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

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Storytelling is what you do when you've got your fundamentals

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right? Your fundamentals have got to start with knowing what your cost of goods

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is. What's the cost of getting to market, what's the cost of all of those

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things? And that's the step that lots of people

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skip. I wrote this silly throwaway post on LinkedIn once where I said how

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to make money in wine is learn to use Excel, learn to use spreadsheets, which

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by the way, I can't do very well. I'm not very good on spreadsheets. Sit

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back and grab a glass. It's Wine Talks with

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Paul Kitchen. Hey, welcome to

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Wine Talks with Paul K. And we are in studio today in beautiful Southern California

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about to have a conversation with Felicity Carter all the way out in

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Germany. Introductions in just a minute. Hey, have a listen to or

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watch an episode I just put out with Max Riedel,

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the famed 11th generation owner of the Riedel Glassware

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Company. Incredible insight and wisdom into bringing 11

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generations to the table. But now while we're here, here to have a

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conversation with Felicity Carter. She is the founder of Drinks

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Insider. Well, as the communications director of

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Areni Global, welcome to the show. It's nice to

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be here. And we're out in Germany. What part of Germany are we at?

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It's a place called Neustadt Underweinstrasse, which means new town on the wine

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road. It's the wine capital of the Rhineland Pfalz region. So we're

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part of the Vosges mountains. I'm on the border with Alsace, so very

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close to France. Oh wow, that's great spot to be. I

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love that area. I just had to master Psalm on

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the show. Stephanie Henn, she is the master Psalm

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and a curator up in Hamburg at a five

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star hotel and a three, I think it's a three star restaurant. Really

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interesting stuff about what was happening tourist wise in that part

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of the country, a part of the world and as well as sort of the

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consumption of wine. But the your main.

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I was trying to pin down Felicity Carter as to

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her objective with Drinks Insider and then

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your work with Arini. Just tell me a little bit about

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what you're trying to do with this. So Arena Global

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is a think tank. It was founded by somebody

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who's part of the Nicole Roller who was part of the Davos set and she

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was like we don't discuss these big issues in wine. And she found

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Pauline Vicart, who's French, very brilliant and

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basically what Irini does is it researches

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fine wine. The Fine wine market the consumers, high net worth individuals,

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but also asks big questions like what if wine loses its

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social license to operate, does a lot of events, a lot of publications,

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things like that. So it's very, very interesting work. Drinks Insider

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is my, my own consultancy I founded a year

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ago. So I've got a podcast and I've got a newsletter and I also do

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sort of advisory work quietly. I do a lot of research into

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export markets and things like that. I do a

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lot of speaking, a lot of mentoring, a lot of,

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you know, work going into companies and looking at their editorial strategies, things

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like that. Yeah, it's interesting. Let's just kind of sit on that for a second.

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I just want to talk to the listeners and the viewers about that

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kind of work because the social network world,

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Obviously communication and PR has changed radically in the last

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five years, 10 years for sure. But even the last months,

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the way AI has changed the way you can put out

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communication and how fast you can do it. I often

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find myself now even clipping somebody's article and

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putting it into CHAP GTT to see if it was written by AI. Yeah, I

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do that too. But how much, how many

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hours a day do you spend writing? Oh, way too many.

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I can't, I can't write constantly. It kills me.

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So I do a couple of hours a day, but I do a lot of

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other things, like I write a lot of strategic documents. So

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actual writing, like the hardcore writing, it'd be a couple of hours a day

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because. Interesting. And that's it. That's as much as I can take. Well, it's hard

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and it's taxing and I just spent the summer down at the

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beach and I was telling my wife this morning, I said, you know, it was

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so hard to not to be distracted.

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And so with all kinds of distractions, right. We had the grandkids with us there.

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You hear noise in the background and that immediately dislodges me

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and just derails me from what I'm trying to focus on. See, I don't need

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distractions to be derailed. I can just be derailed just because

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I'm finding it difficult and just do. It on your own. I can do it

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all on my own. Yeah, I don't need distractions because you. Want to make a

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point. And the thing that's interesting is I was using

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AI a lot when I was producing some of the

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text. You know, it's very effective to, for instance, take

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a show like this, put it into AI, let it transcribe it Let it come

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up with some marketing points. But I found myself back to just writing

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my own stuff to the extent of when I want

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to post a description of a show like this one, I make sure that I

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just write it myself because it just, it's just more authentic. And you can just

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tell I'm actually. Giving, I'm actually giving a talk about this in Chicago

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for Wine to wine in October. I can't remember the dates, but the problem with

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AI is that, or generative AI is that it is

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trained on the average of the Internet. It's trained on the bell

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curve, and it's also trained by whoever does it

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to make sure that it's as non confrontational and non disagreeable

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as possible. Because companies like AI don't want to get sued and they also don't

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want people, you know, making bombs and doing like that. So when

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you, when you use it, it defaults to the average. So if you use it

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a lot to write, it is going to give you the most banal possible

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thing that it can do. And that's the problem with it. It's really, it's

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really dangerous. My wife accuses me of being nicer to

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AI than I am to her. Well, the AI is probably

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nicer to you. It's also been to be quite sycophantic.

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So when you, when you give these speeches like in Chicago and you're talking to

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industry leaders, industry wineries, or

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everybody in between that deals with marketing and communication and wine.

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Yes. I mean, marketing is not my thing. I'm not a, I'm not a marketer.

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But yes, mostly these days people ask me to talk about

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alcohol control policy. That's what I've been doing a lot of speaking about. And

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I do a lot of talking about sort of international trends and what's on the,

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what's on the horizon. And in the past I was asked a lot to do

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a lot about wine tourism, which I used to do a lot of work on.

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So marketing as such is something I can kind of

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pull something together, but it's not my area of expertise. So

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this is so interesting. When we spoke earlier, like a few weeks ago,

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I was telling myself, you've got to stay focused. She covers a lot of ground.

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She's got a lot of experience, a lot of parts. And my brain right now

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is moving in all kinds of directions as to where I want to

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have this conversation. I want to stay focused because it's so

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interesting and you have so much experience in doing this. But you know, we're confronted

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in this industry with a lot of, a lot of headwinds right now. And I.

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That's true, that is an understatement. Yes. And, and I. But

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what does that mean to the extent of haven't,

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hasn't this industry gone through peaks and valleys over many

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generations? I mean this is a 6000 minimum year old product.

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No, I do think, you know the famous words, this time it's different, they're always

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dangerous. But I do think this time is different. I think if you look at.

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There's a really interesting book I read in the 90s, it's called the Empty Raincoat

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by an economist called Charles Handy and he talks about the fact

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that most industries or most big Companies have a 40 year cycle

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and that everything sort of peaks and then

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declines. And I think if you look at the modern wine era,

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it's probably coming to the end of that 40 year period. If you look at

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the early 80s, it's a period where it really took off and then it internationalised

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and globalised and consumption peaked in 2007

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in the world. And I think we've been on the, we're coming down

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the other side of that great expansion. So in some ways we're actually,

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I think reverting to the historical mean.

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You know what, those are amazing statistics.

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I lasted 35 years selling direct to the

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consumer in the sense of lasted. The company still exists, but it

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is a mere shell of its former glory. And when was its former

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glory? It was 2007 was the last. Isn't it interesting?

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It's really interesting. It was the last sort of year where I felt,

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hey, I got this under control and I really know what I'm doing. And then

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this steady decline to 2019

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and I thought, well, 19 was gonna be tough. And then 20 hit and Covid,

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you know, was great for us. And then of course it failed after that. It

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generally failed as far as marketing's concerned. But why do you think

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that cycle exists and what, what's in this book that says.

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So? So what he said was, he said everything exists on a bell.

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And so what happens is what happens in most companies, what will kill them

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is they get to the top of the bell curve, which is their maximum success.

