Wine Economist Year in Review & Looking Ahead to 2016

Past and Future - Two-Way Street Sign2015 was a busy year here at The Wine Economist and 2016 is shaping up to be pretty interesting, too.

Looking Back at 2015

In January I spoke in the “State of the Industry” session at the Unified Wine & Grape Symposium in Sacramento. Then we left for New York City where I spoke at “Vino 2015,” a conference and trade show organized by the Italian Trade Commission.

North to Alaska: I traveled to Juneau and Anchorage to give talks and do a fund-raising wine dinner for the World Affairs Council chapters in those cities. Then it was east to Boise, Idaho to speak at the Idaho Wine Commission annual meeting. Both Anchorage and Boise were surprisingly warm, but …

It was really really cold in Ontario when I visited in March to speak to the Winery & Grower Alliance of Ontario meetings, but the people were warm and it was a great experience. Then a quick trip to Walla Walla to talk about wine industry at a regional business summit.

South to California in May, to speak at the Ramona Valley AVA symposium, then a fund-raiser for the Admiral Theatre Foundation in Bremerton along with my friends from Hedges Family Wines. Sue and I were delighted to be invited to the 50-year retrospective tasting of Oregon’s Eyrie Vineyards in Portland, too.

Italy and a Few Surprises

June’s highlight was lecturing at the Conegliano Wine School in Italy and visiting with winemakers in the Veneto and Friuli.While we were in Cormons I got word that around the globe in Yantai, China the Wine Economist had received the Gourmand International prize for the “Best in the World” wine blog. Incredible.

Back home it was north again in July, to speak at the British Columbia Wine Institute annual meetings, then south to Napa Valley to talk at the California Association of Winegrape Growers summer conference.

Two books came out in the fall, my newest volume Money, Taste, and Wine: It’s Complicated and the paperback edition of Extreme Wine. 

We visited Barboursville Vineyards while in Virginia to meet with Luca Paschina and we were lucky to able to meet up with Marc Hochar in Richmond and taste some older vintages of Lebanon’s Chateau Musar on the same trip.

I spoke at the Seattle meetings of the Academy of International Business and then flew to Milan to participate in a discussion on sustainability organized in conjunction with the big SIMEI trade show there.

The year ended on a high note when we learned that Money, Taste, and Wine will receive the Gourmand International award for the year’s best wine writing in a U.S. book. As the U.S. winner it is a finalist for the “Best in the World” award to be revealed in Yantai, China in May 2016.

What’s Ahead for 2016?

The travel schedule is coming together for 2016. I am looking forward to going back to Sacramento at the end of January for my fifth year moderating the “State of the Industry” program at the Unified Wine & Grape Symposium.

A few weeks later we will head to Napa where Sue and I are on the faculty for the Professional Wine Writers Symposium.

Then it is north to Anchorage for another World Affairs Council fund raising program before returning to Walla Walla for the big Reveal Walla Walla trade auction.

It looks like we will be going to Portugal in May to speak at a conference organized by Wines of Alentejo and later to Seattle for Riesling Rendezvous, an international conference sponsored by Chateau Ste Michelle and Dr Loosen.

That’s what’s on tap for 2016 so far, but the year is still young. No wait — it actually hasn’t even started yet. Who knows where the wine rivers and roads will take us.

That’s the look back and ahead. Hope to see you somewhere on our travels in 2016. In the meantime, cheers to all! And have a great New Year.

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Sometimes I feel like I have been everywhere in the wine world to speak to wine industry groups, but the truth is … I’m not even close!

Wine Economist Joins 2016 Professional Wine Writers Symposium Faculty

I’m pleased to report that Sue and I will be joining the faculty of the 2016 Professional Wine Writers Symposium, which will take place February 16-19, 2016 at the Meadowood Napa Valley resort. I will be speaking about the challenges and opportunities of writing about the wine business and Sue will serve as a writing and career coach, drawing upon her years of corporate communications experience and work as contributing editor of the Wine Economist.

We are honored to join this year’s distinguished faculty, which includes Hugh Johnson, Eric Asimov, Jeannie Cho Lee, Jamie Goode and … well the list goes on and on. Here’s how a press release describes the faculty.

