Wine Innovation: Lessons from Portugal

Innovation is a hot topic in the wine industry these days. While some wine brands can depend upon their traditional markets, messages and products, many producers find themselves under increasing attack from “the crafts” — craft beer, craft cider and craft spirits.

One advantage that these alcoholic alternatives seem to possess is the heightened ability to adapt, evolve and excite — to innovate in various ways that keep customers coming back to see what’s new.

How wine got in this situation is a long story that I will tell another time and whether wine should even enter the innovation wars is something that is hotly debated. Some new wine products have been criticized as “pop wines” that debase and therefore threaten the whole product category — not a view that I endorse, but I can understand the concern behind it.

So I was very interested in looking at innovation during my visit to Portugal and I found it in many different forms. I thought you might be interested in a little of what I discovered.

Port: No Wine Before Its Time

Port, which is arguably Portugal’s signature wine, is an example of a wine category that is both timeless and highly innovative.  Timeless in the sense that Port wines have in many ways remained much the same for several centuries. White Ports, Ruby Ports, Tawny Ports — in fundamental respects these are the same today as they were 100 or 200 years ago. Almost nothing is as traditional as Port, with its stenciled bottles and historic brands.

This is a plus and also a minus. The plus of course is brand recognition — only Champagne was a stronger brand than Port from a name recognition standpoint. But it’s a minus, too, because that brand, like Sherry, is wrongly associated with one-note sweet wines. Like Rodney Dangerfield, they sometimes don’t get the respect they deserve.

And it is a minus because the traditional Port wine styles are exercises in patience in a very impatient world. Tawny Ports must be held by the maker until they are mature in 10, 20 or even 40 years. That’s a lot of time to wait with the investment time clock running. Vintage Ports need time, too, but this time the buyer is expected to patiently wait for the wine to mature.

Time is Port’s friend because of what they do together in terms of the quality of the final product but, from an economic and market standpoint, time is also an inconvenient enemy and seemed to limit Port’s potential in the postwar years.

The answer to the time problem was an innovation that appeared in 1970, when Taylor Fladgate released their  1965 Late Bottled Vintage (LBV) Port.  LBV has the character of Vintage Port but is ready to drink when released, not 20 years later. It was not quite the Chateau Cash Flow killer app of the wine world, but it certainly breathed new life into the Port market at a moment when this was especially welcome. Some say that LBV saved the Port industry and I think this might be true.

Colorful Port

Red and white are the traditional colors of Port, but recently some makers have innovated to try to get the attention of younger consumers who have as little interest in their notion of grandfather’s Port as they do in their stereotype of granny’s Cream Sherry. Croft Pink Port and Quinta de Noval Black Port are examples of this innovative trend.

Pink Port is made in a Rosé style, with less skin contact and therefore fewer grippy tannins than Ruby Port. The Croft website is fully of cocktail ideas so perhaps this is a Pink Martini killer wine? Richard Hemmings, writing on the JancisRobinson.com website, makes the wine sound like an excellent option for the many Moscato lovers in your life.

97g/l RS, 4.2g/l TA. Raspberry juice, bubblegum, pink apples and fresh strawberries. Sweet and full on the palate, good concentration. Well balanced and smooth, creamy texture with a mouth-watering burst of fruit on the finish. Very good, not massively complex but a worthy product. (RH)

Noval Black is more traditional in style and color, with more of the tannins than the Pink. Less complex than my favorite LBVs, but interesting. I agree with the website’s chocolate pairing suggestions, although I haven’t tried any of the cocktail-type recipes. Here is Hemmings’ take on Noval Black:

Ruby reserve in style, with an average age of 2-3 years old. Aimed at younger consumers, as the flashy website attests! Fruity, jammy, figs and dates. Sweet and supple, with a glacé cherry flavour and a simple, satisfying style. (RH)

Product versus Process Innovation

So far I have focused on product innovation but I haven’t mentioned process innovation and that is a mistake ,as I learned from a winemaker during my stay in Porto.

George Sandeman of the famous Port & Sherry family invited me to taste through the Ferreira line of wines and Ports and of course the Sandeman Ports. How could I resist? Even better, we would be joined by Luis Sottomayor, Porto Ferreira’s award-winning winemaker.

The bottles and glassware filled the big table as we began to taste through the Casa Ferreirinha wines then the Ferreira and Sandeman Ports. The wines were eye-opening. From the most basic wines selling for just a few Euro on up to the super-premium products they were well-balance, distinctive and delicious. Not all the Portuguese wines that make it to the US market have these qualities.

I have a star in my notebook next to the entry for the Casa Ferreirinha Vinha Grande Red 2010, for example. A blend of classic Portuguese grape varieties from two Douro regions, it spent twelve months in second the third use oak. Easy drinking, soft tannins, nice finish, classy, well-made. Cost? About Euro 10. in the home market or $19.99 in the US.

“Delicious” I wrote next to the note for the Casa Ferreirinha Quita Da Leda Red, which comes from an estate vineyard just 1 kilometer from the Spanish border. It is the product of a small winery located within the company’s larger facility. Spectacular wine, special terroir, I wrote. US price is $64.99 and worth it.