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And at that moment they all go, oh, look at all the things I did

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that brought me to this success. I'm just going to keep doing them because they're

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obviously working. And at that point it is a mathematical certainty that you're

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going to go down the other side. So at the moment of maximum success, what

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you should do is you should change what you're doing. And

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unfortunately, in wine, that decline in

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2007, which was a real warning sign, there were a couple of things

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happened after that disguised the fact that wine was

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probably on that downward track. So first of all, there was the big bang of

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February 2008, when the Hong Kong government dropped its duties on

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wine. And what happened was in the global financial

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crisis, all of the fine wine and all the big wines suddenly found it had

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a new and lucrative market in Hong Kong, which was the gateway to

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China. And so the great China boom took off. And that peaked

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probably about 2012. But around 2011, 2012, the wine

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industry decided it was going to start to market heavily to women.

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And so it brought lots of. Did that pretty aggressively and

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pretty badly, I think, but it brought a lot of new consumers into it. So

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all of this was covering the fact that there was an underlying decay beginning to

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happen. This is.

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I mean, just every subject you talk about brings me the new things

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to peel back because the women in wine, in wine is

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also has been an issue. It seems to have subsided a little bit. But

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back in those days, when you're talking about 2007 and 2012,

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that sort of range, it was very, very popular in my trade

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to go after mothers. You know,

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the, the drink of your post, you know, your

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afternoon drink or your, your evening drink after you've had the kids all day or

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they picked them up from school, put them to bed, and now it's time for

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a glass of wine. And there's this whole movement to market to mothers. Yeah.

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And I think that did, I think that did horrible damage to the wine industry.

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I think that was one of the gravest mistakes that was made in the last

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40 years. I mean, at the time, I remember standing on stage railing against

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this horrible marketing of the mummy juice thing, which was. I

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was always selling crappy wine. It was not selling fine wine or good wine. It

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was selling the absolute crappiest bulk wine on the sort

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of. And the awful thing was just how many women were doing it as well,

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how many women were marketing these awful things, but they made wine

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into something that, you know, is a drink to relieve you because your toddlers are

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screaming too much. And I think probably,

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you know, apart from the fact it was a horrible, you know, it was, it

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was patronizing, it was treating people like they were just a market that you

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could, you could shovel this kind of crappy wine onto. But I think that did

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a lot of damage. I think what we're seeing now with Gen Z, I have

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no evidence for this, by the way, this is my opinion. But I think nobody

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wants to do what their mother does. You know, and you've got all of these

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young people who looked at Instagram and went, well that's, you know, that's what

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middle aged women do is they drink too much because they're stressed. I'm not going

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to do that. You know, that's interesting because

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I do believe part of this problem today is not only that and

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certainly that ties into it the crappy bulk wine. And just

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from a buying standpoint, you know, my club originally was founded on the idea

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there's always something interesting in the, you know, catacombs of

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wineries that you could buy and sell that were good. And I could tell you

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a thousand stories about how this, how Trader Joe's got started for

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matter of fact here in America. That was really their premise. They would buy the

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last 2,000 cases of somebody's vintage and put it out there and this is all

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we have. And that's, that actually existed. Then came

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these 50 cent a liter crap wine from Spain and all over the

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world that they'd bring the New York bottle up in a billion brands and put

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out in the street. And I think that's a lot to do with sort of

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sour pun intended taste for wine in certain, in certain

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regards because how many times can you fool the consumer into a

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bottle called, literally called Mommy Juice? And

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that innovation, and this is what drives me crazy about it right now,

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we'll probably get into this in a second. But that, I don't consider that

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innovation. But there's a lot of people that will say, hey, we're being innovative, we're

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calling it Mommy Juice or what's the new latest one? There's one for Gen

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Z's where you for instance, the wine's crap,

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it's just not any good. But they labeled it and packaged it so that

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it might attract a generation. And I, I don't think that's

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what wine is. And maybe Global has peeled that back

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a little bit as to, you know, what's happening with the finer wine. Well, wine

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is, I mean wine is lots of things. And if you're talking about, you know,

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entry level products, it's, it's a fact that at an entry level you need

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things that are much sweeter. And you know,

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then, then the wine trade certainly likes, you know, I think

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there's, I, I have no objection, I have to say I have no objection to

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crappy wine. I, I grew up drinking Crappy wine, you know, big brand

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wine. But I really object to rip off wine. And I think a lot of

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that sort of wine that was, you know, shoved at

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women under the guise of empowerment was really poor

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quality and priced as though it wasn't.

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Do you think that this. The dynamic

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of the wine marketplace right now is partially

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in trouble because the change is much more

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rapid than it used to be? And I'll give you an example. I used to

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mail a million pieces of mail a year, and I knew what

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the response was going to be. And when I got the response, I knew how

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to strategize for the next mailer, and I would send out another

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300,000 and wait for the results to come. That doesn't exist

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anymore. It happens immediately, and it's a

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radical change. And I'll highlight it by. My niece started a

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new salad dressing company, and, man, she put that thing on

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TikTok and it just rocketed. And of course, now

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the organic part of that is slowing down and the orders aren't coming in this

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prolifically because it's so dynamic out there right now. And the

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messaging as well is so dynamic to. To the

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consumer. Do you. Do you think that some of this has to do

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with that? No, I don't, actually. It's interesting. I don't,

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because I think if. If that were the case, what you'd see is you'd

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see lots of brands switching within the category. You'd see people pick up something and

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then they try something else. You wouldn't see them abandon the category, which is

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what's happening. I mean, it's like, you know, with. With sauce or salad

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dressing. Are people giving up sources? No, they're probably. They're

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probably getting something new instead. But what we're seeing in wine

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is we're seeing people leaving it wholesale. I think that's a different thing.

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Like people leaving product, leaving.

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Abandoning the product line or abandoning the. No, I think they're abandoning the category.

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So. For two. So for two reasons. So I think you're just seeing people

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aging out. I think a lot of what's happening is you're seeing people aging out

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of it. So you're seeing the very heavy consumers, which is the baby boomers. And

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a lot of them are just giving up. Not because they have to, because, you

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know, their doctors are telling them to, or because they're dying or because they're,

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you know, they, you know, alcohol is just affecting their sleep or whatever. So you're

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seeing that natural attrition. But of course, they were called the

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baby boomer for a reason. It was a really big demographic. It is a really

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big demographic group. And the, the demographic groups underneath

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them aren't big enough to make up for that. Gen

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X is a much smaller generation. I mean, I'm Gen X and you know, my

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generation drinks wine enthusiastically. But it's not enough to counter for the lack

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of the baby boomer. And then you get millennials, which is a

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much bigger generation, but they haven't yet moved into their high spending

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life phase yet. And then what you're seeing is the next

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generation, Gen Z, who are not that interested in it, who

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aren't. They're a much bigger generation as well, but they're not showing the same

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interest in it. So some of this is demographic movement, I think.

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Is this high spending rejection. Do you

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think it has something to do with, like you said earlier, it's for an earlier

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generation saying, I don't want to do what my mother did. Yeah, look,

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I think there's lots of things. I think there's lots and lots of, you know,

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one thing that you can't, in the United States that you can't move past is

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the fact that the distribution bottleneck is so narrow. And

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so you've got a very few companies that are selling, you

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know, that are really dominating the shelves. And are those products the ones that are

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the most exciting for consumers? You know, one thing that's really

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interesting at the retail level is that a lot of products now look exactly the

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same because those big companies are all benchmarking. They're, they're all looking

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at what everyone else is doing and they're saying, well, this one's really successful. Let's

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see if we can, you know, come close to it. So in a funny way,

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the wine market is homogenizing at that level that most people enter

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the category and discover it. So it's not very exciting. I mean, the

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congestion is phenomenal. And that's why this

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is the part that's kind of interesting. Maybe we can peel this back a little

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bit. I had this question I used to. I asked

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winemakers that are. You've been doing this for a while and that is, let's just

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pretend, if it's even possible, that profit has

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nothing to do with this. And what I'm suggesting

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there is. There's a balance between this ethereal product, which represents history

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and culture and all the things that come with a proper glass of wine.

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But as Irini Global and Pauline mentioned on my show,

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it's always been driven by consumerism, just like

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White Zinfandel was the entry level drink in 1974,

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and who knows what it is today? White Claw or just

302
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sweet, you know, Josh or Apothec Red. But

303
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what if there's no profit? Would we. Would it be different?

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Or is that just way too. Is that way too

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philosophical to try and figure out?