Renowned British author and expert on wine, Hugh Johnson OBE, will deliver the industry keynote address at the 2016 Symposium for Professional Wine Writers at Meadowood Napa Valley to be held February 16-19. The Symposium is open to qualified wine, wine-food and wine-travel writers.

Other faculty members featured at the 12th annual gathering include Eric Asimov, chief wine critic for the New York Times; Jay McInerney, author and wine columnist for Town & Country; Jeannie Cho Lee MW, founder of AsianPalate.com; Ray Isle, executive wine editor, Food & Wine; Doug Frost, wine author, educator and one of only four people in the world to hold both the Master of Wine and Master Sommelier credentials; Jamie Goode, author, writer and founder of wineanorak.com; Virginie Boone, contributing editor for Wine Enthusiast; Mike Veseth, publisher of the Wine Economist; satirist Ron Washam, the HoseMaster of Wine; Esther Mobley, wine, beer and spirits writer for the San Francisco Chronicle, and Tilar Mazzeo, author of The Widow Clicquot and associate professor at Colby College.

The full program for the 2016 symposium has not yet been announced, but participants can expect an intense set of lectures, meetings, discussions, writing exercises, and one-on-one coaching sessions — plus the opportunity to taste great food and wine and get to know some luminaries of the wine world. The program emphasizes three subjects: the craft of writing, career advancement and wine knowledge.

This year’s symposium marks a transition toward a fully funded fellowship model (in place of the tuition charge of previous years) thanks to the generosity of Meadowood and the Napa Valley Vintners Association. Applications for  the 30 fellowships are now being accepted with a November 1, 2015 deadline. Learn more at WineWritersSymposium.org.

Founded by Meadowood Napa Valley and the Napa Valley Vintners Association and supported by The Culinary Institute of America, the symposium brings together wine book authors and editors, wine magazine writers and critics, newspaper wine columnists, bloggers and other editorial wine content creators. Special thanks to Jim Gordon for inviting us to join the faculty for 2016.

American Association of Wine Economists Conference Program

As I noted last week, the American Association of Wine Economists are meeting in Walla Walla in a few days. I thought you might be interested in the full program, including papers, authors, activities and so on. Lots of interesting wine economics topics and ideas. Enjoy

JUNE 23, 2014 Whitman College, Maxey Hall

8:00 – 9:00

REGISTRATION, Maxey Auditorium Foyer

 

 9:00 – 10:30 Room – Maxey Auditorium  Session #1A: Consumers & Markets
Chair: XXX
Richard Belzer (Regulatory Checkbook) Leveraging consumer ignorance and information search costs to maximize profits in US wine ‘Flash sales’: a follow up
Linda L. Lowry, Robin Back (both University of Massachusetts, Amherst) Impact of farm winery legislation S 2582: an act relative to economic development reorganization on Massachusetts wineries
Marc Dressler (University Ludwigshafen, Germany) Exploring success factors in export management – Results of a survey on relevance in the context of the wine business and performance of German producers
Olivier Gergaud (KEDGE Business School, Bordeaux, France), Philippe Masset (Ecole Hôtelière de Lausanne, Switzerland) Using information about web searches to forecast auction prices of fine wines

 

 9:00 – 10:30Room – Maxey 207  Session #1B: Tourism and Economic Impact
Chair: Luigi Galletto (University of Padova, Italy)
Christopher Lucha, Gustavo Ferreira, Martha Walker (all Virginia Polytechnic Institute and State University, Blacksburg) Virginia wine tourism: a profitability analysis
Luca Rossetto, Luigi Galletto (both University of Padova, Italy) Wine tourist profiles: a comparison between two wine routes in Veneto region
Theodore Lane (Western Regional Science Association), Bill Mundy (Bill Mundy Associates) Walla Walla’s wine-based agro-industrial cluster
Martin Prokes, Kamil Prokes (both Mendel University Brno, Czech Republic) Job creation by investing in the wine sector

 

10:30 – 11:00 Coffee Break
Maxey Auditorium Foyer

 

