4dfdvf by igmhsynfgv

MARKET INTELLIGENCE ON SPIRITS, WINE AND BEER

NOVEMBER 2017

THE EXPLOSIVE GROWTH OF

TOTAL WINE & MORE

THE NATION’S TOP INDEPENDENT RETAIL PLAYER HAS SEEN ITS REVENUES MORE THAN TRIPLE IN THIS DECADE

199

1 199

5 20

201

PLUS

CANADIAN WHISKY BARREL-AGED BEERS SESSION COCKTAILS CAVA’S FUTURE

201

58 26

mw MARKET WATCH November 2017

Features 26 Cover Story: Total Wine & More The largest independent beverage alcohol retailer in the nation continues to accelerate.

34 2017 LEADERS Banquet

MARKET WATCH’s annual awards dinner honored the leading forces in the drinks industry.

58 Cohn Restaurant Group A long-running family business has helped redefine San Diego’s on-premise scene. On the cover: Total Wine & More revenue chart Illustration by Mirza Basic/Dreamstime

82 Heisler Hospitality Group The Chicago-based company develops distinct and authentic venues.

86 Nonino PHOTOS BY (TOP LEFT) AUDA & CAUDAYRE PHOTOGRAPHY; (TOP RIGHT) SCOTT SUCHMAN; (BOTTOM LEFT) JONATHAN LOCKWOOD SMITH

Artisanal values and high-quality flavor are the hallmark of this historic grappa producer.

mw MARKET WATCH November 2017

Drinks Features 46 Canadian Whisky With brown spirits seemingly unstoppable, the category awaits its breakout moment.

52 Cava Spainâ&#x20AC;&#x2122;s native sparkling wine is gaining ground amid the bubbly boom.

62 Sour Beers A range of tart and acidic craft brews offer variety for curious consumers.

68 Wine Files: Spain Consumers explore Spanish wine regions and styles as premiumization takes hold.

74 Mixology: Session Cocktails Low-alcohol drinks get high marks on bar menus nationwide.

78 Barrel-Aged Beers PHOTO BY (BOTTOM RIGHT) AJ TRELLA

Brewers turn to oak to impart a variety of flavors on unique beers.

91 23

mw MARKET WATCH November 2017

Departments 9

Editorial

11 Through The Glass 12 Bar & Nightclub Openings 13 Restaurant Openings 14 Events 16 New Products 21 Brand Watch 23 Shop Window Organic Wine Exchange is a one-stop source for environmentally conscious wines.

24 Tastes & Tipples 90 Bar Talk Switchel adds sweet-and-sour flavors, acid and spice to cocktails.

91 Beer Buzz Freshness has become a key factor in off-premise beer sales.

92 Wine Sense Vin Sur Vingt demystifies French wine at its five New York City locations.

93 On The Move 94 News PHOTO BY (LEFT) FRANK APOLLONIO

96 Parting Shot

EDITORIAL

Total Juggernaut

t’s quite a story. It all started back in 1991 with a single store in the town of Claymont, Delaware, which lies just north of Wilmington along the Delaware River. The store manager was David Trone, and he was also the owner. Today, David and his brother Robert sit atop a beverage alcohol retail empire whose annual revenue has reached nearly $3 billion. What’s truly remarkable is that as Total Wine continues to grow its national footprint, the pace of expansion is actually accelerating. This year, in fact, Total Wine will show the greatest growth in its entire history. In every market where it stakes a claim, Total Wine strikes fear into the hearts of smaller independent players and forces supermarkets and big box players to up their game. By stocking local products, focusing on staff and customer education, and constantly fine-tuning its web and social media components, the company leaves no stone unturned. Anticipating the changes currently being seen in the marketplace, Total Wine is also now looking to boost its capability in home delivery. Building strong local management and stressing the overall concept of teamwork at all levels of the business has been the cornerstone of Total Wine’s strategy. But at its core, the story of Total Wine & More is about two brothers who rose from modest beginnings to build a multibilliondollar business. Our cover story on the company, which begins on page 26, explains how they did it and where they plan to go from here. Elsewhere in this issue, we explore the state of play for Canadian whisky, whose renaissance is simply a matter of time. In a whisky world where the undiscovered or rediscovered attract the greatest interest, it’s logical that Canadian whisky will have its turn. Check out our feature on page 46, which covers the latest efforts by Canada’s distillers to focus on new, more upscale products. We also take a look at the wines of Spain, including the increasingly vibrant Cava category. Last but not least, check out the coverage of our annual MARKET WATCH LEADERS banquet, which was held in September. Congratulations once again to all the honorees. Enjoy the issue,

Marvin R. Shanken

NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

MARKET WATCH MARKETWATCHMAG.COM â&#x20AC;˘ VOL. 36 NO. 10 Editor and Publisher Marvin R. Shanken Editorial Director Michael D. Moaba Executive Editor David Fleming Senior Editors Adam Polonski, Susannah Skiver Barton Editorial Assistant Julia Higgins Contributing Editors Terri Allan, Kevin Barry, Amber Drea, H. Lee Murphy, Laura Pelner, Jean Deitz Sexton, Carol Ward RESEARCH Director of Research Juan Banaag Market Research Manager Natalia Razzo Market Research Analysts Callie Eidler, Daria Saenko ART & PRODUCTION Art Director John Thompson Photo Editor Casey Oto Assistant Photo Editor Karissa Maggio Director of Technology Michael Turro Imaging Associates Samantha Saffer, Eli Halpern Pre-press Coordinator David Boulanger Pre-press Assistant Eric Cheung Vice President Production Kevin Mulligan Associate Art Directors Lisa Aurigemma, Todd Miller Designers Henry Eng, Diana Witkowski Promotions Designer Lisa George I.T. Manager Enrique Velez Director of Digital Media James LaPorte ADVERTISING Advertising Director Stephen Senatore Advertising Services/Production Jenny Jaikaran, Christina Chiaffitella Vice President Custom Media Don Gatterdam East Coast Advertising Headquarters Telephone: (212) 684-4224 Fax: (212) 779-3334 CIRCULATION Circulation Director Phylicia Bedoya Assistant Circulation Manager Tina Ratwani For subscription questions, visit questions.marketwatchmagazine.com or email customerservice@marketwatchmagazine.com.

M. Shanken Communications, Inc. Chairman Marvin R. Shanken Vice Chairman Michael D. Moaba Senior Advisor to the Chairman Mel Mannion Senior VP Administration and Advertising Sales & Services Constance McGilvray Senior VP Event Marketing Lynn Rittenband Vice President Advertising Miriam Morgenstern Senior Vice President Circulation Laura Zandi Chief Financial Officer Steven Gordon Vice President Business Development Jessica Shanken Assistant to the Chairman Sheena Dellanzo

THROUGH THE GLASS

Port Ellen, Brora and Rosebank To Reopen…. Three famous and long-shuttered Scotch distilleries are set to reopen. Diageo will invest £35 million ($46.1 million) to reopen Islay’s Port Ellen and Sutherland-based Brora, which have both been closed since 1983. The two distilleries are slated to restart production by 2020, with an estimated capacity of 800,000 liters each annually. Both distilleries will also feature cask filling and traditional warehousing on site, as well as tourism amenities. In addition, Ian Macleod Distillers will reopen Rosebank Distillery after acquiring the trademark from Diageo and agreeing to acquire the former distillery site from Scottish Canals. The project—which includes a visitor center, along with production and warehousing—will cost £10 to £12 million ($13.2 to $15.9 million). Construction is projected to take about two years, with a goal to begin distil-

lation by 2019. Ian Macleod has also acquired all of Diageo’s remaining stocks of Rosebank whisky. Single malt continues to outpace the overall Scotch category in the U.S., with sales up 4 percent to nearly 1.6 million nine-liter cases last year, according to Impact Databank. Amazon Wine To End…. Following its acquisition of Whole Foods for $13.7 billion earlier this year, Amazon has announced plans to shutter its Amazon Wine platform at the end of the year. The company will continue to offer wine through its Amazon Fresh and Prime Now programs, as well as at Whole Foods. Launched in November 2012, Amazon Wine allows wineries to list their wares on the mega-retailer’s online platform for a fee and then ship wines directly to consumers themselves. Industry observers noted that because it accepted

fees from suppliers, Amazon Wine may have come into conflict with tiedhouse laws once Amazon held retail wine licenses through Whole Foods. Originally announced in June, the Whole Foods deal has allowed Amazon to markedly expand its brickand-mortar presence. The acquisition will allow Amazon to rapidly scale up its participation in both groceries and beverage alcohol, and may enable the company to make a major play in the food and beverage delivery business. Stoli Group USA Adds Loch Lomond….Stoli Group USA has struck a deal to handle the portfolio of Scotland’s Loch Lomond Group in the U.S. market, effective January 1st. The agreement marks Stoli’s entry into the single malt Scotch whisky category. Loch Lomond’s namesake Highland single malt ($26 to $100 a 750-ml.) range

includes Original, 12-year-old and 18-year-old. Stoli chief marketing officer Brian Cox says the Loch Lomond brand can become an effective entryway into single malt for newer consumers. The portfolio also includes Glen Scotia single malt, one of only three remaining distilleries from Campbeltown. Stoli aims to market Glen Scotia as “the Victorian malt,” harkening back to an era when Campbeltown had dozens of distilleries. The portfolio will be available nationally, but Stoli intends to focus on the off-premise in 15 key markets, including New York, California, Florida, Texas, Illinois, New Jersey and Pennsylvania. Loch Lomond is currently under 10,000 cases in the U.S. The Stoli Group portfolio includes the flagship 1.7-million-case vodka brand, as well as Bayou rum, Kentucky Owl Bourbon and the forthmw coming Cenote Tequila. The Editors

PHOTO BY STUART PALLEY VIA ZUMA WIRE

California Plans Recovery After Devastating Wildfires Two weeks after multiple major wildfires began raging in Northern California’s wine country, firefighters contained the last of the blazes, the deadliest in the state’s modern history. A report by rating agency Moody’s projects that the wildfires, which caused 42 deaths, destroyed nearly 8,000 buildings and burnt more than 210,000 acres, will cost California at least $4.6 billion. A number of wineries in Napa County were destroyed or severely damaged, including Signorello Vineyard, Sill Family Vineyards, VinRoc, Segassia Vineyard, Roy Estate, Patland Vineyard and White Rock Vineyards. Heron Vineyard and Winery and Stagecoach Vineyard sustained minor damages. Meanwhile, wildfires in Sonoma destroyed Paradise Ridge Winery, and damaged Gundlach Bundschu Massive wildfires, which recently roared throughout Northern and Chateau St. Jean, among others. Mendocino County’s California’s wine country, severely damaged a number of Frey Vineyards, Oster Wine Cellars and Backbone Vineyard wineries in Napa, Sonoma and Mendocino counties. & Winery were also leveled by fire. In a show of solidarity, a number of companies—including Trinchero Family Estates, Treasury Wine Estates, E. & J. Gallo and Southern Glazer’s— have donated to relief efforts. Despite all the bad news, California vintners have resolved to look forward. But the fires’ aftermath will affect the wine industry in many ways, some subtle and some obvious, for years to come.

NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

BAR & NIGHTCLUB OPENINGS

Craft Beer And Sake Shine At California Taproom Paying homage to their educational pursuits and cultural backgrounds, husband-andwife team Jake Freed and Hiroko Nakamura unveiled The Periodic Table in September in Emeryville, California’s Public Market. The duo, who both have doctorates in chemistry, aim to make the space a destination for beer and sake lovers, pouring a variety of Bay Area craft brews and offering nearly 30 sake labels, as well as shochubased cocktails and Japanese whiskies. The draft program includes labels from Southern

Dallas Welcomes Stellar Cocktail Bar Featuring a flair for dramatic cocktails, Bar Stellar opened in Dallas’ Knox-Henderson neighborhood in September. The venue, launched by 21-year-old entrepreneurial college student Francois Reihani, offers nearly 20 signature drinks ($12), ranging from classics to large-format creations

Within Emeryville, California’s Public Market, The Periodic Table offers a wide variety of beer, sake, shochu and Japanese whisky labels, as well as a handful of Japanese small plates.

California producers like Gilman Brewing Co. and Faction Brewing ($6.50 to $9.50 a draft pour), joined by a handful of packaged Japanese imports ($7 to $8.50 a can or bottle), including Yo-Ho Brewing’s Yona ale and Kiuchi Brewery’s Hitachino Red Rice Belgian Strong pale ale. The Periodic Table’s sake menu ranges from Bushido Ginjo Genshu to Kenbishi Mizuho junmai (from $6 to $56 a bottle) and is complemented by a handful of shochus ($6 to $10 a 2-ounce pour) and Japanese whiskies ($8 to $18 a 1½-ounce pour). The venue also offers a limited menu of Japanese-inspired small plates ($4 to $13), including a pastry filled with miso pork chashu and Nagoya-style fried sesame pepper chicken wings.

styled for social media sharing. Highlights include the Wildfire, made with Maker’s Mark 46 Bourbon and Angostura bitters poured over a sugar cube and Maraschino cherries into a smoked glass, and the Cloud Nine, blending Chopin vodka, lemon juice and blueberries, served over dry ice and garnished with cotton candy. Bar Stellar also offers imported and craft beers ($4 to $6 a bottle) and approachable wines ($7 to $13 a glass; $28 to $68 a 750-ml.), along with upscale bar fare like truffle fries, ceviche and lobster mw mac and cheese ($5 to $32). —Laura Pelner

NYC Lounge Aims To Amuse….D.C. Bar Goes All Day….L.A. Brewers Open Pub…. Y Operated by Marriott Hotels, the Moxy Times Square hotel opened in September in Manhattan with a slew of venues operated by Tao Group. The property’s nightlife standout, Magic Hour Rooftop Bar & Lounge, evokes an urban amusement park. At 10,000 square feet, the venue houses a mini golf course and carousel seating, with high-end fair food and decadent cocktails. Y The Darcy Hotel in Washington, D.C., unveiled the coffee bar and cocktail den Lil’ B Coffee & Eatery in September. The venue serves breakfast and lunch, transitioning later in the day into a drinks space that highlights innovative cocktails, Virginia wines, craft beers and mead. 12

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

Y A group of Southern California brewers-turned-businesspeople have created the Artisanal Brewers Collective, opening their first venue, The Stalking Horse, in September. The pub serves house-made beers alongside labels from local producers and whiskies. Y The Asian-American Piggyback Bar opened in September in Jersey City, New Jersey. The tavern emphasizes Asian-inspired cocktails and offers 12 beers on tap and 12 wines by the glass, as well as Asian-influenced bar fare, including disco fries topped with mw pho gravy and a kimchi pulled pork sandwich. —L.P.

PHOTO BY (LEFT) ERIC RORER

Dallas–based Bar Stellar serves creative cocktails in a social media–friendly space.

RESTAURANT OPENINGS Chicago Chef Debuts Upscale American Eatery Chef Lee Wolen, in partnership with Windy City restaurant company Boka Restaurant Group, opened his second concept, Somerset, in September in Chicago’s Gold Coast neighborhood. The American restaurant highlights familiar flavors and dishes prepared with seasonal, locally sourced ingredients. Somerset’s dinner menu includes starters like dry-aged beef tartare and charred broccoli ($11 to $18), while larger entrées range from duck leg gnocchetti pasta to seared halibut to grilled beef short ribs ($14 to $55). The

Global Fare Grows Roots In L.A.’s Koreatown Serving seasonal and global cuisine and inventive cocktails, Sapor Restaurant & Bar opened in September in Los Angeles’ vibrant Koreatown neighborhood. The menu offers tapas and larger dishes, ranging from broccoli topped with tomato marmalade, ricotta and a fried egg to a

Sapor serves globally inspired seasonal cuisine in Los Angeles’ Koreatown neighborhood.

PHOTO BY (LEFT) ANTHONY TAHLIER

The drinks program at Chicago’s Somerset features an extensive wine list and a variety of cocktails, while the food menu highlights American dishes made with locally sourced ingredients.

venue boasts an expansive wine program with roughly 200 labels ($10 to $25 a glass; $40 to $1,900 a 750-ml.), including limited-production offerings like Liquid Farm’s White Hill Chardonnay and Ritme Celler’s Etern Priorat Tinto. In addition, Somerset’s bar program spans a variety of craft beers ($6 to $14 a bottle) and classic cocktails ($13 to $16) divided into categories like Martinis, On The Rocks, Collins and Swizzles. The Pineapple Collins mixes Maestro Dobel Silver and Tequila Ocho Plata Tequilas, pineapple and lemon juices, and mineral soda, while the Scotch Cocktail comprises Glenmorangie 10-year-old and Ardbeg 10-year-old single malt Scotches, Leopold Bros. Maraschino liqueur, Vieux Pontarlier absinthe, and Tempus Fugit’s Abbott’s bitters.

grilled ribeye (entrées are $11 to $28). Sapor’s bar program is equally international in scope, boasting spirits from around the world mixed into a variety of specialty cocktails ($14 to $17), such as The Caxcan, mixing Fortaleza Añejo Tequila, Ramazzotti amaro and Fee Brothers Jerry Thomas bitters. The restaurant also has a handful of imported and domestic craft beers ($6 to $8 a bottle) and wines ($8 to $15 a glass). Sapor boasts indoor and outdoor patio seating, an open kitchen and earthy, mw elemental interior accents. —Laura Pelner

Brazil Meets Miami….L.A. Debuts Modern Mexican….Chicago Gets Riverside Dining…. Y Celebrating progressive Brazilian cuisine, Ofa opened in September in Miami Beach. The restaurant serves seasonal meats, chicken and fish combined with greens and grains, as well as caipirinhas and the classic Rabo de Galo cocktail. Ofa has an indoor dining area and bar, a lush patio, and a garden lounge. Y The modern Mexican restaurant Tintorera opened in September in Los Angeles’ Silver Lake neighborhood, offering a refined seafood-centric menu. Along with crudo and raw plates, the venue serves roasted fish and meats and boasts a wine list that includes Mexican labels and a bar program highlighting mezcal, Tequila and other agave distillates.

Y Located in a new 54-story skyscraper along the Chicago River in The Loop, Porter Kitchen & Deck serves classic American fare in an upscale yet approachable setting. The venue, managed by Four Corners Tavern Group, serves sandwiches and larger entrées, along with classic cocktails and draft beers. Y Korean restaurant Gayeon opened in September in Fort Lee, New Jersey, offering an authentic Korean dining experience and an extensive selection of Japanese whiskies, sake, soju and shochu. The venue boasts a seven-course tasting menu for dinner and mw features tableside grills. —L.P. NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

EVENTS

AS PICTURED: 1. Union Square Hospitality Group CEO Danny Meyer participated in the Chef ’s Challenge at Wine Spectator’s New York Wine Experience on October 21st at the Marriot Marquis in New York City.

3 4

5. Actor JB Smoove was named Crown Royal’s King of Flavor on October 12th at New York City’s Shop Studio.

2. Actor Ted Danson made a surprise appearance at the Smirnoff production facility in Plainfield, Illinois, on October 4th.

6. Wines of Portugal U.S. ambassador Eugenio Jardim poured wine at a Wines of Portugal showcase held in New York City’s Metropolitan Pavilion on October 12th.

3. Model Alexa Chung sipped on Grey Goose cocktails with writer Brandon Borror-Chappell at a pop-up in the Amastan Paris during Paris Fashion Week on September 29th. 4. Thomas Waugh, bartender and director of bar operations at Major Food Group’s The Pool Lounge in New York City, celebrated the space’s debut at a cocktail party on October 23rd.

7. M.S. Walker general manager of New York and New Jersey Jeff Allen, Cape Classics executive vice president Molly Choi and M.S. Walker senior vice president Doug Shaw joined forces on October 9th for a fundraiser at New York City’s Eleven Madison Park. mw Julia Higgins

5 7

PHOTOS BY (1) SHANNON STURGIS PHOTOGRAPHY; (2) GETTY IMAGES; (3) BFA; (5) LAUREN VOLO; (7) HAL CAMPBELL

NEW PRODUCTS

Little Book “The Easy” Beam Suntory has introduced the first whiskey from Freddie Noe, son of current Jim Beam master distiller Fred Noe and grandson of legendary distiller Booker Noe. Little Book ($80 a 750-ml.) is a blend of 4-year-old Kentucky straight Bourbon, 13-year-old corn whiskey, 5-year-old malt whiskey and 5-year-old rye. Bottled at barrel strength, the 64.1-percent abv unfiltered whiskey is available nationwide and will be released in new batches each year. For more information, visit Beamsuntory.com.

the whiskey. The 45.2-percent abv spirit is available nationwide. For more information, visit Woodfordreserve.com.

Highland Park Full Volume Edrington Americas launched a new single malt Scotch whisky from its Highland Park distillery this fall. Highland Park Full Volume (around $100 a 750-ml.) was distilled in 1999 and aged entirely in ex-Bourbon casks. The 47.2-percent abv whisky, which is available nationwide, has packaging that evokes rock music. For more information, visit Highlandparkwhisky.com.

Hornitos Cristalino Tequila Beam Suntory also expanded its Hornitos Tequila brand this fall. Hornitos Cristalino Tequila ($29.99 a 750-ml.) is a 100-percent blue agave Tequila that’s aged for at least 12 months in white oak casks, then filtered to produce a clear Tequila with a balanced and round profile. The 40-percent abv spirit is now available nationwide. For more information, visit Hornitostequila.com.

Woodford Reserve Cherry Wood Smoked Barley Brown-Forman Corp. has unveiled the latest edition of the annual Woodford Reserve Master’s Collection. The new expression, Woodford Reserve Master’s Collection Cherry Wood Smoked Barley ($99 a 750-ml.), was made using malted barley that was smoked with cherry wood, adding red fruit and subtle cherry notes to

LITTLE BOOK “THE EASY”

Diageo 2017 Special Releases Diageo North America has announced its annual Special Release Scotch whiskies lineup. The 2017 range includes Blair Athol 24-year-old ($460 a 750-ml.), Brora 34-year-old ($1,700), Caol Ila 18-year-old ($100), Convalmore 32-year-old ($1,400), Glen Elgin 18-year-old ($340), Lagavulin 12-yearold ($130), Port Dundas 52-year-old single grain ($900), Port Ellen 37-yearold ($3,500) and Teaninich 17-yearold ($310). The whiskies (abv varies) are now available in limited quantities nationwide. For more information, visit Malts.com.

Tullamore DEW Cider Cask William Grant & Sons is launching a fall seasonal from its Tullamore DEW Irish whiskey brand. Tullamore DEW Cider

WOODFORD RESERVE CHERRY WOOD SMOKED BARLEY

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

HIGHLAND PARK FULL VOLUME

Cask ($39.99 a 750-ml.) is finished in hard apple cider barrels for three months, giving the whiskey flavors of sweet apple cider and toasted oak. The 40-percent abv spirit is now available in limited quantities nationwide. For more information, visit Tullamoredew.com.

Glenfiddich Winter Storm William Grant & Sons has also unveiled the latest expression in Glenfiddich’s Experimental Series. Glenfiddich Winter Storm 21-year-old single malt Scotch whisky ($250 a 750-ml.) is a blend of aged malts that were finished for up to six months in French oak ice wine casks sourced from Canada’s Peller Estate winery. Winter Storm joins the India Pale Ale Cask Finish and Project XX labels in the brand’s Experimental Series. The 43-percent abv spirit is available in select markets. For more information, visit Glenfiddich.com.

Kimo Sabe Añejo Mezcal Martinez Brands expanded its Kimo Sabe mezcal line in September. Kimo Sabe Añejo ($54.99 a 750-ml.) is matured for 18 months in American oak casks previously used to age Kimo Sabe Reposado. The Añejo is the company’s fourth mezcal released in the U.S., following Joven, Reposado and Cinco de Noviembre, a 700-bottle luxury release. The 41.5-percent abv spirit is available in nine states. For more information, visit Kimosabemezcal.com.

GLENFIDDICH WINTER STORM

NEW PRODUCTS

Avuá Jequitibá Rosa Cachaça and Still Strength Cachaça

Speyburn 15-Year-Old Scotch Whisky

Brazil’s Avuá Cachaça has added two new entries to its U.S. portfolio. Avuá Jequitibá Rosa Cachaça ($70 a 750-ml.) and Avuá Still Strength Cachaça ($45) are both limited-edition offerings, with the former aged in Brazil’s native Jequitibá Rosa wood and the latter a 45-percent abv expression. The spirits are available in select markets. For more information, visit Avuacachaca.com.br.

375 Park Avenue Spirits has introduced a new single malt Scotch from the Speyburn distillery. Speyburn 15-year-old ($65 a 750-ml.) is matured in American and Spanish oak casks. Concurrent with the launch, Speyburn has unveiled updated packaging across its portfolio, featuring a revamped label and carton showcasing its Speyside distillery. The 46-percent abv spirit is available nationwide and will be released annually. For more information, visit Speyburn.com.

Drumshanbo Gunpowder Irish Gin Palm Bay International is adding a new Irish gin to its artisanal spirits portfolio. Drumshanbo Gunpowder Irish gin ($35 a 750-ml.) fuses spices from Asia, Africa and Europe with local botanicals and gunpowder tea—a slow-dried green tea that adds spiciness to the blend. The new offering is distilled in copper pot stills at The Shed Distillery in Drumshanbo, Ireland. The 43-percent abv spirit is now available nationwide. For more information, visit Drumshanbogunpowderirishgin.com.