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You have to. You have to. That. That the. The economic model would

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be so different that you. You. So how would it work if there was no

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profit? You mean people could just produce what they like and they would have to

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worry about the market? I suppose that is the. The basis. Just

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produce what? Let's just say that

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if ethically they were just producing what

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the land was going to give them. And. Well, you know what? We've done a

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lot of that. All of the people who entered the. The wine market in the

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80s and 90s are all aging out now. Most of them did that. And it's.

315
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It's actually turned out to be a bit disastrous. Pauline

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is quite right. The market supplies a lot of discipline. Like, when people

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think of the market, they're always thinking of the mass market and they're thinking of.

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Of, you know, the entry level. But actually at all levels, the market

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is what gives you tremendous discipline. I mean, Bordeaux is a perfect

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example of that. Bordeaux only exists and only became

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a fine wine area because they had the

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port and they could see what was leaving the port and they could see that

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all these wines from the southwest were making off like bandits when they hit

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the shores in the uk. So Bordeaux actually

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closed the port to all of those other producers and began to ramp up their

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own production. And from when they started doing that to when,

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you know, British tastes change or Dutch tastes change, they

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changed the market, they changed what they did. So commerce by

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itself is not a bad thing. Commerce can actually drive things in a really

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good direction, I think, where

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if you're talking about if it's only consumerism, then you get

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the lowest common denominator. Well,

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this is the. That was well thought out, what I just said

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with Pauline. When Pauline was on the show. I had

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Ms. Roulet on the show as well. She was in. In studio here, actually,

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when they. When it's. Consumerism drives things. And I started to think about

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Madame Clico, you know, where

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she was sending a Suppage to Russia and sending a different one

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to England and was able to, you know, understand

340
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that marketing that back in the late 1700s, which is pretty phenomenal.

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And so it sort of obviously validates the idea that consumerism drives what we

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do here. But I wonder then maybe my

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romantic view of wine has been

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developed by the commerce changes. In other words, you were talking about

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Bordeaux. I mean, they were suffering greatly at some point in time,

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and now it's a romantic thing. My dad

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used to say the French have learned how to romanticize wine.

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So taking it past the consumer side and making you feel like there's something

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extra here that you're drinking. And I had a bottle of

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2010 Chateau Montrose last night. I mean, it was incredible, right? And

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I feel like I'm participating in this history by

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drinking this wine. Is that something that this

353
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generation, the Gen Z's and the millennials just don't really care about?

354
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Look, I always say, people always bring up this thing about sustainability and tradition.

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And the thing I always say is people don't choose products based on any

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of those things. Those things give them the.

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The reasons, they explain to themselves why they've chosen them. People buy things

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primarily because they like the taste of it

359
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or, you know, it suits them in some way. And then all of the other

360
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stuff is window dressing to make them feel good about their choices.

361
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You can't sell something just because it's traditional. If that

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were true, the antiques market would not be in a slump.

363
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You have to sell it based on. That's the thing people

364
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tell themselves, but it's not the real reason they're buying it. That's a

365
00:22:24,360 --> 00:22:28,040
really good point. We're trying to sell my in laws estate and

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I remember we bought this beautiful china

367
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cabinet at auction years ago. And I'm an auction nut

368
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and love going to the Paris flea market type. Right? Yeah, me

369
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too. Nobody wants it. Yeah,

370
00:22:43,640 --> 00:22:47,000
my whole house is full of antiques

371
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that I bought on ebay at unbelievable prices because

372
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nobody wants it. You know, I've got a mahogany desk from

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1780. You can't buy mahogany. I mean, mahogany is, you know, an

374
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endangered wood. But you can't buy a mahogany table for

375
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€190, which is what I paid for it. You can't buy an inlaid

376
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Italian table for the €400 I paid for that either. You know,

377
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you don't buy things because it's traditional. That's the excuse you tell yourself

378
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for why you bought it. It. I guess that's why when people come to our

379
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house, the younger generation, they go, gee, it's like a museum in here. Yeah, that's

380
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right. Brown. So do you think then

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that. That the wine industry, I mean,

382
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I was looking for solutions and there aren't any real solutions. I mean, there

383
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are. There are lots of solutions. There are lots and lots and lots of solutions.

384
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It's just, it's just the romanticism stands in the way

385
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often of that. So there's lots of people, for example, example,

386
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there's new DTC software which is allowing people to do really

387
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interesting things. And I've heard. So I've got a

388
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friend of mine who works in this area and she was saying that

389
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she's been migrating people to new websites and people,

390
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hundreds of people in California just go, no, I want exactly what I had. I

391
00:24:02,630 --> 00:24:06,350
understand what I had. I don't want to learn a new

392
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system. And she can talk until she's blue in the face about, well, it'll give

393
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you more flexibility and it'll tell you if you're about to lose a customer. You

394
00:24:13,030 --> 00:24:15,970
can tell by buying patterns if a customer's about to drop out. You can tell

395
00:24:15,970 --> 00:24:19,610
when they're ready to buy something new. You know, and so

396
00:24:19,610 --> 00:24:23,090
there's, there's things like that, that people can do and they're, they're almost

397
00:24:23,170 --> 00:24:26,930
willfully choosing not to because again, there's this whole romantic idea about,

398
00:24:26,930 --> 00:24:29,730
you know, the thing should sell itself and you know, blah, blah, blah, blah, blah.

399
00:24:30,530 --> 00:24:34,210
So, you know, I think that, I think there are things and also making products

400
00:24:34,450 --> 00:24:38,090
that, you know, that there's not enough of those gateway products. The products

401
00:24:38,090 --> 00:24:41,890
that everybody who cares about wine absolutely wants to vomit when

402
00:24:41,890 --> 00:24:44,960
they hear about about are actually the, the things that open

403
00:24:45,360 --> 00:24:48,320
doors. Right? So there's a product at the moment called xxl.

404
00:24:49,040 --> 00:24:51,480
I don't know if they still make it from wine from Moldova, but it was

405
00:24:51,480 --> 00:24:54,760
made from, I think it was one of those aromatic wines with

406
00:24:54,760 --> 00:24:58,519
Muscadine. No, Muscat from Muscat.

407
00:24:58,519 --> 00:25:02,320
Musket from Moldova. And they've put aromatized fruit juice through it. So

408
00:25:02,320 --> 00:25:05,800
in Georgia they sell it with aromatized peach juice and they, you know, they do

409
00:25:05,800 --> 00:25:09,550
that. And this has been flying off the shelf in less than a couple

410
00:25:09,550 --> 00:25:12,670
of years. It's, it's gone to being a 2 million case brand because

411
00:25:14,190 --> 00:25:17,830
it's, if you've got the taste buds of a 19 or 20 year old wine

412
00:25:17,830 --> 00:25:21,670
is just too bitter. It's, it's bitter, it needs to be sweetened in some

413
00:25:21,670 --> 00:25:25,430
way. And so they went, all right, well let's do

414
00:25:25,430 --> 00:25:28,790
that. But you know, everyone else is going, when are they going to embrace tradition?

415
00:25:28,790 --> 00:25:32,230
Don't they care about sustainability? When are they going to buy my $60 wine? You

416
00:25:32,230 --> 00:25:35,750
know, it's not going to happen. I will

417
00:25:35,750 --> 00:25:39,470
not. Well, you know, the, the number one Selling flavor of

418
00:25:39,470 --> 00:25:42,970
Stella Ro from my good friends, the Riboli family

419
00:25:43,530 --> 00:25:47,050
was the chili pineapple flavor over the holidays. That's right.

420
00:25:47,130 --> 00:25:50,810
That's right. It's doing really well. That, yeah, that crawls

421
00:25:50,810 --> 00:25:53,850
under my skin, but I get it, you know, I'm a market. Well, how do

422
00:25:53,850 --> 00:25:56,889
you feel about the fact that the Romans used to put pepper and honey in

423
00:25:56,889 --> 00:26:00,610
their wine? Well, I suppose, but that's. That had to be to

424
00:26:00,610 --> 00:26:03,930
cut the bitterness and the, and the flavor character. Right.

425
00:26:04,810 --> 00:26:07,570
You know, there's just two things I wanted to just sort of jump on here.

426
00:26:07,570 --> 00:26:11,270
One of them was it'll sell itself.

