Walla Walla Comes of Age

Sue and I recently returned from 10 days in the Walla Walla AVA — half spent attending events sponsored by the Walla Walla Wine Alliance celebrating the AVA’s 30th birthday through a celebration of  its wines and half with the American Association of Wine Economists who met at Whitman College.

Coming of Age in Washington

As we drove back over the Cascades towards home base in Tacoma, we talked about key takeaway messages and at the top of both of our lists was the region’s coming of age. We’ve visited Walla Walla many times over the years and watched it grow and change, but without ever having a sense that it had achieved its potential.

Maybe it is because we had more time on this visit or maybe it is because we had so much access and guidance (from the Wine Alliance as well as from our growing list of winemaker friends there), but somehow this time it all came together and I will use the next few columns to tell you how and why we came to this conclusion and what it might mean.

International Recognition

A number of factors contributed to our view but as fortune would have it a single event sort of summed up the moment. We were up on a hilltop on the Oregon side of the AVA for a festive dinner at the Glass House at the Caderetta vineyard and we tasted a number of Bordeaux blend wines with the meal. (Scroll down to view the wines and menu for that dinner.) Marty Clubb of the Walla Walla pioneer winery L’Ecole No. 41 was there and we tasted his 2011 Ferguson Vineyard blend. I think we could actually see the recently developed Ferguson Vineyard over the hill from our vantage point.

The wine was great, with a real sense of place (more to come about this in future posts) and Marty told us that he was about to fly off to London because of this wine. The L’Ecole team was so happy with the Ferguson that they had entered it in the Decanter World Wine Awards and he had been summoned to London for the awards dinner.

The invitation meant that the wine had won one of the bigger prizes — not just a bronze, silver or gold. Maybe a regional trophy (best U.S. Bordeaux variety wine?) or maybe even an International Trophy (best of all the wine in this category from all over the world!). No way to tell which it was, but he was willing to fly to London to find out. How exciting!

lecole A couple of days later I was busy hitting the F5 reload key on my laptop, impatient to see the Decanter results appear on my screen. And finally at 1:01 pm there they were. L’Ecole won the International Trophy for Best Bordeaux Variety Red Wine over £15 -- the top award in what must be one of the most competitive wine categories.

Wow — I couldn’t stop smiling when I learned that. Happy for Marty and his team. And happy for Walla Walla and Washington — great recognition for their wines. And a sign of Walla Walla’s coming of age, don’t you think?

Art versus Science?

I don’t know if I was lucky or not, but I got the news when I was surrounded by my academic wine economist colleagues, who are intensely skeptical of wine competitions and rankings. I think it is possible they have collectively devoted far too much of their very considerable intellectual firepower to proving what I think is obvious — that judging wines, even using expert tasters and careful protocols, is more subjective art than objective science.

Winning a Decanter award or any other obviously doesn’t prove that one particular wine is objectively “better” (whatever that  means) than any other. But, I would argue, it is hard to deny that the excellence of the L’Ecole Ferguson stood out to the initial American tasting panel, which is how it entered in the International Trophy competition. And it obviously stood out there, too, when tasted with similar wines from other parts of the world. Not rocket science, I agree, but still worth celebrating.

Frenchtown Schoolhouse Roots

Best in the world? That’s a matter of opinion. But a sign that Walla Walla has come of age? Absolutely yes! And while LEcole is not the only Walla Walla winery set to take a place on the national and global stage, it is a very good example for us to study.  The Ferguson vineyard itself, for example, shows L’Ecole’s determination to expand production without diluting quality and, at over 40,000 cases, L’Ecole  is now large for a Washington producer (although everyone is small compared with Chateau Ste Michelle and its sister wineries, which together produce well more than half of all the wine in the state).

L’Ecole’s recently re-designed label also suggests a thoughtful approach to moving into the national spotlight.  The old label was a playful rendering of the historic schoolhouse that serves as the winery tasting room today in the tiny town of Lowden, which was known in days past as Frenchtown because of the French settlers there. The new label keeps the Frenchtown schoolhouse image, but updates it and presents the wine in an elegant way that communicates quality to a broader audience while respecting the heritage of the winery and the region.

Is the L’Ecole Ferguson’s award the whole “coming of age” story? Far from it — I’m just getting started. Stay tuned.

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Before I go: Here’s a brief video that Marty Clubb made before his London flight. I include it here because it anticipates my next column, but also because it gives you a sense of our experience talking with Marty on that high ridge overlooking the Ferguson vineyard last month. Enjoy!

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Thanks to everyone we met in Walla Walla for their help and hospitality. Special thanks guide extraordinare Sharon Ferraro and to Duane Wollmuth and Heather Bradshaw of the Walla Walla Wine Alliance. Here’s the menu from the dinner at the Cadaretta glass house. Enjoy!

menu

Wine Vision 2014: Focus on the Future of the Global Wine Business

The preliminary agenda for Wine Vision 2014 has been announced and I am excited to be included in the list of presenters. The event will be in London from 17-19 November. Click here for more information and to receive updates about the event. You can view videos of Wine Vision 2013 here.

