Brave New World on Planet Riesling

No joke: Idaho Riesling

I’ve been writing about the problems of marketing misunderstood and misunderappreciated wines for the last couple of weeks and before I leave this subject I want to take time to give you a brief report from the Riesling Rendezvous conference hosted by Chateau Ste Michelle and Dr Loosen in Seattle last month.

Although the public face of the conference was the sell-out Sunday Grand Tasting on the grounds of the Chateau in Woodinville, the real work took place at the waterfront Bell Harbor Conference Center on Elliott Bay. What did we learn about life on Planet Riesling (as Stuart Pigott calls it)?

Small Worlds and Big

Well, its a big world after all — that’s the first insight. We tasted spectacular wines from many corners of the globe and regions of the U.S. and Canada. But it is a small world, too, as global quality standards have risen due in part, I think, to the international exchange of technical information that Riesling Rendezvous and its partner conferences have promoted. The gap between Old and New Worlds has closed dramatically.

You might have enjoyed the scene at the two formal tastings, where about 300 of us sat in front of 20 glasses each of dry Riesling on the first day and off-dry Riesling on the second. We tasted the wines blind and then, one by one, members of the expert panel commented on the wines and tried to place them in terms of origin — Old World or New? Cooler climate or warmer site? Particular time (vintage) and place?

Sometimes the experts were spot on, but I think the organizers might have selected the line up of wines to make the point that Planet Riesling is changing, so sometimes (more often than not, I believe) they were fooled. Fooled, generally, by unexpected quality from an unexpected source, which is a nice way to be surprised.

Ooohs and Aaahs

There were ooohs and aaahs, for example, when one wine was revealed to be from Elesko Winery in Slovakia. Wow, none of us saw that coming, probably because we didn’t have Slovakia on our radar. I remember tasting a few crisp, delicious white wines from this region when I taught in Prague, but beer, not wine, is probably the first thing that comes to mind (despite Austria’s obvious presence) when you think Central Europe.  Very impressive.

Tim Atkin, who moderated the off-dry tasting (John Winthrop Haeger handled the job for the dry wines) seemed to take special pleasure in revealing that a wine that had been firmly placed in the Mosel region by a panelist was in fact made by Ste Chapelle of Idaho (part of the rapidly rising Precept Wine group).

How many cases do you make, Atkin asked Marueen Johnson who represented the winery, probably imagining the sort of hillbilly Idaho wine industry that the old Muppet Movie scene (see below) suggested? Forty thousand cases came the reply. Wow, that’s lot, Atkin said obviously surprised (and that’s just Riesling — total production tops 100,000 cases for this, the largest winery in Idaho). It’s a brave new world on Planet Riesling when fine wines can come from such unexpected corners of the globe.

Two Directions at Once

Further evidence of how the Riesling map is changing was provided by two new Chateau Ste Michelle Riesling wines: Anew Riesling, which seeks to broaden the Riesling base, and Eroica Gold, which aims for a more classic style and promises to deepen interest in this category.

Anew, with its elegant bottle (which reminds me of a graceful off-the-shoulder gown) and subtle flower label seems to enter the market as a wine targeting  women, who of course make up the majority of wine drinkers and, for reasons that I’ll explain in a future post, a disproportionate part of the Riesling base. Off-dry but not too sweet,  it makes a tasty aperitif — a nice way to end of day of work and start the evening. Coming from the creators of the hugely successful 14 Hands wine brand, this is a wine that could convert Pinot Grigio drinkers to Riesling fans.

Seafood

Inevitable Seattle Food Porn

Eroica Gold is the newest project of the Ste Michelle – Dr. Loosen partnership and it builds upon and expands the very successful Eroica Riesling line. Eroica has a hint of sweetness and can often be purchased for $20 or less (I’ve seen it at Costco for about $15) — very good value for money and often listed as one of America’s best Riesling wines.

Eroica Gold is riper, botrytis influenced, and, at $30+, more expensive. It aims to take American Riesling consumers to the next stage. Hopefully it will both communicate to American consumers what they might find in European wines and also represent the New World effectively to the Old.

