Direct Shipping, Grocery Sales and Health Issues Hit the Floor at the CVA Annual Meeting
by David Lawrason
Winds of change and currents of conflict were swirling at the recent annual general meeting of the Canadian Vintners Association in Kelowna. I will get right to the details, but first I want to share the most exciting news for Canadian wine consumers.
On July 26, WineAlign will announce the results of the National Wine Awards of Canada, and on July 28th the winner of the coveted Winery of the Year and Small Winery of the Year Awards. I joined 21 other judges in Penticton in June to taste over 1500 wines over five days, and I can tell you there was a great deal of excitement in the judges’ room – I believe there were some leaping out of seats. Canadian wine quality has never been better, nor evolution so rapid. This is reflected by increases in the medal counts, and the emergence of new stars.
Days after the judging I was invited to attend the annual general meeting of the Canadian Vintners Association (CVA) in Kelowna, and sat transfixed as experts stood up to address the issues facing Canadian wine across the country. Direct inter-provincial shipping, selling wine in grocery stores and educating Canadians about alcohol-related health issues and safe drinking guidelines were all discussed in detail.
Some will not be aware of the Canadian Vintners Association, even though it is celebrating its 49th year of existence. With a 3.5 person office in Ottawa, but a membership of about 60 mostly large and mid-size wineries representing 90% of the wine produced in Canada, it is the industry’s mechanism for dealing with national regulatory issues, standards and policies. It is also involved in market study and analysis, developing wine exports, and most recently establishing marketing materials through a database at wine411.ca that includes info on all 675 wineries in Canada.
The CVA’s political connectedness was on display at the Kelowna AGM. No fewer than five federal MPs from BC and Ontario were in attendance with a sixth sending his regrets. Through lobbying efforts by the CVA these MPs have formed an all-party parliamentary Canadian wine caucus, giving Canadian wine the loudest voice in the House that it has ever had. That voice is exactly what is needed for Canadian wine to move ahead.
Direct to Consumer Interprovincial Shipping
The politicians and CVA members were most vocal about getting Canadian wine moving freely and directly across all provincial boundaries in Canada. Alas, there was no breakthrough to announce in terms of more provinces dropping their opposition, but I was surprised by how loud, frequent and public the CVA and its members, as well as the politicians, have become – insisting that action be taken sooner rather than later. There was a mood in the room.
By way of background, two of the MPs – Dan Albas, Central Okanagan-Similkameen-Nicola, and Ron Canaan, Kelowna Lake Country, were instrumental back in 2012 in creating a private members bill to overturn Bill C311 that made it illegal to carry or ship wine for personal use across provincial borders. Their bill received an historic, unanimous vote in the House of Commons, but it was left to individual provinces to agree, or not. To date only Manitoba, British Columbia and Nova Scotia have allowed their citizens to freely import Canadian wine from other provinces.
Newly elected Liberal MP Vance Badaway of Niagara Centre gently approved of the movement when he addressed the CVA membership. “I am committed to supporting the wine industry and helping with efficiencies and market development. And we are going to park party politics and work to get things done,” he said. Whether rhetoric or not, it demonstrates sympathy. And wine is now firmly entwined in broader discussions about eradicating interprovincial trade irritants. This is all a step forward.
Loblaws Outlines Plans for Selling Wine in Grocery Stores
With grocery store wine sales rolling out this year in B.C. and Ontario, the most highly anticipated presenter was Greg Raimer, Senior Vice-President of Wholesale, Gas, Liquor and Tobacco for the Loblaws group of companies. The retailing of wine by Loblaws is underway in Alberta, and in a pilot project in New Brunswick. So Mr. Raimer has their corporate strategy well thought out, and he opened his presentation with a bold prediction:
“Within 20 years wine will be sold in grocery stores right across Canada” he said. Amen, I said under my breath, but can we make that sooner?
Most of his presentation outlined how wine will fit at Loblaws stores, differentiating the grocery shopping environment from state and privately run stores where food is not involved. And for those who think that supermarkets will become a trash heap for cheap, giant brands, you may want to think again.
“Our strategy is to elevate the shopping experience” Mt. Raimer explained, “by offering, diversity, uniqueness and education.” He went on to say they are looking to provide occasion-based in-store retailing, solution-based retailing, as well local, organic and healthy products, all of which dovetail with modern trends in grocery retailing.
Then came his second telling comment. “The average grocery store bill is about $40. We have found that when there is a bottle of wine in the cart, the average bill is closer to $80. Shoppers who buy wine for dinner almost always spend more on food”.
He said that Loblaws was not looking to make wine a huge profit centre in itself, but it was an up-selling tool. “We want to offer wine from $10 to $100 per bottle” he said. It’s worth noting that the Ontario government has currently set $10.95 as a floor price in supermarkets.
It is a good thing that Loblaws is not looking to make bushels of money selling wine in Ontario, because government regulations will be capping grocery store wine margins at 4%.
At the moment we don’t know how many of the first 70 licenses awarded in 2016 in Ontario will go to Loblaws, or whether other grocers will have the same perspective on wine sales. But Raimer did say he thought we would see wine in grocery store starting to roll out at the end of October, to catch the holiday spending season. So we will know before long.