Wine Vision is meant to be an opportunity for members of the global wine business community to come together to think about the challenges and opportunities that the wine business faces today and consider how best to prepare for the changing future industry environment.

We speakers have been challenged to throw out ideas that will challenge the conventional wisdom, sharpen thinking and stimulate discussion. I have been asked to help set the scene by analyzing the state of the global industry today and, since the next speaker,  Jean-Guillaume Prats, President and CEO, Moët Hennessy Estates & Wines, will be talking about the future of wine I decided to look at the present from a slightly different angle that I hope will generate some interesting insights. Here’s the description of my talk — what do you think? (You can read more about my presentation here.)

An unlikely future? Today’s wine world – and the forces that shaped it

Fifty years ago it would have been hard to predict the world of wine we live in today. In this presentation one of the world’s most provocative commentators will consider both its most surprising characteristics and the historical forces that have shaped it. Mike will challenge conventional thinking and suggest new ways to predict the future based on a fresh interpretation of the past. He’ll shake up the way we see the wine world – both as it is today and might be tomorrow – with topics that include:

  • Redrawing the wine map – who makes it, buys it and drinks it, and why the market’s borders have shifted so dramatically
  • Lost in translation – the wine world’s lingua franca has changed dramatically, how did that happen and what are the implications?
  • Deconstructing disintermediation – how market structures have shifted and where power lies today
  • New friends, new foes – in a complex competitive landscape, who are the enemies and allies for today’s wine makers?

The program is still coming together — I’ll provide occasional updates as news is released. In the meantime, here is the current speaker/panelist list  and here is a link to the current agenda. Hope to see you in London!

Jean-Guillaume PratsPresident and CEO, Moët Hennessy Estates & Wines
Dan JagoUK and Group Wine Director, Tesco Stores PLC
Mike RatcliffeManaging Director, Warwick Wine Estate and co-founder and Managing Partner of Vilafonté
Kevin ShawFounder and CEO, Stranger & Stranger
Tyler BallietPresident and Founder, The Second Glass and Wine Riot
Mike VesethThe Wine Economist
Prof Charles SpenceHead of Crossmodal Lab, Oxford University
Prof Barry SmithDirector, Institute of Philosophy, University of London’s School of Advanced Study
Dominique PersooneThe ‘Shock-o-latier’, Founder, The Chocolate Line
David Schuemann, Owner and Creative Director, CF Napa Brand Design
Robin CopestickManaging Director, I heart wine – Copestick Murray
Jonny ForsythGlobal Drinks Analyst, Mintel
Barry ClarkThe Future Foundation
Mike Greenefounder of Him!, business mentor and author of ‘Into the Eye of the Storm’

Saving our Skins: French Vineyard Dreams (and Reality)

Caro Feely, Saving our Skins: Building a Vineyard Dream in France. Summersdale Publishers, 2014.

Caro Feely, Grape Expectations: A Family’s Vineyard Adventure in France. Summersdale Publishers, 2012.

Caro Feely is an economist and a dreamer and so there was bound to be a bit of cognitive dissonance when she and her husband Sean and their two daughters pulled up stakes in Dublin and moved to Saussignac to grow grapes, make wine and live the dream instead of just dreaming it.

The Vines Aren’t the Only Ones that are Stressed!

Cognitive dissonance? Yes, that’s the stress that you feel when you try to believe two contradictory things at the same time and there cannot be two thoughts that are much more in contradiction than the idea of taking over a dilapidated house and run down vineyard and cellar and making great wine and the notion that you will be able to pay the bills and support a family in the process.

The easiest way to make a small fortune in wine is to start with a big one, they say, and the Feely fortune was not all that big to begin with. Stress? Yes, lots of stress.  And two fine books, too.

I’m not quite sure if Feely’s 2012 book Grape Expectations was written as a creative outlet, a cheap form of therapy or to generate an additional revenue stream, but it is a delightful book that I recommend to all my friends. Feely tells her family’s story and the book could be placed on a shelf along with Under the Tuscan Sun or A Year in Provence because of its ability to give all of us a peek at expat daily life in a suitably romantic setting,

More Than Just a Good Story

But while there’s enough romance in Feely’s book to make it attractive to someone looking for an escape, it is the reality of her situation that appeals most to me. Besides telling a good story about her family’s experiences she also teaches us a great deal about the arts and craft of winegrowing and the economics of the wine business, with its peculiar challenges and opportunities.

I enjoyed Grape Expectations enormously, so I couldn’t wait for the sequel, Saving our Skins, which is released this month.  The Feely saga continues in the new book, but with a twist. Having survived their first vintages with their marriage, home and business intact, Caro and Sean take the possibly fatal step of pushing things to a new extreme.  They decide to go biodynamic. Yikes!