427
00:26:11,270 --> 00:26:14,030
And I was reading a book for On Burgundy, and this is one of my

428
00:26:14,030 --> 00:26:17,750
dad's books. It was probably published in the 50s or 60s. And it talked about

429
00:26:18,710 --> 00:26:22,270
an appellation meeting with some winery, with the vintners. And one vintner

430
00:26:22,270 --> 00:26:25,710
said that, you know, we shouldn't allow in our Appalachian

431
00:26:25,710 --> 00:26:28,950
marketing or advertising because if we build a better market,

432
00:26:29,350 --> 00:26:33,110
people will just come buy it. And I thought, okay, that's probably nearsighted in the

433
00:26:33,110 --> 00:26:36,920
world. But it's, but it's interesting that going back to the 30s, that that mentality

434
00:26:36,920 --> 00:26:40,680
existed. It kind of exists today. But the other thing you

435
00:26:40,680 --> 00:26:44,480
said, which is this DTC software, not. My last full

436
00:26:44,480 --> 00:26:48,040
year in business, I sent 33 million emails,

437
00:26:48,840 --> 00:26:52,600
but I only, I created probably 300. You know, you can understand this.

438
00:26:52,600 --> 00:26:56,200
Promo codes, advertising, you know, text graphics, all had to be

439
00:26:56,200 --> 00:27:00,000
created 300 times. But a lot of that millions of emails

440
00:27:00,000 --> 00:27:03,560
was created by the system on its own, based on the

441
00:27:03,560 --> 00:27:07,080
path of the consumer when they're on the website and

442
00:27:07,780 --> 00:27:11,540
interpretation of whether they were a high intent, low intent gift, whatever

443
00:27:11,540 --> 00:27:13,940
they're trying to do. And so it would try and sort through

444
00:27:15,540 --> 00:27:19,140
their clicking through my site to determine where these

445
00:27:19,140 --> 00:27:22,860
people were and then try to save them. And before I

446
00:27:22,860 --> 00:27:26,460
sold the company, I was in the midst of

447
00:27:26,460 --> 00:27:30,180
making a new website and database because

448
00:27:30,180 --> 00:27:33,110
my database that I, that we wrote in 1993,

449
00:27:33,980 --> 00:27:37,620
that ran on DOS, was still infinitely more capable

450
00:27:37,620 --> 00:27:41,180
in its flexibility than the stuff that was on the market at the time. Oh,

451
00:27:41,180 --> 00:27:44,900
interesting, interesting. It was really. So should you have spent

452
00:27:44,900 --> 00:27:48,620
your life selling wine pool or should you have been designing database

453
00:27:48,780 --> 00:27:52,220
software? Well, I had a software company. Did you waste your life is this.

454
00:27:53,420 --> 00:27:57,060
No, because I, I thank my father every day. You can see my

455
00:27:57,060 --> 00:28:00,680
dad right there in that 1975 I've photographed

456
00:28:01,080 --> 00:28:04,640
for putting me in this industry. Because I, I love the industry. But here's something

457
00:28:04,640 --> 00:28:07,880
that's interesting and maybe this sort of defines what you're saying

458
00:28:08,440 --> 00:28:12,240
famous master of wine friend of mine called me

459
00:28:12,240 --> 00:28:15,920
and says, paul, I got no response in my last email. Not

460
00:28:15,920 --> 00:28:19,240
zero. Now he's a credible mw.

461
00:28:19,640 --> 00:28:22,480
And I said, well, send me the email you sent and show me your website.

462
00:28:22,480 --> 00:28:26,180
And it's like, it's just so old. I mean, this

463
00:28:26,500 --> 00:28:30,340
maybe from, you know, my first website, 1997, it almost was

464
00:28:30,500 --> 00:28:33,700
looked that old. And so his credential

465
00:28:34,100 --> 00:28:37,820
at this point in time is failing him radically

466
00:28:37,820 --> 00:28:41,180
when it comes to trying to sell something. And he was not

467
00:28:41,180 --> 00:28:44,660
willing to spend the time it took to fix the website

468
00:28:44,740 --> 00:28:48,580
or even the email because it looked like somebody created

469
00:28:48,660 --> 00:28:52,020
in an old version of word, you know, 20 years ago.

470
00:28:52,580 --> 00:28:56,100
So I'm wondering if that's resistance is part of what you run into

471
00:28:56,420 --> 00:29:00,000
with RE Global and your drinks insider consulting.

472
00:29:00,160 --> 00:29:03,200
Well, funnily enough, Arena Global. No, because,

473
00:29:04,560 --> 00:29:07,920
you know, it's like I said, it's a think tank. We do thinky,

474
00:29:07,920 --> 00:29:10,960
philosophical things. But most of the people that we deal with.

475
00:29:11,680 --> 00:29:15,520
You don't get to be in the world of fine wine without

476
00:29:15,520 --> 00:29:18,800
being like super smart and super commercial. Right. The least

477
00:29:18,800 --> 00:29:22,240
romantic people that you will meet are some of the people that run the

478
00:29:22,400 --> 00:29:25,940
really fabled winery because

479
00:29:26,100 --> 00:29:29,820
they didn't get to be fabled by being, you know, by

480
00:29:29,820 --> 00:29:33,660
sitting around doing nothing. They know a lot about how the market works

481
00:29:33,660 --> 00:29:36,980
and how to take care of customers. It's a different segment of the market

482
00:29:37,700 --> 00:29:41,460
that they're usually, you know, and they hire the best commercial brains

483
00:29:41,460 --> 00:29:44,660
to do that. They take all of that stuff very, very seriously.

484
00:29:45,300 --> 00:29:49,140
It's usually, it's usually people who had some other career. You know, they've

485
00:29:49,140 --> 00:29:51,620
gone into wine because they love wine and they don't want to be a lawyer

486
00:29:51,620 --> 00:29:55,400
anymore. They're hopeless. And they resist because they, they, they

487
00:29:55,400 --> 00:29:57,720
dumped all of that. They left all of that behind them. Now they just want

488
00:29:57,720 --> 00:29:59,400
a nice life. Yeah, right.

489
00:30:02,040 --> 00:30:05,880
That's very common, actually. Well, how do you explain then with some of these things

490
00:30:05,880 --> 00:30:08,520
and maybe we're ready for a new movie. Maybe you and I should make a

491
00:30:08,520 --> 00:30:12,200
movie. You know, these, the three

492
00:30:12,600 --> 00:30:15,880
sort of market changing

493
00:30:16,040 --> 00:30:19,760
events that I lived through. Doing

494
00:30:19,760 --> 00:30:23,520
this was, was of course the judgment of Paris with

495
00:30:23,520 --> 00:30:26,940
my father's store. I mean, Jim Barrett used to come into the store all Warren

496
00:30:26,940 --> 00:30:30,780
wi. Slept in my father's home when I was a kid on a. You

497
00:30:30,780 --> 00:30:33,780
know, back then in the romantic days of Napa wines,

498
00:30:34,180 --> 00:30:37,140
Sideways, you know, radically changed

499
00:30:37,460 --> 00:30:41,260
consumption of Merlot, obviously. And then in Pinot Noir, you couldn't find Pinot Noir

500
00:30:41,260 --> 00:30:44,820
here in Southern California worth a damn at that time.

501
00:30:45,380 --> 00:30:48,020
And, of course, Morally Safer's 1990

502
00:30:49,300 --> 00:30:52,940
Mediterranean Diet. Conversation on Six Paradox.

