Wine Industry at a Crossroads: Changing Tastes, AI, and Where the Money Goes

You can't speak of trends in the wine trends in the wine trade without mentioning Felicity Carter. You can't talk data mining in the wine trade without mentioning Felicity Carter...in fact, I can't think of many surrounding the wine trade that you could speak of without mentioning Felicity Carter. She is a force of date (substituting for "nature").

I've got to tell you, sitting down with Felicity Carter for this episode of Wine Talks was like uncorking an old Burgundy—layered, surprising, and deeply satisfying. There’s something about Felicity’s perspective that just sharpens the mind. Maybe it’s because she’s perched out there in Neustadt an der Weinstraße, on the wine road of the Rhineland Pfalz, right at the border with Alsace. Or maybe it’s just down to the years she’s logged at the intersection of writing, advisory work, and researching high-end wine trends.

You know me—I love a guest who isn’t afraid to press into the hard truths and then turn them over like a newly racked barrel. Felicity didn’t disappoint. Right out of the gate, she set the tone: before you start spinning stories about your wine, you better know your cost of goods. Learn Excel, she said. It wasn’t fancy, but, boy, did that resonate with me. Nothing romantic about spreadsheets, but there’s also nothing more sobering than realizing that most people in this business skip the basics.

What I really appreciated was how Felicity drew a line in the sand about the current state of the wine industry—not just saying “it’s tough out there” (though it surely is), but also peeling back the bigger picture. She’s got this knack for linking what we see at the store or on Instagram right back to seismic shifts underway. She brought up this old book, “The Empty Raincoat” by Charles Handy, to frame what’s happening now: the wine industry is at the tail end of a 40-year golden run and we’re sliding into a new, uncertain era. It reminded me of my own business, the highs of 2007, and how everything since then feels like riding out after a storm, trying to read new winds that keep shifting.

Felicity didn’t shy from the stickier discussions either—like the damage done by “mummy juice” wines and those forgettable bulk bottles that flooded the market in a misguided effort to market to women. She’s got strong opinions on that, and so do I. We both bemoaned how those wines aimed at mothers after a long day might have alienated a generation—or at least set the table for younger drinkers to turn their noses up at what their parents drank.

And while I always want to reach for the romance of wine—the history, the sense of being part of something ancient—Felicity was bracing with her take: people buy wine because they like the taste and the fit, and they make up the romance later, mostly to themselves. We commiserated over antiques collecting dust—literally and figuratively—in our homes, the same way “tradition” can just become a nice story rather than a selling point.

But here’s what I loved: Felicity isn’t a doomsayer. Sure, the wine industry is congested. Sure, Gen Z might be drinking less wine—maybe because, as Felicity points out, no one wants to do what their mother did—but she still sees opportunity. There’s hope in innovation, in making products for new tastes, and, yes, in getting our business basics right. If you want to make money in wine, she says, embrace the numbers before the stories.

And I have to agree. At the end of the day, Felicity brought the clarity that’s so easy to miss when we get caught up in the swirl of nostalgia. Sometimes you need someone to remind you that, yes, wine is culture, and yes, it’s business too—and the two are tangled in ways we all have to keep learning to navigate. Thanks, Felicity. This one’s worth a slow sip.

 

1. Drinks Insider
   Felicity Carter mentions she is the founder of Drinks Insider.
   Website: https://www.drinksinsider.com

2. Areni Global
   Felicity Carter is the communications director for Areni Global, described as a fine wine think tank.
   Website: https://areni.global

3. Riedel Glassware Company
   Max Riedel, owner of Riedel, is referenced in the introduction.
   Website: https://riedel.com

#WineIndustry

#WineMarketing

#WineBusiness

#WineTrends

#FelicityCarter

#WinePodcast

#WineInnovation

#WineEconomics

#Areniglobal

 

Episode Transcript

(00:00):
Storytelling is what you do when you've got your fundamentals
right? Your fundamentals have got to start with knowing what your cost of goods
is. What's the cost of getting to market, what's the cost of all of those
things? And that's the step that lots of people
skip. I wrote this silly throwaway post on LinkedIn once where I said how
to make money in wine is learn to use Excel, learn to use spreadsheets, which

(00:22):
by the way, I can't do very well. I'm not very good on spreadsheets. Sit
back and grab a glass. It's Wine Talks with
Paul Kitchen. Hey, welcome to
Wine Talks with Paul K. And we are in studio today in beautiful Southern California
about to have a conversation with Felicity Carter all the way out in
Germany. Introductions in just a minute. Hey, have a listen to or

(00:43):
watch an episode I just put out with Max Riedel,
the famed 11th generation owner of the Riedel Glassware
Company. Incredible insight and wisdom into bringing 11
generations to the table. But now while we're here, here to have a
conversation with Felicity Carter. She is the founder of Drinks
Insider. Well, as the communications director of

(01:05):
Areni Global, welcome to the show. It's nice to
be here. And we're out in Germany. What part of Germany are we at?
It's a place called Neustadt Underweinstrasse, which means new town on the wine
road. It's the wine capital of the Rhineland Pfalz region. So we're
part of the Vosges mountains. I'm on the border with Alsace, so very
close to France. Oh wow, that's great spot to be. I

(01:28):
love that area. I just had to master Psalm on
the show. Stephanie Henn, she is the master Psalm
and a curator up in Hamburg at a five
star hotel and a three, I think it's a three star restaurant. Really
interesting stuff about what was happening tourist wise in that part
of the country, a part of the world and as well as sort of the

(01:49):
consumption of wine. But the your main.
I was trying to pin down Felicity Carter as to
her objective with Drinks Insider and then
your work with Arini. Just tell me a little bit about
what you're trying to do with this. So Arena Global
is a think tank. It was founded by somebody

(02:12):
who's part of the Nicole Roller who was part of the Davos set and she
was like we don't discuss these big issues in wine. And she found
Pauline Vicart, who's French, very brilliant and
basically what Irini does is it researches
fine wine. The Fine wine market the consumers, high net worth individuals,
but also asks big questions like what if wine loses its

