Wine Economics: Coming Full Circle

My new book, Wine Wars, will be officially released next month; it tells the story of the battle for the future of wine (the Curse of the Blue Nun, the Miracle of Two Buck Chuck and the Revenge of the Terroirists) starting  in Napa Valley, where my interest in wine economics began, and ending  back in the same place 30 years later. Here’s a brief excerpt from the book.

Back on the Silverado Trail

People often ask me how I became a wine economist, an economist who studies the global wine markets. The answer is rooted in a particular time and place. Sue and I were still newlyweds, taking a low-budget vacation in the Napa Valley back in the day when that was still possible. We were headed north on the Silverado Trail late on our last day, pointed toward our economy motel in Santa Rosa, when we decided to stop for one last tasting.

The winery name was very familiar and I had high hopes for our tasting. If I had known more about wine back then I would have recognized this as one of the wineries that kicked French butt in the 1976 Judgment of Paris wine tasting. We pulled off the road and went in to find just the winemaker and a cellar rat at work. No fancy tasting room back then, just boards and barrels to form a makeshift bar. They stopped what they were doing and brought out a couple of glasses. If I knew more about wine back then, I would have been in awe of the guy pouring the wine, but I was pretty much in the dark. So we tasted and talked.

I started asking my amateur questions about the wine, but pretty soon the conversation turned around. The winemaker found out that I was an economics professor. Suddenly he was very interested in talking with me. What’s going to happen to interest rates? Inflation? Tax reform? He had a lot of concerns about the economy because his prestigious winery was also a business and what was happening out there in the financial markets (especially to interest rates and bank credit, as I remember) had a big impact on what he could or would do in the cellar. Wineries, especially those that specialize in fine red wines, have a lot of financial issues.

Besides the initial investment in vineyards, winery facility, equipment, and so forth, there is also the fact that each year’s production ages for two or three years, quietly soaking up implicit or explicit interest cost as it waits to be released from barrel to bottle to marketplace. The wine changes as it ages, but the economy changes, too. It’s impossible to know at crush what things will be like when the first bottle is sold. As Bill Hatcher (of Oregon’s A to Z Wineworks) likes to say, from an economic standpoint the only person who is crazier than a winemaker is his or her banker.

Wine economics is a serious concern. Few winemakers are completely insulated from the business side and sometimes the economy can have a huge effect on what winemakers get to make (if they have the resources to stick with their vision) or have to make (if they don’t).

And so a famous winemaker taught me to think about wine in economic terms and to consider that supply and demand sometimes matter as much as climate and soil when it comes to what’s in my wineglass. I should have known. Fully a third of the ferociously difficult Master of Wine exam (the MW designation that appears after the names of many famous wine experts) deals with business and economic issues.

Coming full circle — returning to the Stags Leap District and to that same cellar 30 years later —  gave me a strong appreciation for how wine has changed in the past and will likely continue to evolve in the future. I hope I have captured that understanding in Wine Wars.

Adam Smith’s Winery

I came full circle in another sense last weekend, when Sue and I crossed the Cascades to work on the bottling line at the Fielding Hills Winery in East Wenatchee. Mike and Karen Wade use the great fruit from their Riverbend Vineyard in the Wahluke Slope AVA to make wine at their small production facility perched high on a hill overlooking the Columbia River.

The very first Wine Economist blog post was an account of my initial visit to the Wade’s winery and the fun Dave Seago and I had helping out on the bottle line that year. I was struck by the productivity of the bottle crew (particularly since some of us were “quality testing” the wine as we worked) and I compared it to Adam Smith’s famous pin factory example of the benefits of the division of labor. (It is a little known fact that Adam Smith is both the Father of Economics and also the Father of Wine Economics.)

Arriving at the winery on Friday, I was very pleased to discover that the Wades were celebrating their tenth year of handcrafted production with a T-shirt that actually listed the twelve bottle line work stations.  The twelve tasks are:

  1. Bottleunboxer
  2. Sparger
  3. Fillerdeupper
  4. Corker
  5. Wiperista
  6. Foilplacer
  7. Foilmeister
  8. Wiper
  9. Labelista
  10. Boxfillerupper
  11. Tape Gunslinger
  12. Palletizerist

Adam Smith could not have organized the assembly line any better (or come up with more creative titles).