503
00:30:52,940 --> 00:30:56,500
Yeah, the French paradox. So those things had

504
00:30:56,500 --> 00:31:00,340
radical implications in the marketing of

505
00:31:00,340 --> 00:31:04,060
wine, and I would suspect raised the awareness of wine

506
00:31:04,060 --> 00:31:07,380
at the same time. Well, I think you've left one out. I think there was

507
00:31:07,380 --> 00:31:11,020
a really big thing that happened around the turn of the century which people

508
00:31:11,020 --> 00:31:14,420
are embarrassed by now, but I think the emergence of two Buckchuck and

509
00:31:14,420 --> 00:31:18,180
Yellowtail actually changed the entire market because, you know, two

510
00:31:18,180 --> 00:31:21,890
Buckchuck was so cheap. Cheap that. And, you know, they used to do different batches

511
00:31:21,890 --> 00:31:24,330
depending on what was on sale. And so you could get a really good batch

512
00:31:24,330 --> 00:31:26,970
of it or you could get a really terrible batch of it. And because it

513
00:31:26,970 --> 00:31:30,610
was only like, whatever it was, $2, people could take a risk and it could

514
00:31:30,610 --> 00:31:34,370
be really lousy, and it didn't matter. They hadn't lost anything. And that brought

515
00:31:34,370 --> 00:31:38,210
a lot of people into wine. Whereas now it's going to cost you

516
00:31:38,210 --> 00:31:41,970
$15, and you're taking a risk because it might suck. You

517
00:31:41,970 --> 00:31:45,370
know, you can forgive. You can forgive $2, but you can't forgive

518
00:31:45,370 --> 00:31:49,050
$15. And I think those two wines, which

519
00:31:49,050 --> 00:31:52,390
in their day weren't the crap that they are now,

520
00:31:53,270 --> 00:31:55,750
I think Yellow Tail was a lot better back in the day. But, you know,

521
00:31:55,830 --> 00:31:59,510
those two things brought a whole new lot of Gen X

522
00:32:00,230 --> 00:32:03,750
into wine. Well, they. You're right. That was

523
00:32:03,750 --> 00:32:06,790
2004, I think when Charles Shaw came out.

524
00:32:07,350 --> 00:32:10,870
There was a couple of things to that, though. Charles Shaw was a brand at

525
00:32:10,870 --> 00:32:14,710
one time, prior to that, no longer around, and

526
00:32:14,950 --> 00:32:18,320
there was a huge glass, lot of good juice.

527
00:32:18,640 --> 00:32:21,600
Well, that was. There was. In Australia as well. And so Yellowtail back in the.

528
00:32:21,600 --> 00:32:24,480
And also the Australian dollar was really low against the US it was

529
00:32:24,880 --> 00:32:28,440
$2 to one American dollar. So they were able to sell

530
00:32:28,440 --> 00:32:31,840
a. A wine that was a $15 quality for about $7

531
00:32:32,399 --> 00:32:35,600
because the dollar Australian dollar was so low. And there was. There was the grape

532
00:32:35,600 --> 00:32:39,400
gut so that all of these people had this really fantastic fruit lying around

533
00:32:39,400 --> 00:32:42,320
that they could make these. And of course, what happens is, you know, then it

534
00:32:42,320 --> 00:32:45,640
corrects itself, and then the fruit goes down, you know, whatever. But, you know, there's

535
00:32:45,640 --> 00:32:49,300
that opportunity today. Really good fruit lying

536
00:32:49,300 --> 00:32:53,060
around, not enough white, unfortunately. It's all red. But,

537
00:32:53,060 --> 00:32:55,740
you know, there's. There's that possibility right there.

538
00:32:56,620 --> 00:33:00,460
It's. There's a lot. Well, to highlight the 2004 situation,

539
00:33:00,460 --> 00:33:04,180
I actually had vineyard land in Paso Robles I never

540
00:33:04,180 --> 00:33:07,500
planted because I didn't realize when I bought it how expensive it was to plant.

541
00:33:07,980 --> 00:33:10,860
But the guy behind me had 60 acres and it just hung there.

542
00:33:11,340 --> 00:33:14,930
Nobody, there was no contracts and nobody wanted it. There was so much, much

543
00:33:15,250 --> 00:33:18,930
so many grapes on the marketplace and that, so two buck chuck@ that time was

544
00:33:18,930 --> 00:33:22,690
actually probably pretty palatable. And as you mentioned that,

545
00:33:22,690 --> 00:33:26,170
that Es and Flows and the way market, you know, is such a slow industry

546
00:33:26,170 --> 00:33:29,890
and it takes time to catch up and then realize that the market's changed again.

547
00:33:30,210 --> 00:33:33,890
That, that now I don't think it's the same quality

548
00:33:33,890 --> 00:33:37,730
of juice and also the same premise that One of the Month

549
00:33:37,730 --> 00:33:41,410
Club and, and Trader Joe's were founded on. There were good things to do.

550
00:33:41,410 --> 00:33:44,290
It's agricultural. Es and flows and you never know what you're going to get.

551
00:33:45,120 --> 00:33:48,560
Um, what, what's your objective now with Drinks Insider,

552
00:33:48,880 --> 00:33:52,720
with the platform? Are we, are you addressing the consumer? Are you addressing

553
00:33:52,720 --> 00:33:56,080
the. No, no, it's for, it's for the wine trade. Stick with the trade. Yeah,

554
00:33:56,080 --> 00:33:59,120
it's strictly the trade. So I'm in the middle of writing a white paper that

555
00:33:59,360 --> 00:34:03,040
I'm going to finish someday soon on the, the alcohol control

556
00:34:03,040 --> 00:34:06,800
issue and, and alcohol and, and what's, what's going on and I'm

557
00:34:06,800 --> 00:34:10,560
going to make some recommendations. So that's my big project at the moment. I'm hoping

558
00:34:10,560 --> 00:34:13,560
to get that finished pretty soon. So I'm going to do more of that. I'm

559
00:34:13,560 --> 00:34:17,180
going to do more writing of reports and, and writing of

560
00:34:17,180 --> 00:34:21,020
market analysis. Not very interesting, is it? But I actually find it, I actually

561
00:34:21,020 --> 00:34:24,660
find it quite interesting. So I like seeing if I can see something

562
00:34:24,660 --> 00:34:28,500
that other people can't see and putting it down on paper. I think

563
00:34:28,500 --> 00:34:30,700
you're doing a good job of that. Oh, thanks, Paul.

564
00:34:32,700 --> 00:34:34,780
But that is to help

565
00:34:36,380 --> 00:34:39,980
guide the trade. Whether I'm a maker or

566
00:34:39,980 --> 00:34:42,220
a marketeer or DTC company.

567
00:34:43,340 --> 00:34:47,159
Whatever information you can research and bring to the table and Drinks and Cider Insiders

568
00:34:47,159 --> 00:34:50,999
is to help me understand, maybe. To help you make money.

569
00:34:50,999 --> 00:34:54,559
That's my goal. That's my stated goal. Drinks Insider is there to help people

570
00:34:54,559 --> 00:34:58,079
make money. Because I don't think we talk enough about that. We all, you know,

571
00:34:58,079 --> 00:35:01,759
we, we tiptoe around the. Everyone talks about how broke they are. Right. But we

572
00:35:01,759 --> 00:35:05,279
tiptoe around the profitability and the money making discussion and there's this

573
00:35:05,519 --> 00:35:08,879
awful idea that everybody's got which is that being in wine sort of

574
00:35:08,879 --> 00:35:12,679
automatically means you're not supposed to, you know, make money. That, you know, there's

575
00:35:12,679 --> 00:35:15,279
all these jokes about how do you make a fortune in wine, you know,

576
00:35:16,799 --> 00:35:19,740
and I find all of that really offensive. I, I think, no, if you're going

577
00:35:19,740 --> 00:35:22,540
to do it, do it properly. And I, I'm going to find out all the

578
00:35:22,540 --> 00:35:25,100
ways that you can make money and I'm going to write them down and people

579
00:35:25,100 --> 00:35:28,900
can come and find out what I've found out. One of the things

580
00:35:28,900 --> 00:35:32,500
that, that's going around and I say it all the

581
00:35:32,500 --> 00:35:35,740
time, in fact, I had a conversation when I sold my company.

