More people also drank at home instead of at pricier bars, restaurants

Americans' love affair with top-shelf booze cooled last year as the recession took a toll on high-priced tipples.

A new report by an industry group shows people drank more but turned to cheaper brands. They also drank more at home and less in pricier bars and restaurants.
Industry growth slowed in 2009, with the amount of liquor sold by suppliers up 1.4 percent. That's the smallest increase since 2001 and below the 10-year average of 2.6 percent.
Last year, the lowest-priced segment, with brands such as Popov vodka that can go for less than $10 for a 750 ml bottle, grew the fastest, with volume rising 5.5 percent, after edging up 0.6 percent in 2008. Meanwhile, the most expensive price range, roughly $30 or more for a 750 ml bottle (like Grey Goose, owned by Bacardi), fell the most, tumbling 5.1 percent.

The Distilled Spirits Council of the United States said in its report Tuesday that liquor suppliers reported flat total revenue of $18.7 billion last year.
Kenneth Jolly of Milwaukee has been swapping his favorite, pricier liquors such Patron tequila, for cheaper brands such as Jose Cuervo to stay on top of his budget. For him, it's simple math.
"If you consume a lot on a regular basis and you have people come to your house, you have to adjust," said Jolly, a 27-year-old network technician in Milwaukee who buys liquor every other week. "If your body can take it, you might as well buy the cheaper liquor."

Sales in stores - which make up three-quarters of liquor sales - rose about 2.1 percent, while sales in restaurants fell 3 percent.
"People still want to entertain themselves, they still want to get together with family and friends, so a lot of people will move from a restaurant to their living room," council President Peter Cressy said.
Vodka remained Americans' favorite liquor, accounting for almost a third of all spirits sold and sales of $4.56 billion.

Sales volume for the cheapest versions of tequila rose 21 percent, the fastest of any type of spirit. That's most likely because entertainers are using pre-made margarita mixes to serve at home, said David Ozgo, the council's chief economist. Plus you can mix it before guests arrive, so they don't know what brand you use, said Joan Holleran, director of research at research firm Mintel.
Cressy said the fact that people were still drinking more spirits bodes well for the industry, still recovering from a long decline from the 1980s through the mid-'90s, when liquor sales fell by a third as drinkers turned to beer. Since then, an ever-increasing array of expensive liquors have fueled rapid growth.

The industry's goal to keep people drinking spirits - no matter the price - and it can then get them to pay for higher-priced drinks when the economy recovers. Most major liquor manufacturers make brands in a variety of price ranges. For example, industry giant Diageo plc, based in London, makes vodka brand ranging from cheap Popov to midpriced Smirnoff to expensive Ketel One and Ciroc.Mintel's Holleran expects people to start going out more this year, as they get bored staying home and want to treat themselves to little luxuries - like a night out. "You want to go out and have someone do all the work for you," Holleran said.

Of course, switching brands isn't the only way to economize.
Matt McCluskey, a 28-year-old researcher in California, started buying most of his alcohol at Costco, trying to save money by buying bigger bottles. Now he spends $36 for 1.75 liters of Maker's Mark bourbon, rather than $25 for less than half that at his local liquor store.

"It's a lot harder to pour. That's the only drawback," he said.