Mike and Karen’s daughter Robin was one of my university students and they have been very generous with their time, teaching me how the wine business works in practice to supplement my theoretical background. So I was pleased to join the volunteer bottling crew again this year, 243 blog posts after that first visit.  The Smithian division of labor allowed us to bottle 291 cases (that’s 3492 individual bottles) of Cabernet Franc between 9 a.m. and 4 p.m., when we finally ran out of wine to bottle.

The Wine Economist has come along way from that first post and the Wades and Fielding Hills have come a long way, too, from their first tiny vintage ten years ago. Although production levels are still relatively small (about 1200 cases this year, up from 800 when I first visited), their reputation is large and growing.

When Paul Gregutt surveyed Washington’s 600+ wineries for the second edition of his authoritative book Washington Wines & Wineries he awarded five stars to just twenty wineries. Fielding Hills made the five star list, as it did in Gregutt’s first edition, joining much larger producers like Chateau Ste. Michelle and famous wineries like Betz Family, Leonetti, Woodward Canyon and Quilceda Creek. Nice company to be in.

Coming full circle. It’s what winegrowers do — the conclusion of each vintage is also the start of the next. I guess it’s what wine economists do, too.  It is a good feeling to circle back and start out again!

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Photos by expert Foilplacer and master Boxfillerupper Sue Veseth.

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!)

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).

Restaurant Wine: A Double-Sided Puzzle

If there is one thing that wine enthusiasts have in common (maybe the only thing?) it is their frustration with wine in restaurants. I was reminded of this fact as I read through the weekend newspaper wine columns. Lettie Teague’s Wall Street Journal piece is an extended rant (or maybe she’s venting and not ranting) about wine-by-the glass in restaurants.

The Confidence Game

Teague can’t decide which is worse in restaurant wine-by-the glass programs — the price or the quality. The rule of thumb is that restaurants charge as much per glass of wine as they actually paid for the whole bottle (and sometimes even more). This makes her feel ripped off. At the same time, the wine has been sitting around open for who knows how long, losing some or all of its freshness.  Fancy wine storage systems can help with this, but still it’s difficult to order a glass of wine (sometimes for $25 or more) with much confidence.

Over at the Financial Times Nicholas Lander approaches the issue from the business side and  looks for a solution in cooperative arrangements between wine collectors (who are willing to sell off some of their stash at market prices) and restaurants who offer these wines to their customers at reduced mark-ups.  The collectors get a fair price on their investment, the restaurants get a middle man return without big up-front costs and customers get access to special wines at lower prices. A great idea, but perhaps hard to scale-up.

Restaurant wine is like a double-sided jigsaw puzzle. The same pieces have to fit together to form two different appealing pictures — one for the customers and another for the business. If any of the pieces are upside down or missing, the whole experience is ruined.

Putting the Pieces Together

Not that it is impossible to put it all together. One of my most completely satisfying wine experiences of recent years was a dinner at The Black Rabbit Restaurant at Edgefield, a funky old  hotel in Troutdale, just outside of Portland, Oregon. A bottle of  the stellar 2006 Fielding Hills Cabernet Sauvignon sold for the same price that the winery was charging at that time — what a deal! It wasn’t the only good value on the menu, either. (The current wine list on the Black Rabbit website lists a 2007 Ken Wright Cellars McCrone Vineyard Pinot Noir for $60. I saw the same wine on another wine list for about $200. Where are my car keys?)

How can they do it? Well, Edgefield is an unusual operation.  It is an affordable destination hotel housed in a former Depression-era poor farm (really!) with its own movie theater, winery, brewery and distillery.  The owners can afford to sell their own wine at good prices and the rest of the list falls into place around those wines. Edgefield is part of a regional chain of restaurants and hotels, so some scale economies may exist, too.

Constantly Disappointed?

Edgefield shows that it is possible to put the pieces together to everyone’s satisfaction. But is it the model for restaurant wine programs generally?  Obviously not. Like Lander’s proposal it is too much of a special case, but it shows that there is hope for constantly disappointed wine enthusiasts. Unlike a real jigsaw puzzle, which has just one solution, I think there are probably many different ways to put the pieces together to improve the restaurant wine experience.

Flemming’s Steak House offers 100 wines by the glass at its restaurants, for example. Although Lettie Teague is appalled by this for the price and quality reasons noted above, the broad choice may please many customers.  After all, we are accustomed to choosing from a huge wine selection at competitive prices at supermarkets and wine shops. Even a very large restaurant wine list (say, 300 choices) is tiny compared with your local upscale supermarket, which may have 2000 or more wines on the shelves.

The fact that the restaurant charges a semi-monopoly price (hard to get a competitive bid once you’ve been seated) makes the situation more frustrating.

