Jon Bonné, Antonio Galloni and I will be guests tomorrow morning (11am Eastern time) on the popular WBUR National Public Radio show “On Point.” Our topic is “The State of American Wine.” Click here to visit the WBUR website for the broadcast.
The Wine Economist’s chief Hanoi correspondent Ali Hoover recently visited Bali, Indonesia and volunteered to investigate the local wine sector, focusing on Sababay wine. Here is her report.
A decade ago, one of my personal favorite wine celebrities, Jancis Robinson, wrote about a new breed of wine emerging on the market – New Latitude Wines. Joining existing wine region categories of Old World and New World, New Latitude’s name suggests it all: these alternate regions seek to break out from the +/- 30 to 50 degree latitude belt considered the bookends of quality viticulture, due in part to climate change, but also enabled through increasing human understanding of how and when vines grow and advancements in refrigeration and irrigation techniques. Jancis ended her article with hesitation, though, admitting “I still find it hard to believe that New Latitude Wines will ever be seriously good, but then that’s what was said about New World Wines not that long ago.”
Since then, wine has begun to pour into the international market from a myriad of unexpected places. I certainly didn’t think Kenya, Azerbaijan, or Thailand were producing wine, and apparently I’m not alone; the Wine Explorers estimates 80% of wine producing countries are poorly known to the general public.
Among the surprisingly extensive list of non-traditional wine producing countries is equatorial Indonesia, and Bali in particular. After my visit to Bali last month, I’m happy to report it deserves the overuse of the word “paradise” in reference. Despite a confluence of tourists and a disproportionate amount of surfer types, Bali has preserved much of its cultural essence. The crowd favorite ‘homestay’ accommodation looks more like a new-purposed temple, replete with impressive stonework, koi ponds covered in lotus flowers, and breakfast served on sunny patios in the morning. Crystal blue water, lush green vegetation, infamous coffee shops, yoga retreats, and small boutiques have created a getaway nothing short of idyllic. The abundance of fresh fish and produce, coupled with the laid-back attitude and stunning views lends itself all to easily to a crisp glass of wine, but producing local wine posed its own difficult set of challenges.
The Sababay Project
At a mere -8 degrees latitude, low-quality grapes considered unfit for consumption flood the Balinese market, destined for the omnipresent sidewalk religious offering (pictured below). But it turns out climate wasn’t the biggest barrier to quality wine – education in farming sustainability and viticulture standards was. Seeking to use these advances in modern technology to contribute to their native homeland, Evy Gozali and her mother founded Sababay Winery and the Asteroid Vineyards Partnership. In exchange for agricultural & technical support, Northern Balinese grape farmers commit their yields exclusively to Sababay—the 175 farmers currently producing have experienced yield increases of up to 50% in the first year alone with the new viticulture practices, and some have even reported a ten-fold annual profit increase since engaging in the partnership.
What struck me most was Sababay’s strong Indonesian identity, a true achievement in an industry with a constant tug of war between terroir and global appeal. Beyond their tangible contributions to local agriculture, Sababay produces wine to match the cultural preferences and local flavors. Marketing wine to the largest Muslim country by population in the world is no small feat, but the demand is growing, and Sababay provides an alternative to these new consumers who’re looking for a twist-top wine that tastes good with dinner. The resulting wines, designed to be poured young, are sweet, with low alcohol content, and are a perfect pair for the complex, spicy flavors of Indonesian dishes.
Think Global, Act Local
Sababay does not currently export its wines – they’re 100% focused on local consumers. In keeping with advancements in technology and understanding, they have machinery imported from all over the world and a French winemaker to make the magic happen, but in all other facets of their operation they maximize Indonesian involvement in their leadership, staff, production, branding, and promotion. Sababay’s focus is a wine for the people, as opposed to an award winning wine – though they’ve incidentally done that as well! Their sparkling Moscato d’Bali (my personal favorite) recently won the silver award at the WSA Wine Challenge 2014 in Singapore.