Biodynamics brings with it a new set of cognitive dissonant stresses and strains, which is tough on the Feelys who must struggle through them but good news for us, because we get to pleasantly continue our wine-growing and wine business educations.

Both books are highly recommended. Great summer (or anytime) reading.

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This video leans toward the romantic side more than the books do, but it does let you view the Feely’s property. Sean is the fellow with long hair, Caro has short hair and glasses. Look closely for their daughters. Click here to read about their winery and wines.

Wine and Identity: Branding, Heritage and Terroir — a review

Matt Harvey, Leanne White and Warwick Frost (editors), Wine and Identity: Branding, heritage, terroir. Routledge, 2014.

The premise of this interesting collection of academic papers is that the global wine market is highly competitive and rapidly changing and, in this dynamic environment, identity has become an increasingly important factor in the way that wine is thought about, experienced and especially how it is marketed.

Harvey, White and Frost, Australian professors of law, marketing and tourism respectively, analyze wine and identity in terms of heritage, branding and terroir — three flexible but useful “created” concepts.

You might think that heritage and terroir are historical and natural phenomena whereas brands are manufactured by marketers, but when you think about it heritage and terroir are subject to the same story-telling factors as commercial brands and are perhaps more powerful because unlike a created brand they bring with them a sense of authenticity.

Like many others, I see story-telling and identity as key to wine in the 21st century, so I was excited to receive this volume and I find it well-written, interesting and wholly worthwhile. I think anyone who wants to understand wine a bit better will find something useful here.

Each of the 18 chapters presents a relatively brief introduction to an interesting topic — enough to whet the appetite for more research and raise some thoughtful questions. Chapters that I found interesting include a comparison of wine heritage in California and Victoria (Australia), two regions with a great deal in common besides their wine, a comparison of wine in the “emerging” markets of Malaysia and the United States that made me rethink what I thought I knew about the U.S., and heritage and tourism in the Barossa Valley examined through case studies of Penfolds and Jacobs Creek, two wineries now owned by multinational firms.

I also enjoyed chapters on identity as expressed through winery architecture and an unexpected analysis of online “terroir.” There was something to like in every chapter, although as with every collected papers volume some parts will be more interesting to any given reader than others and the heritage-branding-terroir theme sometimes gets lost.

The authors of the chapters are appropriately multinational — Australia, New Zealand, France, Canada, Brazil, Georgia, Slovenia, the UK and South Africa are represented. Well worth reading. Part of the Routledge series on gastronomy, food and drink.

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Note: Since I am an economist, I have to mention cost. Academic books like this are expensive for personal purchases. You might see if your local library has a copy or can borrow one for you.

 

Argentinean Wine & Restaurants: Reflections on a Catena Asado

Sue and I and our friends Ron and Mary recently attended a sold-out Bodega Catena Zapata wine dinner at Asado Cucina Argentina in Tacoma.  Some people came for the wine, which Daniel McKeown of Catena importer Winebow carefully explained to each table of guests. Others came for the music and dancing, which was simply spectacular. Everyone enjoyed the wonderful food — the menu is shown at the bottom of this post.

Most of the guests were already familiar with Argentinean wine, but I think some were surprised by the range of wines we sampled, including sparking pink  Malbec (the only non-Catena product), Chardonnay, a Malbec from Vista Flores, a gutsy Malbec blended with a bit of Petit Verdot, and a Cabernet Sauvignon that was served with the chocolate course.

Although Argentina is known for Malbec, its signature grape variety, it is not and should not be defined by it. When we visited Argentina a few years ago our friend Andrés Rosberg made a point of showing us just how much the country has to offer beyond Malbec. You can read about our experience here.

The diners clearly enjoyed themselves and I think we all learned a lot. Hopefully this event and others like it will help interest in and sales of Argentinean wine to continue to grow.

The Gaucho Effect: How Malbec Conquered Britain

Restaurants are an important wine sales vector, of course, particularly for wines that need to be hand sold because consumers are not familiar with them. When diners try and enjoy a new wine at the sommelier’s suggestion they may become both continuing customers and also brand ambassadors. That’s why there is so much competition to get on a popular restaurant’s wine list.

But sometimes restaurants can have an even bigger impact. Some say that the rising British interest in Argentinean wines in general and Malbec in particular is due to the efforts of a single restaurant group. For the English to embrace the wines of Argentina is a remarkable event given the turbulent history of relations between the countries in the last century, including the Falklands / Malvinas War and the 1986 “Hand of God” World Cup soccer match.

So I think it was quite a bold move to open an Argentinean steak house in London, but that’s what Gaucho did and now they have 14 restaurants in Britain, have invested in Sucre, a popular eatery in Buenos Aires and opened a Gaucho outpost in Dubai. The Gaucho wine list includes more than 200 different wines from Argentina and is said to be the largest such collection outside of that country.

I haven’t dined at a Gaucho restaurant yet, but I hope to remedy that when I’m in London in November. Gaucho seems to succeed by embracing the whole Argentinean experience — the food, wine, people, culture, history — drawing British diners into the story. Irresistible! And great for Argentina’s wine industry.