Is the Cult Cab dead?
The current economy has created ominous rumblings in the market for Napa Valley wine. Demand for high-end super-premium Cabs, even so called "cult" wines, has weakened considerably with the recession. Sales are stagnant, inventories are high and direct-mail customers -- a vital piece of the high-end model -- are abandoning once-coveted positions on mailing lists, while those who have waited years for the opportunity to buy in are overwhelmed with offers.
And for those wineries whose flagship productions climb above 5,000 cases, the forecast is even more challenging. Such formerly untouchable wines as Rubicon Estate, Caymus "Special Select," Pine Ridge "Fortis" and Joseph Phelps "Insignia" have made appearances at "back-channel" quick-sale retail websites, such as Cinderella Wine and WTSO (Wines 'Til Sold Out), at substantial discounts. The law of supply and demand suggests that the days of stratospheric pricing for Napa Cabernet may be numbered.
Even wine critic and Cult Cab kingmaker Robert M. Parker has issued warnings: "Wines priced over $300 have encountered considerable resistance, with their mailing list customers dropping off, or taking much smaller allocations," he wrote in the December issue of his widely read newsletter, the Wine Advocate.
"Sadly, far too many proprietors of high-end Napa wines are in denial, and have failed to recognize the dramatically changing parameters in the wine world of the consumer."
Slowing of sales is not restricted just to expensive wines. California wine shipments fell in 2009 for the first time in 16 years, by a whopping 4%, or 4 million cases, according to wine industry analyst Jon Fredrikson of Gomberg-Fredrikson and Associates. No winery executives would speak on the record about specifics of their sales numbers, though they all acknowledged that the industry in general was going through a hard time.
Despite the shift in the market, some producers are defiant. "I'm not dropping my price," says Ron Wornick, owner of Seven Stones Winery in St. Helena, "and you can put that in writing." That price is $175 a bottle, to which Wornick feels entitled, comparing his wines to other luxury goods, like fine watches and diamonds. "A hard-to-find, precious, high-end product, whether it's from Ferrari or from a tiny vineyard in Napa, is still fine and precious," he says.
Perhaps. But such swagger may prove to be hard to sustain as collectors shy away from the Next Big Thing. "This used to be a game about discovery; what's the next great wine to try?" says Jim Weinrott, founder of the online wine merchant Wineaccess.com. "Now all consumers want is value."
At Twenty-Twenty Wine Co. in West Los Angeles, owner Bob Golbahar sees the same trend among former big spenders. The market, he says, is "over-culted. Our average bottle sale used to be $100; now it's $50. Unless you're giving it away, they're not interested."
As a case in point, Golbahar cites the posh Napa standard Opus One, which usually sells briskly during the holidays, when it's frequently employed as a business gift. In past seasons, he's sold as many as 150 bottles of the wine, which retails for $140 to $170 a bottle. This year he sold six. "It's a whole different world out there," he says.
Nowhere is this more evident than in the attrition rates on wineries' direct-mail customer lists, an important segment of the business for many so-called cult wineries, which not only receive full retail markup on direct sales but have enjoyed a virtually guaranteed purchase among dedicated customers.
In flush years, wineries had hundreds of customers clamoring for a chance to buy a few precious allocated bottles. That demand, however, has shrunk considerably, and wineries are, in the words of one potential customer, practically "spamming" the in-boxes of wait-listed candidates with offers.
"Four years ago [customers would] buy from 10 different mailing lists," says Heidi Barrett, who owns La Sirena Winery and who has made many of Napa's most coveted Cabs, including Screaming Eagle, Dalla Valle and Vineyard 29. "Now they're going to pick their top three. And you want to be in that top three."
On wine bulletin boards like erobertparker.com, collectors herald new opportunities to each other daily, even as interest wanes: "I am on a bunch of lists, but have come to the conclusion that I don't actually need any of them," wrote one collector in a typical post. "There is so much great wine out there that lists are kinda silly."
In the same thread, another collector was considerably more blunt: "Cults," he wrote, "are dead."
Not all of Napa's Cult Cabs are dead, of course. Wines still in the good graces of critics like Robert Parker and James Laube of the Wine Spectator are weathering the storm well, including Shrader, Screaming Eagle and Harlan, as well as the more recently anointed, such as Scarecrow, Maybach and Kapcsandy.
But many more may be out of luck. "For a winery with no track record, this is a nightmare," says Barrett. "If they came into the market thinking they could start in at a $200 price point, they have no chance."
Even before the economic downturn, Tim Mondavi knew the challenges in establishing his new brand, Continuum. As the former winemaker for Robert Mondavi Winery, whose troubled final years as an independent winery forced its sale in 2004 to the wine business giant Constellation Brands, he had a wealth of lessons to draw from on what not to do, such as overextending himself.
Continuum makes just one wine, a Bordeaux blend. At $150, it's priced slightly below the stratosphere as cult wines go but is still a significant piece of pocket change. "We know that nobody's going to be asking for Continuum with just two vintages," he says.
So he has personalized his message, employing members of his famous family, including sister Marcia and daughter Carissa, on sales calls and as spokespersons; though it's not on the bottle, the Mondavi name is an integral part of the brand message.
Practically next door to the Continuum vineyard on Pritchard Hill lies Ovid, a super-premium venture whose debut 2005 vintage was first offered in 2008. Interest has been high for this $200 Cabernet blend, though it hasn't been helped by recent assessments from Parker. Though his tasting note was full of flattering prose ("opulence," "purity," "burgeoning complexity"), the all-important score was merely a fairly pedestrian 93 points -- far from a knockout by Parker's standards.
And yet, according to managing partner Janet Pagano, the brand has received persistent attention on bulletin boards and blog sites, which has kept the brand in play. In fact, she says it was early buzz on wine boards that generated brisk sales for Ovid's first vintage and obliged critics like Laube to review the wine. "The people evaluated the wine before the critics, in a manner of speaking," Pagano says.
Perhaps one of the most interesting cases is Bond Estates, a high-minded project established in the late '90s to showcase some of what the winemaking team believed were "Grand Cru" Napa Valley sites. Until this year, the winery sold boxed sets of five wines, each with the price tag of $275 per bottle. For its first few vintages, those boxes flew out the door.
The last two years, says managing director Paul Roberts, have been more difficult. Roberts has recently "unbundled" its offering, giving buyer and seller greater flexibility. And they are actively trying to sell in regional markets that weren't initially being considered, both here and abroad. With wine on hand and an interested, untapped clientele, suddenly Kansas doesn't seem like such a bad place to sell wine -- Bond's recent offering to that state's wine shops sold out in a matter of weeks.
None of these wineries has yet taken the final, inexorable step of officially reducing their suggested retail prices. Instead, they are trying, even in such a soft market, to convince people that their wine is worth the money they're asking -- an increasingly difficult task as inventories rise and consumer thinking shifts, perhaps for good.
"As much as I hate this recession," says Jim Weinrott of online merchant Wineaccess, "it's going to make people turn around and say, 'I'm going to buy things I value; I'm going to drink wines that have an intrinsic worth to me.'"