Inevitable Seattle Food Porn

The conference ended with a festive reception at the Chihuly Garden, a blown glass fantasy highlighting the work of Northwest art icon Dale Chihuly, which I mention only because it gives me an excuse to include this “food porn” photo of the seafood buffet. Ahi tuna, smoked salmon, oysters, shrimp, and crab. What a treat!

Riesling may be misunderstood and there certainly are problems to be worked out, but on that warm afternoon in Seattle, with Riesling in my glass and smoked salmon on my plate, life on Planet Riesling seemed a pretty sweet place to be.

Is the Wine Market Saturated?

Is the wine market saturated? That’s the question a journalist asked me a few weeks ago. The query was provoked by the release of a study of the economic impact of the wine industry in Washington State, which noted that the number of wineries has reached 700+.  Lots of wineries hereabouts and in California and the rest of the U.S. Lots of imports, too. Have we reached the limit? Is the market saturated?

Big and Small Cycles in Finance

Well, it is a mistake to think of a market as a sponge that sits there waiting to be filled up. Markets are complicated and adaptable — they are literally living creatures because they are made up of smart, incentive-driven human beings. So their behavior is likely to be more complicated than empty versus full.

Financial markets are a good example. Scale is useful in financial markets, so it is not uncommon for finance to go through periods of consolidation, where the big get bigger and absorb (another sponge reference) the small. At some point you might worry about saturation. But as the big get really big, they always seem to leave gaps behind that smaller financial firms rush to fill. So a cycle of big creating opportunities for the little emerges.

Financial markets cycles are more complicated than this, of course, and sometimes the sponge gets squeezed out in market adjustments, but I think you get the idea. The same dynamic process that seems to be filling the market in some ways is also leaving gaps for new entrepreneurs. It’s an interesting industry to study, but not necessarily a stable one to work in! Finance is a crazy business. Almost as crazy as wine!

Washington Wine Gets Bigger

So what does this have to do with wine? Well, I see some of the same patterns. Here in Washington State, for example, I see some of that consolidation going on right now. Gallo has finally (because it was inevitable) entered the state as a producer, acquiring the venerable Columbia Winery and Covey Run brands. It looks like Gallo will invest heavily to revive and upgrade Columbia’s wines and historic brand. It’s less clear what will happen with Covey Run — some speculate that the brand will disappear but the valuable vineyards and facilities will continue to produce.

Precept Wines is part of the consolidation pattern here in the Pacific Northwest, too. Precept has built and acquired a number of brands over the years — including the recent acquisition of Idaho’s Ste Chapelle — as it has established valuable scale and scope. Ste Michelle Wine Estates is also part of the trend. SMWE recently announced the purchase of O Wines, a maker of Washington Chardonnay. SMWE intends to add a red wine to the O Wines portfolio and take the brand national.

Washington Wine Gets Smaller

At the same time that Washington wine has gotten bigger (and some wine brands are being squeezed out like water from a sponge), it’s very clear that other winemakers are finding opportunities at the opposite extreme of the market. Their wines will succeed (or fail) not so much because of national branding and economies of scale but depending upon how well they can achieve real quality and successfully attract a small but loyal (usually local) following.

I wrote about Mosquito Fleet Winery a couple of months ago. This small Belfair, Washington winery has found a market for its excellent wines. The fact that the wines celebrate local history helps them connect to a particular customer base in a way that big brother wineries probably cannot.

Another local winery — this one only a few blocks from The Wine Economist’s office in Tacoma — is also succeeding in a crowded market by stressing its distinctly local roots. It is called 21 Cellars for the simple reason of its location: in a cellar beneath a medical office on North 21st Street, just a short walk from the University of Puget Sound.

21 Cellars is a two person operation. Philip Coates is the winemaker and Katrina Lange is assistant winemaker. But job titles are essentially meaningless in an artisan operation like this one, where everyone pretty much does everything — and most of it is done by hand. Here’s how the website describes the operation.

Fermenting in small lots with native yeasts, aging in French oak, and bottling unfiltered and unfined allows for highly structured and distinctive wines. Our limited production allows us to give more hands-on attention to each varietal, de-stemming by hand and using unique methods such as whole berry barrel-fermentation for our reds. Every bottle sold has been filled, corked, and waxed by hand, with labels designed by local artists. We are proud to present wines exhibiting creativity and longevity; showcasing the deep, earthy qualities of Washington’s premier vineyards.