But wait — there’s more. They have also opened a specialist wine shop in London, Cavas de Gaucho, to promote the wines of Argentina. They purchased a small vineyard with 80-year old vines in Lunlunta, Mendoza and started their own winery, Viña Patricia, which supplies the restaurant group.  Gaucho also sponsors a widely publicized winemaker award in association with Wines of Argentina.

The total “Gaucho Effect” is very important — it shows the story-telling (and selling!) power of restaurants that bring together wine, food and culture in a way that captures consumer imagination.

Argentina’s Upbeat Future

I used the occasion of the Catena wine dinner to contact Laura Catena, who was just back from Florence and shared a nice story, which was appropriately set in a restaurant. She was dining with some members of the Italian wine industry, enjoying fine Italian food and wine, when she brought out a bottle of Nicolas Catena Zapata 2002 — her winery’s flagship Cabernet – Malbec blend. The Italians were blown away by the wine, she wrote — completely unprepared for the idea that a wine of such elegance could come from far-away Argentina.

I asked Laura about the state of the Argentinean wine industry and she was very upbeat. There are problems, of course, especially with domestic politics and the economy, but all of the elements are there for success, especially in export markets now that the Peso has weakened a bit. Former Central Bank chief Alfonso Prat Gay recently proposed that Argentina would rapidly emerge from its malaise once a new government is elected in October 2015. “Short pain, long gain,” he said, which would be good news for Argentinean wine.

I hope that Laura Catena and  Alfonso Prat Gay are right — Argentina could certainly use some good economic news. Once the country’s political and economic policies are on track, the wine industry seems poised to advance.  Argentina has distinctive terroirs, which many wineries including especially Catena are now highlighting in their wines. And as Laura said,  Malbec continues to be hugely popular because it tastes so good. And then there is diversity …

There are many other varietals that do well in Argentina – chardonnay (we recently received 96 points from Parker for our white Stones Catena Zapata chardonnay), syrah, red blends, torrontes, bonarda, cabernet sauvignon +++ (many Argentines prefer cab to malbec or the blend) and the future holds all these new varieties as well as consumers discovering the high end, the ageability, collectibility (our Estiba Reservada Catena Zapata was recently ranked by wine searcher as one of the 50 most expensive wines in the world.)

Sustaining the Boom

I love Malbec and I am one of those who thinks that Cabernet and Cab-Malbec blends (and Syrah, too) have great potential in Argentina. Argentina remains a hot wine category in the United States (along with New Zealand).

How do you sustain such a boom? Obviously quality and value must be present in each glass, but you must also tell the right stories in the right ways to engage consumers and renew their interest.  Wine dinners like the one we attended at Asado (and Laura’s dinner in Florence and the Gaucho Effect in Britain) are an important part of this process.

asado

 

 

American Association of Wine Economists Conference Program

As I noted last week, the American Association of Wine Economists are meeting in Walla Walla in a few days. I thought you might be interested in the full program, including papers, authors, activities and so on. Lots of interesting wine economics topics and ideas. Enjoy

JUNE 23, 2014 Whitman College, Maxey Hall

8:00 – 9:00

REGISTRATION, Maxey Auditorium Foyer

 

 9:00 – 10:30 Room – Maxey Auditorium  Session #1A: Consumers & Markets
Chair: XXX
Richard Belzer (Regulatory Checkbook) Leveraging consumer ignorance and information search costs to maximize profits in US wine ‘Flash sales': a follow up
Linda L. Lowry, Robin Back (both University of Massachusetts, Amherst) Impact of farm winery legislation S 2582: an act relative to economic development reorganization on Massachusetts wineries
Marc Dressler (University Ludwigshafen, Germany) Exploring success factors in export management – Results of a survey on relevance in the context of the wine business and performance of German producers
Olivier Gergaud (KEDGE Business School, Bordeaux, France), Philippe Masset (Ecole Hôtelière de Lausanne, Switzerland) Using information about web searches to forecast auction prices of fine wines

 

 9:00 – 10:30Room – Maxey 207  Session #1B: Tourism and Economic Impact
Chair: Luigi Galletto (University of Padova, Italy)
Christopher Lucha, Gustavo Ferreira, Martha Walker (all Virginia Polytechnic Institute and State University, Blacksburg) Virginia wine tourism: a profitability analysis
Luca Rossetto, Luigi Galletto (both University of Padova, Italy) Wine tourist profiles: a comparison between two wine routes in Veneto region
Theodore Lane (Western Regional Science Association), Bill Mundy (Bill Mundy Associates) Walla Walla’s wine-based agro-industrial cluster
Martin Prokes, Kamil Prokes (both Mendel University Brno, Czech Republic) Job creation by investing in the wine sector

 

10:30 – 11:00 Coffee Break
Maxey Auditorium Foyer

 