582
00:35:36,300 --> 00:35:40,060
It's already being sold again. And I'm sure it's not because

583
00:35:40,060 --> 00:35:43,260
they were making too much money the last go around. And

584
00:35:45,030 --> 00:35:48,030
I was, I was talking to the owner and I said, you know, maybe it's

585
00:35:48,030 --> 00:35:51,510
the fact that you guys, the previous buyer, have just

586
00:35:51,510 --> 00:35:55,150
diluted the story. Now I don't know if my story is

587
00:35:55,150 --> 00:35:58,710
valid anymore. The story of the club, my dad, the whole thing, you know,

588
00:35:59,030 --> 00:36:01,670
if that sells wine, we don't know that yet. But

589
00:36:02,710 --> 00:36:06,230
how do you feel about the concept of that? Wine is about

590
00:36:06,230 --> 00:36:09,880
storytelling. I mean, most product is. But do you think that's, is

591
00:36:09,880 --> 00:36:12,520
that we're just beating a dead horse at this point and it's going to be

592
00:36:12,520 --> 00:36:15,880
strictly metric marketing and trying to find the best way to acquisition? Look, it

593
00:36:15,880 --> 00:36:19,720
depends, it depends on what you're talking about. So

594
00:36:19,720 --> 00:36:22,720
again, I've done my workshops on storytelling and they're all very interesting.

595
00:36:23,520 --> 00:36:26,760
Storytelling is what you do when you've got your

596
00:36:26,760 --> 00:36:30,560
fundamentals right? Your fundamentals have got to

597
00:36:30,560 --> 00:36:33,720
start with knowing what your cost of goods is, what's the cost of getting to

598
00:36:33,720 --> 00:36:37,440
market, what's the cost of all of those things. And that's the

599
00:36:37,440 --> 00:36:41,290
step that lots of people, people skip. And actually,

600
00:36:41,610 --> 00:36:45,090
you know, I wrote this, I wrote this silly throwaway post on LinkedIn once where

601
00:36:45,090 --> 00:36:48,770
I said, how to make money in wine is learn to use Excel,

602
00:36:48,770 --> 00:36:51,210
learn to use spreadsheets. Which, by the way, I can't do very well. I'm not

603
00:36:51,210 --> 00:36:54,849
very good on spreadsheets. But, you know, learn, learn basic

604
00:36:54,849 --> 00:36:58,210
accounting and everybody. I've never had such sort of

605
00:36:58,210 --> 00:37:02,010
rage come back at me. People thought that I meant, you know, make wine making

606
00:37:02,010 --> 00:37:05,690
by spreadsheet. But I wasn't, I was like all these people I've interviewed, you know,

607
00:37:05,690 --> 00:37:09,330
I've been a business journalist for a very long time and everybody who's done really

608
00:37:09,330 --> 00:37:13,050
well are people who understand spreadsheets and

609
00:37:13,050 --> 00:37:16,810
how to do basic accounting. And that is more important than anything else. You

610
00:37:16,810 --> 00:37:20,650
can have a lousy story, you know, in

611
00:37:20,650 --> 00:37:24,330
an ideal world you wouldn't. But you can even have not very great

612
00:37:24,330 --> 00:37:28,090
branding. But if the, if the, you know, the market fit is right and

613
00:37:28,090 --> 00:37:31,770
the quality is right for the price and you've got it in front of the

614
00:37:31,770 --> 00:37:34,580
right people, you know, that's actually more important, I think.

615
00:37:35,540 --> 00:37:39,300
Well, that's why I married a cpa. Oh,

616
00:37:39,380 --> 00:37:42,700
well done. But since she doesn't listen, since she doesn't watch the show, I can

617
00:37:42,700 --> 00:37:46,420
just say that that's. I tell you, my story does become important

618
00:37:46,420 --> 00:37:50,259
is I've interviewed lots of people who, when they've lost their way, one of the

619
00:37:50,259 --> 00:37:53,380
things they've done is they've gone back and tried to look at

620
00:37:54,100 --> 00:37:57,220
why they did what they did in the first place. So the famous example of

621
00:37:57,220 --> 00:38:00,990
this is Krug, you know, what's her

622
00:38:00,990 --> 00:38:04,390
name? Enriquez. Margarita Maggie

623
00:38:04,390 --> 00:38:08,150
Enriquez was. Was brought in by LVMH to turn

624
00:38:08,150 --> 00:38:11,590
it around. And the first thing that she did was she. She went back through

625
00:38:11,590 --> 00:38:15,350
the historical documents. Why did they make the decisions they did in

626
00:38:15,350 --> 00:38:19,110
the early days? And they, they sort of. They sort of put themselves back

627
00:38:19,110 --> 00:38:22,910
in touch with their. Their historic roots, their storytelling roots, all of those sorts of

628
00:38:22,910 --> 00:38:25,230
things. And actually that did turn it around. You know, Elvie Match will never tell

629
00:38:25,230 --> 00:38:28,950
you that numbers. But apparently, apparently it went off, apparently started flying off

630
00:38:28,950 --> 00:38:32,430
shelves and, And I think there's a lot of examples of that, of people going,

631
00:38:32,430 --> 00:38:35,830
okay, so we've moved away from where we were. What did we set out to

632
00:38:35,830 --> 00:38:39,270
do in the first place? You know, who are we? And. And sort of

633
00:38:39,430 --> 00:38:42,710
asking themselves those questions. And those are really powerful questions.

634
00:38:43,030 --> 00:38:46,510
You know, it's interesting. I. I did a podcast with a local chef. His name

635
00:38:46,510 --> 00:38:50,350
is David Slay. I. I ran into him. He sounds like he should have been

636
00:38:50,350 --> 00:38:54,130
a butcher. Yeah, Well, I think first of all, I ran into

637
00:38:54,130 --> 00:38:57,930
him in Hot Yoga. I saw, and I realized this was. Dave

638
00:38:57,930 --> 00:39:00,490
and Slay in Hot Yoga. I would not go to that yoga class.

639
00:39:01,610 --> 00:39:05,050
Well, actually, the podcast, I said, you know, and you go to the hottest corner

640
00:39:05,050 --> 00:39:07,490
in the whole room. I don't know how you do that. Oh, I have to

641
00:39:07,490 --> 00:39:10,690
do that every day. But the point of that is he's got four or five

642
00:39:10,690 --> 00:39:13,210
restaurants here in Southern California. And it was.

643
00:39:14,490 --> 00:39:17,570
The quality of his restaurants is very good. He's got a French, he's got Italian,

644
00:39:17,570 --> 00:39:21,250
he's got a steakhouse, he's got a casual restaurant, all with the slave

645
00:39:21,250 --> 00:39:24,450
moniker. But he mentioned that

646
00:39:25,170 --> 00:39:28,810
none of the kids that come out of cooking school know how to

647
00:39:28,810 --> 00:39:32,530
use Excel. They. Which led me to believe.

648
00:39:32,530 --> 00:39:36,370
And we talked about A little bit that he is completely driven

649
00:39:36,370 --> 00:39:40,210
by the metric of restaurant touring. If you don't do that, you don't have,

650
00:39:40,370 --> 00:39:44,210
you don't have a chance to do this. And I reflected on a

651
00:39:44,210 --> 00:39:47,700
conversation I had with a wine Napa wine

652
00:39:47,700 --> 00:39:51,380
register writer just before COVID hit the COVID was coming, the

653
00:39:51,380 --> 00:39:54,700
new was coming, lockdown was coming. And she's like, what are we going to do

654
00:39:54,700 --> 00:39:58,140
here? Because there's too many. We're all farmers in general

655
00:39:58,380 --> 00:40:02,060
and we don't even know. We don't even have a chat. But chat bar

656
00:40:02,060 --> 00:40:05,700
on our, on our website, I go, that was pretty revealing.

657
00:40:05,700 --> 00:40:09,420
It's kind of what you're saying. If you can't manage the business

658
00:40:09,500 --> 00:40:12,220
side of doing this, it's going to be very difficult to,

659
00:40:13,230 --> 00:40:17,030
to rise above through romanticism only. And look, I look

660
00:40:17,030 --> 00:40:20,750
at the arts, right? So the arts are really interesting. So that's the most

661
00:40:20,750 --> 00:40:24,510
romantic of all, you know, endeavors really. If you

662
00:40:24,510 --> 00:40:28,190
go to the great art schools in the world, or

663
00:40:28,510 --> 00:40:32,190
maybe not here in the continent, but certainly St. Martin's in, I think it's.

