WHO KILLED THE WINE BUSINESS? The dunce cap goes to the distributors. Once upon a time, there was a proven supply chain of new customers. It started at the little bottle shop that SOLD wine by educating the customer and telling the story of each wine. Then the snake showed up in the Garden of Eden. It was the supermarket or grocery chain.
What are their skills? Stacking shelves, and placing orders in time to see that the shelves can stay full. It's a very simple business. Did anyone notice that they don't have a sales department, nor any sales people?
What do they stack on shelves? Products like Coke, Pepsi, Tide, Mars candies, etc. Items that spend Billions each year, creating demand that allows shelf-stackers to know nothing about how it was made, what's in the container, nor who or where it was made.
Obviously, wine does not have those characteristics and never will. So the partnership was doomed from the start. That would have been ok, except that volume discounts drove the bottle shop out of business, and killed the supply of new drinkers.
And that, my little darlings, is how the wine business committed suicide.
Let’s pour some cold water on that romantic picture. Wine has been in supermarkets since the 1950s. In the US, for most of those earlier decades very few people were drinking wine. (Bear in mind that only 35% drink it now)
In Europe, wine was not produced by small estates and purchased from lovely little shops. It came from the big cooperatives that still produce around half of it. In France, it probably came from Algeria or S France. In any case it was in a returnable litre-bottle with a cheap plastic stopper. There was no indication of origin; you bought it by the alcoholic degree. And got through a litre or two per day. If you were lucky enough to live in a wine producing region, you went to the cooperative and had them fill your large glass container.
If you were French, Italian or Spanish, you most likely knew nothing about any wine produced more than a few miles from your home
Supermarkets democratised wine. They allowed people to drink wine from other regions and countries, and they almost certainly broadened most people’s wine drinking experience.
The shift from Vin de Table to AOC was driven by the retailers. Without the supermarkets (and self-service specialist stores) the Brits and Grmans would never have developed into major wine drinking markets.
But, as I said in my piece, of course that came at a price, as it did for the producers of everything else on sale in those stores. Nothing is for nothing.
It is a fact that the distributors in the US violated the Robinson-Patman Act with volume discounts beyond legal cost savings that reduced competition and killed the bottle shops
The only question of "romance" is how important was the bottle shop to the creation of new wine drinkers. I think it was the most important education and sales link in the chain of distribution.
Could we bring them back? Yes, many of the laid-off workers you described would be natural owners of bottle shops, but the state and federal governments would have to protect them from the short-sighted illegal volume discounts of the larger distributors.
I have no doubt that distributors broke numerous rules. However, my firm impression, viewing the growth of wine consumption from 1970-2010, is that in almost all countries, supermarkets - which have 70-85% of the market in most countries - were far more responsible for the growth in consumption than any other factor.
WHO KILLED THE WINE BUSINESS? The dunce cap goes to the distributors. Once upon a time, there was a proven supply chain of new customers. It started at the little bottle shop that SOLD wine by educating the customer and telling the story of each wine. Then the snake showed up in the Garden of Eden. It was the supermarket or grocery chain.
What are their skills? Stacking shelves, and placing orders in time to see that the shelves can stay full. It's a very simple business. Did anyone notice that they don't have a sales department, nor any sales people?
What do they stack on shelves? Products like Coke, Pepsi, Tide, Mars candies, etc. Items that spend Billions each year, creating demand that allows shelf-stackers to know nothing about how it was made, what's in the container, nor who or where it was made.
Obviously, wine does not have those characteristics and never will. So the partnership was doomed from the start. That would have been ok, except that volume discounts drove the bottle shop out of business, and killed the supply of new drinkers.
And that, my little darlings, is how the wine business committed suicide.
Let’s pour some cold water on that romantic picture. Wine has been in supermarkets since the 1950s. In the US, for most of those earlier decades very few people were drinking wine. (Bear in mind that only 35% drink it now)
In Europe, wine was not produced by small estates and purchased from lovely little shops. It came from the big cooperatives that still produce around half of it. In France, it probably came from Algeria or S France. In any case it was in a returnable litre-bottle with a cheap plastic stopper. There was no indication of origin; you bought it by the alcoholic degree. And got through a litre or two per day. If you were lucky enough to live in a wine producing region, you went to the cooperative and had them fill your large glass container.
If you were French, Italian or Spanish, you most likely knew nothing about any wine produced more than a few miles from your home
Supermarkets democratised wine. They allowed people to drink wine from other regions and countries, and they almost certainly broadened most people’s wine drinking experience.
The shift from Vin de Table to AOC was driven by the retailers. Without the supermarkets (and self-service specialist stores) the Brits and Grmans would never have developed into major wine drinking markets.
But, as I said in my piece, of course that came at a price, as it did for the producers of everything else on sale in those stores. Nothing is for nothing.
It is a fact that the distributors in the US violated the Robinson-Patman Act with volume discounts beyond legal cost savings that reduced competition and killed the bottle shops
The only question of "romance" is how important was the bottle shop to the creation of new wine drinkers. I think it was the most important education and sales link in the chain of distribution.
Could we bring them back? Yes, many of the laid-off workers you described would be natural owners of bottle shops, but the state and federal governments would have to protect them from the short-sighted illegal volume discounts of the larger distributors.
I have no doubt that distributors broke numerous rules. However, my firm impression, viewing the growth of wine consumption from 1970-2010, is that in almost all countries, supermarkets - which have 70-85% of the market in most countries - were far more responsible for the growth in consumption than any other factor.