The obstacles are too numerous and strong.

I read an article today that the wineries in New York have appealed to Sen. Schumer because the federal government is hurting business by taking too long to approve new labels for wine bottles. Schumer said, “Often, when wineries finally do receive feedback, it is with a rejected label and the necessary corrections. And, at that point, labels must be resubmitted and the process must begin again.” He went on to point out that delayed label approval means delayed sales that in turn means less tax dollars.

Maybe the folks in Pennsylvania should work for the federal Alcohol and Tobacco Tax and Trade Bureau (TTB).

The news that fast-food chains are selling alcohol sent me scurrying to the Internet to gauge the reaction among the public and pundits. After all, “demon rum” could be polluting the American haute cuisine realm and worse, is Ronald McDonald going to turn into a boozer? Will people fear that a McBeer will replace a shake? Do you typically pair your Whopper with a nice lager or with a zinfandel?

According to USA Today (and reprinted by Mark Brown’s newsletter), Burger King and Sonic will join Pizza Hut and Starbuck’s in offering alcoholic beverages along with fast food. Clearly, the move into alcohol is designed to compete with casual dining chains and to increase the cash register ring.

So, my Internet journey revealed mainly neutral to favorable reactions plus some interesting insights.

A number of blog postings (Chowhound, for example) referenced the differences between American and European attitudes toward alcohol, such as:

“There is a simple cultural difference between the US and the far more relaxed attitude many Europeans have towards beer. We seem to think that we need to regulate alcohol wherever we can, Europeans seem to think that adults are generally capable of making the right decision without the state telling them what to do.”

The gourmets also waded (or is it weighted) in:

“I would very much like a glass of Sangiovese with a Baracoa plate at Chipotle, or a Gewurtz with some good Tacos Al Pastor.”

I found this interesting item about Louisiana:

“…Not only drive-thru daiquiris, but doughnut shops with liquor licenses, too. Video poker is legal in Louisiana, but to get a gaming license, the operator has to have a liquor license (logically, if you check IDs for alcohol, you’ll check them for video poker). So damn near every corner cafe, sandwich shop, po’boy joint, doughnut and coffee place, serves alcohol and has video poker.”

Finally, the doom and gloom, anti-alcohol folks had their say: “Fast food plus fast alcohol equals fast drunks.” That’s obviously from someone who has never experienced the therapeutic benefit of a burger and fries at the end of the night or the day after.

Looks like the last posting on “What’s in a name – Bartender vs. Mixologist?” got some folks annoyed. Most of the people I heard from were anti-mixologist terminology in sentiment.

(By the way, see the word ‘comment’ at the top of the post, beneath the headline? That’s so you can put something up directly without sending an email. Anyway, happy to hear from you.)

Here is a sample of the comments:

Ray Foley, publisher of Bartender Magazine, wanted me to know that in a recent survey he took of his readers, more than two-thirds described themselves as a bartender. As Ray put it, it depends on the questions and the sample of those who participate. But I love this line he used in the email, “I never heard anyone at a bar say ‘Hey Mixologist’ can I have a drink?”

Kyle Branche, a professional/private bartender from LA who has a blog at www.LABartender.wordpress.com, feels that “there are…individuals saying they’re a so-called or self-titled ‘Mixologist’ just so they can take advantage of a wave…as a cocktail personality…without any actual experience behind a live bar.”

And, this one from a good friend who knows very little about the alcohol industry and, other than an occasional libation, could care less – “I’ve never heard or saw the term mixologist before… And I actually think that it is one of the dumber things I’ve ever heard.”

Any mixologists out there who care to step in?

Some folks I know are planning a multi-client research service to measure and understand the views of the key players in the alcohol industry – bartenders, wait staff, sommeliers, servers and on premise management.

The project will be run by Kevin Moran from MSS, Multi-Sponsored Studies LLC with extensive experience in the spirits and wine industry and Paul Braun owner of Braun Research Inc. a leading data collection company with a broad panel of people “behind the bar.” Together they are launching a syndicated extension to their powerful on premise multi-sponsored research and solutions service.

To start the ball rolling they polled the bartender database on a number of key and timely issues. The first one I wanted to share was the question of whether the term mixologist is taking hold.

Moran and Braun surveyed 500 bartenders from a national sample that reflected gender, geography, type of establishment and so on. They asked two questions related to bartender vs. mixologist – how do on premise people describe themselves and whether the term mixologist is here to stay or a fad.

