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PROGRAM
President Hays introduced our speaker: our own Gillett Johnson who we recognized today for his seventh anniversary as a member of Lamorinda Sunrise.
Gillett had a reflective moment and then began his presentation: A Day in the Life of a Winery Owner/International Wine Merchant
Gillett presented an overview of the many aspects of the wine business including: History, Geography, Viticulture, Oenology, Packaging, Import/Export, Marketing
History of Wine has its origins in various regions around the globe including: 7000 BC in Georgia and Iran 4500 BC. Wine is made from many kinds of fruits. Romania still makes wine.
Wine is made in all corners of the world...and in all 50 states of the US.
Gillett interspersed family pictures throughout his presentation including a picture of Grandma Gillett. Gillett shared that Grandma brought gin in by the glass....and taught the family to party!
In wine consumption: France is #1, United States is #4 and China is #7
Another family picture of the Top 10 Producing Families of Tennessee and the family is increasing as the next generation is having children.
Gillett talked about New Zealand and Australia as wine growing regions. Muritai, Marlborough is a cool climate which is currently planted in white grapes but which may be a future necessity as climate changes, areas planted with white grapes now may change to red. Global warming needs to be factored into decisions on where to grow what grapes. Climate changes are having a big impact - some regions will no longer be able to support the same grapes and it is already happening as tastes change. Australia has some great growing areas including Margaret River area which is up and coming especially for whites.
At this point, the AV curse of Lamorinda Sunrise struck...but Gillett recovered gracefully as always!
The Path to a Wine Brand...has many facets:
Wine Choices, Packaging and Design, Distribution, Targets, Pricing, Brand Positioning, Essential Brand Message
Oenology (Winemaking) - winemakers use the taste profile of the grape and the wine maker can exert different levels of influence on the final product.
Packaging comes in all sizes and directions...
Trade Dress (aka labeling) - wines use various approaches to get their brand out there in front of buyers.
Import Export requires accurate projections and lots of logistics
Distribution in the US varies state by state. It is controlled and licensed. There are many laws, rules and oversight agencies including the TTB (Alcohol and Tobacco Tax and Trade Bureau), Homeland Security, State ABCs and the FDA
Finance - at this point, Gillett inserted a joke:
"Why did the accountant stare at his box of grape juice?"
Because the box said 'concentrate'.
The economics of wine making are not for the faint hearted. You have to buy the land and the vines. Then plant them, watch then grow as you prune and tend them until harvest. It is generally three years from planting to the first vintage. Then you have to harvest, buy barrels (French oak $800 per), then the wine needs to ferment and age. After the wine is made, it is bottled, labeled and marketed.
For serious reds, there will be no revenue for 5-6 years and then selling expenses can be equal to all of the production costs. That is why Gillett's company exists to help sell and distribute wine successfully.
Public Relations to promote wine are changing. These days wine drinkers are listening to one another via social media as opposed to wine critics in the traditional publications like Wine Enthusiast,
Wine Spectator and The Tasting Panel.
There are 3 tiers to market to: Suppliers to Distributors to Trade to Consumers...
Some wine statistics:
In 2008, US consumption was 2.45 gals/resident - by 2011 it was up to 2.73 gals/resident.
7% of wine drinkers consume wine every day
When they drink alcohol, women drink wine 52% of the time and men 20% of the time
And lastly, Gillett announced that he brought wine to share with us...thanks Gillett!
Questions from the audience:
Which state is most difficult regulation wise? Gillett cited Texas; Vermont just raised fees; MA, FL, and TN are challenging in varying degrees
What impact will the drought have? Gillett says it is too early to tell. Some of the wines may be dry farmed. Last year was ok and probably this year but a prolonged drought will definitely cause problems.
What price point is included in the statistical calculations? The full range but the growth is happening at $8 and above price point.
Climate changes are having a big impact...some regions will no longer be able to support same grapes; it is already happening as tastes changes
Various questions about wine prices:
With the global recession, people started buying less expensive wines....during recession $8-10 bottle and now it is the $15-20 range
What is the markup on wines? The retail price is about 3x the cost...$10 to make + import + Gillett's markup + distributor + retailer
Of the 360 mil cases sold, 75% under $13
Alcohol content....trying to push alcohol back down US is higher than Bordeaux
All alcohol consumption is rising
Final question...what was the best wine that Gillett has ever had? Gillett shared that he in 2007 he had a 1957 Romanee-Conte to celebrate a friend's 50th and he also had 1900 Madeira.
Gillett ended with "great wine tastes better with great friends in great places..."
Hays reminded us about TGITLFOTM...tonight at the Bettelheims at 5:30pm
Gillett had to remind Hays about the hand and he got no certificate...with that, Hays adjourned the meeting.
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Pat Flaharty reminded us that we will gather on Tuesday, Feb 11th from 5:30-8:30pm for our 5 year plan update meeting. You can still sign-up by talking to Pat. The meeting will be held at Lafayette Library and Learning Center and a dinner of sandwiches will be provided by the Club.
Don Jenkins...announced that each of us has an opportunity to participate in a dinner at the home of Ken Behring. It is a celebration for the members of the Paul Harris Society who make a commitment to contribute $1,000 per year to the Rotary Foundation. Easy pay plan is available. Please see Don for more information. 