As wine expands its boundaries, both in terms of production and consumption, I believe local identity and alternative branding will play a critical role in New Latitude’s potential success. There are untapped demographics with unique preferences and flavors, and New Latitude presents an opportunity to break out not only from geographic constraints, but traditional flavor profiles as well. In our increasingly global world, it seems the time is right to engage these regions and step outside our delimiting 30/50. Rather than expecting New Latitude to produce “seriously good” wines by our preexisting standards, I think we ought to encourage them to create “seriously relevant and unique” wines that appeal to emerging demographics and engage local consumers. So keep your eye out for these intriguing New Latitude wines on your next vacation, it’s bound to shake up your wine experience and add an extra dimension to your cultural experience.
Update: All of the Sababay wines entered in the Chine Wine & Spirits Awards competition have received medals. The Sababay Pink Blossom received a double gold! Congratulations to Sababay on this international recognition. To see the details click on the awards link and search for Sababay.
Thanks to Ali for her report. Here is a photo of Ali (red blouse) and the Sababay team.
I’m also impressed by the Sababay wines and also by the values they embody. Here is the winery’s mission statement (taken from the website):
Our mission is to elaborate local products of international standard that are accessible to all to enjoy and to give back to the land and to the local community.
Developing a diversified and performing agriculture in Indonesia with reduced impact on the land.
Recycling solid and liquid wastes at every steps of the production.
Social responsibility in the local community by creating jobs.
Constant training of the work force.
Harmonious relationship with trading partners and consumers.
The Wine Economist World Tour is picking up steam. I’m in Salem, Oregon today speaking to a wine industry group and I will be back home in tomorrow doing a fund-raiser for the World Affairs Council of Tacoma.
Valpolicella and Prosecco
Sue and I head off to Italy in early September to evaluate some programs that the Valpolicella Corsozio are working on. While we are there we will also meet with winemakers and wine economists from the Procecco region.
We are really looking forward to getting to know this region in greater depth and to learn more about the ambitious wine tourism initiatives being developed there.
Wine Industry Financial Symposium
I’ll be speaking at the Wine Industry Financial Symposium in Napa, California on September 23. The program’s theme is “Let the Good Times Roll” and it will be interesting to see what the speakers have to say.
Economists tend to worry when the good times roll, but I’ll make an effort to keep my “dismal science” skepticism in check!
Wine Vision 2014
November is a global-local month. I’ll be speaking to a local book group before heading off to London for Wine Vision 2014. Wine Vision is shaping up to be an outstanding program. I’ll be opening the program on the first full day, talking about the unexpected forces and events that have shaped today’s world of wine.
I’m followed by Jean-Guillaume Prats,President and CEO of Estates & Wines, the Moët Hennessy Wine Division that includes Domain Chandon wineries in California, Brazil, Argentina, China, Australia and India, as well as wines from Cloudy Bay (New Zealand), Cape Mentelle (Margaret River, Australia), Newton (Napa California), Numanthia (Toro, Spain), Terrazas de los Andes and Cheval des Andes (Mendoza, Argentina). Is that global enough for you!
Looking forward to greeting old friends and meeting new ones at these events. Cheers!
Jerry Lockspeiser recently interviewed me for Harpers Wine & Spirits, the UK drinks industry publication. You can read the online version here. Enjoy!
This is the last in a series of columns about Walla Walla’s wine industry. I previously proposed that Walla Walla has “come of age” as a leading wine region. How did it happen? No single factor can explain it all. Previous columns have examined two of the five “pillars” of the region’s success, the Land and the People. In this final column I’ll quickly discuss history, culture and what I call “the spark.”
The Fifth Element
“You Florentines are the fifth element,” Pope Boniface VIII proclaimed in 1300, reflecting a popular view of the unique contributions of Florentine citizens. Earth, air, water, and fire could be combined by all men to produce the simple goods of everyday life. But when the Florentine “fifth element” was added, a new and more creative alchemy was possible.
These lines back appeared in my 1990 book Mountains of Debt, which told the story of financial crisis in Renaissance Florence, Victorian Britain and Postwar America. I repeat them here because it seems to me that a modern day papal visit to Walla Walla might produce a similar sort of comment (although the current pope might include a reference to Malbec since he’s originally from Argentina).