After the meeting I asked him how Loblaws will be purchasing wine, given that the LCBO is the wholesaler. He said that grocery stores that sell imports (about half of the initial 70 licences) must buy wines pre-selected by the LCBO that are stocked in the LCBO warehouse. This does not include stocks from the Consignment Warehouse, from which agents sell direct to licensees.
Grocery stores selling Ontario wine (all of them) will be able to buy from the LCBO or directly from the wineries, at LCBO dictated prices that ensures government gets its cut. This will at least give many Ontario wines a much needed boost in their retail distribution.
Health & Social Responsibility
As impressed as I was with all the speakers, it was Rita Notarandrea, CEO of the Canadian Centre of Substance Abuse, who made perhaps the most thought-provoking presentation, which in the end urged Canadian vintners to take a leading role in educating the public about the harms of alcohol over-use and abuse.
They ignore her at their peril.
The Canadian Centre for Substance Abuse is an organization mandated by an Act of Parliament in 1988. Its role is to track alcohol and drug usage, abuse and addiction, and to find ways to educate the public on the harms of unsafe usage.
“We are not out to promote abstinence or abolition of alcohol” she assured the winemakers, several times. Although she did say there are those in the health field who would like to do that, and that there is “a groundswell among health professionals who want more regulation”.
She also said that much of her current work surrounds the impending legalization of marijuana in Canada, but she focused on alcohol this day.
“Canada has a deep seated drinking culture” she said. She reported that 76.5% over the age of 25 consumed alcohol in last year, 82% aged 19 to 24, and 60% under age. She said that 36% of Canadians qualify as “risky drinkers”, consuming more than the recommended amounts of “ two drinks a day, 10 per week for women, and three drinks a day, 15 per week for men, with an extra drink allowed on special occasions”.
She said “alcohol abuse costs Canada $14.6 billion dollar per year”, and estimates that alcohol-related deaths would be reduced by approximately 4,600 per year if the guidelines were followed.
So she asked the Canadian wine industry for help in educating the public – in two specific ways.
Most controversially she asked them to help come up with a way to include more detailed safe drinking guidelines and social responsibility messaging on wine labels. There was opposition by some vintners to the idea of giving up more “label real estate”, but some thought there might be “an elegant way” to do it.
I was most impressed by her “elegant” idea of developing labels specific to the size of the bottle and the type of alcohol (by volume) therein. My head spins trying to figure out labels that try to do this universally, as on Australian wines, that utilize one label for all types of alcohol in all sizes of packaging.
Ms. Notarandrea’s second request was to enlist winery help in disseminating The Centre’s “Low Risk Drinking Guidelines” now available in printed format and online.
And I don’t see any reason why wineries and wine writers shouldn’t be directing readers to these guidelines too. Somehow the “please drink responsibly message” seems just a bit shallow in the face of the magnitude of this issue.
Wine Drinkers Are More Moderate Consumers of Alcohol
There were two other presentations but I am going to end of with partial results of an alcohol consumption survey conducted by John Mohler, Vice President of Ipsos Canada, a national polling firm.
It is the result of a project now in its second year that has 1,000 Canadians from coast to coast keeping a daily diary of their alcohol consumption – how much, what kinds of alcohol, how often they mix, where, when and with whom they drink.
In a typical day the respondents drank two glasses of wine, or 2.3 glasses of beer, or 2.1 glasses of spirits, comfortably within the “Low Risk Drinking Guidelines”.
Among those who drink wine 84% stop after two glasses. For those who drink more than that 63% stay with wine. Among beer and spirit drinkers 75% stop after two drinks, not a wide margin of difference.
Among wine drinkers, 61% drink wine with dinner and another 18% while grazing (the latter percentage higher among millennials). It is a stat that leapt off the screen, a much larger percentage than beer and spirits.
Where, dear reader and imbiber, do you fit in?
See you next month, with analysis and recommendations from the National Wine Awards. Meanwhile here are links to ten Canadian wines I poured at the Fine Vintage Canadian Wine Scholar course in Kelowna on the heels of the CVA meeting. More courses are coming up across Canada coming up this fall: Toronto Sept 10/11 , Edmonton Oct 15/16, Calgary Oct 22/23, Kelowna Oct 29/30 and Vancouver Nov 5/6. More details are available here.
Whites and Sparkling
Cave Spring Blanc de Blancs Brut, Niagara Escarpment, Ontario
Thirty Bench Small Lot Riesling Steel Post Vineyard 2014, Beamsville Bench, Ontario
Rosehall Run Chardonnay JCR Rosehall Vineyard 2014, Prince Edward County, Ontario
Meyer Family Mclean Creek Vineyard Chardonnay 2014, Okanagan Valley, B.C.
Le Vieux Pin Ava 2014, Okanagan Valley, B.C.
Norman Hardie County Unfiltered Pinot Noir 2014, Prince Edward County, Ontario
Rosewood Origin Merlot 2012, Beamsville Bench, Ontario
Orofino Wild Ferment Syrah 2015, Similkameen Valley, B.C.
Osoyoos Larose Le Grand Vin 2012, Okanagan Valley, B.C.