Wine Vision, Tescogate and Shifting Wine Market Power

Wine Vision, the CEO-level global wine conference to be held in London next week, looks like it will be an unusually interesting gathering because of the issues that have risen to the top of the wine industry agenda as a result of the recent Tescogate scandal.

A School for Scandal?

Tescogate? The scandal, for those of you who don’t follow UK retailer news, is that the big supermarket chain Tesco is reported to have used various financial manipulations to overstate its earnings by a whopping £250 million.  The value of the company’s stock has come crashing down and high-level heads have rolled. Investigations continue.

Tescogate has changed perceptions of this big retail chain among investors, consumers and regulators.  A “word cloud” of web references to Tesco today might look much different from the innocent image above  that I found on the internet — maybe more like this one, which was created to display public opinion about bankers a couple of years ago. What do you think?

Inevitable Wine

Wine inevitably enters the Tescogate story because Tesco is the world’s largest retailer of wine and, although the wine program is not at the center of the investigation, the scandal has prompted many in the trade to give voice to long-held concerns. Their complaint is not so much accounting fraud as near as I can tell as a pattern of unequal relations between retailers and suppliers that is not just limited to Tesco and probably not just limited to wine either.

The issue is power and it is something that was already part of my planned Wine Vision presentation when the Tescogate news first broke. I’m still trying to decide exactly  how much attention to give it in my talk. A number of factors have shifted power in the global wine industry — away from those who make the wine in favor of those who can sell it. It’s not the first time that it has happened and its not just a wine thing, either. Because the wine gets sold a lot of people are happy for now with the situation. But power is power and you’ve got to pay attention to who has it, what kind and how it is used. Fill in your favorite Machiavelli saying here!

The Rules of the Game

In my other life as a university professor I have often written about power. Power comes in many forms. Hard power is the ability to impose your will. Soft power is about influencing the environment in which choices are made. Relational power comes from your resources versus those of your opponent. Structural power comes from the organization of the system — the rules of the game — and the leverage that results.

Tesco and other large-multiple retailers can be seen to have all of these types of power, but structural power is probably the most important. They write the rules of the game to an important extent. Because they are the gate keepers to the retail shelves, they really don’t need to throw their weight around to get lower prices and other benefits from suppliers. The suppliers will fall over themselves to make sure they stay in the game.

Wine suppliers in many cases drive down their own margins because they are afraid that someone else will do so first to grab scarce shelf territory or private label bulk wine sales.

An Opportunity for Dialogue

Concerns among suppliers are not new, but there is a sense that people were previously afraid to speak out and the Tescogate scandal has created an opening where the issues of producer-retailer power (and not just about Tesco) can be more safely and openly discussed. And that’s a good thing.

The Tescogate  chatter has brought the concerns and frustrations of the wine suppliers to the fore and there is a lot to be learned from listening to the discussion. But then what? It looks to me like Wine Vision is shaping up an interesting place to see how the conversation unfolds because of the people on the program (including Tesco’s Laura Jewell MW) and the people in the audience.

If there is every going to be an opportunity for an open discussion of the (un) balance of power in the wine industry, this will be it.

Valpolicella Revisited: What’s the Story?

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So, what’s the story? That’s a question that Sue and I frequently ask each other after a tasting or winery visit. We’ve learned a lot, tasted interesting wines, met fascinating people. But what’s the takeaway message?

Sometimes it’s a fairly straightforward choice but to be honest I think we live for the complicated narratives– the experiences that really make us sit down and think. What is the story!? Our recent visit to the Valpolicella region was like that. We didn’t find a story — we found a lot of them and the other members of our merry media band – Mauro Fermariello, Michelangelo Tagliente, Michelle Williams and Mads Jordansen – who shared the same experience with us, found many different stories, too, and different ways of telling them.

(Click on the names above to see our colleagues’ work. Mauro Fermariello’s video, which I have embedded above, is a particularly striking account of our journey.)

We’ve already told several of the stories we found in earlier columns and  I’m using this final post to fill in some gaps and sum up. What are the stories? Here are three of them chosen to say something about the winery business models we encountered.

The San Rustico Story

Let me start with San Rustico, a winery with a long history that it wears proudly and gracefully. As you can see in Mauro’s video, the tasting room is decorated with artifacts that give a sense of the past. Touring the cellar we were struck by the wooden grape drying racks, key to Amarone production, that spoke to us of time and tradition. Great atmosphere.

A visit to the winery is a warm and friendly experience here — very personal. Sort of like tasting wine with a family friend in a farmhouse kitchen. And while the wines honor tradition they do not seem especially  trapped in it. Wines are made in two ranges and Amarone in particular in several styles.

One wine we tasted for example was made to appeal to new world export markets, a bit sweeter and with more new oak  (60 percent of the winery’s 170,000 bottle annual product is sold outside of Italy). The premium Gaso Amarone, on the other hand, is made in the traditional style. It was delicious — our favorite glass in the line up.

The two brothers who are responsible for San Rustico (one works in the vineyard and the other in the cellar) have purposefully focused on their traditional production base, limiting output while looking outside the region for sales.

Sartori di Verona

History is also a strong theme at  Sartori di Verona, but the business strategy is much different. Andrea Sartori is the fourth generation of the Sartori family to lead the winery and he has taken it in a different direction from San Rustico. Actually (and this fits into the theme of this column), Sartori’s strategy involves moving in several directions at once.