664
00:40:32,590 --> 00:40:35,030
Was that the Fashion School in London. But if you go to the big, the

665
00:40:35,030 --> 00:40:38,150
art schools in New York or London or if you go to the great music

666
00:40:38,150 --> 00:40:41,780
school schools, they will teach you how to put on an art

667
00:40:41,780 --> 00:40:44,540
exhibition. They will teach you how to get an agent, they'll teach you how to

668
00:40:44,540 --> 00:40:48,300
price your work. If you go to the Sydney Conservatory of Music, they

669
00:40:48,300 --> 00:40:51,540
will teach you about, you know, you're going to spend a lot of your life

670
00:40:51,540 --> 00:40:54,500
singing at weddings. Here's how you price what you do.

671
00:40:55,220 --> 00:40:58,900
You know, they, they understand that your life is going to be very, very hard

672
00:40:58,900 --> 00:41:02,620
if you set out to be an artist or a singer or a florist or

673
00:41:02,620 --> 00:41:05,620
whatever. And so they're like, here are the financial skills to get you through it.

674
00:41:05,780 --> 00:41:09,390
And I think, what. Well, if a bunch of flute players can learn those

675
00:41:09,390 --> 00:41:12,950
basic skills, why in wine is just the very idea

676
00:41:13,030 --> 00:41:16,630
of talking about accounting and cost of goods and stuff

677
00:41:17,430 --> 00:41:20,710
so repellent? It's a really good question.

678
00:41:22,950 --> 00:41:26,630
And I think that's probably one of the examples and one of the reasons why

679
00:41:27,510 --> 00:41:31,030
you're a successful surgeon or you're a successful

680
00:41:31,910 --> 00:41:34,630
government contractor and you have all your money and you go to Napa and you

681
00:41:34,630 --> 00:41:38,230
buy your chateau and then you realize that the minimum you have to charge for

682
00:41:38,530 --> 00:41:41,850
of wine is $200 and there's not that many people buying those wines and you

683
00:41:41,850 --> 00:41:44,730
got to figure out how to market it. And all of a sudden now metrics

684
00:41:44,730 --> 00:41:48,410
and Marketing and I mean, I went through

685
00:41:48,410 --> 00:41:52,130
dozens of consultants selling wine online to learn

686
00:41:52,450 --> 00:41:55,570
that, you know, when it comes down to it, you have to understand it.

687
00:41:56,690 --> 00:42:00,250
The consultant's not going to make those decisions for you. You have to know who

688
00:42:00,250 --> 00:42:03,570
your customer is. And you have to know, based on the metrics of what's going

689
00:42:03,570 --> 00:42:07,320
on, you can't do it. You know, I think, I think a lot of

690
00:42:07,320 --> 00:42:10,640
what's gone wrong is just too many rich people involved. Actually. I remember when I

691
00:42:10,640 --> 00:42:13,800
first came to Europe, I used to go to Provine and. Cause I was the

692
00:42:13,800 --> 00:42:17,600
editor of a magazine. I used to get approached. It stopped about 2014,

693
00:42:17,600 --> 00:42:20,360
I think. But for a while I was being approached by people, rich people, right.

694
00:42:20,360 --> 00:42:23,640
And you could tell how they got rich by where they bought. So if it

695
00:42:23,640 --> 00:42:27,440
was a telco from Britain or a lawyer, they'd go to Languedoc. If it was

696
00:42:27,440 --> 00:42:31,120
a Swiss banker, he'd buy in Tuscany. You know, you could tell who,

697
00:42:31,120 --> 00:42:34,400
who'd made their money how, by where they bought. And they all bought these properties

698
00:42:34,400 --> 00:42:37,780
and they'd all like, you know, I'm gonna live the wine. Not one of them

699
00:42:37,780 --> 00:42:41,620
had thought about distribution or whether the product had a good market

700
00:42:41,620 --> 00:42:45,020
fit or. You know, I remember one guy who went to

701
00:42:45,020 --> 00:42:48,660
Languedoc, I think entre de mer made this 20 pound red

702
00:42:48,900 --> 00:42:51,660
and went to the market and they said, well, we only really buy 2 pound

703
00:42:51,660 --> 00:42:55,340
whites from the entre de mer every Cockney. And you know, I think there was

704
00:42:55,340 --> 00:42:58,540
so much of that. I think people who'd made money in other fields who brought

705
00:42:58,540 --> 00:43:01,460
this idea that they were sick of corporate life and they didn't want that anymore.

706
00:43:01,460 --> 00:43:05,140
They wanted the big bucolic country life. I think that's actually done a lot of

707
00:43:05,140 --> 00:43:08,950
damage. I agree with that. It's pretty amazing.

708
00:43:08,950 --> 00:43:12,750
And it's a whole nother story and we're almost out

709
00:43:12,750 --> 00:43:15,190
of time. But I do want to touch on the wine tourism thing

710
00:43:16,550 --> 00:43:20,310
in this viewpoint. And that is, I do think

711
00:43:20,390 --> 00:43:24,190
that the experiential side of wine is sort of coming back. And

712
00:43:24,190 --> 00:43:27,350
this patch here is Les amid events, my dad had a chapter and you know,

713
00:43:27,350 --> 00:43:30,750
people would come to dinner and they would invite Robert Mondavi or Lawrence

714
00:43:30,750 --> 00:43:34,390
Bowser. Even Harry was spoke a couple times to this group.

715
00:43:34,710 --> 00:43:38,370
And so people came away with a mem. With a conversation.

716
00:43:38,850 --> 00:43:42,050
Whether they understood or not, it was kind of irrelevant. It was, I, I know

717
00:43:42,050 --> 00:43:45,690
this wine now. I know if I see it on the menu, I'll be able

718
00:43:45,690 --> 00:43:49,250
to at least have some cognizant review. Of it in my

719
00:43:49,250 --> 00:43:52,290
head. And so, you know, tourism seems to have

720
00:43:53,570 --> 00:43:57,010
a little. A little resurgent. And I, and I just put on a trip. It

721
00:43:57,010 --> 00:44:00,450
was an accident. I. I just wanted to go to the Monaco Grand Prix. I

722
00:44:00,450 --> 00:44:03,790
brought this up yesterday, and all of a sudden I was in Piemonte and Bordeaux

723
00:44:04,420 --> 00:44:08,140
with. With five other couples. You know, I did not bite

724
00:44:08,140 --> 00:44:11,540
this up. I did not want to be. Okay, that sounds a very nice experience.

725
00:44:11,540 --> 00:44:15,220
So that's hell on earth. Exactly. But, you know,

726
00:44:15,700 --> 00:44:18,780
I told my wife when we landed at Pamonte, I didn't want to put on

727
00:44:18,780 --> 00:44:21,460
a wine tour, but it ended up being really good. And I will never do

728
00:44:21,460 --> 00:44:25,260
it again because it'll never be this good because everything worked. But

729
00:44:25,260 --> 00:44:28,860
the point I'm making is having this conversation yesterday with Lille

730
00:44:28,860 --> 00:44:32,670
Gregorian from the Armenian, you know, Tourism Council, is

731
00:44:32,670 --> 00:44:36,350
that. Is there a resurgence in that? And do you think people

732
00:44:36,350 --> 00:44:40,190
are seeking the experience through culture, you know,

733
00:44:40,190 --> 00:44:43,670
to find culture through. Through traveling for wine,

734
00:44:43,670 --> 00:44:47,310
wherever you end up? Yes, there has been since about

735
00:44:47,310 --> 00:44:51,030
2011, because, you know, one of the things that. That happened

736
00:44:51,030 --> 00:44:54,830
was. So a couple of things happened, which was really

737
00:44:54,830 --> 00:44:58,630
interesting. One was after the global financial crisis, a lot of professionals who'd worked

738
00:44:58,630 --> 00:45:02,280
overseas had to go home to wherever home was. And

739
00:45:02,280 --> 00:45:05,720
they, and they were. They were actively looking for

740
00:45:06,280 --> 00:45:09,880
the foods they left behind, especially people who worked in places like Southeast Asia and

741
00:45:09,880 --> 00:45:13,240
then went. Went home. And so there was this huge resurgence in

742
00:45:13,480 --> 00:45:16,840
interest in food. I mean, there had been for the last 30 years anyway. But

743
00:45:16,840 --> 00:45:20,360
after the GFC, people got very interested in traveling

744
00:45:20,600 --> 00:45:24,080
specifically for food. And the other thing that happened around then was that

745
00:45:24,080 --> 00:45:27,550
airline prices dropped. And so there was suddenly a lot of.