Nearly half (48%) of the bartenders surveyed described themselves as a bartender. But, a third (33%) referred to themselves as a mixologist. Interestingly, the rest – 20% — saw themselves as bartenders who want to become mixologists. So while the self-descriptions split 50/50, it seems that the term mixologist has taken hold. For many, it’s becoming an aspiration.

If you have any doubts, here are the results of “Is the term mixologist a fad that will go away in the future or a real change in what bartenders do and will grow in importance?”

Nearly 2 out of 3 (64%) of those surveyed felt that the term mixologist is here to stay and reflects their changing role. By the way, those who live and work in the western States supported the permanence of the term at the 72% level.

My takeaway from this finding is that too often manufacturers think in terms of the “star” factor and feel that the creation of drinks and cocktails can only reside among a few. Guess what, more and more bartenders seem to be embracing the idea of creating a drink in addition to just serving it.

Maybe its just nomenclature, but I detect from these results and personal experience that bartending as a “way station” or day job while waiting to be discovered is giving way to a broader view of the profession. The idea of quickly making and serving drinks does not preclude the ability to create — quantity and quality of effort are not mutually exclusive.

I think suppliers might want to reexamine their notion of the power behind the bar.

Next: Views about the 3-tier system.

Call it Pig Swig.

Ad Age reported last week that the Piggly Wiggly supermarket chain is launching a line of store brand beers under the umbrella name of Pig Swig. The line up consists of “craft style” beers – Pig Tail Ale and Pig Pen Pilsner. I suppose if your company is called Piggly Wiggly you might as well go “whole hog” (sorry about that) and name your store brands accordingly.

But I must say that charging $6.99 for a 6-pack is more than a bit piggish. (Okay I’ll stop.)

A number of retailers have launched private labels/store brands but managed to name the products intelligently if not creatively. Supervalu has Buck Range Light selling at Albertson’s and other stores in the chain; Walgreen sells Big Flats; and 7-Eleven sells Game Day beer. Costco uses the Kirkland name as it does on spirits and Kroger calls its beers Tap Room No 21 and Port Republic.

The Ad Age article also reports (via Nielsen) that private label beers account for only $23.6 million out of the total beer category of $27.4 billion. But, store brand sales are up 41% the past year versus 2.3% drop in branded sales.

That must be the inspiration for Piggly Wiggly to come up with ads and slogans telling consumers to “get your swig on,” “put some pink in your cheeks” and my favorite – “toast of the trough.”

I don’t know if it’s still around but there was a Malt Scotch Whisky called Sheep Dip. Think of the name applied to the Pig Swig line. I even have the slogan – “come wallow in our beer.”

I knew that sooner or later, I’d get to post something about Bernie Madoff and the booze business.

Morrell and Company held an online auction of his wine and spirits collection. For a swindler who lived the rich life having stolen $65 billion, his wine collection seems to me to be paltry and uninspired. But, buyers gladly overpaid for the boasting rights of owning the charlatan’s wine and spirits.

As the auction house put it, “Some of the bottles are better viewed as conversation pieces rather than valued for their contents.”

The wines went for well beyond their value. A case of 1996 Chateau Mouton-Rothschild was valued at $3,200 to $3,800 and sold for $6,800. A bottle of Chateau Lynch-Bages from 1990 went for $2,200 despite a value appraised at no more than $1,600.

But, my favorite over valued auctioned items was on the spirits side.

Four minis consisting of Bombay, Grand Marnier and Smirnoff valued at $10 to $20 went for $300. Minis?

Nine bottles that included Jack Daniel’s, Jose Cuervo and Drambuie sold for $500 versus an estimated value of around $200. (The value must have taken into account the prices billionaires have to pay for booze in midtown Manhattan or in The Hamptons.)

Included in the nine bottle lot was – drumroll please – a bottle of Seagram’s VO with the original Canadian tax stamp dated 1981. All those years trying to figure out how to make VO grow – who knew it was a collector’s item!

A personal note to Madoff:

Dear Bernie,

Happy you are rotting in prison and hope you are not doing well. While many are laughing about your choice of alcohol libations, I for one am pleased that you obviously were not “from the drinkers.” I’m also pleased that the industry did not benefit from your ill-gotten gains.