Ruthless Exploitation?

21 Cellars’ roots go back to a home winemaking kit that Coates received several years ago. He caught the wine making bug and the rest is history if by “history”  you mean lots and lots of hard work, constant learning and experimentation. Coates’s efforts were good enough to impress some picky vineyard owners, who agreed to sell him their fruit. (Reputation is key in wine and no vineyard owner wants his or her name on the label of a mediocre bottle of wine). We tasted the 09 Malbec and 09 Cab made with grapes from the Two Blondes vineyard, for example, which was developed by Chris Camarda for his Andrew Will winery. The wines we tasted were excellent, with real depth and balance.

Production is modest (less than 500 cases per year) with sensible plans to grow in the future. 21 Cellars will get bigger, but not too big. They don’t want to outgrow the niche that they have so successfully begun to fill.

21 Cellars ruthlessly exploits (and that’s a good thing) its small scale, personal approach and local base with the same passion that Gallo and the others exploit large scale and national or global reach.  Marketing is community based. 21 Cellars seems to take pride in supporting local causes and events, including the Washington State Historical Museum. The small and local strategy seems to be very effective. Their recent Semillon release sold out in three weeks!

Is the wine market saturated? Well, it is crowded and competitive, that’s for sure. And some wineries and brands are certainly feeling the squeeze. But as in finance, it seems like there is always room for one more on the bus — if there is quality and commitment and if a legitimate local need is met.

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Thanks to Philip and Katrina for showing us around 21 Cellars and telling us their story. Thanks to Sue, Cynthia and Pierre for their work as research assistants for this project.

The Forbes Interview: Wineries that “Get It”

Forbes Asia published “The Future of Wine,” a  three page excerpt from Chapter 15 (“The China Syndrome”) of Wine Wars last month. A follow up interview appeared this week on Karl Shmavonian‘s Forbes.com blog “Horse Feathers” under the heading “An Economist Shares His Thoughts on Wine.” (You can read the excerpt and the interview by clicking on the links provided.)

It was fun to answer Karl’s questions. Karl’s focus is Asia, so I wasn’t surprised that he had questions about Chinese wines, the Chinese-Bordeaux wine market and even the prospects for South African wine in India and … Sub-Saharan Africa!

One question really made me think. Who “gets it” in the wine world?  Here’s the question and my brief answer copied from “Horse Feathers.”

Name a few wineries that “get it” from a business standpoint.

I think Chateau Ste Michelle gets it here in Washington State. Ste Michelle Wine Estates has a “string of pearls” operating philosophy that allows each of their winery brands (including Columbia Crest, for example, and Stag’s Leap Wine Cellars) a good deal of independence while benefiting from the economies of distribution, etc. Even the large production facilities like the white wine facility in Woodinville contain mini-wineries that allow the winemakers to do small scale projects while also producing hundreds of thousands of cases of the mainline products.  Chateau Ste Michelle balances the big and the small without losing their terroirist souls. Boisset and Frog’s Leap (both in California) are examples of two totally different companies that both get it. In particular, they both get the environmental problem, although they approach it in very different ways.

Reading this, you probably wonder what I mean by “getting it” and why I picked these three wineries as examples? Here’s the story.

What does it mean “to “get it?”

“Getting it” in this context means understanding the tensions that are at the core of the wine market (and that I analyze in Wine Wars).  Globalization and wine market expansion generally have brought a world of wines to our doorstep. This embarrassment of riches is both blessing and curse. It’s a blessing because of the opportunity to sample wines from all around the world. It is a curse because of the difficulty of choosing. Too much choice can be intimidating, especially in the case of wine, which has so many other intimidating factors associated with it.

Anyone who can simplify the choice and gain the consumer’s trust stands to benefit in this complex market environment. Brands have therefore become increasingly important, both private brands like Mondavi and Mouton Cadet and more general types of brands like Brand Marlborough Sauvignon Blanc and Brand Argentina Malbec. Consumers understand the wines associated with these brands and so are more confident in making purchases. (Just having a strong brand is not enough, however, as the roller-coaster story of Brand Australia Shiraz demonstrates).

