No Snifferati or Spitterati: Extreme Wine Countdown

I’m counting the days and hours until the October 7 official release day for my new book Extreme Wine.  But I have a secret: I think some of the online retailers are already selling and shipping it. Check it out.

One of the fun things you get to do in the final stages of producing a book is to ask a few people to read your work and, if they choose, to write a “book blurb” for the back cover.

After all the hours hunched over a keyboard, it is great to finally hear what people think! We managed to squeeze in six blurbs from extreme wine people on five continents.  Hey, I guess that bit in the subtitle about “searching the world” isn’t just a marketing line!

Extreme Wine Blurbs

This book is not for the snifferati and spitterati. It is an incredible and balanced study of the extremities of the wine world and wines of the world. Veseth even found our 600 bottles of extreme wine made in South Africa.
— Emil Den Dulk, owner, De Toren Private Cellar, South Africa

Extreme Wine is a must-read for wine lovers and people in the wine industry. It helps me to look at the industry from various unique angles. I found myself jotting down idea after idea while reading the book—of which many are now part of my plan for promoting Grace Vineyard in China. Highly recommended!
— Judy Leissner, CEO, Grace Vineyard, China

Congratulations to Mike Veseth for his outstanding book on the global wine world. It takes a very creative mind and a keen eye to see the center from the ‘extreme’ edges without distorting reality. It is a book that grabs you from the very beginning and once you start reading, you can hardly leave it before reaching its end.
— Aldo Biondolillo, Tempus Alba, Argentina

A provocative, engaging, and seriously entertaining journey covering all the vineyards under the sun. Mike Veseth provides a delightful sensory experience that will greatly increase the reader’s enjoyment of wine.
— Cobus Joubert, Maison Joubert, South Africa

Extreme Wine is as broad as it is fascinating, with Mike Veseth’s always perceptive insights into what makes the world of wine tick. His book is a must read for all of us who eat, sleep, and breath the rich and wonderful life of wine, and it opens its hidden extremes to the novice who might otherwise wonder why we find it so immensely rewarding.
— Bartholomew Broadbent, CEO, Broadbent Selections, United States

Thanks to Mike Veseth, readers will discover and understand the philosophy that leads each producer to create his or her own wines. All our family is very proud to be considered ‘extreme wine’ people!
— Giuseppe and Rafaella Bologna, owners, Braida Winery (maker of Bricco dell’Uccellone), Italy

Positive Early Reviews!

A couple of early reviews are already in. Click here to read Ken Umbach’s comprehensive Amazon.com reader review. Booklist and Library Journal have also published favorable reviews, which I will copy below. Thanks to everyone who takes the time to write a review or leave a comment!

No wine-making or wine-selling professional can afford to ignore Veseth’s blog, which illuminates wine’s often murky economics. Here he expounds on wine’s outliers, revealing those wines that have unusual histories, are particularly expensive or cheap, or are made under the most difficult conditions. Taking what could be an esoteric subject and making it compelling for any wine drinker, Veseth probes the best and worst that the world’s vineyards produce. He chronicles booms and busts, relating how Prohibition actually became a boon for vineyards as home winemakers of the era snapped up grapes by the case for cross-country shipment. Explaining the impact of international currency markets, he documents how Australia’s strong dollar has dampened exports. Veseth also details why the cheapest wines aren’t necessarily the worst nor the most expensive the best. Surprisingly, celebrities’ involvement in winemaking has produced some bottlings that transcend the media status of the vineyards’ owners. Not just for geeky wine snobs.
— Booklist

Veseth (Wine Wars), who blogs at the Wine Economist, takes readers on a whirlwind tour of the world’s wines in the titular superlatives. Readers may be familiar with French wines, but get ready to explore Canada’s Icewine (made from grapes frozen to 17 degrees Fahrenheit). These highly concentrated wines (popular in Asia) sell for prices ranging from $50 to $500. Veseth discusses how Prohibition (1920–33) impacted the wine industry (most wineries went out of business) as well as loopholes in the Volstead Act that allowed four million gallons of wine to be legally produced in 1925. The most expensive wine should be no surprise to readers: Bordeaux 2009. What’s the worst wine? Veseth writes, “That’s easy: look down!” Wines can be judged by their prices, with the cheaper wines located at the bottom of the wine shelves. Veseth asserts that celebrity wines such as those made by Yao Ming, Martha Stewart, and Paul Newman don’t necessarily harm the “real wine” industry and, in fact, encourage wine drinkers to try new varieties. VERDICT History buffs and adventurous wine drinkers are sure to find interesting tidbits about the industry and encounter new wines to hunt down. Highly recommended.
— Library Journal

 

Developing a Market for Chinese Wine: Tourism and Education

Here is the final post in the series on the Chinese wine industry by Cynthia Howson, Pierre Ly and Jeff Begun. It has been very revealing to see aspects of China’s wine industry through their eyes! Thanks to all three for so capably filling this space while I have been away. I hope to persuade them to give us brief reports of their future research fieldwork.