But I am curious about something. I can understand ripping off minis from an airplane or hotel room bar. But Smirnoff and Cuervo?

Well anyway, at least the victims’ fund got some money — $41,530 to be exact. I suppose it’s a rounding error in the scheme of things but I also got a posting out of it, didn’t I?

Just when you think you’ve heard of everything, every gimmick, and every ploy to sell a drink – along comes a new one.

There is a bar and club in NYC where the bartender and a “beauty vendor” have teamed up to create cocktails whose mixer ingredients are supposed to smooth skin, plump it up or otherwise enhance the appearance.

Among the cocktails is a Watermelon Kiss which mixes tequila with watermelon, “to even out skin tone,” according to a newspaper article on the club. Another drink uses kumquats and special vitamins and minerals to reduce oiliness.

You get the picture.

Call me old school but alcohol with or without a mixer can be a social lubricant, a calming influence, a road to mood change and, of course, relaxing. If I’ve had a drink or two, you probably can convince me that some products enhance the romantic moment. But, a cocktail for skin improvement? No way.

I think this is how it works – you have 3 or 4 cocktails, go to the restroom and look in the mirror. You’ll love what you see.

In any event, hats off to the owners for a novel way to sell booze. Shows that the PT Barnum adage is still alive and well.

Just thought I would take a moment to alert readers – consumers as well as those in the industry – about upcoming events of interest related to the booze industry.

First and foremost, from May 13 to 17 is the Manhattan Cocktail Classic all over NYC. It starts with a Gala at the New York Public Library and there are events all over town. Anyone who has been to previous events recommends it highly. Here’s the link www.manhattancocktailclassic.com – got to warn you, most events are sold out.

In June (28 and 29), the Javits center in NYC has the Bar and Wine Show for the on premise trade. www.newyorkbarshow.com

Finally, and not directly related to spirits and wine – there is a charity event called The Lone Star Chili Cookoff on May 21. What does this have to do with the booze business? Not much except when I think of the business I often think about Texas. You know, 6^th St. in Austin, Crown Royal and great times with the Southern region. Here’s the link. www.lonestarchilicookoff.org/about.php?club=NYAMC

Who says this blog doesn’t provide a public service?

The same group of Attorneys General that went after products like Four Loko, Sparks, Tilt and and others have set their sights on Blast by Colt 45 which is a fruity malt liquor made by Pabst Brewing Co.

What gives this effort a bit of a twist is that Blast contains 12% alcohol by volume in a 23.5-ounce can. Second, rapper Snoop Dogg is promoting the brand. So, the combination of extra octane, the fruity flavors and packaging plus the spokesperson has led the AGs to request that Pabst pull the product.

I remember Snoop when he was known as Snoop Doggy Dogg, his longer and more elegant name. We had just introduced Seagram’s Gin & Juice (basically an RTD/premix) and by coincidence Mr. Snoop had a best selling hit called “Gin & Juice” – a top 10 hit and on the charts for months. We did not pay for the “placement” and he was singing about the generic concept of mixing gin and juice, but, never mind, Seagram’s G&J flew off the shelves.

Mr. Snoop can move product either by happenstance or intent.

I don’t think that his involvement precipitated the AG action on its own. But in conjunction with the size and alcohol, bright colored cans and flavors well… Ah, the flavors – Raspberry Watermelon, Strawberry Lemonade, to name just two.

I understand the products are doing well but Pabst, with a long history and heritage of outstanding quality beers, needs to think about responsibility in its products. Brands like Blast — which is being referred to as “binge in a can” – only serves to engender the ire of regulators, the Attorneys General, the taxation folks and the self appointed anti-alcohol watchdogs.

For a company who markets such iconic brands like Stroh, Schlitz, Lone Star, Olympia, Pabst, to name a few, well, let’s just say that Blast doesn’t live up to the beer brewing legacy and class.

With or without the Snoop-ster.

Two news reports covered by the Buffalo Trace newsletter made me feel badly for Diageo.

The first, as predicted by many industry observers including yours truly, is that India’s United Spirits Ltd. has become the world’s largest liquor company by sales volume.

No big deal you say. But what about this?

The Sunday Times reports that the Beckmann family has reportedly held discussions about selling the business for shares of Diageo stock instead of cash. If correct, it would make the family the largest shareholder with 10%. That would give them the right to express opinions about how all the brands are run. Too scary to contemplate.