Go big or go home is one part of the story. Seeking the resources needed to expand production, Sartori entered into an agreement with the Cantina Colognol cooperative in 2000 that gave it secure access to 6200 acres of vineyards in the Valpolicella and Soave regions. This base allowed a three-fold expansion of production necessary to fill an increasingly export-oriented pipeline. About 80 percent of production is exported today. The well-regarded Banfi firm imports Sartori into the U.S. market.

At about the same time that the volume push began a super-quality brand was also established. Sartori partnered with consulting winemaker Franco Bernabel, who began to work with both vineyards and cellar practices, raising quality and drawing out the characteristics of the different vineyard terroirs. Four years later, in 2006, the I Saltari line of super-premium wines was launched. Sartori has also expanded its reach beyond the Veneto, establishing relationships with Cerulli Spinozzi in Abruzzo and Feudo Sartanna in Sicily. There’s also a partnership with Mont’Albano, a pioneering organic estate in Friuli.

Sartori reminds me a bit of the Mondavi strategy of years past. Mondavi moved upmarket with Opus One and also mass market with the Woodbridge wines. The story did not end happily for everyone, as Mondavi went public to raise expansion capital and eventually lost control of the business (wine giant Constellation is the current owner).  The stories differ here: there’s no indication that the Sartori strategy will have anything other than a happy conclusion.

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The Cesari Story

One of our favotie stops was at Cesari. We loved the wine, the people and the story.  The fact that we like the wines is perhaps not an accident. The U.S. is a prime export market for this winery and it is not impossible that the style was evolved over the  years with American tastes in mind — rounder, fuller wines, but still striking the authentic classic notes.

The Americans in our group were all familiar with the Cesari brand so I was a little surprised when someone told me that it is not as well-known within Italy. The strong export focus makes it different even among wineries (like those above) who sell more than half their production abroad.

Cesari was founded in 1936, during a particularly turbulent period for wine in Italy and Europe. Many private firms failed and cooperatives went bankrupt. Some of the wineries that emerged (or simply survived it) were led by supremely talented entrepreneurs. This sprit in part drove Cesari to push dramatically into global export markets in the 1970s and guides them today to produce the distinctive wines that are needed to attract discerning customers.

I’ve embedded a Cesari video above to give you a sense of the winery and its vision and also to show you how effective they are in telling their own story. Story-telling is almost as important as wine-making when it comes to the business of wine today. Fascinating that the global market’s demands appear here, don’t you think. And I agree with the narrator — all kidding aside, the wines really are good.

Eight Million Stories?

Years ago there was a U.S. television series about life in New York City called “Naked City” that closed each week with the line “There are eight million stories in the Naked City — this has been one of them.” (Scroll down to see a video clip.) There may not be eight million stories in Valpolicella but there are sure a lot of them. Some, like the three above, about different business models and different historical evolutions. Others, like my earlier posts, are about wine tourism, weather problems and  the difficulties of establishing and maintaining a luxury brand for the region in an increasingly competitive marketplace.

There are very personal stories too, like two of my favorite wineries (Zyme and Secondo Marco) that exist today more or less because of family issues that caused a younger generation to start out in a different direction. Reminds me a bit of the story of Robert Mondavi and  the family disagreements that led to the founding of his eponymous Napa Valley winery.

Lots of stories and not enough time or space to tell them all. Maybe that’s what makes a wine region really great. I realize that wine marketers are attracted to the idea of a silver bullet story — a signature grape variety, an iconic brand or rock star winemaker — that can make a region’s reputation in a single stroke. There are good examples for each of these strategies, but I have my doubts about this as a general theory. Maybe real strength comes from diversity and not from a monolithic approach?

I’m glad there are millions of stories to tell and not just one because that means a world of different and distinctive wines … and job security for story-tellers like me! Thanks to everyone who made our Valpolicella visit so rewarding.

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Here is a list of the wineries we visited during our Valpolicella tour. See if you can identify each one of them in Mauro’s video. At the end of the list I have embedded a bit of the old “Naked City” television show for those of you too young to have seen the original. Cheers!

Wineries we visited in Valpolicella:

Valentina Cubi, Fumani

Scriani, Fumani

San Rustico, Valgatara

Terre di Leone, Marano di Valpolicella

Villa Cordevigo and Villabella, Cavaion Veronese

Casa Vinicola Sartori, S. Maria di Negrar

Cantina Valpolicella Negrar, Negrar

Monteci, Pescantina

Cesari, Cavaion Veronese

Zýmé, San Pietro in Cariano

Santa Sofia, Pedemonte

Secondo Marco, Fumane

Salvaterra, San Pietro in Cariano

A Field Guide to Prosecco’s Many Faces

P1090234Prosecco sales here in the U.S. are surging — up 34% in the first half of 2014 according to one report. At 1.27 million cases, the U.S. is now the #3 export market for Prosecco trailing only the UK and Germany.

Quantity is one thing, but quality is often something else entirely. Last week’s column talked about Prosecco’s upmarket move and the premiumization pyramid that lies at the heart of the strategy.  Is premium Prosecco real or just a marketing gimmick?

Mionetto’s Impressive Line-up

We tasted the wines from three producers during our quick business trip to the Veneto and if there is truth in wine, then premium Prosecco is real.

Our first stop was at Mionetto, a large producer that is the U.S. market leader with their popularly priced, crown capped “IL” Prosecco line of wines. “IL” is great fun and has attractive packaging — we like it a lot — but it doesn’t especially strive for upmarket status. But wait, there is more …

We tasted through several Mionetto wines that showed the true potential for premium Prosecco wines. We started with Prosecco made from organic grapes – the idea came from the growers not the marketing department — that was perhaps the most effective presentation of an organic wine that I have seen. This wine should appeal both to enthusiasts seeking something different and to dedicated green wine fans. The wine, the messaging, the packaging — they all come together in a very impressive way.