Phew! A 40% abv brew - billed as the world's strongest beer - is now available in the UK.

Schorschbock is a lager from German craft brewer Schorschbräu, which - unsurprisingly - specialises is stronger brews. It's home is Oberasbach, in the middle of the Franconia's lake region.

It's available in these shores from Glasgow-based brewery West, which is headed by Franconian Petra Wetzel.

She said: "The Schorschbock has a totally unique flavour that will appeal to any beer connoisseur. Due to its exceptional strength and rarity, we are restricting sales of Schorschbock to one measure per customer."

Schorschbock is produced through Schorschbräu's own proprietary fermentation process. It includes a rarely-used method for producing ice bock, supplemented by extended cold-lagering for a minimum of six months.

Schorschbock's rival for the strongest beer crown is also available from Scotland - the 32% abv Tactical Nuclear Penguin from Aberdeenshire's BrewDog.

The brew from the controversial Scottish microbrewer came under heavy criticism from the health lobby when it was launched late last year.

More people also drank at home instead of at pricier bars, restaurants

Americans' love affair with top-shelf booze cooled last year as the recession took a toll on high-priced tipples.

A new report by an industry group shows people drank more but turned to cheaper brands. They also drank more at home and less in pricier bars and restaurants.

Industry growth slowed in 2009, with the amount of liquor sold by suppliers up 1.4 percent. That's the smallest increase since 2001 and below the 10-year average of 2.6 percent.

Last year, the lowest-priced segment, with brands such as Popov vodka that can go for less than $10 for a 750 ml bottle, grew the fastest, with volume rising 5.5 percent, after edging up 0.6 percent in 2008. Meanwhile, the most expensive price range, roughly $30 or more for a 750 ml bottle (like Grey Goose, owned by Bacardi), fell the most, tumbling 5.1 percent.

The Distilled Spirits Council of the United States said in its report Tuesday that liquor suppliers reported flat total revenue of $18.7 billion last year.