There have been a few reports in the press recently about a trademark dispute over the use of the word “mommy” in conjunction with a wine brand.

You read it right – Mommy. As in a wine brand called Mommy’s Time Out and another called Mommy Juice. It gets even more interesting (perhaps a bit bizarre) since they are in court fighting over the trademark rights to the word Mommy. I wouldn’t have thought that you can trademark that word, but I guess it’s for the court to decide.

I don’t know what to make of it.

On one hand, it’s a brand name that reflects a usage occasion. As in, after a hard day as a mom and the kids are in bed, relax and have a glass of wine. In fact, one of the brands suggests on their website “you deserve a break, take a mommy timeout” and the other says, “…so tuck your kids into bed, sit down and have a glass …because you deserve it.”

I suppose too, that in a world of cluttered wine choices where the supply seems to overshadow demand, an interesting brand name allows a product to stand out. Which is why we have such clever, thoughtful and aptly named brands like Fat Bastard, Cleavage Creek, a rooster on a bottle called Big Red Pecker, Oops and, my favorite, Le Vin de Merde (if your French is not too good, you might want to translate it).

So I get it.

But I wonder what consumers think? Are they saying something like, “Oh, here’s an interesting wine that actually gives me permission as a mother to have some when I’m off duty.” Or, are they saying, “If I want a glass of wine to relax after a hard day as a multitasking mother, I’ll find my own wine, thank you.” Perhaps they’re saying, “Hey, wine is wine and that one is cute and worth a smile…I’ll buy it.”

Some might even suggest that a mom is never off duty and a product that carries these names are not appropriate. Neither is the usage occasion.

I have no idea and the real test will come in the stores. The fact that there are two brands suggests that the suppliers know something I don’t know.

One thing is clear to me. The moment they co-pack the wine with a Sippy cup, I’m going to hurt someone.

I was troubled on many levels today when I saw a story in USA Today (April 15) about two restaurant chains accidentally and mistakenly serving drinks to toddlers that had alcohol.

Here’s the lead:

This week, two of the nation’s largest casual dining chains — Applebee’s and Olive Garden — found themselves very uncomfortably trying to explain how alcohol ended up in kids’ drinks.

Tuesday, at an Applebee’s in Madison Heights, Mich., a 15-month-old boy’s sippy cup was supposed to be filled with apple juice but was filled with margarita mix and alcohol. On March 31, at an Olive Garden in Lakeland, Fla., a 2-year-old was served alcoholic sangria, not orange juice.

At one level, as a part of the alcohol industry, I recognize that these are extremely rare occurrences. But, as a consumer and grandparent of a toddler, even one in a billion or trillion is too much.

What were the servers thinking? Are they so bored, uninterested or lazy that they didn’t look carefully at what they were serving? How about the managers at the restaurants, is this how they train their staff?

Another part of the USA Today story got me further annoyed:

Leaders at Applebee’s, Olive Garden and the National Restaurant Association all declined interviews on Thursday, deferring to public relations departments and statements. Applebee’s cited pending litigation.

Come on, I know that corporate lawyers rule, but this is a moral and public confidence issue. Instead of hiding behind PR and counsels, senior management needs to be out there explaining what happened and what it intends to do to prevent this in the future.

This is not the first time. In 2006, a New York City Applebee’s admitted to accidentally serving a 5-year-old a Long Island iced tea instead of apple juice. A California restaurant experienced a similar incident to the one in Detroit in 2007.

So my advice to the brass at these chains is to forget about “damage control” and hiding behind the lawyers. Kick some butt and regain public confidence. The food service business is rebounding, why do you want to shoot yourself in the foot?

For those of us in the alcohol industry, the accidents (or acts of carelessness) add another arrow in the quiver of the anti-alcohol forces.

This week’s Ad Age had a story and insert about trends from the 2010 census. I found the information and learning interesting as a snapshot of the US market in general and my favorite industry in particular.

If you look closely at Ad Age’s analysis and spend some time with the census results itself, the “story” is about the shifting population. Not a new trend, by any means, but some interesting twists and turns that continue to affect marketing.

First, it should come as no surprise that the US is becoming more diverse — the minority populations grew 8 times faster than the majority white, non-Hispanic population.

