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July 2012, Volume 18, Number 3

Wine, Food

Americans bought 347 million cases of wine worth $32.5 billion in 2011, paying an average $94 a case or $7.80 a bottle. California wineries accounted for 212 million cases of the wine sold in the US, 60 percent, imports supplied 30 percent, and other states 10 percent. The leading sources of wine imports are Italy and Australia.

Chardonnay accounted for 21 percent of all wine sold in the US, followed by cabernet sauvignon, 12 percent; merlot, 10 percent; pinot grigio/gris, eight percent; and white zinfandel, seven percent.

California produces about 10 percent of the world's wine from 550,000 acres of wine grapes, down from a peak 570,000 acres in 2000. Low prices encouraged some San Joaquin Valley farmers to replace wine grapes with almonds, whose acreage expanded from 600,000 to almost 840,000 over the past decade.

Napa county produces about four percent of California's wine. Under a 1990 county ordinance, wine that is labeled "produced in Napa county" must include at least 75 percent Napa-grown grapes. With about 40,000 acres of vineyards, maximum wine production is about 26 million gallons of wine (each gallon includes five standard bottles).

There were over 7,100 US wineries at the beginning of 2012, and many introduced new labels and tried to ship more wine directly to consumers (over half of US wineries are in California). Most US wineries are small, and most lose money producing wine (over 1,000 are virtual vineyards, meaning that they rely on a bonded winery to produce their wine). Some 120,000 new wine labels were introduced in 2011, and 39 states allowed direct-to-consumer shipments.

The top three US wineries, E&J Gallo (75 million US cases sold in 2011), the Wine Group (62 million cases), and Constellation (47 million), accounted for half of US wine sold. The fourth largest US winery, Treasury Wine Estates (18 million cases), sold about a fourth as much wine as Gallo. Bronco with 12 million cases was the fifth largest US winery.

Most wineries have a portfolio of labels. Gallo's include Martini, Turning Leaf and Barefoot; the Wine Group's include Concannon, Franzia and Glen Ellen; and Constellation's labels include Robert Mondavi, Toasted Head, and Rex Golliath. Major wineries have been adding sweet red wines that appeal to young people and unoaked wines.

There are more wine negociants or merchants buying wine in bulk and selling it under their own label. Cameron Hughes Wine aims to sell 300,000 cases of wine under various labels in 2012, buying bulk wine and having wine made to specification. Most of the 80 "Lot" labels sold by Cameron Hughes Wine are in Costco.

Supermarkets, which sell most US wine, are aiming for fewer suppliers to provide them with a variety of labels. Many supermarket chains get over 80 percent of their wine from fewer than eight wineries.

The prices of Bordeaux wines jumped in 2009 and 2010, but have not risen since. The 2011 vintage, to be priced in spring 2012, is considered inferior, leading to predictions of a price drop. The most profitable vintage for investors was 2000, when a case of 2000 Chƒteau Lafite that sold for œ2,000 was worth œ16,000 in 2012.

Food. Between 1975 and 2005, the average weight of Americans increased by about 20 pounds, so that today a third of American adults and a third of children are overweight. Some analysts attribute rising obesity to increased US food production in the 1970s that lowered food costs; other policies and attitudes also encouraged today's "obesogenic society."

Most doctors say that, to lose a pound of weight, a person must eat 3,500 fewer calories. However, the body changes as it gains and loses weight, so that fatter people gain weight more easily than thin people. Losing weight in a food-abundant society requires disciplined eating over time.

The Society of Actuaries estimated that the cost of overweight and obese Americans was $270 billion in 2011 in additional health and related costs. Recommendations to curb obesity include reducing or eliminating marketing processed food to children, imposing taxes on foods with high levels of sugar and fat, and raising insurance rates for overweight people.

Whole Foods in April 2012 announced that it would stop selling seafood whose catch it does not consider sustainable, with sustainability defined by factors that include how abundant a species is, how quickly it reproduces and whether the catch method damages seafood habitat. Whole Foods stopped selling orange roughy, shark, bluefin tuna and most marlin, and added to its no-sale list Atlantic halibut, octopus, sturgeon, tautog, turbot, imported wild shrimp, some species of rockfish, and tuna and swordfish caught in certain areas or by certain methods.

AquaBounty Technologies is seeking federal approval of the first genetically engineered animal in the human food supply, an Atlantic salmon with a growth hormone gene from the Chinook salmon. With the growth hormone, the AquaBounty salmon grows to market size in 16 to 18 months instead of 30 months. In 2010, the Food and Drug Administration tentatively concluded that the fish would be safe to eat and safe for the environment, but has not yet given final approval, in part because of opposition from Alaska politicians.

The best caviar is considered that from the beluga sturgeon in the Caspian Sea. However, overfishing and pollution have depleted sturgeon populations in the Caspian Sea, prompting efforts to ban trade in caviar from beluga sturgeon. One result is an effort to sell roe or fish eggs from a number of other fishes, including white sturgeon, shovelnose sturgeon (also called hackleback) and paddlefish. The Food and Drug Administration allows the roe from fish other than the sturgeon to be called caviar if it is qualified by the fish's name, as in "bowfin caviar."

An administrative law judge in May 2012 ruled that Pom Wonderful's pomegranate juice cannot claim to reduce the risks of heart disease, prostate cancer and impotence. The Federal Trade Commission in 2010 complained that Pom Wonderful engaged in false and misleading advertising.

Food. The New Alliance for Food Security and Nutrition, a consortium of 45 firms including Monsanto, Diageo and Swiss Re, pledged in May 2012 to invest $3 billion in projects aimed at helping the world's poorest farmers grow enough food to feed themselves and their families. The alliance aims to implement the 2009 L'Aquila Food Security Initiative, an effort to combat hunger by investing in the fundamentals of agriculture, including seeds, fertilizer, grain storage, roads and infrastructure.

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