Opening remarks by Steve Miller

On the occasion of the VDP-Frühjahrs-Weinbörse 2002 in Mainz

Steve Miller, Lauber Imports, a Division of Southern Wines and Spirits, is a fine wine wholesaler that distributes and promotes wines from the United States and from throughout the world in the New York, New Jersey and Pennsylvania markets.

"Esteemed Ladies and Gentlemen of the VDP, it is a great privilege to be here to address you today. I am humbled by the honor you have accorded me in inviting me to do so.

As I look around the room I see many familiar faces. Although I’ve known many of you for years, there are also many here whom I have not yet had the pleasure of meeting. So I’d like to take a few minutes to tell everyone a little about myself.

I have not been in the wine business that long, but I have loved wine ever since the first time I wandered into my local wine shop shortly after arriving in New York after college. There I discovered that all wine was not pink, sweet and something simply to get drunk on at all night parties. I remember it was a little Portuguese wine that got me started, but soon I was learning about wines from all over the world. Inevitably I stumbled over a good German Riesling. And when I did, it was like a ray of sunlight bursting through a cloudy sky. From that point on I was hooked.

Throughout the seventies, eighties and nineties I studied and learned all I could about wine, and in particular, German wine. I apprenticed with Mary Ewing Mulligan, America’s first and still only female Master of Wine, at New York’s International Wine Center. I attended every German Wine Information Bureau vintage tasting, meeting in the process, Carol Sullivan, who provided me with statistics, information, access to winemakers and wines and along the way her friendship. I want to take this moment to thank her for the instrumental role she has played in furthering my career. I developed relationships with every important German wine importer and attended every tasting they put on as well. I read everything I could find on the subject and traveled to Germany as often as I could. It was on some of these trips that I met many of you.

Eventually I began writing and teaching about wine. I have now taught at the International Wine Center for over ten years, becoming their German wine specialist, and over that time have contributed many articles to the Wine Enthusiast and other magazines. In 1999 I wrote Food and Wine Magazine’s Official Wine Guide 2000, greatly expanding the woefully inadequate coverage of German wines that previous versions had contained.

In the early nineties, I spent five years consulting for restaurants and hotels, designing wine lists and programs. Of course I dealt with wines from all over the world, but I never missed an opportunity to place good quality German wines on lists or even better, offer them by the glass. I always delighted in educating the staff about them.

1998 was a watershed year for me. I began working as Director of Marketing and Education for Lauber Imports, a fine wine importing and distributing company operating in the states of New York, New Jersey and Pennsylvania. At that time we represented the portfolios of not just one, but two major U. S. German wine importers. I was like the proverbial kid in a candy store and I immediately volunteered to manage our German wine programs. I have now spent four years working directly with German wines from within this critical point in the supply chain. It is from this hands-on, front-line wholesaler and importer experience, along with my years as a writer, consultant, trainer and teacher, that I have developed the insights I want to share with you today.

I don’t have to tell you that in recent decades, the U. S. market for German wines has been difficult and frustrating. Throughout the 60s, 70s and 80s the marketing of German wines in the U. S was spearheaded by Liebfraumilch, regional blends, cheap Grosslagen wines and worse: inexpensive, low quality wines that taught the consumer that all German wines were soft, sugary and absolutely unworthy of a serious wine lover’s attention. The previously solid reputations of great winemaking villages such as Nierstein and vineyards such as Goldtröpfchen were swept away in a flood of Gutes Domtal and Michelsberg. When the bottom fell out of the low-end market, there was virtually nothing left.

But since then, slowly, things have been improving. The consumer in the U. S. has developed a new curiosity and desire for sophistication in food and wine. Enrollment in culinary and wine classes is at an all-time high. Dining out has become a national pastime, a form of entertainment in its own right. Wine lovers are broadening their interests and a whole new generation, unshackled from prejudices of their parents, is much more willing to experiment and accept new and different styles.

In Germany, changes have been afoot, as well. While many of you maintained your exacting standards and continued to produce the great wines you always had, others responded to the challenge of the 80s by reducing yields, increasing investment and improving quality. Many of you traveled more and learned more about other wines and other markets than you previously had, and benefited enormously from the vital cross-pollination of ideas and knowledge that resulted. Vineyards that underwent Fleurbereinigung came back into production and started to reach maturity. Fortune blessed you with an unprecedented string of excellent vintages.  Coverage of all wines, including German wines, burgeoned in an increasingly influential winepress.

All of this has resulted in a steady rebuilding of the market for high-quality, estate produced German wines. Although the growth was nonexistent at first, and still almost imperceptible in the first half of the 90s, in the second half of the decade, it accelerated rapidly. Additionally, during this period, sales in dollars grew much faster than unit sales, indicating that the mix was trending more towards higher priced estate wines. Your wines. In the New York, New Jersey and Pennsylvania markets, we saw double-digit growth in every year from 1995-2001. For me, after feeling for many years like the mythological Sisyphus, doomed forever to push an enormous rock uphill, this was a most gratifying development.