(02:34):
social license to operate, does a lot of events, a lot of publications,
things like that. So it's very, very interesting work. Drinks Insider
is my, my own consultancy I founded a year
ago. So I've got a podcast and I've got a newsletter and I also do
sort of advisory work quietly. I do a lot of research into
export markets and things like that. I do a

(02:56):
lot of speaking, a lot of mentoring, a lot of,
you know, work going into companies and looking at their editorial strategies, things
like that. Yeah, it's interesting. Let's just kind of sit on that for a second.
I just want to talk to the listeners and the viewers about that
kind of work because the social network world,
Obviously communication and PR has changed radically in the last

(03:19):
five years, 10 years for sure. But even the last months,
the way AI has changed the way you can put out
communication and how fast you can do it. I often
find myself now even clipping somebody's article and
putting it into CHAP GTT to see if it was written by AI. Yeah, I
do that too. But how much, how many

(03:41):
hours a day do you spend writing? Oh, way too many.
I can't, I can't write constantly. It kills me.
So I do a couple of hours a day, but I do a lot of
other things, like I write a lot of strategic documents. So
actual writing, like the hardcore writing, it'd be a couple of hours a day
because. Interesting. And that's it. That's as much as I can take. Well, it's hard

(04:04):
and it's taxing and I just spent the summer down at the
beach and I was telling my wife this morning, I said, you know, it was
so hard to not to be distracted.
And so with all kinds of distractions, right. We had the grandkids with us there.
You hear noise in the background and that immediately dislodges me
and just derails me from what I'm trying to focus on. See, I don't need

(04:25):
distractions to be derailed. I can just be derailed just because
I'm finding it difficult and just do. It on your own. I can do it
all on my own. Yeah, I don't need distractions because you. Want to make a
point. And the thing that's interesting is I was using
AI a lot when I was producing some of the
text. You know, it's very effective to, for instance, take

(04:46):
a show like this, put it into AI, let it transcribe it Let it come
up with some marketing points. But I found myself back to just writing
my own stuff to the extent of when I want
to post a description of a show like this one, I make sure that I
just write it myself because it just, it's just more authentic. And you can just
tell I'm actually. Giving, I'm actually giving a talk about this in Chicago

(05:08):
for Wine to wine in October. I can't remember the dates, but the problem with
AI is that, or generative AI is that it is
trained on the average of the Internet. It's trained on the bell
curve, and it's also trained by whoever does it
to make sure that it's as non confrontational and non disagreeable
as possible. Because companies like AI don't want to get sued and they also don't

(05:30):
want people, you know, making bombs and doing like that. So when
you, when you use it, it defaults to the average. So if you use it
a lot to write, it is going to give you the most banal possible
thing that it can do. And that's the problem with it. It's really, it's
really dangerous. My wife accuses me of being nicer to
AI than I am to her. Well, the AI is probably

(05:52):
nicer to you. It's also been to be quite sycophantic.
So when you, when you give these speeches like in Chicago and you're talking to
industry leaders, industry wineries, or
everybody in between that deals with marketing and communication and wine.
Yes. I mean, marketing is not my thing. I'm not a, I'm not a marketer.

(06:14):
But yes, mostly these days people ask me to talk about
alcohol control policy. That's what I've been doing a lot of speaking about. And
I do a lot of talking about sort of international trends and what's on the,
what's on the horizon. And in the past I was asked a lot to do
a lot about wine tourism, which I used to do a lot of work on.
So marketing as such is something I can kind of

(06:37):
pull something together, but it's not my area of expertise. So
this is so interesting. When we spoke earlier, like a few weeks ago,
I was telling myself, you've got to stay focused. She covers a lot of ground.
She's got a lot of experience, a lot of parts. And my brain right now
is moving in all kinds of directions as to where I want to
have this conversation. I want to stay focused because it's so

(07:00):
interesting and you have so much experience in doing this. But you know, we're confronted
in this industry with a lot of, a lot of headwinds right now. And I.
That's true, that is an understatement. Yes. And, and I. But
what does that mean to the extent of haven't,
hasn't this industry gone through peaks and valleys over many
generations? I mean this is a 6000 minimum year old product.

(07:23):
No, I do think, you know the famous words, this time it's different, they're always
dangerous. But I do think this time is different. I think if you look at.
There's a really interesting book I read in the 90s, it's called the Empty Raincoat
by an economist called Charles Handy and he talks about the fact
that most industries or most big Companies have a 40 year cycle
and that everything sort of peaks and then

(07:45):
declines. And I think if you look at the modern wine era,
it's probably coming to the end of that 40 year period. If you look at
the early 80s, it's a period where it really took off and then it internationalised
and globalised and consumption peaked in 2007
in the world. And I think we've been on the, we're coming down
the other side of that great expansion. So in some ways we're actually,

(08:06):
I think reverting to the historical mean.
You know what, those are amazing statistics.
I lasted 35 years selling direct to the
consumer in the sense of lasted. The company still exists, but it
is a mere shell of its former glory. And when was its former
glory? It was 2007 was the last. Isn't it interesting?

(08:29):
It's really interesting. It was the last sort of year where I felt,
hey, I got this under control and I really know what I'm doing. And then
this steady decline to 2019
and I thought, well, 19 was gonna be tough. And then 20 hit and Covid,
you know, was great for us. And then of course it failed after that. It
generally failed as far as marketing's concerned. But why do you think

(08:50):
that cycle exists and what, what's in this book that says.
So? So what he said was, he said everything exists on a bell.
And so what happens is what happens in most companies, what will kill them
is they get to the top of the bell curve, which is their maximum success.
And at that moment they all go, oh, look at all the things I did
that brought me to this success. I'm just going to keep doing them because they're

(09:12):
obviously working. And at that point it is a mathematical certainty that you're
going to go down the other side. So at the moment of maximum success, what
you should do is you should change what you're doing. And
unfortunately, in wine, that decline in
2007, which was a real warning sign, there were a couple of things
happened after that disguised the fact that wine was

(09:33):
probably on that downward track. So first of all, there was the big bang of
February 2008, when the Hong Kong government dropped its duties on
wine. And what happened was in the global financial
crisis, all of the fine wine and all the big wines suddenly found it had
a new and lucrative market in Hong Kong, which was the gateway to
China. And so the great China boom took off. And that peaked

(09:53):
probably about 2012. But around 2011, 2012, the wine
industry decided it was going to start to market heavily to women.
And so it brought lots of. Did that pretty aggressively and
pretty badly, I think, but it brought a lot of new consumers into it. So
all of this was covering the fact that there was an underlying decay beginning to
happen. This is.