The risk with brands, however, is that they can sometimes go too far in their effort to simplify (the Shiraz problem). It is important that branded wines not sacrifice the qualities that make wine special. Wine that is just another packaged good has lost its “terroirist” soul — the winemakers just don’t “get it.”

The Terroirist Revenge

So Wine Wars argues that the future of wine will be determined by the battle between the market forces that will push wine into the world and the “revenge of the terroirists” that will push back. Because I am an optimist (I have “grape expectations”), I think the future is bright. But this requires that wineries “get it.” So, Karl asked me, who does?

Well, a lot of wineries get it, to be honest, but in the short time available I only mentioned three of them. Boisset gets it, for example. It’s a good example of a “global” wine business, with strong brands in both the Old World (France) and New World (California). But there is a strong terroirist element to Boisset that keeps it honest, both in terms of the desire for wine to express a sense of place and also a concern for the environment. Boisset has been especially active in packaging innovations, for example, that aim to reduce the carbon footprint of wine. That’s one way to “get it.”

Frog’s Leap gets it in a different way. It is an example of a producer that has developed a strong brand without dumbing down its wines or selling its soul. Frog’s Leap is such a strong brand in Japan, for example, that it was the featured winery in the Japanese re-make of Sideways. But Frog’s Leap proves that branding doesn’t have to sacrifice quality or reduce wines to a least-common-denominator status. Frog’s Leap stands for something, both in terms of wine and with respect to the environment (dry farming, sustainable methods). They show that it is possible to “get it” this way, too.

Global-Local Nexus

Chateau Ste Michelle is my third example. They are the largest wine producer in Washington State and the largest producer of Riesling wine in the world. The parent company, Ste Michelle Wine Estates, usually ranks about #7 among U.S. wine producers. The Chateau as it is known here in Washington knows about globalization (its wines can be found all around the world) and brands, too, but it hasn’t sacrificed its soul in the process. In fact, I think you could argue that it has tried to use the forces of globalization and brands very constructively — through international partnerships with Germany’s Dr. Loosen and Italy’s Antinori family, for example.

The Chateau collaborates with the Antinori on two projects: Col Solare (an ambitious winery in the Red Mountain AVA) and as partners in the Stag’s Leap Wine Cellars in Napa Valley. Working together, they leverage powerful brands and bring together international expertise, but the goal is to produce distinctly local wines.

The partnership with Germany’s Dr. Loosen has created Eroica, one of America’s most distinctive Riesling wines, and a series of Riesling Rendezvous conferences, which bring together terroirists from across the nation and around the world to share their expertise and plot strategies to promote Riesling without sacrificing quality. The Chateau really “gets it,” but in its own unique way.

The future of wine? A big question. Not everyone will “get it” but I’m betting that enough will to justify my grape expectations.

Getting Serious About Washington Wine

“Wine is not a serious subject. Its point is to give pleasure.” This is what Jancis Robinson says in the opening segment of her BBC series on wine.

It is pretty obvious that Paul Gregutt (author of Washington Wines & Wineries: The Essential Guide 2/e; University of California Press, 2010) didn’t get the message because he seems to take wine pretty seriously and manages to do so without sacrificing pleasure. The new edition of his book is a serious analysis of Washington wine that is seriously interesting.

Wine for Nerds?

Is there an audience for serious wine writing? Certainly Jancis Robinson must think so, despite her disclaimer, since her books and articles are so comprehensive. Gregutt knows this audience, too. When he begins chapter 4 by saying “If you are the type of person who delights in reading through every scrap of information on the back labels of wine bottles …” he must be aware that this description will apply to nearly every one of his readers, of which there are sufficient numbers to justify a second edition of this book just three years after the appearance of the first.

Gregutt’s book is unusual in that it is neither a coffee table photo album nor a wine tourism guidebook (the two most popular formats for northwest regional wine books). Rather it is a comprehensive resource for anyone interested in the continuing development of the Washington wine industry. Gregutt takes us through the history of Washington wine followed by a detailed analysis of the terroir (Washington’s AVAs), the grape varietals (with recommended producers for each wine type) and the most important vineyards (what a great idea). Then and only then does he begin a survey of wineries. The message is clear: wine is made in the vineyard before it is made in the cellar and there is a lot to know if you want to understand it.