Developing a Market for Chinese Wine: Tourism and Education

by Cynthia HowsonPierre Ly and Jeff Begun

Like many sectors of Chinese economy, the wine industry is growing at breathtaking speeds and we were excited to spend a month finding out how it’s happening. Our last posts talked about how China is developing distinct terroirs and the arrival of world class wines, but there’s more to the industry than the best tasting wine. It’s not just the huge production (now 6th in the world), or the arrival of awarding winners like Jiabelan and Silver Heights. It’s the bevy of chateaux, wine museums, resorts and tourist activities that seem to be popping up faster than customers can fill them. Are there really consumers to justify the small European town at Changyu AFIP? What about the entire roads lined with just-opened wineries and resorts in Ningxia, where a long vine separates lanes and signs are shaped like wine bottles?china3a

Recently, Mike wrote about the “amenities gap” in Yakima, Washington, where some say there aren’t enough restaurants and hotels to attract visitors, but there aren’t enough tourists to attract investment. But in China, investors seem more than happy to tolerate some empty hotels and restaurants as they anticipate (and promote) future demand. Of course, each new business or infrastructure project helps provincial governments to achieve very high economic growth targets, so the environment for investment matters. But it’s not enough. The seeming promise of an insatiable and growing consumer market in China continues to draw investors from around the world. (The documentary, Red Obsession, shows a China passionate about buying and making expensive red wine and it’s easy to forget that most Chinese people never drink wine, and many others add Sprite).

An Insatiable Market? Developing a Taste for Wine

Industry experts and winemakers repeatedly told us that the Chinese consumer market is bigger than they can satisfy and it continues to grow. But, they are also concerned about marketing to average consumers, people developing a taste for wine when most still prefer spirits (baijiu) or beer and serious wine lovers tend to be biased toward imports. For the winemakers, of course, there are always concerns about a stable and consistent grape supply. High quality wine is a notoriously costly and long term investment, so it’s not surprising that young wineries are not yet profitable. The search to define a style that will distinguish a Ningxia cabernet sauvignon and the ability to coordinate wineries toward the development of appellations is still in the earliest stages. What is unusual in China is that there are resorts and wine clubs when the wines may be largely unknown or difficult to find.

Of course, many resorts and clubs are beautiful, but not yet full or profitable. The crowds have yet to arrive, but investors seem confident enough to continue building. So, what is binding construction companies, real estate moguls and foreign wine merchants in their faith in the Chinese wine market?

There is something to be said for accessing the largest market in the world. Indeed, the most famous wineries have no trouble attracting crowds for their tours and it is worth noting that the tasting at the end of the tour is not an important part of the experience. Some people skip it. Others seem to find it amusing. We appreciated the insight of one expert, who told us that when the tasting seems deemphasized, it’s probably not the best part of the tour.

The picture here is the Changyu Wine Culture Museum on a typical day. The museum is packed with tourists, attracted to the beaches of Shandong Province for the summer holidays. On another tour, we invited our taxi driver to join us. Although more of a beer drinker, he told us about the founder of Changyu Winery in 1892 and took his own pictures in the museum.   china3b

So, unlike other wine regions in the world, the infrastructure for wine tourism is appearing in China before the actual tourists. And, the tourists may be willing to come when they are not (yet) wine drinkers. We saw photo shoots with blushing brides and families learning about wine tasting, but what struck us was the number of people who were interested in wine even though they claimed not to like the taste of wine.

Of course, true connoisseurs aren’t left out. They will find wine clubs where they can not only blend their own wine, but actually pick and crush their own grapes before fermenting their own wines. Meanwhile, for families looking for something to do on the weekend, there are day trips where grandparents can play mahjong under a beautiful trellis and kids can pick grapes, run around, and at one wine chateau, they can even play drums or a game of foosball in the wine bar.   Indeed, wine tourism in China has something to offer for everyone.

Australian Wine on the Global Stage

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Click on the image above to view a video of my recent talk on “Australia on the Global Stage” at Savour Australia 2013, the international gathering designed to re-launch Brand Australia to the world market.

Unfortunately you can’t see the slides that I used to illustrate my talk, but I think you will get a good idea of what the audience experienced. I received lots of positive feedback — I guess most people were surprised that an economist could be interesting at 9 am! Who knew?

(Update: Click here to see both the video and the slide show that goes with it! Thanks Savour Australia for making this available.)

I’m still travelling in Australia (Tasmania at the moment), but I’ll file a series of reports on the conference once I’m back in the office. In the meantime, enjoy the video of my talk and check out the other presentations.

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Come back next week for the final report in the three-part series on wine in China.

 

Wine in China: Government Investment, Civil Servants and Hospitality

I’m still in Australia (soon to step aboard a flight to Tasmania) and, through the magic of the Internet, simultaneously in Mendoza, Argentina, where I am a member of a virtual panel of experts (or is that a panel of virtual experts?) addressing the competitiveness of Argentina’s wine industry at the IX Foro Internacional Viniviticola. I guess you can be in two places at once these days!