Kenneth Jolly of Milwaukee has been swapping his favorite, pricier liquors such Patron tequila, for cheaper brands such as Jose Cuervo to stay on top of his budget. For him, it's simple math.

"If you consume a lot on a regular basis and you have people come to your house, you have to adjust," said Jolly, a 27-year-old network technician in Milwaukee who buys liquor every other week. "If your body can take it, you might as well buy the cheaper liquor."

Sales in stores - which make up three-quarters of liquor sales - rose about 2.1 percent, while sales in restaurants fell 3 percent.

"People still want to entertain themselves, they still want to get together with family and friends, so a lot of people will move from a restaurant to their living room," council President Peter Cressy said.

Vodka remained Americans' favorite liquor, accounting for almost a third of all spirits sold and sales of $4.56 billion.

Sales volume for the cheapest versions of tequila rose 21 percent, the fastest of any type of spirit. That's most likely because entertainers are using pre-made margarita mixes to serve at home, said David Ozgo, the council's chief economist. Plus you can mix it before guests arrive, so they don't know what brand you use, said Joan Holleran, director of research at research firm Mintel.

Cressy said the fact that people were still drinking more spirits bodes well for the industry, still recovering from a long decline from the 1980s through the mid-'90s, when liquor sales fell by a third as drinkers turned to beer. Since then, an ever-increasing array of expensive liquors have fueled rapid growth.

The industry's goal to keep people drinking spirits - no matter the price - and it can then get them to pay for higher-priced drinks when the economy recovers. Most major liquor manufacturers make brands in a variety of price ranges. For example, industry giant Diageo plc, based in London, makes vodka brand ranging from cheap Popov to midpriced Smirnoff to expensive Ketel One and Ciroc.

Mintel's Holleran expects people to start going out more this year, as they get bored staying home and want to treat themselves to little luxuries - like a night out. "You want to go out and have someone do all the work for you," Holleran said.

Of course, switching brands isn't the only way to economize.

Matt McCluskey, a 28-year-old researcher in California, started buying most of his alcohol at Costco, trying to save money by buying bigger bottles. Now he spends $36 for 1.75 liters of Maker's Mark bourbon, rather than $25 for less than half that at his local liquor store.

"It's a lot harder to pour. That's the only drawback," he said.

Heineken said Monday that it would buy the beer operations of Femsa, one of the biggest brewers in Mexico, in an all-share transaction that values the business at $7.6 billion. The move would further consolidate the beer industry into a few global players.
The move will make Heineken a “more competitive player in Latin America, one of the world’s most profitable and fastest-growing beer markets,” the chairman and chief executive of Heineken, Jean-François van Boxmeer, said in a statement.
Heineken will issue 86 million new shares to finance the deal, the first time it has done so for a takeover since 1968.
Heineken shares were up 1.075 euros, or 3.26 percent, to 34 euros on the Amsterdam exchange.
After the deal closes, Femsa will hold 20 percent of the Heineken Group, making it one of the Dutch brewer’s largest shareholders. Femsa will also have the right to appoint two nonexecutive directors. The transaction is expected be completed in the second quarter of 2010.
Femsa, which is formally known as Fomento Económico Mexicano S.A.B., makes Dos Equis and Tecate.
“It’s a transformational deal for Heineken,” said Marco Gulpers, beverage analyst at ING. “We were expecting a deal north of $10 billion. The way they structured it, this is creating more value.”
Over the last decade, companies in the beer industry have combined rapidly.
One of the most notable deals included the 2002 sale of Miller Brewing of the United States to South African Breweries for $3.6 billion.
Against the backdrop of “the reconfiguration of the global brewing landscape, scale and geographic diversification are more important than ever,” José Antonio Fernández Carbajal, chairman and chief executive of Femsa, said in a statement Monday.
Besides giving Heineken a bigger foothold in Latin America, especially the highly profitable Mexican market, the deal with Femsa also offers Heineken the 83 percent of Femsa’s Brazilian beer business that the Dutch company does not already own.
Femsa’s share of the Mexican beer market is 43 percent; it has a 9 percent share in Brazil.
For Femsa, merging with Heineken could help bolster its competitive position, especially as it continues to battle its larger Mexican rival, Grupo Modelo, in which AB InBev has a noncontrolling 50 percent stake. AB InBev is also strongly positioned in Brazil.
About a quarter of Femsa’s revenue in 2008 of 168 billion Mexican pesos ($13.3 billion) came from its beer operations. The company posted about $1.6 billion in operating profit that year.
Heineken said in its statement that it expected the transaction would provide cost savings of 150 million euros ($218 million) a year, within three years.

