#266 – March 26, 2014
Despite the fact that nearly 25% of 2014 is in the bag, I’m hoping that there is still an appetite for the third leg of my annual trifecta of year-end newsletters. The delay is at least partially attributable to the fact that I recently switched jobs and have been playing catch-up on my wine-related “duties”. The previously distributed first two parts included my Best Wines of 2013 and a look back on some of the important events of trends the Israeli and kosher wine world (“IKWW”) experienced during 2013. This week’s newsletter peers into the crystal ball and tries to predict what events and trends will shape the IKWW over the next 12 (er, nine) months.
Now onto what 2014 holds in store for the glorious world of Israeli and kosher wines!
Variety & Availability
Over the last 12-18 months I began to notice a rapidly accelerating trend. Each time I would go to update my “Only in Israel” page (which needs to be updated once again) I would find myself deleting more and more wines and wineries that had recently become available in the United States. The genesis of the page was the hundreds of emails I received annually from folks traveling to Israel and asking which wines were worth their time, money and valuable luggage-space to bring back with them. As there used to be tons of such wines (and as my memory faded with age), I created the page to keep track of which wines were only available in Israel. In addition to the numerous wineries whose wares were not imported at all into the United States (including Adir, Agur, and Gvaot – all now imported), there were plenty of individual wines from wineries imported into the US who were not imported, usually due to their low production levels. While there are still multiple wines that fit into this category (including the Yarden Brut Rose, Yatir Petit Verdot, Ramot Naftaly Barbera and Ella Valley Pinot Noir, Petit Sirah and Personal), it is a rapidly diminishing club, especially when looking for wines “worth” the efforts entailed. These days when asked the questions it is sometimes a struggle to find more than a handful of wines that are both not available in the US and worth buying. While this presents me with certain difficulties, it is obviously a good thing for the kosher wine consumer whose wine buying choices in America are greater than they have ever been in the past. The majority of kosher wineries in Israel are being imported and the few that are not, have all approached me for assistance in connecting them with the “right” importer and distributor, which I am always happy to do. As its sophistication (and consumption) grows, the US kosher consumer market has become increasingly important for Israeli wineries, with many paying wineries dedicating marketing and other resources to penetrate this market. I am contacted at least once a week with requests to assist in analyzing the US kosher wine market, the penetration of which is becoming more and more difficult. With more and more wineries cropping up these days and others becoming kosher (stay tuned for Pelter’s kosher wines), I don’t envision this trend ebbing anytime soon, so stay tuned for more and more Israeli and other kosher wines to hit our market in the next few months. While there are many exciting wines coming our way, there is also plenty of chaff accompanying this abundance of wheat, waiting to entrap the unwary consumer. My annual Pesach Kosher Wine Buying Guide, coming next week should be helpful in navigating this abundance.
Limited Edition & Private Labels
With a passion for vino and involvement over the years with the many and varied aspects of the wine business (while remaining 100% and blessedly commercial-free in all aspects), one tends to muse from time to time about the inner-workings of the industry I am no exception to this. One such insight relates to the hard work kosher wine retailers have in selling kosher wines. With the massive increase in available quality kosher wines accompanying a near-matching increase in potential customers, one would think that the kosher wine-retail business was thriving. While I am not shedding tears for the wine retailers, they encounter certain difficulties in selling their wares that are unparalleled in the non-kosher wine world – that of a commoditized product. Most self-respecting quality wine stores have wine buyers dedicated to specific wine-growing regions around the world whose job is to find new and exciting wines from these regions. While the horrendously antiquated New York liquor laws technically prohibit any retailer from obtaining an exclusive on any particular wine, it isn’t that hard to accomplish from a practical standpoint. Additionally, even if there are other stores that have the same individual wines, each wine store manages to have a nicely curated selection of wines it has sourced, likes and will happily recommend. This, coupled with great customer service helps builds relationships with customers who don’t stray just because one of the wines is available online or next door for a few dollars less (albeit, if this happens often a store will start to lose customers which is why any store worth its salt will match prices for its customers on most occasions). Despite it seeming like the kosher wine world has an abundance of choices (and with close to 3,000 labels, it has doubled in the last 8 years), relative to the “real” wine world, it’s a pittance that is exacerbated by the fact that less than 1,000 of these of are of any interest whatsoever and less than 500 are of interest to a serious wine consumer. These low numbers hamper any wine store primarily catering to the kosher consumer from providing more than a handful of wines that are truly unique and special. While there are stores that provide great customer service and a number of stores whose proprietors and/or managers are knowledgeable about kosher wines, this level of attentiveness and expertise is usually insufficient to maintain the loyalty of the price conscious consumer seeking the absolute lowest price on any given wine. Other than a few true-limited edition wines that are tough to source (like some of the Four Gates wines whose limited production and high-quality makes them tough to get or club wines like the Landsman from Covenant, Prix from Hagafen or some of Herzog’s special wines), the kosher consumer takes to the internet to find the absolute lowest price to find the wines he wants, as they are available pretty much anywhere. Consumer loyalty doesn’t prevent the consumer seeking out the lowest price for the Castel Grand Vine or Yatir Forest, and when buying by the case the expectation is for a discount that eliminates much of the retailers profit.