As we tasted through the Ports I started to talk about innovation — Pink, Black and so on. Sottomayor stopped me in my tracks. If you want to really understand innovation in Portugal, he said, you have to look beyond new products to the work that is being done to improve the process in the vineyard and the cellar. This is where the real gains are, as seen in the table wines I had just tasted and the Ports I was about to sample.

Taste this LBV, Sottomayor said. The LBVs we make today are of the same quality as the Vintage Ports we made 15 years ago. And the Vintage Ports are that much better, too.  New products are part of the story of Portuguese wine innovation, but improved winegrowing and winemaking are just as important now and probably more important in the long run. Lesson learned!

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I came away from the tasting described above both richer and poorer. Richer because Sottomayor’s lesson about innovation will save me some money — as much as I enjoy Vintage Port and will continue to buy it, I now have LBV centered on my radar screen and it sells for a good deal less.

And poorer? Well, Sandeman and Sottomayor set up a little experiment for me, first letting me taste their 10-year old Tawny Ports and then the 20-year-olds. We like the 20s, George Sandeman said, because you can taste where they’ve been (the 10-year old wines) and also where they are going  (the 40-year old Tawny that I tasted next). The tension between youth and old age makes the 20-year old Tawny particularly interesting, he said.

And I am sad to say that I could taste exactly what he was describing. Sad? Yes, because 20-year old Tawny costs a good deal more than the 10 and for the rest of my life I am going to be paying that extra sum!

Congratulations to George and Luis on the great ratings that their 2011 Vintage Ports have received! And thanks to them and to Joana Pais for their help and hospitality.

Chilean Wine at the Crossroads


When Oz Clarke spoke at the Wines of Chile Awards seminar earlier this year, his theme was simple and clear: Chilean wine is at a crossroads and it was up to the people in that room to decide which direction to go. Would they make the same mistakes as winemakers in Australia, for example, or choose another path? Oz, who was a stage and film actor in a previous life, is a dramatic speaker, but if you watch the video I think you will agree with me that his message is even more powerful than the delivery.

Preaching to the Choir

Oz Clarke is not alone in this view and to a certain extent I’m sure he was “preaching to the choir.” Wines of Chile released its ambitious  Strategic Plan 2020  about a year ago (you can download a pdf of the full report here). The plans calls for Chile to become the #1 New World producer of “sustainable and diverse” premium wines by 2020.

The carefully devised Plan projects an average annual growth rate of 9.2% and is based on strengthening the recognition and appreciation of  “Wines of Chile” as a world-class appellation, which will in turn increase the average price, sales, and added value for all Chilean wine industry stakeholders, including small and large growers, suppliers, wineries, and exporters.

The plan focuses on four messages to drive the transformation:

  • Diversity and Quality. Chile has much to offer with respect to quality, diversity, and wines that over-deliver at every price point.
  • Sustainability. Sustainable Chile: Clean, efficient, and responsible.
  • Country Image. Chile is good for you.
  • Innovation. Chile: Moving above and beyond.

The plan’s ten year time horizon speaks to the sense of “Chile at the Crossroads” immediacy while the four “strategic pillars” indicate how much needs to be done in terms of recasting Chile’s image. Chile’s reputation as a producer of bargain Cabernet Sauvignon, Chardonnay and Sauvignon Blanc needs to be reshaped in terms of both wine types and price points. And the image of Chile itself must be updated or redefined, according to the plan’s analysis, so that the country sells the wine  (as Italy’s image obvious does for Italian wine) and not the other way around. (Whether a campaign built around the slogan “Chile is Good For You” can accomplish this is debatable.)

Audacious Goals?

Exports are key for Chile since domestic consumers drink up only about 30% of total production.  The idea that revenues might grow by 9.2% in the next decade is not as ridiculous as it might sound, given the current economic climate, although it is certainly an audacious goal.

Chile’s wine exports grew by a yearly average of 33% in the 1990s (according to data in the Wines of Chile report) and by 11% per year between 2000-2009. But whereas growth came through both increased price (7%) and quantity (25%) in the 1990s, the 11% revenue growth in the 2000s was due to volume growth (12%) offsetting 0.1% average price declines. The new strategic plan calls for a radical change, with rising price not higher production driving revenue growth.  Good idea, but easier said than done.

So (and this is the “crossroads” theme again), Chile needs to turn things around in a fundamental sense and this may be difficult in today’s market environment as an excellent interview with  with Rabobank’s Stephen Rannekleiv in a special September 2011 Chile Report  issue of The Drinks Business makes clear. Rannekleiv is an optimist about Chile’s wines, but very cautious about its wine industry’s ability to meet the 2020 goal.

 Something Completely Different

Rannekleiv suggests that Chile seek out new markets to supplement but not replace the UK, its largest export market today, where margins currently are thin or even  negative and where upward price adjustment is extremely difficult. Focus must be on price and quality, Rannekleiv notes, so major supply surges must be avoided.