The focus is clearly on AVAs, vineyards and wineries — the constants of Washington wine —  not individual wines that can change from vintage to vintage, although an appendix contains Gregutt’s “Top 100 Washington wine” lists for the last few years for those who want to know more specifically what to look for on shop shelves.

What’s New?

What’s new in the second edition (and is it enough to justify replacing your copy of the first edition)? Well, there is a great deal of new material reflecting the fact that the Washington wine industry has experienced so much recent growth.  There are new AVAs, of course (Snipes Mountain and Lake Chelan) and many new wineries (now up to 650+ for the state). Gregutt has doubled the number of vineyards (a top twenty list) and wineries (about 300 in this edition), making this volume far more comprehensive in this regard than the first edition.

I’d say the additional and updated material easily justifies a new edition. And, with the way things are changing, I suppose a third edition will be needed in a few years.

One aspect of the book that is sure to be controversial is the way Gregutt has organized his analysis of the most important wineries in the state. If this were a wine tourism book, I suppose he would have organized them by regions or wine roads and provided tasting room hours and so forth. But he didn’t and that’s a good thing, since the internet is the best place to find that sort of often-updated information.

Instead, Gregutt organized the wineries into four categories, starting with “five star” superstars that both produce great wines but also provide important leadership, moving down through four stars, three stars and then a “rising stars” category.  Where you put a winery in this taxonomy is necessarily problematic, since each of us might use different criteria or weigh the same factors differently. Hence the potential for debate.

Some ratings are surely uncontroversial (Leonetti and Quilceda Creek are superstars, of course), but others are likely to generate discussion. Gregutt is interested in the wines, of course, but also the wineries’ impacts on the Washington wine industry, so the huge Chateau Ste. Michelle appears in the five star list alongside tiny Fielding Hills – each very important to the Washington industry, but in very different ways.

Hedges Family Estates and Corliss Estates (two wineries owned by University of Puget Sound graduates) receive four stars, but I think you could make a case for “promotion” to the top group. For Hedges it would be based upon its leadership in development of the Red Mountain AVA and promotion of Washington wine abroad. For Corliss, it is the single-minded commitment to the highest vision of excellence — an attempt to redefine what Washington wine can be. Four stars or five? Such questions are pleasurable recreation for wine nerds like me.

More for Wine Nerds?

The success of Gregutt’s book has me wondering what other products wine nerds might be willing to buy. Hopefully, of course, they’ll want copies of my book when it comes out in 2011, but maybe there’s an even broader market for wine nerd products.

De Long’s periodic table of wine grape varietals (see below) is a great wine nerd item. I can spend hours looking at it and thinking about the different relationships it proposes. Excellent! De Long’s regional wine maps are great, too.

And then there are wine games, like Winerd the Game shown above. Winerd has a colorful playing board (decorated with faux wine labels), 276 quiz cards and includes a blind tasting test component. Pretty nerdy and probably pretty fun, too, since it has a strong educational component and people always seem to enjoy learning about wine.

I actually have a sealed Winerd game box on my game shelf. Nerdy, yes — and I’m sure it will be fun to play when I eventually get around to it. But apparently I’d rather be drinking wine (and reading nerdy books like Paul Gregutt’s).

Riesling’s Rising Tide

The continuing globalization of wine presents many challenges and opportunities. The opportunities are fresh in my mind because I recently attended the third Riesling Rendezvous conference – an international gathering of Riesling makers from around the world (Germany, Austria, France, Canada, Australian and New Zealand) and across the U.S. (Washington, Oregon, California, Michigan, New York and New Jersey).

It was a real love fest. Riesling is the fastest growing market segment in the United States right now and the rising tide raises all boats. There was a strong sense of good will and collective achievement.

International [Wine] Relations

The meeting was organized by Washington State’s Chateau Ste Michelle (CSM), the number one U.S. Riesling maker, and Dr. Loosen, a leading Mosel producer. Their partnership was really at the core of the event — you could see evidence of it everywhere. Loosen and CSM have collaborated for a dozen years on a number of projects, the most visible of which is Eroica, consistently one of America’s top Rieslings.

It was interesting to listen to Ernie Loosen and Bob Bertheau, CSM’s head winemaker, talk about their work together and how much they have learned from each other. There was a real sense of mutual respect and pride of accomplishment – part of the feel-good feeling.

