A Booze Business Fairy Tale

Once upon a time in the land of Makaplan, the ruling Prince was having some problems. Business was not good and the people were not happy.

“How will we manage to increase our wealth if our sales are not growing? If you can’t do it, then we will find someone who will move our goods and at a more profitable rate,” they exclaimed.

The Prince was worried and turned to the King for help. Alas, the King, who was from another land, had no idea how to increase the wealth of Makaplan. “What do you think?” asked the King.

“Well, I could do what we always did in my previous kingdom when I was just a Duke,” said the Prince. “What is that?” the King asked.

“First, we will tell everyone that the cost of our products will go up soon,” said the prince.

“How will that help?”

“Don’t you see, they will buy more at lower prices than they will soon pay,” said the prince. “Our sales will go up.”

“What about the year after” asked the King?

“Well… in my previous Kingdom, we also put new things up for sale. That brought us more business; people are always looking for new shiny things” said the Prince.

“Are you sure that both these things will increase the wealth and keep people happy?”

“Absolutely” said the Prince.

He also thought to himself… “If that doesn’t work, next year, I will be the King.”

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Organic Booze

I just got back from a trip to LA and my head is spinning with matters having to do with green in general and organic in particular.

I saw the following on a brochure for the Santa Monica aquarium:

“Printed on 100% recycled content, 100% post-consumer waste, processed chlorine free paper using soy-based inks.”

Once I got past the ‘post-consumer waste’ part, I thought, did they expect people to read or eat the brochure? But, these are important matters and we need to pay attention to what is becoming the “green” lifestyle. Including the alcohol industry.

The June issue of Cheers has a cover story on organic drinking. The following tidbit of information caught my eye.

According to the Greenfield, Ma.-based Organic Trade Association, sales of organic beer, wine and spirits were up last year. Organic beer sales totaled $41 million in 2009, up 11.7 percent from 2008; organic wine sales equaled $161 million, up 7.5 percent; and spirits were up 16 percent with $7 million in sales.

A drop in the bucket, sure, but there is a market for organic alcohol products especially in wine. In spirits, it’s the vodka category that leads the way with dozens of entries although Chatham Imports (Crop Organic Vodka) recently introduced Farmer’s Botanical Gin. In tequila, more and more organic products are entering the market.

The gist of the article seems to indicate that the organic trend in alcohol is here to stay.

A consumer friend who is not in the industry can best sum up my view:

“If organic means smoother, purer, better tasting, I’m all for it. But to tell you the truth, when I’m having a drink, I’m not thinking about hugging trees.”

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Control States

Have you been following the press about privatization of some Control States?

In case you haven’t, Wine and Spirits Daily (June 7th edition) has a great score card on what’s been happening.

NABCA has issued a resolution in support of Control States. No surprise but people I’ve talked with have wondered why they didn’t do this some time ago. WSD reports that 4 states (NC, PA, WA and VA) are looking closely at privatization. So the debate must be getting serious.

I’m not sure I know how I feel about privatization.

Those who want to keep government involvement argue about jobs and the need for industry regulation or control in their jurisdiction. But the NABCA resolution states, “there is irrefutable proof that alcohol control systems have a positive public health and safety impact on their communities.” Does this mean that the 32 open states are not doing a good job in protecting health and safety? Or, that the industry, unless governed by state officials, will behave badly?

Follow the money. As WSD points out, in tough economic times, states will look to a range of resources to increase revenue including taxes, fees and privatization.

Hey, look at California – on the ballot this November is a voter initiative to legalize marijuana. The tax revenue from sales is seen as a way to help the state’s budget difficulties.

Interesting that the economic climate has created change in government’s involvement in the social climate. But I guess it’s always been that way.

Here’s a thought if you’re working in a state store that gets privatized – think about moving to California.

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