Last week’s column by  Cynthia Howson, Pierre Ly and Jeff Begun on the search for Chinese terroir generated a lot of interest. Here is the second part of their report. Come back next week for the final installment.

Government Investment, Civil Servants and Hospitality in China

by Cynthia HowsonPierre Ly and Jeff Begun

 In the last post, we talked about the diversity of Chinese terroir and how the distinctive features of each region might be developed. It’s no secret that the government is a major player in the Chinese economy and wine is no exception. Each winery we encountered depends on some form of support or relationship with local government officials, usually at the local level (town, county or prefecture). And each wine producing region has a provincial government that is committed to upgrading in some way, but the issues they face and the resources they can provide vastly different.

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In this photo, a couple poses at the “World Wine Walk”, a street in Yantai, Shandong, where city has built a beautiful space to highlight the wine industry. Presumably, wine shops or other stores will fill the vacant spaces, but for now, it is just a very pretty place to walk near the beach and restaurants.

The State as Public Investor, Institutional Facilitator and Quality Control Monitor

Crucial government support can come in the form of investment, cheap credit, infrastructure or institutional support, like facilitating contracts or coordinating farmers. Each of these is critical and is likely to affect the types of wineries that will be most successful in each region. For some wineries, relationships with farmers require careful, daily supervision. In one case, the village head provides much of the human resource management for a winery, coordinating day laborers and making sure the vineyard has the right workers at the right time. Elsewhere, a manager for a large corporate winery said it’s not so much about financial support as good policy, helping to coordinate with banks and institutions. “They don’t interfere,” he said.

In Ningxia, local governments encourage new wineries by providing electricity, irrigation, pavement, signs on the road, subsidies for imported vines and even funds to invite foreign consultants and prizes for award-winning wineries. In Shandong, local governments coordinate lease agreements with farmers so that a winery can establish a single vineyard and control its grapes even if dozens of different farmers control the small plots of land.

Interestingly, the role of government as regulator came up less frequently in our discussions, but it is one of critical determinants of a successful wine industry. Pollution, pesticides and food safety are all critical features of a healthy vineyard and are very sensitive topics in China. Indeed, a 2012 scandal over contaminated wine stoked concerns about the largest producers and whether food safety inspectors should become stricter about pesticides. We took this photo of a pesticide-laden cluster at a major state-owned winery (although this may be just a very large demonstration vineyard).

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Needless to say, this is not what the grapes looked like in most of the vineyards we visited, including those of small farmers.  However, several wineries expressed concerns about producers using pesticides that are banned in China (where regulations are already looser than in Western countries). This is a particular concern in Shandong, where humidity is most threatening and where, it’s worth noting, some farmers are hesitant to eat the skins of their own grapes. Here, efforts to tighten enforcement of environmental regulations could be facilitated by ongoing efforts to promote agribusiness over more diverse types of wineries.

Another Public Investment: Government as Customer

The most successful wineries benefit from government contracts for banquets and from civil servants as high end customers. Those sought after consumers are not just wine drinkers, of course, but collectors, and most importantly, those who purchase wine as gifts. It’s no secret that gifts are an important part of business negotiations in China. Some experts have pointed out that a market for extremely expensive Chinese wine has benefited from civil servants and business magnates who are looking for an appropriately priced gift. Such a gift need not be consumed. At other times, negotiations might involve fancy banquets or informal meetings, where the spirit of friendship is facilitated by a meal and a bottle. Indeed, most people we spoke with emphasized food and drink as part of maintaining good relationships with local officials.

But conventional wisdom has it that civil servants have seen their belts tighten, a trend that the new President, Xi Jinping, is eager to continue. The national government has made some public efforts toward curbing corruption in addition to increasingly strict monitoring of accounts. Of course, careful control of public expenditure sounds great to a political economist, so we were surprised when even a taxi driver called it a “disaster.” The “disaster,” we are told, is that when civil servants are constricted in their use of expense accounts, the entire hospitality industry is affected, including hotels, bars, restaurants, taxi drivers, and of course, wineries. Now, it’s important to keep in mind that our informal conversations are just that. We can’t say whether civil servants have actually changed their spending habits or if, for example, announcements in the media have stoked the rumor mill, but we did find it curious to encounter the same perspective from very different people in the hospitality industry and to note that it was echoed by Beijing Boyce. We asked a driver in Shanxi province whether he sees a lot of tourists and he explained how changes in government spending have hurt the tourism industry. We discussed the prices of Chinese wine with a foreign barrel merchant in Shandong province and he explained how changes in civil servants’ accounts are crushing the market for low quality, expensive gift wines.

If our barrel merchant and others are correct, there may be important changes in Chinese supermarkets. If wine drinkers seek out higher quality at the same time as consumers limit their purchase of exorbitantly price gift wines, we might start to see some of the delicious wines we tasted taking up more space at the supermarket. Actually, we are pretty optimistic that those delicious wines are coming regardless of civil servants’ expense accounts.