Interestingly though, the news about Hispanics is that the population and growth is concentrated, with nearly half of all US Hispanics living in just two states – you guessed it – California and Texas. And, three quarters live in just eight states.

The Asian population is growing even faster and is more highly concentrated. Since 2000, the population has grown by 43%. New York and California have the largest concentrations.

Among African Americans, the Census data reported by Ad Age indicates, “many are moving to the suburbs and to the South…a sign of better job prospects and increasing affluence.”

I think the implications of these shifts are clear. The consumer and the spirits and wine marketplace is anything but homogeneous. Strategies, plans, brand building and related marketing/sales factors that don’t take this into account are simply worthless.

I also think that as affluence and acculturation take hold, the old rules of who drinks what need to be re-examined. As demographics change, over time, so do attitudes, life styles and purchase behavior.

Oh, one more piece of information from Ad Age caught my eye that I wanted to share. In an analysis of Boomers sponsored by AARP, it seems that older Boomers (55 to 65 years) spend as much on alcohol as the general population. But, younger Boomers (45 to 55 years) spend 15% more than the population in general.

No surprise to me…I used to think it was because the empty nest means more entertaining and food and beverage occasions. I now know better. It is not because of the empty nest – it’s more drinking because the kids have come back home.

I no sooner posted the piece below on South America when my inbox lit up with stories about the possible sale of Jose Cuervo International.

(In case you don’t know, the brand(s) are owned by the Beckmann family and distributed worldwide by Diageo.)

Both Buffalo Trace Newsletter and Wine and Spirits Daily had special additions on Sunday reporting that the Beckmann family was in talks to appoint Barclays to explore a possible $2 billion sale of all or part of the Jose Cuervo brand.

I heard from a wide range of people who know the brand and the players well. Their opinions on the matter were all over the place, but very interesting.

Some wondered about the low price…

“As recently as a few years ago, they bragged about a $5 billion price tag …$2 billion must be for part and not the production or for limited worldwide distribution…seems crazy.”

The more cynical views had to do with the historic combative nature of the relationship between Cuervo and Diageo…

“I once heard a senior Diageo executive say that if Patron were available, they would gladly overpay for it in order not to have to deal with the Beckmanns any longer.”

“Diageo’s recent poor performance on the brand now looks like a strategy to keep the value low in order to buy the Beckmanns out.”

My own view is that it could be (as WSD suggests) based on a preemptive move against the possible sale of Sauza, although count me among those who think Beam Global will remain in tact and flourish in the future. Perhaps it’s a warning shot to Diageo to pick up the pace since their contract comes to an end in a few years.

What I can’t understand is where Proximo (also owned by Beckmann family members) fits in the equation. They are doing well and could easily handle the addition of Cuervo to the portfolio. But, their strength is strictly in the US. So, perhaps the low price tag is for international distribution.

One thing for sure is that the Beckmanns are shrewd and unpredictable so who knows what they have in mind.

And now, on to the foremost industry show of the year, at least in my opinion. The Wine and Spirits Wholesalers of America (WSWA) 68^th annual convention is in Orlando at the beginning of April. Once upon a time this was a key meeting point between suppliers and wholesalers. Speakers, exhibitors, award presentations were all a sideshow to the supplier-wholesaler hospitality suite meetings and dinners. Brands and lines were awarded and lost at this event. Friendships were made and solidified. Animosities were seeded and blossomed. All in all, it was one of the events that drove the business.

But there may be problems this year.

Last week, Wine and Spirits Daily reported as follows:

“WSD had heard rumblings that some DISCUS members will not be attending the WSWA’s annual convention this year. Initially we supposed this was due to disagreements over the CARE Act, but a number of distiller sources we have spoken to say the issues are unrelated and that it is a commercial decision.”

A commercial decision?  WSD closed the piece with:

“Our conclusion?  While we don’t doubt DISCUS’ reasoning for bowing out, it’s likely that disagreements over the CARE Act sped up the process.”

Ah, the CARE Act (aka H.R. 5034) – let me see if I can simplify the issue.

The CARE Act aims to clarify that states have primary authority to regulate alcohol. I can go on and on with details about letters to congress, lobbying rationales, assorted fine print gobbledygook and each side’s arguments and counter arguments.  But it’s simple — the wholesalers want to protect and solidify the three-tier system and the suppliers want to make inroads and cause some erosion.

