Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.
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wine BUSINESS 14 Beverage Dynamics • July/August 2015 www.beveragedynamics.com CHATEAU CASH FLOW EXERCISE CAUTION Unfortunately, Sauvignon Blanc does not command a big retail price tag and you need to generate some volume and move the inventory quickly. There are some quite pricey Sauvignon Blancs like Duckhorn, Merry Edwards, Spottswoode and Ro- chioli, but these are the exceptions and many are aged in oak. While Sauvignon Blanc is considered the go-to wine for warm weather months, it's starting to sell more steadily throughout the year. And consumers are also enjoying a wider range of SB taste pro- fi les, from the pink grapefruit, Gooseberry profi le of New Zealand to the tropical fruit of Napa Valley to the minerality-infused beauties of France's Sancerre region. Wineries love to turn their inventory into cash and SB is a much more reliable sell than unoaked Chardonnays, which are more hit-or-miss with the consumer. The one caveat: you need to turn over the current vintage of SB before the following vintage hits. Consumers like their Sauvignon Blanc fresh and don't want last year's close-out vintage. If a winery is sitting on inventory going into the next release, that's a danger sign and that cash cow turns into an expensive write-off. BD JONATHAN NEWMAN is widely recognized as a leader in the wine industry. As chairman of the Pennsylvania Liquor Control Board, he was the nation's largest wine buyer and brought a number of popular innovations to bear, including the Chairman's Selection program and opening of local stores for Sunday sales. Jonathan has received signifi cant industry accolades during his career. Follow him on Twitter at @NewmanWine or visit his website at www.newmanwine.com. WHEN WE THINK OF SUMMER, we think Sauvignon Blanc. It's a great aperitif, pool or porch wine and the perfect wine to accompany seafood and light summer dishes. It also generates nice cash fl ow for wineries. You can harvest in September and release the wine by late winter or early spring. There is a famous adage in the wine industry: "How do you make a small fortune? Start with a large fortune." Many wineries struggle to turn a profi t because it's a very expensive enterprise. You have to plant the right varietal in the right soil, have a tal- ented vineyard manager and winemaker, hope that Mother Nature cooperates and have a marketing savvy, effective sales team to bring your wines to market. Wineries are looking for every edge they can fi nd to stay competitive and be smart with their cash fl ow. While red wines can fetch impressive prices, they are also very expensive and labor intensive. Napa Valley Cabernet can often spend a year or two in oak. Oak barrels are very expensive and you also sit on your inventory for a long time. Plus bottle costs. To sell that pricy Cab, it had better be in an impressive package with nice foil, a big punt and heavy glass to wow the customer. Sauvignon Blanc has a simpler path to market. It rarely sees oak, often comes in a screwcap, doesn't sit in a winery's inven- tory long and the bottle has a much friendlier carbon footprint. After the tiny 2010 and 2011 vintages in Sonoma and Napa, some wineries were even releasing 2012 Sauvignon Blanc in time for the December holidays. Consumers like their Sauvignon Blanc fresh and don't want last year's close-out vintage BY JONATHAN H. NEWMAN