It is very difficult to raise price (without dramatic loss of market share) for existing product lines in today’s market, so  “Chile needs to find something different, such as marketing around new varieties that are exceptional; it also needs to continually work on improving quality.”

There is no silver bullet, Rannekleiv suggests. It will take a combination of controlled output growth, continuing quality improvements, image development and new products and markets to turn the Chilean wine industry onto the right path.

Getting the Message Out

One element of the Wines of Chile strategy is a series of blogger wine tastings that are designed to educate, inform and persuade social media representatives and their audiences of Chile’s new direction. I took part in one of these programs last year that featured Chilean Syrah and Pinot Noir, stressing the diversity of Chilean wine.

This certainly is part of the 2020 strategy’s message (and the wines told that story pretty well), but Syrah is a problematic market these days and while Pinot is popular, it is hard to break in except at the bulk level. (Although both Chile and Argentina produce Pinot Noir, for example, neither country made the cut for inclusion in Benjamin Lewin’s recent book In Search of Pinot Noir.)

Is Carmenere The Key?

Which brings us to Carmenere, the focus of the most recent blogger tasting program.  Is Carmenere the key (or one of them) to Chile’s crossroads dilemma? Carmenere is (like Malbec) a Bordeaux variety that is now better known in the New World than the Old. Can Carmenere be to Chile what Malbec has become for Argentina, a signature variety that creates a new market and that serves as a brand ambassador for the entire country?

A Carmenere boom would tick a lot of the Wines of Chile 2020 plan boxes. Is Carmenere the key? Come back next week for my answer.

Reimagining Chile’s Wine Identity

What do you think of when you think of Italian wine? Many people think first of Italy — the place, the art, the people, the culture and the food (OK, especially the food). The romantic idea of Italy sells Italian wine. Brand Italy is stronger, it is said, than any Italian wine brand and Italian winemakers have profited from this fact.

Changing Places

The relationship between country and wine image is reversed for Chile, or at least that’s the theory I found in a recent report called the Wines of Chile Strategic Plan 2020.  The wines of Chile are the nation’s ambassadors to the rest of the world, the report asserts. The wines of Chile have a more distinct image than Chile itself (although of course the two are related) and so when people think of Chile they think first of its wines.

I am not sure that I completely agree with this idea — “Chile” conjures up many images and associations for me — but I am willing to consider it for the sake of argument. Certainly how we think about the wines of Chile has some impact on our attitudes towards this country more generally. Chile’s wine identity, as important as it is to people in the wine industry, may have an even broader significance in terms of international investment, export sales, tourism and so forth.

Good and Good Value

So what is Chile’s wine identity? Well, for most of the last 50 years Chilean wine has been synonymous with “good value for the money.” As I wrote in a previous post, Chile has been trapped in a vicious cycle of rising expectations that has made it difficult for them to increase price even as the quality of their wines has continued to improve.

Is this a bad thing? Yes, I know that it is better to be known for good value than for bad value, but in today’s very competitive global market it is also good to have products that consumers are willing to pay a bit more for. The average FOB export price of Chilean wine hovers around USD 2 per liter or less than USD 20 per case. The appreciation of the Chilean peso in 2010 combined with the difficulty of raising the USD price has really put the squeeze on Chilean wine producers.

Chile is the most trade dependent of the top wine producing countries, according to the Wines of Chile report, exporting nearly 70 percent of their production.  Wine accounts for over 2.5% of Chile’s total export earnings. So enhancing the image of Chilean wine abroad by moving it upmarket is important.

There are several ways to define a country’s wine identity and this video illustrates the current theme, Wines of Chile: The Natural Choice. As you can see the theme connects the dots of factors contributing to Chile’s complex terroir and stresses the fact that that its phylloxera-free vines grow on their own rootstocks — a  nice “natural” connection.

But broad messages like this have their limitations since by definition they cannot thoroughly take into account detailed factors that may be important to understanding and promoting the wine.  The New Zealand wine tagline is “Pure Discovery,” for example, and here in Washington the motto is “The Perfect Climate for Wine.” None of these tag lines is especially stirring or sharply defining, although the key words — Natural, Pure, Perfect — have obvious appeal.

Is Carmenere the New Malbec?

Another way to think about wine identity is in terms of grape varieties, although this has limitations, too. If you think Burgundy  you think Pinot Noir and Chardonnay, for example. And Napa Valley is Cabernet Sauvignon. There is much more to the wine from these regions than type of grape, of course, but the iconic varieties are straightforward identifiers that confused New World consumers can easily understand.

Wine in Chile is really about three varieties: Cabernet Sauvignon, Sauvignon Blanc and Carmenere. Cab Sauv and Sauv Blanc together account for more than two-thirds of all wine grape plantings in Chile. These wines can be very good, but it must be said that they are cursed with that “good value” label that will be hard to shake no matter how many Wine Spectator Top 100 awards they receive.

