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Wall Street Journal
Tuesday, October 14, 1997

Swallowing Hard
Wine Gets a Makeover: A Complex Zinfandel Becomes a Power `Zin'
With Consumption Flat, Vintners Plan Flashy Ads To Lure Leery Gen-Xers
'Take It Off Its Pedestal'

By Elizabeth Jensen
Staff Reporter of The Wall Street Journal
(Copyright (c) 1997, Dow Jones & Company, Inc.)

At the Best Cellars wine store on New York's Upper East Side, there isn't a bottle of expensive Chateau Margaux to be found. Instead, shoppers find 100 good, mostly lesser-known wines, not one with a price-tag over $10. Joshua Wesson and Richard Marmet, who opened the store last fall and hope it will be the prototype for a national chain, are betting that Americans are ripe for a pared-down approach to buying wine. Displayed in spare, backlit columns in a setting that looks remarkably like a Gap store, Best Cellars' carefully edited inventory is grouped not by country of origin, but by color and taste, such as "juicy" or "fizzy." The idea is to make wine-buying fun, simple, and "bomb proof," says Mr. Wesson, a longtime sommelier and wine consultant who saw an untapped market in consumers who find wine off-putting.

The $12.4 billion wine industry has had exactly the same epiphany. "It's time for us to take wine off its pedestal and place it squarely on weekday family dinner tables, right alongside the microwaved macaroni and cheese," said R. Michael Mondavi, president and chief executive of Robert Mondavi Corp., in a speech to the Wine and Spirits Wholesalers of America in May.

Faced with an increasingly narrow customer base and the specter of a glut in grapes, winemakers have launched a flurry of initiatives aimed at reversing their product's snob image as a complicated beverage with strict rules for enjoyment. Their goal: to persuade Americans that wine is a casual, everyday libation to be drunk like bottled water, beer or soda.

Consumers are thus being blitzed with everything from a Gen-X wine magazine to "Wine 101," a series for public television demystifying wine, to a campaign encouraging people to think of wine as celebrities: sauvignon blanc as say, lean, peppy Jamie Lee Curtis or chardonnay as voluptuous, blond Marilyn Monroe.

In their biggest undertaking, the industry is laying plans to spend as much as $20 million a year for its first national generic TV-ad campaign, enlisting Bozell Worldwide, the New York ad agency that created the Milk Mustache and "Pork: The Other White Meat," to come up with a whimsical concept to give wine a feel-good image for a mass audience.

This is all in response to a few obvious realities. Although wine is enjoying a modest resurgence after a decade-long slip from a 1982 peak in consumption, a cruel fact looms: The vast majority of wine is drunk by a small group of dedicated Boomers -- and they aren't getting any younger. The rest of the population -- particularly 20- and 30-year-olds who are tomorrow's market -- are often intimidated by all the complex talk of varietals, appellations and vintages.

Chris Begley, 31, shopping for wine on a Friday night at Best Cellars, typifies the problem. Unlike with vodka, "with wine, you never know what you're getting," she says. "You don't want to spend $10 or more on something if you don't know whether you'll like it. Buying wine takes a certain amount of knowledge."

Good Cocktail Party Word

Indeed, young investment bankers and lawyers with a lot of disposable income, flood classes held by Kevin Zraly, wine director at Windows on the World in New York's World Trade Center. "They're taking my course because they're insecure" about wine, he says. "If they're feeling insecure, then can you imagine what the average person thinks?"

In a recent class, the fast-talking Mr. Zraly explained phylloxera, a microscopic pest that kills vines and led to a recent grape shortage, calling it "a good cocktail-party word." He noted that the only problem with German wines is "unpronounceable names." One student, Daniel Sarano, 33, took the class because he is "always embarrassed about not knowing what wine to ask for." Jennifer Baldinger, 27, enrolled with her husband, Howard, after "an unbelievable amount of frustration" ordering wines while on their honeymoon in Italy. Though she calls herself "a beer drinker at heart," Ms. Baldinger says she and her husband go to fancy restaurants frequently, "and you can't exactly go to Le Cirque and order a beer."