Opulence and a German Bet

We then moved up the pyramid to a single vineyard “Rive di Santo Stefano” DOCG Prosecco and into the “Luxury” series of wines, then reaching the summit with the Mionetto Luxury Cartizze DOCG. The luxury wines really were opulent both in the glass and to the eye. Very impressive. Will wines like this some day challenge Champagne? No future tense needed — I think they already do so, providing that memorable feeling (isn’t that what Champagne is really all about for most people?) at a more attractive price point. Here is a list of the Mionetto wines we tasted with links to more information about them.

An interesting sidebar to the Mionetto story is that the Italian firm was purchased a few years ago by Henkell, the German sparking wine producer, and everyone worried that the usual layoffs and cost-cutting measures were in store. Instead the new parent company kept all hands on board and hired more workers while investing in plant modernization and expansion. They are betting on the premium future of Prosecco and based on the “cards” we tasted it seems they have a winning hand.

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A Different Prosecco: Sorelle Bronca

Sorelle Bronca is a very different enterprise that illustrates Prosecco’s many dimensions. A small firm run by two sisters, all its wines are organic. Total production is much smaller than Mionetto, but the wines are perhaps equally diverse in the experiences they present the curious wine enthusiast.

We tasted through several excellent organic DOCG Proseccos and some still wines, too, including a white blend featuring the Manzoni Bianco grape and a Colli di Conegliano DOCG Riserva “Ser Bele” red blend of Cabernet Franc, Cab Sauvignon and Merlot (Bordeaux grape varieties have long been planted in the Veneto) that received Gambero Rosso’s  top “3 glasses” rating. Red wine from Prosecco-ville? Maybe. Really great red wine?  Apparently yes. I didn’t see that coming.

The “normal” Proseccos we tasted here were delicious as was the Sorelle Bronca Valdobbiadene Prosecco Superiore DOCG Particella 68  made from grapes from a specific vineyard bloc. But the hit of the tasting was Sorrele Bronca Valdobbiadene Prosecco DOCG “Difetto Perfetto” Sur Lie. Difetto Perfetto? Defective and perfect at the same time? Well, yes. This cloudy wine (see photo) had its secondary fermentation in the bottle not the pressurized tank as is typical for Prosecco. Then it was left on the lees for a period and then not disgourged, so the lees were still there.

Cloudy, a bit like a hefeweizen beer. I think “foggy” is the best word — look at the photo. Unfiltered, but not Difetto in my opinion. The first taste was just the wine, taking care not to disturb the lees at the bottom of the bottle. Good! Then we shook up the bottle and tasted it all together. Wow! Even better, Sue and I agreed.  Champagne-like but still clearly Prosecco without the strong leesy taste you might expect because the sur lie period was so short.  And quite an interesting mouth-feel. A Prosecco to surprise and delight. What fun!P1090311

A Bisol Mosaic at Venissa

We spent the night in Venice and set out the next day to visit Venissa, the ambitious vineyard project of the Bisol family that is located on an island in the Venetian Lagoon (see next week’s column for a full report). The Bisol Prosecco house is behind Venissa and as part of our visit Matteo Bisol arranged for us to taste several of his family’s wines along with dinner at the restaurant.

Usually, Matteo said, he would serve just one Bisol wine as part of a multi-course / multi-wine tasting menu, but he decided to use the opportunity to show us many difference faces of Bisol and Prosecco. It was quite an experience.

We started with the classic Bisol “Crede” Prosecco DOCG  2013  (“Crede” refers to the marine limestone subsoil of the growing area) that we have tasted before here in the U.S. A premium and traditional DOCG Prosecco.  Next, in a silver-clad bottle, was Bisol noSO2 Prosecco Extra Brut 2012 . NoSo2 – no sulfites — in the “natural wine” style.

Bisol Relio Extra Brut 2009  came next, made from the Glera grape commonly used in Prosecco but using the classic method (secondary fermentation in bottle not tank). Different from the Sorelle Bronco sur lie wine — the Champagne style yeastiness more pronounced.

The Dry and the Sweet

Following this we were served Bisol “Eliseo Bisol Cuvee del Fondatore” Millesimato 2001 – Pinot Noir, Pinot Blanc, Chardonnay grapes, classic method. Italian Champagne, you might say (if such language were permitted) with Pinot Blanc taking the place of Pinot Meunier in the grape blend.  Note the vintage date! Quite spectacular.

The last sparkling wine of the evening was the opulent Bisol Cru Cartizze DOCG -- from the prime Cartizze zone. I felt fortunate to taste wine from Cartizze both here and at Mionetto. A friend had warned me that Cartizze would be too sweet but I found both wines dry and well balanced. Prosecco, like Champagne, can be and is made in different degrees of dry and sweet and some styles are more popular than others in particular markets.

The final wine was sweeter but still very well balanced and it came as a complete surprise. It was Bisol Duca de Dolle Prosecco Passita – dessert wine made  with air-dried grapes like a white Recioto, but aged in a modiied solera system you find with some Sherries. A unique experience — different from any of the other wines from this region we tried and not exactly like any other sweet wine, either. Matteo wanted to show us the variety of Prosecco expressions and he certainly succeeded.