So, back to the WSWA –

I don’t believe the attendance will be down. I also don’t buy the argument that “we see the wholesalers on a frequent basis already so why go to the event?” Because, it’s called relationship building. Because, the size of the line alone is not the answer for “winning the hearts and minds” of distributors and their salespeople.

As for the wholesalers, if the big boys don’t show in the same numbers as in the past, perhaps they will spend more time in the exhibit area and get to know the smaller suppliers and the new brands and players that may become the powerhouses of the future.

It’s fascinating to see each of the oligopolies battle each other. I guess it’s called the “irresistible force” meets the “immovable object.”

The Nightclub and Bar Show opens this week in Las Vegas. It’s considered by many to be the foremost trade (on premise) show in the business. That is, for those who can recollect what transpired while they were at the show.

Seriously, my own experiences with the show have been good. From a supplier’s standpoint, it’s an opportunity to showcase new products, new drinks and other innovations. It’s also a chance to see and mingle with the trade and get a first hand sense of the state of the bar business and what’s on their mind.

So, a supplier’s presence among the nation’s bar and nightclub owners and managers is a bit like chicken soup – it may not help the business but it certainly won’t hurt. There’s much to be said for a presence at this event. Probably explains why there are more large suppliers there this year.

In any event it’s “Vegas,baby.”

Which brings me to a show I attended last week at the Javits Center in NYC, The 3^rd Annual New York Wine Expo. It’s a wine tasting event for consumers who paid roughly $75 for admission, less with a discount. Regardless of what they spent, all attendees were determined to get their money’s worth in sips.

I’m amazed that it survived the first 2 years. Consumers, who staggered from exhibitor to exhibitor, seemed less interested in learning about the wines shown than in comparing the alcohol effects from one country to another. So I couldn’t understand why the wines bothered to exhibit. “It’s about the last day and the trade,” one exhibitor told me. So I went on the last day and to my surprise, it seemed like some business was being done. Lesson learned for me – only go to trade shows.

Next posting: The Wine and Spirits Wholesalers of America (WSWA) convention. Any stories to share?

In my never-ending desire to bring items of interest to the attention of my readers (all 3 of you), here are a few things I came across in the news about the industry.

From Mark Brown’s Buffalo Trace Newsletter….

Former ‘MADD’ Chapter President Busted for DUI

Source: KTLA, February 25, 2011

The former president of a Gainesville, Fla. chapter of Mothers Against Drunk Driving, or MADD, is facing DUI charges, according to the Gainesville Sun.

48-year-old Debra Oberlin was pulled over last week after officers reportedly spotted her driving erratically.

She blew a .234 and a .239 on a pair of breathalyzer tests, the Sun reports, well over Florida’s .08 legal limit.

Oberlin apparently told officers she’d had four beers.

Oberlin has not commented.

She was the president of Gainesville’s MADD chapter for three years. The chapter closed in 1996 due to a lack of funds.

All I care to say is that 3 times over the limit on 4 beers? I’ll leave the other punch lines to you.

____________________________________________

From boozenews.com (no relation)….

A Tangle of Corkage Laws Around The Nation

Virginia and Maryland debate whether to overturn bans on restaurant BYO; a Wine Spectator survey finds laws around the country remain a confusing tangle.

As more Americans drink wine regularly with meals, more are asking their favorite restaurants that perennial question: Can I bring my own bottle? Like most practices created in the aftermath of Prohibition, corkage laws are a jigsaw puzzle of arcane, contradictory and confusing rules that vary from state to state and even from town to town. But whether they call it “corkage,” “BYOB” or “brown-bagging,” most wine drinkers want the freedom to bring a bottle of wine from their personal collection into a restaurant.

This year, some states with longstanding corkage bans have begun to reconsider. Last week the Virginia state Senate passed a bill allowing corkage; the House is voting on it today. Groups in Maryland are pushing to end their state’s ban as well.

A Wine Spectator survey of all 50 states, plus the District of Columbia and Puerto Rico, found that 25 of these allow corkage in restaurants with a license to sell wine; some also permit the practice in unlicensed restaurants, though individual municipalities—and, of course, individual restaurants—can often elect to outlaw or limit the practice. Fifteen states forbid corkage outright, and an additional 12 have more convoluted regulations.

Everyone clear on these rules and regulations?

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And, finally, Mike Bacco brought this to my attention….