George Remus Repeal Reserve Bourbon MGP Ingredients launched a new Bourbon this month. George Remus Repeal Reserve Bourbon ($75 a 750-ml.) is a blend of Bourbon distilled in 2005 and 2006. The 47-percent abv spirit is available in nine states. For more information, visit Georgeremus.com.

NEW! Unrivaled Quality

Crystal Head Aurora Vodka Crystal Head Vodka has introduced a permanent addition to its portfolio. Made with English wheat and Canadian water, Aurora ($60 a 750-ml.) was distilled five times, then filtered three times with activated charcoal and three times over 10,000 Herkimer diamonds. The vodka’s iridescent skull-shaped packaging was inspired by the Northern Lights. The 40-percent abv spirit is available in select markets. For more information, visit Crystalheadvodka.com.

Old Potrero Hotaling’s 11-Year-Old Rye Whiskey Anchor Distilling has launched a new whiskey from its Old Potrero brand. The limited-edition Hotaling’s 11-year-old whiskey ($115 a 750-ml.) is a single malt rye whiskey aged in once-used, charred, fine-grain American oak barrels. The

F A M I L Y

AVUÁ JEQUITIBÁ ROSA CACHAÇA

DRUMSHANBO GUNPOWDER IRISH GIN

O W N E D

Four G enerations of American Winemaking SPEYBURN 15-YEAR-OLD

– S I N C E

1 9 4 3 –

NEW PRODUCTS

50-percent abv spirit is available in Texas, California, Illinois, Massachusetts and New Jersey. In addition, Anchor launched two limited-edition Old Potreros (both $100), finished respectively in Port and stout barrels, available exclusively in California. For more information, visit Anchordistilling.com.

Hochstadter’s Slow & Low Rock & Rye 6-Year-Old The Cooper Spirits Co. has expanded its Hochstadter’s range with a new limitededition release. Hochstadter’s Slow & Low Rock & Rye 6-year-old ($39.99 a 750-ml.) is a blend of 6-year-old straight rye whiskey, air-dried Florida navel oranges, Pennsylvania-sourced raw honey, Angostura bitters and rock candy. The 50-percent abv blend was aged for six years prior to bottling, and is now available nationwide. For more information, visit Drinkslowandlow.com.

Eau Claire Parlour Gin and Prickly Pear Equine Ox Alberta, Canada’s Eau Claire Distillery has introduced two new spirits through U.S. importer Park Street. Parlour gin ($48 a 750-ml.) is a London dry gin, and Prickly Pear Equine Ox ($48) is a barley-based, prickly pear cactus–infused spirit. Eau Claire’s products are made with ingredients sourced from local farms. The 40-percent abv spirits are available in select markets. For more information, visit Eauclairedistillery.ca.

HOCHSTADTER’S SLOW & LOW ROCK & RYE 6-YEAR OLD

Great Women Spirits The Family Coppola has introduced Great Women Spirits, a new collection inspired by famous women who were pioneers in the fields of politics, science, mathematics and philosophy. The small-batch, house-crafted line includes The Countess Maria Walewska vodka ($39 a 750-ml.), distilled from Polish potatoes; Maria Gaetana Agnesi American brandy ($59), a 5-year-old spirit created in collaboration with American Brandy Distillers; and Ada Lovelace gin ($39), an English-style expression made with 10 different botanicals. All three 40-percent abv spirits are available in select markets. For more information, visit Thefamilycoppola.com.

Novo Fogo Colibri Cachaça Novo Fogo has released a new cachaça expression. Colibri ($34.99 a 750-ml.) was aged in both repurposed oak and Brazilian teak barrels. The 42-percent abv spirit is available nationwide in limited quantities. For more information, visit Novofogo.com.

West Cork Glengarriff Peat Charred Cask and Glengarriff Bog Oak Charred Cask Ireland’s West Cork Distillers, imported by M.S. Walker, has introduced two limitededition Irish whiskies under its Glengarriff Collection series. Glengarriff Peat Charred Cask and Glengarriff Bog Oak Charred Cask (both $44.99 a 750-ml.) are both single malt whiskies aged in Sherry casks

EAU CLAIRE DISTILLERY PRICKLY PEAR

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

and finished for six months in barrels charred using fuel sources from southern Ireland’s Glengarriff Forest. For more information, visit Westcorkdistillers.com.

Union Horse Rolling Standard Midwestern Four-Grain Whiskey Kansas-based Union Horse Distilling Co. introduced the first release in its new Distiller Series this fall. Rolling Standard Midwestern Four-Grain whiskey (around $33 a 750-ml.) is distilled from barley, wheat, corn and rye. The 46-percent abv whiskey is available in 10 states. For more information, visit Unionhorse.com.

Chandon Winter Collection Moët Hennessy USA is debuting a new Winter Collection of sparkling wines under its Chandon California brand. Available through December, Chandon’s winter offerings will include Brut and Rosé sparklers ($24 a 750-ml.) packaged in holographic-foil bottles created by fashion designer and brand ambassador Rebecca Minkoff. The wine is available nationwide. For more information, visit Chandon.com.

90+ Cellars Lot 150 Cabernet Sauvignon Boston-based Latitude Beverage is introducing a new wine in its 90+ Cellars lineup. 90+ Cellars Lot 150 Cabernet Sauvignon ($40 a 750-ml.) is sourced from Napa Valley’s Spring Mountain District and is predominantly Cabernet

WEST CORK GLENGARRIFF BOG OAK CHARRED CASK

ROLLING STANDARD MIDWESTERN FOUR-GRAIN

NEW PRODUCTS Sauvignon, along with some Cabernet Franc, Merlot and Petit Verdot. It was aged for 22 months in French oak. The wine is available in 15 states. For more information, visit Ninetypluscellars.com.

Iron Side Cellars Reserve Pinot Noir Latitude Beverage is also rolling out a new wine from its Iron Side Cellars brand. Iron Side Reserve Pinot Noir ($25 a 750-ml.) is sourced from Monterey in California and joins the brand’s existing Reserve Red expression ($30). Both wines are available in 15 states. For more information, visit Ironsidecellars.com.

Giuliana Prosecco Terlato Wine Group has partnered with entertainment personality Giuliana Rancic and her husband Bill Rancic to launch a new sparkling wine. Giuliana Prosecco DOC ($14.99 a 750-ml.) is made from 100-percent Glera grapes, which are cold-macerated and fermented in stainless steel for a month prior to bottling. The wine is available in 15 markets, with a nationwide launch expected in January. For more information, visit Terlatowines.com.

Petite Sirène Bordeaux Cabernet Sauvignon-Merlot and Sauvignon-Sémillon Blends New York City–based importer Cape Classics has partnered with Bordeaux

GIULIANA PROSECCO

third growth Château Giscours to bring a pair of new wines to the United States. The 2015 Petite Sirène Bordeaux Cabernet Sauvignon-Merlot and 2016 Petite Sirène Bordeaux Sauvignon-Sémillon (both $19.99 a 750-ml.) are both now available nationwide. For more information, visit Chateau-giscours.com.

Wapisa Sauvignon Blanc Vino del Sol has introduced a new wine from Argentina’s Tapiz family of wineries. Wapisa Sauvignon Blanc ($14.99 a 750-ml.) is the first offering from the company’s new winery in the Patagonia region. The wine is available nationwide. The winery will release additional varietals including Malbec, Pinot Noir and Cabernet Sauvignon in 2018. For more information, visit Vinodelsol.com.

Stave & Steel Cabernet Sauvignon The Wine Group also launched a new brand this fall. Stave & Steel Cabernet Sauvignon ($21 a 750-ml.) is made with Paso Robles grapes and was aged for four months in toasted, charred and Kentucky Bourbon–soaked American oak barrels. The wine is available nationwide. For more information, visit Staveandsteel.com.

Backpack Rowdy Red Backpack Wine Co. expanded its canned wine range in October. Backpack Rowdy Red ($19.99 a four-pack of 250-ml. cans) is a red blend made from Washington-sourced Merlot and Syrah grapes. The wine is now available in 18 markets. For more information, visit Backpack-wine.com.

Mionetto Cuvée Anniversario Concannon Clone 7 Cabernet Sauvignon The Wine Group’s Concannon Vineyard has unveiled a new limited offering. Sourced from the Chalk Hill AVA in Sonoma County, Concannon Clone 7 Cabernet Sauvignon ($90 a 750-ml.) is 100-percent Cabernet Sauvignon, grown from clippings of Concannon’s famous Clone 7 Cab variety. The new bottling spent 22 months in French and American oak and is available in select markets. For more information, visit Concannonvineyard.com.

PETITE SIRÈNE BORDEAUX

Mionetto USA is launching a new special release within its Luxury Collection. Mionetto Cuvée Anniversario Valdobbiadene Prosecco Superiore DOCG Millesimato Brut Nature ($25 a 750-ml.) is a hand-harvested expression celebrating the company’s 130th anniversary. The wine is now available nationwide. For more information, visit Mionetto.com.

Angry Orchard Pear The Boston Beer Co.’s Angry Orchard has unveiled a new fruit cider made

CONCANNON CLONE 7 CABERNET SAUVIGNON

BACKPACK ROWDY RED

NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

NEW PRODUCTS

with both pears and apples. Inspired by pear-based perry drinks popular in Europe, Angry Orchard Pear ($7.99 to $9.99 a six-pack of 12-ounce bottles) blends domestic Bartlett, D’Anjou and Bosc pears with culinary apple varietals like Gala, Fuji, Golden Delicious and Granny Smith. The 5-percent abv cider is rolling out nationwide. For more information, visit Angryorchard.com.

Guinness 200th Anniversary Export Stout Diageo’s Guinness launched a new beer to commemorate its 200th anniversary in the U.S. market. Based on a recipe from 1817, the 6-percent abv Guinness 200th Anniversary Export Stout ($8.99 a six-pack of 11.2-ounce bottles) is made with Black Patent malt and Golding hops and marks the latest entry from Guinness’s Open Gate Brewery in Dublin, which specializes in experimental and historic brews. Concurrently, Guinness has unveiled new limited edition Guinness Draught cans ($8.99 an eight-pack), which showcase Guinness ads from the 1930s and the 1950s, and has also announced the lineup for its 200 Years of Stout in America Mixed Pack. The 12-pack, which retails at $21.99, will feature Guinness Original, 200 th Anniversary Export Stout, Antwerpen Stout and Foreign Extra Stout. The beers are available nationwide for a limited time. For more information, visit Guinness.com.

GUINNESS 200TH ANNIVERSARY EXPORT STOUT

Redd’s Black Cherry Ale

Full Sail Session EZ IPA

MillerCoors has announced an expansion to its Redd’s brand of fruit-flavored beers. Launching in early 2018, Redd’s Black Cherry Ale (pricing varies by market) is the second limited-edition flavor in the Redd’s lineup. The 5-percent abv brew will be available in six-packs of 12-ounce bottles, individual 16-ounce cans and the Redd’s variety pack. For more information, visit Reddsapple.com.

Hood River, Oregon–based Full Sail Brewing Co. has extended its Session beer range. Session EZ IPA (pricing varies by market) is brewed with Equinox, Citra and Cascade hops. Unfiltered and characterized by a non-bitter taste profile and relatively low alcohol content, the 4.8-percent abv beer is available in six-packs, 12-packs and on draft year-round. For more information, visit Fullsailbrewing.com.

Dead ‘N’ Dead

Anchor Coffee Porter

Rogue Ales & Spirits has debuted a new whiskey barrel–aged beer. Dead ‘N’ Dead ($9.99 a 22-ounce bottle) is made by aging Rogue’s flagship Dead Guy ale for six months in the producer’s Dead Guy whiskey barrels prior to bottling. The 7.3-percent abv brew is available nationwide. For more information, visit Rogue.com.

Anchor Brewing Co. introduced a new winter seasonal in October. Made in collaboration with San Francisco–based Four Barrel Coffee, Anchor coffee porter ($10.99 a six-pack of 12-ounce bottles) is a rich porter with roasty malt flavors and notes of chocolate, nuts, spices and coffee. The 6.7-percent abv beer is available nationwide. For more information, visit Anchorbrewing.com.

Strongbow Artisanal Blend Heineken USA’s Strongbow cider brand has debuted the fifth flavor extension in its portfolio. Strongbow Artisanal Blend (pricing varies by market) is made from three different varieties of heirloom apples—Dabinett, Major and Harry Master’s Jersey. The 6-percent abv cider is available nationwide in 6-packs of 11.2-ounce bottles, as well as in variety 12- and 24-packs. For more information, visit Strongbow.com.

ROGUE DEAD ‘N’ DEAD

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

FULL SAIL SESSION EZ IPA

Ballast Point Fathom IPA Constellation Brands’ Ballast Point Brewing launched a new beer in October. Fathom IPA (pricing varies by market) is an approachable, easydrinking IPA intended to complement the brewery’s flagship Sculpin IPA. The 6-percent abv brew is available nationwide in six-packs of 12-ounce cans. For more information, visit mw Ballastpoint.com. Adam Polonski

ANCHOR COFFEE PORTER

BRAND WATCH

Espolòn As the super-premium Tequila category keeps heating up in the U.S. market, Campari-owned Espolòn Tequila shot up 38 percent to hit 200,000 cases last year. That represented an accelerating momentum following its 29-percent growth in 2015 and 12-percent growth in 2014, according to Impact Databank. Campari America says that the 100-percent agave brand has kept up its strong double-digit momentum this year, growing by 47 percent in control states during the first half of the year. Led by its Blanco expression (about $26 a 750-ml.), which represents 60 percent of its overall volume, Espolòn has more than doubled its U.S. business since 2013. “Espolòn’s aged expressions are also enjoying significant growth,” says Christine Moll, category marketing director for Tequila at Campari America. “The brand is squarely targeting the millennial consumer.” Campari says New York is a key market for Espolòn, followed by Texas and California. Smaller markets are also showing significant growth, driven largely by the mixology community. This spring, Espolòn rolled out a new 1.75-liter format ($50) intended to expand its footprint in the off-premise, which represents more than 70 percent of its sales. “Both the on- and off-premise channels are growing at double-digits for Espolòn,” Moll says. “We expect a larger share of total business in the on-premise channel for this year.” The brand is also benefiting from consumer initiatives like its ongoing Espolòn Black Market campaign dedicated to immersive engagement in the on-premise. Kimberly Tharel

Mionetto With growth in the Italian sparkling wine segment ongoing, Prosecco brand Mionetto is projected to approach 700,000 cases in the U.S. market this year, up from 610,000 cases in 2016, according to Impact Databank. Mionetto USA CEO Enore Ceola sees the brand reaching its goal of 1 million cases soon, given the overall health of the category and Mionetto’s expansion in the chain retail market. The brand’s recent partnership with California-based sales agent Vintage Point to target the chain channel has been paying dividends, Ceola says. “We’ve made incredible strides with Safeway-Albertsons in California,” he explains. Within the next year, Mionetto ($14 a 750-ml.) will also have national placements with CVS and Cost Plus World Market. The brand has gotten more aggressive with advertising, spending $3 million last year. Ceola expects those above-the-line efforts to pay off this holiday season. “We learned a lot about what the consumer is looking for today, so we’ll be able to invest better going forward in 2018 and 2019,” he says. While stoking growth for its namesake Prosecco remains the top priority, Mionetto USA has also branched out in other segments through its MW Imports division, which includes Champagne Alfred Gratien, Livio Felluga, Castello di Monsanto, Pertinace and Schloss Johannisberg, among others. Tuscan label Monsanto has been among the top performers lately, rising by high double-digits. Meanwhile, Friuli’s Livio Felluga is also growing by low double-digits. Shane English

Chloe The Wine Group, the third-largest wine marketer in the country, is best known for big-volume brands like Franzia and Cupcake, but the company is now carving out impressive growth at more premium price points with its celebration-themed Chloe Wine Collection. Chloe (around $17 a 750-ml.) debuted in 2014 and has since gained a strong following. After a 73-percent jump to 290,000 cases in 2016, the brand is poised to cross the 300,000-case threshold this year. Chloe’s core lineup includes a Prosecco DOC, a Valdadige DOC Pinot Grigio, a Sonoma County Chardonnay, a Central Coast Rosé, a Monterey County Pinot Noir and California North Coast Red No. 249, a red blend. Chloe recently added a single-vineyard Merlot ($18) to its range, sourced from the San Lucas Estate Vineyard in Monterey County and aged for 12 months in French and American oak barrels. “We believe that Merlot is poised for a comeback, and that Chloe can help lead the way,” notes Chloe brand manager Belinda Harcombe. Chloe’s Pinot Grigio is currently its top-selling varietal, and the brand has also benefited from the expansion of its Central Coast Rosé, which went to national distribution earlier this year. The Wine Group is also tapping higher price points with its Concannon and Imagery Estate brands. Concannon recently unveiled a limited-release Clone 7 Cabernet positioned at $90 a bottle; Imagery, meanmw while, is launching a new series of red and white blends at the $20 price point. Daniel Marsteller NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

SHOP WINDOW

Organic Wine’s Retail Pioneer Organic Wine Exchange is dedicated to telling the stories of the organic wine movement

ince establishing Organicwineexchange.com in 2013, The site’s wines are sourced from a core group of roughly proprietor Ann Arnold has curated a one-stop online 50 producers, and Arnold shares close working relationships shop for certified organic, biodynamic, sustainable, with many of them, especially those that are domestic and non-GMO, no-sulfites-added, gluten-free and vegan wines. more accessible from her California base. “My niche is so small Though only four years old, the site has deep roots: It emerged that what I do is represent wineries and their entire lines, from the closure of Long Beach, California–based Morry’s because I never know what customers want, and I’m not going of Naples, a retail wine shop established by Arnold’s family to choose what they like. I tell my customers that these are the in 1938. With the support of her family, Arnold—the third wineries I’ve researched, and that they’re all certified.” generation to helm Morry’s—shutOrganic Wine Exchange also tered the storefront in 2010 in order doubles as an education center. The to take the business online and instisite initially launched as a blog aimed tute a fresh retail mission. at teaching consumers, and retail Initially, Arnold aimed to represent sales came a couple years later. “I boutique wineries, so she researched wanted the public to understand various small-scale producers. All the why they should choose organic winemakers that jumped out at her wines, or at least what the benewere farming sustainably, organically fits were,” Arnold explains. “The or biodynamically. Her unfamiliarity industry isn’t very clear-cut right with this area of the wine business now. It’s not consumer-friendly in prompted her to explore further. She the way that it speaks about the soon discovered that there was no three different levels of organic in major platform dedicated to organic the United States, and that separawine. From there, Organic Wine tion needs to be better defined for Exchange took off. “Originally, it the consumer.” was just going to be wines made with To that end, Arnold has created organic grapes, whether certified or pages of content dedicated to such not,” says Arnold. “But I eventually topics as USDA labeling laws, honed in more on the certifications, biodiversity and environmental because at the end of the day, that’s sustainability, and the website what people trust. I felt like I needed profiles of many of the winemakers to create a safe haven for people who whose offerings are featured. The choose to go organic.” profiles offer an up-close view of Today, Organic Wine Exchange the organic winemaking process, stocks between 250 and 300 wines, thanks largely to Arnold’s talent all made from certified organic Organic Wine Exchange founder Ann Arnold for storytelling. (above with a selection of her site’s offerings) grapes and priced at $11 to $48 a curates a comprehensive online portfolio of certi“My background is in filmmak750-ml. While organic and biody- fied organic wines sourced from across the globe. ing and photography,” says Arnold, namic wines account for most of who’s currently working on a docuOrganic Wine Exchange’s SKUs, consumers are offered a mentary centered on daily activity at an organic winery. In light wide variety of options, including gluten-free, no-sulfitesof the wildfires that recently ignited across California, Arnold is added, non-GMO and vegan wines. A number of different planning a trip to northern California to film the aftermath; this wine club options are also available, ranging from three footage will be included within the documentary as well. “It’s bottles of reds a month to monthly mixed cases of red and very important to me that the consumer has a connection with white wines. Quarterly shipments are also available. As of where their product comes from, so I’m telling those stories. now, Organic Wine Exchange currently ships to 14 states, The winemakers are involved in the process from grape to glass, mw though Arnold hopes to see shipping laws for retailers and I want people to see that. I feel like I’m their voice.” loosen in the future. Julia Higgins NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

TASTES & TIPPLES

Coravin Screw Cap Consumers and industry professionals can now pour wines directly from bottles with screw cap closures. Launched in September, the new Coravin screw cap features selfsealing silicone that protects the wine for up to three months and is compatible with all Coravin models. Users simply untwist the bottle’s screw cap, quickly replace it with the Coravin cap and access the wine using any Coravin opener. Each cap can withstand 50 punctures, so it can be used several times on new bottles. The Coravin screw cap comes in two sizes to ensure proper fit on any bottle, and six-cap variety packs that contain four standard and two large caps sell for $29.95. For more information, visit Coravin.com.

The Modern Cocktail Matt Whiley, aka the Talented Mr. Fox, has written a book about innovation and flavor in mixology. “The Modern Cocktail” contains more than 60 recipes featuring gin, vodka, whiskies, rum, Tequila, Cognac, sake, wine and vermouth, as well as expert advice form the award-winning London bartender on equipment and glassware. The chapter on “The Alchemy of Flavour” breaks taste down into five types—sourness, bitterness, saltiness, sweetness and umami—and divides cocktails into two categories—long and short—followed by flavor profiles like herbaceous, smoky, floral or dry. Whiley also covers ice, garnishes, syrups, liqueurs, sodas and infusions. Published in October by Jacqui Small, the 224-page hardback retails for $35. For more information, visit Quartoknows.com.

Drinkmate Spritzer Following the success of a countertop version released two years ago, Ann Arbor, Michigan– based i-Drink Products has unveiled a portable device for carbonating beverages on the go. The Drinkmate Spritzer can add bubbles to any drink and is powered by a refillable carbon dioxide canister, so no batteries are required. The patented Fizz Infuser features two-stage pressure control, allowing for safe and easy carbonation of water, cocktails, flat soda or beer, and more. The Drinkmate Spritzer retails for around $90. Each kit includes a matte black, metallic red or pewter Spritzer, a Fizz Infuser, a BPA-free 500-ml. reusable carbonating bottle and two 3-ounce carbonator cylinders. For more information, visit Idrinkproducts.com. 24

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

Fresh Victor Mixers Belmont, California–based Nine Brands Inc. has introduced a line of chilled juice blends for mixing with spirits, wines and sparkling water. Fresh Victor products are made with non-GMO ingredients, organic agave nectar and cane sugar, and no artificial preservatives, colors or flavors. The mixers ($10 a 32-ounce bottle) are offered in five varieties: Mexican Lime & Agave, Three Citrus & Mint Leaf, Poblano Heat & Wild Lime, Pineapple & Ginger Root and Cactus Pear & Pomegranate. Each bottle makes 10 cocktails, must be stored at 32 to 38 degrees Fahrenheit and lasts for 45 days from the production date. Currently available in Northern California, the Fresh Victor blends will expand to Southern California within the next six months. For more information, visit Freshvictor.com.

OtterBox Elevation 64 Growler Known for its durable smartphone cases, Fort Collins, Colorado–based OtterBox is expanding with a new line of beverage alcohol–related products developed for the great outdoors. The Elevation 64 ($69.99) is a 64-ounce stainless steel growler that features an interior copper lining that keeps beer cold for hours; a screwon, leak-proof lid; and a sweat-resistant design. Launched this summer, the growler is also backed by a lifetime warranty. Visit Otterbox.com for more mw information. Amber Drea

RETAIL KINGS THE COUNTRY’S LARGEST INDEPENDENT WINE AND SPIRITS RETAILER, TOTAL WINE & MORE CONTINUES TO EXPAND AGGRESSIVELY WHILE MODERNIZING EXISTING STORES AND UPGRADING ITS ONLINE PRESENCE BY LAURA PELNER • PHOTOGRAPHS BY SCOTT SUCHMAN

or 25 years, Total Wine & More has been a dominant force in the world of beverage alcohol retail. The Maryland-based chain is on track to have 173 stores and annual revenue of $2.7 billion by the end of the calendar year. It has big plans for the future—and no intention of slowing down. Along with continued unit growth in existing markets, Total Wine & More is working to enter two new states—New York and Tennessee—and launch some major online initiatives, in addition to increasing its cigar business, upgrading older stores and expanding its home delivery service. In fact, 2017 has shaped up to be Total Wine’s biggest growth year ever. 26

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

“We’re continuing to expand aggressively,” says David Trone, who co-owns Total Wine & More with his brother, Robert. “This year has been our best ever in terms of number of new stores, and we’re making big advancements in the digital space. We look forward to adding new states, improving e-commerce and being a local retailer in every market.” Total Wine & More closed out 2016 with 148 stores, and the company is opening 25 new units this year, Led by co-owners Robert and David Trone (pictured opposite from left to right), Total Wine is experiencing the strongest growth in its history (McLean, Virginia, store interior above). The company expects revenue to reach $2.7 billion this year.