Luring Younger Drinkers

A study earlier this year by the industry-funded Wine Market Council showed that a mere 11% of the nation's 21-to-59-year-olds drinks 88% of the table wine consumed. And while per-capita consumption has crept up steadily since 1991 to 2.26 gallons per person, it is still far below the 1982 high of 2.58 gallons, according to Adams Media figures. Moreover, almost all of the increased consumption is coming from people who are already core wine drinkers -- those who drink wine at least once a week, says John Gillespie, president of the council, which is sponsoring the Bozell campaign.

The solution as many see it is to lure marginal consumers, as well as younger drinkers like Ms. Begley or Ms. Baldinger. But winemakers are starting their ad blitz just as regulators are closely scrutinizing alcohol marketing. Other factors work against them: For many families, sitting down for even macaroni and cheese dinners is a rare occasion. Wine packaging discourages consumers who want to have just a glass or two, and retailers are reluctant to carry half-bottles.

In addition, winemakers tread a thin line between trying to expand the market and cheapening their product's image with ad gimmicks. Big wineries are generally united in their support of a makeover; others aren't so sure. For "everyday wines, the less frightening approach is very important," and novice drinkers may eventually appreciate finer wines, says Sandra MacIver, president of Matanzas Creek Winery in Santa Rosa, Calif. "But when you get up into our wines, which run from $18 to $125 a bottle, I worry about taking away too much of the mystery and allure. There's a lot that goes into making our wines; they're complex and we want people to pay attention to the unique elements."

Grape Glut

Lending even more urgency to vintners' sense that they need to shift gears is the projected glut in U.S. grape production by the turn of the century. The prediction is based on a few factors. For one, vines planted to replace phylloxera-infested roots are expected to soon start producing in large quantities. The acreage devoted to grapes has also expanded significantly, as more farmers join the wine business. And growers are using new techniques to double grape yields.

To keep prices from tumbling, analysts figure the industry needs to raise per capita wine consumption by as much as 15% annually for the next few years. "If we think we can sit here and expect prices to remain stable in light of increased production, we're sadly mistaken," says Barry Bedwell, president of Allied Grape Growers, a Fresno, Calif., marketing cooperative. "We have to grow consumption."

Even before the generic campaign kicks in, wineries are stepping up advertising. This year, Brown-Forman Corp.'s Fetzer Vineyards launched its first-ever TV-ad campaign, spending $7 million, a huge sum by industry standards; by comparison, leading producer E. & J. Gallo Winery, one of the few vintners to regularly advertise on television, spent $12.3 million on TV ads last year, according to Competitive Media Reporting, followed by Sebastiani Vineyards, at $3.1 million.

'Forget the Rules!'

Most of the new ads tout wine with a more accessible, fun image, such as Sebastiani's $5 million campaign for its Nathanson Creek brand ("Plan to be Spontaneous"). The print campaign for Gallo's Ecco Domani brand shows a young woman kicking up her heels, with the copy "Red wine is for meat. White wine is for fish. Blah! blah! blah! blah! Forget the rules! Enjoy the wine."

New print and TV ads for Gallo's Sonoma Estate Wines feature the Gallo families' 30-something third-generation of winemakers. "We're very conscious of the aging of the wine consumer and the need to attract younger adults," says Patrick Dodd, director of marketing, of the decision to use "our own generation of GenXers who are entering into major executive positions at the company."

Advertising, however, may have actually contributed to some of wine's current dilemma. The most memorable U.S. wine campaign ever was Orson Welles intoning, "We will sell no wine before its time," for the Paul Masson brand in the late seventies, and the image stuck: of wine as a special-occasion drink, which should be drunk in the right year, using the appropriate glasses, paired with the right food.

Mr. Mondavi traces the intimidation problem even further back, to post-Prohibition. With Americans shut out of the business for so long, he says, the British moved in, with formal rules about where and how wine should be stored and drunk, and an obsession with expensive French Bordeaux wines, many of which need years of aging before being ready to drink. "The American consumer, when given all these rules, said, `To hell with it; give me a beer, a scotch, a cup of coffee,'" he says.