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Final thoughts? The Prosecco mosaic caught me by surprise — Prosecco is not one thing, but many things and hopefully consumers who start with cheerful wines like the Mionetto “IL” bottlings can be persuaded to move up the Prosecco Pyramid to the DOCG and Rive wines and perhaps even summit with Cartizze and beyond to some of the truly unique wines we were fortunate to be able to sample. Thanks to the everyone who hosted us and to the Conegliano Valdobbiadene Consortium for arranging the winery visits. Next time: the story of Venissa.

What’s Ahead for Amarone? Looking Beyond This Year’s Soggy Vintage

P1080942It is a soggy vintage in Valpolicella and the Veneto generally. Rain, rain and more rain on through harvest. This is problematic and also a bit ironic for wines like Amarone, Ripasso della Valpolicella and Reciotto that are defined by dry not wet — that are made with grapes carefully air dried for weeks or months before being made into wine.

Not that all the news is bad — some winemakers told us that grapes from higher elevations and steeper hillsides held promise for good quality. Others noted that the old fashioned looking pergola-trained vines were doing better (better air circulation) than the conventional Guyot-trained vineyards.

Lots of concern about mildew and rot, and some grapes, like the ones pictured here, were almost blue, we were told, from Bordeaux mixture spray (an approved organic anti-mildew treatment) they had recently received.

(See the photo below to gauge the rainy season’s impact on the first of the white grapes being harvested — probably mechanically — for use at a high-volume winery.)

That’s Where the Money Goes!

Amarone and Ripasso are key elements of the  upmarket Valpolicella premiumization strategy. Although the more popularly-priced wines of the region — Valpolicella, Valpolicella Classico, Valpolicella Superiore — are often delicious, they are light in body and even sometimes in color in a world that seems to be searching for deeper, richer wines. Luxurious Amarone, made from those air-dried grapes, fits the bill very well and has established a strong global following. When I told my friends I would visit Valpolicella, “Amarone!” was the uniform initial response.

Ripasso, which is made by refermenting “ordinary” Valpolicella on the pressed skins left over from Amarone, also has a strong following among those who see it as a more affordable “baby Amarone.” It is sometimes a better wine and might even be a more profitable wine for some producers, but you can’t make Ripasso unless you have made Amarone, so they are joined at the hip.

Amarone and Ripasso are the money wines of Valpolicella, even if a bottle of good Valpolicella Classico Superiore is difficult to beat paired with mushroom risotto. High prices are an imperative here because of high costs — high vineyard valuations (€400,000 per hectare in some areas, we were told), high grape tonnage prices, and expensive long aging periods in tank, wood and bottle before release. Plus the obvious volume losses that come from the air-drying process.

Yes We Have No Amarone (in 2014)

This makes the rainy vintage even more problematic. Quantity will be down for those producers who carefully sort through the grapes, but quality is likely to suffer, too. How much? Enough to drag down price? Enough to damage the wines’ and region’s reputations?

A thin veneer of confidence about quality masks some real concerns and fermenting disagreements. Bertani, one of the big players in the game, announced that they would pass on Amarone  Classico this year rather than accept lower quality. A producer  I cannot name revealed during our visit that he had that morning signed a contract to sell off his Amarone wines to the bulk market rather than release an inferior product under his own label. No Amarone, maybe no Ripasso, no money wine this year … for some.

How can someone just walk away from their money wine? Well, the first answer is that wine is agriculture and Mother Nature often makes the call for you (something that growers in Valpolicella already know since they live an area with frequent sporadic catastrophic hail storms). A deeper reason is that for some producers a year without Amarone might actually be a good thing. The Amarone boom of recent years was always worrying to those of us familiar with busts. Maybe a year without Amarone would help rebalance supply and demand?

Declaring a Vintage? Or Not …

P1090059Given the soggy year and what may well be a substantial inventory over-hang, a case might be made for treating Amarone like Port and “declaring” a vintage in the best years while focusing on other types and styles when quality is in doubt. Amarone, like Vintage Port, is a luxury product and you can see the logic of not wanting to undermine its reputation.

Given the choice, I think some producers would give the “Vintage Amarone” idea  a try although others would prefer a half-way measure — none of their finest Amarone, but maybe still produce some lesser wines.  Hmmm … I wonder if that would really work?

But expanding the focus beyond Amarone to other wines might have some benefits apart from the obvious one of supporting quality. More attention to the conventional Valpolicella wines would be welcome if the broad trend I sense of a shift to lighter and more balanced wines is correct. And then there are the innovative IGT wines that I talked about in a recent column.

When I asked one winemaker why he was making a proprietary IGT wine in addition to his DOC and DOCG traditional products, he replied honestly that it was an upmarket thing — he wanted to have something that wasn’t Amarone or Ripasso for his Valpolicella customers to move up to.

Lots of room for great wines in this category, without the restrictions of the DOC rules. Lots of opportunity for interesting products in “non-vintage” years.

Life without Amarone? Impossible?

But passing up on the money wine in off years is a luxury that not everyone can afford.  We saw many new and impressive wineries that may well have been built on the expectation of Amarone-style returns. If the business model is built on Amarone, a bad year (which would be a year without Amarone) could be devastating.

And some wineries are so closely identified with Amarone that skipping a vintage is nearly unthinkable for them. Take the cooperative winery in Negrar — Cantina Valpolicella Negrar. This is where Amarone was born in 1936 when the cellarmaster lost track of a tank of Recioto (in theory a sweet wine made from air-dried grapes), which fermented dry by accident instead of the yeasts being stopped with some residual sugar remaining.  A catastrophe — except that it was really good. Not bitter “Amaro” but smooth and dry “Amarone.”