With nearly every commercial wine becoming highly commoditized, the next wave of high-end kosher wines is going to be private labeling. Private (or white) labels exist in one for or another in nearly every industry and you can read up on the links to understand the basic premise. A prime example in the kosher wine world are those wines made by Shimshon Welner who makes kosher wines that are sourced from around the world. After production, many a time the same wine is bottled under a number of different labels, depending on the retailer in question. Now, while some of these wines provide a very high QPR, including some of those kosher wines available at Trader Joe’s, these are obviously not the wines that are going to solve the aforementioned dilemma. The wines I am referring to are very high-end (and expensive wines) being made to the highest standards by existing and highly reputable wine makers and wineries. While this practice is not in any way confined to the kosher world, I believe it carries a disproportionate value to this world, given the rarity and exclusivity issues raised above. To date, the vast majority of these wines are being made by individuals for their own (and their friend’s) consumption but I believe that will change. There are a number ofnégociants who have and continue to source small lots of really terrific wines from a number of the kosher wine world’s top vineyards, wineries and winemakers and offer some of them for sale. Others are utilizing some of the best (non-kosher) winemakers and valuable vino real-estate to have private “runs” of kosher wines made. I have been facilitating these arrangements for folks for a number of years and have seen the frequency of these arrangements continue to grow rapidly. The next stage will be an increase in commercially available limited edition and special wines that will finally provide the seller of these wines with something exclusive (or at least truly limited) to offer the customers and something besides a price race to the bottom in order to build customer loyalty. I have tasted many of these wines from France, Israel, Napa and obviously those made by City Winery, and many of these are truly great wines, well deserving of our attention. Stay tuned for some of these wines to be hitting the market soon.
Wine Investing
With new wines and wineries popping up at a rapid pace and new vineyards being planted in what appears to be any available spot, wineries are seeking more capital than ever before to support this expansion. With the [at least perceived] increase in the importance of the export market, much of this new capital is being utilized for marketing and development purposes abroad, with much of these efforts focused on the US market which remains, for the vast majority of kosher wine producers around the world, the primary (and most lucrative) market. While investing in a winery remains a risky investment proposition at best, I am constantly receiving inquiries from wine lovers from every walk of life who are interested in investing in a winery in one way or another. For many of these individuals, it is simply a way of combining a number of passions together – primarily Israel, wine and deal making. That said, most folks aren’t interested in throwing money down the drain and are doing more diligence on the credibility, talent and financials of these potential investments than in the past, an area I am called upon to opine on with frequent regularity. With my stated conflict-free policy and desire to remain commitment-free (by anything other than my love f the grape and desire to share), this advice is always free with no strings attached J. While there is a significant amount of nationalistic fervor behind some of these requests, which usually target wineries located in the Shomron (which happens to have some of the best terroir in Israel, especially for Merlot), I believe that much of this interest is simply fueled by an increasingly sophisticated consumer who finds, as most of us do, the wine world to be a truly fabulous place and, as with the tech-world, Israel happens to be a hotbed of creativity and talent in this arena (coupled with great terroir and being the easiest place in the world to make kosher wine). Other motivators are the obvious bragging rights in owning a winery, the interest in being involved in something as sexy and exciting as winemaking, winemaking aspirations and a deep desire to help the Israeli economy, especially in light of the inane BDS and similar idiotic reactions to Israel’s maintaining its presence as a “light among the nations”.
While Israel remains the main focus of these investment requests and opportunities, there are rather large investments being made in kosher winemaking facilities (less so in actual kosher wineries for obvious reasons) around the world, the fruit of which we will begin to reap in the coming years (some of which is tied to the private labels and exclusives referenced above), likely in time for the potential coming Shmittah“drought” discussed below.