PHOTO BY (TK) TK

Though wine is the focal point of all Total Wine stores (McLean store wine aisle pictured left) and accounts for half of total sales, the company has recently embraced the cigar business and is betting big on it, adding walk-in humidors (right) to all new locations.

bringing its store count up to 173 by the end of 2017. Its focus aren’t afraid to fail. He notes that when the company remains on Texas, where it’s adding 13 units this year, as well revamps existing stores, it adds classroom spaces into units as on California—particularly the Bay Area, San Diego and that don’t have them, and he says Total Wine is also experthe Central Valley—where the company expects to add 12 to imenting with home delivery in markets where legal, specif14 stores over the next two years. David anticipates revenues ically Florida and California. Furthermore, he stresses that will reach $2.7 billion for 2017, and that his company will even for a large multi-state operator, maintaining a local have nearly 6,000 employees by the end of the year. image is crucial. “Our most important markets now are Texas and California, “The more local we are—working with local breweries, and that’s clearly where our expansion focus is,” David says. wineries and distilleries—the more we can appeal to millen“We see great opportunities in both of those markets, with a nials who are focused on farm-to-table freshness,” David says. growing economy in Texas and a very wine-savvy, educated “That’s important to millennials and therefore it’s important and high-income customer base in California. Our plan has to us. If we can keep that focus on creating customer satisfacalways been to continually grow the tion, and do that through hiring and company aggressively, but I don’t think training the best teammates, we’ll WE’RE GOING TO CONTINUE continue to be successful in doubling anyone envisioned we’d be approaching $3 billion in 2017.” the size of the company every five years, TO FOCUS ON CIGARS, which is what we’ve done for the past AND WE EXPECT TO SEE Growth And Change 20 years.” A HUGE SURGE ONCE One of the keys to Total Wine’s continTo stay ahead of trends, Robert says ued growth is a commitment to embracTotal Wine works hard to bring new CUBA OPENS UP. ing change at every level. The compaproducts to store shelves fast and is David Trone equally speedy in pulling them from ny fights hard to avoid complacency. shelves if they don’t sell. Wine domi“We realize the ideas we had 25 years nates, comprising roughly half of the company’s sales, with ago are no longer relevant today,” Robert says. “We have to spirits contributing about 30 percent and beer making up be a corporation that’s willing to make changes and take roughly 20 percent. David adds that a relatively new sector risks to move forward and stay ahead of the competition. We for the company is also performing well: cigars. Total Wine win on price, selection and service. The key differentiator is building walk-in humidors in all of its new properties and for us is the service and knowledge of our store personnel. We focus on having great store teams.” adding them into existing locations as stores go through David adds that Total Wine aims to foster an environment remodeling projects. David notes that Total Wine & More that promotes continuous improvement, and it actually values has already become one of the country’s top brick and mistakes so that people are challenged to take risks and mortar cigar retailers. 28

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

“Cigars are a business we can do well,” David explains. “We see the synergies for cigar smokers with spirits and single malts and have the products priced right. We’re going to continue to focus on cigars, and we expect to see a huge surge once Cuba opens up.” Total Wine & More’s typical store averages 25,000 square feet, though some units reach a footprint as large as 50,000 square feet. The stores carry 8,000 wine SKUs, 3,000 spirits SKUs and 3,000 beer SKUs, and David says their customer profile skews toward higher-income and higher-educated individuals. Robert notes that the wine and spirits businesses continue to grow, though he adds that beer sales have slowed down a bit. Total Wine’s top wine varietals are Cabernet Sauvignon and Chardonnay. Napa Valley Cabernets reign and Robert says upper-end labels are moving well. For Chardonnay, he says California, Chile, Southern France and Burgundy are top-performing regions, and he adds that beyond those varietals, rosés and wines from Italy and Spain are also showing growth.

TOTAL WINE & MORE AT A GLANCE Founded

1991 in Claymont, Delaware

Key Executives

Co-owners David and Robert Trone, CEO Adam Orvos, CFO Tom Haubenstricker, chief technology officer Michael Kirschner, executive vice president of retail operations Mark Powell

Headquarters

Bethesda, Maryland

Number of Stores

The company expects to operate 173 stores by the end of 2017.

Locations

20 states, with 2 more in the works

Annual Sales

The company projects revenues to reach $2.7 billion this year.

Sales Breakdown

Wine dominates, comprising roughly half of company sales, followed by spirits at about 30 percent and beer at around 20 percent. Though small by overall sales, cigars are a growing part of Total Wine’s retail mix.

Website

Totalwine.com

Future Plans

Total Wine & More is opening 25 stores in calendar 2017, its largest annual growth in company history, with a focus on Texas and California. The company will also enter the New York and Tennessee markets in the near future. In addition, Total Wine is planning digital and online enhancements, led by a mobile-optimized website and a mobile app launching later this year that will allow consumers to make purchases on their phones. Total Wine is also experimenting with home delivery in select areas in Florida and California.

Cabernet Sauvignon and Chardonnay lead wine sales (Cellar Selections section in McLean store pictured top), while rosé and Italian and Spanish wines are growing. Spirits make up 30 percent of sales (spirits aisle above), and leading categories vary by market.

Spirits and beer sales vary more by store location. Vodka is king in Florida, while Scotch and American whiskies are leading in California. For beer, craft labels are on top and most stores see big interest in regional and local labels. Robert notes that consumer beer preferences are now hyper-local, sometimes trending not by a brewer’s home region or even state, but by their home city and neighborhood. “We empower our local teams to interact with local brewers and wholesalers to make sure we have local beers on display,” Robert says. “We’ve gotten much better about that in the last few years.”

Online Improvements The internet and mobile technologies are receiving a lot of Total Wine’s attention these days. The company is continually unveiling improvements to its website, Totalwine.com, and is also developing a mobile app to attract modern-day consumers who use their phones or tablets more than computers. The goal, David says, is to offer customers the choice to shop in a physical store, shop online and pick items up in-store, or take advantage of home delivery, where legal. NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

in physical stores can type in the product they want and see exactly where to find it at a Total Wine location. The company expects to release the app late this year. “The app will make e-commerce much more enjoyable and efficient and create a better customer-facing experience,” David says. Robert acknowledges that Total Wine has room to improve its website and online platforms, especially for shipping wine, and says he has high expectations for its advancement over the next few years. “The key for us is to figure out how to better serve our consumers,” Robert adds. “We need to make stores easier and more convenient to shop, with localized delivery and better store pickup.”

“We realize the future is the ability to be a full omni-channel retailer,” David says. “Whether it’s bricks or clicks, we’ve got to Legislative Issues be the best in the business. We’re making Total Wine & More has a long history of huge investments in people and technology fighting legislative battles against laws to improve our e-commerce ability and that inhibit its growth and entry into new website. We want to have the best website markets. That continues today, as the for alcoholic beverages in the world, with company has several legal initiatives more content than any other site.” underway. In Connecticut, Total Wine Total Wine hired Mike Kirschner to be is litigating to allow the free pricing of its chief digital officer last year and products so that pricing is no longer promoted him to chief technology officer under state control. David says the effort earlier this year. Kirschner comes to the is going well and has the support of company after running the digital and Connecticut Governor Dannel Malloy, e-commerce portions of retail chain Office and adds that he’s confident Total Wine Depot for nearly 20 years. Kirschner says will win and be able to eliminate minihis goals for Total Wine’s digital platmum bottle pricing laws. Meanwhile, in forms are centered around convenience, Tennessee—a market Total Wine plans personalization, inspiration and engagement. He notes that a mobile-friendly Scotch and American whiskies dominate to enter soon—the company contested a spirits sales in California, one of Total platform is crucial since shoppers today Wine’s most important markets (Bourbon law that said retailers have to live in the use cell phones and digital tablets to displays pictured top; rye whiskies above), state to own a beverage alcohol store there. The effort was successful, meaning look for product recommendations, while vodka plays a key role in Florida. residency is no longer a requirement for ratings and reviews, product history, and store licensing. Looking to the future, David says the compamanufacturing information. ny may pursue legal and legislative efforts to privatize markets “If you look at the way our site was originally designed, it was like Virginia, Alabama and North Carolina for spirits, and very focused on people using a computer,” Kirschner explains. Pennsylvania for spirits and wine. “The majority of our online traffic now comes from people using Total Wine is also celebrating some recent legal victories. their phones, so we’re making it easier to navigate by phone. The company worked with industry partners on a bid to allow We’re increasing overall usability and decluttering the site to Sunday sales in Minnesota and won, and stores in the state make it easier for people to understand.” can now open on Sundays. And in South Carolina, Total Kirschner is working to make Totalwine.com more personWine petitioned the state Supreme Court to eliminate beveralized so that people who join the company’s loyalty program age alcohol retail license limitations. By a vote of four to can log in to view their purchase histories, product recommenone, the law was overturned, allowing retailers to operate an dations, reward points, and even recipes and pairing suggestions. unlimited number of stores in South Carolina. Along with upgrading the website, he’s also developing a mobile Along with these efforts, Total Wine is celebrating a record app that’s geared toward the in-store experience. The app will number of donations for community service-related work. show a member’s reward points and coupons, local in-store Both David and Robert cite community service as a key part events, tastings, classes, and brand availability for growler refills. of their business strategy, noting that getting involved in local It will also feature way-finding capabilities so that consumers 30

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

communities helps the stores make personal connections. In 2016, Total Wine donated more than $6 million to non-profit groups like the Make-A-Wish Foundation and others that support awareness for autism and epilepsy, helping a total of more than 6,000 groups overall. “We think being a part of the local community, whether it’s an arts community or various health-related causes, is part of who we need to be to give back to each of the communities that support us,” David says. “The key to building and managing a cross-country business always goes back to the same thing, and that’s great people. We continue to invest and trust our people and remain focused on being ultra-competitive and concentrated on our customers. That allows us to be successful.” No stranger to the legislative process, David also recently announced his intent to make another run for Congress, this time in Maryland’s 6th Congressional District. David, who seeks the Democratic nomination for the House seat left open by Rep. John Delaney, made a similar run last year for Maryland’s 8th Congressional District, but lost. He funded his first campaign himself and accepted no donations from any outside source, which he says was a good learning experience. “I funded the first campaign to demonstrate that I will be independent of the various interests that dominate Washington,” David says. “What I didn’t realize is that a lot of people wanted to invest in my campaign. So, this time, I will raise money from individuals, but will not accept contributions from political action committees, lobbyists or corporations.” David says he’s well suited for political public service because his life has been different from most other politicians, as he

The beer category represents 20 percent of sales at Total Wine, with craft brands (pictured top) drawing the most interest. Regional and hyper-local labels in particular attract significant attention (local beer selections at McLean location above).

grew up working on a farm, went through college on student loans, and started his own business and built it into a powerhouse from the ground up. If he wins this Congressional bid, David says Total Wine will remain on solid footing. He and Robert reconfigured the company’s corporate structure a few years ago, adding top-level management positions and transforming its board of directors so they could step back a bit. “Total Wine is in good hands and will continue to follow the same principles we’ve followed since day one,” David adds. “The company is on strong footing, has a long-term expansion plan and a customer-first approach that will carry on mw whether I’m there or not. Total Wine will do great.” NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

LEADERS 2017

Marvin R. Shanken makes his opening remarks at the 2017 MARKET WATCH LEADERS dinner in New York City on September 14th.

2017

LEADERS

Awards Dinner

MARKET WATCH HONORS THE NATION’S TOP RETAILERS PHOTOGRAPHS BY JONATHAN LOCKWOOD SMITH

ARKET WATCH honored the nation’s top beverage alcohol retailers on September 14th at its LEADERS Annual Awards Dinner, a black-tie affair held at the St. Regis Roof in New York City. Stew Leonard Jr., president and CEO of Connecticut-based Stew Leonard’s Wine & Spirits, was named 2017 Retailer of the Year. Stew Leonard’s nine-unit chain, founded in 1999, does more than $100 million in wine and spirits sales annually at its stores in Connecticut, New York and New Jersey. Rob Sands, president and CEO of Constellation Brands, won the Industry Executive of the Year award. Sands has led his company for a decade, presiding over a period of marked expansion across the wine, spirits and beer categories. Ten new MARKET WATCH LEADERS from six retail businesses were recognized at the dinner. Here’s a look at the winners: •Dan Schuette of Texas-based H-E-B. A 21-year H-E-B veteran and current director of the company’s wine and beer department, Schuette has played a major role in making the grocery giant a billion-dollar player in the beverage alcohol industry. •Warren Scheidt of Cork Liquors in Indiana. As co-owner of the 12-unit store founded in 1982, Scheidt has spearheaded many of the company’s successful expansion initiatives. •Tim Turner of Chicago-based Walgreens. Last year, Turner helped lead the national chain to $1 billion in alcohol sales with just 235 wine and spirits SKUs. •Glen and Jim Knight of The Wine House in Los Angeles. Glen and Jim are second-generation LEADERS—their father, Bill, 34

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

first won the award in 1993. Under their leadership, the fine wine destination sees annual revenues of about $20 million. •Steve Sternberger, Adam Sternberger and Elizabeth McCabe of White Horse Wine & Spirits in Absecon, New Jersey. The co-owners transformed a small store into a 33,500-square-foot retail giant whose annual sales revenue exceeds $10 million. •Richard Splan and Chris Zaborowski of Louisville, Kentucky’s Westport Whiskey & Wine. Splan and Zaborowski have created a vibrant whisk(e)y destination in the heart of Bourbon country for curious visitors and aficionados alike. Three LEADERS Alumni were also recognized for outstanding achievement. Saurabh Abrol of New Jersey-based Wine Chateau, a 2015 LEADER, won the LEADERS Alumni Award for Best Marketing, while 2014 LEADER Bruce Dierking of Boulder, Colorado’s Hazel’s Beverage World, took home the prize for Best Website. Kent Starr, a 2010 LEADER from Liquor World in Fayetteville, Arkansas, earned the award for Community Service. The market’s most successful brands were also honored at the LEADERS dinner. Diageo’s Bulleit was named Spirits Brand of the Year, with a record 1.06 million cases in 2016. Australian wine brand 19 Crimes from Treasury Wine Estates, which is set to reach 1.2 million cases in 2017, was tapped as Wine Brand of the Year. The best-performing new products were also recognized. Crown Royal Vanilla from Diageo won the award for Best New Spirits Product, depleting 286,000 nine-liter cases in its first year of distribution. Meanwhile, E. & J. Gallo’s Prophecy won for wine, with mw the brand projected to reach 285,000 cases in 2017.

LEADERS 2017

2017 MARKET WATCH LEADERS “Retailer of the Year” Stew Leonard Jr. of Stew Leonard’s Wines & Spirits

2017 M ARKET W ATCH L EADER Dan Schuette of Texas-based H-E-B

2017 MARKET WATCH LEADER Warren Scheidt of Indiana’s Cork Liquors

2017 M ARKET W ATCH L EADER Tim Turner of national chain Walgreens

NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

LEADERS 2017

2017 MARKET WATCH LEADERS Glen and Jim Knight of The Wine House in Los Angeles

2017 MARKET WATCH LEADER Chris Zaborowski of Louisville, Kentucky’s Westport Whiskey & Wine

2017 MARKET WATCH LEADERS Steve Sternberger, Adam Sternberger and Elizabeth McCabe of Absecon, New Jersey’s White Horse Wine & Spirits

Kent Starr of Arkansas-based Liquor World won the L EADERS Alumni Award for “Community Service” 36

Bruce Dierking of Boulder, Colorado–based Hazel’s Beverage World won the LEADERS Alumni Award for “Best Website”

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

Saurabh Abrol of New Jersey’s Wine Chateau won the LEADERS Alumni Award for “Best Marketing”

LEADERS 2017

Rob Sands of Constellation Brands accepts the honor for “Industry Executive of the Year.”

Tom Looney of Diageo North America accepts the award for “Best New Product: Spirits” for Crown Royal Vanilla.

Molly Davis of E. & J. Gallo Winery accepts the award for “Best New Product: Wine,” won by Prophecy.

Stephen Rust of Diageo North America accepts the award for “Spirits Brand of the Year,” won by Bulleit.

James Casey of Treasury Wine Estates accepts the “Wine Brand of the Year” award for 19 Crimes. NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

LEADERS 2017

(TOP, FROM LEFT): Bill Terlato of Terlato Wines International, Roger Nabedian of E. & J. Gallo Winery, Jonathan Yusen of William Grant & Sons, Julien Hemard of Pernod Ricard USA, Rick Tigner of Jackson Family Wines, Annette Alvarez-Peters of Costco Wholesale Corp., Michael Keyes of Brown-Forman, Charles Merinoff of Breakthru Beverage Group, Tom Cole of Republic National Distributing Co. (BOTTOM, FROM LEFT): Bill Deutsch of W. J. Deutsch & Sons, Harvey Chaplin of Southern Glazer’s Wine & Spirits, Marvin R. Shanken, Rob Sands of Constellation Brands and Stephen Rust of Diageo North America

Neal Sachman and Angela Slade of Pacific Highway Wine & Spirits with John Sellar of Frederick Wildman and Sons and Christian Wylie of Pacific Highway Wine & Spirits 38

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

Blake Leonard, Stew Leonard Jr. and Kim Leonard of Stew Leonard’s Wines & Spirits, with Hae Un Lee and Kenneth Lee of Lee’s Discount Liquor

LEADERS 2017

John Terlato of Terlato International Wines with Annette Alvarez-Peters of Costco Wholesale Corp., Marvin R. Shanken, Bill Terlato of Terlato Wines International, Sandra LeDrew of Terlato Wines International and Stephen Rust of Diageo North America

Marc Bromfeld of Edrington Americas and Kraig Naasz of the Distilled Spirits Council of the United States

Mel Dick of Southern Glazer’s Wine & Spirits with Bill Deutsch and Peter Deutsch of Deutsch Family Wine & Spirits

Adam Sternberger, Elizabeth McCabe and Steve Sternberger of White Horse Wine & Spirits with Steve’s wife, Charlee Sternberger

Jeff Kreston and Bob Kreston of Kreston Wine & Spirits with Warren Scheidt of Cork Liquors

Kevin Jones and Shannon Coursey of Wilson Daniels

NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

LEADERS 2017

Giancarlo Bianchetti of Fetzer Vineyards with Rick Tigner of Jackson Family Wines

Chris Spalding and James Brennan of Edrington Americas

Warren Scheidt of Cork Liquors and his wife, Molly Scheidt, with Chris Zaborowski of Westport Whiskey & Wine

Terry Woodard and Philip Woodard of Kirby Wines & Liquors

Barkley Stuart of Southern Glazer’s Wine & Spirits and Margaret Jabour of Twin Liquors

Kevin O’Neil of Breakthru Beverage Group and Vanessa Kay of Moët Hennessy

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

LEADERS 2017

Molly Davis of E. & J. Gallo Winery, Barkley Stuart of Southern Glazer’s Wine & Spirits and Amy Hoopes of Wente Family Estates

Tom Jacob of Jacob Liquor Exchange and Mat Dinsmore of Wilbur’s Total Beverage

Kelly Nicolas of Veritas Imports with Glen Knight, Bill Knight and Jim Knight of The Wine House, as well as Bill’s wife, Nancy Knight, and Jim’s wife, Lauren Knight

James Casey of Treasury Wine Estates with Dan Schuette of H-E-B

Julien Hemard of Pernod Ricard USA with David Jabour of Twin Liquors

Saul Leighton of Bayway World of Liquor with Neil Barnett of Fedway Associates and Sasha Vaynerchuk of The Wine Library

NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

LEADERS 2017

Jason Shorrock and Mike Duggan of Phillips Distilling Co. with Mike Morgan of Prestige Wine & Spirits Group

Mel Dick of Southern Glazerâ&#x20AC;&#x2122;s Wine & Spirits and Rob Sands of Constellation Brands

Jerry Harrod and Kent Starr of Liquor World with their respective spouses, Karen Harrod and Sara Starr

Christina Mariani-May of Banfi Vintners and Bob Torkelson of Trinchero Napa Valley

Kevin Jones of Wilson Daniels with Bill Seawright of Frederick Wildman & Sons

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

Lauren Ephrat, Chris Low and Nora Feeley of Delicato Family Vineyards

LEADERS 2017

Amy Hoopes of Wente Family Estates with John Terlato of Terlato Wines International, Chris Adams of Sherry-Lehmann and Bill Terlato of Terlato Wines International

Mike McGrew of Constellation Brands and Michelle Perry of Constellation Wines US

Bruce and Carleen Dierking of Hazel’s Beverage World

George Randall of Randall’s Wines & Spirits and Rob Sands of Constellation Brands

Mark Lyle and Zoe Moral of Santa Margherita

Chris Zaborowski of Westport Whiskey & Wine and James Slack of Pernod Ricard USA

NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

Long known as an easy-drinking spirit, Canadian whisky (above) is at the forefront of a renaissance inspired by its rye roots, as more artisanal producers begin releasing rye-forward expressions full of bolder flavors.

NORTH

irst it was single malt Ken Pritz is the beverage manager at Amid rising interest in Scotch. Eventually Amerthe River Roast lounge in Chicago, and whiskies of all types, icans began to rediscover up until now his Canadian selection was Canadian whiskies are their native Bourbon, and long dominated by the major brands. But due to break out then came the rise of Irish whiskey. More Pritz is making room for newer labels like recently, Japanese whisky has become a Lot 40, offered at $12 a 2-ounce pour. BY H. LEE MURPHY must-have spirit. Now, another brown “The best Canadian whiskies have a highspirit that consumers have long taken for granted is due for a rye, spicy profile that’s ideal for cocktail making,” Pritz says. revival. Is Canadian whisky ready for its turn in the spotlight? “Canadian brands have to start emphasizing their rye content.” Brett Pontoni, specialty spirits buyer at the 38-store Binny’s Rye is a longstanding staple in Canadian whisky making. Beverage Depot chain based in Chicago, sees harbingers of For most of the past century, Canadians themselves have a Canadian renaissance. “As more interesting Bourbons were routinely referred to their whisky by the generic term “rye,” getting made a few years ago, Canadian whisky wasn’t changeven though many brands are produced from corn-dominant ing much,” he says. “The category was dominated by thin and grain bills and may include no rye grain at all. But that’s light whisky that seemed out of fashion. Then we began changing, as more distilleries are introducing authentic seeing new Canadian brands like Forty Creek, Lot 40 and ryes—many of them 100-percent rye expressions. Canadian Pike Creek—they’ve raised consumer perceptions of the Club introduced its Canadian Club 100% Rye ($20 a entire category.” 750-ml.) in May of last year. Hood River Distillers is putting 46

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

PHOTO BY (TOP) ISTOCKPHOTO

OF THE BORDER

Crown Royal (distillery above) has in many ways transcended the Canadian whisky category, in part due to its emphasis on flavor extensions. New craft Canadian whisky producers like Still Waters Distillery (Carl still bottom right) and Campari-owned Forty Creek (barrel storage bottom left), however, are coming to represent the categoryâ&#x20AC;&#x2122;s future.

Long Climb Back Plenty of patience will be required, however. Canadian whisky’s volume last year was down 2.2 percent to 13.3 million nine-liter cases, according to Impact Databank. That represented another year of decline for a category whose U.S. volume was 5 million cases larger in 1990, when Canadian offerings far outdistanced all other whiskies. Most major brands were down last year, though bottom-shelf brands continue to suffer the biggest losses. On the top shelf, Crown Royal’s displays are often so separated from its category that many consumers don’t recognize it as a Canadian whisky. Brand director Jim Ruane admits as much. “Our research shows that maybe only 30 percent of people identify Crown Royal as a Canadian product right away,” he says. “That’s not a condemnation of the category, Produced at Canada’s Corby Distillery (above), Pernod Ricard’s Lot 40 brand is a blend of 90-percent rye and 10-percent malted rye. The whisky is currently on allocation. but testament to the fact that Crown Royal has transcended it.” Flavors have perhaps only confused the matter. Crown Royal its marketing efforts behind its all-rye Pendleton 1910 ($40). Regal Apple ($25 a 750-ml.) has been a huge success, reaching Meanwhile, Pernod Ricard’s Lot 40 ($30) has proven so more than 1 million cases in volume. Crown Royal Vanilla popular that it’s on allocation. Pernod has also enriched its came out a year ago at the same price and has won plaudits, J.P. Wiser’s blend ($20), bringing it to 60-percent rye. including being named Best New Spirit at MARKET WATCH’s “Historically, Canadian whisky has been pigeonholed into very smooth and easy drinking liquids, but the picture is 2017 LEADERS banquet. A honey-flavored variant, however, starting to change,” says Gerard Graham, director of new was launched in summer 2016 and withdrawn, with no plans brands at Pernod Ricard. “Rye has become more popular, to bring it back. Ruane maintains that the flavors haven’t canniand the Canadians are adding it to their whiskies. We want balized sales of Crown’s original Deluxe ($25). “The flavors we to introduce bigger, bolder flavors.” sell have been 75-percent to 80-percent incremental to the brand,” Ruane says. “We get a higher percentage of multicultural consumers, as well as younger millennials, in flavored CANADIAN WHISKY CONSUMPTION whiskies. So flavors have been valuable line extensions.” IN THE UNITED STATES —2006-2016* Crown Royal was once a major sponsor of stock car racing (millions of nine-liter case depletions) under the NASCAR banner, as well as thoroughbred horse racing. But its ties to both have fallen off in recent years as Diageo 15.5 has centered its marketing ambitions on the Armed Forces weekend at the Indianapolis 500. “The military is now the center of gravity for Crown Royal marketing efforts,” Ruane says. 15.0 At Constellation Brands, owner of No.-2 Canadian brand Black Velvet, vice president of marketing Carl Evans concedes that the company is doing little advertising support today. “It 14.5 isn’t print or TV commercials at this point,” Evans says. “Most of what we do now is trade promotions and point-of-sale displays.” Constellation has had limited success in expanding beyond 14.0 its core Black Velvet, which retails at $19.99 a 1.75-ml. and promotes at $17.99 and even lower. There is a Reserve 8-yearold ($15 a 750-ml.) and two flavors—Toasted Caramel and 13.5 Cinnamon Rush, priced at the same level as the core Black Velvet—but the line extensions represent just 9 percent of sales, according to Evans, who adds that “the flavor category 13.0 for us is finicky. It’s never been something we’ve focused on ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 Calendar Years heavily. We’ve introduced flavors largely to maintain a *Excludes flavors competitive position in the market, hoping that it’s a Source: IMPACT DATABANK ©2017 plus-business overall.” 48

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

TOP 10 CANADIAN WHISKY BRANDS IN THE UNITED STATES (thousands of nine-liter case depletions)

Rank

Brand

Importer

1 2 3 4

Crown Royal Black Velvet Canadian Club Canadian Mist

5 6 7

Diageo North America Constellation Brands Beam Suntory Inc. Brown-Forman Beverages Worldwide Beam Suntory Inc. Diageo North America Sazerac Co.