Negrar makes many wines today under its own label and the premium Domini Veneti brand, but for obvious reasons its identity is tied to Amarone. It is difficult to imagine that it could pass on an Amarone vintage for any reason and so certain tensions are inevitable between those who for one reason or another cannot or will not miss an Amarone vintage and those who for different reasons are willing to take the risk.P1090036

Victim of Amarone Success?

Our visit to Cantina Valpolicella Negrar showed their focus and continuing commitment to Amarone.  A line of single-vineyard wines, Domini Veneti “Amarone Espressioni,” were presented at lunch.  The five wines  were as different as their origins — I liked the wines from higher elevation vineyards the best, although I think I might actually prefer the multi-vineayrd blend that I tried with dinner the next night.

So what’s in the future? More rain, if past is prologue, but it is difficult to say beyond that. Valpolicella is in a way a victim of its own success. Great wines that earn a premium in the market — no doubt about it. But also expensive wines that play in a very competitive luxury wine league along with heavyweights like Barolo, Brunello and Barbaresco. Finding the right solution is no simple matter.

The people we met are smart and while they will disagree about how best to move forward I’m pretty confident that they will find a way to sustain the good thing that they have got and maybe even kick it up a notch as they have done in the past. In the meantime, pray for a break from the rains!

Valpolicella & Prosecco: The Pendulum Swings to Premiumization in the Veneto

Sue and I recently returned from a week in Northern Italy as guests of the Valpolicella Consorzio. We joined a small group of multinational wine bloggers to test out a nifty new wine tourism app (available as free download for Android and Apple mobile devices) and visit a number of wineries and winemakers. We had a great experience (thanks so much to the Consorzio, our guide Federica Schir and to the winemakers) and learned a lot.

We accepted a generous invitation from my wine economist colleague Prof. Luigi Galletto to visit the Conegliano Valdobbiadene region, meet with officials of their Consorzio, tour the famous Wine School in Conegliano and visit Prosecco makers.

We capped the trip with a visit to Venissa, the vineyard and winery on the island of Mazzorbo in the Venetian Lagoon, to taste both the wines of this special place and the sparkling wines made by the Bisol family who created the Venissa project. I’ll be reporting on our trip over the next few weeks. Here is a brief introduction to the series.

Contrasts: The Red and the White

The visit was full of contrasts, some more obvious than others, starting with red and white. Valpolicella is home to many powerful red wines while Prosecco is known for its crisp sparkling whites. And the Conegliano-Valdobbiadene vineyards are sometimes so steep that they make the more rolling hills of Valpolicella seem like tabletops (which they definitely are not!).P1090025

But the biggest contrast was about shifting market focus, not color or geography. Not so long ago the Veneto (which also includes the major regions of Soave and Bardolino) was all about quantity not quality. Vast lakes of undistinguished wine were produced here, something that challenged the reputations of the quality producers back then and to a certain degree colors market perception today.

But the pendulum has swung from quantity towards quality and, while there are still undistinguished wines produced here, the focus is clearly on what we call today “premiumization” and a race to the top is under way to make better wines and to draw consumers towards more precisely defined premium products. We saw evidence of much new investment in the wine sector here. It’s a brave new world for Valpolicella — not without challenges, of course (since this is wine), but poised to grasp new market opportunities.

The swinging pendulum takes different paths in different regions. Besides rising quality in general in Valpolicella, for example, there is growing emphasis on the premium Amarone and Ripasso wines as well as distinctive wines that do not play by the DOC or DOCG rules, qualifying only for the less prestigious IGT geographical designation.

Some of these IGTs — such as the Dedicatum from Terre di Leone – were among the most interesting wines we tasted here. Dedicatum is made from a blend of 14 grape varieties — some of them rare heritage varieties — grown on the estate’s terraced hillside vineyard. Delicious and distinctive — good enough stand tall with the winery’s other fine wines — it is one of several notable and innovative IGT wines we encountered.P1090240

Prosecco is moving upmarket in its own way, with special emphasis on the premium Conegliano Valdobbiadene zone, then on “grand cru” hillside vineyards (“Rive” in the local dialect) with the luxurous Cartizze at the top of the pyramid. The “IGT” phenomenon is at work here, too, with wineries producing attention-grabbing new wines (different grapes, different winemaking methods) alongside their DOC and DOCG products.

Venissa is a special case in every way, but it can be seen as the ultimate premiumization play — distinctive terroir and innovative winemaking closely tied to Venetian history wrapped in a luxurious combination that includes wine, lodging, gourmet food and lifestyle — the complete package. Can’t wait to tell you all about it!

Discoveries: Three New Grape Varieties

The movement towards quality and innovation is only part of the  story of our Veneto visit. We were also able to add three grape varieties to our lifetime list. At Venissa we tasted the white wine made from the Dorona grape found on the lagoon vineyard. In Valpolicella we discovered Oselata vines at Villabella and tasted the very concentrated wines that the tiny red grapes produce both at Villabella and at Zýmé. A very intense experience!

Finally, we were able to sample wine made from the Manzoni Bianco grape made by the team at the Conegliano Wine School where Prof. Luigi Manzoni taught. Manzoni experimented with several grape crossings (much as Luther Burbank did with different crops in the U.S.) and the Incrocio Manzoni 6.0.13 that we tasted is a cross of Riesling and Pinot Bianco (or maybe Chardonnay based on DNA analysis, according to Ian D’Agata’s excellent book Native Wine Grapes of Italy).