(10:15):
I mean, just every subject you talk about brings me the new things
to peel back because the women in wine, in wine is
also has been an issue. It seems to have subsided a little bit. But
back in those days, when you're talking about 2007 and 2012,
that sort of range, it was very, very popular in my trade
to go after mothers. You know,

(10:38):
the, the drink of your post, you know, your
afternoon drink or your, your evening drink after you've had the kids all day or
they picked them up from school, put them to bed, and now it's time for
a glass of wine. And there's this whole movement to market to mothers. Yeah.
And I think that did, I think that did horrible damage to the wine industry.
I think that was one of the gravest mistakes that was made in the last
40 years. I mean, at the time, I remember standing on stage railing against

(11:01):
this horrible marketing of the mummy juice thing, which was. I
was always selling crappy wine. It was not selling fine wine or good wine. It
was selling the absolute crappiest bulk wine on the sort
of. And the awful thing was just how many women were doing it as well,
how many women were marketing these awful things, but they made wine
into something that, you know, is a drink to relieve you because your toddlers are

(11:21):
screaming too much. And I think probably,
you know, apart from the fact it was a horrible, you know, it was, it
was patronizing, it was treating people like they were just a market that you
could, you could shovel this kind of crappy wine onto. But I think that did
a lot of damage. I think what we're seeing now with Gen Z, I have
no evidence for this, by the way, this is my opinion. But I think nobody

(11:43):
wants to do what their mother does. You know, and you've got all of these
young people who looked at Instagram and went, well that's, you know, that's what
middle aged women do is they drink too much because they're stressed. I'm not going
to do that. You know, that's interesting because
I do believe part of this problem today is not only that and
certainly that ties into it the crappy bulk wine. And just

(12:05):
from a buying standpoint, you know, my club originally was founded on the idea
there's always something interesting in the, you know, catacombs of
wineries that you could buy and sell that were good. And I could tell you
a thousand stories about how this, how Trader Joe's got started for
matter of fact here in America. That was really their premise. They would buy the
last 2,000 cases of somebody's vintage and put it out there and this is all

(12:26):
we have. And that's, that actually existed. Then came
these 50 cent a liter crap wine from Spain and all over the
world that they'd bring the New York bottle up in a billion brands and put
out in the street. And I think that's a lot to do with sort of
sour pun intended taste for wine in certain, in certain
regards because how many times can you fool the consumer into a

(12:47):
bottle called, literally called Mommy Juice? And
that innovation, and this is what drives me crazy about it right now,
we'll probably get into this in a second. But that, I don't consider that
innovation. But there's a lot of people that will say, hey, we're being innovative, we're
calling it Mommy Juice or what's the new latest one? There's one for Gen
Z's where you for instance, the wine's crap,

(13:10):
it's just not any good. But they labeled it and packaged it so that
it might attract a generation. And I, I don't think that's
what wine is. And maybe Global has peeled that back
a little bit as to, you know, what's happening with the finer wine. Well, wine
is, I mean wine is lots of things. And if you're talking about, you know,
entry level products, it's, it's a fact that at an entry level you need

(13:32):
things that are much sweeter. And you know,
then, then the wine trade certainly likes, you know, I think
there's, I, I have no objection, I have to say I have no objection to
crappy wine. I, I grew up drinking Crappy wine, you know, big brand
wine. But I really object to rip off wine. And I think a lot of
that sort of wine that was, you know, shoved at

(13:55):
women under the guise of empowerment was really poor
quality and priced as though it wasn't.
Do you think that this. The dynamic
of the wine marketplace right now is partially
in trouble because the change is much more
rapid than it used to be? And I'll give you an example. I used to

(14:16):
mail a million pieces of mail a year, and I knew what
the response was going to be. And when I got the response, I knew how
to strategize for the next mailer, and I would send out another
300,000 and wait for the results to come. That doesn't exist
anymore. It happens immediately, and it's a
radical change. And I'll highlight it by. My niece started a

(14:37):
new salad dressing company, and, man, she put that thing on
TikTok and it just rocketed. And of course, now
the organic part of that is slowing down and the orders aren't coming in this
prolifically because it's so dynamic out there right now. And the
messaging as well is so dynamic to. To the
consumer. Do you. Do you think that some of this has to do

(14:59):
with that? No, I don't, actually. It's interesting. I don't,
because I think if. If that were the case, what you'd see is you'd
see lots of brands switching within the category. You'd see people pick up something and
then they try something else. You wouldn't see them abandon the category, which is
what's happening. I mean, it's like, you know, with. With sauce or salad
dressing. Are people giving up sources? No, they're probably. They're

(15:21):
probably getting something new instead. But what we're seeing in wine
is we're seeing people leaving it wholesale. I think that's a different thing.
Like people leaving product, leaving.
Abandoning the product line or abandoning the. No, I think they're abandoning the category.
So. For two. So for two reasons. So I think you're just seeing people

(15:41):
aging out. I think a lot of what's happening is you're seeing people aging out
of it. So you're seeing the very heavy consumers, which is the baby boomers. And
a lot of them are just giving up. Not because they have to, because, you
know, their doctors are telling them to, or because they're dying or because they're,
you know, they, you know, alcohol is just affecting their sleep or whatever. So you're
seeing that natural attrition. But of course, they were called the