One solution is to loosen the monopoly hold on price, which some restaurants are doing right now by reducing or eliminating corkage fees. Bring your own wine (purchased at normal retail prices) and enjoy dinner and a wine experience. Since wine is typically the highest priced item on a restaurant bill (more expensive than the entree, for example), reducing the wine cost removes a disincentive to dine out.

I don’t think many customers take up the “no corkage fee”  offer, but some do and if treated well they are likely to return to dine again. If there are conditions on free corkage (the wine cannot be on our list, for example, or free corkage on one bottle if you purchase a bottle from us) they need to be clearly stated to avoid misunderstanding and hard feelings.

Wine-by-the Keg?

The continuing recession is putting more strain on restaurant wine programs, which is unfortunate for everyone involved. But perhaps it will also spur the search for creative solutions to the double-sided puzzle problem.

One interesting approach to the wine-by-the-glass problem, for example, is keg wine — wine packaged in reusable steel containers. Cheaper per unit than bottled wine (assuming that the keg can be returned and refilled efficiently) with a reasonably long quality shelf life if properly tapped, keg wine may be the rosy  future of restaurant wine-by-the-glass.

Someone should tell Lettie Teague the good news.

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Thanks to Michael and Nancy Morrell for their assistance with this report.

The Bottleneck Bottleneck

Bottlenecks are always problematic.  It seems like they are always too narrow or not narrow enough.

We ran into an unusual bottleneck last week when were went to Wenatchee to help our friends Mike and Karen Wade bottle the 2008 vintage at the Fielding Hills Winery.  FHW is award winning 800-case operation and the bottling is done by a volunteer crew of friends, family and wine club members. I wrote about it in one of my first blog posts, comparing the wine bottle assembly line to Adam Smith’s famous pin factory.

Bottleneck Bottleneck

The division of labor does improve efficiency,  just as Smith said, but anyone who’s worked an assembly line knows about bottlenecks – the whole process only moves as fast as the slowest work station.  If the corker is slow, for example, nothing else will go very fast. (The corker was no slacker on our shift – John Sosnowy of the Wine Peeps blog.)

Our crew worked very well, but there was still a bottleneck, albeit an invisible one. The capsules that fit over the bottle’s neck hadn’t arrive (a bottleneck bottleneck!) – they were held up somewhere in customs in a container that must contain hundreds  of thousands of capsules for many wineries. We bottled the wine, but when the capsules finally arrive it will be necessary to open each of the 800 cases, pull out every bottle, affix the capsule, return and reseal. That’s about 10,000 bottles. What a headache! I hate bottlenecks.

The biggest bottleneck in the American wine business, of course, is distribution. With 51 different sets of state rules and regulations and the three-tier winery/distributor/retailer/consumer system, it sometimes seems like making wine is the easy part – getting it to customers is the bigger problem. Widening the distribution bottleneck seems to me to be a key to expanding the wine market and building a more robust American wine culture.

Tightening the Distribution Bottleneck

The Obama administration seems to want to build up the U.S. wine industry – that’s why he sent Commerce Secretary Gary Locke to Hong Kong to sign an agreement to ease the wine export process and open that bottleneck a bit.

But Congress is moving in the opposite direction. Wine Spectator reports that more than 100 members of Congress have announced support for H.R. 5034, a bill that would further restrict direct wine sales in American. It would make it (even) harder to ship wine across state lines. Wine Spectator reports that wine distributors (who benefit from their key position in the three tier bottleneck) actively support the bill.

The supporters of H.R. 5034 argue that direct shipping undercuts the power of states to regulate alcohol distribution and sales, and I understand this logic. But the winery owners I know actually go to extremes to satisfy state regulations because the penalties for making a mistake are often extremely onerous. (I know one winery that has stopped all interstate sales for now because of compliance concerns.)

Focus on Direct Sales

The slack economy has put direct sales in the spotlight. With wine sales down in many categories and price points still eroding, wineries are trying to boost the yield per bottle and increasing direct sales and reducing the flow that goes through distributors is one way to do that. Isenhower Cellars in  Walla Walla  has actually reorganized itself (and opened an off-site tasting room) so that it can rely entirely on direct sales. Their website announced that

Isenhower Cellars is no longer selling wine to restaurants, wine shops, or grocery outlets in Washington State. Our wines are now exclusively available from the winery in Walla Walla, Washington, our tasting room in Woodinville, Washington, or here on our web site. We treasure the past relationships with our Washington State distributors and friends in the wine trade. However a complete focus on quality limits production to 2,000 cases of wine and the success of our wine club and second tasting room leaves no extra Isenhower wines available for sale outside of our winery’s embrace.