Nationally, 2001 painted a different picture. According to the NAABI’s (National Association of Alcohol Beverage Importers) year end 2001 statistics, German wine imports to the United States totaled just over 12.6M liters or 1.4M cases. This compares with 12.8M liters for the year 2000, for a decrease of approximately 1.5%. Sales in dollars showed a tiny increase, but were essentially flat. And, for the first year in some time, higher end German wine did not increase its share of the mix.

Together, we have been successful selling German wines in the United States over these last five years, but the future presents some significant challenges. In the short term, my gut feeling is that 2002 will turn out much the same as 2001, another year of little or no growth. The aftermath of 9/11, a sluggish economy, the need to consolidate five years of growth and a poorly received 2000 vintage will all conspire to make this a difficult year. If we see any growth at all, my guess is that it won’t come until the fourth quarter. In the long term, we still have to overcome much consumer ignorance, resistance to the category at the wholesale and retail levels, label comprehension problems and other image problems. If these challenges are overcome, the future for German wines in the United States market is bright.

I want to make a few points about the nature of the market itself. You must realize that to speak of the “U. S. market” as if it were one homogeneous entity is to make a critical mistake. The United States is made up of dozens, if not hundreds of separate markets and every one is different. Those of you with national distribution in the U. S. know this and recognize the necessity of treating each market individually. My experience stems mostly from the  New York, New Jersey and Pennsylvania markets, since those are the ones in which I do business. For most of you, these are also your most important U. S. markets.

Secondly, don’t make the mistake of seeing the U. S. market as a clone of England’s. We are very different.  Our markets are much more open and dynamic that those in England. They are certainly more affluent and the average customer spends more for a bottle of wine on average. Ours are also more educated markets, much more receptive to new ideas and less inhibited by old ones. As I said before, there is a willingness to experiment and a real thirst for knowledge. The recent Deutscher Weinfonds (Onivins) survey shows that our biggest wine consumers drink wines from all categories and that they are as open to German wines as any others. People, especially younger drinkers, are discovering Riesling and German wines in greater numbers than ever before. Nevertheless, German wines still represent but a small proportion of all the wine sold in the U. S.

These things being said, our markets are brutally competitive, in both price and quality. At the lower end, our markets are extremely sensitive to pricing and those who would be successful in the United States must be attentive to the critical price-points our retailers live and die by. At higher price and quality levels, the market accepts price increases with somewhat less resistance. You should be aware that when respondents in the recent study were asked how much they spent on their last bottle of wine, 75% said $13.99 or less. Encouragingly the largest segment, at 28% was from $10.00 - $13.00. But life gets a lot tougher when your wine sells for more than $13.99.

At every price level, however, quality is essential. The United States, because of its affluence, geographic position, relatively free trade and vigorous home wine industry, has the most crowded wine marketplace in the world. Our retailers, restaurateurs and consumers have an enormous selection of wines from which to choose and educated buyers can demand top quality at any price point and get it. You must be prepared to give it to them. Especially now, when buyers are being offered deals and discounts every day.

To cut through all this clutter of product, is essential that you look carefully at your offerings, and their presentation, and streamline them wherever possible. I say this with some sense of discomfort, since, for me, it is the very diversity of German wines that is your greatest asset, offering the wine lover a smorgasbord of sensory delights and endless intellectual challenge. But for the average drinker this diversity is also your greatest liability, confusing and intimidating most people into avoiding the category altogether. Think twice, and then think again before offering a U. S. market the same wine in trocken, halbtrocken and lieblich styles, in both Erstes Gewächs and non- Erstes Gewächs versions, or too great an assortment of vineyards in a single prädikat level. Our markets are not yet sophisticated enough for this. Consider regionalizing your sales, offering only a few of your products exclusively in each market, rather than overwhelming each market with a baffling multitude of wines.

Another thing, please do not think that “dry” is the magic bullet. In all my experience in promoting and selling German wine, I have yet to see the evidence that American consumers are clamoring for dry German wine. In fact, sales in my markets are overwhelmingly in favor of the lieblich style and German Wine Information Bureau statistics support this, showing that only 7.3% of total German wine imports in 2000 were Trocken or Halbtrocken. My guess is that this did not increase in 2002. Despite the well-known negative connotations of “sweet,” I have rarely run across anyone who, when offered a “blind” taste of a Lieblich style wine, did not immediately like it. The problem is not that people don’t like these wines, because they do. But they have been taught that they are not supposed to like sweet wines are that they are not “hip.” Rather than try to change the customer to dry, we should address the perception problem and fix it.