Another of Washington’s best Rieslings is also the result of international collaboration. I’m thinking of Poet’s Leap, the wine that Germany’s Armin Diel makes with Gilles Nicault, the resident winemaker at Allen Shoup’s ambitious Long Shadows winery in Walla Walla. I got the same feeling about this collaboration from Gilles.

Eroica and Poet’s Leap are wines I recommend to my students – exceptional wines, widely distributed and  priced at around $20. Loosen & CSM and Diel & Long Shadows have made their partnerships work very well.

The Ghost of Rieslings Past

But collaboration is difficult and partnerships don’t always work out so well. This was the case with the first attempt by an international winemaker to make Riesling in Washington State. I’m talking about the great failed (and now nearly forgotten) F.W. Langguth winery experiment.

The Langguth family has been making wine in the Mosel for over 200 years. F.W. Langguth is today best known mainly for its mass market wines – it purchased the Blue Nun global brand (see  the Curse of the Blue Nun ) a few years ago and makes many of the low cost wines that fill German supermarket shelves.

Langguth became interested in international expansion in the early 1980s (two of its current brands, made in Tunisia of all places, were born in this period). The success of Washington Rieslings from Chateau Ste Michelle and other producers caught Langguth’s attention and soon plans were under way for a major investment.

Langguth and local partners developed Weinbau Vineyard (now part of Sagemoor Farms) on the Wahluke Slope and built a $5 million 35,000 square foot state of the art winery in Mattawa. The winery was the second largest in the state at the time, behind only Chateau Ste Michelle’s big Woodinville facility.

A Simple Idea

The idea was simple – make German-style Rieslings in Washington State and ride the rising U.S. market tide. The first vintage (220,000 gallons) was made in 1982 and released the next year. The wines sold for $4 to $6 per bottle, equivalent to the $8 to $12 price band today. There was a heady feeling of coming success, both at Langguth and within the Washington wine industry generally, which I think was flattered and encouraged by the international attention.

It did not last long. By 1986 the bankrupt Langguth winery was being sold to Snoqualmie Vineyards, where Mike Januik and Charlie Hoppes made wine. Snoqualmie was eventually absorbed by CSM’s parent company and the gleaming stainless steel of the Langguth facility disappeared. The big building was eventually used for storage.

What went wrong? Well, as I said, collaboration is difficult and it seems that there was a great failure to communicate in this one. The wine was made in Mattawa, of course, but I understand that all the decisions were made back in the Germany. The grapes were picked early at low brix and high acid, just like in Germany where climate and geography make this necessary, even though that combination didn’t make much sense in sunny Mattawa, where longer hang times are the current norm.

Remote Control Winemaking

The technicians back at the mother ship analyzed the data – wine by the numbers — but I guess they didn’t taste the grapes, as winemakers around the world always do. So they couldn’t tell that the resulting wines were soulless (as one critic concluded) and seemed over-processed. The market was under-whelmed by the wines when they were released.

Although Langguth wines improved in the following vintages, it was already too late. The market opportunity was gone. It is too harsh to say that Langguth was the Edsel of Washington Rieslings, but that’s the general idea I get from published accounts.

No one talked about Langguth at the Riesling Rendezvous – and I don’t blame them. Why dig up old skeletons?

But I think remembering the failed Langguth experiment usefully helps us appreciate how truly exceptional these recent successful partnerships really are. Here’s to Riesling’s rising tide!

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Thanks to Chateau Ste Michelle for inviting me to participate in Riesling Rendezvous. Information for this report was drawn from Paul Gregutt’s Washington Wines & Wineries (2005), Ronald Irvine’s The Wine Project (1997) and Ronald and Glenda Holden’s Touring the Washington Wine Country (1983).

Washington Brands vs Brand Washington

Lettie Teague’s column in today’s Wall Street Journal provokes a post on Washington wine’s identity crisis.

Teague writes in “Stalking the Wines of Washington” that the Washington wine industry has expanded rapidly in the last few years and that there are many great wines and great wine values. Yet Washington wines are hard to buy (she had trouble finding them in New York wine shops) and hard to sell (she quotes several winemakers in this regard, including Chris Camarda of Andrew Will, who is holding back wine and reducing capacity by 40%). What’s the problem?

