Those evil tied houses

All last week's discussion of "tied houses" laws left my head spinning, so I decided to do some further research.

The original tied houses were pubs that were contracted with (or owned by) specific breweries to sell only that brewery's beer. The brewery got a steady source of demand, the pub got favorable pricing or exclusive sales rights, and everyone was happy.

Miller Cafe in Milwaukee (Photo: MillerCoors, via https://onmilwaukee.com/bars/articles/miller-tied-houses.html)

Well, not everyone. Tied houses were a villain to temperance campaigners. Pubs tied to breweries were fiercely competitive. (After all, it was doubly important to sell the beer -- it mattered to both the pub business and the brewery business!) The results were aggressive marketing tactics: low beer prices, offers of free lunch with drinks, and salty bar snacks, all things that encourage more drinking. Temperance leaders blamed alcohol consumption for crime and low living standards -- and tied houses were scourges that encouraged intoxication. (Adopting the second part of this narrative, many histories of tied house law partially blame the tied house system for Prohibition. If not for excessive drinking in tied houses, the logic goes, public outrage over alcohol wouldn't have been sufficient to justify the Eighteenth Amendment.)

When Prohibition was repealed after a disastrous thirteen years, states were given the responsibility of writing and enforcing their own liquor laws. Each created some form of a three-tier system with tied-house prohibitions.

From brewery-owned pubs where people got too drunk to wineries getting in trouble for tweets seems like a stretch, but there you go! California tied house laws were upheld in court as recently as 2017, and some people think these laws are still an essential part of encouraging temperance. It will be interesting to follow the legal developments: as tied house laws vs. First Amendment cases crop up around the country, this issue may end up in the Supreme Court.

Follow up on Regulation Lecture - Mobile Alcohol Delivery Platform

Came across this interesting article on how Eaze (cannabis) and Drizzly (alcohol) mobile delivery platforms navigated through the stringent regulation and achieved relative success so far. Key takeaways are below and more details can be found in this link: https://jilt.com/upsell/drizly-eaze-regulations/

·       Know market regulations inside and out

·       Focus on customer experience

·       Work with knowledgeable partners (In Drizzly's case, Wine & Spirits Wholesalers of America, an established distributor and also an early investor in the business has helped the business work with the regulators and expand nationally)

·       Build compliant technologies (including ID check, payment) 

·       Make data-driven decisions

Sparkling Reds...

At a restaurant with friends recently, I was introduced to a type of wine I literally would have thought was made up....except it was on the menu: sparkling reds.

The experience had me reflecting on various types of wine and wondering where the boundary was. Why did I find the idea of a sparkling red so offensive and what does this mean about our social taste in wine? The fact that I enjoy sparkling whites a lot meant that a sparkling red shouldn't really be such a crazy concept. The distinction felt as arbitrary as the fact that certain types of meats are eaten in one culture, while other individuals in another region would turn their noses up at it.

For anyone else who's wondering - sparkling reds is a small but growing category! There is some interesting background reading here in this article: https://www.eater.com/wine/2016/8/30/12694650/lambrusco-best-sparkling-wine

Food and Wine magazine has also highlighted four sparkling reds to try in this article: https://www.foodandwine.com/blogs/4-great-sparkling-red-wines

Cheers to expanding our opinions into what is an acceptable wine category!

Why wine?

Wine has a way of weaving itself in and out of life. These days, I frequently share wine with friends, order wine while out for dinner, and visit wineries and tasting rooms when family comes to visit. Many of my favorite memories and traditions stem from experiences with wine, and I notice I spend more on wine as my tastes mature. I am taking a class on the dynamics of the wine industry because I feel wine will have a lasting place in my life; I am eager to further my knowledge of the wine industry and hope to share this knowledge to elevate the wine-drinking experience of others.

