Pernod to push premium wines

Pernod Ricard UK is turning the spotlight on its premium wines in order to bridge the gap between shoppers who are willing to trade up on wine, and those who actually do. As reported on thedrinksbusiness.com, of 2,500 consumers surveyed, almost 60% said they were willing to spend more than £7 on a bottle of wine, though in reality only 11% do.

Pernod’s premium focus has been spurred on by the fact that light wine is in decline, with volumes down 2.3% on last year. “The market is flat for the fist time in many years, so we need to inject value into the category,” admitted Pernod’s deputy managing director Simon Thomas. “Premium wine is our fastest growing category, and with such a high percentage of consumers willing to trade up, it’s a compelling growth proposition."

According to Thomas, retailers could expect an average of £2.74 more a bottle from premium wine. Defined by PRUK as priced between £6.50 to £8.50, research showed premium wine is appealing to both connoisseurs and aspirational wine consumers, though Pernod has chosen to focus its energy on “floating voters” that dip in and out of the category. The company aims to make the most of its premium offering in the off-trade by making the wines readily available, attractive to look at and built around a special occasion.

Chris Shead, Pernod’s category insights director, believes the “enormous gap” between consumers’ intention to buy premium wine and actual buying habits provided a big opportunity. “The intimidating wall of wine in supermarkets drives consumers pick wines by price. We desperately need to improve the in-store experience to entice shoppers to trade up,” he said. Describing premium wine as “the engine room for growth,” Shead believes the current economic climate has lead to more people entertaining at home, who are treating themselves to better quality food and wine as a result.

To allow retailers to capitalise on the premium sector, PRUK will be offering help with in-store marketing, focused around promoting occasions. “Special occasions provide the best opportunities for trading up, so we’re giving them a big push with on-shelf video barkers, occasion neck collars and occasion cases,” said wine channel director Lee James. Pernod is also looking to maximise opportunities at deli counters with suggested premium wine pairings for cheeses and meats, and recipes on the back labels of Campo Viejo.

Lafite winery in China underway

Domaines Barons de Rothschild has begun construction of a winery in Penglai in China’s Shandong province in order to capitalise on the thirst for fine wine in Asia. As reported on thedrinksbusiness.com, in partnership with CITIC East China Group, the new winery, in the only coastal wine producing area in Asia, is expected to produce 120,000 bottles of wine a year.

After fifteen years of research on grape planting in Asia, Lafite selected the port town of Penglai as the optimum site for its Chinese property. The company has invested £10m in the 1.73 hectare winery, and the accompanying 25 hectare estate. A completion date for the project has yet to be given. Lafite will plant different kinds of grapes in accordance with soil constituents, without the use of chemical fertilisers.

“The world’s top luxury brands are all very interested in the Chinese market, Rothschild is no exception,” said Zhang Lu, a Shanghai-based analyst at Capital Securities Corp. Outside France, Lafite also owns Bodegas Caro in Argentina and Viña Los Vascos in Chile. Penglai has a quality grape growing area of more than 10,000 hectares.

Wine production in the region has doubled to 140,000 tons in 2011 from 2005, while the number of winemakers increased to 70 from 39 in the same period. Chinese wine imports meanwhile, were worth over US$1.27bn last year, after an annual increase of 88%. According to the latest figures from Vinexpo, Asia is on course to become the world’s second biggest market for wine within the next three years.

Chinese consumers will increase the amount of wine they drink by 54% by 2015 as consumption reaches 1.9 to 2 liters per person, the Vinexpo study found. The value of wine purchases may outpace volume in the next four years, helped by high-end consumption in China, which is now the fifth largest wine market by volume.

Bob Bob Ricard

A good restaurant is one that transports you from the humdrum of everyday life into another world – a temporary cocoon of comfort. Diner deluxe Bob Bob Ricard is such a place. From the moment the black cloaked doorman ushers you in, the journey begins. Designed by David Collins, who previously prettified The Wolseley, Bob Bob Ricard’s lavish interiors evoke an Edwardian Orient Express carriage, from the plush midnight blue booths complete with pleated lampshades and velvet curtains, which allow for intimacy amidst the buzz, to the smoked mirrors and brass railings running from booth to ceiling.