Carmenere represents only 7 percent of vineyard plantings now, but it is seen by many as the breakthrough wine of the future, a uniquely Chilean wine that has the potential to do for Chile what Malbec has done for Argentina. The Wines of Chile report has high hopes for Carmenere both as an export product and as a tool to redefine Chile’s wine identity. But it warns against cutting corners to capture low price sales. Carmenere needs to be a premium brand if it is to serve its useful symbolic function.

Blogger Wine Tasting

Which brings us to Syrah and Pinot Noir — not grape varieties that you usually associate with Chile. They were the focus of a recent tasting organized by Wines of Chile that brought together, if that is the right phrase, a virtual group of U.S. wine bloggers including members of The Wine Economist staff. The idea was to use new media to get out the message about Chilean wine’s new directions and to help establish its wine identity among younger tech-savvy consumers. We were sent wines to sample, literature to read and provided with online access to Chilean winemakers for interactive Q&A.

Are wines like these the way forward for Chile? Syrah and Pinot Noir are high value bottled wine exports (FOB prices of $4.66 and $4.08 per liter respectively in 2009 compared with $3.37 for Cab Sauv and $2.79 for Sauv Blanc) and so they may be useful tools in this task of getting consumers to rethink the wines of Chile and what they might be willing to pay for them.

(Math note: Chile receives only about $2 per liter on average for its wine exports because lower priced bulk wine sales drag the average down while higher priced bottled wine exports try to hold it up.)

I asked the winemakers to comment on the potential for these wines on the international markets. How can Chilean Pinot Noir differentiate itself from New World Pinots from Oregon and New Zealand? And how can Chilean Syrah succeed in the U.S., where Syrah sales are slumping?

Wine Economist volunteer tasting staff: Scott, Janice, Kevin and Jeni

Their responses were not very enlightening, but I blame the online environment for that, with the group of winemakers in a boardroom in Chile trying to answer questions submitted from thousands of miles away by faceless bloggers. Anyone who has been on a conference call knows the problem. But, like conference calls, this internet session facilitated a great deal of interaction even if it wasn’t completely satisfying and so the pluses outweigh the minuses. I’ll just need to follow up, that’s all.

Tasting Notes? From the Wine Economist?

No one comes to The Wine Economist to read tasting notes, but I thought you might be interested in the team’s reactions to the wines. On the whole we liked the Pinots a bit better than the Syrahs — we just found more complexity in the glass and more to talk about. That said, I noticed that when everyone was given the opportunity to take home a partial bottle, it was the Syrahs that disappeared. Interesting.

The Syrahs were better with food, which in our case included tasty empanadas purchased from Pampeana Empanadas here in Tacoma and bruschetta with Fontina and  Huerto Azul Myrtleberry Chutney with Merken, a Chilean product that was provided by Wines of Chile along with the wines and is available from puro-gourmet.com.

I was especially interested in how college students Jeni and Kevin reacted to the tasting since young consumers are a key wine marketing target and new media initiatives like this are often organized with them in mind. Jeni said that she had never purchased a bottle of wine from Chile — her image of Chilean wine was pretty much a blank canvas —  but that the tasting put Chile on the wine map for her and she was more likely to try these wines in the future. Jeni’s image of Chilean wine changed from invisible to positive — a good sign.

Kevin had tasted Chilean Pinots before — he comes from the Willamette Valley in Oregon and is friends with many winemaker families. In Oregon, the aim is to be Burgundian, he said, and he was surprised by a couple of these Chilean Pinots. They weren’t exactly what he was expecting, which made him want to taste more to try to understand the Casablanca Valley terroir and the winemaker styles a bit better. Another good sign

Overall I would say it was a successful tasting that answered some questions and raised many more. The question of the future of Chile’s wine identity remains to be answered, however, so I’ll come back to it in an upcoming post.

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Thanks to Wines of Chile for inviting us to participate in the blogger tasting and to Amber Gallaty of the thomas collective for making the arrangements. Special thanks to Sue Veseth, Janice Brevik, Scott Hogman, Jeni Oppenheimer and Kevin Chambers for their insights on the wines and the virtual tasting process. The photos are by Sue and Scott.

Here are the wines featured in the April 2011 blogger tasting

Is Malbec Washington’s Next Big Thing?

Celebrate! April 17 is Malbec World Day

Every year Seattle magazine publishes a list of Washington’s top wines and wineries and identifies an “emerging” wine variety to highlight and promote. This year it was Grenache and there are some great Grenache and Southern Rhone-style Grenache-blend wines made in Washington state, so I think this was a good choice. The wines we sampled at the Taste Washington Grenache seminar were delicious (see list at the end of the post).

The Big Freeze

But Grenache, as good as it can be here, is probably pretty far down the list in the search for The Next Big Thing in Washington wine. There is only a tiny bit of it planted and I don’t think there are any “old vines” left (old vine Grenache is said to produce more complex wines). Grenache was more widely planted in Washington wine’s early days, but the vines didn’t survive the hard winters that strike the Columbia Valley every few years. Now, with greater attention to vineyard location and management practices, Grenache is making a welcome comeback.