 11:00 – 12:30Room – Maxey Auditorium  Session #2A: Coffee & FoodChair: Morten Scholer (International Trade Centre, Geneva, Switzerland)
Morten Scholer (International Trade Centre, Geneva, Switzerland) Coffee: the product, the trade and comparison with wine
Samrawit Ebabe (Jimma University, Ethiopia) Constraints to Ethiopian coffee exports from a supply chain management perspective
Peter Roberts (Emory University) Product differentiation, pricing and fair trading in specialty coffee markets
Albert I. Ugochukwu University of Saskatchewan, Jill E. Hobbs. University of Saskatchewan Food product authenticity in agri-food markets: implications for collective reputation
Bernd Frick (University of Paderborn, Germany), Olivier Gergaud (KEDGE Business School, Bordeaux, France), Laure Salais (Institut Paul Bocuse, France) The demand for restaurants in Europe

 

 11:00 – 12:30Room – Maxey 207  Session #2B: Trade and International I
Chair: XXX
Alejandro Gennari, Jimena Estrella. Xavier Brevet (both National University of Cuyo, Mendoza, Argentina) Argentinean wineries’ strategies on export markets
Miguel A. Fierro, Rodrigo Romo Muñoz (both Universidad del Bío-Bío, Chile) Characterization of the Chilean bottled wine market
Cynthia Howson (University of Washington Tacoma), Pierre Ly (University of Puget Sound), Jeff Begun (University of Washington Tacoma) Grape procurement, land rights and industrial upgrading in the Chinese wine industry
Maryline Filippi (University of Bordeaux, France) Elena Garnevka (Massey University, New Zealand) Exporting wine to China from New Zealand and from France. Strategies and perspectives
 11:00 – 12:30Room – Maxey 307  Session #2C: U.S. Wine Market & Industry
Chair: XXX
Raphael Schirmer (University of Bordeaux, France) Drinking wine in the United States of America (from 1850 to the present) through the New York Public Library’s collection “What’s on the menu?”
Jon H. Hanf (Geisenheim University, Germany) Retail branding and its consequences on wine brands
Bradley Rickard (Cornell University), Olivier Gergaud (KEDGE Business School, Bordeaux, France), Hu Wenjing (Cornell University) Trade liberalization in the presence of domestic regulations: likely impacts of the TTIP on wine markets
Robert Hodgson (Fieldbrook Winery) The unimportance of terroir

 

12:30 – 14:00 Lunch Break

 

 14:00 – 15.15Room – Maxey Auditorium

 

PLENARY SESSION:
Welcome and Introduction
 Orley Ashenfelter (Princeton University)    Welcome and Introduction
     
Kevin Pogue (Whitman College)   The Terroirs of the Walla Walla Valley American Viticultural Area
15:15 – 15:45 Coffee Break
Maxey Auditorium Foyer
 15:45 – 18:00Room – Maxey Auditorium  Session #3A: Varietals, Geography, Environment
Chair: Julian Alston (UC Davis)
Kate Fuller, Julian Alston, Olena S. Sambucci. (all UC Davis) The value of powdery mildew resistance in grapes: evidence from California
Julian Alston (UC Davis), Kym Anderson (University of Adelaide) Evolving varietal distinctiveness of US wine regions: comparative evidence from a new global database
Christopher Bitter (University of Washington, Seattle) The evolving geography of the U.S. wine industry
Luigi Galletto, Federica Bianchin, Luigino Barisan (all University of Padova, Italy), Eugenio Pomarici (University of Naples Federico II, Italy) An evaluation of a new drought-resistant rootstock in Italy
Jean-Philippe Roby (Bordeaux Science Agro, France) Viticulture of varietal wines: the dead end of terroir at the time of global warming? Case study of Burgundy
Karl Storchmann (New York University), Peter Griffin (Vanderbilt University) Climate change and vineyard prices

 

 15:45 – 18:00Room – Maxey 207 Session #3B: Wine Investment
Chair: Lee Sanning (Whitman College)
Marie-Claude Pichery (Université de Bourgogne, France), Catherine Pivot (Université Jean Moulin – Lyon 3, France) Wine investment: a profitable alternative investment or simply a long-term pleasure?
Beysül Aytac, Thi Hong Van, Hoang, Cyrille Mandou (all Sup de Co Montpellier Business School, France) Wine: to drink or to invest? A study of wine as a financial asset in a French portfolio context
Philippe Masset, Jean-Philippe Weisskopf (both Ecole Hôtelière de Lausanne, Switzerland) Wine funds – an alternative turning sour?
Philippe Masset, Jean-Philippe Weisskopf (both  Ecole Hôtelière de Lausanne, Switzerland) Wine indices in practice: nicely labeled but slightly corked
Jean-Marie Cardebat (Université de Bordeaux, France), Benoît Faye, Eric Le Fur (both INSEEC Bordeaux, France), Philippe Masset (Ecole Hôtelière de Lausanne, Switzerland)  Is wine still an investable asset?
Benoît Faye, Eric Le Fur (both INSEEC Bordeaux, France) Dynamics of fine wine and asset prices: evidence from short- and long-run co-movements

