Those Mysterious New Brands

The names may not ring a bell: Bon Marche, Ashland Park, Bell Canyon, Felta Springs, Willow Glen, Domaine Breton.

Some are brands of existing wineries, so-called “second labels”; others were created by savvy retailers. All of them are brands created to sell wine at low prices in a stagnant market. This is not a new idea, but as a wine glut has slowed sales of primary brands in the last few months, it has become increasingly popular.

You may remember when we reported, late last year, that a huge wine surplus was building up in California and predicted that prices for major brands would soon drop. By February, discounts for even well-regarded wines were commonplace. Today, prices are in retreat, and wineries, to protect the image of their top brands, are resorting to all kinds of tactics to market wine.

Two of the most obvious are (a) creation of second labels (such as Bell Canyon by Burgess, or Felta Springs by Mill Creek) and (b) the sale of high-quality wine in the bulk market, where it later appears under an arbitrary name created just to move the wine quickly.

“Wineries need cash to operate,” says one Napa Valley winemaker, “and people are trying to hold their brands without too much discounting. So they keep their margins on their primary brand and create second labels to move some wine out, to create cash flow.”

Steve Wallace, owner of Wally’s in West Los Angeles, says prices for the very top wines aren’t collapsing yet. California wineries “increased prices too fast in the late 1980s,” he says, “and now the only way to move them is to drop prices or create second labels.”

Analysts say health concerns and attacks on all alcoholic beverages have caused a drop in per-capita consumption in the United States, from 2.45 gallons to about two gallons per year. But production of wine continues to rise. The resulting glut benefits major wine marketers such as Trader Joe’s, the South Pasadena-based chain of 37 specialty food stores.

“We’re seeing a lot of secondary labels,” says Bob Berning, wine buyer for Trader Joe’s. “Some of them are the familiar ones we’ve seen in the past, but some of them we’ve actually helped to create.”

One Trader Joe’s wine is called Boar’s Run. A 1987 Boar’s Run Sonoma County Cabernet Sauvignon at Trader Joe’s sells for $3.49 a bottle. “The winery asked us not to say who made it, but don’t look at the cork,” says Berning.

The cork shows that the wine was made by Chalk Hill Winery, which has hired David Ramey as its new winemaker, and it wants to move into the Ramey era of winemaking as quickly as possible. So the winery sold all 6,200 case of its 1987 Cabernet to Trader Joe’s. The 1988 Chalk Hill Cabernet retails for $12.

Two other “unbranded brands” at Trader Joe’s are Sun Ridge Winery and Willow Glen. The 1990 Sun Ridge Chardonnay “is barrel-fermented and aged in French oak,” says Berning. “It comes from a respected Napa Valley producer better known for its Cabernet. Our price will be $3.49. Hey, this is a $15 wine under their label.

“Also, we picked up a Mendocino Zinfandel. We’re calling it Willow Glen, and we’ll retail it for $1.99. I didn’t think I’d ever have a buck-ninety-nine Zinfandel of this quality again, but there has been such desperation up there to move stuff.”

Trader Joe’s also is selling a 1990 Willow Glen White Zinfandel from the Russian River Valley for $1.99. Again, Berning declines to say who made the wine, but I know of only one White Zinfandel producer who uses Russian River fruit: DeLoach.

“We are helping these wineries with their cash flow,” says Danny Bobroff, president of Irvine Ranch Markets and the Chalet Gourmet stores, another who looks for bulk-market wine. “If their (wineries’) sales projections are not there, we can negotiate a better price by paying cash.”

One of the nation’s largest brokers of high-quality bulk wine, both California and imported, is European Beverage Co. of Chatsworth. President Roberto Posternak says that on a recent trip to Bordeaux to attend the wine trade fair VinExpo, he saw weakness in all areas of the wine market.

“Very soon we will see Macon selling at $3.99 again,” he says, the reason being that many producers in the Macon region held back, hoping to get higher prices, but the market never responded. He adds, “I know Bob Berning is talking to people.”

Berning says, “We have a 1985 Chablis for $3.99 that we got as a close-out from Wine Warehouse,” and predicts a lot more good-value wine.

And not in low-end wine, either. Posternak says: “The people in the classified growths (of Bordeaux) are very nervous. (I expect) to see second- and third-growth Bordeaux back on the market for less than $20 and maybe even $9.99. The Japanese are not buying and the prices are very soft.”

Merchants interviewed say that California Chardonnays now selling for $15 to $20 a bottle are going to be hard hit by the excess wine now on shelves. The surplus of Chardonnay is evident, says a spokesman for United Airlines. The airline buys high-quality wines for in-flight service. He says, “In the past, we’d solicit samples and we’d get two brands for coach: Paul Masson and Almaden. This year, we got offered 64 different Chardonnays.”

Wine brokers say that wineries selling top-rate wine in the bulk market include Pine Ridge, Sterling, Rombauer, Sequoia Grove and a dozen others. (The 1986 Sterling Diamond Mountain Reserve Chardonnay, with a retail price of $15, was recently seen on shelves at the northern California Canned Foods chain for $5.99.)

A spokesman for Liquor Barn says the Ashland Park brand it created has had such good wine at times that some restaurants are buying the Ashland Park wine off the shelf and putting them on wine lists. (This is illegal in California, but so far I know of no prosecutions.)

Berning of Trader Joe’s says that only in Chardonnay is the market not yet squishy-soft, but that will change too. Indeed. State statistics show that there are 33,000 acres of Chardonnay vines bearing a crop in California today, but an additional 15,000 acres of Chardonnay are listed as non-bearing. They will produce a crop either this year or next.

Berning says the best bargain in the coming months will be Cabernet from California’s north coast: “It’s a real feast out there.” He adds that the current wine surplus was worse than the one that occurred in 1984, because at that time American consumption was on the rise and there were still only 450 brands in the marketplace. Today there are probably closer to 900.

Moreover, he adds: “Merchants and brokers (in Europe) tell me their sales are down 30% to 40% too--and when a Frenchman stops drinking wine, you’re talking about some serious numbers of gallons. Where is that wine going to go?”

Wine of the Week

James J’s Private Reserve Dry Sherry ($12)-- Delicate bone-dry, fino-style Sherries are rare in the United States because few of the Spanish Bodegas that produce them ship good fino Sherry here. This one isn’t exactly true-to-type fino, but it is an excellent example of the concept. The wine has the familiar aroma of flor yeast and a nuttiness richer than some finos.

This one was made by Jim Lockshaw, chief executive of a Southern California manufacturing firm, who also owns Twin Hill winery in Paso Robles. He made it in a traditional Jerez manner, using Palomino grapes and aging the wine in the traditional solera. Serve this chilled with soups, tapas or rich appetizers for a delightful change of pace.