I don’t mean to flippantly compare today’s Walla Wallans to the great artists of the Italian Renaissance, but it is true that Walla Walla wine is having something of its own renaissance and the Fifth Element, which I earlier called “the spark,” is certainly part of the story.
It is a property of the fifth element, if we take Florence as a model, that if it exists it is not in one person but everywhere within the culture that supports it and you can see that in Walla Walla today, which is bustling and growing in terms of its wine industry after a few hard Great Recession years.
The group that I call The Pioneers clearly had that fifth element spark — creative, entrepreneurial, determined. They started wineries but they also helped build the industry in many other ways — I think of Myles Anderson’s efforts to breathe life into the Walla Walla Community College Viticulture and Enology program must be recognized, for example. That program provides an affordable way for a surprisingly diverse group of students to prepare for immediate employment in the wine sector. It has helped power the growth of the industry here and throughout the region.
Christophe Baron’s “discovery” of the rocky vineyard sites in Milton-Freewater get a lots of attention — perhaps only a crazy Frenchman (a “bionic frog” according to one of his wine labels) could have built Cayuse into the cult wine that it is. Now that I have walked the vineyards and tasted the wines, I have to admit that the fuss is justified. Christophe must have a bit of the Florentine in him.
All important wine-growing regions must at some point go through a time when many creative people combine to create a new reality and identity and it is easy to see the renaissance in Walla Walla today.
The Black Prince
Walla Walla’s current blossoming has deep roots — deeper than most probably suspect. The first vines were probably planted (and wines made) about 200 years ago by French Canadians who settled in these parts between 1812 and 1821. Walla Walla was an outpost of the Hudson Bay Company empire in those days and, although there is no proof of vines and wines, everything we know about how the French Canadians behaved elsewhere suggests that a permanent settlement would not be wine-free.
We know for sure that there were wines and vines about 150 years ago because there is evidence that the early settlers in the valley planted vines and even organized grape nurseries using plants imported from Oregon. Frank Orselli, a native of Luca, Italy, came to Walla Walla in 1859, according to Ronald Irvine’s history of Washington wine, The Wine Project, part of an important Italian influence that can still be seen today. The wine industry thrived along with Walla Walla until the Northern Pacific Railroad construction by-passed the town in 1883, diverting growth elsewhere.
The wine didn’t go away, of course, and we were fortunate to see evidence of those Italian winegrowers when Kevin Pogue took us on a visit to the Rocks vineyard area. There, growing wild on the side of the road, where Cinsault grapes that someone still took the time to tend and harvest. Cinsault — Black Prince grapes they were called. Gary Figgins, whose winery is named Leonetti for the Italian side of his family who farmed and made wine here, is credited with tracking down the Black Prince’s true title. Cinsault is still grown in Walla Walla and wine is made. You will get a big smile from the locals if you ask for it!
A Creative Culture
Culture is the last of the five “pillars” of Walla Walla’s renaissance and you can see it all around you when you visit, especially downtown where a cluster of tasting rooms have erupted with cafes, restaurants and shops to support them.
We met two people who seem to represent the cultural renaissance in this area. Dan Thiesen is executive director of the culinary arts program at the Wine County Culinary Institute at Walla Walla Community College. Under Dan’s leadership this program has blossomed, creating affordable opportunities for those seeking culinary training and providing skilled professionals for the region’s expanding food scene.
We had two meals prepared by Dan’s talented students and had the opportunity to hear him speak about the world class program that he is building. The sky’s the limit for this program and the food-wine pairings it supports.
We also met with Joan Monteillet of Monteillet Fromagerie just outside of nearby Dayton, Washington. Joan and her French husband Pierre-Louis raise sheep and goats to supply their small artisan cheese business. A visit to the fromagerie is an opportunity to connect with the food’s roots and to sample the cheeses with wines specially created for the purpose by a local producer. It is a very personal experience of the sort that wine people seek out. A perfect part of the cultural renaissance.