In Search of Chinese Terroirs

I am in Australia this week where I am giving a talk called “Australia on the Global Stage” at Savour Australia 2013, the international wine gathering that Australian wine is using to relaunch Brand Australia on the global scene. I will have a report on what I learn in Australia in due course, but for now I’m busy just being there.

My friends and colleagues Cynthia Howson and Pierre Ly and their associate Jeff Begun have recently spent several weeks in China examining trends and issues in the Chinese wine industry. They have been kind enough to write three short essays that I will publish here while I’m away from the office. I think you will find their analyses very timely and interesting! Here is their first report.

In Search of Chinese Terroirs

by Cynthia HowsonPierre Ly and Jeff Begun

We were lucky to spend a month last summer traveling through several Chinese wine regions, meeting producers, farmers, and experts, and tasting some truly delicious wines. In past Wine Economist posts, Mike noted that China’s fragmented agriculture was the biggest challenge for Chinese wine producers. How can winemakers ensure a reliable supply of flavorful and fully ripe grapes, when they have to work with hundreds of implausibly small family-run vineyards?  Mike pointed out that the best producers are those who somehow solved this problem. Another serious and more permanent challenge comes from the climate. So how did they improve and what’s next?

The grape supply chain

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Stunning view at Grace Vineyard in Shanxi province.

Getting control over land is not easy in China and many producers still have to work in large part with hundreds of small family-run vineyards. Yet, some high quality producers have found ways to work with this difficult supply chain by developing relationships with growers. For example, Grace Vineyard, in addition to renting land to grow grapes with their own labor, works with hundreds of very small farmers, and provides them with training and credit for inputs. Grace is willing to pay the price for good quality grapes and provides incentives to farmers accordingly. Of course, at Grace like elsewhere, this takes a lot of work with supervisors going through the vineyards and checking on the work, relationships are not always easy and some compromises may have to be made in difficult vintages to sustain good relationships. But the excellent wines we tasted at places like Grace Vineyard in Shanxi, or Leirenshou in Ningxia, could not have been produced without flavorful, fully ripe fruit and a sizeable portion of it had to come from small family farms.

Of course, it is easier for wineries to secure high quality fruit when it is grown in-house, by renting land to farm with their own employees. Some wineries rent large plots of land directly from the government. Others have to rent from individual farmers, either by dealing with each individual grower directly, or by entering contracts with a village authority which then redistributes rents to individual farmer. In each case, relationships and the local institutional context determine which types of arrangements are feasible and on what terms. Future policies and reforms regarding land markets will certainly play a key role to spread existing improvements in Chinese wine on a larger scale.

Many Chinese terroirs?

So if wineries have found and continue to find ways to improve the grape supply chain, what about the climate? Isn’t China simply too difficult a place to grow high quality wine grapes? People seem to disagree on this issue but what we saw makes us hopeful and optimistic that pockets of high quality will continue to develop.

One source of hope is that China, as one would expect given its size, has many terroirs with incredible diversity. One winemaker told us that opportunities and challenges come together, and this applies to each region in a different way. This post by award-winning winemaker and consultant Professor Li Demei, does a great job explaining the pros and cons of the climate in seven wine regions. For example, toward the Northwest, in Ningxia and Xinjiang, although harsh winters require that vines be buried in winter, reliably hot and dry summers protect the grapes from disease. A reputation for limited or no pesticide use could be a strong selling point, given that food safety incidents in China (including some related to pesticide residue) have received a lot of media attention.

In Shandong province on the East coast, producers enjoy a mild winter and vines do not have to be buried. However, the location also comes with the challenge of humidity and rain during the summer, and especially at harvest. The risk is that people will use pesticides a bit too generously, but careful disease prevention programs can be developed. Emma Gao, from award winning winery Silver Heights, based in Ningxia province, told us she saw a lot of potential for Shandong winemakers, and she compared them to the Burgundians, in the sense that there are many people there willing to put in the hard work needed to overcome challenging conditions. Hardworking Shandong terroiristes overcoming adversity, how interesting would that be! It will be interesting to see future advances there, and it is worth noting that the DBR (Lafite) – Citic project is currently under construction there in a small village next to the resort town of Penglai.

Unlocking China’s terroirist soul

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Terroir labeling: the mountains of Alti-wine, and the sandy dunes of Skyline.

That’s what Mike hoped when he wrote about China in Wine Wars. There are many challenges ahead for producers of course, from contracts on land and grapes, to infrastructure and climate. But our last tasting before leaving China gave us further hope. Jim Sun, founder and chief editor of the leading industry media winechina.com, welcomed us at his China-focused cellar in Yantai to share insights, as well as five delicious wines. With passion, Jim told us the story of each of the wines he picked from regions we had not visited, to illustrate a variety of interesting microclimates. The terroir message of each wine was evident, from the Gobi desert vineyard of the Skyline Chardonnay, the vertiginous high altitude of vineyards of the “Altiwine” red produced in Yunnan province, to the proximity to a lake that keeps some Cabernet Sauvignon vines cooler than usual in Xinjiang.