Windsor Supreme Seagram’s V.O. Canadian Rich & Rare Canadian LTD Sazerac Co. Lord Calvert Luxco Inc. Pendleton3 Hood River Distillers Total Top Ten4 Other Brands Total Canadian Whisky

8 9 10

Percent Change2 2016 2015-2016

1990

1995

2000

2005

2010

2015

1,540 2,015 1,945 3,430

1,850 1,820 1,590 2,960

2,720 1,830 1,415 2,315

3,675 1,880 1,305 2,045

4,145 1,860 1,180 1,730

3,910 1,889 1,228 1,355

3,883 1,869 1,231 1,222

1,990 2,180 370

1,575 1,780 300

1,210 1,370 455

995 1,225 620

960 1,050 665

885 753 685

845 759 695

750 610 665 610 675 530 500 1,080 840 630 480 450 390 370 25 105 229 240 15,300 13,325 12,610 12,860 12,820 11,853 11,615 3,225 2,670 2,440 2,165 1,930 1,756 1,691 18,525 15,995 15,050 15,025 14,750 13,609 13,306

-0.7% -1.1 0.3 -9.8 -4.5 0.8 1.5 -5.7 -5.0 5.2 -2.0 -3.7 -2.2%

Excludes ﬂavors Based on unrounded data 3 Includes Midnight 4 Addition of columns may not agree due to rounding. 2

LEADING SUPER PREMIUM-PRICED CANADIAN WHISKY BRANDS IN THE UNITED STATES (thousands of nine-liter case depletions) Brand1

Importer

Crown Royal3 Pendleton4 Forty Creek J.P. Wiser’s5,6 Pendleton Midnight 1910 Rye Total Leading Super-Premium7

Diageo North America Hood River Distillers Campari America Pernod Ricard USA Hood River Distillers Hood River Distillers

2014

2015

2016

4,057 191 63 31 8 4,351

3,910 220 68 20 9 4 4,230

3,883 229 65 14 11 11 4,213

Percent Change2 2014-2015 2015-2016 -3.6% 15.0 7.2 -37.3 + -50.0 -2.8%

-0.7% 4.3 -4.4 -28.7 27.5 + -0.4%

At least $200 a nine-liter case at retail Based on unrounded data 3 Excludes ﬂavors 4 Excludes Midnight 5 Includes Rye, Spiced and 18-year old 6 Excludes Wiser’s de Luxe, Wiser’s Legacy and other Wiser’s 7 Addition of columns may not agree due to rounding. 2

Bottom Shelf Competition Other economy brands are in a scramble to hold onto their positions. Brown-Forman’s Canadian Mist has lost some 65 percent of its volume in the U.S. since 1990. For years, its product has hit $9.99 a 750-ml. on promotion, often employing $2 bottleneck coupons to get that price, while the 1.75-liter is sold every day at $19.99. The company’s experiment with line extension Black Diamond, which was priced $4 higher, ended four years ago. “I wish Canadian whisky were growing and there was more buzz around the category,” says Brown-Forman group brand director

Wayne Rose, who takes heart in Nielsen numbers showing that Canadian Mist sales have “stabilized” in recent months. “We hope Mist has turned a corner,” he adds. Kevin Richards, the senior marketing director for whiskey and specialty brands at Sazerac, believes his company’s bottom-shelf labels aren’t getting their due. Rich & Rare sells as low as $12.99 a 1.75-liter on promotion, struggling to compete against such rivals as Windsor—which has gotten as low as $11.99 a 1.75-liter lately—and Canadian Mist, which is frequently reduced below $15 a 1.75-ml. Most of these brands haven’t taken any price increases over the past decade. NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

LEADING FLAVORED CANADIAN WHISKY BRANDS IN THE UNITED STATES (thousands of nine-liter case depletions) Brand

Importer

Fireball Crown Royal Regal Apple Crown Royal Vanilla Black Velvet Toasted Caramel Crown Royal Honey Revel Stoke2 Total Leading Flavored3

Sazerac Co. Diageo North America Diageo North America Constellation Brands Diageo North America Phillips Distilling Co.

2014

2015

2016

3,940 309 108 30 4,386

4,375 1,250 112 35 5,772

4,595 1,278 286 113 64 62 6,398

Percent Change1 2014-2015 2015-2016 11.0% + 4.4 16.7 31.6%

5.0% 2.2 + 0.7 + 77.1 10.9%

Based on unrounded data Includes a small amount of non-ﬂavored Canadian whisky 3 Addition of columns may not agree due to rounding. 2

TOP SIX CANADIAN WHISKY BRANDS IN THE UNITED STATES—1991 vs. 2016 1991

Other Brands 21.8%

Canadian Mist 20.1% Seagram’s V.O. 12.7%

Crown Royal 9.7%

Canadian Club 11.5%

Black Velvet 12.2% Windsor Supreme 12.0%

15.7 million nine-liter cases = 100% 2016*

Other Brands 26.2%

Seagram’s V.O. 5.7% Windsor Supreme 6.4% Canadian Mist 9.2%

Crown Royal 29.2%

Black Velvet 14.0% Canadian Club 9.3%

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

“We don’t take annual price increases on our value products,” Richards says. “And coupons are a fact of life. You are noticeably absent from the play if you don’t use them.” He admits that on the bottom shelf there hasn’t been much new brand development, yet he is unrepentant: “It’s easy to say that Canadian whisky is dull. I hear that all the time. But it’s also important to see that there’s a budget-conscious consumer out there who appreciates the consistent and reliable price points of Canadian whisky. Many people like the neutrality of Canadian whisky with Coke or ginger ale. In the end, the bottom shelf isn’t sexy, but our brands on the bottom shelf are the workhorse of retail. They bring a great mass of consumers through the store’s front door.” Nevertheless, there are critics who argue that Canadian whisky is missing out on the movement favoring less industrialized brands. “Many years ago there was a turn in focus in Canada to mass-produced offerings—whisky lite,” says Mike Price, category marketing director for whiskies at Campari, which owns the Forty Creek label. “The idea was to appeal to people moving to vodka. Now that the movement has been back in favor of fuller-flavored whiskies, these companies have been slow to respond. We think the full body and flavor of Forty Creek is what Canadian whisky ought to represent these days.” Still, Campari has struggled in getting consumers to trade up from its core Forty Creek Barrel Select ($21.99 a 750-ml.), which continues to represent 90 percent of its sales. There are such upmarket alternatives as Copper Pot Reserve ($27.99) and Double Barrel Reserve ($59.99). “The higher-end versions of Canadian whisky continue to be niche products,” says Price. “It hasn’t helped us that American whiskies have been stealing shelf space from the Canadian category in a lot of U.S. retail stores.” 375 Park Avenue Spirits, a division of Sazerac, has experienced similar challenges with its Tap 357 Maple rye, ($29.99 a 750-ml.). First released back in 2012, the brand has experimented along the way with such finishes as Port, but sales are down by some 30 percent since 2015. CEO Norman Bonchick wants to introduce more age-statement

expressions, but says it hasn’t been easy to source the necessary liquid. Premiumization hasn’t been easy for even the biggest whisky names. Brown-Forman has been marketing its Collingwood brand ($25 a 750-ml.) since 2011. Yet after six years, it’s selling in only about a half-dozen states. Brown-Forman is set to launch a Double Barrel variant in Canada soon, featuring liquid aged in heavily-toasted and -charred barrels, but the company hasn’t said if the expression will be hitting the U.S. market.

The Promise Of Canadian Craft If Canadian whisky sales are to break out, perhaps the expanding ranks of craft distillers will show the way. Davin de Kergommeaux, the author of “Canadian Whisky: The New Portable Expert,” says there were just 10 Canadian distilleries five years ago, compared to about 40 today. Many of them are turning out gin and vodka while waiting for their whisky stocks to mature. He mentions the promise of such names as Kinship, Wayne Gretzky Estates Winery and Distillery, and Highwood, among others. “Many of these are on the cusp,” de Kergommeaux says. A few years ago, American import firms were wary of taking on unknown Canadian brands, but that’s changing. “I get calls all the time now from American distributors looking to work with Canadian microdistillers,” he adds. Again, patience will be required. Kinship House of Fine Spirits in Ontario released 66 Gilead whisky a year ago in Canada, priced at nearly C$70 ($57) a 750-ml. Kinship has a 100-percent rye expression finished in Cabernet Franc wine barrels, as well as a maple-flavored whisky made from 100-percent corn. Nonetheless, the company isn’t selling in the United States yet. “We’re hoping to sell to America in 2018, but we’re not sure yet,” says Kinship president Jeremiah Soucie. “We’re building a bottle for the market now.” Still Waters Distillery, founded in 2009, is exporting a couple of blended Canadian whiskies (both around $32 a 750-ml.) to the U.S. market through Glass Revolution Imports, but its footprint so far covers only a dozen or so states. “The Canadian craft distilling movement is at least five years behind the United States,” says Still Waters’ co-owner Barry Bernstein. “Our excise taxes here are very high, and other laws make the business challenging. We had hoped to be further along than we are.” Dillon’s Small Batch Distillers in Beamsville, Ontario, was founded in 2012. So far, the company is selling just gin to the U.S. market through ECU Worldwide, as it’s concentrating on selling what whisky it has through its own distillery tasting

Forty Creek’s Canadian Sour (above) incorporates the distillery’s Canadian rye whisky for a slight twist on the cocktail classic. Similarly, Brown-Forman’s Canadian Mist (left) offers a fresh take on whisky and ginger ale.

room. “We’re doing a good job here this year,” says Dillon Small Batch president Geoff Dillon. “Next year I plan on visiting the United States for more marketing.” The suspicion is that American retailers have been so caught up in carving out space for expanding Bourbon stocks that they aren’t exactly thirsty for new names like Dillon’s. But major retailers like Binny’s are promising to take them on. “We’ll make room for more Canadian labels,” says Pontoni, who’s a big booster of such trailblazing names as Forty Creek and has been recently buying proprietary barrels from Still Waters. “Anytime there’s something new and interesting from Canada that’s of good quality, we’ll get excited about it and stock it. If these new labels require hand-selling, we’ll do that. We think there are good things ahead for the mw Canadian category.” NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

Freixenet (headquarters pictured) has retailed at the same low price point for some time, as the Cava category overall faces challenges in securing upward price mobility.

Cava’s Sparkling Role Though long a presence in America’s sparkling wine scene, Spanish bubbly now looks to climb aboard the boom

BY CAROL WARD

yan Valentine is keen on Cava, but that doesn’t always translate into positions on his wine lists. Valentine, director of beverage for Columbus, Ohio–based Cameron Mitchell Restaurants, doesn’t have a Cava on the wine list for the company’s Ocean Prime chain of 13 restaurants. Some of the smaller restaurants in the Cameron Mitchell portfolio offer Cava, however, and it’s used in sparkling cocktails in those venues as well. For Valentine, Cava’s quality and value are there, but the image is still lacking. “For Ocean Prime, I was focused on having a range of offerings—Prosecco, California sparkling, Champagne and French sparkling—and those took the lead,” he says. “That restaurant lends itself to cachet brands being front and center. I have absolutely no objection to adding a Cava to Ocean Prime’s menu, but the sparkling wine we offer now sells so well that I’ve never thought about making that change. That doesn’t mean it won’t happen eventually. In my opinion, Cava is, dollar for dollar, as good a sparkling wine as you can get. As the sparkling category continues to mature, I think more people will discover Cava.” John Vego, senior wine manager at Buster’s Liquors in Memphis, is also a big fan; the Cava category is thriving at Buster’s. “I’m expanding it all the time, and constantly looking for new Cava brands,” Vego says. But he explains that much of the appeal to his customers is based on price, noting NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

that Campo Viejo, at $9.99, is a current hot seller. In general, Cava pricing at Buster’s hovers at around $10 a 750-ml., a few dollars cheaper than Prosecco and about half the price of a quality California méthode champenoise brand. “It’s more about price,” Vego explains. “When suppliers start bumping up the price, people have got to really want to try it. Once brands get into the $15-to-$20 range, there’s Gloria Ferrer, Scharffenberger and others—they’re putting themselves in a huge range of wines that are really well liked. They’d have to demonstrate that they’re as good, if not better, than the competition, and I haven’t seen that yet.” The lack of upward price mobility is one of a few challenges facing the Cava sector in the United States. The category has arguably higher brand recognition than its much larger Italian rival Prosecco, but retail pricing has remained below $12 or $13 a bottle for most Cava labels. That’s despite the méthode traditionelle production required for all Cavas. Tom Burnet, president of Freixenet USA, which imports the Freixenet and Seguro Viudas Cava brands, says the company “hasn’t taken any price action in either direction for some time.” Freixenet retails at $10 to $11, and Seguro Viudas is priced slightly lower at $9.50 to $10.50.

New Upscaling Efforts Other leading Cavas are similarly priced, although some smaller brands inch their way toward the $15 mark. Patrick Mata, owner of Olé Imports, says the Naveran brand hits that price point and is seeing strong growth, a sign that the category might be moving a bit more upscale. Some producers are trying to push that further. In June 2016, the Cava Regulatory Board announced the designation of Cava de Paraje Calificado, a new premium category that will include single vineyard Cavas

CAVA IMPORTS INTO THE UNITED STATES—1996-2016 (millions of nine-liter case shipments) 1.8 1.6 1.4 1.2 1.0 0.8 0.6 ’96

’98

’00

’02

’04

’06

’08

Calendar Years

’10

’12

’14

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

’16

Retail priced at $15, the Navern brand (bottle pictured) is experiencing growth, an indication that Cava is open to premiumization.

made with grapes from select estates deemed exceptional due to their climate or geological features. Classified Cava must meet several requirements. First, it must be made with grapes from vines at least 10 years old and from vineyards that are hand-harvested and have a maximum yield of 8,000 kilos a hectare. The wine must also be estate-fermented and -vinified with a maximum output of 48 hectoliters per hectare, and fermented in the bottle and aged for at least 36 months as well. Finally, a certification of the wine base must be made for complete traceability from the vine to a store shelf. Pedro Bonet, president of the Cava Regulatory Board, told the Wines of Spain trade group in a February 2017 interview that the designation was in the works for some time. “The new Cava de Paraje Calificado designation is ideal for positioning Cava at the top of the qualitative wine pyramid and for doing justice to this incredible sparkling wine,” he said. “As far as the Cava category is concerned, the new designation represents a step toward giving visibility to the singular excellence in the production of sparkling wines made in the traditional method.” Earlier this year, 12 Pareje Calificado designations were approved for nine different companies. The next step is label approval, and then the wines can be sold in all markets. Codorníu owns three of the 12 vineyards. Mike Bartlett, president of Codorníu importer Aveníu Brands, says the designations are “a good example of what’s going on in the Cava business. They’re driving for quality, trying to change the mindset. Cava is not just low end, it’s a quality product.”

Aveníu will be importing limited quantities of those wines in the future. “It’s something we’re going to highlight, and we’ll continue to drive the quality story,” Bartlett explains, adding that the overwhelming focus will be on growing the standard Anna de Codorníu brand. “We’re three years into a six to seven year program aimed at building volume. Our shipments and depletions this year are up by 35 percent to 40 percent versus last year. A lot of that has been driven by increased distribution in chains. People are gravitating toward the product. It’s one of the few $10-to-$15 Cavas from Spain that has the Chardonnay and Pinot Noir component, which really helps with the flavor profile, making it more food friendly and more accessible.” Freixenet’s Burnet says his company is also focusing on the higher end. “We have Freixenet Casa Sala, available in very limited quantities and retailing at around $60,” he says. “But we certainly put most of our marketing efforts below that line. There are some terrific Cavas at ultra-premium prices that I’m sure will be more prominent eventually in the United States, but today they’re not.”

TOP THREE CAVA BRANDS IN THE UNITED STATES—2001 vs. 2016 (share of depletions) 2001* Other Brands 7.7% Segura Viudas 7.1% Jaume Serra Cristalino 11.6%

Freixenet 73.5%

775,000 nine-liter cases = 100% 2016

Capturing Momentum For Cava marketers, perhaps more important than moving upscale, at least in the short term, is holding their own against the expansion of Prosecco. The Italian bubbly has been growing strongly over the past several years, prompting producers of other sparklers to scramble to catch up. Aveníu’s Bartlett says consumer willingness to learn and explore bodes well. “I don’t know if people understand exactly what Cava is at this point,” he says. “It’s more of a trend of sparkling wine versus Cava specifically. People are looking for brands they know, and they’re also looking to experiment beyond Prosecco, Moscato or whatever they’ve been drinking.” “Consumer understanding of Cava is still embryonic,” says Burnet, noting that Prosecco has done a good job at educating consumers. But he says in terms of brands, leading Cavas have more name recognition than the leading Prosecco brands. Jim Shpall, co-owner of Applejack Wine & Spirits in Wheat Ridge, Colorado, says Cava is buoyant in his store, but Prosecco still dominates. “The entire category of sparkling

Other Brands 14.8%

Segura Viudas 18.2%

Freixenet 39.7%

LEADING CAVA BRANDS IN THE UNITED STATES (thousands of nine-liter case depletions) Brand

Importer

2000

2005

2010

2015

2016

Freixenet Jaume Serra Cristalino Segura Viudas Campo Viejo Codorníu Total Leading Brands2

Freixenet USA CIV USA Freixenet USA Pernod Ricard USA Aveníu Brands

570 65 35 30 700

625 245 100 40 1,010

545 410 215 25 1,195

557 400 251 13 14 1,234

590 350 270 17 16 1,243

1 2

Percent Change1 2015-2016 5.9% -12.5 7.6 29.5 18.5 0.7%

NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

wines is doing well, and as the expression goes, a rising tide raises all boats,” Shpall says. “But for Prosecco, it's a rising tide coupled with a tsunami. The problem for Cava is that many consumers, if they want a sparkling wine and they don’t want Champagne, know the word Prosecco.” While category development for Cava may be lagging, Mata of Olé Imports believes in the long game. “Prosecco is very popular in America, but most Prosecco is produced with the charmat method, while all Cavas are fermented in the bottle like Champagne,” he notes. “It’s a more time-consuming and expensive method, but surprisingly, Cavas are less expensive than Prosecco, which is great for the consumer. Many consumers are realizing that and so Cava is becoming stronger as time goes by.” Retailers have mixed experiences with Cava. Austin Keith, owner of the Texas retail chain Pinkie’s, says Cava doesn’t move much in his stores. And Gary Rounseville, president of M&R Liquors in South Windsor, Connecticut, says Cava is falling short. “Cava is doing okay, but most people are still looking for Prosecco because it has a rounder mouthfeel and tends not to be as dry and yeasty as Cava,” Rounseville explains, noting that at most retail establishments the number of Prosecco brands far outweighs the number of Cavas on offer. But Vego of Buster’s Liquors says Cava is ratcheting up volume while Prosecco is slowing down. “For a while Prosecco was all people would talk about, but not anymore,” he says, noting that Cava is piquing ongoing interest because of its price-quality relationship.

Expanded Occasions Expanded usage occasions for bubbly beverages work in favor of Cava and other sparkling wines. Cava marketers are latching on to the idea that sparkling wine isn’t just for celebrations, it’s for everyday enjoyment. And with most brands retailing below $15 or even $12 a bottle, frequent usage isn’t a big stretch. “Sparkling wine has become more food-friendly, and the use of sparkling wine in cocktails has become popular too,” Aveníu’s Bartlett says. “It’s not just Mimosas anymore—it’s a big part of the cocktail culture scene.” Burnet says much of the marketing and advertising surrounding Freixenet and Segura Viudas zeroes in on cocktails. “We’re pushing very aggressively in mixing both brands with cocktails, and also in Segura’s connection with food,” he says. “Our target is millennial women. Social media is a big part of that, and we do a lot more experiential events like tastings, with fewer print ads and less old-school marketing. We’re going after a different crowd than 10 years ago.” Olé Imports’ Mata says he expects the millennial audience to shift to Cava eventually. “Millennials enjoy sweeter-style wines in general, so I can see why Prosecco is popular,” he says. “But as millennials develop a taste for drier wines, which will happen over time, Cava should do well. There are a lot of good things on the Cava side—how it’s made, its price and quality. These characteristics will make Cava a strong category. As people become more educated that’s going to benefit mw Cava immensely.”

Codorníu (brand’s Jaume cellar above) owns three Pareje Calificado– designated vineyards. The company hopes these will drive growth.

CAVA: KEY FACTS Cava is a Denominación de Origen sparkling wine produced in select regions in Spain. Its name, which means “caves” in Spanish, references vast networks of caverns in which Cava is aged.

Production Rules • Cava must be made in the traditional method (akin to méthode champenoise) • It must be aged in the bottle in which it will be sold. • It can be sold in three quality levels. Standard Cava is aged for a minimum of 9 months, Reserva Cava for 15 months and Gran Reserva Cava for 30 months. Gran Reserva Cava is vintage-dated. • Cava can be made in white or rosé expressions.

Single Estate Cavas In June 2016, the Cava Regulatory Board announced the designation of Single Estate Cavas, a new premium category that will include all Cavas made with grapes from select exceptional estates due to their climate or geological features. In July 2017, the board named the first 12 vineyard sites to be awarded the “Cava de Paraje Calificado” official recognition.

Production Rules for Single Estate Cava • Must be made with grapes from vines that are at least 10 years old • Grapes must be from vineyards that are hand-harvested and have a maximum yield of 8,000 kg. per hectare. • The wine must be estate-fermented and -vinified with a maximum output of 48 hectoliters per hectare. • The Cava must be fermented in bottle and aged for at least 36 months. • A certification of the base wine must be made for complete traceability from the vine to a store shelf.

Regions The vast majority of Cava is produced in the Spain’s Penedès region in Catalonia, just south of Barcelona. Other regions that have Cava D.O. status include Aragon, Basque Country, Castile y León, Extremadura, Navarra, Rioja and Valencia.

Grape varietals The three main grape varietals used in making Cava are Macabeo, Xarel-lo and Parellado. Other white grapes sometimes used in Cava are Chardonnay, Subirat and Malvasia Riojana. Red grapes—including Cabernet Sauvignon, Pinot Noir, Garnatza, Monastrell and Trepat—can be used only in the production of rosé Cavas.

NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

BO-beau kitchen + garden (interior pictured) in La Mesa, California, is one of four BO-beau venues owned by the San Diego– based Cohn Restaurant Group. Though there is overlap among each location, all of them have unique identifying features.

California I

t’s a family affair for Cohn Restaunot only in the city’s hotspots of Little With its diverse array of rant Group, in more ways than concepts, Cohn Restaurant Italy and the Gaslamp district, but one. The group of 24 restaupushing south to Imperial, north to Group has spearheaded rants is owned by David and Oceanside and east to places like La Mesa the transformation of Lesley Cohn, who run the San and Escondido. In addition, the group Diego–based business with the help has moved further up the coast to Long San Diego’s dining scene of son Jeremy Cohn, daughter Jessica Beach, and also operates one restaurant BY CAROL WARD Cohn Feinman and son-in-law in Hawaii. “They’re one of the biggest Mike Feinman. and best in the San Diego market and Their family focus extends to the restaurant brands as well. beyond,” says Neil Sorensen, regional vice president of the “We look at our restaurants as siblings,” David Cohn explains. San Diego branch at Southern Glazer’s Wine & Spirits. “They “In most families, mine included, there are similarities among have different concepts—they’re not like a chain. If one family members and also very distinct differences. We try to concept isn’t performing at the level they would like it to, have similarities in terms of unique design, great service and they’re not afraid to make changes, which I think is great.” menus that reflect what we think that community is looking for. We try to have real differences as well, to set them all apart Evolving The Market so we’re not creating a chain.” Cohn Restaurant Group has been a fixture in the San Diego Since its founding in 1981, Cohn Restaurant Group has popudining scene since the early 1980s. At that point, Cohn notes, lated the dining scene in San Diego County, operating restaurants San Diego was a chain town, but the city has evolved since

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

PHOTOS BY (OPPOSITE, TOP) AUDA & CAUDAYRE PHOTOGRAPHY; (BOTTOM) MIKE NEWTON

C R E AT I V I T Y

Cohn owns and operates 23 unique venues, including the San Diegoâ&#x20AC;&#x201C;based fine dining restaurant Coasterra (interior pictured above left; exterior top right; outdoor patio above right) and La Jollaâ&#x20AC;&#x2122;s beer-centric Draft Republic (draft handles pictured right; main dining room bottom right; bar below).

