Pink Challenge: French Rosé Winemakers Face Long Odds in 2020

Tariffs? Pandemic? After a decade of booming sales in the U.S., southern France winemakers confront daunting challenges

Pink Challenge: French Rosé Winemakers Face Long Odds in 2020
Gérard Bertrand, who makes several high-scoring rosés, believes this year will be a rough one for French rosé.
May 14, 2020

French rosé producers who had been riding high on the U.S. pink wine boom are suddenly grappling with three big challenges. Demand for grapes has pushed production costs higher at the same time that U.S. tariffs on French wine have created tremendous pricing pressure. And now the global COVID-19 pandemic has eliminated most restaurant sales in many American markets. And while the U.S. demand for rosé is still strong, consumers might find fewer options of these pink bottlings as the summer season approaches.

Quality-wise, the 2019 vintage from the South of France, the latest vintage to hit the market, is looking good. I recently tasted, non-blind, three well known and widely available 2019 French rosés, and the overall quality was very good.

But for rosé producers, especially smaller wineries in Provence, the first big challenge arrived before any winemaking took place.

Get Wine Spectator associate editor and lead taster for French rosés Gillian Sciaretta's notes on a recent non-blind tasting of the Whispering Angel, Hecht & Bannier and Hampton Water 2019 rosés.

"Pricing for the grapes was completely crazy last year," explained Gregory Hecht of Hecht & Bannier, a négociant that makes several cuvées from across the South of France. "The price of the grapes has doubled in five years … so our consumers will need to readjust to that because we worked hard with our importer to really shave the margins in order to stick to the $19.99 price. I think this is really the key price."

Signs of the grape-pricing struggle are already being noticed by U.S. retailers. Gary Fisch, president and CEO of the chain Gary's Wine & Marketplace in New Jersey, noticed changes on 2019 French rosé labels this past January, when he and his team did a rosé tasting with suppliers. "First, we had trouble getting samples, and then at the end of the tasting we noticed the wines, even though they had the same labels as last year, were different wines," said Fisch. "A lot of our great Provence wines came as IGP [not AOC appellation wines]. The quality was good, but it is not the same source of fruit. They went IGP because, I think, they can get the fruit cheaper. We saw this with the smaller producers that produce 5,000 to 20,000 cases."

The grape issue may be a sign of Provençal rosé's incredible success. Shipments of Provence rosé wine to the United States grew 14 percent in 2018, surpassing 2 million cases for the first time, according to BusinessFrance, a French government agency. At the beginning of this decade, Provence rosé amounted to just 123,000 cases in the U.S. market. Export value of Provence rosé to the U.S. also set a new all-time high last year, increasing 17 percent to $152 million.

Collateral damage

In October, as their 2019 wines were fermenting, Provence vintners received more bad news. The U.S. government announced a 25 percent tariff on most still wines from France, Spain, Germany and the U.K., part of a trade dispute with the European Union over subsidies to airplane manufacturer Airbus. In January, the government considered raising the tariffs to 100 percent, but later relented. Still, the 25 percent tariff remains in effect.

"I know that many of my colleagues in Provence with smaller importers, when they knew about the tariffs, they said, 'We cannot do it. We will not be able to do it,'" said Hecht. "And I know that already some small importers have laid off many people and are in a very difficult position."

After discussions with their importer, Hecht and his team decided to ship less wine to the U.S. compared to last year. Bigger wineries like Gérard Bertrand and Château d'Esclans, the winery behind Provence's Whispering Angel, decided to ship many months' allocations to the U.S. ahead of schedule in January to beat the proposed 100 percent tariff threat, just in case it passed. But their importers still had to pay the 25 percent duty.

Strike three

The third blow was the COVID-19 pandemic, which triggered lockdowns, first in China, and then Europe and the U.S., essentially halting all economies, especially restaurants and bars. Wine shipments to the U.S. slowed significantly.

"Normally we're at almost 90 percent capacity by Mother's Day, and we're not there yet," said Fisch. "Two of our best-selling rosés from last year have not arrived yet. I was worried about not having them, but now I am saying we may be OK because when we run out of some of the [rosé wine] that we have, the late arrivals will show up."

The temporary shutdown of restaurants, bars and hotels, which makes up a big chunk of the rosé business, has left many brands worried. "Our on-premise business is down 98 percent across the country," said Paul Chevalier, national fine wine director at Shaw-Ross Importers, which brings in Whispering Angel.

Jesse Bongiovi and Jon Bon Jovi
Jesse Bongiovi and Jon Bon Jovi are trying to keep prices under $20 for their French rosé Hampton Water. (Photo Courtesy Hampton Water)

Even as on-premise locations in some states slowly start to open up, rosé brands are specifically concerned about one key area: the Northeast. "If you were to draw a triangle between Nantucket swing through Cape Cod and Martha's Vineyard to Boston, come down through Connecticut and Rhode Island to D.C., 50 percent of the rosé consumption in America is within that triangle," explained Chevalier. "It's a very big, sophisticated rosé market that happens to be very affected by the coronavirus." According to Chevalier, on-premise sales in New York City alone are 25 percent of Whispering Angel's business.

For Chevalier, the big question is how people in the northeast this summer will consume rosé, a wine that fuels many social gatherings, especially if social distancing restrictions continue. The answer might be simple: at home.

On the plus side, retailers have seen wine sales rise dramatically. According to Fisch, rosé sales are through the roof. "We are up year-to-date 61.2 percent for selling rosé." He attributes this increase to a couple of things. The first being that some big rosé brands had leftover inventory of the 2018s that Fisch was able to sell through January, a month he usually has no rosé to sell. Second, with on-premise locations closed, retail is getting bigger allotments of rosé, which Fisch is able to sell at more lucrative price points.

Chevalier also notes the strong retail swing. "I can't complain because Whispering Angel, being such a strong brand, we've seen a lot of pull through the retail channel. Online delivery has boomed. So far if you look at the big picture for us, what we lost with on-premise and restaurants and hotels, we kind of made it up a little bit with people drinking at home."

To cater to their at-home consumers, rosé brands are taking a virtual approach to maintain and create connections. For example, Hampton Water, the Languedoc rosé collaboration between rock icon Jon Bon Jovi, his 25-year-old son, Jesse Bongiovi, and winemaker Gérard Bertrand, launched a "Virtual Happy Half Hour" series on Instagram in April.

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According to Bongiovi, they have made sacrifices this year to keep their brand affordable to their young target audience. "We've taken kind of a personal hit so that we can make our wine more approachable to the everyday drinker. Our intention for this year was to come in closer to that $19.99 price point, to continue to remain accessible."

There is universal agreement that 2020 is already a very tricky year for French rosé producers. "With the tariffs and the coronavirus, some [rosé producers] will lose market share," said Bertrand.

Others, however, are choosing to look beyond 2020 through rosé-colored glasses. "We still will put [our rosé] on the market because there's plenty to grow," said Hecht. "This is just the beginning of the conception of rosé in the United States. In France and some other European countries, we've been drinking rosé way more than whites for a while. We're not yet there in the United States. I think it's still growing."

News COVID-19 Trade War Tariffs Rosé France United States 2019

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