I Can Get it for you Wholesale

Well, as in most cases, it is not a single thing but a confluence of forces at work. Although she says that fine wines from Washington have a reputation for good value, Teague suggests that many are currently over-priced relative to Napa Valley products. Judging from my email inbox, the reason for this is that a lot of Napa producers are selling off their wines at deeply-discounted prices.

The typical deal I am offered is “limited time only” 50% off the retail price plus discounted shipping. A great deal, except I can sometimes find even lower prices on these wines at local stores. The wholesale prices must be rock-bottom if wineries can do better with these low revenue direct sales. Teague writes that

One Washington winemaker lamented to me, “We can’t compete when Pahlmeyer Cabernet that used to be $90 a bottle is now $45 a bottle.” And so, while the quality has never been higher—Washington has had three excellent vintages (2006, 2007 and 2008)—the wines are getting harder and harder to find in stores outside of Washington state.

[Interestingly, some of the offers have six bottle limits -- a psychological ploy in most cases, I think, to make customers believe that surplus wines are really quite scarce. Wine people tell me that it works every time.]

I think that Washington wines are still a great value, given their high quality, but deep discounting by the competition is never a good thing for producers.

Napa Valley vs Columbia Valley

The lack of a strong regional wine identity is a second issue that Teague identifies (she also cites the small scale of most Washington producers as a disadvantage). Everyone thinks they know what Napa Valley wine is (although it is a large and very varied AVA that produces lots of different types and styles of wine). Napa was a strong brand.

What is Washington wine?  Washington apples have a strong identity and Washington cherries, too. But Washington wine — not so much. A stronger, more prestigious identity could be a real advantage, especially in this economic climate, Teague notes.

… Napa Valley has just done a much better job of marketing itself, according to Marty Clubb, whose L’Ecole 41 Winery in Walla Walla is probably one of the best known and oldest (circa 1983) wineries in the state. “Nobody really knows where our wines are from. People recognize our brand but not as a Washington-state winery.”

Washington has well-known wine brands at nearly every price point from Columbia Crest to Quilceda Creek, but there is no well-established Brand Washington. This is an issue that Paul Gregutt identified in his terrific book,  Washington Wines & Wineries: The Essential Guide (watch for a second edition on bookstore shelves this fall). He interviewed leaders in the Washington wine industry about their vision for Brand Washington and, while most considered this an important issue, no consensus emerged.

I’ve heard that Allen Shoup (the godfather of Washington wine: former head of Chateau Ste Michelle, now the driving force at Long Shadows) wanted to promote the idea of the Columbia Valley as Washington’s equivalent of Napa Valley — building the Columbia Valley brand to compete with California.

But this plan ran into a collective action problem as individual producers invested in their own private brands and sub-AVA brands instead. I’m sure some buyers today see Columbia Valley as a generic designation, not the prestige brand originally envisioned. And I’m sure a lot of people don’t associate it with any particular place (some people still confuse Washington  State with Washington DC; maybe they think the Columbia Valley is in … Columbia!).

Although the lack of regional identity may be a serious issue in the long run, I think other problems are more pressing right now. After all, most of those deep discount emails I’m getting aren’t coming from Washington, they’re being sent out by famous wineries in famous Napa Valley.  A strong identity surely helps, but can’t completely compensate for competitive market forces.

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One area where Washignton’s wine identity is strong is in Riesling. Riesling Rendezvous — sponsored by Chateau Ste Michelle and Mosel’s Dr. Loosen, begins tomorrow. Riesling makers from around the world will gather near Seattle to discuss the problems and opportunities they face. Look for a Riesling Rendezvous post in the near future.

Riesling: How Sweet It Is?

There is no doubt about it: Riesling is one of the world’s great wines. I think my students were slightly stunned by the eight Riesling wines (ranging from very dry to an ice wine) that they sampled at a recent tasting I organized for them.

Riesling drinkers know “how sweet it is!” (to borrow Jackie Gleason’s signature phrase). The wines are good and good value, too. Some of the best American Rieslings (wines like Poet’s Leap or Chateau Ste Michelle’s Eroica) sell for  only about $20. What a deal!