COHN RESTAURANT GROUP AT A GLANCE Founded

1981

Owners

David and Lesley Cohn

Key Executives

Owners David and Lesley Cohn; community relations manager Jeremy Cohn; marketing manager Jessica Cohn Feinman; CFO Mike Feinman; and wine and beverage manager Maurice DiMarino

Headquarters

San Diego, CA

Number of Units

23 venues, including 333 Pacific, Analog, Blue Point Coastal Cuisine, BO-beau kitchen +bar, BO-beau kitchen + garden, BO-beau kitchen + roof tap, BO-beau kitchen + cache, Coasterra, Coin Haus, Corvette Diner, Draft Republic, Gaslamp Strip Club, Indigo Grill, Island Prime, The Plantation House Restaurant, Sea180°, Tea Pavilion, The Prado at Balboa Park, Tacos Libertad, Vin de Syrah, Vintana Wine + Dine, Zigzag Pizza Pie, and The Melting Pot

Annual Revenue

Not disclosed

Sales Breakdown

Food makes up 72-percent of sales, while beer is 4-percent, wine comprises 12-percent, spirits are 10-percent and “other” is 2-percent.

Website

Cohnrestaurants.com

Future Plans

Expansion continues, with more venues likely throughout Southern California. The company does not have a set goal for a number of restaurants, instead waiting for opportunities to emerge that meet a specific set of criteria.

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

The Bar Approach Maurice DiMarino embraces the unique attributes of each restaurant. The Cohn Restaurant Group wine and beverage manager says each restaurant or bar takes its own approach to its beverage selection. “All my restaurants are very different, so when I put a program together I don’t do a core list,” DiMarino says. “Wine and spirits are sold at the restaurant level so the manager has some ownership over it. They’re the ones who are going to push it out to the staff and talk to the guests about it. It’s important for them to select the brands they want to use. However, I do have a core program, because we have partnerships with certain suppliers. Managers have autonomy with those portfolios. I’m here to assist with that and I absolutely do help, but I’m not here to tell them they have to have this particular cocktail or this particular brand.” Earlier this year, DiMarino partnered with California State University San Marcos in north San Diego County for an emailed survey of guests’ preferences in beer, wine and spirits. The results weren’t surprising, showing a propensity for categories like vodka, Chardonnay and Cabernet. But the survey skewed older, with very little participation from millennial-aged patrons. DiMarino acknowledges the different demands from

PHOTO BY LIZ MURRAY

Cohn’s The Prado at Balboa Park (interior above) in San Diego offers California cuisine and tapas, as well as a drinks menu that includes a variety of wines by the glass, beers and specialty cocktails.

then. “San Diego is now a culinary destination,” he says. “We have wonderful chefs and wonderful restaurateurs. We have a bit of a south-of-Los Angeles complex, but I travel quite a bit, as do my restaurant friends, and we’re as creative and innovative as anyone. What’s happening here is exciting.” The group’s growth has been gradual, but that’s by design. There were years that it didn’t open any restaurants and years that it opened two or three. It grew organically, and now operates 24 restaurants. Financial stability drove the slow and steady expansion. “Our plan was to only grow as quickly as we could finance from within so that we didn’t become over-leveraged,” Cohn says. “We had seen too many people grow too quickly and end up losing what they started with.” The financial factors are paramount, but the group also considers whether it has the internal talent to expand at any given time. “People want to be with a company that’s expanding, not one that’s stagnant or contracting,” Cohn says. Concepts cover a broad spectrum, from fine dining at places like Island Prime, 333 Pacific, Blue Point Coastal Cuisine and Coasterra, to beer-centric venues such as Draft Republic and Coin Haus Beer & Games, to more casual fare at Zigzag Pizza Pie and Corvette Diner. There is some overlap. For example, there are multiple BO-beau venues—BO-beau kitchen + garden in La Mesa, BO-beau kitchen + bar in San Diego and BO-beau kitchen + roof tap in Long Beach—but each has a unique twist. “Each one of our BO-beaus has some common menu items, but other than that they are different,” Cohn says. “The menus are driven by the executive chef in that location.” BO-beau kitchen + caché, which recently opened in the Hillcrest neighborhood, is a dual concept with a backroom speakeasy. Next door is Tacos Libertad, a taco shop where 100 percent of profits are donated to a monthly charity selected by an advisory committee.

that age group. “I think it’s on us to introduce our guests to new things,” he says. “The younger generation is looking for something new all the time.” As for trends, red blends have been on fire recently, and wines from Mexico have also found a foothold. “Because we’re so close to the border we do a good amount of Baja wines,” DiMarino notes. “They’re up and coming for this area for sure.” He puts his own stamp on wine menus as well. “I really want people to drink more Riesling,” he says. “Every one of my restaurants has Riesling on the menu in some form. I just don’t think people understand it yet, and once they taste dry Riesling they’re going to be all over it.” Tiki is the big trend in spirits for San Diego. Cohn Restaurant Group doesn’t have a tiki-centric venue, but nevertheless has incorporated its influence. “It’s not really about the rum—it’s about the fruity, fresh, tropical cocktails,” DiMarino says. He adds that interest in mezcal is on the rise among locals in San Diego. It’s not a big seller right now, but it’s drawing increasing attention. “Nobody likes mezcal when they’re trying it for the first time,” DiMarino explains. At one venue, Indigo Grill, bartenders are infusing mezcal with fruits and chilis as a way to introduce the unique spirit to guests. Excitement about craft and local beer is very high in San Diego. That’s underscored by some of Cohn Restaurant Group’s most recent openings, including Draft Republic and Coin Haus, which has a second location opening in Ocean Beach next year. Although the local brewing scene is thriving in San Diego, DiMarino contends that local beer isn’t always the best fit at his restaurants. “We like to feature great beer, not just local beer,” he says. “Most of my restaurants do feature local beer, but I’m not stuck to that. In fact, local sometimes doesn’t make business sense because local brands tend to be more expensive in their home market than they are outside of their locality. I pay less for a small craft brew from San Francisco than people in San Francisco do.” The proliferation of brewpubs and craft tasting rooms make the local craft beer scene very competitive. “The craft brewers have tasting rooms everywhere, and they also compete with us—they can serve a $5 pint and we’re serving a $7 pint. That’s the issue I have with local beer,” he adds.

PHOTO BY (TK) TK

Looking Ahead Cohn says his company is always looking for new opportunities and will continue on the expansion path for the foreseeable future. New concepts are always in the works. “The magic of multi-concept restaurants—and we may be doing it backwards, but it has worked for us—is that we find the right location and then try to match a restaurant that we think will work in that particular neighborhood,” he says. “We certainly look at demographics and the competitive set and try to see if anything is missing from the neighborhood that we think would work well.” Looking ahead, Cohn has no specific goal to reach in terms of number of locations. “I’ve never done it that way,” he says. “It’s

The Harbor Island–based Island Prime (exterior pictured top) is Cohn’s steak- and seafood-focused fine dining restaurant. The venue is attached to the more casual C Level bar (above).

always been based on opportunities, and what’s happening in the marketplace. I do think it’s a bit trickier these days because occupancy costs have risen a bit, so we’re a bit more cautious.” Orange County is a likely next step, Cohn says. With one restaurant in nearby Long Beach and given Orange County’s proximity to San Diego, the wealthy area is an obvious choice. “We like the idea of staying close enough so we’re within a few hours’ drive of all of our restaurants, except of course Hawaii,” he says. “We just need something that excites us. We’re a family company and we don’t have any outside debt, so we’re not driven by investors. We make decisions based on whether the location and the opportunity feels right.” Growth may be stymied by market factors. Cohn admits that expansion has slowed due to the rising costs of doing business. An escalating minimum wage is a factor but, more importantly, real estate costs are skyrocketing. He laments the “very competitive environment and high costs of doing business” in California. “You don’t always hit a home run so you’ve got to make sure your costs are in line, especially your occupancy costs, so that you can afford to be successful if you hit a double,” Cohn says. “I’ve turned down a lot of deals only because we would’ve had mw to hit a home run.” NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

SOUR

BEERS

SOAR Brewers and retailers are sweet on sour beers BY TERRI ALLAN

“I

’m definitely seeing more people seeking out sour beers,” says Greg Norton, owner of Bier Cellar, a beer and wine shop in Portland, Maine. “They come into the store and ask where the sours are.” Norton believes this increased demand is due to improved availability of affordable sour styles such as goses, Berliner weisses and kettle sours. Jason Glunt, owner of Salud Beer Shop in Charlotte, North Carolina, has seen interest in sours building for some time. His store has sponsored the “Release the Funk” sour beer festival every November since 2013. “It’s always been a sellout,” Glunt says of the one-day event. In Dallas, Rosie Ildemaro, co-owner of Strangeways bar and restaurant, has been such a longtime fan of sours that four years ago she launched the venue’s first “Sour Week,” devoting nearly all of its 40 draft handles to sour brews ($7 to $10 a 10-ounce pour). “I figured we’d attract a few people,” she says. “But it was the best week of the year.” Since then, Strangeways has hosted Sour Week every year during October, drawing local beer lovers as well as those from as far away as England. “It’s my favorite week of the year,” says Ildemaro, adding that this year’s Sour Week also took place in October.

Growth Mode Sour beers are certainly growing in popularity. According to Nielsen, for the 52 weeks through May 20th, dollar sales of sour beer styles soared 49 percent in off-premise outlets. And while sour beer styles account for less than 1 percent of off-premise craft beer sales, Nielsen notes that the category’s dollar sales are 62

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

Portland, Oregonâ&#x20AC;&#x201C;based Cascade Brewing Barrel House is a pioneer of barrel-aged sour beer production, with its first offerings dating back to 2004. Today, the brewer distributes exclusively barrel-aged sours.

aging.” And because sours allow for more nearly seven times what they were four experimentation than other beer styles, years ago. Sours are also trending in the Dayhoff says today’s variety-seeking beer on-premise, as beer drinkers seek more consumer is interested. variety. “Bars are realizing that draft sours are a big opportunity, particularly in Craft Brewing’s Embrace venues that are selling 18 different IPAs,” Wood Shop Sour Ale’s facility opened last remarks Scott Vaccaro, founder of Elmsyear following tremendous demand for the ford, New York–based Captain Lawrence sours produced at the flagship Upland Brewing Co., which produces numerous brewery. In fact, retail sales of Upland’s sour beers. sours such as Peach ($25 a 750-ml. bottle) Sours tend to fall within a catchall only began this year (previously the category—hailing from both U.S. craft small-volume beers were exclusively availbrewers and traditional European breweries—and they cross a variety of Portland, Maine’s Bier Cellar (pictured top) able at the parent brewery or via a lottery) offers a slew of sours, including barrel-aged price points. Sour styles include lambics offerings whose high-end prices surprise in markets such as New York, Boston, such as gueuzes, Flanders red ales, Berliner customers. Cascade’s luxury sours (bottles Washington, D.C., Nashville, Chicago, weisses, goses, barrel-aged brews and the above) can age for up to two and a half years. Wisconsin, Illinois and Indiana. In addilatest wave, kettle sours. In general, sours tion to the wood-aged beers produced at are fermented with wild yeast and bacteria, yielding acidic, tart the Wood Shop, Upland also brews kettle sours like Petal to the taste profiles. Like other retailers and beer marketers, Norton Kettle ($10 a six-pack of 12-ounce bottles) at its main brewery. from Bier Cellar would like to see sours more specifically categoThe Bruery has been producing sour beers since opening in rized, as there can be a wide price disparity between kettle sours 2008. “At the time, there weren’t many brewers making sours,” and Belgian lambics or barrel-aged sours. “Some people are Rue says. Bruery Terreux opened last year in a separate location shocked at the prices of beers that are barrel-aged for two to three to prevent cross-contamination of yeast among the different beer years,” he says. Bier Cellar’s 40 to 50 sour brews range from styles. “Our sour beer production today is outpacing our overall $9.99 a six-pack of 12-ounce cans of White Birch Blueberry production,” he reveals. Bruery Terreux sours are available in Berliner Weiss to $52 for a 750-ml. bottle of Drie Fonteinen. 29 states, generally priced from $8 to $23 a 750-ml. bottle. The Frucht series ($12) is among the company’s most popular labels. Beer retailers and marketers say there are several reasons for the Portland, Oregon’s Cascade Brewing Barrel House produces growing popularity of sours. “Beer education continues to increase exclusively sour beers for distribution beyond its two pubs. Vice and more adventurous palates are beginning to emerge,” explains president of sales and marketing Tim Larrance explains that Patrick Rue, founder of California’s The Bruery and Bruery Cascade began brewing sours in 2004 to showcase indigenous Terreux, which specializes in farmhouse-style wild and sour beers. Pacific Northwest products, such as locally grown fruits, and “People are also looking for the tartness and acidity that are missing from other beer styles,” such as IPAs. Douglas Dayhoff, barrels from nearby wineries that are used to produce the brews. part-owner of Bloomington, Indiana’s Upland Brewing and the Cascade produces only barrel-aged sours—with some beers aged Wood Shop Sour Ale Brewery, notes that as consumer underfor up to two and a half years—and they’re among the most standing of how beer is made increases, “people are discovering expensive on the market, retailing between $20 and $31 a traditional practices like mixed fermentation and wood-barrel 750-ml. bottle. Cascade beers are available in 40 states. NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

foeders that were made 150 years ago from 150-year-old French oak trees. Earlier this year Latis introduced Rodenbach Fruitage— comprised of 25-percent aged Rodenbach and 75-percent young Rodenbach, with cherries and elderberries—in four-packs of 8.5-ounce cans ($6.99) in select markets. “We’ve had a lot of requests for Grand Cru in cans so we’re dipping our toe in the water,” Latis says.

Wine-Drinker Appeal

DeCicco & Sons (Armonk, New York, store pictured top) offers over 200 sour beers, including craft offerings from New Belgium and classics from Rodenbach (above right). The store collaborated with Newburgh Brewing in 2016 on Project DeCiccoWeiss, a kettle sour.

Captain Lawrence, meanwhile, produces both kettle and barrelaged sours, ranging from Tropigose gose-style ale ($12 to $16 a four-pack of 16-ounce cans) to Cuvée de Castleton ($15 a 375-ml. bottle). The New York brewery has been producing sours since it opened 10 years ago, and according to Vaccaro, it will brew a total of 17 sours this year. Captain Lawrence beers are distributed in 11 states, from Massachusetts to South Carolina. National craft brewers like New Belgium are also on the sours scene. The Fort Collins, Colorado–based brewery first produced LaFolie sour ale, aged in foeders, or oak barrels, in 1999, and since then has added three more year-round barrel-aged sours— Transatlantique Kriek in 2005, Le Terroir in 2007 and Sour Saison this year. Last year, New Belgium introduced Tartastic, a kettle sour. Lauren Woods Salazar, wood cellar director and blender, calls the brew “very accessible,” while the company’s wood sours are “occasion beers, not everyday beers.” Indeed, growing popularity of craft sours is bringing an increased awareness to classic sours, such as Rodenbach Flemish red ale from Belgium. David van Wees, founder of Latis Imports, says brews like Rodenbach Grand Cru ($9.99 a 750-ml. bottle) represent “signature sours” as they’re aged in 66

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

Sour beer marketers and beer retailers agree that the beers appeal to wine drinkers more so than other beer styles, creating a good opportunity to further widen the ranks of the craft beer segment. “Whenever wine drinkers come in and say they don’t like beer, I steer them toward sours,” remarks Kevin Brooks, manager of Top Hops bottle shop in New York, which offers about 50 different sours, priced from $2.49 a 12-ounce can of Sierra Nevada Otra Vez to $65 for a 750-ml. bottle of Oud Beersel Bzart Kriekenlambiek. Rue says a Flemish red is a great alternative for a Pinot Noir. In fact, Bruery Terreux sees so much opportunity for its beers with wine drinkers that Rue says the brewery is more likely to participate in a wine festival than a beer festival. Rue and others point to sour beers’ ability to pair with a variety of foods—ranging from cheese to hamburgers to rich desserts—more easily than other beers and even some wines. “Sour beers cleanse the palate and work well with savory foods,” remarks Upland’s Dayhoff. “My favorite pairing is a sweet dessert like cheesecake,” Rue adds. “A sour beer helps refresh the palate and elevates the creaminess of the cheesecake.” Beer retailers and bar operators are finding that sour brews lend themselves to unique merchandising and marketing practices. “We’ve cross-merchandised sour beers with cheese,” remarks Joseph DeCicco Jr., owner and partner at DeCicco & Sons gourmet grocery chain based in Westchester, New York. The stores offer more than 200 packaged sours, priced from $9.99 a four-pack of 16-ounce cans of Project DeCiccoWeiss—a collaboration kettle sour produced with Newburgh Brewing—to about $60 for a 750-ml. bottle of Oud Beersel Bzart Lambiek. DeCicco’s offers draft sours at in-store bars as well, generally priced at $10 a 9-ounce pour. Bier Cellar in Portland, meanwhile, has also collaborated on a kettle sour with a local brewer, and according to Norton, Tropical Storm—produced at Liquid Riot Bottling Co.—is the store’s top-selling sour at $16.9 a four-pack of 16-ounce cans. While retailers and marketers concede that sours are unlikely to grow in size to rival IPAs anytime soon, they say increased demand for the brews is not a fad. “Sour beers aren’t a flash in the pan,” remarks Brooks from Top Hops. New Belgium’s Salazar believes that sours can make for nice alternatives to IPAs. “They aren’t going anywhere,” she says. “They’re just mw more crayons in your crayon box.”

WINE FILES S PA I N

Vineyard Brands (pictured) capitalizes on the appealing price-quality ratio of Spanish wines for consumer outreach.

Spain’s Age of Discovery Spanish wine’s popularity is no longer due to price orientation as drinkers explore its styles and regions

roducers and importers of Spanish wines have been known to bristle at the recurring assessment that the category offers good value. Most would agree that Spanish wines do indeed offer an attractive quality-price dynamic, but it’s the word “value”—the implication that Spanish wines should be inexpensive—that some say is detrimental to the higher end of market. “Little by little, people are moving to higher quality wines, but it’s difficult to rid ourselves of the ‘good value’ image,” says Nicolás Bertino, CEO and manager of González Byass USA. “That reputation helps sell bigger volumes, but it’s a handicap when it comes to selling higher-priced wines from single estates, when importers are typically looking for wines at around the $10 mark.” Andrew Holod, national sales manager for Grapes of Spain, Inc., focuses on smaller, often family-owned wineries.

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

He’s making inroads as buyers become increasingly cognizant of the quality Spain has to offer, but hurdles remain. “We still see retailers reluctant to stock the mid-to-upper-tier Spanish wines,” despite the fact that they typically over-deliver on quality, Holod says. “A $12 wine from Spain is competent and potentially interesting, and an $18 wine is likely to be world class,” he adds. The lack of development of a luxury tier of Spanish wines in the United States is “probably our biggest gap,” according to Javier Murua, co-owner of Bodegas Muriel, Viña Eguía, Conde de los Andes and other wineries. “We’re recognized as very good value, but I don’t think the consumer has the perception of Spanish wines being as luxurious as they perceive France or Italy,” he notes. Daniel Toral, beverage director for 50 Eggs Inc.—which owns Chica at The Venetian Las Vegas, as well as other

PHOTO BY (OPPOSITE) (TK) TK FRIEDERIKE PAETZOLD

BY CAROL WARD

Though OlĂŠ Imports handles producers from such regions as RĂas Baixas (Pazo de Galegos winery pictured), the company is currently eyeing vintners from the northwest region of Galicia.

At Himmel Hospitality’s Grill 23 (dining room pictured left), beverage director and master sommelier Brahm Callahan (right) offers highend Spanish wines that reflect modern winemaking techniques within the glass, which often resonate better with American consumers.

RIOJA IMPORTS INTO THE UNITED STATES—1996-2016 (millions of nine-liter case shipments) 1.2

1.0

0.8

0.6

0.4

0.2 ’96

’98

’00

’02

’04

’06

’08

’10

’12

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

’14

’16

Investing Behind Brands Spain is an Old World producer that doesn’t have the history or reputation of peers like France and Italy. Instead, it’s often viewed as a newcomer along with many New World producers. Murua says the onus is on producers and importers to ensure Spanish wines are properly recognized. “Our introduction to the market has really only been over the last 10 to 15 years, and establishing a premium brand takes a lot of time and consistency,” he explains. “Though we’ve had that in the domestic and European markets, the U.S. market is still quite new to us. We need time, patience and investment.” Communication is also key in a competitive landscape that includes luxury stalwarts from France, Italy and elsewhere. “The difficulty for Spain is to open up the sector to more expensive wines, where France and Italy are very well represented,” says Bertino of González Byass. “Spanish wines are obliged to have strong brands that are well-rated. This is a long-term job and one in which communication is more important than price.” Patrick Mata, co-owner of Olé Imports, agrees that connecting with consumers is the best strategy for growth at the higher end. “Our company is making great effort to directly engage with the consumer and do events where we show them higher-end wines,” he says. “If we weren’t doing those types of events, selling higher-end wines would be almost impossible. Without them, consumers risk paying $50 for a bottle they don’t know about.” For online retailer Wine Access, Spanish wines priced between $20 and $25 are growing, but the sector is dragging down the company’s average retail price because Spain has few players in the $50-plus price category. Matt Deller, a Master of Wine and the chief wine officer at Wine Access, suggests communication needs to ramp up. “Collectors seem to have a mild interest in Spanish fine wine, but there’s a lot of

PHOTO BY (TOP RIGHT) TODD MAZER

restaurants—assesses the situation from a different viewpoint. Chica’s wine list is dominated by South American wines, although Spanish wines make up about 25 percent of the menu. “More and more guests are willing to pay a little more for Spain than for Chile or Argentina,” Toral says. “With a little push from our sommelier, we’re able to get those wines in front of people.”

LEADING BOTTLED SPANISH TABLE WINE BRANDS IN THE U.S.1 (thousands of nine-liter case depletions)

Brand

Importer

Marqués de Riscal Shaw-Ross International Importers Campo Viejo Pernod Ricard USA Marqués de Caceres Vineyard Brands Bodegas Muriel Quintessential Wines Honoro Vera Blue Ventures CVNE Europvin USA Rene Barbier Dreyfus, Ashby & Co. Bodegas Montecillo Evaton Inc. El Coto de Rioja Frederick Wildman & Sons Ramon Bilbao Deutsch Family Wine & Spirits Total Leading Brands4

2011

2012

2013

2014

2015

2016

122 105 157 4 103 15 33 13 552

129 109 158 52 19 10 94 10 30 21 632

132 118 158 105 40 26 68 14 33 21 715

138 114 160 116 55 44 49 27 35 22 759

141 137 165 120 64 38 45 31 35 23 799

172 162 149 91 84 55 45 32 30 20 840

Growth Percent Rate2 Change3 2011-2016 2015-2016 7.1% 9.0 -1.0 86.8 + + -15.3 16.4 -1.9 9.0 8.8%

22.0% 18.1 -9.7 -24.2 31.8 44.8 4.6 -14.3 -13.0 5.2%

Still wine not over 14% abv; excludes sangria Average annual compound growth rate 3 Based on unrounded data 4 Addition of columns may not agree due to rounding. 2

opportunity to build awareness for classic Spanish wines as a cellar must-have,” Deller says. “More vertical tastings for collectors, trade and media are recommended.” Murua of Bodegas Muriel notes that Rioja has invested considerable resources in promoting its wines to U.S. consumers, but suggests that a more individualized approach is warranted. “If we promote it as generic, Rioja will be recognized as generic,” he says. “Investment in the luxury and premium sectors has to be made by the brand.” One development that helped start conversations about higher-end Spanish wines occurred in 2013, when Wine Spectator named the Cune Rioja Imperial Gran Reserva 2004 as its Wine of the Year. Dennis Kreps, owner and national sales manager for importer Quintessential Wines, says The international wine list at Murphy’s Restaurant (above) in Atlanta that “did a lot to legitimize the country.” Listings includes a number of Spanish labels that have an attractive price-quality dynamic, in prominent restaurant chains followed and have in addition to offering Old World sensibility alongside New World flavor. stayed strong. Because of the nature of his portfolio, Kreps sees thriving demand for Spanish wines at higher was expected to consider another change, allowing the naming price points. “We’ve always had a little bit of trouble with a of specific villages in which a wine is produced. consumer understanding what a Crianza is, but once you get The vineyard classifications will complement the existing to Reserva or Gran Reserva, the recognition is a little better age statements for Rioja wines: Joven, Crianza, Reserva and and the pull-through is a lot better,” he says. Gran Reserva. “The vineyard designation will step up the image and reputation of the region,” Kreps says. “It will start Rioja Classification Changes there and then move into village-level wines as well, so you’re Changes in the way producers communicate provenance and going to have a Burgundy-like classification system for Rioja quality are underway in Rioja, Spain’s most prominent which will move prices and reputation up.” wine-producing region. In June, Rioja’s Consejo Regulador Mata of Olé Imports notes that the changes will give voted to approve the creation of a single vineyard, or “viñeconsumers a better understanding of the region’s attributes. dos singulares,” classification. Under restrictive rules, the “There are many faces to Rioja and now communication is change will allow wineries to identify a single vineyard of going to be deeper and more thorough, and that’s going to origin on wine labels. At press time, the Consejo Regulador engage more consumers,” he says. But Murua of Bodegas Muriel NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

Quintessential Wines (the importer’s Rioja-based Conde de los Andes above) expects that the new vineyard classification system for Rioja wines, which is meant to establish a hierarchy and complement existing age statements, will raise demand for the region’s high-end offerings.

says the new designations could run the risk of “over-informing” the consumer. “Sometimes we need to consider how much information we can supply to the consumer versus how much information they can retain,” he explains.