 

 15:45 -18:00Room – Maxey 306  Session #3C: Quality and Experts IChair: XXX
Robin Golstein (Fearless Critic Media) Do more expensive things generally taste worse?
Omer Gokcekus, Clare Finnegan (both Seton Hall University) Lumping and splitting in expert ratings’ effect on wine prices
Neal Hulkower (McMinnville, OR) Information lost: the unbearable lightness of vintage charts
Ying Lou, Jing Cao, Lynne Stokes (all Southern Methodist University) Comparing measures of rater agreement for wine quality ratings
Dom Cicchetti (Yale University), Arnie Cicchetti (San Anselmo, CA) Assessing reliability when multiple judges taste a single wine
Eric Stuen, Jon Miller, Robert Stone (all University of Idaho) An analysis of consensus of prominent wine critic ratings in the US market
 19:00 – about 23.00
Conference Dinner
Long Shadows
Buses leave from Whitman College at 18:15  

 

 

JUNE 24, 2014 Maxey Hall

 

 9:00 – 10:30Room –Maxey Auditorium  Session #4A: Water, Whiskey, Wine, Food
Chair: XXX
Kevin W. Capehart (American University, Washington, DC) Fine water: a hedonic pricing approach
Ian B. Page (University of Maryland) The economics of whisky: an analysis of imperfect competition when product quality is endogenous
Kenneth Elzinga. University of Virginia, Carol Tremblay. Oregon State University, Victor Tremblay. Oregon State University Craft beer in the USA: history, scope and geography
Yohannes Yehabe (Molde University College, Norway) Assessment of weather impact on the sales of breweries in Norway: a panel data regression approach
Robert Harrington, Lobat Siahmakoun. (both University of Arkansas) Which wine and food elements drive high and low levels of perceived match?
 9:00 – 10:30Room – Maxey 207

 

Session #4B: Wine Demand
Chair:
XXX
Getnet Yitagesu (Unity University, Addis Ababa, Ethiopia) A principal component analysis of the demand structure of Wine. The Case of Addis Ababa
Paulina Rytkönen (Södertörn University, Sweden) Wine in a vodka country – changing consumption patterns in Sweden’s way from a rural to an industrial nation
Gary M. Thompson (Cornell University) Wine cellar optimization
Amy Holbrook, Dennis Reynolds (both Washington State University, Pullman) What effect does wine closure type have on perceptions of wine’s appearance, bouquet, Taste, and overall quality? An empirical investigation
Judit Szigeti (Ministry of Foreign Affairs, Hungary), Szilárd Podruzsik, Orsolya Fehér, Péter Gál (all Corvinus University of Budapest, Hungary) Wine affordability for the Hungarian consumers

 

10:30 – 11:00 Coffee Break
Maxey Auditorium Foyer
 9:00 – 10:30Room – Maxey Auditorium

 

Session #5A: Quality & Experts II
Chair: XXX
Adeline Alonso Ugaglia (Bordeaux Science Agro, France), Olivier Gergaud (KEDGE Business School, Bordeaux, France) Restaurant awards and financial rewards: Michelin
Guenter Schamel (Free University of Bolzano, Italy) Points for sale? Examining the market entry of a new wine guide
Orley Ashenfelter (Princeton University), Robin Goldstein (Fearless Critic Media), Craig Riddell (University of British Columbia, Vancouver) Do expert ratings measure quality? The case of restaurant wine lists
Robert Hodgson (Fieldbrook Winery) The fallacy of wine competitions; a ten year retrospective

 

 11:00 – 12:30Room – Maxey 207

 