Table tops are marble, equipped with an electric socket for the silver toasters brought out at breakfast and during afternoon tea, and a golden “Press for Champagne” button. Cubist chandeliers hang from a high Venetian-mirrored ceiling, while walls, covered in paper fashioned from Japanese book bindings, are festooned with ancestral portraits, the subjects of which gaze haughtily into the middle distance. Throwing gender stereotypes out the train window, waiters wear pale pink jackets and ties while waitresses sport turquoise waistcoats.

Russian owner, Leonid Shutov, is keen to please. Every last detail is considered, from the pink and white placemats, menus and plates etched with the BBR emblem, to the pink and gold coasters – even the water bottles have a pink and white label. Attention to detail is fastidious, each intricacy adding to the pleasure of the experience. Unable to resist the lure of the Champagne buzzer, I press it excitedly, feeling momentarily transported from train to plane. Seconds later, our waitress appears and tempts us into two glasses of rich yet refreshing Pol Roger NV – Churchill, I’m sure, would have loved buzzing for his favourite fizz.

Our feast begins with a taster platter of Zakuski (Russian canapés) taken with a shot of Kauffman 2008 Selected Vintage Vodka served at a brain-freezing -18ºC in a charming cut crystal glass. Among the Zakuski is a communion host of creamy foie gras topped with shaved black truffle, quail egg mayonnaise nestled in a lettuce leaf with a razor-thin slither of salty anchovy, and a tiny white dish filled with jellied ox tongue that recalls the meaty interior of a pork pie.

A duo of exquisitely executed cold starters arrives shortly after: a flamboyant take on the ever-popular beetroot and goat’s cheese salad, and a textured venison tartare. The paper-thin beetroot shavings resemble rose petals, with fluffy goat’s cheese sandwiched in between like cream. The meaty medallion of venison meanwhile, is smooth, subtle, pure and lovely. It whispers deer rather than shouting its origins from the plate. Resting on top is a raw quail egg, its yellow innards invitingly on display, begging to be drizzled on the meat. While the egg adds lubrication, drops from an accompanying bottle of Tabasco give a vivifying kick of heat.

Nicolás, our French waiter, urges us to try the three cheese soufflé, made with Parmesan, Wigmore and Shropshire blue, served with a peanut-flecked apple and endive salad. Bob Bob Ricard is fond of apple – it weaves its refreshing way into a large number of dishes as the garnish of choice. Also present in the soufflé is a ghostly trace of truffle. If dishes don’t visibly contain truffle, they are redolent with the ghosts of truffles past. Spewing forth from its ramekin like a Mount Etna eruption, the light and fluffy soufflé’s meringue-like form reminds me fondly of a cheesy baked Alaska.

Alongside the soufflé, we’re served a duo of scallops resting on discs of apple served with grainy black pudding and a truffle dressing. The scallops are pleasingly meaty, but for £13.25, more than two would have been preferable. To wash them down, Nicolás recommends a bottle of 2007 Kumeu River Hunting Hill Chardonnay from Auckland – a creamy white with hints of lime and limestone. Tightly woven and beautifully balanced on the palate, notes of honeysuckle, orange water and Brazil nut are given weight by the judiciously judged oak.

The wine list is incredibly fairly priced, with a maximum mark-up of £50 per bottle added to the trade price, meaning many bottles are cheaper than high-end retailers. BBR is also the only place in the UK offering Château d’Yquem by the glass – the 1998 vintage is currently on sale for £26.75. I digress. Our main event is a slab of crispy suckling pork belly in a (gasp) truffle gravy dotted with glistening globes of apple sauce. The belly meat is achingly tender, while the crunchy cracking adds texture, proving a great match for the Kiwi Chardonnay.

Desserts are worth leaving room for, though this shouldn’t be hard, as portion sizes are fit only to fill up diners of Borrowers proportions. My companion’s Eton mess arrives neatly packed into what looks like an ice pink bath bomb drenched in strawberry sauce. I opt for the trio of homemade ice cream, the waitress kindly accommodating my request that all three of the trio be salted caramel.

Bob Bob Ricard is a one off. Interpreting classic British dishes like prawn cocktail and chicken kiev with a Russian twist, hat tips to the owner’s homeland can be found in frequent caviar cameos on the menu. While portions are small and prices high, there are few restaurants in London that offer such escapism. Clasped in its welcoming bosom, the restaurant takes you on a journey back to an age of elegance – a flight of fancy that requires a vivid imagination to get lost in, but a voyage worth taking. When we reach our final destination and disembark, having stepped out of the fantasy, I feel a pang of sadness, as I make my way home down the sodden Soho street.