Delivering Value While producers and importers seek ways to gain recognition and volume for Spain’s higher-end wines, many others are fully capitalizing on that “value” mantle that has long been associated with the category in the United States. “Spanish

BOTTLED SPANISH TABLE WINE IMPORTS INTO THE UNITED STATES—1996-2016* (millions of nine-liter case shipments) 5

wines represent a great value at all price points and segments,” says Taylor Case, vice president for the Southeast region at Vineyard Brands. “There’s opportunity to communicate to the average wine consumer the price-value benefit of Spanish wines, and also to showcase the overall category.” Jo Adamo, vice president of marketing for wines and Champagne at Pernod Ricard USA, says wines like Campo Viejo and other category leaders have “tapped into a drinker that’s looking for more modern wine styles that are great with food. These wines are great for everyday consumption.” Adamo says volume of Spanish wine overall is “fairly flat,” but that value is rising, with multiple brands competing in the $10-to-$15 price band. Case notes that the “sweet spot” for pricing at retail is edging up somewhat, rising to $12.99 to $14.99, compared to $9.99 to $11.99 a few years ago. Holod has a different experience. He says Spanish wines in the Grapes of Spain portfolio were averaging well above $15 at retail before the economic collapse of 2008. Since then, “our average price is down at retail,” he says. Volumes are also stagnating, although leading brands had wildly varying performances in 2016. The top two Spanish wine brands in the United States—Marqués de Riscal and Campo Viejo—both registered double-digit volume increases, as did a number of other top-20 wines. But those gains were countered by a similar number of double-digit declines. In total, 19 leading Spanish wine brands combined for a 0.3 percent decline to just under 1.3 million nine-liter cases, according to Impact Databank. Those wines together accounted for 30.9 percent of Spanish wine volume in the United States in 2016.

Complementing Food ’96

’98

’00

’02

’04

’06

’08

’10

’12

’14

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

’16

At any price point, wine professionals say value is a key driver in consumer interest in Spanish wines. But that’s not the only draw. Darren Scott, general manager and sommelier at Red Room Lounge in Austin, says Spanish wine works on every

Vineyard Brands handles Rioja-based Marqués de Cáceres (president Christina Forner left; bottles pictured right) in the United States. The winery, which offers a variety of price points, varietals and age statements across its portfolio, is a top value wine at Murphy’s in Atlanta.

level of his wine program. “Spain treats wine as part and parcel with a meal, so there are many affordable, idiosyncratic styles that pair extremely well with food and my guests really love,” Scott explains. Red Room’s by-the-glass selections include the 2016 Rezabal Getariako Txakolina Rosé, made from the Hondarrabi Beltza grape varietal ($13), and the 2015 Bodegas Alfredo Maestro Viña Almate Castilla y León Tempranillo ($12). When it comes to the restaurant’s bottle selections, Scott says his guests are seeking bottle aging and an affordable price, which wines from Spain regularly deliver. One popular label is the 2005 López de Heredia Viña Bosconia Rioja Reserva ($82 a 750-ml.). Wine professionals also point to the modern techniques employed by some Spanish winemakers, which helps to differentiate them from Old World stalwarts. “Spanish wines are generally clean and polished, and many of the newer regions are focusing on a more international style of wine that resonates with American drinkers,” says Brahm Callahan, beverage director and master sommelier of Himmel Hospitality Group. “Generally speaking, most Spanish wines are great values. Regions like Ribera del Duero or Toro produce world-class wines that are values when compared to similar wines that come from the domestic market. While they might be modern in style, most Spanish wines are still extremely food-friendly, making them appealing for the table as well.” At Himmel Hospitality’s Grill 23 & Bar in Boston, two popular Spanish selections are the 2007 Viña Ardanza Riserva Rioja ($78 a 750-ml.) and the 2012 Hacienda Monasterio from Ribera de Duero ($110). Taurean Philpott, a wine consultant for Murphy’s Restaurant in Atlanta, also notes the value and style combination. “People are drawn to Spanish wine due to the fact that it has Old World sensibility with New World flavor,” Philpott says, adding that “value is a big part of Spanish wine, as many are priced very well.” Two wines exemplifying that value, according to Philpott, are the 2011 Marqués de Cáceres Reserva from Rioja ($52) and the 2006 Can Ràfols dels Caus from Penedès ($56).

Ripe For Exploration One factor that could work in Spain’s favor, aside from the value proposition of its wines, is the fact that many of the country’s wine producing regions are largely unknown in the United States. “The American consumer is not generally up to speed with the different Spanish Denominaciónes de Origen—historically the most recognized tend to be Rioja and Ribera del Duero,” González Byass’ Bertino notes. But, he adds that American wine drinkers are increasingly “curious and open to trying new things,” which bodes well for the sector. Rioja is by far the most prominent region in Spain, offering a familiarity to consumers that other regions can’t currently match. That can help with those who want a certain comfort level. “We push regions and varieties other than the easily recognizable ones, but always find that established estates in Rioja outsell others,” notes Toral of 50 Eggs. Other regions, or in some cases individual varietals, are ripe for exploration. “In the on-premise, I believe we will see millennials exploring more of the lesser-known regions and varietals as they are very adventurous with their selections,” says Case of Vineyard Brands. “This will help with varietals like Verdejo and Albariño, as well as Spanish red blends.” Olé Imports’ Mata is currently bullish on wines from the Galicia region in Northwest Spain. “Before, Spain was about Priorat, Rías Baixas and Rioja,” he says. “The next phase for American wine drinkers is to learn about small, artisanal producers located all over Spain. There is a great concentration of them in Galicia. There are more than 200 varieties grown in this area, so there’s a lot of room for discovery.” Mata sees a bright future in coupling millennial consumers with Spain’s diverse offerings. “Spain produces wines that millennials like to drink—not only in terms of price point but also varietal and regional diversity, regional growth, and the emergence of artisanal producers,” he says. “They just need mw to be conscious of engaging the consumer.” NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

MIXOLOGY LOW-ABV

Sessionable Sippers Drinks with lower alcohol content make for slow, steady and enjoyable drinking BY SALLY KRAL

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

PHOTO BY (TK) TK

an Francisco’s Myriad Gastrocreative with the category. “The possipub has a license to serve beer bilities are endless,” Toscano adds. and wine, including fortified “There’s something really fun about wine, but not spirits. The bar team is working with ingredients that are typinonetheless determined to offer cally modifiers in a cocktail and mixed drinks, but as lead bartender making them the main attraction.” Stephen Swisher points out, creating cocktails with these low-abv beverFlavor Focus ages required a bit more work: “There Though Myriad Gastropub can’t offer aren’t really any standard session traditional distilled spirits, the cocktail cocktails like an Old Fashioned or menu features various low-abv beverMartini, so you have to be creative ages, some of which have similar flavor and try something new.” characteristics to spirits. “We use prodMyriad’s general manager Mark ucts that ring familiar but are a little Finein adds that as a longtime bardifferent, such as agave wine, which is tender himself, he struggled with the as it sounds: a wine made from agave,” “mental block” of not having the usual Finein says. “We also carry RJ Boone, spirits to reach for, but he’s happily which is a fortified wine made from adjusted over time. “Stephen has a oranges that’s aged in whiskey barrels to more youthful approach and fewer give it smoky, Bourbon-like flavors.” preconceived notions and has taught He adds that although the instinct me a lot about what you can do in this might be to make a traditional setting,” he says. “It’s not a limitation, Tequila-based or Bourbon-based cockbut a chance to expand your knowledge At New York City’s Ousia, the Sherry Cobbler blends tail with these ingredients, it’s better to and explore new possibilities.” Sherry, orange brandy liqueur and orange. Complex think outside the box. “We try to avoid Luckily for the folks at Myriad, wines like Sherry mix well in low-proof cocktails. just making a basic agave wine Margarsession cocktails—generally those that ita, for example, which would not be feature ingredients with an abv of 25 percent or less—are becomparticularly creative or flavorful,” he says. “Without the alcohol ing more popular as consumers seek out drinks they can enjoy bite of a distilled spirit, there needs to be more complexity added to keep it intriguing.” Swisher’s Persephone’s On Fire ($11) is a throughout an evening, without the risk of over-inebriation. spicy and flavorful take on the Margarita, featuring Veeno agave “People have figured out that a night drinking nothing but wine, Cocchi Americano aperitif, pomegranate juice, house-made Negronis and Manhattans isn’t going to last very long,” says jalapeño syrup and lime juice. Michael Toscano, head bartender at New York City restaurant “With session cocktails, the base spirit you’re using is not and bar Dante. “People have also become more sophisticated only lower in alcohol, but also in intensity of flavor a lot of in their approach to drinking and are learning what it means the time,” Swisher says, noting that a great way to add instant to really enjoy a drink.” flavor and complexity to a session drink is to incorporate Even at bars with full liquor licenses, session-style cocktails are house-made syrups and fresh juices. In The Freshie ($11), taking up more space on menus as mixologists get increasingly

PHOTO BY (LEFT) AJ TRELA

The low-abv Miss Beauregarde (pictured left) at Cindy’s is a beer-based cocktail, while similarly sessionable creations like the Old Timer (top right) at Myriad Gastropub and the Tahini Martini (bottom right) at Timna feature dry vermouth as a base.

Veeno is mixed with Ku soju, D’Arbo Elderflower syrup, housemade juniper syrup, fresh lime juice, and muddled cucumber and mint. “Just because we don’t have distilled spirits doesn’t mean we can’t be creative with cocktails,” he adds. Indeed, even with the lower alcohol content, session cocktails can still pack a flavor punch, especially with the addition of house-made tinctures. At Los Angeles restaurant and bar Cassia, the Blood Orange Rome with a View ($13) features Leopold Bros. Aperitivo liqueur, lemongrass- and pineapple-infused Dolin Dry vermouth, house-made blood orange syrup and fresh lime juice. At Cindy’s in Chicago, meanwhile, “spirit guide” Nandini Khaund’s Miss Beauregarde ($12) is a beer-based cocktail comprising Off-Color Brewing’s Apex Predator saison, lemon juice and house-made blueberry-ginger Demerara syrup. At The Boardroom in Los Angeles, lead bartender Christina Russo’s Gertrude Stein ($14) blends Pimm’s No. 1 liqueur, Tuaca brandy liqueur, fresh lime juice, house-made hibiscus-rosehip syrup and San Pellegrino Limonata sparkling water.

Like Myriad Gastropub, Timna in New York City has a license to sell only beer and wine, so all its cocktails are in the session category. “Our guests gravitate toward these types of drinks because they’re refreshing and elegant, and they complement our cuisine without overshadowing it,” says general manager Danielle Magen. “Our food menu is influenced by flavors from the Mediterranean, Asia, North Africa and the Middle East. To match this in our cocktails, we use a lot of fresh and seasonal ingredients, including fruits and vegetables like pineapple, watermelon, beets and cucumber, as well as spices like cinnamon, cardamom, star anise, lavender, cayenne pepper and even raw tahini.” Chef Nir Mesika created many of the drinks on Timna’s menu, including the Wicked Red ($14), which features a low-proof vodka called Klir Red, as well as fresh beet and lemon juices and orange blossom water; and the Tahini Martini ($14), comprising Dolin Dry vermouth, raw tahini, lime juice, house-made anise syrup and a date honey syrup imported from Lebanon. NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

“One of the things we like most about session cocktails is that they’re the perfect option for those who want to have a few cocktails over dinner, or those who want to start the evening with a cocktail and later switch to wine,” Magen says. “They can be complex without being too strong, both in terms of flavor and alcohol content.”

another Italian bubbly session drink called the Negroni Sbagliato ($10)—or “Mistaken Negroni”—blending Cinzano 1757 Rosso sweet vermouth, Cappaletti bitter liqueur and Corvezzo Terre di Marca Millesimato. “Our guests tend to go for cocktails that are light and refreshing, and there’s definitely a correlation between a drink’s effervescence and its popularity,” Toscano says. Elegant Aperitifs Sparkling wine is indeed a common Bright and bubbly cocktails are always a ingredient in these lighter, aperitif-style hit, notes Camille Ralph Vidal, global session drinks that are currently in such brand ambassador for St-Germain. She high demand. At Boa Steakhouse, which notes the continued popularity of the has two locations in Los Angeles, the Floral elderflower liqueur brand’s signature Bloom ($15) features Charles Lafitte Brut St-Germain Cocktail, a blend of the Rosé Champagne and a foam made with liqueur, Champagne and sparkling water. Patz & Hall Chardonnay and St-Germain. “Everyone loves this drink; it has no At Timna, former manager Amir Nathan’s Peace in the Middle East ($14) comprises gender, no season,” she says. “It’s a light, Dolin Dry vermouth, fresh lemon juice, refreshing and balanced aperitif that house-made lavender syrup and Paul De perfectly embodies the low-abv cocktail Coste Blanc de Blancs Brut sparkling wine. category. These types of cocktails have Sparkling wine is frequently used in sessionBeyond sparkling, there’s a wide range of delicate, nuanced flavors and can be able cocktails, like the Peace in the Middle different, complex wines to choose from sipped elegantly throughout the evening.” East, which also has vermouth, fresh lemon when making low-proof cocktails. “Sherry, The Aperol Spritz—which follows the juice and house-made lavender syrup. sake and vermouth have been big favorites same basic recipe as the St-Germain Cockof mine lately,” says Kevin Diedrich, owner of Pacific Cocktail but with Aperol aperitif in place of St-Germain and Prosecco tail Haven in San Francisco. “I try to stay away from pairing favored over Champagne—is wildly popular right now. Dante offers a classic Aperol Spritz ($14), made with Aperol, Corvezzo them with citrus, as it tends to bury the delicate flavors of Terre di Marca Millesimato Prosecco and soda water, as well as these spirits, but they’re otherwise so versatile to mix with.

Session Cocktail Recipes

Ingredients: 1½ ounces Dolin Dry vermouth; ½ ounce fresh lemon juice; ½ ounce lavender syrup1; Splash of Paul De Coste Blanc de Blancs Brut; Lavender sprig. Recipe: In a cocktail shaker, combine the vermouth, lemon juice and syrup. Add ice and shake. Strain into a Champagne flute. Top with Blanc de Blancs and garnish with a lavender sprig.

STRANGER THAN PARADISE By Lisa Nguyen Ingredients: 1 ounce Dolin Blanc vermouth; ½ ounce Giffard Elderflower liqueur; ¾ ounce lemon juice; ½ ounce honey syrup2; Splash Fever-Tree Bitter Lemon soda; Spritz Kübler absinthe; Bunch of mint; Orange wedge. Recipe: In a shaker, combine vermouth, liqueur, lemon juice and honey syrup. Dry shake and pour into a Collins glass. Top with soda. Add crushed ice all the way to the top in a dome-like shape. Garnish with mint and orange wedge. Spritz with absinthe for aromatics.

1Boil

ROMAN HOLIDAY By Nandini Khaund Ingredients: 1 ounce Meletti amaro; ¼ ounce Campari aperitif; 1 ounce La Colombe Pure Black cold brew coffee; ¾ ounce pineapple juice; ¾ ounce lime juice; ¼ ounce Demerara simple syrup; Pinch sea salt; Cinnamon stick. Recipe: In an ice-filled cocktail shaker, combine amaro, aperitif, coffee, juices, simple syrup and salt. Shake ingredients, strain over crushed ice, and garnish with a cinnamon stick.

1 quart water, 1 quart sugar and 1 cup dried lavender for 5 minutes. Let sit for 24 hours, then fine strain. Mix equal parts honey and water until honey is dissolved.

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

PHOTO BY (TK) TK

PEACE IN THE MIDDLE EAST By Amir Nathan

His Salary Man cocktail ($12) mixes Enter.Sake Shuhari sake, Dolin Blanc vermouth, Luxardo Maraschino liqueur and house-made lemongrass-grapefruit bitters, while his Sherry Cobbler ($11) blends Hidalgo La Gitana cream sherry, Tempus Fugit Spirits crème de noyaux liqueur, Combier triple sec, Super Judo pineapple syrup, orange marmalade and Angostura bitters. Johnny Livanos, beverage program director at Ousia in New York City, has his own take on the Sherry Cobbler ($13), featuring Lustau Los Arcos Amontillado Sherry, Torres Gran Torres orange brandy liqueur and fresh orange. Though typically featured as a modifier in classic cocktails, vermouth shines when used as a base ingredient. Myriad Gastropub’s Swisher notes that vermouth is his favorite low-proof product to use in session drinks, so he’s happy to see it “becoming more mainstream.” Lo-Fi vermouth, which is produced in Napa, is his preferred brand. His Old Timer cocktail ($13.50) features Lo-Fi dry vermouth, Carpano Antica Formula sweet vermouth, lime juice, house-made thyme syrup and Angostura bitters. “When I first began bartending in the late ’90’s, the choices of vermouths were very limited. You had sweet and dry and maybe three brands. Now there is an incredible variety of vermouths on the market spanning an amazing range of flavor profiles,” Myriad’s Finein notes. “Bartenders are making use of these and other new products and inventing more intriguing combinations all the time.” At Spoon and Stable in Minneapolis, bar director Robb Jones created the Orchards and Orchids ($13), which features Dolin Blanc vermouth, Rothman & Winter Orchard Peach liqueur, house-made raspberry syrup, fresh lemon juice and chilled rooibos tea.

PHOTO BY PHOTOS BY(TK) (TOP) TKAJ TRELA; (CENTER) GEORGINA ROSE

The Bitter End “I love amari and aperitifs that have spicy, herbaceous notes,” says Lisa Nguyen, bar manager at Seaworthy in New Orleans’ Ace Hotel. “They’re great for adding depth and complexity.” She notes that these types of spirits have long been favored among industry professionals and are becoming more common in popular cocktails. The Outer Banks ($11), created by Seaworthy’s consulting bar program manager Lauren Schell, comprises Averna amaro, Carpano Antica Formula sweet vermouth, house-made ginger syrup, lime juice, Angostura bitters and a splash of club soda. At Cindy’s, Khaund’s Roman Holiday ($15) mixes Meletti amaro with Campari aperitif, La Colombe Pure Black cold brew coffee, Demerara simple syrup, pineapple and lime juices, and a pinch of sea salt.

Aperitifs are increasingly used as base ingredients in cocktails. Seaworthy’s Stranger Than Paradise (left) has a dry vermouth base, while the Roman Holiday at Cindy’s (above) features a foundation of amaro and Campari.

“These products bring great, big flavors to a drink, and fresh fruit and syrups help to balance the different nuances of those ingredients. Adding a sparkling wine or soda gives the whole drink texture,” Nguyen adds. Her Stranger Than Paradise cocktail ($11) comprises Dolin Blanc, Giffard Elderflower liqueur, lemon juice and house-made honey syrup, topped with a splash of FeverTree Bitter Lemon soda and a spritz of Kübler absinthe; and bartender Alison Kafka’s Napoleon Complex ($11) blends Cocchi Americano Rosa aperitivo, housemade orgeat syrup, lemon juice and Mistinguett Cava Brut. Finein also loves amari, but notes that most brands are distilled and therefore can’t be served under Myriad Gastropub’s license. “That’s why I’m thrilled about a vermouth-based amaro like Cardamaro, which adds a pleasing herbal bitterness from cardoon and blessed thistle, or Cocchi Dopo Teatro with its deep raisin sweetness balanced with bitterness from rhubarb, quassia and cinchona bark,” he says. The venue’s Forbidden Lowball ($13) mixes Cardamaro with Crabbie’s alcoholic ginger beer, lime juice and Miracle Mile Forbidden bitters. “I also like quinquinas like Byrrh, which features quinine as the major flavoring agent,” Finein says. “I’ve always been a fan of bitter or tart flavors to add brightness and depth to food or drink.” Swisher’s Byrrh-ning Man ($13.50) features Byrrh Gran Quinquina, Lo-Fi dry vermouth, Blandy’s Rainwater Madeira, lemon juice and Torani cherry syrup. “Our guests are often quite skeptical that session cocktails will have enough flavor,” he adds. mw “Then they have one, say ‘Wow!’ and try two more.” Sally Kral is an Ithaca, New York–based freelance writer. NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

Kansas City’s Boulevard Brewing Co. (barrel room above) debuted its first barrel-aged beer, Bourbon Barrel Quad, in 2008. Since then, the brewery has emerged as a leader in the barrel-aged brew category, with nine barrel-aged offerings available.

Barrel-Aged

BEERS Like their whisk(e)y counterparts, craft brewers are experimenting with barrels of all types BY TERRI ALLAN

ill Murnighan marvels at the many options that craft beer lovers enjoy today. The beer buyer at Bailey’s Taproom in Portland, Oregon, says that variety is particularly apparent in the barrel-aged beer segment, where brewers are experimenting with all manner of barrels, as well as new ingredients. “It seems like nothing is off the table when it comes to barrel-aged beer these days,” says Murninghan, pointing to the range of spirits and wine barrels used for aging that help “create an infinite combination of fun flavors.” And for retailers like him, cask-aged brews can provide 78

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

a handsome return, as they’re often priced at $15 or more for a large-format bottle. The consumer quest for flavor variety and enhanced education in the art of brewing are helping to fuel the growth of barrel-aged beers. Phil Markowski, partner and brewmaster at Two Roads Brewing Co. in Stratford, Connecticut, points to the enthusiasm for new beers and styles as a driving force in the growth of barrel-aged brews. With barrel-aged beer experience dating back to his homebrewing days of the 1980s, Markowski also notes that craft beer fans are discovering European beers and “barrel aging is becoming a part of that discovery.” David Walker, cofounder of Firestone Walker Brewing Co. in Paso Robles, California, says rising interest in beer-making techniques is also contributing to the segment’s popularity surge. “Barrels have played a role with beer at various points over the centuries, and seeking out those flavors is a journey,” he says. “When you add the dynamic of spirits barrels to the equation, then the flavor opportunities become infinite.” Walker points to flavors like dark chocolate, coconut, caramel and tobacco, which are derived from the casks Firestone Walker uses to produce its wood-aged brews.

Coast-to-Coast Trend Kansas City, Missouri–based Boulevard Brewing Co. has emerged as a leader in barrel-aged beer production. “Our first release of a barrel-aged beer was in 2008 with Bourbon Barrel

For the past few years, Belgian brewer Chimay has aged a portion of its annual Christmas brew, Chimay Grand Reserve (bottle pictured), in barrels. The most recent special edition spent time in rum barrels prior to bottling.

Firestone Walker (exterior pictured top) is releasing six barrel-aged beers this year, including Parabola, a Heaven Hill barrel–aged brew (barrels above), and Anniversary, an ale aged in Bourbon barrels.

Quad,” says ambassador brewer Jeremy Danner. “At the time, we’d been brewing The Sixth Glass, a Belgian-style quad, for nearly two years, but wanted to find ways to make it more complex. Whiskey barrel–aging with tart cherries did the trick.” Today, Boulevard produces nine barrel-aged brews, with the year-round Bourbon Barrel Quad—priced at $12 to $14 a four-pack of 12-ounce bottles—the top seller. Firestone Walker’s involvement in barrel-aged beers, meanwhile, rose from its roots in the wine industry. Walker’s partner Adam Firestone is the grandson of Harvey Firestone, founder of Firestone Vineyard in California’s Santa Ynez Valley. “The brewery was started in a vacant barrel room at the family vineyard,” Walker explains. “Wood was part of our beginnings.” This year, Firestone Walker will release six barrelaged beers ($9.99 a 12-ounce bottle), including the highly anticipated Parabola, aged in Heaven Hill Bourbon barrels, and Anniversary ale, aged in a mix of Bourbon barrels. Two Roads has been producing barrel-aged beers since it opened in 2012, and the company uses several types of casks. 80

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

Offerings include the Bourbon barrel–aged Conntucky Lightnin’ sour mash ale, rum barrel–aged Roadsmary’s Baby pumpkin ale and white wine barrel–aged Worker’s Stomp saison. A few years ago the brewery even aged its Unorthodox Russian Imperial stout in an aquavit barrel. According to Markowski, Roadsmary’s Baby is the top seller of the lot, generally priced at $11.99 a six-pack of 12-ounce bottles or cans. Even Chimay Grand Reserve, the annual release from Belgium, has begun experimenting with barrel aging. For the past three years, brewer Bières de Chimay has aged a small volume of the annual Christmas brew in barrels—first oak, then Cognac and, most recently, rum barrels. Chimay Grande Réserve Barrel Aged Rhum edition is priced at $45 a 25.4ounce bottle. According to Luc “Bobo” Van Mechelen, president of Manneken-Brussel Imports, purchasers of the special-edition brew tend to be collectors or consumers searching for a special gift, “just like a fine wine.”

Barrels Of Fun As with other beer styles popularized by craft brewers, barrelaged beers now include many variations. “More and more brewers are producing barrel-aged beers, and they’re not just using Bourbon barrels—they’re using Tequila, gin and wine barrels,” says Ferdinand Sneed, beer manager at the flagship Jungle Jim’s International Market in Fairfield, Ohio. The store’s cask-aged beers can be priced as high as $20 a 750 ml. of Founders Brewing Co.’s Kentucky Breakfast Stout (KBS). Kenny Cooper, beer buyer at the five-unit Garfield’s Beverages in the Chicagoland area, adds, “Variety is becoming the hallmark of barrel-aged beers.” Garfield’s stores stock 50 or more of the beers, generally priced from $12.99 a 22-ounce bottle of Clown Shoes’ Crasher in the Rye to $89.99 for the 2015 Goose Island Bourbon County Stout Rare. “There’s no ceiling for these beers,” Cooper adds. The growth in Bourbon and rye whiskey in recent years has resulted in more availability of used Bourbon and rye barrels

for beer making, as producers of those whiskies only use a barrel once. But Markowski of Two Roads notes that rum barrels—which are used over and over again by distilleries—are harder to come by. He adds that the variety of spirits barrels now used in aging beer could stem from a little bit of “one-upmanship. At first, it was oak barrels, then it was Bourbon barrels, and now it’s all sorts of whiskies and other spirits.” Firestone Walker, meanwhile, enlists the help of local winemakers when blending a variety of barrel-aged brews for its annual Anniversary ale. “Winemakers are reflexively more comfortable with blending than brewers,” Walker explains. “Brewers are programmed for infinite consistency, whereas winemakers allow themselves some margin for surprise in the outcome of each vintage. Having winemakers in the room when we blend our barrel-aged Anniversary beer adds a dynamic that we couldn’t conjure in a room of only brewers.”