Coke to ramp up Seagram’s distribution

Atlanta Business Chronicle, February 28, 2011

The Coca-Cola Co. is looking to capitalize on a partnership with Seagram’s made back in 2002.

Atlanta-based Coca-Cola (NYSE: KO) said it is expanding availability for the full line of Seagram’s Ginger Ale and mixers across the country. Coca-Cola gained the rights to the Seagram’s business in 2002, but distribution for Seagram’s brands has been limited within the Coca-Cola system. Now, Coca-Cola Refreshments and other bottlers are combining the Seagram’s brand with the Coca-Cola distribution system to boost availability of Seagram’s Ginger Ale, Club Soda, Seltzer and Tonic Water in retail outlets.

See…brands do have a life of their own. I guess after nearly 10 years they thought it was a safe thing to do.

There have been lots of conversations among Seagram alumni since it was announced on Friday that Edgar Bronfman Jr. was convicted of insider trading in a French court.

The news reports I read raised a number of questions. According to Crain’s NY Business, “The conviction came even though the prosecutor had recommended acquittal…” That’s curious.

The report went on to say that “the prosecutor felt the executives did not have enough information themselves about the company’s health.” What? Are we talking Edgar Jr. here? Didn’t have enough information after having bet the heritage and fortune on a guy who referred to himself as Master of the Universe?

I wonder what the judge heard and saw that the prosecutor missed.

Edgar Jr. sometimes referred to the ease and depth with which people in Hollywood were capable of lying. He described studio executives as people who can swear on their mother’s life that it is raining outside when you and they know it’s a beautiful sunny day. Yet, he couldn’t wait to do business there.

Every year since the 1950’s, Seagram ran the Seagram Family Association (SFA) meeting, an annual session for senior managers and distributor principals. At what turned out to be the last SFA, while it wasn’t known at the time, the deal to sell the company was in the works. Rumors were widespread and felt to have more than the ring of truth. Every conversation, among distributors and management alike, dealt with the speculation. Junior was at the event but hardly visible. Stayed in his suite the entire time, and based on subsequent events, was probably cutting the deals.

He showed up at the last session where customarily the owner addressed the distributors to remind them that Seagram was a family in both the literal and figurative sense of the word and to provide remarks on the state of the business and the future.

When he walked into the back of the room, he stopped and asked what we thought he should touch on in his remarks. What was the tempo, what were the top issues, what’s on their minds?

The answer was candid. “What’s on everyone’s mind is — are we going to be sold?” “The concerns are palpable…they, we, all want to know what’s going on.”

He just looked at us and went on the stage. Immediately, he began to address the topic of a sale in no uncertain terms. He said emphatically and repeatedly that Seagram was not for sale. He didn’t say this — but it was almost as though he swore on his grandfather that would not happen. Less than a month later the announcement of a sale was made.

It was a sunny, beautiful day in southern California but inside the meeting room the rain was pouring down.

In a previous blog on the Bronfman’s I wrote about pity or scorn. This is another occasion for pity. Junior orchestrated the end of his family’s spirits and wine business in favor of the idea of integrating media, entertainment, information and communications in one hand held device. The Smartphone. The idea he had was ahead of its time and with the wrong people.

Quel dommage.

A few items in the news caught my eye recently.

In the January 11 issue of Mark Brown’s Industry News Update there is a reprint of a WSJ article titled, Perhaps a Red, 4100 B.C. Here’s the story lead:

Scientists have discovered the world’s oldest known winery, secreted amid dozens of prehistoric graves in a cavern in Armenia…

Outside a mountain village still known for its wine-making skill, archaeologists unearthed a large vat set in a platform for treading grapes, along with the well-preserved remains of crushed grapes, seeds and vine leaves, dating to about 6,100 years ago—a thousand years older than other comparable finds.

The article ends by providing a “prehistory” of wine and indicates archaeologists have found traces of a fermented rice wine from a village in northern China dating back 9,000 years. Wow — alcohol use goes back 9,000 years!

But wait, there is more.

Last month the newsletter reprinted an article from the LA Times called Prohibition, online. The opening paragraph:

In most states, ordering a gun online is perfectly legal. As is ordering pornography, cigarettes and ammunition. A bottle of merlot, though, could land you in jail.

So, tell me, where do Neanderthals come from? 

Two different worlds, right?

Maybe not.