 11:00 – 12:30Room – Maxey Auditorium  Session #2A: Coffee & FoodChair: Morten Scholer (International Trade Centre, Geneva, Switzerland)
Morten Scholer (International Trade Centre, Geneva, Switzerland) Coffee: the product, the trade and comparison with wine
Samrawit Ebabe (Jimma University, Ethiopia) Constraints to Ethiopian coffee exports from a supply chain management perspective
Peter Roberts (Emory University) Product differentiation, pricing and fair trading in specialty coffee markets
Albert I. Ugochukwu University of Saskatchewan, Jill E. Hobbs. University of Saskatchewan Food product authenticity in agri-food markets: implications for collective reputation
Bernd Frick (University of Paderborn, Germany), Olivier Gergaud (KEDGE Business School, Bordeaux, France), Laure Salais (Institut Paul Bocuse, France) The demand for restaurants in Europe

 

 11:00 – 12:30Room – Maxey 207  Session #2B: Trade and International I
Chair: XXX
Alejandro Gennari, Jimena Estrella. Xavier Brevet (both National University of Cuyo, Mendoza, Argentina) Argentinean wineries’ strategies on export markets
Miguel A. Fierro, Rodrigo Romo Muñoz (both Universidad del Bío-Bío, Chile) Characterization of the Chilean bottled wine market
Cynthia Howson (University of Washington Tacoma), Pierre Ly (University of Puget Sound), Jeff Begun (University of Washington Tacoma) Grape procurement, land rights and industrial upgrading in the Chinese wine industry
Maryline Filippi (University of Bordeaux, France) Elena Garnevka (Massey University, New Zealand) Exporting wine to China from New Zealand and from France. Strategies and perspectives
 11:00 – 12:30Room – Maxey 307  Session #2C: U.S. Wine Market & Industry
Chair: XXX
Raphael Schirmer (University of Bordeaux, France) Drinking wine in the United States of America (from 1850 to the present) through the New York Public Library’s collection “What’s on the menu?”
Jon H. Hanf (Geisenheim University, Germany) Retail branding and its consequences on wine brands
Bradley Rickard (Cornell University), Olivier Gergaud (KEDGE Business School, Bordeaux, France), Hu Wenjing (Cornell University) Trade liberalization in the presence of domestic regulations: likely impacts of the TTIP on wine markets
Robert Hodgson (Fieldbrook Winery) The unimportance of terroir

 

12:30 – 14:00 Lunch Break

 

 14:00 – 15.15Room – Maxey Auditorium

 

PLENARY SESSION:
Welcome and Introduction
 Orley Ashenfelter (Princeton University)    Welcome and Introduction
     
Kevin Pogue (Whitman College)   The Terroirs of the Walla Walla Valley American Viticultural Area
15:15 – 15:45 Coffee Break
Maxey Auditorium Foyer
 15:45 – 18:00Room – Maxey Auditorium  Session #3A: Varietals, Geography, Environment
Chair: Julian Alston (UC Davis)
Kate Fuller, Julian Alston, Olena S. Sambucci. (all UC Davis) The value of powdery mildew resistance in grapes: evidence from California
Julian Alston (UC Davis), Kym Anderson (University of Adelaide) Evolving varietal distinctiveness of US wine regions: comparative evidence from a new global database
Christopher Bitter (University of Washington, Seattle) The evolving geography of the U.S. wine industry
Luigi Galletto, Federica Bianchin, Luigino Barisan (all University of Padova, Italy), Eugenio Pomarici (University of Naples Federico II, Italy) An evaluation of a new drought-resistant rootstock in Italy
Jean-Philippe Roby (Bordeaux Science Agro, France) Viticulture of varietal wines: the dead end of terroir at the time of global warming? Case study of Burgundy
Karl Storchmann (New York University), Peter Griffin (Vanderbilt University) Climate change and vineyard prices

 

 15:45 – 18:00Room – Maxey 207 Session #3B: Wine Investment
Chair: Lee Sanning (Whitman College)
Marie-Claude Pichery (Université de Bourgogne, France), Catherine Pivot (Université Jean Moulin – Lyon 3, France) Wine investment: a profitable alternative investment or simply a long-term pleasure?
Beysül Aytac, Thi Hong Van, Hoang, Cyrille Mandou (all Sup de Co Montpellier Business School, France) Wine: to drink or to invest? A study of wine as a financial asset in a French portfolio context
Philippe Masset, Jean-Philippe Weisskopf (both Ecole Hôtelière de Lausanne, Switzerland) Wine funds – an alternative turning sour?
Philippe Masset, Jean-Philippe Weisskopf (both  Ecole Hôtelière de Lausanne, Switzerland) Wine indices in practice: nicely labeled but slightly corked
Jean-Marie Cardebat (Université de Bordeaux, France), Benoît Faye, Eric Le Fur (both INSEEC Bordeaux, France), Philippe Masset (Ecole Hôtelière de Lausanne, Switzerland)  Is wine still an investable asset?
Benoît Faye, Eric Le Fur (both INSEEC Bordeaux, France) Dynamics of fine wine and asset prices: evidence from short- and long-run co-movements

