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Off the Vine

Red wine lovers chug their choice into No. 1 spot
Domestic vinters planting more vines to cash in on trend toward premium reds

Monday, July 2, 2001

Canadians are drinking more red wine than all other kinds put together and that is one trend that domestic vintners are keen to toast.

They are building dozens of new wineries across the country, planting new vineyards and converting production to fill the demand for the more sophisticated -- and more profitable -- red wines.

The numbers tell the story. Sales of reds passed whites for the first time in fiscal 2000, which ended March 31 that year. They passed all other wines in the next 12 months, accounting for 53 per cent of all wine sales in Canada. They are still growing by 13 per cent a year, far outpacing the growth of whites and rosés, or beer for that matter, at about 1 per cent each.

Donald Triggs, president and chief executive officer of Vincor International Inc., is pleased with a related trend. Sales of premium wines have been creeping up steadily for years, reaching 51 per cent of Vincor's total volume and 62 per cent of revenue in fiscal 2001.

That is a far cry from 1996 when only 17 per cent of Vincor's wine was rated premium or better.

Canadians are drinking considerable quantities of red wine from the traditional wine-growing countries of Europe as well as the new-world vineyards of California, Australia, Chile and Argentina.

But in a trend that may surprise those who remember Canada's former reputation for sweet and fizzy white wines, locally grown wines are steadily gaining on the imports.

"Canadian wineries are definitely holding their own," said Chris Layton, spokesman for the Liquor Control Board of Ontario. "Sales of Canadian wines are rising by 12 per cent a year even though the market is much more competitive than it was a few years ago."

"We have a wine that is as good as the best in the world," said John Peller, president and CEO of Andrés Wines Ltd. in Winona, Ont. "There's no doubt that the ultra-premium wines will do well in Ontario."

The wineries offer a host of reasons for the change in wine drinkers' tastes, and most have to do with the aging population of baby boomers. Those baby boomers are now in their 40s and 50s, an age when he said people start looking for stronger tastes.

"The eyes and ears fade with age, and the palate does, too," Mr. Triggs joked.

He is convinced the trend is here to stay, given the aging population. In the eighties, he said, "everything was related to white and light -- white wine, vodka, light beer." But as the eighties' yuppies age, "they are moving to stronger, richer, mature tastes."

Like many other wine experts, Mr. Peller gives credit for the growth of red wine to French health studies that claimed that wine cuts the risk of heart attack.

"It's the French paradox," Mr. Layton said, adding that sales of red wine started to climb soon after the health studies were publicized.

Mr. Peller also believes that consumers follow a well-trodden path as they grow older, more mature and more sophisticated. They start with cold, refreshing, sparkling wines when they are teenagers. They graduate to cold, refreshing white wine; and then to red wines with their complex, richer tastes at the age of 40.

Whatever the reason, the wineries are running with it. The boom in red wine has spawned a host of new wineries across the country. There are now 80 wineries in Ontario alone, Mr. Layton said, a far cry from 25 in 1991 and the small handful in the eighties when Canadian wine was known for its sweet and foxy taste.

Canada's wineries are expanding as fast as they can to meet the demand. They are adding capacity, building new plants and planting hundreds of acres of sophisticated French grapes. Andrés has planted about 140 hectares of Cabernet Franc, Cabernet Sauvignon, Merlot and Pinot Noir.

"The myth that we can't grow premium reds [in Canada] has been dispelled," he said.

To handle the new crop, Andrés is opening a new Peller Estates winery in a prime location in Ontario's Niagara Peninsula, and it is coming out with a range of upscale wines under the Peller Estates, Hillebrand Estates, Signature and Private Reserve labels.

Vincor, based in Mississauga, is also expanding rapidly. Already rated among the 15 largest wineries in the world, Vincor has staked its future on premium wines.

It has added numerous premium wineries to its stable in recent years, including California's R.H. Phillips and Canada's Inniskillin, Sumac Ridge and Hawthorne Mountain.

It is looking for a new winery in California or Australia and it is planting premium grapes in Ontario's Niagara Peninsula, B.C.'s Okanagan Valley and California.

The red wines are "a challenge," Mr. Triggs said, but they are worth it. "Higher margin wines are better for profitability and growth," he said.

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