Grenache is an up-and-comer and there are great wines being made already,  but as it is probably best viewed as the Next Next or Next Next Next Big Thing until more and older vines are on line.

But what about Malbec?

When you say Malbec everyone thinks Argentina and, since I’ve recently returned from doing fieldwork in Mendoza, naturally so do I. But what about Washington Malbec? Seattle magazine named it their hot wine variety in 2009 and so I decided to use this year’s Taste Washington event to evaluate the Malbec status quo. (Click here to view a video of last year’s Taste Washington Malbec seminar.)

Mendoza del Norte?

Argentina makes distinctive Malbec wine and there is good reason to think Malbec might do well here in Washington, too. Mendoza and the Columbia Valley are both basically deserts (the Andes and Cascade mountains respectively provide rain shadow effects) where irrigation is a necessity. Both areas get plenty of sunlight although I think vineyard elevations are higher down south.

There are many patches of Malbec planted in AVAs from Lake Chelan to Yakima Valley to Snipes Mountain, Red Mountain and Walla Walla. Statistically Malbec is the fifth most-planted black grape variety after Cabernet Sauvignon, Merlot, Syrah and Cab Franc and ahead of Sangiovese, Pinot Noir and Lemberger (according to Washington Wine Commission data).

The vines are relatively young, reflecting Washington’s comparative youth as a quality wine producer. Most of the wines I tasted were made with grapes from roughly 10 year old vines, but I know there have been recent plantings that should begin to appear in forthcoming wine releases.  Argentina has some old vine Malbec (80 years and more) in Luján de Cujo, but a lot of the vineyards (especially those in the Uco Valley) are about the same age as Washington’s.

When I ask Washington winemakers why they started making varietal Malbec they usually say that it was because the wine was too good to hide in a blend and, while I don’t dispute this, I suspect Argentinean Malbec’s market success did not unnoticed.

Malbec was originally planted here to use as a blending grape — Malbec is one of the five classic Bordeaux varietals along with Cabernet Sauvignon, Merlot, Cab Franc and Petit Verdot. Seven Hills released a what I think was the first varietal Malbec (from very young vines) in 2001, but most other makers restricted it to blends until more recently.

Price and Cost Differences

If Washington and Argentina share certain aspects of geography, they differ tremendously in terms of production cost and retail price. There are precious few Washington Malbecs below the $20 price point. The most frequently observed Malbec price at Taste Washington was $28 and many more were priced above than below this figure. Reininger’s 2007 Walla Walla bottling was the highest priced Malbec on the published listing at $51 and I think that the Eliseo Silva was the cheapest at a listed $10.

Argentinean Malbecs can be found at all price points from about $10 up, but they are biggest in the sub-$20 arena. In other words, Washington and Mendoza compete in the Malbec market, but exactly not head-to-head.

Cost differences account for some of the price difference. Malbec is in short supply at the moment in Washington (only 1100 tons were crushed in 2010 compared with 31,900 of Cab Sauv). Malbec is Washington’s most expensive wine grape according to USDA average price data. Malbec cost $1,540 per ton on average in 2010, putting it ahead of Cab Franc ($1,325) and Cabernet Sauvignon ($1,297).

Malbec is in short supply in Argentina, too, but land and labor costs are a lot less there. High quality Malbec costs 5-6 pesos per kilo in Argentina these days and good quality costs 4 pesos (both figures have risen significantly in the last two years).  At an exchange rate of 4 pesos per dollar and figuring 5 pesos per kilo, that converts to about $1100+ per ton, a lot less than in Washington.

Taste Washington Malbec

There was a lot of Malbec at Taste Washington, mostly from small producers.  Nineteen wineries listed Malbec on the program but I think there may be nearly 100 different Malbecs made in this state by the 700+ large and small registered wineries.

I am not an expert wine taster (which is why you won’t find wine ratings on this website), but I sampled enough quality Malbec in Argentina to begin to understand it a little. In general I found the Malbecs at Taste Washington to be very good representations of the varietal, with well integrated oak in most cases, and able to reflect the different vineyard terroirs. I think they compete very well with the Mendoza wines in the same price ranges, which is a high complement.

My favorites, for what it is worth, were from Fidelitas, Gamache, Hamilton Cellars, Nefarious, Reininger, Saviah and William Church. Special marks go to Hamilton Cellars for making Malbec in three styles: Rose, straight Malbec and a Malbec-heavy Bordeaux blend.

So is Malbec Washington’s Next Big Thing? Not yet — not until there are more vines on line and Chateau Ste. Michelle or  Columbia Crest get into the market and help develop it. Interestingly, Columbia Crest’s newly-appointed chief winemaker, Juan Muñoz Oca,  is Argentinean and Columbia Crest recently released it’s first Malbec — maybe that’s a sign! I’m looking forward to finding out.

Cost is still a big issue and perhaps Washington cannot compete with Argentina at the key price points. But in terms of quality? Yes, it could happen. Malbec could be Washington’s NBT.