Wine Writing
As this is now a regular topic that I have been discussing since the premature passing of Daniel Rogov, the topic of wine writing is well known to any regular reader of this newsletter. Despite many attempts (and this past year saw more credible attempts than in the past), nobody has succeeded in supplanting him as the undisputed expert of kosher wines. Due to the sheer number of kosher wines being produced on an annual basis (now nearing 3,000), it is a sheer impossibility for one person to have an informed opinion on all that is happening in the world of kosher wines and the expertise is now split among a few different writers with no one individual possessing the knowledge on every kosher wine (although yours truly spends an inordinate amount of time trying). The vast majority of folks tackling this subject are Israelis who live in Israel and focus on Israeli wines. Outside of Israel, besides yours truly, there are less than a handful of other folks who write often (or regularly) about kosher wines in English and none of them do it as their only occupation – in fact the majority do it as a hobby or on a very part-time basis. As such (and as discussed in the past) consumers are relying more and more on their local retailer, importer or distributor to educate them on which of these wines are worthy of their time, attention and most importantly – their hard-earned shekels. While many of these folks are unscrupulous and knowledgeable, there remains a tremendous potential for conflicts of interest and there are many out there making wine recommendations that are iffy at best, either from lack of knowledge or worse. All of this makes it paramount to find folks you trust, rely on and who continuously make recommendations you enjoy are comfortable. Once you find someone like that, consider yourself lucky and build a relationship with these people and don’t abandon them because you can get the same bottle for $1-2 less at a competing place. A good/trustworthy retailer is worth his or her weight in gold and needs your support to continue providing the quality service you enjoy.
Shmittah
With Shmittah once again on the horizon, stay tuned for an in-depth discussion on the various aspects of the legal requirements, the various preparations going on in Israel and the potentially massive implications 2015 will have on all our drinking habits. While the last few Shmittah years ended up being tremendous vintages, at least in Israel (2001 and 2008), the availability of these wines diminishes each time, partially resulting form the increased stringency of the kosher consumer and partially due to a host of other, to be discussed items. With 2009-2011being relatively poor vintage years, we are luck that 2012 and 2013 are looking good, as these years are going to have to carry us through a relatively dry 2015 when many wineries plan on limiting or halting production (the quality of the 2014 vintage is up in the air, with recent meteorological occurrences not boding well – but it is early).
Comings & Goings
After a rather tumultuous 2013 with respect to personnel changes at the various wineries, I expect 2014 to continue this trend. Stay tuned for some changes at a number of well-known wineries that will directly impact our world as consumers, not all of them positive. On the flip side, many talented winemakers are going to be finding new homes soon and we will soon have the delightful opportunity to experience the wares of these talented folk. The “going kosher” trend will continue as more wineries ramp up production and edge up against that magic 100,000 annual bottle number, a production level that usually necessitates kosher certification in order to remain financially viable, which despite any romantic notions us oenophiles may have, remains the primary objective of nearly every winery in the world. Pelter is producing a kosher wine that should be available soon and at least two other well-regarded wineries are in the process of exploring their options in this regard. The majority of this is good and will ultimately result in more good kosher wine on the market place!
Yossie’s Corkboard
While the past year experienced a significant increase in my involved in various wine-related enterprises (mostly providing consulting and the wine investment banking services referenced above free-of-charge), the frequency of this newsletter took a hit and dipped a bit from its more-or-less weekly appearance. Looking forward, this will change and revert back to a more regular schedule, starting with the first edition of the Annual Pesach Wine Buying Guide coming in the next few days. I am also starting to write for a few new publications, including the Grape Collective and hope that it will be another avenue in enlightening the world at large as to the tremendous potential Israeli (and other kosher) wines have to offer! As you know, I am also active on Twitter where I endeavor to share wine related news that relates to the wine world in general. If you don’t already – please follow me there. Along with a franchised monthly wine dinner akin to “Open that Bottle Night”, stay tuned for additional new wine enjoyment opportunities in the coming year which will include oenophilic and culinary delights, that have previously been unavailable. As always, please don’t hesitate to contact me with any comments or questions about wines, wineries, winery visits, wine investing or otherwise, as I am always happy to try and help any way I can and please let me know if you would like to be included on the Yossie’s Corkboard Wine Opportunity mailing list, in which I typically share great purchasing opportunities that cross my computer screen a few times a year. All in all, despite a few bad vintages and a move to the mean palate-wise, I expect the upward trajectory of the kosher wine world to grow stronger and continue to delight and impress throughout 2014 and beyond and very much look forward to continuing to share this journey with you.
Here is to a great [rest of] 2014!