 

 15:45 -18:00Room – Maxey 306  Session #3C: Quality and Experts IChair: XXX
Robin Golstein (Fearless Critic Media) Do more expensive things generally taste worse?
Omer Gokcekus, Clare Finnegan (both Seton Hall University) Lumping and splitting in expert ratings’ effect on wine prices
Neal Hulkower (McMinnville, OR) Information lost: the unbearable lightness of vintage charts
Ying Lou, Jing Cao, Lynne Stokes (all Southern Methodist University) Comparing measures of rater agreement for wine quality ratings
Dom Cicchetti (Yale University), Arnie Cicchetti (San Anselmo, CA) Assessing reliability when multiple judges taste a single wine
Eric Stuen, Jon Miller, Robert Stone (all University of Idaho) An analysis of consensus of prominent wine critic ratings in the US market
 19:00 – about 23.00
Conference Dinner
Long Shadows
Buses leave from Whitman College at 18:15  

 

 

JUNE 24, 2014 Maxey Hall

 

 9:00 – 10:30Room –Maxey Auditorium  Session #4A: Water, Whiskey, Wine, Food
Chair: XXX
Kevin W. Capehart (American University, Washington, DC) Fine water: a hedonic pricing approach
Ian B. Page (University of Maryland) The economics of whisky: an analysis of imperfect competition when product quality is endogenous
Kenneth Elzinga. University of Virginia, Carol Tremblay. Oregon State University, Victor Tremblay. Oregon State University Craft beer in the USA: history, scope and geography
Yohannes Yehabe (Molde University College, Norway) Assessment of weather impact on the sales of breweries in Norway: a panel data regression approach
Robert Harrington, Lobat Siahmakoun. (both University of Arkansas) Which wine and food elements drive high and low levels of perceived match?
 9:00 – 10:30Room – Maxey 207

 

Session #4B: Wine Demand
Chair:
XXX
Getnet Yitagesu (Unity University, Addis Ababa, Ethiopia) A principal component analysis of the demand structure of Wine. The Case of Addis Ababa
Paulina Rytkönen (Södertörn University, Sweden) Wine in a vodka country – changing consumption patterns in Sweden’s way from a rural to an industrial nation
Gary M. Thompson (Cornell University) Wine cellar optimization
Amy Holbrook, Dennis Reynolds (both Washington State University, Pullman) What effect does wine closure type have on perceptions of wine’s appearance, bouquet, Taste, and overall quality? An empirical investigation
Judit Szigeti (Ministry of Foreign Affairs, Hungary), Szilárd Podruzsik, Orsolya Fehér, Péter Gál (all Corvinus University of Budapest, Hungary) Wine affordability for the Hungarian consumers

 

10:30 – 11:00 Coffee Break
Maxey Auditorium Foyer
 9:00 – 10:30Room – Maxey Auditorium

 

Session #5A: Quality & Experts II
Chair: XXX
Adeline Alonso Ugaglia (Bordeaux Science Agro, France), Olivier Gergaud (KEDGE Business School, Bordeaux, France) Restaurant awards and financial rewards: Michelin
Guenter Schamel (Free University of Bolzano, Italy) Points for sale? Examining the market entry of a new wine guide
Orley Ashenfelter (Princeton University), Robin Goldstein (Fearless Critic Media), Craig Riddell (University of British Columbia, Vancouver) Do expert ratings measure quality? The case of restaurant wine lists
Robert Hodgson (Fieldbrook Winery) The fallacy of wine competitions; a ten year retrospective

 

 11:00 – 12:30Room – Maxey 207

 

Session #5B: Marketing
Chair: XXX
Steven Cuellar (Sonoma State University) Measuring the return to social media
Lindsey Higgins, Erica Llanos (both California Polytech, San Luis Obispo) A healthy, but confusing, indulgence? Wine consumers and the health benefits of wine
Benjamin C. Lawrence, Alex M. Susskind, Gary M.  Thompson (all Cornell University) Wine mailing lists
Jon H. Hanf, Oliver Gierig (both Geisenheim University, Germany) Discussion of an Innovative pricing strategy in the context of wine tastings

  

 11:00 – 12:30Room – Maxey 306

 

Session #5C: Industry Organization
Chair: XXX
Paulina Rytkönen (Södertörn University, Sweden) The Swedish wine industry – institutions, knowledge, temperance and regional development in an upcoming wine country
Betsy Carter (Max Planck Institute for the Study of Societies, Cologne, Germany) The state versus the market: patterns of producer politics and the construction of status markets
Marc Dressler (University Ludwigshafen, Germany) Organizational levers on reputation and performance – An empirical analysis of German wineries
Florine Livat (KEDGE Business School, Bordeaux, France), Jean-Marie Cardebat. (University of Bordeaux, France) Are there too many appellations in Bordeaux? A renewal of the brand vs. appellation debate
12:30 – 14:00 Lunch Break
 14:00 – 15.30Room – Maxey Auditorium