[Thanks to Sean Sullivan and Guillermo Banfi for help tracking down Malbec grape prices in Washington and Argentina respectively.

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Taste Washington Seminars: Washington’s Emerging Varieties: Grenache Panache
Presented by Seattle Magazine

The rising popularity of this new-to-the-Washington-scene grape variety in recent times is a boon for wine drinkers.  Seattle Magazine recognizes that Washington State’s offerings with this amazing grape are truly delicious, having awarded it Best Emerging Varietal in their 2010 Best of Washington Wine Awards. Bob Betz MW, an admitted Grenache fiend, will join Seattle Mag’s wine columnist Shannon Borg and an esteemed panel as they help you discover why our region’s Grenache offerings are fast becoming some of the New World’s most distinctive and respected.

Moderator:
Bob Betz MW (Betz Family Winery)
Panelists:
Shannon Borg (Seattle Magazine)
Brian Carter (Brian Carter Cellars)
Sara Schneider (Sunset Magazine)
Sean Sullivan (Washington Wine Report)
Wines:
2008 Milbrandt Vineyards “The Estates” Grenache, WS $25
2009 Maison Bleue “La Montagnette – Upland Vineyard” Grenache, SM $35
2008 Darby Winery “Stillwater Creek Vineyard” Grenache, CV $45
2009 Betz Family Winery “Besoleil” Grenache, YV $50
2007 Brian Carter Cellars “Byzance” Red Wine, CV $30
2008 Syncline Wine Cellars “Cuvée Elena” Red Wine, Columbia Valley $35
2008 Rôtie Cellars “Southern Blend” Red Wine, WA $35

Washington Wine’s Identity Crisis

The title of the seminar was provocative: “In Search Of: Washington’s Singular Style.” Moderator Bruce Schoenfeld of Travel + Leisure magazine wanted to talk about regional wine identity. What does “Washington wine” mean in the wine glass and to consumers in the marketplace?

Schoenfeld’s search for a definitive Washington wine identity was cleverly conceived (I have pasted the details of the seminar including the list of wines we tasted at the end of the post). We began by tasting wines from three regions with clear identities: Chablis, Ribera del Duero and Barolo.

An Identity Crisis?

These wine regions have strong brands, if you think of it from a business angle. Does Washington have a strong brand in this sense or does it suffer from an identity crisis that limits its market potential? Well, there are many ways to try to answer this question and Schoenfeld deftly guided the discussion to consider several of them.

Can Washington wine be defined by grape variety?  Well, not exactly. Over the years Washington has embraced and then abandoned a string of “defining wines” from the varietal standpoint. First it was Riesling, then Merlot, then on to Cabernet Sauvignon and now Syrah and soon maybe Malbec (the featured “emerging variety” at last year’s conference) or Grenache (highlighted this year).

The problem is that none of the wine identities have stuck, so Washington must seem a bit schizophrenic to outsiders who pay attention to these things. Washington Riesling, the first attempt to define the state’s wine identity,  can be great here, but it is a white wine and red wines get most of the attention in the wine world today. Young wine regions like Washington want that attention, so Riesling fell off the radar despite its high quality and strong sales.

Multiple Identities

Merlot was The Next Big Thing and Washington Merlot can be great, too. Washington makes some of the best Merlot in the world, Jancis Robsinson once wrote, sending hearts hereabouts fluttering with excitement. But, so what? she added. Merlot isn’t a serious wine, or so some  say, and the search for that defining variety continued.

Cabernet Sauvignon was next up and Washington has produced more than its share of 95+ point Cabs. But Napa Valley seems to have the Cab identity locked up. First rate Washington Cabs sometimes sell for half the price of second-tier Napa products. That Napa reputation seems to be invincible.

So now Washington wants to show off its Syrah wines, and they can be wonderful, too. But the damn Aussies have messed up the Syrah bonanza. I think it is easier to make quality Syrah in Washington today than it is to sell it. So the search for a wine identity goes on.

A Certain Style

Maybe it’s not a grape variety that defines Washington wine, Schoefeld suggested, but a style of wine. Bob Betz agreed in principle, suggesting that Washignton wines at their best combine Old World structure with New World fruit — a tag line that a lot of us in the audience liked, even if it might be difficult to communicate to consumers.

Tasting through the Washington wines (from Riesling to Merlot, Cab and Syrah), Schoenfeld asked the panel and audience, “Can you tell that this is a Washington wine — does it have the Washington style?” He certainly thought so, but I never saw more than half the hands go up.

This was a pretty serious  winemaker, consumer, trade and journalist audience. They’ve tasted a lot of wine and a lot of Washington wine. All the wines Schoenfeld selected were interesting, but did they individually or collectively outline a Washington style? I didn’t think so. I’ve tasted wines similar to these from other regions and I have tasted very good Washington wines with completely different styles from these. I don’t claim to be a skilled wine taster (which might for once be an advantage since I am on a par with many consumers in this regard), but I can’t find a definitive Washington style.