Bob Bob Ricard, 1 Upper James St, London W1F 9DF; Tel: +44 (0)20 3145 1000; a meal for two with wine costs around £150.

Mood and wine matching

Forget food and wine matching, 2012 is all about mood and wine matching. Wine retailer Oddbins has launched a new website where customers can select wines according to their mood. As reported on thedrinksbusiness.com, the site features suggested wine pairings for times of passion, contemplation and even adversity, along with wines suited to staying in, going out, or celebrating.

After a bad date, the site suggests drowning your sorrows with a bottle of Morellino di Scansano Ventoso 2010, preferably while listening to Portishead. It also recommends “writing your life story” with the help of a bottle of Bourgogne Pinot Noir 2009 Nuiton-Beaunoy, and a zippy Quinta de Azevedo Vinho Verde 2010 while watching motor racing.

The quirky new site offers a music pairing for each of its wines, from Taylor Swift (above) with Montemar Malbec, and Elbow with Grange Des Roc Blancs 2009, to Abdullah Ibrahim “after a long birthday dinner” with Churchill’s 10 Year Old Tawny Port. For less mood-driven consumers, the site also features the more conventional categories of country, grape, price and style.

The retailer plans to increase the number of wines on the site from 100 to 500 in the coming weeks. "E-commerce is an extremely important part of the new Oddbins. The design and content of the new website is in keeping with the Oddbins philosophy of making wine as accessible as possible for consumers,” said managing director Ayo Akintola.

Love it or loathe it, Oddbins is at least making an effort to inject a bit of fun and humour into wine buying. Wine desperately needs to reach out to younger consumers, and music matching is an ideal way of making wine more appealing to a younger audience. Most of us pick wines to suit our mood, albeit subconsciously, in the same way a song will strike a chord one day and jar the next. I’ve yet to put the music and wine matching theory to the test – have any matches worked for you?

Argentina needs to “focus on whites”

Argentina needs to start focusing more on its white wines, according to one of the country’s top producers. As reported on thedrinksbusiness.com, Alberto Arizu of Bodega Luigi Bosca believes there is a real opportunity for high-end white blends in Argentina, and Chardonnay from the Uco Valley.

Speaking at a lunch hosted by Bancroft Wines at Gaucho in Piccadilly, Arizu (above) said: “We’ve shown the world that Argentina can do reds, now it’s time to prove our worth with our whites. Chardonnay is the second most important white grape in Argentina and we’re discovering new areas to plant it, like Lujan de Cuyo. Argentinian Chardonnay has a unique character to Chile and other New World examples."

Arizu cited the bodega’s Gala 3, a premium blend of Chardonnay, Viognier and Riesling, as an example of what Argentina can do outside Torrontés. “We’re one of the few bodegas to be working on premium white blends, and are reducing the amount of time our Chardonnays stay in oak.” He pinpointed Chardonnay from the Uco Valley as having improved “tremendously” in the past few years, producing some of the best examples of the grape. “The quality has gone through the roof. You get more freshness at the higher altitude,” he said.

Though he also sees a chance for Torrontés to quench a global thirst for freshness. “We need to ride the wave of the global demand for fresh, aromatic, dry whites – Torrontés is ideally placed to satisfy this thirst,” he said. Arizu also spoke of the importance of seeking out and shouting about Argentina’s best micro regions for Malbec. “Malbec differs greatly depending on where it’s planted. Those from the Uco Valley are floral and fresh, the Vistalba and Lujan de Cuyo examples are red fruited, while Malbecs from Las Compuertas are full bodied, spicy and complex.

“We need to communicate these terroir differences to consumers so they understand the diversity of styles of Malbec. We’re not shouting about it enough,” he asserted. Malbec aside, Arizu is keen to focus on Pinot Noir and Syrah in Argentina, both of which have huge potential but remain largely undiscovered. “Our challenge will be to develop these grapes in the most suitable terroirs, like Maipú and San Juan for Pinot,” he said.

Arizu described the Asian market as “where Brazil was 20 years ago,” but spoke of the “great potential” Argentinian wine has in China with the new generation. “They are better educated about wine and more open-minded to trying new things. The best way to promote our wines will be with the quality/price message,” he said. “A Wines of Argentina office opened in Beijing last year, which will be hugely important in spreading the word about our wines in Asia. More wine brands need to have a presence in China in order to open the category up,” he admitted.

