Non Disclosure Wine

The pandemic has been difficult for everyone and the economic fallout for businesses has been immeasurable. There have been winners and losers in the business world. Lord knows I wish I had listened to the Bitcoin believer we sat next to at a communal table a year and a half ago at our local pizza parlor. If I would have heeded his advice I would be awaiting the arrival of my cases of 2016 First Growth Bordeaux. Alas, my curse is my conservative nature with regards to investing.

Remember the 2001 U.S. recession, the result of the Y2K boom and the dot com bust? Cameron Hughes started his wine company out of those ashes. Not unlike today he found himself in a business environment where there were too many good quality wines and not enough buyers. He leveraged that moment in time to create one of the most successful wine nègociant companies in the world all the while landing an exclusive with mega-box store Costco to feature his products. For years Cameron profited by cutting out the middle man (wholesalers) and capitalizing on the oversupply of quality wine in the U. S. Once the oversupply dried up so did his business. Cameron didn’t survive the cyclical nature of the agriculture business and ended up in bankruptcy court and his business was eventually sold to Vintage Wine Estates in 2017.

I won’t go down a rabbit hole chronicling the drawbacks of the three tier alcohol distribution laws that were instituted after the repeal of prohibition in 1933 and how the scales are tipped in favor of ensuring the greatest profits go to the wholesalers. Large distributors wield considerable political clout so changing legislation moves at a glacial pace. However, the pandemic has brought about substantial changes in the channels that are now being used to get alcohol to consumers.

An economic downturn hits everyone along the distribution chain but restaurants have borne the brunt of this recession. Hundreds of notable restaurants have closed and those that depend on tourism and thriving downtown commerce are barely getting by. A winery operating a good direct to consumer business out of a tasting room loses all of that revenue when they are forced to close due to local or state Covid restrictions. Restaurant closures further erode demand for wines. When producers have their distribution channels disrupted they have to find other ways to move their wines. Smaller producers (less than 20,000 case production annually) often get lost in the inevitable cost cutting and consolidation of distributors. Zoom calls and specialized sales and marketing teams created to promote smaller brands are stepping in to fill the sales voids.

Year 2021 economic conditions for high end wine producers are similar to those two decades ago. Premium wineries find themselves caught between a rock and a hard place. They have done all the hard work and produced great products, but there simply aren’t enough buyers to consume the supply. If they discount their offerings to move pallets they risk devaluing their brand while courting the prospect of shaved profit margins in the future. If they sit on their inventory and wait for market conditions to improve the holding costs eat away at their profits. If they don’t move the wine quickly enough it could age out and need to be discounted anyway. Even more so the winemaker may need the tank space for the upcoming vintage. What’s a vintner to do?

Enter the modern day wine retailer/ nègociant. Although it may not be a new trend for retailers to look outside their normal channels to secure premium quality wine at great values (wine consignment and auctions), there are an increasing number of players in the game now. Have you ever had a non disclosure wine? Chances are you have although you may not have been aware of it. Offers flood my email inbox daily touting 93 to 96 point wines made by 100 point winemakers. The one common denominator is the non disclosure pronouncement. “We can’t tell you very much about the wine or who bottled it for us. What we can tell you is that the wine is 50% off the list price that it normally sells for”. The non disclosure agreement shields the producer from being exposed for selling their wine at a discount. The offer is an easy sale for a reputable retailer as the customer can know that they are getting a great wine at a discount even if they can’t conspicuously display the lofty label of the producer to their friends. The key here is the consumer has to look beyond the label and use their knowledge of wine to evaluate what is actually in the glass, i.e, trust your nose and your palate.

I discovered the 2017 Kalinda Russian River Chardonnay recently. It’s on offer with KL wines. According to the staff, “This parcel was initially headed to an overseas market before 2020 happened...and now we're simply the lucky benefactors thanks to our long relationship with the winery”. I’ve tried numerous wine under the KL wine house label and been happy with the results so it was easy for me to pull the trigger on this bottling. If you are a lover of $40 to $60 Russian River Valley Chardonnay but would prefer to pay $30 here’s your chance to secure a Cadillac Chardonnay in Chevy Vega clothing. Aromatics of stone fruit and citrus complement the spice, lightly toasted nuts and caramel notes. Medium bodied and seamless from the attack to the finish displaying a richness and elegance that one only gets with wines that have spent time in expensive French oak and were subjected to labor intensive battonage. Serve this Chardonnay to your friends that enjoy drinking high quality wines instead of labels. If one had the ability to slap a Dehlinger, Ramey or Rochioli label onto this bottle, no informed RRV Chardonnay drinker would consider questioning its provenance. That’s how well crafted it is. This is a non disclosure wine you don’t want to miss. Cheers!

A Cadillac Chardonnay in Chevy Vega clothing

I discovered the 2017 Kalinda Russian River Chardonnay recently. It’s on offer with KL wines. According to the staff, “This parcel was initially headed to an overseas market before 2020 happened...and now we're simply the lucky benefactors thanks to our long relationship with the winery”. I’ve tried numerous wine under the KL wine house label and been happy with the results so it was easy for me to pull the trigger on this bottling.