In the shorter term, this class will dovetail with a wine venture with my classmate and business partner are pursuing through Startup Garage. Our company, Cab Labs, was born when Sarah took the Dynamics of the Wine Industry last year and approached me with an idea to bring a modern voice and new brand to wine. Since last Spring, Sarah and I have spoken to more than 50 wineries and winemakers and countless wine consumers to refine our business plan. As a result, I have become enthralled by the wine industry, particularly the complexity and opacity of the wine supply chain. I am excited to continue learning through this course and am especially interested in innovations that might change how consumers experience wine differently in the future.

Why I'm taking this class

When I think wine, I think of happy moments. I only really started drinking wine during my undergraduate at university.  Ever since, wine has coincided with happy memories in my life. I did study abroad in my final year of my undergrad near Paris, which involved a lot of wine drinking. Subsequently, I started my consulting career, which involved many dinners and gatherings at seniors' homes. Seniors were very happy to share their knowledge and collection of wine. Earning an income also meant being able to travel to Australia's wine regions during weekends. I visited the Hunter Valley during 25th birthdays and the Barossa Valley to celebrate anniversaries and a colleague's 40th birthday. These tours made me appreciate the complexities of wine and the wine business, which operates at the intersection of art, agriculture/nature, science and business. The industry fascinates me and I hope to learn more about the global wine industry through this class, out of both interest and potential future investments in the sector.

Why this Class?

I first heard about this class from a friend who’s an MBA 2. I was finding the process of figuring out how to register for foundations classes and leave space for the “right” electives daunting, and welcomed any signals that could send me in a good direction when it came to planning.

I’ve been slow to learn more about wine in general, though I’ve been curious about it. For most wines, I’m at the point where I know I prefer drier wines, red ones over white ones, and that Malbec’s always a good bet. My one spot of deeper knowledge is in sparkling wines, which I love. This class felt like a good opportunity to learn more, and I like that its scope goes significantly beyond tasting different wines. I’m looking forward to understanding more about how the wine market operates and how the people in it think about how, when, and why to produce the drink.

Last summer, I had the opportunity to visit the Douro wine region in Portugal. With the backdrop of acres beautifully green vines, I learned a bit about port wine, and discovered either my palate had changed or that I’d previous tried bad port. It was a nice reminder to be more open about trying wine, something I’m looking forward to exercising this quarter. Once I know there’s a wine I like on a menu, I tend to go for that over exploring, something I’d like to change so I can learn more about what the wine world has to offer.

I’m not convinced that I’m ever going to work in the wine industry. But I’m hoping that the lessons it can teach me about how brands stand out in a crowded market can be carried over to whatever my future entails. I’m especially interested in how this is done in a market where there’s relatively low knowledge on the consumer side about what differentiates products within the same broad category.

Why wine? In search of truth

“In vino veritas” – roughly translates to “Truth in wine”. From its origins nearly ten thousand years ago, wine has had a consistent thread through the fabric of society. There is no drug more divisive, no libation more celebrated, and no indulgence more shared. How did we get here, and why are we still so fascinated with this beverage?

Hippocrates, the father of modern medicine, proclaimed two thousand years ago that wine was “a part of a healthy diet”. Our love affair with wine increased exponentially over the next thousand years, and at its peak large portions of the world turned to wine and beer as a safer form of hydration when water sources were widely contaminated. And yet as we rounded the corner into modernity a ‘temperance movement’ took hold, espousing the societal and physiological benefits of complete abstinence from drinking. This segued into prohibition, which was undoubtedly America’s worst hangover. As the dust has settled in the hundred years since, no substance has been more frequently studied by modern medicine, and yet we’re still no closer to the truth.

Looking back through the empty glass, wine was responsible for the invention of coca cola, pasteurization, and pretty much everything Hemingway penned. It led to the expansion of Rome via its legions, gave confidence to the crusaders, and even fueled the expansion of the American Revolution. While all of these may just seem like anachronistic tidbits of history, they’ve all contributed to the tight weave of wine in our societal fabric. Whether wine is good for us or not, it’s a part of our history and is here to stay. My hope is that over the quarter, understanding the current dynamics in the wine industry may get me a little closer to finding the truth.