 

PLENARY SESSION:
Regulation in the U.S. Wine Industry                                 
 Orley Ashenfelter    Princeton University, Princeton
Paul Beveridge   Family Wineries of Washington State, Seattle
John Hinman   Hinman & Carmichael LLP, San Francisco
Allen Shoup   Long Shadows, Walla Walla

 

15:30 – 15:45 Coffee Break
Maxey Auditorium Foyer
 15:45 – 17:15Room – Maxey Auditorium  Session #6A: Supply
Chair: XXX
Nick Vink, Theo Kleynhans, Willem Hoffmann. (Stellenbosch University, South Africa) Financing wine barrels in South Africa: the Vincorp model
Alessandro Muscio, Gianluca Nardone, Antonio Stasi (all Università degli Studi di Foggia, Italy) Perceived technological regimes: an empirical analysis of the wine industry
Lindsey Higgins. Cal Poly, San Luis Obispo Economic stochastic simulation model for small to medium sized wineries
Julien Cadot (ISG Business School, France), Adeline Ugaglia (Bordeaux Sciences Agro, France) The horizon problem in Bordeaux wine cooperatives.

  

 15:45 – 17:15Room – XXX

 

Session #6B: International & Trade II
Chair: XXX
Joachim Ewert (University of Stellenbosch, South Africa), Jon H. Hanf, Erik Schweickert. (Geisenheim University, Germany) South African Cooperatives and the challenge of product quality
Silvia Gatti (University of Bologna, Italy) Designations of origin for wines, labor and cooperatives in Emilia-Romagna between the Censuses of Agriculture 2000 and 2010
Bo Gao, James L. Seale, Zhifeng Gao (all University of Florida) U.S. import demand for wine by country of origin: a differential approach
Leo-Paul Dana (Montpellier Business School, France), Mathieu Labadan (University of Pau, France), Michael Mettrick, Agate Ponder-Sutton. (both University of Canterbury, New Zealand) Interaction among wine makers in New Zealand
17:15 – 17:30 Coffee Break
Maxey Auditorium Foyer

 

 17:30 – 18:00Room – Maxey Auditorium  PLENARY SESSION:
Upshot and Outlook
 Karl Storchmann    New York University, New York

Alejandro Gennari
 
National University of Cuyo, Mendoza, Argentina

 

 19:00 – 23:00 
Dinner
Whitehouse Crawford, Walla Walla
JUNE 25, 2014 09:00 – 18:00
Tour of Walla Walla Vineyards and Wineries
Geological Guide: Kevin Pogue, Whitman College
Lunch at Basel Cellars
Buses leave from the Marcus Whitman Hotel at 9am

 

World Cup 2014: Prime Time for Brazilian Wine?

Faces, the official World Cup Brazilian wine. Click on the image to view a FIFA video about the wine.

The World Cup — FIFA’s celebration of global soccer — kicks off  on Thursday in  São Paulo with host Brazil vs Croatia and will end on July 13 in Rio with the final match at the famous Maracanã stadium, which was originally constructed for the first Post-WWII World Cup in 1950.

That game is likely to be the most-watched single event in world history — talk about prime time!

Soccer is a fast game full of twists and turns and it is notoriously difficult to predict how a big tournament like this will end, but based on history, which I admit does not always repeat itself, I will hazard three observations.

And the Winner Will Be …

First, the winner is likely to be from the western hemisphere, not Europe, Asia , Oceania or Africa.  Only twice has a team from outside the host country’s half of the globe won the big prize: Brazil in Sweden in 1958 and Brazil in South Korea-Japan in 2002. Good news for Brazil, Argentina, Uruguay, Columbia, Mexico, the USA and the other teams from that part of the world.

Second, the winner is likely to be Brazil based on the fact that they have won more World Cups (5) than Italy (4) or Germany (3). Among Western Hemisphere powers Argentina and Uruguay have won two each. That Brazil is also the host country improves its odds, according to my soccer-mad friends, although it is important to remember they lost the final at home to Uruguay in 1950 — a result that made young Pelé’s father cry and inspired the later successful efforts.

Finally, the 2014 World Cup champion is likely to be a significant wine country. Every previous winner of the Cup from Uruguay in 1932 to Spain 2010 plays in the world wine league, even 1966 winner England, which makes up for its modest but growing current wine product by being a key export market for the world’s wine.  Is that too much of a stretch? I hope not — otherwise the Netherlands, another big export market,  might as well give up now!

Is Brazil an important wine country? If so, then it would seem to be the strongest possible favorite to win the cup, as a report from the analysts at Goldman Sachs suggests. Wine is alive and well in Brazil. No wonder they are using the occasion of the World Cup to promote their industry (click on the image above to see a FIFA video) much as South Africa did (see video below) when they hosted the 2010 tournament.