Fine wine more solid than FTSE 100

While the FTSE 100 has been delivering poor returns in the past five years, fine wine investment is booming. The Wine Investment Fund has posted double digit returns over five years of 10.04% compared to 0.03% returns in the FTSE 100 over the same period. However, the market has taken some hits during the economic crisis, with the investment falling 15% in 2011.

Andrew della Casa, director of The Wine Investment Fund, told the Daily Telegraph that this fall is a correction from a 76% increase since the end of 2008. He predicted that by the end of 2012, the Liv-ex Fine Wine 100 index will finish 10% above its 2011 year-end level.

"So far this year it has risen 3%. Now may be the most advantageous time to buy into the fine wine market since January 2009,” he said. Last week, the Liv-ex Fine Wine 50 reached a 13-week high.

The power of wine competitions

Wine competitions are a lottery. Evidence of the random nature of the results came to light in 2009, when winemaker and retired statistics professor Robert Hodgson published a report in the Journal of Wine Economics, which found that the winning of a gold medal at a wine competition can be statistically explained by chance alone. The report analysed over 4,000 wines entered in 13 US competitions. Of the 2,440 wines entered in more than three competitions, 47% received gold medals, but 84% of these same wines also received no award in another competition, indicating that the probability of winning a gold medal at one competition is stochastically independent from the probability of receiving gold at another. Hodgson concluded that there was almost no consensus across the 13 competitions regarding wine quality. “I take awards results with a huge pinch of salt because there’s such a huge chance for random results,” admits Andrew Maidment, director of Wines of Argentina.

But despite this rather damning report, or perhaps because of it, producers in their thousands continue to enter wine competitions, presumably under the premise that if you make a competent wine and enter it into enough competitions, that wine will almost certainly win gold eventually. Though some producers, such as South Africa’s Eben Sadie and Ken Forrester, have spoken publicly about their dislike of the wine competition model, refusing to enter any of the awards on the market. For those that do take part, wine competitions are a win-win situation for both the organisers and the participants, with the former putting them on for the profits, and the latter entering for the visibility and bragging rights a medal win brings. Further along the buying chain, consumers gravitate towards award winners in supermarkets, using the shiny gold medal sticker as a quality signpost, while retailers continue to rely on medal winning wines to boost sales.

Wine competitions serve all sectors of the industry, but with the recent proliferation of competitions flooding the market, is their power becoming diluted? Singapore-based wine writer and editor Ch’ng Poh Tiong is skeptical about the number of new competitions that have appeared in recent years: “There’s an ocean of different competitions from every wine region in the world – every wine fair has one – it’s mind-boggling.” Deborah Pratt of Canadian wine producer Inniskillin agrees: “The increasing amount of wine awards out there starts to dilute their importance. Consumers are less likely to react to the results if the market is flooded with similar competitions.”

So which competitions still carry weight? The big three: The Decanter World Wine Awards, International Wine Challenge and the International Wine and Spirits Competition appear to be in a league of their own from the rest of the competitions around the world. “As with all things, from cars to hotel chains, the brand is important,” says Poh Tiong, adding, “Reputation is everything, otherwise you’re just another competition from the rabbit’s hat.” The big three aside, Jo Ahearne, winemaker for Marks and Spencer, believes competitions with a specialist focus like the New Wave Spanish Wine Awards “give a narrower spotlight” on the winners. Local competitions are proving important in their own markets, such as the Concours Mondial de Bruxelles, Vinitaly, the Australian show competitions and the SA Awards in South Africa. “Occasionally, medal wins at a local competition can have wider influence,” says Michael Cox, director of Wines of Chile. “A big win at an Australian show can affect sales substantially, and make or break a wine’s reputation,” Cox adds, though Poh Tiong believes the idea of Australian judges awarding medals to Australian wine to be “almost inbred.”

Having organised The Wine Review Wine Challenge since 1991 – a successful wine competition born of Singapore-based wine magazine The Wine Review, Poh Tiong decided to discontinue it last year and launch an online wine competition geared around matching wines with Asian food – the Perfect Pairing Awards. “We were part of the wine awards mix, but there were so many like us, so I decided to do something completely different and focus on food pairings. It was a cold-blooded business decision, but a differentiation worth making,” says Poh Tiong. The competition pits wines against three popular dishes from three key Asian cities – this year Singapore, Hong Kong and Beijing took part. “It seemed a logical path. There’s a lot of focus on pairing wines with Asian cuisine and I think it answers the needs of the consumer,” says Poh Tiong.