Experts seem to disagree on whether China can become a serious producer of fine wine. But there are already some delicious wines, and they each come with their unique and interesting story. That may be enough to get wine enthusiasts interested in China and encourage further progress.

In our next post, we will discuss the role of government in Chinese wine.

Extreme Wine Oregon: Big & Small, Old & New, North & South


I’ve spent a lot of time in Oregon in the last year or so — there is a whole chapter in my soon to be released book Extreme Wine  about the extreme wine people I met at last year’s International Pinot Noir Celebration. But Oregon has a lot of extreme wines and extreme wine people with stories that deserve to be told. Herewith a very brief survey of some of the Oregon extreme wines and people that we’ve encountered in the past few months.

P1050635Extremely Old Oregon Zinfandel

Lonnie Wright is one of the key  figures in the Columbia Gorge AVA that spans the Washington-Oregon border along the Columbia River. He has been instrumental in the development of the vineyards in this region. I am not sure where this part of the Oregon wine scene would be today without Lonnie’s wine-growing and vineyard management expertise.

Lonnie appears in this column not because of a vineyard he planted, however, but because of one he brought back to life: a vineyard of 100+ year old Zinfandel vines that produce a special wine for his The Pines 1852 label. The story is that stone mason Louis Comini came from Genoa to help build the locks on the Columbia River. He stayed in The Dalles when the job was done, helping out at the local Catholic church. The vineyard, planted in the late 1800s, was his work.

I thought I knew what an Old Vine Zin vineyard looked like from my visits to Sonoma, but this one bears no resemblance to the gnarled vines I saw there. It gets cold in this part of Oregon and in the old days the vines were cut off at the ground so that they’d be protected from freezing temperatures by a blanket of  snow. The roots are ancient and gnarly, but the vines not so much as you can see in this photo and in the video above.  Lonnie found this vineyard and recognized its potential. The old vines and the wines that come from them are a tribute to his extreme persistence and sense of history.

P1060171Extremely Old World Oregon Wines

Phelps Creek Vineyard is also in the Columbia Gorge AVA, a short drive from Lonnie’s old vines, but a world apart. Bob Morus began this extreme project in 1990 when the first blocks of Dijon clone Pinot Noir were planted (Lonnie helped lay out the vineyard, Bob tells me). The slopes are steep, the aspect dramatic and the view of Mount Hood is spectacular.

Bob has a pretty extreme view of what his vineyard and winery can accomplish — and ambition to make wines that can not just stand up to the Willamette Valley wines that get all the attention, but to Burgundy, too. He was able to entice Alexandrine Roy of the famous Burgundian wine-making family to become involved with the winery, eventually becoming Director of Winemaking.

Bob generously met with us twice this year, first in March when we tasted a vertical of the Estate Reserve Chardonnay and then again in July, when we sampled a vertical of the Cuvee Alexandrine Pinot Noir at the winery overlooking the vineyards. The wines were elegant and Burgundian in their ability to capture both place and vintage. Really delicious and a great reminder that extreme Oregon Pinot extends beyond the Willamette Valley.

P1060309Oregon’s Largest Winery

King Estate Winery is Oregon’s largest wine producer, but its estate vineyards lie just south of the the Willamette Valley AVA line, so most of its wines carry the more general “Oregon” appellation. King Estate has four main wine lines, the flagship  King Estate Domaine wines made exclusively from estate fruit,  the Signature wines that add purchased grapes to the mix, the wildly popular Acrobat wines and a line called NxNW made from Columbia Valley fruit. Pinto Gris is the top seller and the winery’s flagship wine.  Wine club members have access to special bottlings and single vineyard wines. The beautiful hilltop winery is bursting at the seams with activity.

We met with executive VP Steve Thomson to talk about King Estate’s marketing program (and especially its recent move into the Chinese market) and its plans for the future. Elizabeth Allcott introduced us to wine club members at a wine pick-up party that was going on during our visit. And we enjoyed talking both wine and wine economics with assistant winemaker Derrick Thoma  (both of Derrick’s parents are economics professors — his father Mark is the guy behind the influential Economist’s View blog).

King Estate is large by Oregon standards, but not a megawinery by any means. It is extreme in many ways, but perhaps most notable for its commitment to sustainability, which seems very deep, and its focus on hospitality. We perceived a strong sense of identity and purpose, but also a dynamic feeling appropriate to a rapidly evolving wine region. The winery experience is very well designed and the opportunity to taste estate wines along with locally-sourced food products (many from the estate itself) at the well-regarded winery restaurant is a treat. We will remember for a long time the dinner we enjoyed on the deck overlooking the vineyards with a bottle of 2002 King Estate Domaine Pinot Noir.

The Biodynamic Frontier

We were in Southern Oregon recently — I spoke at a regional wine industry symposium and we attended an event called World of Wine Festival, the premise of which is that you can find a world of wine in this part of the state. And you can! It was great to meet everyone and taste the wines. We found time to visit two wineries that showed two very different wine extremes.

