The Wine Economist

Rabobank's World Wine Map

Welcome to the page for my new book project, Grape Expectations: Globalization, Two Buck Chuck and the Future of Wine, the story of  the battle between the market forces that are redrawing the world wine map and the terroiristes who resist them. Here’s how the book unfolds.

Globalization

Globalization has pushed back the borders of the wine world (click on the Rabobank World Wine map above to see what I mean), creating a complex inter-connected market where Old World and New World wines and producers compete head to head.

The battle isn’t just about bottles bought and sold, however, power and taste are also at stake. Who will call the shots in the wine market of the future? Who will set the price? Whose palate will prevail? To paraphrase the Chairman on Iron Chef, whose idea of wine will reign supreme?

Two Buck Chuck

Many fear that power and taste will shift from the Old World to the New and vin de terroir (wine from the earth) will be replaced with vin du marché (market wine) – wine designed by marketing executives and engineered to appeal to least common-denominator palates shaped by long exposure to vast quantities of fizzy sweet ice-cold Diet Coke.

This is the world, wine snobs say, of Two Buck Chuck, the simple, cheap wine sold in the U.S. at Trade Joe’s supermarkets. Every country has its Two Buck Chuck (sometimes at prices significantly below two dollars!) and every wine snob worries that the global market has unleashed a race to the bottom, where taste and terroir are endangered species and Chuck and his even cheaper cousins will someday rule.

Revenge of the Terroiristes

It’s not surprising that some people would put up a fight, resisting the tide of Two Buck Chuck and pushing back against the power of globalization. These are the terroiristes, those who seek to preserve and protect a different idea of wine, one more tightly connected to place and tradition.

The future of wine will be decided in the marketplace where globalization and Two Buck Chuck confront the “revenge of the terroiristes.”Or at least that’s the basic story I tell in Grape Expectations, although it’s actually a little more complicated than that.

The World Isn’t Flat

Globalization is a powerful dynamic in the world of wine, but the spread of wine is nothing new. The Old World of wine (Italy, France and Spain) was once the New World as wine spread from Asia minor to Greece to Italy and on to France and Spain before eventually painting the the earth in hues of red, white and rose. Now wine has a global market where what goes ‘round comes ‘round.

The Old World, once the master, now finds itself in the uncomfortable role of apprentice, forced to learn a new trade as demand for its wine dries up. The Old World is now the New New World as ideas and practices imported from Australia and California come ‘round.

Power is shifting as globalization proceeds, from producers and the wines they wish to make to consumers and the wines they wish to buy. Two Buck Chuck is one symptom of this trend, but it isn’t the whole story. There have always been cheap wines, even in the Old World (Two Buck Chuck is actually a German invention!) and while the demand for bottom shelf wines has increased in the New World, the real action is further up the Wine Wall, in the premium wine category. The race to the bottom is really a sprint to the top!

The Secret of Two Buck Chuck

The secret of Two Buck Chuck isn’t that it is cheap, but that it is trustworthy. People buy TBC because it is sold at Trader Joe’s. When you see a $2 wine at Safeway you think “how can it be any good?” but when you see one at Trader Joe’s you think “how bad can it be?”

With so many wines from so many places made with so many grapes at so many price points, how can anyone know what to buy? Wine has become a confidence game where the key is to make wine easier to understand without letting out the genie that makes wine a special drink.

The real power in the global market increasingly resides in the hands of those who can simplify this choice and help consumers feel confident about buying wine. Hence the importance of “brands” and influential retailers such as Aldi in Germany, Tesco and Sainsbury’s in Britain and Costco and Trader Joe’s in the  United States.

These wine market forces do not go unopposed. The “revenge of the terroiristes” is real, both the black masked guerilla fighters who protest wine reforms in the South of France (the real terroiristes!) and those who resist in more peaceful ways.

Terroir is Now a Moving Target

Resistance is not futile (it would be wrong to create Grape Expectations only to crush them!) but it is complicated. Globalization and Two Buck Chuck are not the only threats to the terroirste idea of wine. Climate change and demographic shifts are turning the world of wine upside down.

It is difficult to defend, terroir, the taste of place, when the place is changing so quickly (the best French Champagne, it is said, will eventually be made in Scotland if climate change continues).

And it is difficult to defend an Old World vision of wine when consumers in the  countries that produce the most wine (France, Spain and Italy) are rapidly turning their backs on it.

Sideways

So the future of wine is up in the air. How can we tell how the battle for the soul of wine will be resolved? The answer, I propose, will be found by taking a sideways approach.

Wine enthusiasts are trained to tip their glasses so that they can see how the color changes at the far edges. That’s one way to know how a wine has developed and how it may change in the future.

In the same way I want to tip the wine world sideways and look at its edges, the places where the change may be greatest: that means looking at China, New Zealand and the furthest edge of all, the New New World of France, where Old World and New World spectacularly collide.

That’s where we can best appreciate the potential for Grape Expectations about the future of wine.