746
00:45:27,700 --> 00:45:31,220
Of culinary tourism going on. And that

747
00:45:31,380 --> 00:45:35,060
almost automatically boosted wine tourism as well. Wine tourism

748
00:45:35,060 --> 00:45:38,740
sits in an area called experiential tourism. So people don't tend

749
00:45:38,740 --> 00:45:42,180
to. Unless they're really, really hardcore wine people, they don't tend to go,

750
00:45:42,340 --> 00:45:45,500
I'm going to France next year. My itinerary is only going to be wineries. They

751
00:45:45,500 --> 00:45:48,460
tend to go, I'm going to the Loire Valley. And as part of that, I'll

752
00:45:48,460 --> 00:45:51,940
tack on some wineries. But yes,

753
00:45:52,100 --> 00:45:55,460
it's very, very much probably one of the most thriving

754
00:45:55,780 --> 00:45:59,140
sectors of wine. And actually, what's really interesting is

755
00:45:59,600 --> 00:46:03,360
are now beginning to do wine tourists who don't drink alcohol. A

756
00:46:03,360 --> 00:46:06,760
lot of wineries are starting to find that they're having to cater for people who

757
00:46:06,760 --> 00:46:09,760
are never going to be their customers, and they're starting to think about how they

758
00:46:09,760 --> 00:46:12,880
do that, which is really Interesting. That's really interesting.

759
00:46:14,000 --> 00:46:17,840
Well, this has been a fabulous conversation, and I. And I hope we can do

760
00:46:17,840 --> 00:46:20,640
it again. We have so much to talk about. I didn't even touch, like, most

761
00:46:20,640 --> 00:46:23,200
of it. I just want to say one thing. So we've been talking a lot

762
00:46:23,200 --> 00:46:26,520
about the problems in wine and, you know, about whatever. I just want to say

763
00:46:26,520 --> 00:46:30,280
I still think there's a lot of opportunity. I really do. I still

764
00:46:30,280 --> 00:46:34,060
think it is a vibrant, exciting area, and it's going through one of these. These

765
00:46:34,060 --> 00:46:37,340
terrible dips. And I think there'll be a big shakeout happening. But I think.

766
00:46:37,900 --> 00:46:41,300
I still think there's a lot of really exciting things going on. That's interesting. You

767
00:46:41,300 --> 00:46:45,140
said it. Because America, though, the consumption volume of

768
00:46:45,140 --> 00:46:48,820
cases was off a little. I mean, it always fascinates me

769
00:46:48,820 --> 00:46:52,660
because my studies in college was market research, and it was exactly this, following

770
00:46:52,660 --> 00:46:55,340
these numbers and trying to understand how they happened. But

771
00:46:56,300 --> 00:47:00,080
so we were doing down in consumption by like, I think it was 10%,

772
00:47:00,400 --> 00:47:04,200
but the actual dollar spent was higher. And at least people

773
00:47:04,200 --> 00:47:07,040
to believe that we're drinking better. I'm not sure I believe that. It's just. I

774
00:47:07,040 --> 00:47:10,880
think prices are up a little bit. But I agree with you. I

775
00:47:11,200 --> 00:47:15,040
don't see. I see the congestion. There was one thing

776
00:47:15,040 --> 00:47:17,360
I wanted to bring up that I didn't talk about, and you were talking about,

777
00:47:18,160 --> 00:47:21,880
you know, you walk down the market aisle and everybody's using the same

778
00:47:21,880 --> 00:47:25,680
metrics, everybody's using the same, you know, trying to find this vision that's going to

779
00:47:25,680 --> 00:47:28,870
change everything. Everybody's. The way they buy wine, they're going to grab that bottle of

780
00:47:28,870 --> 00:47:32,310
the other bottle. I mean, it's almost impossible to go to a supermarket in Los

781
00:47:32,310 --> 00:47:35,950
Angeles and not see a shelf talker on every single wine that's

782
00:47:35,950 --> 00:47:39,590
there. So it's kind of like, okay, so the first ones had shelf talkers are

783
00:47:39,590 --> 00:47:42,870
four or five. You go to that. Now they all have shelf talkers. So now

784
00:47:42,870 --> 00:47:46,630
what do you do? And one of the comments that was made 50

785
00:47:46,630 --> 00:47:50,470
years ago to Mike

786
00:47:50,470 --> 00:47:53,870
Houlihan, who owned Barefoot Sellers or created Barefoot Sellers,

787
00:47:54,750 --> 00:47:58,590
and he came into my office in 1989, and

788
00:47:58,590 --> 00:48:01,870
I was young in the industry, and he says, I've got this idea. I've got

789
00:48:01,870 --> 00:48:05,110
this 40,000 gallons that somebody gave me. They owed me money, and now I got

790
00:48:05,110 --> 00:48:08,710
to market it. And I want to use the term Barefoot Sellers. And I got

791
00:48:08,710 --> 00:48:12,070
it from Davis Bynum, and I'm calling myself the Chateau

792
00:48:12,070 --> 00:48:14,830
Lafitte Feet of California.

793
00:48:16,110 --> 00:48:19,510
And how well did that go down. With I thought this was the stupidest thing.

794
00:48:19,510 --> 00:48:21,750
I called my dad. I said, dad, you won't believe this guy came in here,

795
00:48:21,750 --> 00:48:25,060
blah, blah, blah. And, well, it becomes the biggest brand in America.

796
00:48:25,540 --> 00:48:28,900
Gallo ends up buying it. But one of the comments that he made to me

797
00:48:28,900 --> 00:48:32,100
on a podcast later. Was, oh, so he didn't. He didn't register the knife,

798
00:48:32,820 --> 00:48:36,380
I guess. Well, he used it because I had socks. We

799
00:48:36,380 --> 00:48:40,140
sold socks in my wine shop that had Chateau Lafitte on

800
00:48:40,140 --> 00:48:42,260
them. But the comment that was made to him in

801
00:48:42,260 --> 00:48:45,940
1987 or 88 by the

802
00:48:46,020 --> 00:48:49,660
wine buyer for Thrifty Drugstores, which was this, you know,

803
00:48:49,660 --> 00:48:53,420
large CVS type place back in the day, was, I want

804
00:48:53,420 --> 00:48:57,060
to see that label as I'm walking down the aisle from at least

805
00:48:57,060 --> 00:49:00,660
four feet away. You need to be distinctive. And I

806
00:49:00,660 --> 00:49:04,500
thought, wow, that is the same thing that's happening today. And

807
00:49:04,500 --> 00:49:08,340
that's sort of the Gallo guerrilla marketing idea. But he designed a label

808
00:49:08,340 --> 00:49:11,740
with this barefoot stamp so that it was plain, simple, but

809
00:49:11,740 --> 00:49:15,580
jumped out of the. Jumped off the shelf at the time and

810
00:49:15,580 --> 00:49:18,690
marketed like. Like the Gallows did. And of course, they ended up buying them. But

811
00:49:19,400 --> 00:49:23,120
I thought, well, that if everybody's doing that now, then

812
00:49:23,120 --> 00:49:26,640
what happens? Now the whole shelf has got these. Now what we do is put

813
00:49:26,640 --> 00:49:29,320
little AI in it so it can call out to you by name.

814
00:49:30,520 --> 00:49:33,000
That's what we're going to do. I'm sure of it. They're already doing that with

815
00:49:33,000 --> 00:49:35,640
toys. That's true.

816
00:49:37,400 --> 00:49:40,280
Who knows? But somebody will come up with something.

817
00:49:41,000 --> 00:49:44,280
Such a pleasure, and I hope we can do it again. Thank you, Paul. Good

818
00:49:44,280 --> 00:49:48,020
luck in Chicago. Thank you. Doesn't have the best rap these days

819
00:49:48,020 --> 00:49:51,820
in America, but successful. Why is that? Am I going to be

820
00:49:51,820 --> 00:49:55,300
killed? No, I don't think so. But it's actually

821
00:49:55,460 --> 00:49:58,260
cleaned up rather radically. Short in the short.

822
00:49:58,980 --> 00:50:02,020
Yes. So thanks for being on the show.