Bridge To Bourbon Brewers and retailers agree that the popularity of whisk(e)y, especially Bourbon, and other spirits is contributing to the growth of barrel-aged beers. “Bourbon barrel–aged beers are decadent, robust and have a higher alcohol content than other beers,” says Cooper. “They provide a bridge from beer to Bourbon.” Boulevard’s Danner notes, “Personand promotional efforts. Garfield’s, for ally, I love Bourbon and whisk(e)y, but it’s example, features special sections in its not something I necessarily want to stores for barrel-aged beers. “We encourdrink every day, so it’s nice to reach for age our customers to take their time and a beer that captures the essence of browse the selection,” Cooper says. But whisk(e)y barrels.” sales staff help is also required. “SomeMurnighan of Bailey’s Taproom says times, barrel-aged beers can be a handthe use of other types of spirits barrels sell,” he adds, noting that the release of can also entice consumers. “When the local Goose Island Bourbon County they see, ‘aged in gin barrels’ on a stout in late November is “a busy week label, it causes them to question what at our stores.” The stores typically raffle it’s all about, since gin is usually a clear off rights to purchase bottles of the Jungle Jim’s beer buyer Ferdinand Sneed (above) spirit,” he explains. Brewers Markow- sees variety as the hallmark of barrel-aged beers, coveted brew, rather than selling out ski and Walker add that the growth in with makers like Two Roads (barrels top) unveil- their limited allotment to collectors who craft distilleries is also helping to build ing brews aged in the likes of aquavit barrels. “camp out at the store” the night before buzz around barrel-aged brews. “It’s all the Black Friday release. part of the renaissance in flavor in beer and spirits,” Other venues also host regular events focused on barrelMarkowski says. “People want new flavor experiences.” aged brews. Jungle Jim’s has hosted a “Barrel-Aged Beer Bash” Retailers generally describe barrel-aged beer consumers as craft for the past 11 years. For $45 a ticket, attendees can sample beer aficionados and collectors. “Tracking down these beers can from 80 to 100 different cask-aged beers. “It’s one of our most be time-consuming and costly,” Murnighan remarks. “The popular events,” Sneed say. Bailey’s Taproom, meanwhile, consumer of barrel-aged beers has a collector mentality and celebrates its anniversary every July with a Barrel-Aged Beer expendable income and frequents bottle-share events,” in Fest, featuring 32 cask-aged brews on tap. “I hoard beers for the event throughout the year and put them on draft all at search of rare and unique beers, many of which are barrelonce,” Murnighan explains. For the last two years, the bar has aged. But Boulevard’s Danner comments that demographics for collaborated on cask-aged brews for the event with local brewbarrel-aged beer consumers are widening as the products themeries such as Alesong, Breakside and pFriem. selves become more diverse. “With the crazy crossover we’re Retailers and brewers agree that barrel-aged beers are here seeing from spirits and wine drinkers into the beer world, it’s to stay. In fact, in October Two Roads broke ground on a new tough to identify just one demographic,” he says. facility in Stratford that will be dedicated to barrel-aged brews. Walker says the opportunity for barrel-aged beers is “endless,” Sales Support while Danner adds, “The sky is the limit as brewers become As barrel-aged beers increase in popularity and volume, retailmw more innovative and adventurous.” ers and bar operators are supporting them with merchandising NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

Winning IN THE

Chicago’s Heisler Hospitality Group has earned a loyal following for its authentic and creative concepts BY LAURA PELNER

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

Heisler’s British maritime venue, Queen Mary Tavern, features such large format offerings as Pimm’s By The Pitcher (above).

PHOTO BY JACKIE GILLUM

rom hockey player to hospitality executive, Matt Eisler has taken a circuitous path to on-premise success in Chicago. The co-owner of Windy City company Heisler Hospitality operates nine venues in some of the city’s most popular neighborhoods, including Logan Square, Wicker Park and the West Loop. Standing out in those saturated neighborhoods isn’t easy, but Eisler says he’s carved a niche by following his heart and staying committed to the people and the areas in which his venues are located. What started impulsively for the former National Hockey League player has turned into a successful business venture, one that has diversified in recent years from a focus on bars and drinks venues to taverns and food-driven concepts, with more growth planned. “Our places reflect our personal interests,” Eisler says. “We’ve made an effort to hire good people and introduce concepts that complement the neighborhoods in which they live. We try to provide authentic experiences and we’re lucky that it’s all been well received. I opened my first place on a wing and a prayer. We started off as bar guys, but as we’ve grown and matured we’ve definitely become more focused on food and restaurant concepts.” Eisler’s business partner, Heisler co-owner Kevin Heisner, is a designer by trade and lends an artistic eye to the company’s venues, both in concept and interior design. He focuses on developing distinct spaces that embrace their history and the materials already in place to create an authentic atmosphere. Some of

Located in Chicago’s Wicker Park, Revel Room (pictured) specializes in craft cocktails and features a variety of international spirits.

Heisler’s standout and lauded properties include the cocktail den Sportsman’s Club, the Anglo-Indian, beer-heavy tavern Pub Royale and the New American vegetable-centric restaurant Bad Hunter. Beverage alcohol is integral to every Heisler concept and drinks sales vary widely at each location, from around 45 percent of sales at some restaurants to 100 percent of sales at a couple of the bars. “The food-to-beverage ratio is indicative of the atmosphere and liveliness of the venue,” Eisler says. “We aspire to have fun and lively places, and we have a ton of talented beverage people in our group. Every time we do a project, no matter what it is, we pay attention to what type of beverage program would work in that concept. We like our properties to have their own identities, specialties and quirks, as well as their own faces and key people. We make a concerted effort to keep our spaces separate so that each one can be celebrated for what it is.”

PHOTO BY ANTHONY MICHAEL

Bar Gurus Sportsman’s Club takes a historical slant. Situated in Chicago’s Ukrainian Village, the venue opened in 2013 in the same location as the original bar of the same name, which was a haven for Polish immigrants in the late 1980s. The revamped space boasts an art deco design and the original wooden bar of its predecessor, along with taxidermy accents. In lieu of a traditional drinks menu, Sportsman’s Club offers a daily cocktail list with four options ($10 each) that change every day on the whim of the bartenders on duty. The concept’s primary

constant is its eponymous Sportsman’s Cocktail ($8), comprising Very Old Barton Bourbon, Luxardo Bitter aperitif, Zucca Rabarbaro amaro, Angostura Aromatic bitters and Leopold Bros. Absinthe Verte. Sportsman’s Club also has an amaro machine on the bar, pouring shots ($4) and larger 2-ounce pours ($6), as well as a roster of wines ($10 a glass; $35 a 750-ml.) and craft beers ($3 to $9 a draft pour or bottle). For a completely different drinking experience, Heisler’s Latinthemed Estereo offers a bright, Caribbean-inspired atmosphere. The Logan Square bar highlights Latin spirits, including pisco, cachaça, rhum agricole, Tequila and mezcal. Estereo’s cocktail menu features drinks named for their primary spirit or mixology technique, like the Stirred, made with Intipalka Pisco Acholado, Carpano Bianco vermouth, Dolin Dry vermouth, Suze liqueur and house-made grapefruit bitters (cocktails are $9 to $12). The bar also offers a comprehensive Latin spirits menu ($4 to $15 a 1-ounce pour) and Latin and local craft beers ($4 to $8 a draft pour or can). “A lot of our places are concept driven,” Eisler says. “We focus on something pretty specific and something that might not exist elsewhere. We embrace what the space has to offer and try to work with what we have so the places feel authentic, not like a novelty.” Heisler’s corporate beverage director, Michael McAvena, agrees that each Heisler property is unique and adds that the company’s venues have become destinations for hospitality industry professionals throughout Chicago. “Heisler is definitely tied NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

to the roots of the city and the restaurant and bar industry,” McAvena says. “We go for places where people want to be, an aesthetically attractive place that feels new but may be old, a place you want to go to eat, drink, and visit or meet new people. The drinks part is huge. For the most part, our company creates taverns where beverage alcohol is a primary component.” Further showing its diversity, Heisler’s bar portfolio includes Queen Mary Tavern, a British maritime venue that highlights gin, rum and Scotch; Lone Wolf, a modern pub with a contemporary drinks menu; and Revel Room, a dual-concept space with a classic barroom in the front and an upbeat lounge in the back that hosts DJs. Revel Room’s menu spans updated variations of classic drinks and cocktails on tap ($10). Standouts include the Cool Big Truck, comprising Old Grove gin, Pierre Ferrand Dry Curaçao, Gran Classico Bitter aperitif and lemon juice, and the Grand Inversion, mixed with Denizen Merchant’s Reserve 8-year-old rum, Meletti amaro, lime juice and Demerara sugar. The bar also has an extensive list of canned beers ($3 to $10). “There’s been an organic progression of creativity for our company,” McAvena says. “Heisler started out with a local dive bar and then branched out into beer bars, cool cocktail bars and bars located in neighborhoods that are more known for restaurants. Each new project has been a really interesting jump into the pool of creativity. Recently, we’ve moved from unique bar concepts and branched out into restaurants. That has helped us grow exponentially.”

The cocktail menu at Latin-themed Estereo (above) features drinks named for their primary spirit or mixology technique.

Heisler Hospitality’s restaurant roster is as diverse as its bar portfolio. The company operates a British-influenced Indian pub, taverns with New American and upscale bar fare, and a vegetable-focused eatery. Bad Hunter, the veggie-forward restaurant, is Heisler’s newest project, having opened last year. The concept isn’t exclusively vegetarian, as meat is on the menu in a supporting role, but plant-based foods take center stage. Dinner items change regularly, but recent standout dishes included fried Chinese eggplant, chilled carrot noodles and coconut ash maltagliati (entrées are $11 to $19). To complement the food items, Bad Hunter offers a drinks menu that emphasizes natural and biodynamic wines and low-alcohol cocktails. The wine list includes such labels as the 2013 Michael Gindl Little Buteo Grüner Veltliner from Austria and the 2014 Jolie Laide Rossi Ranch Grenache-Syrah from Sonoma ($10 to $16 a glass; $38 to $165 a 750-ml.). Meanwhile, cocktail offerings range from the Mermaid Water, comprising Plymouth gin, Dolin Blanc vermouth, Nardini Acqua di Cedro liqueur, Jack Rudy tonic syrup and fresh rhubarb, and the Riesling Rickey, made with Rhum Clément Première Canne, Richter Estate Riesling, house-made snap pea syrup and lime juice (cocktails are $12 to $15). “We engineered a menu that’s specifically geared to complement the food,” Eisler says. Beer dominates the drinks program at the Anglo-Indian tavern Pub Royale, a venue with an eclectic food program. The dinner menu ranges from lamb dumplings to coconut curry mussels with naan to tandoori-spiced wings ($6 to $18). The food is joined by 84

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

Anglo-Indian tavern Pub Royale is a beer-centric destination with a diverse food menu, which includes such Indian fare as Kulcha (above).

PHOTOS BY (TOP) CAROLINA MARIANA; (BOTTOM) MARTHA WILLIAMS

A Focus On Food

a variety of beers on tap ($4 to $7) and several more in bottles and cans ($4 to $8), including Upland Brewing Co.’s Two of Tarts, Half Acre Beer Co.’s White Noise and WarPigs Brewpub’s Foggy Geezer. Cocktails are also varied. Pub Royale partnered with local Letherbee Distillers to offer several Letherbee Royale Cups ($9 each), drinks that mix Letherbee spirits and the company’s Royale Cup liqueur, a collaborative product made especially for the pub. These drinks are joined by a handful of other cocktails ($8 to $11), like the Frozen Mango Lassi, mixing Bacardi 8-year-old rum, fresh mango, paprika and yogurt. Upscale bar fare and classic cocktails reign at Barrelhouse Flat, while New American cuisine shines at Trench, Heisler’s upscale pub helmed by Michelin starred-chef Jared Wentworth. Trench’s menu ranges from foie gras mousse, rabbit pâté and buffalo sweetbread appetizers ($5 to $15) to confit octopus and Barrelhouse Flat (pictured) features one of Heisler’s most notable cocktail seared scallops small plates ($14 to $17), and corn- programs, offering a wide range of classic cocktails alongside fresh creations. meal-crusted catfish and Berkshire pork shoulder entrées ($15 to $26). The venue has a diverse drinks program with grenadine, and the Burnt Fuselage, mixing Maison Rouge draft and packaged beers ($4 to $8), classic cocktails ($8 to VSOP Cognac, Pierre Ferrand Dry Curaçao, Dolin Dry $14)—including a Tom Collins on draft—and worldly wines vermouth and house-made orange bitters. ($9 to $15 a glass; $35 to $125 a 750-ml.). “We’re always focused on quality,” McAvena says. “We allow Meanwhile, Barrelhouse Flat’s menu spans mac and cheese, creative individuals to thrive and, with a healthy amount of steak tartare and poutine ($5 to $14), and is accompanied by direction, they have the ability to create anything. For cockone of Heisler’s most impressive cocktail programs. The tails, we’re seeing interest in unaged brandies and eau de vies, concept lists drinks by their main spirit, offering sections for Sherry, artisanal vodkas, Bourbon and rye, and mezcal and Bourbon and rye cocktails, as well as mixed drinks that highTequila. In wine, we’re pushing natural wines and for beer, we light Scotch, gin, rum and other spirits ($13 to $16). The see people are more interested in light beers.” menu includes myriad classic and old-school drinks, as well as new creations like the Modern Cocktail #2, made with Growth Engine Heisler has a couple projects slated to open this fall, including a Cutty Sark Prohibition Edition Blended Scotch, Plymouth restaurant and a bar in the Google building on the outskirts of the Sloe gin, Pernod absinthe, house-made orange bitters and West Loop. The restaurant, Regards to Edith, will be helmed by Barrelhouse Flat’s Wentworth and explore the depths of Chicago HEISLER HOSPITALITY GROUP AT A GLANCE street food and other Windy City classics. Meanwhile, the bar, Founded 2012, though the company’s co-owners Prairie School, is a collaboration with cocktail guru Jim Meehan started working together in 2006 of New York City’s PDT. Details on Prairie School were limited at press time, but the bar is expected to offer an eclectic array of Key Executives Co-owners Matt Eisler and Kevin Heisner, and beverage director Michael McAvena cocktails and an interesting interior design. Eisler says additional opportunities may be forthcoming and Headquarters Chicago notes that he’s not opposed to branching out beyond Chicago, though nothing definite is underway. He adds that the company’s Number of Units 9 recent introduction of a corporate office and more structured Undisclosed Annual hierarchy will help make future growth possible. Revenues “The biggest reason for our success has been the growth of infrastructure,” Eisler explains. “We now have a management office Varies widely by location. Some bars are Sales and a company of talented people who work behind the scenes 100-percent beverage while the restauBreakdown to support our properties. We also have loyal customers who rants net up to 45-percent beverage sales. frequent all of our places. Most of our venues are destinations, Heislerhospitality.com Website though a good chunk of them serve double duty as neighborhood spots. Each place has its own signature items and there’s no real The company will open two venues this Future Plans overlap. Beverage alcohol is in our DNA as a group. It yields better fall, the restaurant Regards to Edith and margins, creates a convivial atmosphere and plays to our strengths the bar Prairie School. mw in terms of personnel. It’s what we enjoy doing.” NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

Nonino has five aging cellars (pictured), in which a variety of its grappas, amaros and single grape distillates are aged.

Grappa’s True Artisan

Amid a sea of commodity grappas, Nonino stands out with its craft-like, quality approach BY JULIA HIGGINS

espite its long-standing presence in Italy, grappa has yet to establish a foothold in international markets, in part due to its image as a commodity spirit—a perception fueled by the fact that over 80 percent of Italy’s grappa volume is mass-produced. The Nonino family, however, has long been grappa’s gold standard, and decades ago it was a pioneer in transforming the spirit from a working class beverage into an artisanal and delicate digestif. Elisabetta Nonino is a fifth-generation family member and the standard-bearer for the company’s commitment to artisanal quality. “Industrial grappa is neutral,” she says. “In our family, we’ve always been told that if you want something neutral, drink vodka. If you drink grappa, it’s a pity to waste 86

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

the raw material, which costs much more than grain, on something that’s no different from neutral alcohol.” Company founder Orazio Nonino began making grappa in 1897, in the heart of Italy’s Friuli-Venezia Giulia region. When he started, grappa was the concoction of pressed grape skins, stems and seeds (collectively known as pomace)—viewed as the waste of the winemaking process. After working out of a cart with a small still for over three decades, Orazio built his own distillery in Percoto, Italy, in 1928 and effectively established Nonino’s home base. The distillery was passed down through the Nonino line, eventually arriving in the hands of great-grandson Benito Nonino and his wife, Giannola—the fourth generation—in 1962. Together, Benito and Giannola transformed grappa into an upscale sipping

drink, thanks to their enhanced focus on quality, as well as the As the company’s leadership transitions fully into the hands of 1973 release of the first-ever single variety grappa, Monovitigno, the fifth generation, it continues to revitalize the global percepmade from the Picolit grape and still in production today. tion of grappa, particularly in the United States, which is now its “With the debut of single variety grappa distillation, my parents second largest export market. Though grappa’s sales in the United opened the possibility of speaking about this traditional spirit States have fallen over the past two years—down 14 percent in from Northern Italy,” Elisabetta Nonino says. The distillery has 2015 and another 20 percent in 2016—Nonino’s share of the since launched other single variety grappas, including Merlot, category has steadily improved. The distillery produces roughly Moscato and Prosecco Bianco expressions, among others. 900,000 liters of liquid a year across all brands, with 13 percent Despite the company’s success, Italy’s lax regulatory enviof its grappa being exported to the United States. ronment has allowed for a flood of industrial grappa producers. Grappa’s presence in the United States has ebbed and flowed To combat being grouped with them, the distillery indefor decades. The American rediscovery of Italian wines during pendently declares its grappa as 100-percent artisanal, and that the 1970s and 80s heightened the spirit’s visibility, though never any products with the Nonino name are produced and bottled by monumental amounts. Even as craft players like Capovilla, at the distillery, made using artisanal methods, with no added Morolo and Poli entered the market, the proliferation of induscoloring or caramel. trial grappa damaged the spirit’s reputation abroad, and today the “If you want to make good grappa, you have to distill very category is smaller than ever. fresh material,” Nonino explains. To that end, the distillery uses only the freshest pomace for its grappa, sourced from winemakers in Friuli with whom they’ve established dependable partnerships. The facility’s vast stable of copper stills, housed across five distilleries at its Percoto base, allows it to produce multiple types of single variety grappa at once and simultaneously distill fresh pomace immediately following the mid-to-late October harvest. “We are the only distillery in the world with 66 artisanal pot stills for distillation,” says Nonino. “And we only distill during the harvest—24 hours a day, seven days a week.” Industrial players, by contrast, often don’t distill their pomace until months after harvest. Without immediate fermentation and distillation, secondary fermentation occurs naturally and the pomace must then be double distilled. This process ultimately strips the end product of its aromatics and flavor. Continuous stills are also overwhelmingly present in industrial production, and (From left): Cristina Nonino, Elisabetta Nonino, matriarch Giannola Nonino and Antonella contribute to poor quality by boiling the Nonino are all dedicated to educating consumers and raising grappa’s international prestige. pomace relentlessly during distillation. More recently, the company encountered yet another regulaNONINO BRANDS tory thorn in its side: The impending creation of a grappa DOCG, which would allow for grappa production anywhere in Italy. Grappa Blend of grape distillates, includes $11 to $1,190 Grappa originated in northeastern Italy and has deep roots with Vendemmia, Vendemmia Riserva the agricultural populations of Friuli-Venezia Giulia, Veneto and and Monovitigno varieties Trentino-Alto Adige. According to Nonino, the new DOCG will effectively erase that heritage and make it far easier for industrial $23 Amaro Blend of aged grape distillates players from all over Italy to make grappa. “The first grappa distill$42 to $1,219 ÙE Single grape distillates ery in Sicily was built in 1972, so they don’t have a clue about grappa’s tradition,” she says. “If you put a DOCG in Sicily, why $27 Gioiello Honey distillates not Tuscany, Lazio, and any other region?” Nonino has thus chosen to opt out of the DOCG. “We $49 to $158 Frut Fruit Distillates, including raspberry, cherry, williams pear decided it was better to declare that having Nonino on the and plum expressions label is of much higher value than anything else,” she explains. NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

Nonino is the only distillery in the world with 66 artisanal pot stills for distillation (copper batch steam stills bottom right; distillation columns top right), enabing the company to distill fresh pomace (Sauvignon pomace below) and make several types of grappa all at once.

Elisabetta hopes that two new Nonino grappas which entered the U.S. market this fall—Vendemmia, a floral blend of Prosecco, Ribolla Gialla and Malvasia ($40 a 750-ml.), and Vendemmia Riserva ($45), a blend of undeclared grapes aged for 18 months in new French oak barrels—will serve as jumping off points for raising grappa’s quality standard among American consumers. She cites the evolution of grappa in Germany, the distillery’s No.-1 export market by volume, as an example. Production of both new expressions is limited, but the company aims for volumes to eventually exceed those of the more upscale single variety grappas. The distillery’s U.S. portfolio is managed by Terlato Wines. In addition to grappa, the Nonino portfolio also includes Amaro Nonino Quintessentia, an amaro made with an aged grape distillate base. Antonio Nonino, Elisabetta’s grandfather, debuted the amaro brand in 1933. The updated version launched in 1992 with a slight change from the original recipe, which used a base of aged grappa rather than aged grape distillate. Amaro Nonino Quintessentia has been hugely successful for Nonino and currently makes up the majority of Nonino’s exports by volume to the United States, comprising 87 percent of shipments. The Nonino grape distillate line is especially unique. The distillery invented the first Grape Distillate ÚE product in 1984, by distilling the skin, pulp and grape juice all at once. At Nonino’s request, the Italian government authorized the continued production of single grape distillation in 1986, cementing the company’s innovation in history. Today, Nonino’s portfolio includes 13 varieties of ÚE, ranging from single grape expressions to aged, multi-varietal products. 88

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

Many products in the Nonino portfolio will never make it to the U.S. market, where only seven expressions are currently offered. For example, in celebration of its 120th anniversary Nonino is launching several new products exclusively across its European markets. “We’re coming out with the oldest aged grappa that you can find on the market,” says Nonino. “It’s a 22-year-old Riserva.” Alongside that release, the company will also debut 26- and 27-year-old grape distillates, packaged in red bottles in homage to the original grape distillate, Nonino’s Picolit. In the U.S. market, Nonino is stressing grappa’s on-premise potential. Mixology has been a major focus, as it’s a platform that helps separate high quality grappa expressions from their low-end counterparts. With Vendemmia, Elisabetta suggests a Nonino Tonic. “It uses white grappa instead of gin, and you can really appreciate the aroma and the quality of the grappa because it’s lower in alcohol,” she says. She adds that the Vendemmia Riserva, which has a color and flavor profile more similar to that of other aged spirits such as Bourbon or rye whiskies, blends seamlessly in an Old Fashioned or a ginger-infused cocktail. The company’s key on-premise accounts include high-end restaurants throughout New York, Chicago, Aspen, Las Vegas and Palm Beach Gardens. Nonino’s future looks bright, with a new generation of family members set to join the ranks. “There’s someone from the sixth generation starting: my niece Francesca” says Nonino. “My daughters and my sister Antonella’s daughters are too young, but Francesca is 26 and it’s time for her to join us. We mw are very happy.”

