Like clockwork, industry experts are charting the year’s big trends, predicting potential changes throughout the wine, beer and spirits world. Here are some trends worth noting.
Bloomberg critic Elin McCoy sees a bright year ahead for wine, despite strength in competing segments such as craft beer and craft cider. She also sees these coming trends:
1) Continued impact of climate change
2) New technologies such as smartphone price-checking apps
3) Global appreciation for English sparkling wines
4) Natural wines go mainstream
5) Cabernet Franc as this year’s hot trending variety
6) Barolo and Barbaresco will heat up auctions
7) Super-expensive luxury wine tours are coming
8) More and better wine by the glass programs, thanks to Coravin
9) Wine trucks alongside food trucks
10) And still more celebrity wine labels
Trouble In Somm-land?
Levi Dalton, host of podcast I’ll Drink to That and Eater’s wine editor, lays out a number of reasons that the importance and influence of New York City somms may soon decline. Among them, no tipping policies; easy-drinking wines such as Prosecco and dry rosés that need no special expertise; a lack of transparency when somms promote their own and their friends’ wines; the growth in direct-to-consumer sales; the rise in online wine forums and apps; and more competition for a limited number of jobs with stagnant wages. Dalton’s conclusion?
“The real issue for sommeliers is that journalists are more naturally suited to finding and spreading the news about what is new. Sommeliers speak to a limited set of people each shift. Journalist audiences are multiples of that size. And journalists have more opportunities to travel and make new discoveries than sommeliers who have to work the floor each night. The old hierarchy of writers dictating to sommeliers what they should be interested in has returned, this time focused on the new. And sommelier autonomy has diminished as a result.”
Four Seismic Changes Impacting the Beer Industry
On Business Insider, Kate Taylor writes that “the beer industry is changing—and it’s going to impact what you’re sipping on in the new year.” The four top trends she sees are:
1) The rise of gluten-free beers, from specialists such as Burning Brothers and Ghostfish Brewing.
2) Craft beers going mainstream. At year’s end there were 4144 breweries in the U.S., breaking a record set in 1873.
3) A new focus on hard sodas, especially root beers, and sweet beers.
4) Do-it-yourself home brewing. There are an estimated 1.2 million home brewers in the U.S. and more on the way. “In 2016,” Taylor concludes, “many beer drinkers will be building the future of beer all by themselves.”
Other Headlines: Hundreds of Bottles of DRC Stolen
Decanter reports that 31 cases of Domaine de la Romanée-Conti wines have disappeared at Le Havre port in northern France. They were due to be shipped to Canada. The missing bottles are mostly DRC Echezeaux and Romanée-Conti from the 2012 vintage. The latter wine sells for many thousands of dollars a bottle—if you can find it.
Last month, a fine wine collector became suspicious after seeing two magnums of Romanée-Conti 2012 for sale for $48,000 online. Posing as buyers, French police arrested two people in the Paris region, who put investigators on the trail of a man from Bordeaux, who previously held the two magnums in question. This man was an acquaintance of a dock worker from Le Havre, according to initial police inquiries.
Any unusual parcel of Domaine de la Romanée-Conti 2012 wines on sale may be reported to the domaine with batch numbers for authentification.
Woman With Auto-Brewery Syndrome Beats Drunk Driving Charge
Drunken-driving charges against an upstate New York woman have been dismissed based on an unusual defense: her body naturally converts carbs into alcohol. She was arrested while driving with a blood-alcohol level more than four times the legal limit. She was later found to have a rare condition called “auto-brewery syndrome,” in which her digestive system converts ordinary food into alcohol, according to her lawyer.
A town judge in the Buffalo suburb of Hamburg dismissed the drunken-driving charges last month after being presented a doctor’s research showing the woman had the previously undiagnosed condition in which high levels of yeast in her intestines fermented high-carbohydrate foods into alcohol.
The rare condition, also known as gut fermentation syndrome, was first documented in the 1970s in Japan, and both medical and legal experts in the U.S. say it is being raised more frequently in drunken-driving cases as it is becomes more known.
“At first glance, it seems like a get-out-of-jail-free card,” said Jonathan Turley, a law professor at George Washington University. “But it’s not that easy. Courts tend to be skeptical of such claims. You have to be able to document the syndrome through recognized testing.”
In the course of that testing, the attorney arranged to have two nurses and a physician’s assistant monitor his client for a day to document she drank no alcohol, and to take several blood samples for testing.
At the end of the day, she had a blood-alcohol content of .36 without drinking any alcoholic beverages. She also bought a Breathalyzer and blew into it every night for 18 days, registering around .20 every time. The legal threshold for drunkenness in New York is 0.08.
Two DWI cases where auto-brewery syndrome is being used as a defense are currently being tried in Texas and Oregon.
In the Trade
Ste. Michelle Wine Estates Tops Altria Group’s 2015 Success
On its blog, finance company Motley Fool reported that tobacco giant Altria Group’s most successful segment in 2015 was not its core tobacco products but the group’s Ste. Michelle Wine Estates , which left the rest of Altria’s business segments behind.
It’s among the top 10 producers of premium wines in the U.S. market. Through the first three quarters of the year, revenue for Ste. Michelle has jumped nearly 8%, outpacing the 5% pace of sales growth for the smokeable products segment. Pre-tax operating profit growth has been even more impressive, with Ste. Michelle producing gains of nearly 20% year over year.
Altria attributes Ste. Michelle’s growth to several factors. In its October conference call, Altria CEO Martin Barrington noted how a combination of improved sales mix of its top premium brands and increased volumes helped to boost the segment’s results. Margins for the unit have climbed by more than 2 percentage points year to date.
CFO William Gifford recently set out the wine segment’s overall strategic vision, noting how the business complements Altria’s tobacco holdings. Ste. Michelle’s goal is simply to grow income by expanding its share and distribution of the premium wines in its portfolio, and it also fits together well with the equity investment that Altria has made in beer maker SABMiller. If the planned acquisition of SABMiller by Anheuser-Busch InBev goes through, then Ste. Michelle could see even wider distribution if Altria can create a deeper partnership with Anheuser-Busch that would let the wine segment take advantage of joint channels for marketing.
Constellation Brands Shares End Year on 52-week High
Thanks to its solid brand portfolio, strategic growth initiatives, impressive earnings trend and robust financials, Constellation Brands occupies a predominant position in the premium wine and beer segment in the U.S. In second-quarter fiscal 2016, it generated nearly 45% of the total volume growth in the overall U.S. beer industry. Moreover, the company has been undertaking meaningful acquisitions and joint ventures. In a recent development, Constellation Brands agreed to acquire San Diego-based Ballast Point Brewing & Spirits. This buyout will not only widen Constellation brands’ craft beer offering, but will also enhance its footprint in the premier U.S. beer market.
The bottom line has outperformed the Zacks Consensus for four successive quarters now, with an average surprise of nearly 10%. Most recently, the company’s top and bottom lines exceeded expectations and improved year over year, thereby encouraging management to raise its outlook for the fiscal year. The encouraging results and outlook were backed by continued strength in the company’s beer business, improving trends at its wine and spirits business, and solid overall depletion trends.
Social Scene: Champagne with Wine Enthusiast’s Executive Editor
We may be on the first full week post the New Year, but who says we still can’t celebrate with Champagne? If you’re looking for your next bottle of bubbles, look no further than My Fox New York, where Executive Editor Susan Kostrzewa stopped by to highlight her favorite budget-friendly bottles. Catch the segment here >>>