Aromatic, crisp and refreshing — like a lighter style of Riesling — not something I remember tasting before. but perhaps I am wrong since D’Agata says that it is a widely planted variety in the Italian Northeast. Great to taste it at the source (the “6.0.13″ designation is an index of the original plant’s location in the test vineyard we visited).

We were also able to try sweet but balanced Recioto wines, both red (in Valpolicella) and white (from the Garganega grape), made from air-dried grapes. Not everyone in our group enjoyed these wines as much as I did — the fashion against residual sugar is very strong — but I found the best of them to be very much worth seeking out.  Recioto della Valpolicella is underappreciated these days, we were told, and the only market is local, which is a shame because without Recioto the world would  not have Amarone and it is good to be able to taste them both.

Airline Wine: Code-Share Conundrum

I’ll end this rambling introductory column with report on the importance, from a wine consumer standpoint, of reading the airline code-share details carefully. Our journey from Seattle to the Veneto and back presented two distinctly different 35,000 foot wine experiences.

The outbound Lufthansa flight provided industry standard international quality in our economy cabin, with decent complementary red and white wines poured from the bottle — we liked the Riesling best.  Almost everyone had wine with dinner — why wouldn’t they? — and there was even a little Cognac (but, alas, no Port) after the meal. Not luxurious — the usual plastic glasses, etc. — but welcome and civilized and what we have come to expect from international air travel.

The flight back was on Lufthansa’s code-share partner United Airlines, home to the “Friendly Skies” but not very friendly when it came to wine in the economy cabin. Little bottles were offered for sale at $7.99 each. No one had wine with dinner — why would they? — and the flight attendant seemed a little bit surprised when I ordered and paid just to see what it was (a decent Sauvignon Blanc from the Pays D’Oc as I recall). Can you guess which code-share partner I will look for on our next trip if faced with the same choice?

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Here is a list of the wineries we visited during our Valpolicella and Prosecco tour

Wineries we visited in Valpolicella:

Valentina Cubi, Fumani

Scriani, Fumani

San Rustico, Valgatara

Terre di Leone, Marano di Valpolicella

Villa Cordevigo and Villabella, Cavaion Veronese

Casa Vinicola Sartori, S. Maria di Negrar

Cantina Valpolicella Negrar, Negrar

Monteci, Pescantina

Cesari, Cavaion Veronese

Zýmé, San Pietro in Cariano

Santa Sofia, Pedemonte

Secondo Marco, Fumane

Salvaterra, San Pietro in Cariano

Wineries we visited in Conegliano Valdobbiadene

Scuola Enologica Conegliano, Conegliano

Mionetto, Valdobbiadene

Sorrelle Bronca, Colbertaldo di Vidor

and in the Venetian lagoon, 

Venissa, Isola Mazzorbo, Venice

 

Get Ready for the Wine Industry Financial Symposium

Sue and I have just returned from a week in Northern Italy as guests of the Valpolicella Consorzio (look for a series of industry reports on Valpolicella and Prosecco in the coming weeks) and now we are getting ready to head to Napa, California for the Wine Industry Financial Symposium that will be held there on September 22 and 23.

The theme of the symposium is “Let the Good Times Roll,” which will strike some as a bit off-key since the California headlines this year have been dominated by bad news — first drought and then the recent Napa earthquake. The program (see below) doesn’t sidestep the challenges, but seeks to put them into the context of a rising tide in the U.S. market. It should be an interesting couple of days!

Monday’s program features workshops that focus on specific issues of interest to wine industry professionals including the Hispanic wine market in the U.S., the rise of craft beer, the emerging talent gap in the wine industry, tax issues and vineyard finance.  Lots of interesting topics and great speakers — something for everyone.

The Tuesday morning program accentuates the positive, beginning with David Freed’s industry overview and ending just before lunch with Carolyn Wente and the celebration of 130 years of Wente Vineyards. In between Dr. Robert Smiley will present the results of his annual survey of wine industry CEOs and John Ciatti will report on U.S. and global harvest trends.

I will talk about “Lessons from the Global Wine Wars,” with an overview of important global market trends, focusing on two that I think are particularly relevant for the U.S. industry today: the “premiumization” of the wine market and the surge in “disintermediation” in the wine industry.

Tuesday afternoon features sessions on social media marketing, “next generation” consumers and wine distribution. Looking forward to hearing the speakers and seeing everyone in Napa next week. Here’s the complete program. Cheers!

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Wine Industry Financial Symposium

Monday Workshops – September 22, 2014

Session I: 1:30 p.m. – 3:00 p.m. – Choose One

1. NEW DIRECT TO CONSUMER TRENDS
Examine new ways to relate to consumers through the direct to consumer channel. Speaker-moderator Craig Root will present several new tips designed to enhance your operation. Featured speaker Norman Stolzoff, President of Ethnographic Insight, will offer a detailed look at ethnographic research. This important field uses anthropological insights to solve real-world problems. Ethnography helps better serve customers, leading to profitable results.
Craig Root, Visitor Management Resources
Norman Stolzoff, PhD, President, Ethnographic Insight Inc.