(16:02):
baby boomer for a reason. It was a really big demographic. It is a really
big demographic group. And the, the demographic groups underneath
them aren't big enough to make up for that. Gen
X is a much smaller generation. I mean, I'm Gen X and you know, my
generation drinks wine enthusiastically. But it's not enough to counter for the lack
of the baby boomer. And then you get millennials, which is a

(16:23):
much bigger generation, but they haven't yet moved into their high spending
life phase yet. And then what you're seeing is the next
generation, Gen Z, who are not that interested in it, who
aren't. They're a much bigger generation as well, but they're not showing the same
interest in it. So some of this is demographic movement, I think.
Is this high spending rejection. Do you

(16:47):
think it has something to do with, like you said earlier, it's for an earlier
generation saying, I don't want to do what my mother did. Yeah, look,
I think there's lots of things. I think there's lots and lots of, you know,
one thing that you can't, in the United States that you can't move past is
the fact that the distribution bottleneck is so narrow. And
so you've got a very few companies that are selling, you

(17:07):
know, that are really dominating the shelves. And are those products the ones that are
the most exciting for consumers? You know, one thing that's really
interesting at the retail level is that a lot of products now look exactly the
same because those big companies are all benchmarking. They're, they're all looking
at what everyone else is doing and they're saying, well, this one's really successful. Let's
see if we can, you know, come close to it. So in a funny way,

(17:28):
the wine market is homogenizing at that level that most people enter
the category and discover it. So it's not very exciting. I mean, the
congestion is phenomenal. And that's why this
is the part that's kind of interesting. Maybe we can peel this back a little
bit. I had this question I used to. I asked
winemakers that are. You've been doing this for a while and that is, let's just

(17:49):
pretend, if it's even possible, that profit has
nothing to do with this. And what I'm suggesting
there is. There's a balance between this ethereal product, which represents history
and culture and all the things that come with a proper glass of wine.
But as Irini Global and Pauline mentioned on my show,
it's always been driven by consumerism, just like

(18:13):
White Zinfandel was the entry level drink in 1974,
and who knows what it is today? White Claw or just
sweet, you know, Josh or Apothec Red. But
what if there's no profit? Would we. Would it be different?
Or is that just way too. Is that way too
philosophical to try and figure out?

(18:37):
You have to. You have to. That. That the. The economic model would
be so different that you. You. So how would it work if there was no
profit? You mean people could just produce what they like and they would have to
worry about the market? I suppose that is the. The basis. Just
produce what? Let's just say that
if ethically they were just producing what

(19:00):
the land was going to give them. And. Well, you know what? We've done a
lot of that. All of the people who entered the. The wine market in the
80s and 90s are all aging out now. Most of them did that. And it's.
It's actually turned out to be a bit disastrous. Pauline
is quite right. The market supplies a lot of discipline. Like, when people
think of the market, they're always thinking of the mass market and they're thinking of.

(19:21):
Of, you know, the entry level. But actually at all levels, the market
is what gives you tremendous discipline. I mean, Bordeaux is a perfect
example of that. Bordeaux only exists and only became
a fine wine area because they had the
port and they could see what was leaving the port and they could see that
all these wines from the southwest were making off like bandits when they hit

(19:43):
the shores in the uk. So Bordeaux actually
closed the port to all of those other producers and began to ramp up their
own production. And from when they started doing that to when,
you know, British tastes change or Dutch tastes change, they
changed the market, they changed what they did. So commerce by
itself is not a bad thing. Commerce can actually drive things in a really

(20:04):
good direction, I think, where
if you're talking about if it's only consumerism, then you get
the lowest common denominator. Well,
this is the. That was well thought out, what I just said
with Pauline. When Pauline was on the show. I had
Ms. Roulet on the show as well. She was in. In studio here, actually,

(20:29):
when they. When it's. Consumerism drives things. And I started to think about
Madame Clico, you know, where
she was sending a Suppage to Russia and sending a different one
to England and was able to, you know, understand
that marketing that back in the late 1700s, which is pretty phenomenal.
And so it sort of obviously validates the idea that consumerism drives what we

(20:53):
do here. But I wonder then maybe my
romantic view of wine has been
developed by the commerce changes. In other words, you were talking about
Bordeaux. I mean, they were suffering greatly at some point in time,
and now it's a romantic thing. My dad
used to say the French have learned how to romanticize wine.

(21:15):
So taking it past the consumer side and making you feel like there's something
extra here that you're drinking. And I had a bottle of
2010 Chateau Montrose last night. I mean, it was incredible, right? And
I feel like I'm participating in this history by
drinking this wine. Is that something that this
generation, the Gen Z's and the millennials just don't really care about?

(21:39):
Look, I always say, people always bring up this thing about sustainability and tradition.
And the thing I always say is people don't choose products based on any
of those things. Those things give them the.
The reasons, they explain to themselves why they've chosen them. People buy things
primarily because they like the taste of it

(21:59):
or, you know, it suits them in some way. And then all of the other
stuff is window dressing to make them feel good about their choices.
You can't sell something just because it's traditional. If that
were true, the antiques market would not be in a slump.
You have to sell it based on. That's the thing people

(22:20):
tell themselves, but it's not the real reason they're buying it. That's a
really good point. We're trying to sell my in laws estate and
I remember we bought this beautiful china
cabinet at auction years ago. And I'm an auction nut
and love going to the Paris flea market type. Right? Yeah, me
too. Nobody wants it. Yeah,

(22:43):
my whole house is full of antiques
that I bought on ebay at unbelievable prices because
nobody wants it. You know, I've got a mahogany desk from
1780. You can't buy mahogany. I mean, mahogany is, you know, an
endangered wood. But you can't buy a mahogany table for
€190, which is what I paid for it. You can't buy an inlaid

(23:06):
Italian table for the €400 I paid for that either. You know,
you don't buy things because it's traditional. That's the excuse you tell yourself
for why you bought it. It. I guess that's why when people come to our
house, the younger generation, they go, gee, it's like a museum in here. Yeah, that's
right. Brown. So do you think then
that. That the wine industry, I mean,