Session #5B: Marketing
Chair: XXX
Steven Cuellar (Sonoma State University) Measuring the return to social media
Lindsey Higgins, Erica Llanos (both California Polytech, San Luis Obispo) A healthy, but confusing, indulgence? Wine consumers and the health benefits of wine
Benjamin C. Lawrence, Alex M. Susskind, Gary M.  Thompson (all Cornell University) Wine mailing lists
Jon H. Hanf, Oliver Gierig (both Geisenheim University, Germany) Discussion of an Innovative pricing strategy in the context of wine tastings

  

 11:00 – 12:30Room – Maxey 306

 

Session #5C: Industry Organization
Chair: XXX
Paulina Rytkönen (Södertörn University, Sweden) The Swedish wine industry – institutions, knowledge, temperance and regional development in an upcoming wine country
Betsy Carter (Max Planck Institute for the Study of Societies, Cologne, Germany) The state versus the market: patterns of producer politics and the construction of status markets
Marc Dressler (University Ludwigshafen, Germany) Organizational levers on reputation and performance – An empirical analysis of German wineries
Florine Livat (KEDGE Business School, Bordeaux, France), Jean-Marie Cardebat. (University of Bordeaux, France) Are there too many appellations in Bordeaux? A renewal of the brand vs. appellation debate
12:30 – 14:00 Lunch Break
 14:00 – 15.30Room – Maxey Auditorium

 

PLENARY SESSION:
Regulation in the U.S. Wine Industry                                 
 Orley Ashenfelter    Princeton University, Princeton
Paul Beveridge   Family Wineries of Washington State, Seattle
John Hinman   Hinman & Carmichael LLP, San Francisco
Allen Shoup   Long Shadows, Walla Walla

 

15:30 – 15:45 Coffee Break
Maxey Auditorium Foyer
 15:45 – 17:15Room – Maxey Auditorium  Session #6A: Supply
Chair: XXX
Nick Vink, Theo Kleynhans, Willem Hoffmann. (Stellenbosch University, South Africa) Financing wine barrels in South Africa: the Vincorp model
Alessandro Muscio, Gianluca Nardone, Antonio Stasi (all Università degli Studi di Foggia, Italy) Perceived technological regimes: an empirical analysis of the wine industry
Lindsey Higgins. Cal Poly, San Luis Obispo Economic stochastic simulation model for small to medium sized wineries
Julien Cadot (ISG Business School, France), Adeline Ugaglia (Bordeaux Sciences Agro, France) The horizon problem in Bordeaux wine cooperatives.

  

 15:45 – 17:15Room – XXX

 

Session #6B: International & Trade II
Chair: XXX
Joachim Ewert (University of Stellenbosch, South Africa), Jon H. Hanf, Erik Schweickert. (Geisenheim University, Germany) South African Cooperatives and the challenge of product quality
Silvia Gatti (University of Bologna, Italy) Designations of origin for wines, labor and cooperatives in Emilia-Romagna between the Censuses of Agriculture 2000 and 2010
Bo Gao, James L. Seale, Zhifeng Gao (all University of Florida) U.S. import demand for wine by country of origin: a differential approach
Leo-Paul Dana (Montpellier Business School, France), Mathieu Labadan (University of Pau, France), Michael Mettrick, Agate Ponder-Sutton. (both University of Canterbury, New Zealand) Interaction among wine makers in New Zealand
17:15 – 17:30 Coffee Break
Maxey Auditorium Foyer

 

 17:30 – 18:00Room – Maxey Auditorium  PLENARY SESSION:
Upshot and Outlook
 Karl Storchmann    New York University, New York

Alejandro Gennari
 
National University of Cuyo, Mendoza, Argentina

 

 19:00 – 23:00 
Dinner
Whitehouse Crawford, Walla Walla
JUNE 25, 2014 09:00 – 18:00
Tour of Walla Walla Vineyards and Wineries
Geological Guide: Kevin Pogue, Whitman College
Lunch at Basel Cellars
Buses leave from the Marcus Whitman Hotel at 9am

 

World Tour Update: VinPro and the Unified Sympoisium

The “Wine Economist World Tour” (my calendar of talks and book signings) is starting to fill up and the end of January 2014 looks like a particularly interesting couple of weeks. Lots of frequent flier miles — and maybe a bit of jet lag, too!