Brazil’s total wine output does not rival France, Italy and Spain, the globe’s top producers (and World Cup winners, too) but they are not at the bottom of the league table, either. Data for 2009 put Brazil’s wine production at 340 ML, less than Argentina (1214 ML) or Greece (425) but ahead of Austria (235 ML), New Zealand (205 ML), Uruguay (62 ML) and Croatia (75 ML).  Huge Brazil is not covered with vines, but it is clear that enough of it is to make it a significant wine producer.

My friends in Portugal and Argentina see Brazil as a significant export market, too, based on various combinations of language, history, culture and proximity that facilitate sales of their wine. And they are not alone is seeing Brazil’s potential. OIV data for 2013 put Brazil’s total wine consumption at 348 ML, above Chile but less than South Africa.

1532 and All That

While you might think of Brazil as a land of beaches and jungles, it is a very geographically diverse country with several major vineyard areas. The principal winegrowing region is the state of Rio Grande do Sul on the warm edge of the world wine-growing zone (roughly 30 – 50 degrees of latitude north and south). Serra Gaucha has more than 90,000 acres planted to vine.

Wine in Brazil goes way back. The Portuguese planted grapes around São Paulo in 1532 and Jesuit priests established vineyards in Rio Grande do Sul in 1626. But it took a wave of immigrants from Italy in the late 19th century to firmly plant the vine in Brazil.  The migrants came from Italy’s northeast – Trentino and the Veneto – and were drawn to the climate and hilly terrain of the Rio Grande do Sul. They brought winegrowing knowledge and a taste for the wines of their homeland, especially sparkling wines (think Spumante and Prosecco). Their influence persists today.

Champagne-maker Möet & Chandon saw Brazil’s potential, especially for sparklers,  as far back as 1973, when it was making its big globalization push into the U.S., Australia and Argentina. They invested in sparkling wine production in Brazil figuring that if anyone was going to sell domestic “Champagne” to fizz happy Brazilians it should be the Champenoise themselves. Möet & Chandon were soon joined by other wine/drinks multinationals including Seagrams, Bacardi, Heublein, Domecq and Martini & Rossi, so the international presence in Brazil is quite strong.

New World Order

Wine production 100 years ago was focused on quantity instead of quality, as it was in most of the world, and that meant American hybrid grapes rather than European-style vitis vinifera varietals because of climate concerns. Market problems led to the establishment of large cooperatives in the 1920s and 1930s, as growers, many with tiny vineyards, struggled for market power. As in Northern Italy, these cooperatives are still important today as the wine industry moves up the quality ladder.

One of these cooperatives grew so large that it became more or less the Riunite of Brazil. Cooperative Vitinicola Aurora was receiving grapes from more than 1500 family growers at its peak in the mid-1990s and producing (and exporting) very large quantities of wine.

team

Many Faces, One Heart

I haven’t tasted Faces, the official Brazilian wine of the 2014 World Cup, which is made by Lidio Carraro Boutique Winery, but I like its style. The wine brand picks up the twin themes of unity and diversity that are important to a sports team and so very important in Brazil’s history. Many Faces, One Heart — it is a fine message, don’t  you think?

The white wine is a blend of Chardonnay, Muscat and Riesling Italico, which should be a pleasant summer sipper. The red wine spares no effort to make the soccer connection — it is a blend of eleven different red grape varieties, one for each of the players on a soccer team.

Eleven players. Eleven grape varieties. In the same manner as the Brazilian national football team, the FACES wine label will represent Brazil as the OFFICIAL LICENSED WINE OF 2014 FIFA WORLD CUP™,  reflecting the national terroir with a team of grapes from different grape-growing regions, representing colors, aromas and flavors of our territory. Merlot, Cabernet Sauvignon, Teroldego, Touriga Nacional, Tannat, Ancellotta, Nebbiolo, Tempranillo, Pinot Noir, Malbec and Alicante Bouschet are the selected grape varieties for the FACES red wine range. These varieties hail from every corner of the Serra Gaucha, including the Vale dos Vinhedos – the most traditional area for grape growing and wine-making in Brazil and also other locations in the Southern part of Rio Grande do Sul state.

If you scroll down on the Faces website you can find an interactive element that allows you to fill each position on the team from goalkeeper to striker with your choice of the appropriate grape variety. Apparently I am not a very good wine/soccer manager. I put Tannat in goal, but the winery says that Malbec is better there. But I did better with my choices at forward, according to the website.

Keep your eyes open for these wines and others from Brazil, which may be available more widely available during the World Cup. A quick internet search suggests that Faces wines have arrived in parts of Canada and the UK and probably here in the US, too. I’ll bet the Brazilians are hoping that you will toast their team’s victory with a glass of Brazilian wine! Cheers! (Or should I say Goooooooooooooool!?)

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Some parts of this column appeared in my previous survey of wine in the BRIC nations. Here is the Goldman Sachs odds sheet for the World Cup as reported in the Wall Street Journal. GS calculates that Brazil has a 48.5 chance of winning its 6th World Cup.

 

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