SACRAMENTO -- The nation's wine industry descended on a packed hotel ballroom Wednesday to hear a sobering message: Rocked by tight consumer spending and import competition, the industry reeled in 2009 and faces uncertain prospects this year.
The "State of the Industry" presentation kicked off the second day of the Unified Wine & Grape Symposium, expected to attract 11,000 industry members to the Sacramento Convention Center and the Hyatt Regency through Friday.
Last year was "brutal," said John Fredrikson, a wine-business consultant with Bay Area-based Gomberg, Fredrikson & Associates.
 
 
"Usually, we're raving about how great the year was," he told the Hyatt audience of winery professionals and grape growers. "But this was probably the worst year you ever had."
Despite the nation's continued slump, "we're beginning to see slight improvement in some areas" of the wine industry, Frederikson said, particularly among the lowest-priced brands. "It's going to take a while, but we'll come back."
For the first 11 months of 2009, California wine shipments were down an estimated 4 million cases, a drop of nearly 4 percent from 2008. For the entire domestic wine market, shipments were down by 3 million cases.
Wine sales also fell an estimated 6 percent to 10 percent at restaurants nationwide as consumers tightened their budgets in a slumping economy and avoided dining out.
For consumers who did buy wine in 2009, a low price point was more important than ever.
"As we basically had a financial heart attack, people just reined in their spending and were very cautious," Fredrikson said. "They moved dramatically down to lower price points, below $5 and $7. Small wineries in the North Coast that sell bottles from $25 to $100 were basically shut out. Inventories backed up, and that just made it an ugly year."
Global import competition is also on the rise. Some countries, such as Spain, are planting popular varietals to take on the U.S. industry. Chile, in particular, has focused aggressively on the U.S. market, producing affordable and well-crafted cabernet sauvignon that's favored by American palates.
"We are the target," said Glenn Proctor, a grape and wine broker with San Rafael's Joseph Ciatti Co. "Other areas are saying, 'How can I sell them wine?' "
Not all was doom-and-gloom in 2009, especially for large commercial producers that focus on value wines. California's top seven wine producers, including Modesto-based E.&J. Gallo and Constellation, enjoyed overall growth of 6.9 million cases.
Trinchero Family Estates, which oversees such budget brands as Sutter Home and Menage a Trois, saw its shipments rise 16 percent in 2009. Trinchero was awarded "2009 Winery of the Year" at the symposium because of its strong financial performance.
Wine industry representatives expressed hope that the recession will lift soon and wineries will develop new strategies to compete globally.
"We have too much invested here," said Nat DiBuduo, president of Allied Grape Growers, a Fresno-based trade association. "We're taking this on as a challenge. I haven't given up. The industry hasn't given up. We have to change our mode of operations and build a better mousetrap."

A decade ago, limoncello was virtually unknown in the U.S., outside of Italian-American families that made their own. Now the sweet, lemon liqueur from Southern Italy's Sorrento Peninsula is something of a fad -- one that had its pop-culture moment back in November when Danny DeVito stumbled onto a morning television talk show fresh from an all-night limoncello bender with George Clooney. In today's bleary celebrity culture, no sort of notoriety is allowed to escape commercial exploitation. Thus the announcement this month that Mr. DeVito is lending his name to a new brand of the lemon juice. Let's just hope that Mr. DeVito learns to drink his namesake the right way.
 