What did I conclude from this interesting (and delicious) investigation? Having a successful regional wine identity is an advantage in the marketplace, but Washington doesn’t have one. Bob Betz may be right about Old World structure and New World fruit, but I don’t think wine style is easily understood by many consumers.

No Strong Identity. No Crisis Either.

Grape variety is easy to understand and communicate, but that leaves the question which one? If I had to choose, I would select Riesling on the basis of market penetration. Chateau Ste Michelle is the largest producer of Riesling wines in the world (yes, the world!). More Riesling grapes were crushed in 2010 (33,500 tons according to USDA data) than any other Washington variety. Washington Rieslings  (including the widely distributed Eroica, Poet’s Leap and Pacific Rim wines) can hold their own with the best in the world. What more do you want in a wine identity?

But there’s that status thing (red trumps white) and many of Washington’s iconic producers don’t make Rieslings, so focusing on this variety to the exclusion of others would in some ways be counter-productive in terms of regional identity.

So where does that leave us? Washington may lack a strong wine identity but I don’t think it has an identity crisis. Better no single identity than a bad one (think Brand Australia). Better to produce many types and styles of good wine and simply celebrate that!

[Thanks to the Washington Wine Commission for inviting me to attend the Taste Washington seminars.]

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Taste Washington Seminars / March 26, 2011

In Search Of: Washington’s Singular Style

Moderator:
Bruce Schoenfeld (Travel & Leisure Magazine)
Panelists:
Bob Betz MW (Betz Family Winery)
Shayn Bjornholm MS (Washington State Wine Commission)
Sandy Block MW (Legal Seafoods)
Drew Hendricks MS (Pappas Brothers)
Wines:
2008 Louis Michel “Montée de Tonnerre” 1er Cru Chablis, FR
2004 Bodegas y Viñedos Alion, Ribera del Duero, Spain $70
2001 Cavallotto “Riserva Vignolo” Barolo, Piemonte, Italy $75
2009 Chateau Ste. Michelle/Dr. Loosen “Eroica” Riesling, CV $24
2007 Hightower Cellars Merlot, CV $28
2007 Abeja “Reserve” Cabernet Sauvignon, CV $80
2007 Cadence “Ceil du Cheval” Blend, RM $45
2008 Betz Family Winery “La Serenne” Syrah, YV $50
2008 Cayuse Vineyards “En Chamberlin” Syrah, WWV $65

The Wine Economist 200

This is The Wine Economist’s 200th post since it began a little more than three years ago under the name “Grape Expectations” —  a good opportunity to reflect briefly on readership trends, just as I did when we passed milepost 100.

Not that kind of list!

Milepost 200

The Wine Economist has an unusually broad readership given its focus (wine economics), content (no wine reviews, no ratings) and style (most posts are way longer than is typical for weblogs).

I never expected to get millions of visitors like Dr. Vino or Gary V. and other popular wine critic sites, so I’m surprised by how many people have found this page and come back to read and re-read.

About 200,000 visitors have clicked on these links, sometimes with surprising intensity. The Wine Economist has been ranked as high as #6 in the big “Food”  category where wine blogs are filed in Technorati‘s daily ratings and as high as the top 30 in the even broader “Living” group.

Reader Favorites

The most-read articles of the last few days are always listed in the right-hand column on this page, so it is easy to see track reader behavior. I thought you might be interested in readership trends since the blog began. Here are the top ten Wine Economist articles of all time.

  1. Costco and Global Wine — about America’s #1 wine retailer, Costco.
  2. Wine’s Future: It’s in the Bag (in the Bag in the Box) — why “box wine” should be taken seriously.
  3. The World’s Best Wine Magazine? Is it Decanter?
  4. [Yellow Tail] Tales or how business professors explain Yellow Tail’s success.
  5. Olive Garden and the Future of American Wine or how Olive Garden came to be #1 in American restaurant wine sales.
  6. Australia at the Tipping Point — one of many posts about the continuing crisis in Oz.
  7. No Wine Before Its Time explains the difference between fine wine and a flat-pack  antique finish Ikea Aspelund bedside table.
  8. How will the Economic Crisis affect Wine — one of many posts on wine and the recession. Can you believe that some people said that wine sales would rise?
  9. Wine Distribution Bottleneck — damned three tier system!
  10. Curse of the Blue Nun or the rise and fall and rise again of German wine.

As you can see, it is a pretty eclectic mix of topics reflecting, I think, both the quite diverse interests of wine enthusiasts and wine’s inherently complex nature.

My Back Pages

What are my favorite posts? Unsurprisingly, they are columns that connected most directly to people. Wine is a relationship business; building and honoring relationships is what it is all about.

KW’s report on the wine scene in Kabul, Afghanistan has to be near the top of my personal list, for example. I am looking forward to following this friend’s exploits in and out of wine for many years to come. (Afghan authorities found KW’s report so threatening that they blocked access to The Wine Economist in that country!)