Bill and Barbara Steele were not looking to make wine when they bought a big plot of land in the Applegate Valley. They wanted to pursue their passion for sustainable agriculture and sought out farmland that had been abandoned for many years. Once they found their dream farm, they let the land speak to them (not literally — they did a lot of scientific testing) and what it told them was that it wanted to be a vineyard and farm, with Rhone grape varieties covering most of the territory (distributed according to soil types and heat unit measurements) with a fallow pasture, some vegetable gardens and a stand of hazelnut trees. And, of course, a winery called Cowhorn Vineyard and Garden.

Cowhorn might be the only biodynamic vineyard in Southern Oregon (biodynamics is much more common up north) and it could be the largest integrated (grapes plus other agricultural produce) biodynamic farm in the U.S. (Click here to see the master plan of the estate.) Ironically, biodynamics is notable in grape farming, which movement founder Rudolf Steiner did not specifically address, than in the broader farming community that he intended to influence).

It was great to see the Steele’s bush Grenache vines and to learn about their passionate attachment to their land and commitment to sustainability and natural winemaking generally. Oh, and the wines are extremely delicious.

Pioneers on the Southern Oregon Trail

Just down the road from Cowhorn we came to Valley View Winery and it provides this column’s final extreme. Mark and  Michael Wisnovsky’s family are the second generation to farm this land and they seem to have a special relationship with it. They take care of the land and the land takes care of the family. Wine entered the mix in 1972 when their father planted vines and started the first winery in these parts since prohibition. Modern pioneers! They named it Valley View after a winery that was established by pioneer Peter Britt back in the 1850.

Valley View has one foot in the past — we brought home several bottles of a delicious 30th anniversary Pioneer Label 2005 Merlot with a label as close as government regulations allow to the earlier wines.  But the other foot’s in the future. Mark showed us a line of wine called Rogue Red that has proved popular in Oregon (he does bottle signings at Costco) and will soon show up in Washington and other states. It’s larger volume than the other wines and aimed at the growing market for red blends. Our friend Charles walked out with a case of Rogue Red.

Mark said that he would love it if everything happened right  there on the farm — the grapes, the wine, the tasting room, all right there in Applegate Valley.  But Mark and family recognized the need to look outward (even to Costco) to seize market opportunities while still  respecting their history and the region’s heritage. Rogue Red is successful part of that extreme wine balancing act.

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Thanks to everyone who made these visits so interesting: Lonnie and Sierra, Bob and Becky, all the folks at King Estate, Bill and Barb, Mark, Chris and Allison. Special thanks to research assistants Bonnie and Richard.

Three New Books: Sicilian Wine, Postmodern Winemaking & a Wine Economics Textbook

September is an awkward time of the year — it will still be summer for a few more weeks here in the northern hemisphere, but the start of both the harvest cycle and the school year are upon us, too. Still time to play, but work beckons.

This situation inspires me to review three new books from the University of California Press. We’ll start with a bit of summer wine touring, go on to autumn wine making, and then head back to the classroom.

The Sicilian World

The World of Sicilian Wine by Bill Nesto MW and Frances Di Savio. University of California Press, 2013.

I admit that I didn’t know very much about the wines of Sicily before I picked up this interesting and informative book. I guess I just didn’t realize what I was missing! The authors really do take the title seriously, revealing a stunning 360-degree examination of Sicily’s world of wine.

Many (most?) readers will be drawn to the excellent discussion of Sicily’s wine grapes and the detailed survey of Sicily’s regions that make up the second half of the book. After all, if you are interested in understanding the wines themselves as a consumer or enthusiast or perhaps visiting Sicily as a wine tourist, these are the critical sections.

But I have admit that I was fascinated by the introductory chapters, too. The authors drill down into Sicily’s wine history and the factors that unexpectedly pop to the surface are politics and economics! Perfect for a political economist like me.

I was surprised, but I guess I shouldn’t have been. After all, what about Italy is not political? And what about Italy is not economic? And Sicily, with its unique position in terms of politics, economics, history, and geography is a completely fascinating case.

My favorite sections? The analysis of how external factors (trade) and internal incentives (quality versus quantity property rights structures) shaped – or rather pushed and pulled – Sicily in its key formative decades. And the analysis of the European wine policy and its changing impact that opens chapter 3 is worth the price of the book alone. Never seen this explained so clearly. Highly recommended.

Postmodern Turn

Postmodern Winemaking: rethinking the modern science of an ancient craft by Clark Smith. University of California Press, 2013.

[Note: as of 9/5/2013 this book was out of stock awaiting a new printing. UC Press tells me it should be available again by the end of the month.]

I know Clark Smith’s name from his work on music and sensory appreciation of wine, but within the industry he is seen as something of a winemaker’s winemaker – with a twist. His monthly column “The Postmodern Winemaker” in Wines & Vines magazine is required reading for anyone interested in the cutting edge. These columns and other previously published material, edited to be accessible to a broader audience, are the basis for the book.