(23:28):
I was looking for solutions and there aren't any real solutions. I mean, there
are. There are lots of solutions. There are lots and lots and lots of solutions.
It's just, it's just the romanticism stands in the way
often of that. So there's lots of people, for example, example,
there's new DTC software which is allowing people to do really
interesting things. And I've heard. So I've got a

(23:49):
friend of mine who works in this area and she was saying that
she's been migrating people to new websites and people,
hundreds of people in California just go, no, I want exactly what I had. I
understand what I had. I don't want to learn a new
system. And she can talk until she's blue in the face about, well, it'll give

(24:10):
you more flexibility and it'll tell you if you're about to lose a customer. You
can tell by buying patterns if a customer's about to drop out. You can tell
when they're ready to buy something new. You know, and so
there's, there's things like that, that people can do and they're, they're almost
willfully choosing not to because again, there's this whole romantic idea about,
you know, the thing should sell itself and you know, blah, blah, blah, blah, blah.

(24:30):
So, you know, I think that, I think there are things and also making products
that, you know, that there's not enough of those gateway products. The products
that everybody who cares about wine absolutely wants to vomit when
they hear about about are actually the, the things that open
doors. Right? So there's a product at the moment called xxl.
I don't know if they still make it from wine from Moldova, but it was

(24:51):
made from, I think it was one of those aromatic wines with
Muscadine. No, Muscat from Muscat.
Musket from Moldova. And they've put aromatized fruit juice through it. So
in Georgia they sell it with aromatized peach juice and they, you know, they do
that. And this has been flying off the shelf in less than a couple
of years. It's, it's gone to being a 2 million case brand because

(25:14):
it's, if you've got the taste buds of a 19 or 20 year old wine
is just too bitter. It's, it's bitter, it needs to be sweetened in some
way. And so they went, all right, well let's do
that. But you know, everyone else is going, when are they going to embrace tradition?
Don't they care about sustainability? When are they going to buy my $60 wine? You
know, it's not going to happen. I will

(25:35):
not. Well, you know, the, the number one Selling flavor of
Stella Ro from my good friends, the Riboli family
was the chili pineapple flavor over the holidays. That's right.
That's right. It's doing really well. That, yeah, that crawls
under my skin, but I get it, you know, I'm a market. Well, how do
you feel about the fact that the Romans used to put pepper and honey in

(25:56):
their wine? Well, I suppose, but that's. That had to be to
cut the bitterness and the, and the flavor character. Right.
You know, there's just two things I wanted to just sort of jump on here.
One of them was it'll sell itself.
And I was reading a book for On Burgundy, and this is one of my
dad's books. It was probably published in the 50s or 60s. And it talked about

(26:18):
an appellation meeting with some winery, with the vintners. And one vintner
said that, you know, we shouldn't allow in our Appalachian
marketing or advertising because if we build a better market,
people will just come buy it. And I thought, okay, that's probably nearsighted in the
world. But it's, but it's interesting that going back to the 30s, that that mentality
existed. It kind of exists today. But the other thing you

(26:40):
said, which is this DTC software, not. My last full
year in business, I sent 33 million emails,
but I only, I created probably 300. You know, you can understand this.
Promo codes, advertising, you know, text graphics, all had to be
created 300 times. But a lot of that millions of emails
was created by the system on its own, based on the

(27:03):
path of the consumer when they're on the website and
interpretation of whether they were a high intent, low intent gift, whatever
they're trying to do. And so it would try and sort through
their clicking through my site to determine where these
people were and then try to save them. And before I
sold the company, I was in the midst of

(27:26):
making a new website and database because
my database that I, that we wrote in 1993,
that ran on DOS, was still infinitely more capable
in its flexibility than the stuff that was on the market at the time. Oh,
interesting, interesting. It was really. So should you have spent
your life selling wine pool or should you have been designing database

(27:48):
software? Well, I had a software company. Did you waste your life is this.
No, because I, I thank my father every day. You can see my
dad right there in that 1975 I've photographed
for putting me in this industry. Because I, I love the industry. But here's something
that's interesting and maybe this sort of defines what you're saying
famous master of wine friend of mine called me

(28:12):
and says, paul, I got no response in my last email. Not
zero. Now he's a credible mw.
And I said, well, send me the email you sent and show me your website.
And it's like, it's just so old. I mean, this
maybe from, you know, my first website, 1997, it almost was
looked that old. And so his credential

(28:34):
at this point in time is failing him radically
when it comes to trying to sell something. And he was not
willing to spend the time it took to fix the website
or even the email because it looked like somebody created
in an old version of word, you know, 20 years ago.
So I'm wondering if that's resistance is part of what you run into

(28:56):
with RE Global and your drinks insider consulting.
Well, funnily enough, Arena Global. No, because,
you know, it's like I said, it's a think tank. We do thinky,
philosophical things. But most of the people that we deal with.
You don't get to be in the world of fine wine without
being like super smart and super commercial. Right. The least

(29:18):
romantic people that you will meet are some of the people that run the
really fabled winery because
they didn't get to be fabled by being, you know, by
sitting around doing nothing. They know a lot about how the market works
and how to take care of customers. It's a different segment of the market
that they're usually, you know, and they hire the best commercial brains

(29:41):
to do that. They take all of that stuff very, very seriously.
It's usually, it's usually people who had some other career. You know, they've
gone into wine because they love wine and they don't want to be a lawyer
anymore. They're hopeless. And they resist because they, they, they
dumped all of that. They left all of that behind them. Now they just want
a nice life. Yeah, right.

(30:02):
That's very common, actually. Well, how do you explain then with some of these things
and maybe we're ready for a new movie. Maybe you and I should make a
movie. You know, these, the three
sort of market changing
events that I lived through. Doing
this was, was of course the judgment of Paris with

(30:23):
my father's store. I mean, Jim Barrett used to come into the store all Warren
wi. Slept in my father's home when I was a kid on a. You
know, back then in the romantic days of Napa wines,
Sideways, you know, radically changed
consumption of Merlot, obviously. And then in Pinot Noir, you couldn't find Pinot Noir
here in Southern California worth a damn at that time.