2. TRANSACTIONS: WHO ARE THE BUYERS AND WHO ARE THE SELLERS?
John Mackie,
Partner, Carle, Mackie, Power & Ross, LLP, Moderator
Tony Correia, Owner, The Correia Company
Matt Franklin, Principal, Zepponi & Company
Josh Grace, Managing Director, International Wine Associates

3. THE HISPANIC WINE CONSUMER
What does it mean to the wine industry and what do we do to make wine the beverage of choice?
Steve Rannekleiv, Executive Director, Research, Rabobank International
Natalia Velikova, PhD., Texas Tech University

4. THE EMERGING TALENT GAP POSES RISKS FOR THE WINE INDUSTRY
Ray Johnson, Director of Wine Business Institute, Sonoma State University
Carol O’Hara, Partner, Burr, Pilger & Mayer, Moderator
Tom O’Brien, Director of Human Resources, Trinchero Family Estates
Larry Smith, Senior Vice President, Human Resources, Jackson Family Wines
Dawn Wofford, Managing Partner, Benchmark Consulting

Session II: 3:30 p.m. – 5:00 p.m. – Choose One

5. EQUITY AND DEBT MARKETS: CURRENT TRENDS AND FUTURE OUTLOOK
David Freed, Chairman, The Silverado Group
William Beyer, Principal, Prudential Agricultural Investments
Hal Forcey
, American AgAppraisal
Perry F. Deluca, Senior Vice President, Wine Industry Team Leader, Wells Fargo Bank

6. WHO IS THE COMPETITION? WILL CRAFT BEER AND CRAFT SPIRITS HURT WINE SALES, OR SHOULD YOU JUST JOIN THEM?
Bill Leigon, President, Jamieson Ranch Vineyards
Mark Crisler, CS, Founder & Chief Everything Officer, Trellis Wine Group
Jesus Ceja, Ceja Winery / Carneros Brewing Company

7. USE PERMITS: CURRENT ISSUES AND FUTURE TRENDS
Phillip Kalsched, Partner, Carle, Mackie, Power, Ross, LLP, Moderator
Dean Parsons, Project Review Manager, Sonoma County Permit & Resource Management Department
Jeff Redding, Principal, Land Use Environmental Planning Service
Beth Painter, Principal, Balance Planning

8. COMMON TAX ISSUES FOR VINEYARDS AND WINERIES
Federal Income Tax Updates, State Income Tax Updates, Sales Tax Updates and Estate Tax/Valuations
David Pardes, Tax Director, PricewaterhouseCoopers
George Famalett, Tax Partner, PricewaterhouseCoopers
Joan Armenta Roberts, Managing Director, PricewaterhouseCoopers
Eric W. Nath, ASA, Principal, Eric Nath & Associates
Thomas Garigliano, Tax Partner, Burr, Pilger & Mayer


Tuesday General Session – September 23, 2014
7:45 – 8:15 a.m.
COFFEE & REGISTRATION

8:15 – 8:20 a.m.
WELCOME & INTRODUCTIONS
Lisa Adams Walter, Director of Programs, Wine Industry Symposium Group

8:20 – 8:30 a.m.
WINE INDUSTRY OVERVIEW
David Freed, Chairman, The Silverado Group

8:30 – 9:15 a.m.
WHAT WINE INDUSTRY LEADERS THINK IS IMPORTANT FOR THE FUTURE
Robert Smiley, PhD, Dean and Professor Emeritus, Director of Wine
Graduate School of Management, University of California, Davis

9:15 – 10:00 a.m.
LESSONS FROM THE GLOBAL WINE WARS
Mike Veseth, Editor, The Wine Economist Blog

10:00 – 10:30 a.m.
GET – ACQUAINTED BREAK

10:30 – 11:15 a.m.
THE CALIFORNIA AND GLOBAL HARVEST UPDATE
John Ciatti, Broker, Ciatti Company LLC

11:15 a.m. – 12:00 noon
WENTE VINEYARDS CELEBRATES 130 YEARS
Carolyn Wente, CEO, Wente Vineyards

12:00 – 1:15 p.m.
NETWORKING LUNCHEON

1:15 – 2:15 p.m.
HOW SKILLFUL USAGE OF DIGITAL MARKETING AND SOCIAL MEDIA
NEED TO BE INTEGRATED IN THE BIGGER PICTURE OF BRAND BUILDING AND POSITIONING
John Gillespie, President, Wine Market Council and CEO, Wine Opinions
Karena Breslin, VP Digital Marketing, Constellation Brands
Alisa Joseph, Vice President, Business Development, The Nielsen Company
Mark Gordon, Digital Marketing Manager, Jackson Family Wines
Mike Osborn, Founder and VP Merchandising, Wine.com

2:15 – 3:00 p.m.
NEXT GENERATION WINE
Liz Thach, PhD, MW, Professor of Management and Wine Business, Sonoma State University
Judd Finkelstein, Judd’s Hill Winery
Lisa Broman Augustine, Broman Cellars
Nicole Bacigalupi Dericco, Bacigalupi Vineyards

3:00 – 4:00 p.m.
WINE AND DISTRIBUTION
Jonathan Pey, Principal, TEXTBOOK Napa Valley
Jon Moramarco, Principal, BW 166 LLC
Dan Grunbeck, EVP Corporate Business Development & Strategy, Youngs Market

4:00 – 5:00 p.m.
FINANCIAL SPONSOR FINALE
WINETASTING & RECEPTION – Hosted by WIFS Sponsors

 

Wine in Context: Wine Vision Probes the Sensory Experience

Sue and I are in the Valpolicella region today investigating the wine and wine tourist industries and trying to understand the challenges and opportunities the Veneto will confront in the future. Look for our reports in the coming weeks.