But the reason these great wines are great bargains is that the demand for them, while on the rise, is really not so great. Consumers by and large are afraid to buy Riesling. They don’t know how sweet they will taste or if they will like them. The “how sweet is it?” question and the “how sweet it is” exclamation (of those who know the answer) are thus  inextricably linked.

Asymmetric Information Strikes Back

Students of economics will recognize this as a problem of asymmetric information.  The people who make wine know its flavor profile and the people who buy it presumably know what they like (although winemakers tell me that people tend to say they like dry Riesling, but end up buying sweeter products). But they don’t know what’s in the bottle and can only find out by trying it.

Experimentation typically leads to confusion and disappointment as bottles that say “Riesling” produce glasses with much different taste. At some point, for many buyers, the disappointment factor is just too big. Lots of other wines out there. Why beat your head against the wall?  Riesling sits on the shelf.

One answer to the asymmetric information trap is signaling: tell the buyers what they need to know to make a purchase with confidence. It sounds pretty simple, but Riesling makers have until recently resisted it.

Of the seven Riesling table wines at my tasting, only two of them used the front label to signal something about the relative sweetness of the wine. The Pewsey Vale was labeled a “Dry Riesling” (and it was pretty dry, too) while the Pacific Rim bottling billed itself as a “Sweet Riesling” and was medium sweet and very tasty.

Some of the other wines offered descriptors on the back label, but I think it’s fair to say that a typical buyer would have been in the dark trying to figure out how sweet or dry most of them  were. The Pacific Rim wine was interesting because it was the first one I’ve seen that uses the International Riesling Foundation‘s new Riesling Tasting Profile Scale.  About a million cases of Riesling will be released this year by U.S. wineries that are participating in this program. Pacific Rim, a Washington Riesling specialist, has used the scale since 2008, according to a recent article on Decanter.com

How Dry Am I?

I first learned about this initiative at the 2008 Riesling Rendezvous conference, sponsored by Chateau Ste Michelle (Washington State) and Dr. Loosen (Mosel, Germany). An international group of Riesling producers decided to confront the asymmetric information problem head on by developing a simple way to communicate useful information about their wines.

Here is an example of the scale they have come up with taken from a limited edition Chateau Ste Michelle product. As you can see, it is pretty simple — just four descriptors ranging from Dry, Medium Dry, Medium Sweet to Sweet with +/- variation. This wine is “Dry +” — between Dry and Medium Dry.

This would seem like a very small step were it not for the fact that the current state of bottle information is so very limited and uneven. I suspect that this small step will help a lot of wine drinkers take a positive step towards enjoying Riesling.

Simplicity Is Complicated

As is often the case, getting something simple like this tasting scale is a very complicated process. As you may imagine, not all producers see the situation in the same light (there is much more to wine, even Riesling, than sweetness — a valid point). And tastes differ, of course, so what is medium dry to you might be medium sweet to me. (Some of my students thought the Pewsey Vale Riesling was quite sweet, for example.)

How do you define  sweetness in wine? Well, of course, it is a matter of balance between sugar and acid — with the right balance even a dessert wine with a high residual sugar level can avoid having a sticky sweet taste. Translating the chemistry into a taste profile, however, is a complicated matter.

Here is how the IRF handled the problem. As you can see, the standard begins with a simple sugar to acid ratio test (a relative calculation of grams per liter of acid and sugar). It then takes into account the absolute pH, which can push the rating up or down one level of perceived sweetness. Click on the table to enlarge it and see a more detailed explanation of the methodology.

I am going to have to pull a few corks (or twist some ‘caps) to see if I agree with the scale and if there really is the desired consistency across makers. But I am optimistic that this is a step forward. If it works, how sweet it will be!

Note: I am looking forward to attending the 2010 Riesling Rendezvous and getting an update on progress on this and other Riesling industry issues.

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Update 2/17/2010

My friend David Rosenthal, a winemaker at Chateau Ste Michelle, provides this useful news:

I wanted to let you know that all of the 2009 Rieslings from CSM will have the IRF scale on the back.  That includes:

Columbia Valley Riesling
Dry Riesling
Waussie Riesling
Harvest Select Riesling
Cold Creek Vineyard Riesling

We are jumping in with both feet on this one to try and educate people as much as possible at the point of sale.

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