(30:45):
And, of course, Morally Safer's 1990
Mediterranean Diet. Conversation on Six Paradox.
Yeah, the French paradox. So those things had
radical implications in the marketing of
wine, and I would suspect raised the awareness of wine
at the same time. Well, I think you've left one out. I think there was

(31:07):
a really big thing that happened around the turn of the century which people
are embarrassed by now, but I think the emergence of two Buckchuck and
Yellowtail actually changed the entire market because, you know, two
Buckchuck was so cheap. Cheap that. And, you know, they used to do different batches
depending on what was on sale. And so you could get a really good batch
of it or you could get a really terrible batch of it. And because it
was only like, whatever it was, $2, people could take a risk and it could

(31:30):
be really lousy, and it didn't matter. They hadn't lost anything. And that brought
a lot of people into wine. Whereas now it's going to cost you
$15, and you're taking a risk because it might suck. You
know, you can forgive. You can forgive $2, but you can't forgive
$15. And I think those two wines, which
in their day weren't the crap that they are now,

(31:53):
I think Yellow Tail was a lot better back in the day. But, you know,
those two things brought a whole new lot of Gen X
into wine. Well, they. You're right. That was
2004, I think when Charles Shaw came out.
There was a couple of things to that, though. Charles Shaw was a brand at
one time, prior to that, no longer around, and

(32:14):
there was a huge glass, lot of good juice.
Well, that was. There was. In Australia as well. And so Yellowtail back in the.
And also the Australian dollar was really low against the US it was
$2 to one American dollar. So they were able to sell
a. A wine that was a $15 quality for about $7
because the dollar Australian dollar was so low. And there was. There was the grape

(32:35):
gut so that all of these people had this really fantastic fruit lying around
that they could make these. And of course, what happens is, you know, then it
corrects itself, and then the fruit goes down, you know, whatever. But, you know, there's
that opportunity today. Really good fruit lying
around, not enough white, unfortunately. It's all red. But,
you know, there's. There's that possibility right there.

(32:56):
It's. There's a lot. Well, to highlight the 2004 situation,
I actually had vineyard land in Paso Robles I never
planted because I didn't realize when I bought it how expensive it was to plant.
But the guy behind me had 60 acres and it just hung there.
Nobody, there was no contracts and nobody wanted it. There was so much, much
so many grapes on the marketplace and that, so two buck chuck@ that time was

(33:18):
actually probably pretty palatable. And as you mentioned that,
that Es and Flows and the way market, you know, is such a slow industry
and it takes time to catch up and then realize that the market's changed again.
That, that now I don't think it's the same quality
of juice and also the same premise that One of the Month
Club and, and Trader Joe's were founded on. There were good things to do.

(33:41):
It's agricultural. Es and flows and you never know what you're going to get.
Um, what, what's your objective now with Drinks Insider,
with the platform? Are we, are you addressing the consumer? Are you addressing
the. No, no, it's for, it's for the wine trade. Stick with the trade. Yeah,
it's strictly the trade. So I'm in the middle of writing a white paper that
I'm going to finish someday soon on the, the alcohol control

(34:03):
issue and, and alcohol and, and what's, what's going on and I'm
going to make some recommendations. So that's my big project at the moment. I'm hoping
to get that finished pretty soon. So I'm going to do more of that. I'm
going to do more writing of reports and, and writing of
market analysis. Not very interesting, is it? But I actually find it, I actually
find it quite interesting. So I like seeing if I can see something

(34:24):
that other people can't see and putting it down on paper. I think
you're doing a good job of that. Oh, thanks, Paul.
But that is to help
guide the trade. Whether I'm a maker or
a marketeer or DTC company.
Whatever information you can research and bring to the table and Drinks and Cider Insiders

(34:47):
is to help me understand, maybe. To help you make money.
That's my goal. That's my stated goal. Drinks Insider is there to help people
make money. Because I don't think we talk enough about that. We all, you know,
we, we tiptoe around the. Everyone talks about how broke they are. Right. But we
tiptoe around the profitability and the money making discussion and there's this
awful idea that everybody's got which is that being in wine sort of

(35:08):
automatically means you're not supposed to, you know, make money. That, you know, there's
all these jokes about how do you make a fortune in wine, you know,
and I find all of that really offensive. I, I think, no, if you're going
to do it, do it properly. And I, I'm going to find out all the
ways that you can make money and I'm going to write them down and people
can come and find out what I've found out. One of the things

(35:28):
that, that's going around and I say it all the
time, in fact, I had a conversation when I sold my company.
It's already being sold again. And I'm sure it's not because
they were making too much money the last go around. And
I was, I was talking to the owner and I said, you know, maybe it's
the fact that you guys, the previous buyer, have just

(35:51):
diluted the story. Now I don't know if my story is
valid anymore. The story of the club, my dad, the whole thing, you know,
if that sells wine, we don't know that yet. But
how do you feel about the concept of that? Wine is about
storytelling. I mean, most product is. But do you think that's, is
that we're just beating a dead horse at this point and it's going to be

(36:12):
strictly metric marketing and trying to find the best way to acquisition? Look, it
depends, it depends on what you're talking about. So
again, I've done my workshops on storytelling and they're all very interesting.
Storytelling is what you do when you've got your
fundamentals right? Your fundamentals have got to
start with knowing what your cost of goods is, what's the cost of getting to

(36:33):
market, what's the cost of all of those things. And that's the
step that lots of people, people skip. And actually,
you know, I wrote this, I wrote this silly throwaway post on LinkedIn once where
I said, how to make money in wine is learn to use Excel,
learn to use spreadsheets. Which, by the way, I can't do very well. I'm not
very good on spreadsheets. But, you know, learn, learn basic