Producers are becoming more cynical about wine competitions, and discerning about which ones they enter. “Wineries are getting a bit tired of supporting someone else’s bank balance,” says Gary Jordan of South African producer Jordan Wine Estate. “With everyone trading off each other, you have to ask yourself, ‘what am I getting in return?’” If properly publicised, a medal win can lead to a surge in sales. “We see fantastic sales uplifts on award winners. The increase depends on the base sales, but you can double, triple, or even quadruple sales quite easily with a well marketed win,” says Sainsbury’s wine buyer Julian Dyer, adding, “The quality of our own-label wines is unparallel, but our customers don’t necessarily know this, so an award win is a great way of proving their worth.” But recently, both winemakers and retailers have noticed that big wins don’t have the impact they used to. “You can’t win a medal and expect your wine to walk off the shelf. It’s a lot harder work now; you really have to let your customers know about it,” says Jordan. Simon Doyle of Concha y Toro agrees: “Ten years ago, awards wins had a much more immediate impact. Now it’s more steady as you go, with a gradual increase in sales rather than a sudden surge.

In a bid to shout about its numerous award wins, Concha y Toro has released a print advert featuring a wine rack filled with CyT wines, each of them labelled with their medal win alongside the tag line: ‘Which award-winning wine is your favourite?’ “Awards are one more tool in the promotional tool box,” says Alison Dillon of Wines From Spain. “We’re fortunate in the UK to have some of the top international competitions on our doorstep, but it remains to be seen whether this emphasis will shift as Asia starts to flex its wine buying muscles,” Dillon adds. In terms of catching the consumer’s eye in the aisle, opinion is divided as to whether or not to use medal stickers. “I try not to put stickers on my bottles, it’s not our style – they end up looking like Christmas trees,” says Jordan. Andrew Maidment of Wines of Argentina thinks consumers don’t understand the differences between the competitions, let alone the medals: “I read an article that said consumers consider a ‘commended ‘ award better than a bronze medal, because bronze is seen as coming third and commended means experts have given it the thumbs up.”

Stickers aside, in which markets does a big win matter most? Outside the UK, the US, Canada and Asia take awards results the most seriously, especially from the big three (DWWA, IWSC and IWC). A points-driven culture, American consumers are more open-minded about wine recommendations. “Awards results are very important in the US market. Consumers have grown up with Robert Parker and The Wine Spectator scoring wines out of 100, so a big win has an immediate impact over there,” says Concha y Toro’s Doyle. With a lack of concrete knowledge about wine, coupled with a keenness to learn, awards results also have a big impact on Asian consumers’ buying habits. “The average Asian consumer hasn’t even heard of Decanter, but if they were in a supermarket faced with four similar wines, they would gravitate towards the one with the medal,” says Poh Tiong. Doyle agrees: “Wine knowledge in Asia is at a much less mature level than in Europe, so consumers are still looking for pointers when choosing wine, and an award win carries weight. Chinese retailers are also more open-minded about marketing award wins,” he says.

Many wineries seeking representation abroad enter international competitions in the hope that a gold medal might land them a UK listing. “A big award win at an international competition could make us taste that winery’s wines if we didn’t know them, and see if they suited our style,” says M&S’s Ahearne. Maria José Sevilla, director of Wines From Spain, believes the New Wave Spanish Wine Awards serve as a barometer for UK wine trends. “We’ve seen positive effects from the awards in terms of a foot on the export market for some and new listings in the on– and off-trade for others,” says Sevilla. Though not everyone is in favour of wine competitions. Chief wine critic of The New York Times Eric Asimov can’t see the point of them: “I don’t pay attention to wine competitions and put no stock in the results. The idea that tasting several hundred wines in a day is going to yield credible and meaningful results is a myth that I’d rather not do anything to uphold. It doesn’t present consumers with the best wines in the world, only the best of what were available. Robert Parker and The Wine Spectator still carry more weight in the US with their ratings than the results of any of the big wine competitions," says Asimov.

Love them or loathe them, wine competitions are here to stay, serving both as a benchmark for producers to see how their wines match up against their contemporaries’, and a valuable quality signpost for novice wines buyers. For Andrew Maidment of Wines of Argentina, it all boils down to the need for a point of difference. “There’s a desperate desire among producers to make their product stand out. The market is so fiercely competitive, if your wine isn’t instantly recognisable as unique, then you’re a nobody.”

Article originally published in The Drinks Business magazine.