On January 23 I will be in Somerset West, South Africa to give the keynote at the Nedbank VinPro Information Day program. VinPro is a key service organization for 3,600 South African wine producer members. It strives to both represent the wine sector and to further its development. I’m pleased to be invited to speak to South African growers and producers at this important event.

Fast forward a few days and I will be in Sacramento, California at the Unified Wine and Grape Symposium, the western hemisphere’s largest wine industry gathering speaking in two of the sessions.

On Tuesday, January 28 I will be moderating an afternoon panel on “Using Data for Better Decision-Making.” The premise is that you can’t manage what you don’t measure and many in the wine industry would benefit from a more systematic approach. Here is the official description of session.

This session will explore how to use data to better understand and run your business. Presentations will include operating and financial benchmarking data and how these data can be applied to your business for improved decision making. Attendees will hear how benchmarking data are gathered and analyzed, and what it means. A winery and a grower representative will provide examples on how they started measuring various forms of data, what tools they acquired or developed, and lessons learned. They will also share best practices and identify the biggest problem areas for good data measurement and use. The session will end with key takeaways to consider in implementing better data tools for your business.

Then on Wednesday I will be one of three speakers, along with Jon Fredrikson of Gomberg, Fredrikson & Associates and Nat DiBuduo of Allied Grapegrowers of California, at the “State of the Industry” session (Extreme Wine readers will recall that I wrote about this event in Chapter 6).

The State of the Industry session will provide a comprehensive look at every aspect of the wine industry, from what’s being planted to what’s selling. This 2½ hour session features highly regarded speakers and delivers incredible value for attendees who need to understand the market dynamics of the past year and are seeking insight into the market trends that will define the year ahead.

My job will be to bring a global perspective to the discussion. It’s an honor to share the stage with Jon and Nat, who have both earned the respect of those of us in the industry. Looking forward to hearing their remarks!

Hope to see you in Cape Town or Sacramento or any of the other stops on the world tour!

Developing a Market for Chinese Wine: Tourism and Education

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

Developing a Market for Chinese Wine: Tourism and Education

by Cynthia HowsonPierre Ly and Jeff Begun

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

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

An Insatiable Market? Developing a Taste for Wine

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

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

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

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

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

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

Term Papers: Wine, Women, Song (and more)

I’ve been reading the final papers from my university class on The Idea of Wine and I thought I would share some of the topics with you to give you an idea how bright college-aged American students think about wine after spending a semester studying it.

Women and Wine Bars

The “wine, women and song” of this post’s title was inspired by two first-person research papers. Ali is interested in both gender issues and wine in a social setting, so it was natural that she might want to study “Women and the Wine Bar: a Tacoma Case Study.”

Ali’s paper began with academic study (the social analysis of drinking cultures), which she then applied to wine bars. Traditional bars, which feature beer and spirits, are seen by some scholars as a space to create and sustain male relationships.

Ali observed that wine bars attract a disproportionately female clientele and she and a friend observed the demographics of three local wine bars and the pattern of apparent relationships of the patrons. An interesting first step towards an understanding of wine, women and wine bar culture.

Music and Wine: A Harmonious Relationships

Erin, a music performance major,  added song (or music) to the mix with her study of “The Musical Palate: An Exploration of Factors Linking Wine and Music.” Her research began with Clark Smith’s famous studies of  how different musical pieces affect the perception of specific wines. Correctly paired, Smith suggests, music can improve the wine experience. I understand that a number of wineries are working with Smith in this regard.

A classically trained musician, Erin decided to see if the effect could move in the opposite direction, so she tried pairing  several different wines with iconic musical pieces to see if they might enhance the listening experience. Incredibly she found that the right wine really did add something to musical appreciation — it was something like the way turning up the base or treble knobs on a stereo can alter the sound itself, she said. Erin’s study was personal, not scientific, but like Ali’s it suggests an area ripe for further study.

Money, Taste and Retsina?

Several of my students were able to connect wine with their other academic studies in interesting ways. Joanna, for example, saw links with her Psychology class on Sensation, Perception and Action. The course description reads

This course considers the phenomena and methods of sensation, perception, and action in biological organisms. It focuses primarily on vision and audition, but with an emphasis on the general principles of how various forms of physical energy in the world are transduced and transformed to yield useful representations and purposeful behavior.