(36:54):
accounting and everybody. I've never had such sort of
rage come back at me. People thought that I meant, you know, make wine making
by spreadsheet. But I wasn't, I was like all these people I've interviewed, you know,
I've been a business journalist for a very long time and everybody who's done really
well are people who understand spreadsheets and
how to do basic accounting. And that is more important than anything else. You

(37:16):
can have a lousy story, you know, in
an ideal world you wouldn't. But you can even have not very great
branding. But if the, if the, you know, the market fit is right and
the quality is right for the price and you've got it in front of the
right people, you know, that's actually more important, I think.
Well, that's why I married a cpa. Oh,

(37:39):
well done. But since she doesn't listen, since she doesn't watch the show, I can
just say that that's. I tell you, my story does become important
is I've interviewed lots of people who, when they've lost their way, one of the
things they've done is they've gone back and tried to look at
why they did what they did in the first place. So the famous example of
this is Krug, you know, what's her

(38:00):
name? Enriquez. Margarita Maggie
Enriquez was. Was brought in by LVMH to turn
it around. And the first thing that she did was she. She went back through
the historical documents. Why did they make the decisions they did in
the early days? And they, they sort of. They sort of put themselves back
in touch with their. Their historic roots, their storytelling roots, all of those sorts of

(38:22):
things. And actually that did turn it around. You know, Elvie Match will never tell
you that numbers. But apparently, apparently it went off, apparently started flying off
shelves and, And I think there's a lot of examples of that, of people going,
okay, so we've moved away from where we were. What did we set out to
do in the first place? You know, who are we? And. And sort of
asking themselves those questions. And those are really powerful questions.

(38:43):
You know, it's interesting. I. I did a podcast with a local chef. His name
is David Slay. I. I ran into him. He sounds like he should have been
a butcher. Yeah, Well, I think first of all, I ran into
him in Hot Yoga. I saw, and I realized this was. Dave
and Slay in Hot Yoga. I would not go to that yoga class.
Well, actually, the podcast, I said, you know, and you go to the hottest corner

(39:05):
in the whole room. I don't know how you do that. Oh, I have to
do that every day. But the point of that is he's got four or five
restaurants here in Southern California. And it was.
The quality of his restaurants is very good. He's got a French, he's got Italian,
he's got a steakhouse, he's got a casual restaurant, all with the slave
moniker. But he mentioned that

(39:25):
none of the kids that come out of cooking school know how to
use Excel. They. Which led me to believe.
And we talked about A little bit that he is completely driven
by the metric of restaurant touring. If you don't do that, you don't have,
you don't have a chance to do this. And I reflected on a
conversation I had with a wine Napa wine

(39:47):
register writer just before COVID hit the COVID was coming, the
new was coming, lockdown was coming. And she's like, what are we going to do
here? Because there's too many. We're all farmers in general
and we don't even know. We don't even have a chat. But chat bar
on our, on our website, I go, that was pretty revealing.
It's kind of what you're saying. If you can't manage the business

(40:09):
side of doing this, it's going to be very difficult to,
to rise above through romanticism only. And look, I look
at the arts, right? So the arts are really interesting. So that's the most
romantic of all, you know, endeavors really. If you
go to the great art schools in the world, or
maybe not here in the continent, but certainly St. Martin's in, I think it's.

(40:32):
Was that the Fashion School in London. But if you go to the big, the
art schools in New York or London or if you go to the great music
school schools, they will teach you how to put on an art
exhibition. They will teach you how to get an agent, they'll teach you how to
price your work. If you go to the Sydney Conservatory of Music, they
will teach you about, you know, you're going to spend a lot of your life
singing at weddings. Here's how you price what you do.

(40:55):
You know, they, they understand that your life is going to be very, very hard
if you set out to be an artist or a singer or a florist or
whatever. And so they're like, here are the financial skills to get you through it.
And I think, what. Well, if a bunch of flute players can learn those
basic skills, why in wine is just the very idea
of talking about accounting and cost of goods and stuff

(41:17):
so repellent? It's a really good question.
And I think that's probably one of the examples and one of the reasons why
you're a successful surgeon or you're a successful
government contractor and you have all your money and you go to Napa and you
buy your chateau and then you realize that the minimum you have to charge for

(41:38):
of wine is $200 and there's not that many people buying those wines and you
got to figure out how to market it. And all of a sudden now metrics
and Marketing and I mean, I went through
dozens of consultants selling wine online to learn
that, you know, when it comes down to it, you have to understand it.
The consultant's not going to make those decisions for you. You have to know who

(42:00):
your customer is. And you have to know, based on the metrics of what's going
on, you can't do it. You know, I think, I think a lot of
what's gone wrong is just too many rich people involved. Actually. I remember when I
first came to Europe, I used to go to Provine and. Cause I was the
editor of a magazine. I used to get approached. It stopped about 2014,
I think. But for a while I was being approached by people, rich people, right.

(42:20):
And you could tell how they got rich by where they bought. So if it
was a telco from Britain or a lawyer, they'd go to Languedoc. If it was
a Swiss banker, he'd buy in Tuscany. You know, you could tell who,
who'd made their money how, by where they bought. And they all bought these properties
and they'd all like, you know, I'm gonna live the wine. Not one of them
had thought about distribution or whether the product had a good market

(42:41):
fit or. You know, I remember one guy who went to
Languedoc, I think entre de mer made this 20 pound red
and went to the market and they said, well, we only really buy 2 pound
whites from the entre de mer every Cockney. And you know, I think there was
so much of that. I think people who'd made money in other fields who brought
this idea that they were sick of corporate life and they didn't want that anymore.
They wanted the big bucolic country life. I think that's actually done a lot of

(43:05):
damage. I agree with that. It's pretty amazing.
And it's a whole nother story and we're almost out
of time. But I do want to touch on the wine tourism thing
in this viewpoint. And that is, I do think
that the experiential side of wine is sort of coming back. And
this patch here is Les amid events, my dad had a chapter and you know,

(43:27):
people would come to dinner and they would invite Robert Mondavi or Lawrence
Bowser. Even Harry was spoke a couple times to this group.
And so people came away with a mem. With a conversation.
Whether they understood or not, it was kind of irrelevant. It was, I, I know
this wine now. I know if I see it on the menu, I'll be able
to at least have some cognizant review. Of it in my

(43:49):
head. And so, you know, tourism seems to have
a little. A little resurgent. And I, and I just put on a trip. It
was an accident. I. I just wanted to go to the Monaco Grand Prix. I
brought this up yesterday, and all of a sudden I was in Piemonte and Bordeaux
with. With five other couples. You know, I did not bite
this up. I did not want to be. Okay, that sounds a very nice experience.