The Monteillet Fromagerie has become an unintended test for the local community — does it really want to embrace the renaissance opportunity? Apparently a special use permit is required for the farm’s cheese and wine sales and agri-tourist operations, which exist within a designated farming zone, and there is organized opposition to the Monteillet’s continuing operations. Hopefully community leaders will embrace the logic that has helped the wine industry to advance elsewhere in the valley and keep this part of the local culture alive and allow it to thrive.
Previous columns have argued that a critical mass of wine energy has indeed been reached in Walla Walla and it is interesting to watch ways the four groups I identified, Pioneers, Next Generation, Foreign Legion and Millennials, compete, cooperate and collectively build the region’s reputation.
Walla Walla is a farming community at heart, and probably pretty conservative. So newcomers and old timers don’t always get along. And I suspect they haven’t always got along perfectly here, either. But wine and the challenges of growing it, making it and selling it seems to have taught them the need to work together rather than squabble and the results are easy to appreciate.
I’ve been working on tracing out the multiple over-lapping human networks that I’ve observed, but I think I have only scratched the surface. The pattern of interconnections is complex and evolving. It would make a great project for a business student, human geographer or maybe an anthropologist to try to analyze the Walla Walla wine network.
Perhaps the biggest single indicator of the continuing dynamic interaction is the SeVeinVineyard project, which is currently being developed at the south end of the Walla Walla AVA. It shows how the different groups I have mentioned above continue to partner and invest even as they compete with each other in the marketplace.
Here is a list of partners in the project taken from the website. You can see the strong hand of the Pioneers here — they continue to shape the region’s growth — but if you look closely you’ll see that all the elements of the complex human network are represented.
CURRENT SeVein PROPERTY OWNERS DEVELOPING VINEYARDS
- Amavi Cellars | AMAVICELLARS.COM
- Doubleback | DOUBLEBACK.COM
- Figgins Family Wine Estates | FIGGINSFAMILY.COM
- ~ Leonetti Cellar
- JM Cellars | JMCELLARS.COM
- L’Ecole Nº 41 | LECOLE.COM
- Middleton Family Wines | CADARETTA.COM
- ~ Cadaretta
- Octave Winery Partners
- Pepper Bridge Winery | PEPPERBRIDGE.COM
- Premiere Columbia Properties | RROBERTSON@WGIMGLOBAL.COM
- XL Vineyard | JOHN@RDGLTD.NET
When fully planted the SeVein project will increase the vineyard acreage in Walla Walla by an incredible 50 percent! Just imagine what Walla Walla will be able to do with so many more grapes! I foresee a shift to even more Walla Walla designated wines and perhaps less reliance on Columbia Valley fruit.
I suspect that the reputation of the region will grow with production, because this project seems to be about quality not just quantity. Significantly, the L’Ecole Ferguson Vineyard wine that won an International Trophy at the Decanter World Wine Awards came from a vineyard in the SeVein project. There is more good news to come from this ambitious initiative.
Michael Porter’s theory posited that it takes the right combination of rivalry and cooperation to make a regional industry work — that, plus insanely demanding consumers, employers and so on so that competition is a race to the top, not the bottom. Ideally, I suppose, each new generation should raise the stakes and the expectations, and I think that’s part of the story here, although standards were very high right from the start. Walla Walla is still so young — the AVA is just 30 years old this year — but you can see why it has come so far in such a short time.
Come back next week for my final column in this series on Walla Walla. I will examine the three remaining “pillars” of the region’s success: history, culture and “the spark.”
Harvard business professor Michael Porter famously conceived of a “cluster” theory of “competitive advantage.” It isn’t one thing that makes a regional industry successful, he said, but rather it involves the dynamic interaction of a network of forces and factors that, when they come together, create an environment where all are successful.
Porter’s “diamond” analysis can be applied to many regions and industries, even wine. In fact. Nick Velluzzi of the Walla Walla Community College has applied it to his region’s wine sector (click here to read about his research). If you are interested in wine clusters or Walla Walla you should check out his work.
