Industry Matters/News | Booze Business: A Blog Dedicated to the Business of Spirits and Wine

How old is alcohol?

January 11, 2011 No Comments

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?

What does website design and spirits manufacturing have in common?

January 6, 2011 2 Comments

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.

Predictions for 2011

December 30, 2010 No Comments

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.