(44:11):
So that's hell on earth. Exactly. But, you know,
I told my wife when we landed at Pamonte, I didn't want to put on
a wine tour, but it ended up being really good. And I will never do
it again because it'll never be this good because everything worked. But
the point I'm making is having this conversation yesterday with Lille
Gregorian from the Armenian, you know, Tourism Council, is

(44:32):
that. Is there a resurgence in that? And do you think people
are seeking the experience through culture, you know,
to find culture through. Through traveling for wine,
wherever you end up? Yes, there has been since about
2011, because, you know, one of the things that. That happened
was. So a couple of things happened, which was really

(44:54):
interesting. One was after the global financial crisis, a lot of professionals who'd worked
overseas had to go home to wherever home was. And
they, and they were. They were actively looking for
the foods they left behind, especially people who worked in places like Southeast Asia and
then went. Went home. And so there was this huge resurgence in
interest in food. I mean, there had been for the last 30 years anyway. But

(45:16):
after the GFC, people got very interested in traveling
specifically for food. And the other thing that happened around then was that
airline prices dropped. And so there was suddenly a lot of.
Of culinary tourism going on. And that
almost automatically boosted wine tourism as well. Wine tourism
sits in an area called experiential tourism. So people don't tend

(45:38):
to. Unless they're really, really hardcore wine people, they don't tend to go,
I'm going to France next year. My itinerary is only going to be wineries. They
tend to go, I'm going to the Loire Valley. And as part of that, I'll
tack on some wineries. But yes,
it's very, very much probably one of the most thriving
sectors of wine. And actually, what's really interesting is

(45:59):
are now beginning to do wine tourists who don't drink alcohol. A
lot of wineries are starting to find that they're having to cater for people who
are never going to be their customers, and they're starting to think about how they
do that, which is really Interesting. That's really interesting.
Well, this has been a fabulous conversation, and I. And I hope we can do
it again. We have so much to talk about. I didn't even touch, like, most

(46:20):
of it. I just want to say one thing. So we've been talking a lot
about the problems in wine and, you know, about whatever. I just want to say
I still think there's a lot of opportunity. I really do. I still
think it is a vibrant, exciting area, and it's going through one of these. These
terrible dips. And I think there'll be a big shakeout happening. But I think.
I still think there's a lot of really exciting things going on. That's interesting. You

(46:41):
said it. Because America, though, the consumption volume of
cases was off a little. I mean, it always fascinates me
because my studies in college was market research, and it was exactly this, following
these numbers and trying to understand how they happened. But
so we were doing down in consumption by like, I think it was 10%,
but the actual dollar spent was higher. And at least people

(47:04):
to believe that we're drinking better. I'm not sure I believe that. It's just. I
think prices are up a little bit. But I agree with you. I
don't see. I see the congestion. There was one thing
I wanted to bring up that I didn't talk about, and you were talking about,
you know, you walk down the market aisle and everybody's using the same
metrics, everybody's using the same, you know, trying to find this vision that's going to

(47:25):
change everything. Everybody's. The way they buy wine, they're going to grab that bottle of
the other bottle. I mean, it's almost impossible to go to a supermarket in Los
Angeles and not see a shelf talker on every single wine that's
there. So it's kind of like, okay, so the first ones had shelf talkers are
four or five. You go to that. Now they all have shelf talkers. So now
what do you do? And one of the comments that was made 50

(47:46):
years ago to Mike
Houlihan, who owned Barefoot Sellers or created Barefoot Sellers,
and he came into my office in 1989, and
I was young in the industry, and he says, I've got this idea. I've got
this 40,000 gallons that somebody gave me. They owed me money, and now I got
to market it. And I want to use the term Barefoot Sellers. And I got

(48:08):
it from Davis Bynum, and I'm calling myself the Chateau
Lafitte Feet of California.
And how well did that go down. With I thought this was the stupidest thing.
I called my dad. I said, dad, you won't believe this guy came in here,
blah, blah, blah. And, well, it becomes the biggest brand in America.
Gallo ends up buying it. But one of the comments that he made to me

(48:28):
on a podcast later. Was, oh, so he didn't. He didn't register the knife,
I guess. Well, he used it because I had socks. We
sold socks in my wine shop that had Chateau Lafitte on
them. But the comment that was made to him in
1987 or 88 by the
wine buyer for Thrifty Drugstores, which was this, you know,

(48:49):
large CVS type place back in the day, was, I want
to see that label as I'm walking down the aisle from at least
four feet away. You need to be distinctive. And I
thought, wow, that is the same thing that's happening today. And
that's sort of the Gallo guerrilla marketing idea. But he designed a label
with this barefoot stamp so that it was plain, simple, but

(49:11):
jumped out of the. Jumped off the shelf at the time and
marketed like. Like the Gallows did. And of course, they ended up buying them. But
I thought, well, that if everybody's doing that now, then
what happens? Now the whole shelf has got these. Now what we do is put
little AI in it so it can call out to you by name.
That's what we're going to do. I'm sure of it. They're already doing that with

(49:33):
toys. That's true.
Who knows? But somebody will come up with something.
Such a pleasure, and I hope we can do it again. Thank you, Paul. Good
luck in Chicago. Thank you. Doesn't have the best rap these days
in America, but successful. Why is that? Am I going to be
killed? No, I don't think so. But it's actually

(49:55):
cleaned up rather radically. Short in the short.
Yes. So thanks for being on the show.