Matt Ferchen and Steve Burkhalter (both former students of mine now based in China) reported on Portugal’s efforts to break into the wine market there. The commentaries by Matt, Steve and KW received a lot of attention inside the wine trade, but their thoughtful, fresh approaches also drew links, re-posts and readers from the far corners of the web world.

Looking back, I think my favorite post was probably the very first one, a report on my experiences working with the all-volunteer  bottling crew at Fielding Hills winery. I learned a lot that day about the real world of wine and I continue to benefit from my association with Mike and Karen Wade (and their daughter, Robin, another former student) who have taught me a lot about wine, wine making and wine markets.

Look for another report like this when The Wine Economist turns 300. Cheers!

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Thanks to everyone who’s helped me in various ways with these first 200 posts. I couldn’t have done it without you! (Special thanks to Sue, my #1 research assistant!)

Trickle Down [Wine] Economics Jitters

The stock market has the jitters these days and one of the causes is the fear that, even with massive fiscal and monetary stimulus, we may be experiencing a jobless recovery. Things looks OK from the outside (some of the numbers are pretty good), but bad things are still happening deep down where it counts.

A Wine-Free Recovery?

There is some concern that the wine economy is suffering a similar fate. Not a wine-free recover, but just not the big turnaround everyone was hoping for. Although retail sales numbers are cheerfully positive, with overall sales rising at close to double-digit rates and increases even in the $25+ “death zone” range, there’s still enough disturbing news around to give anyone the jitters.

Are jitters justified? I decided to do some fieldwork to see what I could learn about conditions on the ground in my local wine market. An upscale supermarket down the street has recently undergone a major remodel and is have a grand re-opening. One of the areas that seems to have received a lot of attention is the wine wall. Since the supermarket chain is known to do very thorough market research I wanted to see what the redesign would tell me about state of the wine economy today.

First Impressions

My initial impression was very positive. The wine wall is substantially increased in terms of the number of square feet of display space. The quality of the space is much improved, too, with the old industrial shelving replaced in part by the sort of dark wood cases and racks that you see at fine wine shops. Good news! A big investment like this suggests optimism about the future of the wine market.

A second glance provided more information. The wine wall is large enough to need directional signs to help customers find their “comfort zone” area.  Some of the signs were what you would expect: “France/Italy,” Australia” and so on. Just what you’d expect. But other signs pointed to continued “trading down.”

I found areas marked “premium 1.5 liter,” “value wines” and “box wines” and one that said simply “White Zinfandel.” It’s obvious that the marketing and design people knew that many of their customers would be looking for low cost or basic wines and they wanted to help them find them.

Box wine sales surged in the “trading down” wine economy that wine people like to think is over, but apparently isn’t.  There were a number of quality bag-in-box wines for sale in this section, which was conveniently located adjacent to the expanded take-out  delicatessen and bakery areas.

The White Zin section held both the expected Sutter Home and Beringer products plus a limited range of inexpensive domestic rosé wines and a small selection of fruit wine and fruit-flavored wines. My wine snob friends are probably shocked to learn that White Zin, the wine they love to hate  is so popular that it has its own part of the wine wall.  That would be trading down in both price and quality, they say.

Unexpected Discoveries

Now it was time to study the main section of the wine wall carefully. I was impressed by the large selection, of course. Lots of wines. Lots of brands. But some of the wines had unfamiliar labels that I think may be part of a “dumping” strategy where big producers sell off surplus wine under an ersatz value brand to avoid weakening the price position of established brands.

This is a very common practice in Australia, where the wines are sold with very generic labels. They call them “cleanskins” and I guess they are selling like hotcakes. The surplus wine, some of which could be very good, may be trickling down into a sort of  branded cleanskins market here in the U.S. But there’s another trickle down effect that got my attention.

As I surveyed the wine wall I was struck by a small number of hard-to-find or impossible-to-buy wines that were sitting quietly waiting to be found — fine wine that I suspect didn’t find a home in the usual wine club / fine wine shop / restaurant supply chain.

Since we’ve recently returned from a Napa Valley research trip, I was especially struck by the presence of two wines from Stag’s Leap Wine Cellars – their  Fay Vineyard Cabernet and the famous Cask 23. The Fay sold for $87 or $79 for buyers with the store loyalty card. Buy a case and get a further 10 percent discount. The Cask 23’s price was $164.

You can buy Opus One for $209 ($179 with your loyalty card) or Sassicaia for $245 ($213). The Chimney Rock SLV Cab that I liked a lot when I tasted it in California was a bargain at $60 ($48 with your card).

Pétrus at the 7-Eleven?

It’s hard to believe that these great wines can be found on neighborhood supermarket shelves. I could be wrong, but I suspect that they would not be found there during good economic times. But bad times drives good wines down the supply chain. That’s trickle down [wine] economics.

What’s next? Pétrus at the 7-Eleven? No, although 7-Eleven does have an own wine brand called Yosemite Road.

I’m glad there is finally good news about wine sales in the U.S., but while trading down may have stabilized I don’t think the sour economy’s effects will soon disappear. And so the trickle down effect continues. No wonder everyone’s got the jitters.

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