The book is a complex blend of theory, practice and philosophy. It wouldn’t hurt to have a good background in both postmodernism and winemaking if you want to get the most out of it. (Smith provides a handy winemaking primer in an appendix, which is worth having on its own, and also a glossary of postmodern terms).

This is a very personal book, based on Smith’s years of experience. It might not be a book that you sit down and read from cover to cover. It feels like it wants to be read a little at a time, and not always in the given order, and then digested for a while. Or maybe that’s just my reaction because my background in viticulture and oenology isn’t as strong as it could be.

What’s the bottom line of Postmodern Winemaking? Well, I think the book rather intentionally resists a one-line summary. Certainly there is a lot of technical and technological discussion here and the notion is that technological advances are not always progress. The postmodern winemaker uses technology, that’s for sure. Woodchips, not traditional new barrels or popular staves, are an integral part of Smith’s winemaking (he hasn’t bought a barrel in years) and I was fascinated to learn about  a controversial process called flash détente. But it’s important never to let the science run the show.

I talked about Smith’s book with an Oregon winemaker recently and her takeaway was that the march of technology was shrinking her niche — highly natural wines of origin — into a tiny sliver. She was quite upset — she knew she was fighting a battle, but she didn’t quite realize how outnumbered she was! That’s not the message I got from the book, but I can see how she would read it that way.

Interesting. Challenging! Definitely worth your time, whether you are postmodern (or a winemaker) or not.

Textbook Approach

American Wine Economics: an exploration of the U.S. wine industry by James Thornton. University of California Press, 2013 (to be published in September).

Finally, with classes starting up I am reminded that there are now some university courses on wine economics and so what could be more useful than a textbook on this subject? You might think that I would be the author (and that this post would be filed under Shameless Self Promotion), but I have sworn off textbooks now that I have retired from teaching – I wrote or co-authored textbooks in economics, public finance and international political economy earlier in my career.

This book is called American Wine Economics and it focuses on the U.S. wine industry of course, but with due acknowledgement that the wine world is a very small one now and that international and global integration is a powerful force.

This book, due to be published later in September, fills a useful niche and I think it has the potential to expand the number of wine economics courses both in the U.S. and abroad. The core of the book is a survey of the wine economics literature presented in a way that will be accessible to readers with at least a little economics or business background. I am grateful to see all this material collected in one place.

If I have a criticism it is that the book is too ambitious (or perhaps it is too cautious?). You need to understand something of wine to understand wine economics, so the author provides a brief primer such as might be found in a basic guide, which will do its job for newbies. You also need to understand some economics concepts and tools, so these are presented as well.

The result is that there is a lot of background material to get through before the core chapters are finally reached. A less ambitious author might have sent readers to specialized publications for the wine and economics background or put the primers in appendices. No perfect solution, I suppose, and this is probably a good compromise. The core chapters certainly are meaty.

If you have an interest in pushing deeper into the academic side of wine economics, this is a good place to begin.

Fine Wine: Alternative Asset or Emerging Market?

My friend Rebecca Gibb who edits the online wine magazine at Wine-Searcher.com has invited me to write a periodic column on the fine wine investment market. The first column appears today — follow this link to read it. I survey some summer trends in the wine investment market and then ask whether fine wine is best viewed as an alternative investment like oil and gold as as an “emerging” investment market.

The challenge of writing about wine investment is appealing and I look forward to the opportunity to spend more time studying this fascinating intersection of wine and economics. But what sort of column should it be?

I don’t want to write that Paul Krugman calls “up and down” economics. You know, Chateau this down in today’s auction, chateau that up on the Liv-Ex ticker. Besides, the auction houses and trading platforms already provide lots of this sort of information. No comparative advantage for me there.

So analysis and interpretation is what I will try to provide. And a bit of perspective, too, both in terms of time frame (not sure how frequently I will write on this, so I will take time to digest the incoming news) and economic interest. Much of what you see about fine wine investment comes from inside the market bubble, written by people with a dog in the fight. I’ll try to provide an outsider view.

How will this work out? Will I find interesting stories to tell? Will Wine-Searcher’s readers think they are useful? Too soon to tell — that’s what I think. But I would appreciate it if you’d check out today’s column and let me know what you think.

I’d also appreciate your ideas about where I should focus my magnifying glass in the future. Cheers!

Who Should Be The Voice of Wine Wars?

I’ve just learned that Audible.com is going to produce an audio book version of Wine Wars. They are interested in my opinion about who should read the book — what kind of voice would be best for Wine Wars?

I’m not sure, so I thought I would ask you, my readers. Should the voice be young or old? Male or female?  Should the reader have an accent of some sort — British, French, Spanish, Italian?  Is there a particular person’s voice that you’d like to hear?

Please use the comments section below to let me know what you think.  I don’t know if Audible.com will take your advice,  but if they respond to a particular comment I will send that person an autographed book (your choice of Wine Wars, Extreme Wine when it is published or Globaloney 2.0).

Invisible Vineyards & the Division of Labor Theory

Last week I wrote about the Yakima Valley AVA, which I described as Washington’s invisible vineyard. Why doesn’t it get more attention? I considered the “amenities gap” theory and concluded that it was at best a partial explanation. This week I dig a bit deeper into the issue.