The Lieblich style Riesling is a treasure that is totally unique to Germany. It has never been produced successfully anywhere else in the world and I doubt it ever will be. To abandon the Lieblich style in favor of dry wines would be to give up your birthright and is, in my opinion, suicidal. Take a look at the dry Rieslings that are on the market now. If you are under the delusion that dry Rieslings from Alsace, Austria, Australia, Italy or anywhere else are flying off the shelves, I will gladly show you sales figures that prove otherwise. And remember, if you elect to “go dry,” you will be competing not just against these other dry Rieslings, but against every other dry wine in the world. Wouldn’t you rather be producing and selling in a category in which you have no competition at all?

You must continue to simplify labels. I advocate the removal of vineyard names from any wine below Kabinett level, as well as also eliminating everything not legally required from the front label. My predecessor at this lectern last year jokingly suggested making the front label the back label, and this should not be taken in jest. I also agree with his idea to use English language terms in place of the negatively perceived, if understood at all, Trocken and Halbtrocken. Dry and Off-Dry would do well. And without delay, I implore your to get rid of the Gothic script. It may be easy, historic, fun and familiar for you, but it is indecipherable and off-putting to most U. S. consumers. Even I can’t read some of it. Remember, if they can’t read the label, they will not buy the wine.

To understand a market, you must spend time in it. Even if you do everything I have mentioned, you must, in addition, come to the United States more often. You need to see first hand the things I am talking about. You have to spend time with a salesman and see what he is faced with in selling your products day to day. You need to talk with restaurateurs and retailers to learn about their issues and concerns first hand. You need to be here to meet your customers and build long lasting relationships. You need to be present at trade and consumer tastings to put a human face on your wine. Those of you who have put in the time and worked hard in the United States have much success to show for it.

As the organization that represents the greatest number of Germany’s finest producers, the VDP can and should take a leadership role in building the U. S. market for fine German wine. You can facilitate all of the things about which I have been speaking. But, unfortunately, you have a bit of work to do first. I am sorry to say this, but with rare exception, no one in the United States knows who or what the VDP is. Ask the average connoisseur to explain the Bordeaux Classification of 1855 and he will surely be able to name the First Growths and probably most of the Seconds. Mention the VDP and he will give you a blank stare. I doubt one in a hundred will even associate the term with Germany.

So, to begin with, you must establish the identity of the VDP in the United States. To do so, I urge you to establish a marketing budget to maintain a marketing and trade office in the United States. From this office and with this budget you should conduct events and advertising campaigns geared toward making the VDP name as familiar to American wine drinkers as Bordeaux or Burgundy. If the VDP is going to play a significant role in the future growth of German wine in the United States, then the VDP must become in essence a brand whose symbol on a bottle is immediately recognized by the consumer, and instantly conveys a guarantee of quality and reliability.

Among other things, this office would conduct advertising campaigns aimed at building even greater awareness of German Riesling. The Deutscher Weinfonds (Onivins) survey showed that already Riesling is the second most consumed white wine in the United States after Chardonnay. This is a foundation that can be built upon. The VDP should conduct regular food and wine events to show the compatibility of great German Riesling and food. The finest chefs of America are virtually unanimous in their love for German Rieslings, but the Deutscher Weinfonds (Onivins) survey showed that even the most frequent wine drinkers see German wines as less versatile with food than those of the United States, France and Italy. You can be instrumental in changing those perceptions.

Another ad campaign should be aimed at educating consumers about the all-important Prädikat terms: Qba, Kabinett and Spätlese. To quote the Deutscher Weinfonds (Onivins) survey again, recognition and understanding of these terms is still extremely low. A series of well-conceived full-page ads in the popular winepress would work wonders in this area. And while you’re at it, develop a set of standard back labels explaining the meaning and taste of Qba, Kabinett and Spätlese. To be effective, these must be brief, clear and on every bottle of VDP wine. Done correctly, I believe this would result in a big increase in sales. These are just some of the things you can accomplish if you commit to a regular presence in the United States.

I know that when I speak of some of these things, they sound expensive. Some are. But I have never forgotten the words my father spoke to me often in my youth. “You have to spend money to make money,” he said. Those who do and have done so wisely in the wine business have seen a good return on their investments. The advertising and branding campaigns of Chianti’s Gallo Nero Consorzio immediately come to mind. So do the efforts of the Napa Valley Vintners Association and the extensive advertising and other marketing support on behalf of French wines by Sopexa. You can’t open the Wine Spectator or Wine Enthusiast without seeing advertising for Australian Wines and lifestyles. German wine advertising and marketing is, by comparison, non-existent.

Members of the VDP, think about who you are. You are owners and caretakers of some of the most cherished grape growing land in the world and you are creators and possessors of a unique and inimitable style of wine. You are to German wine what the classified growths are to Bordeaux. You have centuries of history and the power of a strong organization behind you. You make the greatest Rieslings in the world. But you must do more. You have to broadcast the message of the greatness of German wine to the United States loudly, clearly and persistently. You have to educate the consumer, building on the positives and slowly transforming the negatives. You have to lead the charge. If you are willing to do so, I feel confident that working together we can grow the United States markets for fine German wine far into the future.

Thank you."

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