Even E&J Gallo, which has done quite well thank you during the recession, is trying to increase direct sales. I’m on a couple of email lists for Gallo wine brands that I follow and they frequently offer nice discounts or low cost shipping to try to encourage orders from their online wine shop, The Barrel Room.

It seems inconsistent to send Gary Locke to China to expand wine exports and then discourage the equivalent interstate trade. As an economist, I am naturally biased toward more choice and freer trade. I hope the attempt to tighten the wine shipping bottleneck gets caught in some legislative bottleneck somewhere down the line and never reaches President Obama’s desk.

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Thanks to Karen, Mike and Robin Wade for their hospitality and great wine. Thanks to the members of the 2008 FHW Cabernet Franc bottling crew both a fun and productive afternoon.

Where Does Wine Come From?

Where does milk come from? Most people will tell you that milk comes from a cow, but it is easy to imagine that a child might be confused and tell you that milk comes from the supermarket or from the milk company because these are the most obvious choices for someone who has never visited a farm.

The links between products and their natural origins are easy to miss or misinterpret in today’s complicated world, with its long and sometimes global supply chains. Christopher Chase-Dunn used to ask his students “where did your breakfast come from?” and the question when taken seriously sometimes really stumped them.

How Wine is Different from Milk

I like to think that wine is different from milk because we have a lot more information about its origins.  We know that it comes from grapes, of course, but there is often a lot of specific information available (on the label and on the web) about the origins and production processes. Most wine labels tell us the vintage year, for example, and the production region. Data on harvest dates, brix levels, vineyards sourced, fermentation and aging techniques and so forth are frequently available, too.

We typically know or can conveniently discover a whole lot more about where wine comes from (and when and how it was made) than we typically know about milk. It gives wine a certain “somewhereness” that I have written about before. So it’s easy to get sorta cocky about wine and to think that wine enthusiasts actually drink in all this information and are very well informed about wine terroir. But it would be a mistake to think that everyone is a geeky as I am in this regard.

Taste the Vineyard

If you ask winemakers where wine comes from many will tell you that it is made in the vineyard (vineyards are to wine as cows are to milk, I guess). But consumers don’t always think of it that way, as I learned on Sunday when Sue and I poured wines by several makers using grapes from the Riverbend Vineyard in the Wahluke Slope AVA during the Taste Washington event in Seattle.

Most of the action at Taste Washington was out on the main floor, where about 200 wineries offered tastes of their wines.  Our table was in a area designated for vineyards, not wineries. You could visit the Boushey Vineyard table, for example, and taste its terroir as expressed by several different wineries that source their fruit from this famous grower. It was a different way of thinking about wine: vineyards, not varietals or winemakers or AVAs.

It’s an idea of wine much closer to the concept of terroir that wine geeks talk about with such urgency.

Riverbend is the estate vineyard of the highly regarded Fielding Hills Winery, so the people who stopped by to chat and taste with us were able to sample the Fielding Hills 2006 Cabernet Sauvignon and Syrah as well as and a half dozen other wines made from Riverbend grapes by others (including wines by Nefarious Cellars, Soos Creek, Tildio Winery, Hard Row to Hoe, and Chateau Faire Le Pont).

The wines, all excellent, were sometimes very different (the influence of the winemakers) but there were some interesting common threads (the terroir) that could be teased out with a little time and concentration (difficult, I know, in the context of a big tasting event). It was an unusual and interesting opportunity to taste wines in this way and decide for yourself where wine comes from — the vineyard, the cellar or maybe both.

Where Does Wine Come From?

We had a great time and met a lot of great people, but we soon came to realize that the idea of tasting wines from the same place but made by different people was quite foreign to most of the attendees. They knew about the idea of terroir, but that’s not the way they identified wine in practice.

Where does wine come from? From wineries — those tables out on the main floor of Taste Washington — and the winemakers who work in them. The idea of the vineyard’s critical role was something we had to explain. To their credit, a lot of people embraced it and took their time tasting through the wines. I hope they found the time they spent worthwhile (they paid a high opportunity cost for their education in terroir given limited time  in a room full of great wines).

I’m always on the lookout for teachable moments and so I liked the challenge of staffing the Riverbend Vineyard table. It turns out that wine is more like milk than I thought — it’s easy to think that it comes from the store or the winery and to forget its natural origins. But you can find terroir if you know where to look and you take the time and trouble to seek it out.