Like most people I’m on the Internet constantly — learning, exploring, researching, being entertained, buying stuff and on and on. More often than not, I get to a website and wonder, “What the hell were they thinking when they put this up? Why is it so hard to move around and find what I want?”

It’s fairly obvious that the problem lies in the “manufacturing” of some websites. They are either over designed or put up on the fly with low cost as the driving force. That’s part of the reason.

I think a more important factor is that the webmasters or designers are thinking of the “product” or what it takes to make it happen and don’t consider the user or the “consumer.”

They’re thinking manufacturing not marketing.

I once paid a visit to one of our main plants and spent a day or two explaining what marketing was up to and why our needs can sometimes be difficult to execute. At the same time, I wanted to learn how the products were made and “walk in the shoes” of the manufacturing people.

At lunch one day I got into a conversation with the plant manager. “You know, if you got rid of the embossed seven with the crown on top (Seagram’s 7 bottle), we could produce a hell of a lot more per day. Those things on the back sometimes knock up against each other, break and we have to stop the line to clean up.”

I pointed out that the brand was falling badly and the last thing we wanted was to mess with the heritage, identity and packaging. He explained that his mission was to provide the best quality product while keeping the cost of goods in line.

We got to understand each other’s agenda and from that day on, we worked in partnership matching consumer expectations with manufacturing excellence.

Above all, he was a consumer himself and understood brand equity from an end user’s standpoint. The same is true for many web designers. But, I believe there are also many who probably never visit the site they create after it’s up.

Maybe it’s just the ones I go to.

After reading all sorts of predictions for the upcoming year, I’ve decided to add my own.

However, I should alert you a few things. First, while this blog has a diverse audience, these predictions are distinctly spirits and wine industry oriented. My ‘editor’ thinks they’re a bit too insider. But, it’s call Booze Business…duh.

Second, please be aware of the fact that any similarity between these forecasts and the likelihood of occurrence is, well, unlikely.

Without further ado, here are my tongue-in-cheek predictions for 2011.

Companies

In a complete reversal of expectations, Fortune Brands will become the majority stockholder in Diageo and the expected owner by 2012. “Hey, we’re one of the only American owned spirits companies left,” a Fortune senior executive will say, “…and the groundswell of patriotic fervor helped us raise the funds.”

Wholesalers/distributors

McLane Company (whose parent company is owned by Warren Buffett) will finish 2011 by buying nearly all spirits and wine wholesalers except for Southern Wine and Spirits.

Meanwhile, in a related action, Southern will announce that it is vacating the distributor tier and will become a spirits and wine supplier. Someone with the company will say, “What the hell, we’re the ones who build the brands anyhow… it’s time we started making the stuff.”

Products

The blended scotch market will start to grow dramatically led by Haig, Cutty Sark, Old Smuggler and Black & White. The Scotch Whisky Association will declare a drought of inventories and prices will soar. As a result, consumers will leave scotch by year’s end.

Next year will indeed be the year of brown goods, as sales of blended American whisky will increase, led by interest among millennial drinkers. Brands like Philadelphia, Carstairs and the venerable Seagram’s 7 will lead the growth. Some entry-level consumers will remark, “If it was good enough for my great granddad, it’s good enough for me.”

The maker’s of 4 Loco will reformulate the product replacing the energy drink component with a Viagra-like ingredient. Their advertising will include the statement, “We make no claims about sexual prowess but do suggest that it’s the best 4 hours you’ll ever have.”

Also in the new products area, trying to capture a large share of the aging baby boomer market, the makers of Metamucil fiber products will license their name and ingredients for a liqueur. A spokesperson will explain, “While everyone concentrates on the youth market, we’re looking at the other end of drinkers.” The brand will bring a new meaning to the phrase, the morning after.

Privatization

In a startling development, all the control states looking at privatization will decide to keep the status quo and remain state run. They will explain that control states are the only way for small brands to survive. Not to mention the financial well being of their employees.

Retailers

Big box store chains will reverse course and stop selling major brands at extremely low prices. They will say, “We’re less interested in deep discounts and more interested in building brands and making sure that the independent stores are able to compete.”  Executives in charge will be committed.

Seagram

The former Seagram owner will sell his shares in a music company to invest in a new spirits product that consumers will love, will generate huge profit margins and will revolutionize the spirits business beyond imagination. Unfortunately, none of the distributors will handle the brand.