BAR TALK

Selling Switchel An apple cider vinegar–based mixer, switchel is gaining ground in cocktails

outed for its health benefits and ability to add acid switchel is a great way to do that. Its preparation is fairly easy and spice into cocktails, switchel is enjoying a and you see the use of similar flavor profiles—ginger, apple mixology moment. The apple cider vinegar–based and honey—quite often.” mixer has long been gaining ground with select crowds as The familiarity of switchel’s dominant apple and ginger a non-alcoholic soda alternative, and now, with the rise of flavors helps convince guests who are unfamiliar with the vinegar-based shrubs in cocktails, switchel’s usage is expanddrink to try it. Neil Goldberg, the tasting room manager ing. While shrubs are generally syrups that combine plain for Mad River Distillers in Vermont, uses locally produced vinegar with fruit, vegetables or herbs, switchel has an apple Vermont Switchel in cocktails. He says switchel mixes well cider vinegar base and is mixed with whiskey and adds flavor to with molasses or honey and often lighter vodka-based cocktails. ginger. In addition, switchel can The Vermont Switchel brand be consumed by itself, while shrubs has strong ginger notes and are intended for mixing. spicy, earthy elements, he adds. Blake Pope, the general manager “Switchel is probably the most of Kindred Restaurant in Davidasked-about term on our menu,” son, North Carolina, keeps a houseGoldberg explains. “Although made, carbonated switchel on awareness seems to be increasdraft behind the bar. She says that ing, maybe 20 percent of our most of the restaurant’s guests guests know what switchel is. aren’t familiar with switchel when Vermont Switchel has really they see it on the menu, so she nice ginger notes, which makes lets them taste it straight first and it pretty approachable, though then steers them toward cockI try to manage expectations tails mixed with the ingredient. when people order our switchel “We love sharing our switchel so drink. It tends to dominate, so I people can try it,” Pope explains. pair it with stronger flavors. “It’s usually a hit and an easy sell. Last year I made a fall cocktail Switchel is a fun mixer because it’s with spiced apple, switchel and super versatile. And our switchel is The Bar at The Spectator Hotel’s Flippin’ The Switchel Bourbon, and I’ve also splashed carbonated, which makes it even incorporates house-made pear-ginger switchel, pear brandy, it into a hot toddy with apple more refreshing.” brandy.” The venue’s Switchel pear and ginger liqueurs, fresh lime juice and ginger beer. Kindred Restaurant offers a in the Rye ($12) cocktail is Barkeep’s Choice cocktail, which allows bartenders to make made with Mad River Revolution rye, Vermont Switchel, up drinks on the spot after asking guests what flavors and jasmine syrup and fresh lemon juice. spirits they enjoy, and Pope says switchel often gets used in In Charleston, South Carolina, Allen Lancaster—the those concoctions. She notes that bartenders mix switchel master mixologist at The Bar at The Spectator Hotel—makes into variations of Mules, tiki drinks and the Penicillin. In a switchel that incorporates pear purée for his Flippin’ The addition, switchel gets play in cocktails like The SwitchaSwitchel ($13) drink. The cocktail mixes Kammer Williams roo ($12), comprising Old Overholt rye, simple syrup and Pear in a Bottle brandy, St. George Spiced Pear liqueur, switchel, garnished with a cinnamon stick, and the Grip Giffard Ginger of the Indies liqueur, fresh lime juice, ginger Tape Goons ($12), made with Aviation gin, Amaro Montebeer and the pear-ginger switchel. negro, Giulio Cocchi Dopo Teatro vermouth and switchel, “The switchel lends brightness, acidity and a touch of sweetserved on the rocks. ness,” Lancaster says. “It’s a support component that takes “Switchel gives great notes of acid and a lingering spice down the power of the main spirit, and it’s versatile. I’ve found from the fresh ginger,” Pope says. “Bartenders have been that it works well in conjunction with fall spice flavors. We’ve mw trying for years to find fun ways to incorporate acid into had a very favorable response to our switchel.” cocktails without grabbing lemons or citrus juices, and Laura Pelner

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

BEER BUZZ

The Freshness Factor Best-by dates and refrigeration are increasingly important selling points for beer

PHOTO BY FRANK APOLLONIO

ome shoppers at Sparrow Wine & Spirits in Hoboken, New Jersey, are so fanatical about quality beer that they lug in cooler backpacks or roller bags to ensure that their purchases stay chilled. That suits Laz Luis, beer director of the two-unit retailer, as Sparrow keeps most of its beer refrigerated anyway. Sparrow and a growing number of retailers now insist on keeping most—if not all—of their beer selection chilled. Luis attributes the practice to the styles of beer that are popular today, such as hoppy IPAs, that are best when continuously chilled. “My customers expect the beer to be refrigerated as a sign of quality,” he explains. So Sparrow—which stocks more than 1,000 beer SKUs, priced from $5.99 a six-pack of 16-ounce cans of Narragansett lager to $34.99 a 750-ml. bottle of the 2016 Bruery Poterie Anniversary ale—loads up its in-store and basement beer coolers despite the higher electricity costs and constant battle for refrigerator shelf space. “When cooler space gets tight, we’ll start to call out special products to our customers,” Luis says. At the Boise Co-Op in Meridian, Idaho, beer manager Derek Bolton says shoppers appreciate that almost all of the beer is kept cold, with the exception of brews like sours and barleywines. The venue devotes 10 cooler doors to beer, with about half reserved for craft labels. Many brewers are now encouraging—or even demanding—that their packaged beer be refrigerated at retail. Ryan Krell, cofounder of New Jersey’s Cape May Brewing Co., says his company requires that brews like Cape May IPA and Coastal Evacuation Double IPA be merchandised in coolers. “If retailers can’t make the commitment to keep our beer chilled, they’re not the right partners for us,” Krell says. Lauren Zeidler, director of quality at California’s Ballast Point Brewing Co., explains, “We take extensive measures to keep our beer cold at all times. While we can’t impose requirements, we rely on our distributor and retail partners to maintain cold storage. We educate and stress the importance of cold displays whenever possible.” Date coding—which helps ensure that consumers purchase fresh beer at retail—is also getting increased attention. While not required by law, “born on” or “best by” codes are increasingly appearing on packaged beer. In fact, the Beer Institute launched the Brewers’ Voluntary Disclosure Initiative last year to encourage participating beer marketers to provide freshness dating on their products by the end of 2020. Anheuser-Busch InBev, MillerCoors, Heineken USA, Constellation Brands, North American Breweries and Craft Brew Alliance— which account for some 80 percent of all U.S. beer volume combined—have agreed to the standards.

Sparrow Wine & Spirits in Hoboken, New Jersey, now stores most of its beer selection in coolers to ensure quality and freshness. This initiative is being echoed by retailers nationwide.

Recommended shelf-life varies by beer style. Cape May’s “best before” dates can range from 60 days from the package date for dry-hopped brews to 180 days for stouts. Ballast Point utilizes the Julian dating system, but Zeidler says the brewery is “exploring other consumer-friendly labeling options so fans can clearly see how fresh our beers are.” The Beer Baron in Livonia, Michigan, which stocks as many as 2,000 beer SKUs, will pull out beers within two weeks of their expiration date and run a promotion, such as 10 percent off the marked price. “We look especially closely at IPAs,” says owner Rocky Zebari. “If beers arrive that are too close to their best-by date, I send them back,” says Bolton, noting that Boise Co-Op’s policy is to return beer to the distributor when it reaches the halfway date for freshness, such as 90 days on a beer with a 180-day freshness date. The Idaho retail store offers 623 beer SKUs, priced from 99 cents for a 24-ounce can of Pabst Blue Ribbon to $27.99 for a 750-ml. bottle of Goose Island Gillian. “We do our best to inspect every delivery for acceptable date codes,” agrees Luis at Sparrow. The New Jersey retailer wants to be sure that any beer that ends up in his customers’ cooler mw backpacks is cold and fresh. Terri Allan NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

WINE SENSE

French Wine, Simpliﬁed Vin Sur Vingt aims to provide a carefree and all-encompassing French wine experience

selection of Champagnes, sparkling wines and sweet wines ($14 to $60 a glass). Most of the red wines hail from Bordeaux, though there’s a healthy selection available from Languedoc, Burgundy and the Rhône, among others. Meanwhile, the white offerings are predominantly sourced from Burgundy, with an ample amount of labels from the Loire and Alsace also available. A handful of wines are from less well-known regions like Corsica, the Jura and Southwest France. Vin Sur Vingt also carries its own private label, Bar A Vin, which launched at the end of 2015 and currently features three selections: Vacqueyras, Muscadet and Morgon. Four more—Côtes de Francs Bordeaux, Beaujolais-Villages, Bordeaux White and Rosé—are slated for arrival next year, with the rosé production expected to surpass 1,000 cases. Moving with the seasons, Auvet has curated a fresh list for the fall. “Beaujolais, Cabernet Franc and Bordeaux, especially from Margaux—we’re going full-speed with these wines,” Auvet says. “The Rhône is also going to be trendier. I’m looking for more wine from the that region, especially natural wines, though they’re not as easy to find in the case numbers we want.” The wine list remains uniform across all five locations, a practice that Auvet and Chandiramani have employed since their first expansion. Difficulties with maintaining a shared master wine list, however, have mounted as Vin Sur Vingt’s growth has continued. “Now that we have multiple locations, rotating the list has become increasingly challenging in that we’re dealing with larger quantities,” Chandiramani explains. “Even though we’re still able to wrap our hands around a lot of the boutique selections that we want and work with some really interesting varieties, those may not get a permanent place on the menu given their limited quantity.” To gain access to a broader selection of French wines, Vin Sur Vingt’s owners are tapping into direct imports. Auvet, who has cultivated relationships with a variety of French winemakers, has started to source directly to secure exclusive selections and reduce costs. Looking ahead, Vin Sur Vingt’s owners see plenty of room for future expansion, both in Manhattan and Brooklyn, as well as beyond to Philadelphia, Boston and Washington, D.C. “As we continue to grow, we’re going to keep the wine list interesting, and offer an experience of all the regions and varieties of France,” At each of its five locations, Vin Sur Vingt (Upper West Side exterior pictured) offers mw Chandiramani says. an exclusively French wine list with around 50 by-the-glass options. Though the wine bar is currently limited to Manhattan, its owners have lofty expansion plans. Julia Higgins 92

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

PHOTO BY (TK) TK

ebastien Auvet and Rakesh Chandiramani have long been ardent appreciators of French wine. In pursuit of their shared passion, Auvet—a French ex-pat with front-of-house experience at David Bouley’s now-shuttered fine dining restaurant Bouley—and Chandiramani—a former director at United Health Group—launched French wine bar concept Vin Sur Vingt in New York City’s West Village neighborhood in 2011, along with a third partner, Dilip Hari. The premise revolved around curating a far-reaching French wine list that would encourage guests to take a deep, stress-free dive into the wine regions of France. “Our goal is to take the intimidation factor out of wine and make it more approachable,” Chandiramani says. “We want to bring it down to a level where you can identify wine and enjoy it, without feeling like you have to pronounce the grapes properly, or even know their names.” Auvet adds, “When you’re given too much information about a wine, you’re going to lose your focus and forget to enjoy the experience.” To this end, the Vin Sur Vingt wine list has never included descriptive words or grape varietals alongside its offerings. Today, Vin Sur Vingt spans five locations throughout Manhattan: West Village, NoMad, Upper West Side, Tribeca and inside the Plaza Hotel’s Food Hall. The flagship West Village venue launched with 20 wines as a play on the French words for wine (“vin”) and 20 (“vingt”). At all sites, Auvet curates a running list of roughly 50 wines by the glass, sourced from across France. The venues offer around 20 reds and 20 whites ($12.50 to $20 a 5-ounce pour), as well as a

ON THE MOVE Following a seven-month transition period, Mahesh Madhavan has officially become CEO of Bacardi Ltd., taking over for Michael Dolan. Madhavan’s appointment was first announced in March and originally scheduled to take effect next April. Concurrent with Madhavan taking the helm, Bacardi has named John Burke as its global chief marketing officer and Ignacio del Valle as head of commercial operations for Latin America and the Caribbean. Burke has spent more than two decades in various leadership roles at Bacardi, most recently as president of the company’s Incubation Brands unit. Del Valle is a 21-year Bacardi veteran and was most recently head of the group’s business in the Caribbean, Central America, and Colombia, Ecuador and Venezuela. González Byass has appointed Nicolás Bertino as CEO and country manager of its U.S. subsidiary, González Byass USA. Bertino served as González Byass’s international sales director since 2008. In his new role, he will continue to grow the company’s presence in the U.S. wine and spirits market, reporting directly to González Byass CEO Jorge Grosse.

PHOTO BY (TK) TK

Anchor Distilling Co. has announced three leadership changes to its executive team. Vice president of East Coast sales Gregory Fitch has been promoted to chief sales officer, while vice president of marketing Morgan Robbat has been named chief marketing officer. Meanwhile, Shannon Tracy has joined Anchor as CFO. Tracy most recently worked at Yalla Mediterranean as vice president of finance and accounting. Additionally, regional sales manager of South Central Stacy Klass was promoted to Central Division sales manager, and regional sales manager of Northeast Jennifer Brown was tapped as Eastern Division sales manager. Beam Suntory has promoted Marc André Tousignant to CFO, effective January 1st, 2018. He succeeds John Owen, who recently announced plans to depart the company at year-end. Tousignant has been with Beam Suntory since 2014,

most recently serving as CFO of the group’s Americas region. Current vice president of global finance planning and analysis Karim Sadik-Khan replaces Tousignant as CFO for the Americas.

Mahesh Madhavan

Rémy Cointreau has named Marc Hériard Dubreuil chairman of its board of directors, replacing François Hériard Dubreuil, who is now vice chairman of the board. Marc Hériard Dubreuil has served as CEO of Rémy Cointreau holding company Andromède since 1984, and has previously held a variety of leadership roles within the company, including chairman of Rémy Martin and Rémy & Associés, and CEO of Rémy Cointreau. Union Wine Co. has tapped Kyna Williams as its director of marketing. Williams’ extensive marketing experience includes a 12-year tenure at Nike, where she oversaw product launches, events and digital enablement.

Nicolás Bertino

Morgan Robbat

Marc André Tousignant

Pabst Brewing Co. has named Diageo veteran Matt Bruhn to the newly created role of chief marketing officer. Most recently CMO at Australia’s GWA Group, Bruhn previously held roles at Diageo, including global senior vice president of Smirnoff. The Beach Whiskey Co. has promoted COO Chuck Trout to the role of CEO, succeeding Smoke Wallin, who recently departed the company to focus on his brand management group Taliera. Concurrently, Andrea Yorgy has been named CFO. Yorgy joins Beach Whiskey from Louisville Distilling Co., where she led the finance and accounting department for Angel’s Envy Bourbon. Napa Valley’s Cuvaison Estate Wines promoted vice president of domestic sales Steve Richards to vice president of international and domestic sales. In addition, the company tapped Jaki Palacios has as director of marketing. Palacios joins Cuvaison Estate comes from C. Mondavi and Family, where she repositioned the mw Charles Krug brand. Julia Higgins NOVEMBER 2017 | MARKETWATCHMAG.COM | MARKET WATCH

NEWS

On-Premise News

Johnson Brothers To Handle The Wine Group In 7 States

Joël Robuchon Returns To New York City

The Wine Group has signed a new multi-year deal to extend its partnership with Johnson Brothers Liquor Co. The agreement spans seven markets, including Minnesota, Iowa, Nebraska, North Dakota, South Dakota, West Virginia and Hawaii. The third-largest wine marketer in the U.S., The Wine Group’s portfolio includes the Franzia, Cupcake, Fisheye, Flipflop, Corbett Canyon and Chloe brands, among others.

Acclaimed French chef Joël Robuchon has debuted a new location of his upscale restaurant, L’Atelier de Joël Robuchon, in New York City’s Meatpacking District. The opening marks the chef’s return to New York following a five-year absence. New to L’Atelier is a nine-course vegetarian tasting menu. A standard tasting menu with meat is also offered, as are a la carte selections. Both tasting menus are priced in the upper $200s. The space also houses Le Bar de Joël Robuchon, a bistro-style, a la carte–only venue aimed at attracting a nightlife crowd.

Supplier News—Spirits Heaven Hill Completes Bernheim Expansion

Distributor News

Heaven Hill Brands has completed a $25 million expansion of its Bernheim facility in Louisville, Kentucky, a project that has made it the single-largest Bourbon production site in the United States, according to the company. With the expansion, the distillery—home to Evan Williams, Larceny, Elijah Craig and Henry McKenna, among other brands—has boosted capacity from 300,000 barrels per year to 400,000 barrels. Heaven Hill’s Evan Williams Bourbon grew 7 percent to 2.3 million cases in the U.S. last year, and has added roughly 1 million cases in volume since 2010. The more upscale Elijah Craig brand finished at 85,000 cases last year and has put on 50,000 cases since 2010.

Young’s Market Partners With Samson & Surrey

Stoli Group USA Plans For Potential Kentucky Distillery

Craft spirits specialist Samson & Surrey— led by former Bacardi executives Robert Furniss-Roe and Juan Rovira—has aligned with Young’s Market Co. in nine Western states: Alaska, California, Hawaii, Washington, Idaho, Montana, Oregon, Utah and Wyoming. The Samson & Surrey portfolio includes FEW American whiskies and gin, Bluecoat gin, Brenne French single malt whisky and Widow Jane Bourbon and rye. Samson & Surrey also recently partnered with Breakthru Beverage in 15 states and Washington, D.C.

Stoli Group USA is planning to pour $150 million into a new distillery in Bardstown, Kentucky. Through its parent company SPI Group, Stoli Group has received preliminary approval for up to $2 million in tax incentives “to establish a distillery, rickhouses, visitor’s center and other related facilities for the production of Bourbon,” according to documents from the Kentucky Economic Development Finance Authority. While the specifics aren’t yet clear, SPI’s proposal was made under the subsidiary

Off-Premise News Drizly Expands New York Footprint Beverage alcohol delivery provider Drizly has expanded its New York footprint with entry into the Albany and Buffalo markets, in partnership with several local retailers. Drizly offers consumers in both markets on-demand alcohol delivery for $5 and free in-store pick-ups. The Wine & Spirits Wholesalers of America holds a minority stake in Drizly, which is now active in more than 70 cities throughout the U.S. and Canada.

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

“Strigiformes LLC,” an apparent reference to the biological order for owls. Stoli Group acquired the cult favorite Kentucky Owl sourced whiskey brand earlier this year.

Sazerac Enters India With John Distilleries Deal Sazerac Co. has acquired an equity stake in India’s John Distilleries. Sazerac declined to specify the size of the purchase, but The Times of India reports that it amounts to a 28-percent stake. Sazerac purchased the equity stake from Gaja Capital, with plans to buy an additional 15 percent from Gaja within the next two years. The group’s chairman, Paul John, retains majority control of the company. The John Distilleries portfolio in India is led by Original Choice whisky, which has sales of more than 11 million cases annually out of a total portfolio of roughly 13 million cases. The company also produces Mont Castle Brandy, Roulette Brandy, Big Banyan wines and Paul John single malt whisky, among other brands. The Paul John single malt range launched in the U.S. market last year, handled by Domaine Select, and is targeting total volume of 12,000 to 15,000 cases in the U.S. market for 2017.

Supplier News—Wine Ste. Michelle Debuts Fresh Branding For Sparkling Wines Washington’s Ste. Michelle Wine Estates has debuted fresh packaging and branding for its namesake sparkling wine collection. With the packaging update, which features a new color scheme and fresh detailing, the brand will return to its original Domaine Ste. Michelle moniker (it was previously known as “Michelle”). The changes are effective across the brand’s Brut, Brut Rosé and Extra Dry offerings. All three wines are available nationwide, retail priced at $13 a 750-ml.

Champagne Piper-Heidsieck Rebrands Cuvée Labels Champagne Piper-Heidsieck has revamped its lineup, rebranding its signa-

NEWS ture and vintage cuvée labels. PiperHeidsieck Brut will henceforth be called Piper-Heidsieck Cuvée Brut, while the Piper-Heidsieck Vintage Brut has been renamed Piper-Heidsieck Vintage. Concurrently, the brand has unveiled new labeling across its full portfolio, featuring a modernized look, shortened foil around the neck of the bottle and a refreshed logo. Terlato Wine Group has imported Champagne Piper-Heidsieck since 2015.

Supplier News—Beer Heineken Adds Unique Draft Lager Heineken has introduced H41, a new limited-edition “wild lager,” to its lineup. Brewed with rare, Patagonia-sourced mother yeast, H41 was developed by Heineken master brewer Willem van Waesberghe, who spent two years developing the beer’s recipe. The new lager is named for the longitudinal coordinate—41 degrees South—where the mother yeast was originally discovered; Heineken has since obtained an exclusive license to brew with this yeast. H41 is available on draft in New York City as of mid-October, with expansion to additional markets slated for 2018.

Cider Organization Releases Style Guidelines The U.S. Association of Cider Makers has adopted its first set of cider style guidelines, meant to help consumers and the trade understand the widening array of cider types found in most stores. The organization also is seeking to expand

upon the style guide with standards for a sweetness scale and a cider marketing vocabulary, both expected soon. The guide divides ciders into two categories—standard and specialty. It includes 10 styles: modern ciders, heritage ciders, modern perries, heritage perries, fruit ciders, hopped ciders, spiced ciders, wood-aged ciders, sour ciders and ice ciders.

Legal News Craft Beverage Tax Effort Gains Majority Legislative Support The Craft Beverage Modernization and Tax Reform Act (S. 236/ H.R. 747), which aims to reduce taxes and regulations for craft brewers, distillers and vintners, has garnered majority support in both the U.S. House and Senate. Fifty-one members of the Senate and 281 members of the House of Representatives have officially backed the bill. The bipartisan legislation would reduce federal excise tax on the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually, and cut excise tax on the first 6 million barrels for all other brewers and beer importers. Additionally, the effort would reduce the excise tax for distillers producing less than 100,000 proof gallons per year and expand the excise tax credit for wineries. The Brewers Association, Distilled Spirits Council of the United States, American Craft Spirits Association and Wine Institute mw all back the proposal. The Editors

MARKET WATCH STATEMENT OF OWNERSHIP, MANAGEMENT AND CIRCULATION 1. Publication Title: MARKET WATCH. 2. Publication No.: 0227-9277. 3. Filing Date: October 1, 2017 4. Issue Frequency: January/February, March, April, May, June, July/August, September, October, November and December and one special issue in September. 5. No. of Issues Published Annually: 11. 6. Annual Subscription Price: $60.00. 7. Complete Mailing Address of Known Office of Publication: 825 Eighth Avenue, 33rd Floor, New York, NY 10019. 8. Complete Mailing Address of the Headquarters or General Business Office of Publisher: 825 Eighth Avenue, 33rd Floor, New York, NY 10019. 9. Full Name and Complete Mailing Address of Publisher and Editor: Marvin R. Shanken, M. Shanken Communications, 825 Eighth Avenue, 33rd Floor, New York, NY 10019; Executive Editor: David Fleming, M. Shanken Communications, 825 Eighth Avenue, 33rd Floor, New York, NY 10019. 10. Owner Name and Address: Marvin R. Shanken, M. Shanken Communications, 825 Eighth Avenue, 33rd Floor, New York, NY 10019. 11. Known Bondholders, Mortgagees, and Other Security Holders Owning 1 Percent or More of Total Amount of Bonds, Mortgages or Other Securities: None. 12. Tax Status (For Completion by Nonprofit Organizations Authorized To Mail at Special Rates): not applicable. 13. Publication Title: MARKET WATCH. 14. Issue Date for Circulation Data Below: October 2017. 15. Extent and Nature of Circulation. Average No. Copies Each Issue During Preceding 12 Months. A. Total No. Copies: 53,358. B. Paid and/or Requested Circulation. 1. Paid/Requested Outside-County Mail Subscriptions stated on form 3541: 50,929. 2. Paid In-County Subscriptions: 0. 3. Sales through Dealers and Carriers, Street Vendors and Counter Sales, and Other Non-USPS Paid Distribution: 0. 4. Other Classes Mailed Through the USPS. 0. C. Total Paid and/or Requested Circulation: 50,929 D. Nonrequested Distribution by Mail. 1. Outside-County as Stated on Form 3541: 400 2. In-County as Stated on Form 3541: 0. 3. Other Classes Mailed Through the USPS: 0. 4. Free Distribution Outside the Mail: 483. E. Total Nonrequested Distribution: 883. F. Total Distribution: 51,812. G. Copies Not Distributed: 1,546. H. Total: 53,358. I. Percent Paid and/or Requested Circulation: 98.30%. 16. Electronic Copy Circulation. A. Requested and Paid Electronic Copies:150. B. Total Requested and Paid Print Copies plus Requested/Paid Electronic Copies: 51,079. C. Total Requested Copy Distribution plus Requested/Paid Electronic Copies: 51,962. D. Percent Paid and/or Requested Circulation (Print & Electronic Copies): 98.30%. Actual No. Copies of Single Issue Published Nearest to Filing Date: A. 53,286. B1. 50,951. B2. 0. B3. 0. B4. 0. C. 50,951. D1. 360. D2. 0. D3. 0. D4. 250 E. 610. F. 51,561. G. 1,725. H. 53,286. I. 98.82%. 16: A. 150. B. 51,101. C. 51,711. D. 98.82%. I certify that the statements made by me above are correct and complete. Marvin R. Shanken, Editor & Publisher.

MARKET WATCH (ISSN 0277-9277) is published 11 times a year: January/February, March, April, May, June, July/August, September, October, November and December and one special issue in September, by M. Shanken Communications, Inc., Worldwide Plaza, 825 Eighth Avenue, 33rd Floor, New York, NY 10019. (212) 684-4224. Periodicals paid at New York, NY and at additional mailing offices. POSTMASTER: Send address changes to MARKET WATCH, P.O. Box 1260, Skokie, IL 60076. Subscription rates are: United States, $60 per year; Canada, $70 per year; Foreign, $85 per year. Canadian and foreign subscriptions are payable in advance in U.S. funds. Subscription inquiries: Please write to Market Watch, P.O. Box 1260, Skokie, IL 60076, or call 1-800-848-7113. Return postage must accompany all unsolicited materials if they are to be returned and no responsibility can be assumed for such material. All “Letters to the Editor” should be sent to the Editor at the aforementioned address. All rights in letters sent to Market Watch will be treated as unconditionally assigned for publication and copyright purposes and as subject to Market Watch’s unrestricted right to edit and to comment editorially. “Market Watch” is a registered trademark of M. Shanken Communications, Inc. All rights reserved. Nothing may be reprinted or reproduced in whole or in part without written permission from the publisher. Copyright © 2017 M. Shanken Communications, Inc.

PARTING SHOT

A priest strolls past a street advertisement for the Suze aperitif brand in this scene from Paris in 1952.

MARKET WATCH | MARKETWATCHMAG.COM | NOVEMBER 2017

PHOTO BY THE JOHN DEAKIN ARCHIVE/GETTY IMAGES