Division of Labor Theory

The romantic idea of wine is a tiny vineyard farmed by a rugged individual who makes wine right there on the spot. We call this an estate winery and for better or worse the conventional wisdom holds that its it the model for quality wine. There are estate wineries in Yakima, but they are the exception rather than the rule.

In general the Washington State model is that there is a division of labor between farming the grapes and making the wine. The vineyards hereabouts are often large and supply grapes to many different wineries. The advantages of scale are tempered with the ability to give special treatment to particular blocks, rows, and sometimes specific grape vines within the larger vineyard.

Exceptional Exceptions

Betz Family Winery and Brian Carter Cellars  are both extreme and typical at the same time. Their wines earn the highest praise, but I don’t think they own any vineyards at all — they “outsource” the grape growing to others (although I think they are far from “laissez faire” in their relations with their winegrowers.) There is no indication that their wines suffer from the lack of “estate” status and probably benefit from the specialized system that has evolved.

Côte Bonneville is an instructive exception to the rule. Kerry Shiels makes the wines from grapes grown by her parents Hugh and Kathy at their iconic DuBrul Vineyard. But only a fraction of the grapes go into the estate wines — the majority are sold to a short list of wineries that are happy to feature the DuBrul Vineyard name on their labels.

Thurston Wolfe is another exceptional example. Wade Wolfe, who has inherited Walter Clore’s place as the valley’s leading viticultural authority, relies upon winemaking skill and an unchallenged knowledge of the region’s vineyards. He makes wines that have a cult-like following despite their lack of “estate” designation. An estate vineyard provides only a small proportion of the winery’s fruit — the rest is purchased.

Famous Names

Many of the most famous names in Yakima Valley such as Boushey and Red Willow are vineyards, not wineries, famous for the quality of their fruit and the dedication of their owners.  But they don’t produce a drop of wine themselves. This model has been very successful and accounts in part for the growth of the Washington wine industry since it is possible to start a new winery, a capital intensive commitment, without also having to develop equally capital intensive vineyard properties. If wine is really made in the vineyards, then Washington wineries with access to these Yakima vineyards start the game with a real advantage.

But the division of labor has also contributed to Yakima’s invisibility. More attention is given to Walla Walla and Red Mountain (a Yakima AVA sub-appellation), for example, in part I think because the estate winery model is more typical in these areas, helping them to achieve a stronger reputation.

(One consequence of the division of labor is that many wineries blend across regions, which they could not do with an estate wine, drawing upon fruit from different vineyards, rather than focusing on expressing a particular terroir. Some critics argue that something is lost in this process, even though the wines may be very good or objectively even better than similar single-vineyard products. And because the vineyards may not all be within the Yakima AVA’s strict boundary, their wines often carry the broader Columbia Valley appellation.)

Westward Ho!

This division of labor was shaped early on by Chateau Ste Michelle’s decision to build its showcase winery in rainy Western Washington, in Woodinville just a short drive from Seattle, rather than in the more distant Yakima Valley where the grapes are grown It must have seemed like a peculiar choice back in the 1970s, but it has turned out to be a brilliant move in terms of the development of the wine industry. (Ste Michelle makes its white wines in Woodinville — the freshly pressed juice is rushed to the winery by tank truck — while the red wines are made in the wine country itself).

Because wine is an industry that seems to develop in clusters, one result of the Ste Michelle strategy has been to help create a vibrant wine production zone in the Seattle area, with literally hundreds of wineries, all far from the vineyards that supply them. Even wineries that have no production facilities in the Seattle area see the wisdom of setting up tasting room operations to facilitate direct sales to the critical mass of wine tourist consumers that the cluster has encouraged.

There are wine clusters in the Yakima Valley, too (especially around Prosser and on Red Mountain), but they are obviously smaller than on the west side of the Cascades and are less successful in generating critical mass. This is changing, however. A number of new investments are in the works including Ste Michelle’s decision to convert its Snoqualmie brand facility in Prosser into a home for its spectacularly successful 14 Hands wines. This might be the cornerstone investment that really starts things moving.

Is This a Problem?

Yakima is sort of a middle sister. Not as big as the Columbia Valley of which it is an integral part but huge compared to the sub-AVAs like Red Mountain and Rattlesnake Hills that live within it.  Some producers choose the broader designation for their wines while others prefer to focus on the more local name. Yakima, which is key to both the big and little, is left to spend Saturday night alone at  home. How sad.

But I think this is the wrong way to look at the situation and so I am glad that the Yakima Valley wine folks are choosing to use the occasion of their 30th birthday to celebrate what and who they are, focusing on the wines, vineyards and the people who make and tend them.

It is only a bit of an exaggeration to say that there would be no Washington wine industry without the Yakima Valley. The next time you pull the cork of a Washington State wine you might stop to consider the invisible vineyards that are responsible for the liquid in your glass.

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Here’s my favorite example of the division of labor (and how not to do it!).

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