Context-Sensitive Experiences

In the meantime I have been giving some thought to how context shapes our perception of wine (one of the topics that I examine in my next book — working title Money, Taste and Wine: A Complicated Relationship).  The way we experience wine depends upon the physical and emotional setting, the food, wine and other products that are involved and the information that we have about the wine’s story and its price. Change any one of these elements you change the wine!

If context matters in wine — and I am quite sure it does since it matters in most aspects of the human experience — then it seems to me that it makes a difference not only in terms of how we actually taste wine when we drink it but also how it is priced, marketed, served and even how we think about critic ratings.  Context-sensitivity isn’t just about those menus that pop up when you right click in Windows,  it at the heart of the wine world.

I was pleased to see that context will be on the agenda at Wine Vision 2014, the CEO-level wine industry conference that is set for London in November. It’s a small part of my talk which will focus on shifting market forces and, somewhat surprisingly, the central element of what you might call the “social program” — the after-hours events that are typically devoted to sip and swirly, grip and grin.

Beyond Taste: Drinking with All Your Senses

The first night’s social program includes a presentation and multi-sensory experience organized by Prof Barry C. Smith, Founding Director, Centre for the Study of the Senses, University of London and Prof Charles Spence, Head of the Crossmodal Research Laboratory, Oxford University Here’s what the online program has to say.

Bring an open mind and all of your senses for a multi-sensory experience that goes beyond taste to investigate how our perception of wine is affected by what we see, smell, hear and feel. Professors Spence and Smith, experts in the field of multisensory flavour and marketing, will take us on a wine-fuelled tour of the human senses, showing how each contributes to our enjoyment and appreciation of wine. Along the way you’ll be invited to use all your senses to experience some very fine wines – and to understand the neuroscience and philosophy that determine exactly why you perceive them in quite the way that you do. You can expect to find answers to questions you’ve hardly dared to ask including:

  • Does everybody taste wine the same way I do?
  • Is wine tasting purely subjective, or are there objective measures of ‘good’?
  • Where does smell stop and taste begin?
  • Can mood music, lighting, and ambience alter the taste of a wine?
  • What do the results of blind taste tests really mean?
  • And what wines should I drink when I’m flying?

Expect to have your perceptions enhanced and your mind altered as we investigate the world of ‘gastrophysics’ – the study of how psychology, cognitive neuroscience and multi-sensory design can help us market wine in new ways to experience-hungry modern consumers.

I think you can see that each of the topics suggested here matters not just for the consumer of wine but also for those of us in the business of making and selling it. My next book includes a section on the particular problems of making and choosing wine for air travel, for example, where the context is out of the ordinary in almost every possible way. Since airline sales are a good wine market, much attention has already been devoted to this sensory context. Maybe more attention should be given to other unusual wine environments?

Wine and Chocolate

The second night’s social program features a presentation by Dominique Persoone, founder of The Chocolate Line. I have a special interest in chocolate, but it’s not what you think. I am hypersensitive to the sugar/caffeine mix in chocolate and can only tolerate it in tiny amounts. So eating chocolate is not on my agenda.

But I have used chocolate for several years to teach students how to think about taste and how to describe what they are tasting — but without tasting wine or consuming alcohol. I start by tasting Hershey’s Milk Chocolate — a taste that everyone knows and most people like. Then we slowly move up the scale to higher and higher cocoa percentages. One year we maxed out at 95% cocoa, well past the 70% level that serious chocolate tasters deem the beginning of real chocolate.  Tasters quickly realize that Hershey’s doesn’t taste much like chocolate — it is more caramel because the milk and sugar dominate over the chocolate flavor.

Tasting all these different chocolates teaches many things that are useful to someone learning about wine. First, all chocolate (and wine) isn’t the same and what your friend enjoys most may not be to your taste. So you have permission to have your own opinion. There is even a chocolate flavor wheel much like the Ann Noble’s famous wine aroma wheel, so we learn how to find words to describe what we taste.

I once asked my class what the take home message was and someone said it best. It’s about balance, professor. Wine and chocolate are complicated and each of us has to find the balance we like best. Having tasted chocolate in this way, they were ready to take on wine and visitors to my student tastings have always been surprised by how much the students were willing to think independently about their experiences whereas more seasoned adult tasting groups sometimes struggle to guess the “right answer.”

Chocolate: A Whole New World

“Chocolate: A Whole New World” is the title of Persoone’s program. Here’s the agenda:

Dominique Persoone, heralded as the most persistent innovator in the world of chocolate, will introduce you to chocolate like you’ve never tasted before; chocolate you can eat, drink, wear and even inhale. In doing so he’ll challenge us all to think about the sources of innovation – the stimuli that drive us to take a traditional product and create something deliciously, temptingly, even shockingly new. He will touch on the power of food-pairing and the complimentary nature of chocolate and wine.  It’ll be a very hands-on (and lips-on) experience. You’ll get to sample his exquisite chocolates, including his wine chocolates, Chocolate Lipstick, and see the world famous Chocolate Shooter he created especially for The Rolling Stones.

As you can see, Persoone also uses chocolate to think about wine and I’m sure this will be a popular and informative session. I’m looking forward to it, even if I have to take tiny tastes.

I think I’m going to like wine chocolates and Chocolate Lipstick, but I’m not sure what to think about the Chocolate Shooter. When I first saw the name I figured it would be something served in a shot glass like an oyster shooter. Sounded pretty good. But instead it is something that is shot up your nose! Yikes. I wonder how Persoone got the idea that the Rolling Stones would want to snort chocolate? Here’s a brief video to show you what’s involved. Enjoy!

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