Joanna moved the focus from sight and sound to taste. Her scientific final paper, “It’s on the Tip of My Tongue: Impact of Individual Tasting Difference on Wine,” was fascinating in a geeky kind of way I really appreciate.

Kelsey also asked to write a cross-over paper that would merge her wine studies with her work in Advanced Empirical Economics. The result was “China and Bordeaux Wine Auction Prices,” which used econometric techniques to probe the timing and impact of Chinese demand on wine prices.

Crown cap from a bottle of Retsina

Many students found ways to connect wine with their personal and professional interests. Taylor had never tasted Retsina, but she was attracted to it as a cultural artifact with contemporary relevance. Her paper is titled “Retsina: An Ancient Wine with an Ongoing Impact in Greece.” I wish I could have been there to see her face when she took her first sip of Retsina — it’s always a surprise!

Business major Eben looked at the closure issue from a winery business perspective in  “A Corking Predicament: Closures of the Present, Past and Future.” Home brewer Lukas just had to write “Beer versus Wine: Switching Roles?” And Kirsten examined social media applications in “Wine on Facebook: Marketing Wine to a New Generation.”

The University of Puget Sound where I teach is a liberal arts college and it is easy to see from these paper topics why The Idea of Wine fits into the curriculum so well. Wine, with all its many forms and functions, is a clearly liberal art!

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Sorry, but I cannot distribute copies of these student papers. Anyone with an interest in a specific study can contact me at Mike@WineEconomist.com and I will try to connect you to the author.

In Vino Veritas? The Truth About Wine in Three Tastings

In vino veritas — in wine there is truth — this is one of the touchstones of the wine enthusiast world. I like the sound of this, but I admit to being a bit confused by two recent wine tastings that I organized where the wines easily fooled us (or perhaps we just fooled ourselves), but a third tasting helped put things right.

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Mary Thomas asked if I would be willing to speak at a wine tasting that she donated (along with autographed copies of Wine Wars) to the local  YWCA fund-raising auction. Yes, of course — and I knew at once what I wanted to do. A flight of red wines made by three University of Puget Sound alumni (Tom Hedges of Hedges Family Estate, Chuck Reininger of Helix and Reininger Cellars and Michael Corliss of Corliss Estates and Tranche Cellars), but first a blind tasting of white wines that figure prominently in Wine Wars.

If you’ve read Wine Wars you know that I end each flight of chapters with a wine tasting designed to explore the themes raised in the book. Three Sauvignon Blancs make up the first flight and thus inspired I put together a tasting of Charles Shaw (a.k.a. Two Buck Chuck) Sauvignon Blanc from California, Robert Mondavi Fume Blanc from Napa Valley and Cloudy Bay Marlborough Sauvignon Blanc from New Zealand.

After tasting the three wines blind in the order given above I asked the tasters to (1) name the grape variety, (2) guess the country or region of origin for each wines, (3) guess the prices and (4) choose their favorite wine from among the three. I am not a big fan of blind tastings, but this one is fun to do in a group. I thought the auction group would enjoy it (and they did).

But first I decided to try out the blind tasting on my “lab rats” — the students enrolled in my university “Idea of Wine” course. Their tasting featured the same blind first flight followed by a different set of reds — a vertical of three Phelps Creek “Le Petit” Pinot Noirs from three years with very different weather. My hypothesis was that students would have more trouble guessing the grape, terroirs and prices of the blind flight than would the more experienced wine drinkers in the auction group.

Things did not go according to plan.  After tasting the three white wines the college students were very confused and guessed all the grape varieties they could think of, but not Sauvignon Blanc. For me the signature taste of the Cloudy Bay is a giveaway — Marlborough Sauvignon Blanc — but tasted in the context of the Fume Blanc and Two Buck Chuck wines, which are so very different, nothing seemed to make sense.  The common thread that connected the three wines was difficult for these wine novices to detect.

Interestingly, the experienced auction tasters did no better than the lab rat students in this regard. This really did surprise me and I think it was the confusing context that caused the trouble. Tasting the Mondavi Fume or the Cloudy Bay by itself might yield a good guess of type of wine or place of origin, but stringing the three wines together apparently distorted the view a bit too much.