Limoncello
1 dozen large lemons
1 bottle vodka
2 cups sugar
3 cups water
Peel thin strips of lemon, avoiding the subdermous white pith. Steep the peels in vodka for a week or so. Strain. Make simple syrup by dissolving sugar in water over a medium flame. Once the syrup is cooled, add it to the lemon-infused vodka. Bottle and chill.
As Mr. DeVito discovered, limoncello is deceptively potent. At 60 proof, the liqueur has about three-fourths as much alcohol as an average vodka. But it is so candy-sweet that the alcohol seems to disappear altogether. Yes, that can be dangerous, but I don't know how one could actually drink glass after glass of the syrupy stuff.
Drinking well is a matter not only of what, but when and how much. The when used to matter a lot, and seems to have become something of a forgotten particular. For example, you wouldn't want to drink a Martini after dinner any more than you would have your coffee with the appetizer. And how much matters for reasons beyond just sobriety. A small cocktail or two before dinner has traditionally been thought of as a proper stimulant to appetite and conviviality; more than that is likely to render one sluggish in both respects.
The when and the how much are crucial with limoncello. In Italy, the liqueur is served as a digestivo, a stomach-settler at the end of a meal. In that context, one small glass is just the right amount, a bright and refreshing swig of dessert. But I find that even a single glass more is a hopeless surfeit. Limoncello is far too sweet to drink in any quantity.
That's why, for me, Mr. DeVito's limoncello endorsement is of limited value. Though I might well trust a whisky recommended by a man not known for moderation, I have to wonder at the taste buds of someone who can take more than a couple of limoncellos in a sitting.
The importer that Mr. DeVito has hooked up with, Harbrew, has made a sub-specialty of branding drinks with celebrity names, large and small. For example they offer "Bench 5," a five-year-old blended Scotch branded by Johnny Bench. Five years isn't anything to brag about when it comes to the age of Scotch whisky, and it's not clear to me how associating a whisky with a Hall of Fame catcher will sell the stuff. More sensible is the iced-tea concentrate the company brands with the likeness and signature of celebrity bass-fisherman Jimmy Houston.
That's not to say that Harbrew is only in down-market products. It has just introduced a Duke Ellington-branded X.O. Cognac priced at $150 a bottle. That's a tie-in that actually makes some semblance of sense, as Ellington was not averse to a good brandy, on its own or mixed in a cocktail.
In his autobiography, "Music Is My Mistress," Duke describes a choppy Atlantic crossing in 1939. The band was aboard a luxurious French ship called the S.S. Champlain (a passenger liner that would be sunk a little over a year later, when pressed into service evacuating refugees). With his signature style of embellishment, Ellington described the rough seas: "You could hear the propeller spin and scream, and then the boat would slap back on the sea with a bump and a crash." Most of the band had crawled off, queasy, to their berths. But Ellington held on at the bar with trumpeter Rex Stewart. "Our drink was champagne and cognac, half and half," Ellington wrote. "When the bar was ready to close, we would order enough to last all night if necessary." Which was no small amount of champagne and cognac, given that they drank a toast every time "the boat tossed with an extra flip."
Harbrew is trying to entice cognac drinkers to try the Ellington brand by offering free MP3 downloads of Duke Ellington and his orchestra. The company is also relying on music to help sell Mr. DeVito's limoncello.
When it hits stores in August, Danny DeVito's brand will have to find room on shelves crowded with newly arrived limoncellos. In trolling a few local shops I was able to find half a dozen different brands. Of these, I thought the ones that came closest to the fresh taste of a homemade limoncello were the Gioia Luisa, Villa Massa and Toschi brands.
If you'd like to try your hand at the homemade sort, it's easy enough to do. Peel fine shavings from the skins of a dozen lemons; avoid cutting into the bitter white pith, so that the peelings are pure yellow. Pile the peel into a glass container, and pour in a bottle of vodka. Let it steep for about a week, or until the peels have lost all their color, before straining out the lemon peels. Dissolve two cups of sugar in three cups of water on a medium stove, and let it cool. Add the sugar syrup to the lemon-infused vodka, to taste. Bottle your limoncello, and keep it chilled.
You can make a similar liqueur using oranges instead of lemons -- or just about any citrus at all. But whether you're pouring your own house limoncello or one of the burgeoning number of commercial brands, just remember that it is best after a meal, and that one small glass is plenty.