Then "there's that whole ritual in restaurants," says Jon Fredrikson, of Gomberg, Fredrikson & Associates, San Francisco wine-industry economists. "With what else," he asks, "is there a person standing over you, say, checking if your steak is OK before you spit it out?"

Guerilla Tactics

After a burst of advertising in the late 1970s and early 1980s helped persuade baby boomers to ask for a glass of chablis, pushing consumption to its 1982 record, the industry stopped touting itself, except in specialized wine publications. An attempt to do an industrywide promotion for California wines in the late-1980s never got past the test stage because of internal bickering, and the campaign -- one ad showed a man with his dog saying "He drinks beer, I drink wine" -- was viewed by many as a creative flop.

In one of the more unorthodox new efforts, a group of young winery employees started the nonprofit, industry-funded Wine Brats, an educational organization in Sonoma, Calif., in 1992; they have now added chapters in 32 cities. The group has been trying to woo young adults away from upscale tequilas and beer through tastings and on-line chats. One of the Wine Brat's first guerrilla attention-getters involved ambushing young diners in San Francisco's trendy restaurant Eleven to grill them about why they hadn't ordered a bottle of wine -- and then challenge them to compare the taste of their meal with a glass of specially chosen wine vs. a soft-drink or beer.

And a who's who of industry sponsors, including the Wine Institute and the Napa and Sonoma valley vintners associations, helped fund the "Wine 101" public TV series. Narrated by David Hyde Pierce, the actor who plays Niles on the hit sitcom "Frasier," the series introduces basic wine terms and discusses how to enjoy, buy and store wine. "Don't let some techno-bourgeois-elitist-yuppie bore tell you how to taste wine!" is one of the show's rallying cries.

Wine X, a new independently funded magazine for Generation X Wine drinkers, aims to make wine seem hip and accessible to younger consumers. Darryl M. Roberts, editor and publisher, says it isn't for connoisseurs who want obscure bottlings like "the second harvest night picking, second vine from the left behind the barn." With the requisite chaotic jumble of typefaces, Wine X launched its first color issue this summer, proclaiming in the publisher's letter: "The era of elitist and pretentious wine publications is over." The first issue features snowboarders talking about wine. Another article, "Sex, Wine & Rock 'n' Roll," suggests "a complex cab or a powerful zin from Clos du Val" as the beverage to drink when listening to the "easily digestible beats simmered against dance-floor friendly grooves" on the new album from the electronic-pop group Orb.

But the timing of all the efforts aimed at increasing consumption, particularly among young people, is less than ideal, in the wake of the crackdown on the tobacco industry's marketing practices to hook young smokers. Unlike beer, wine -- a beverage that largely appeals to a small group of well-off adults -- has always been above the fray. By attempting to boost demand and make itself more of a mass-market product, wineries are now putting themselves smack in the middle of the debate over whether promoting alcoholic drinks stimulates alcohol abuse.

The industry already is drawing intense scrutiny for its proposal to put labels on bottles referring to the health effects of wine, a plan that has drawn fierce opposition from public-health organizations. The label, developed by the Wine Institute, the California vintners' lobbying organization, would direct consumers to write for the 1995 U.S. Dietary Guidelines "to learn the health effects of moderate wine consumption." Those guidelines say that moderate consumption of alcohol, defined as a drink a day for women and two drinks for men, can be part of a healthy diet.

The Wine Institute lobbied heavily to get those benefits included in the guidelines, and aggressively publicized positive scientific studies, particularly the "French Paradox" report of 1991, which linked lower rates of heart disease in France with red-wine consumption. These reports were largely responsible for the turnaround in the decade-long decline in per capita consumption. Baby boomers "drink wine without guilt today," Mr. Fredrikson says, where "10 years ago, wine was basically a recreational drug."

Wine marketers say they are fully aware of public-health sensitivities in trying to increase consumption. The approach being considered by the Wine Market Council encourages moderation, "wine consumed by adults in adult situations," Mr. Gillespie says. "You won't see a Swedish bikini team [in these ads]. . . . If you act responsibly and credibly you have nothing to fear."

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