One place where there was a significant difference between the groups was when it came to guessing the prices. The experienced auction group did much worse! How is that possible? Well, the big difference was the Two Buck Chuck. No frugal college student would offer to pay more than $12 for it in the blind tasting, but at least one member of the auction group was willing to pay $25 or more!

Why were seemingly rational people willing to pay so much for such a modest wine? Well, the quality of the Two Buck Chuck must be part of the answer. Wine drinkers of a certain age (and I include myself in this category) remember when cheap wines were really foul and Two Buck Chuck and its bargain priced siblings changed all that.  The quality may not be high (only a couple of people in the two groups picked it as their favorite of the three), but it does reach a commercial standard that actually shocked one experienced drinker who had not previously tasted a $2.49 wine.

But the real answer is again probably context. The students are used to me presenting them with wines that are just outside a student budget — wines that cost say $10 to $30. They guessed at the low end of that range, which made sense given their expectations. The auction group’s higher guess also reflected context. Who would expect to attend a charity auction tasting and be served such a simple inexpensive wine? Impossible! So it must cost a lot, the logic probably went, and I just can’t taste the difference! If true, this is a classic case of using price (or expected price) as a proxy for perceived quality.

Which was the favorite wine? The auction group was pretty much divided between the Mondavi Fume and Cloudy Bay. The students were divided, too, but Cloudy Bay received most of the votes. That Marlborough style is so distinctive — like nothing they ever had before — and in a blind tasting context it stood out to them.

What conclusion can we draw from these two tastings?  Our perception of wine is sometimes less about truth and more about  context and expectations than we might want to think. That’s not the conclusion I thought I would find when I set up this tiny experiment. Fortunately a third tasting helped balance the scale.

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The nice people at Wines of Chile sent us three Cabernet Sauvignons, which we decided to use for a small scale student tasting. Sue and I were joined by Bruce Titcomb, Eben Corliss and Ali Hoover. Ali’s attendance was based upon her study abroad experience in Chile and a paper she wrote about its wines. Bruce and Eben are enthusiastic students of geology and business respectively with a special personal connection — their parents also took classes from me back in the day.  It promised to be an interesting tasting. We began with a glass of Sauvignon Blanc (from Chile this time) and then got to work on the Cabs we were sent. Here is the list.

  • Montes Classic Series Cabernet Sauvignon 2011 Colchagua Valley 85% Cabernet + 15% Merlot 14% abv. Typical price: around $10.
  • Santa Carolina Colchagua Estate Reserva Cabernet Sauvignon 2011 (from Miraflores in Andes Foothills) 13.5% abv. Around $12.
  • Undurraga T. H. (Terroir Hunter) Alto Maipo Calbernet Sauvignon 2009 (from Picque in Andes Foothills) 14% abv. Around $20.

We sampled the three Cabs by themselves, with food (savory empanadas) and then with chocolate truffles. The wines were very different from each other and each had its moment in the spotlight. On first tasting, the Montes (the least expensive of the group) was simple, enjoyable, and fun. When Ali tasted the Santa Carolina her eyes lit up — this was Chilean wine as she knew it from her time there, she said — a reminder of her temporary South American home. The Undurraga T.H. lived up to its “Terroir Hunter” name — it was much more precise and focused.

Returning to the wines to pair then with food the Montes was a puzzle — Blake noted a strong caramel aroma when the wine had time to air out a bit.  The Santa Carolina seemed to be the best match for the empanadas just as the T.H. was the favorite on its own. Then we broke out the dark chocolate truffles and tried again. This time it was the Montes that stood out — that caramel aroma really worked with the chocolate and made a hard to beat combination.

Which wine was best? Well the T.H. was probably my personal favorite but the answer depended on how you drank it (alone, with savory food, with chocolate) and what you were searching for (for Ali that memory of her time in Chile was pretty special).

So what did we learn from our three tastings. Well, I don’t really want to argue against the idea of in vino veritas, but I do think our impressions of wine are context-sensitive — perhaps more so than we really want to admit.

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Blake, Eben and Ali at the Chilean Cabernet tasting.

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Thanks to Emily Denton of The Thomas Collective for providing  the Chilean wines for this tasting. Thanks to Blake, Eben and Ali for their help with the Chilean Cab tasting. Photos by contributing editor Sue Veseth.

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