Events like Taste Washington create teachable moments and proponents of terroir-based wines have lots of educating work to do to make the difference between milk and wine even clearer in consumer minds.

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Update 3/31/2010: By coincidence Jancis Robinson has posted an article on her Purple Pages website about the incredible terroir of Washington’s best vineyards. She attended a London tasting of Washington wines and was drawn to the the Cabs made from Champoux Vineyard fruit. Here’s a quick taste of the article.

The highlight of the Pacific North West tasting in London earlier this year was a clutch of very fine Cabernet Sauvignons from Champoux vineyard in Washington state. They reinforced my impression from the rest of the tasting that Cabernet can be a real star among the state’s reds, particularly when the vines are more mature, the site just right and the vineyard manager a perfectionist.

You can find the entire article (including tasting notes) here. It reinforces what I wrote above about the benefits of thinking of wine as a vineyard product.

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Thanks to Mike and Karen Wade of Fielding Hills for inviting us to work the Riverbend Vineyard table. Thanks as well to Robin Wade for all her help. Thanks to all the nice people we met. Great wine, great people, great event.

Strong Wine

Wine’s strength is usually measured in percent of alcohol — and everyone complains that it is too strong, too hot. A recent charity event reminds me that there are other ways of measuring the power of wine and that perhaps it can never be strong enough.

Tacoma Wine Classic

Mike and Karen Wade of Fielding Hills Winery asked us to pour their wines at the Tacoma Wine Classic, a charity dinner/auction organized by the Tacoma Community College Foundation to benefit TCC’s scholarship fund and education programs. It’s their major fund-raising event and they were hoping to generate about a third of the $500,000 annual target on this one night. More than 200 people paid $150 each to attend. Wineries and others donated thousands of dollars of goods and services (including a “mountain of magnums”) to the auction. Scores of volunteers contributed their time to pull it all together.

We poured the Fielding Hills wines during the reception alongside representatives from Fort Walla Walla Cellars, Kestrel Vintners, McGavick Winery, Milbrandt Vineyards, McCrea Cellars, Northstar, Page Cellars, Spring Valley Vineyards, Woodward Canyon Winery, Maryhill Vineyards and Saviah Cellars (what a great group of wineries). Everyone had a good time tasting and noshing and bidding on silent auction items (wines and wine-related packages). Then the dinner bell rang — more wine, good food, and the oral auction, which included a five-year vertical of Leonetti Cellar Cabernet Sauvignon magnums that went for about a thousand dollars.

As I reflect on this experience the thing that stands out to me is the power of wine to bring these people together to support a good cause. Providing adequate resources for higher education is very important, but the free rider principle is powerful and the “collective action problem” is therefore difficult to solve. It is hard in general to get people to support projects that provide widely dispersed benefits. Mancur Olson, the great political economist, argued that “specific incentives” are often needed to motivate individuals to cooperate to produce collective goods. People need to feel that they benefit as individuals in some way from their support of collective goals and that their individual benefit and the collective benefit are linked. (This is one reason public television stations both ask for your unselfish support of their public good and at the same time try to give you some sort of private good — a Masterpiece Theater coffee mug? — in exchange for your donation.)

Wine’s Hidden Strength

It seems to me that wine lends itself very well to solving the collective action problem. Wine has obvious private benefits, but it is well known that these benefits are best appreciated (magnified?) in association with others. This is obviously true about wine consumption — half the fun of drinking wine is talking about it with friends. But it is also true of other aspects of wine. People gain private benefits from display of their wine knowledge and taste and from the generous feeling one gets in sharing with others. But these benefits can only be realized in the company of other people — they are private goods that are collectively produced, if that makes any sense (I was tasting as well as pouring last night, so my logic may be a bit fuzzy). Educational benefits are both private and public in a similar way, at least to some extent, which makes the wine and education link useful in both symbolic and practical ways.

In an age when many social activities such as listening to music are increasingly individualized and privatized (think iPod here) the power of wine to connect remains strong and perhaps has become more profound. I would like to say that wine has a universal power to bring people together, but that’s clearly wrong. Some people just don’t care about wine — they have other interests– and some positively object to it because of its alcoholic content.

But it is interesting to observe how effective wine can be at events like this to bring together people of different ages and backgrounds to share collective experiences and support a good cause. The TCC Foundation is wise to uncork wine’s hidden strength by making it the theme of their annual fund-raising event.

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