I am interested in how and why Walla Walla has risen to the top tier of American wine region, but this week I want to talk in terms of human networks not Porter’s approach, which focuses on networks of market institutions. It seems to me that one aspect of Walla Walla’s success has been the dynamic interaction of wine industry people, who I will divide into four loose groups: the Pioneers, the Next Generation, the Foreign Legion and the Millennials.
Let me start with a group that I will call the Pioneers, who got things started in the early days which, since this is the New World, was really just a few years ago. Although I don’t want to name too many names for fear of forgetting someone, this group would certainly include Marty Clubb and the Ferguson family (L’Ecole No 41), Rick Small and Darcy Fugman-Small (Woodward Canyon) and Gary Figgins (Leonetti Cellar) plus Norm McKibben (Pepper Bridge) who came on the wine scene a little bit later after a successful career in construction, and Gordy Venneri and Myles Anderson at Walla Walla Vintners.
Apparently nobody told the Pioneers that this was wheat country (maybe they just didn’t listen). Or maybe the noticed the hillside apple orchards and the small planting of grapes left by the early Italian immigrants (more about this in a future column) and connected the dots. In any case, they and others like them were the leaders in establishing the vineyards and cellars and the reputation of the wines as well. Walla Walla today would not exist without the contributions of the Pioneers.
The Next Generation
It seems to me that the next step was growth, with a new generation of wine people entering the scene, ēand what is significant is that the original insiders and the newcomers found ways to work together rather butt heads. I count my former student Chuck Reininger in this group, although his eponymous winery has deep local roots through his wife Tracy Tucker Reininger’s family.
One of the ways that the Pioneers and the Next Generation worked together was in developing the vineyards. Although there are estate wineries in Walla Walla, much of the local industry is organized along an American agriculture model, which means that the farming and the processing are often organized as separate business but obviously related functions, not always part of a vertically integrated unit.
Partnerships were formed to develop the key vineyard sites that supplied high quality grapes to the Pioneers and the Next Generation, too, which allowed the industry to grow much faster than if each little winery had its own small plot of land.
International influence within the human network has been valuable for Walla Walla. French and Italian settlers are part of the Walla Walla story (Lowden, where L’Ecole and Woodward Canyon make home today, was called “Frenchtown”) A number of talented Europeans were part of the next wave of wine and the synergy continued. Prime among the Foreign Legionnaires are Giles Nicault (Long Shadows), Marie-Eve Gilla (Forgeron), Jean-François Pellet (Pepper Bridge) and Christophe Baron (Cayuse).
Allen Shoup, who was instrumental in forming partnerships with the Antinori and Loosen wineries when he headed Chateau Ste Michelle, continued to attract international talent, investment and attention with his Long Shadows project. John Duval, Michel Rolland and many other international wine stars each make a wine with Washington grapes at Long Shadows.
Several waves of new wine people have arrived since the dawn of the 21st century — I’ll call these the Millennials. I count my former student Michael Corliss of Corliss and Tranche along with fellow University of Puget Sound alumnus Randall Hopkins (Corvus Cellars) in this large and expanding group.
The Corliss winery fills an impressively renovated former bakery building near the center of town. Hopkins’ Corvus Cellars is located out at the airport, in a winery incubator complex organized specifically to make new entry into the local industry possible. They are very different in scale and scope, but both intensely focused on the vineyard — and both produce superior wines (I am unbiased in this, I assure you!).
Reaching a Critical Mass
They are part of a movement , which includes wineries and vineyards large and small, that has created a critical mass of fine wineries that attract critical attention to the region, new talent to the local industry, wine tourists to fill the hotel beds and restaurant tables and provide the basis for the industry’s future growth. (A critical mass to support competitive associated and supporting sectors is part of the Porter model of success.)
I’ve only scratched the surface of this human network analysis, but I hope you get my point. The characteristics of the human networks that evolve are important in every wine region. They are particularly obvious in Walla Walla because of the region’s short history, small scale and the continuing synergies between and among the groups I have identified here.
How do these different groups and overlapping generations fit together to form a powerful human network? In a lot of little ways and one big way that is a key to Walla Walla’s future. Come back next week see what I’m talking about.