“Modified rapture” is a line from Gilbert and Sullivan’s comic opera The Mikado. The dialogue as originally written was “Rapture!” but the actor who played Nanki-Poo was apparently a little too enthusiastic about it during rehearsals and Gilbert kept unsuccessfully asking him to tone it down. (You will understand why the rapture was incomplete if you view the YouTube video above.)

Finally, in complete frustration, Gilbert barked, “Modified rapture!” as a stage direction. And that’s exactly what the actor said, taking it literally as a text revision. Modified rapture, indeed! And it became a permanent part of this entertaining scene.

Dutch Disease Dilemna

Modified  rapture – that’s my reaction to the good news about the Australian dollar (AUD). The Australian wine industry has suffered mightily from the “Dutch Disease,” which is what happens when a boom in one sector of the economy causes an over-valued currency that makes other sectors less competitive.

Exports to China, especially mineral exports, have been the boom sector and they have pushed the Australian dollar to incredible highs relative to the U.S. dollar.  This has created a dilemma – pass the foreign exchange costs along to foreign buyers and you risk losing sales. Absorb the foreign exchange impact and margins shrink and sometimes dip into the red.

Rapture: the short term view

The over-valued Aussie dollar has affected all segments of the Australian wine industry, but bulk wine sales have been perhaps the most impacted because international competition is so fierce for commodity wines. Bulk wine sales account for about 45% of New World wine exports, so lots of business (and grower incomes) hang in the balance when the exchange rate shifts by even a penny or two.

Good News: A Short Sharp Shock

So the recent fall in the Australian dollar as shown above must be greeted with joy by Australian growers and producers. Although it was expected that the AUD would depreciate eventually, I’m not sure anyone would have predicted such a “short  sharp shock” (to use another Gilbert and Sullivan line).

What caused the change? Well, Australians might say that it hardly matters – good news is good news.  But good news doesn’t always last as the graph below indicates. This isn’t the first time that the AUD has tumbled and we can’t be entirely sure that it will not rebound (hence my “modified” description). And although the recent trend is welcome it must be noted that the AUD is a long way from its value back in early 2009, when it was even cheaper relative to the dollar than the 85-cent valuation that one analysis has predicted.

Modified rapture: the longer view

The AUD Trifecta

As I see it, the sudden shift is the result of a trifecta of effects. The first and most important is the slowing of the Chinese economy, with the resultant decrease in demand for Australian minerals. That’s one. The second is the shift in Japanese monetary policy. Abenomics, as it is called, is pumping up Japan’s money supply in an attempt to jump-start the economy.

This has driven down the yen’s value, which encourages some investors to repatriate funds previously placed abroad to take advantage of the fact that each host country Australian dollar (for example) now yields a larger home country yen profit. A good time to cash in your chips and bring your money  home.

Finally, the U.S. Federal Reserve has announced that it is “tapering” its expansionary monetary policy, which has boosted U.S. interest rates and perhaps caused some “carry trade” international investment to shift to the U.S. from other countries (like Australia, for example).

So the result is good news and I think it might last, but it is important to realize that the trend could be reversed if China’s growth rate picks up (as most people hope it will) or if U.S. and Japanese monetary polices change dramatically. Fingers crossed — there is a lot on the line!

>>><<<

Foreign exchange historical tables are from Oanda.com.

I couldn’t resist adding this classic Mikado video — the “short sharp shock” appears at about the two minute mark. Enjoy.

I was pleased to be interviewed the award-winning  journalist Christiane Amanpour earlier this week for her  ”Around the World with Christiane Amanpour” report on ABC.com.  The original topic was set to be last week’s French wine auction, where odd lots and “too-expensive-to-serve” bottles from the Elysee Palace cellars were sold off to pay for more modestly priced wines to serve at state events  (with a bit left over to pay down the French national debt).

The auction was a success (buyers snapped up wines that became famous by the publicity surrounding the auction), but Ms. Amanpour, perhaps sensing that this had already become old news, shifted the conversation to another wine topic.  Click on the image below to view the interview.

>>><<<

Thanks to Mary-Rose, David and of course Christiane Amanpour for their work on this interview.

The goal (and the challenge) goes beyond establishing a destination winery in the Monticello AVA. The Cases want to help elevate the profile of Virginia’s growing wine industry generally.

That’s a worthwhile aim, but not a simple or easy one in today’s competitive market environment. As one friend put it, early days and a mountain to climb.

Virginia Wine Mosaic

We were in Virginia to visit Sue’s parents Mike and Gert who live near Richmond and came to Early Mountain on the advice Frank J. Morgan who writes the popular Drink What You Like blog, which analyzes Virginia wine.   With about  200 wineries of various sizes and foci and 15 AVAs, Virginia presents the potential wine tourist with many choices. Frank suggested several interesting winery targets and I selected Early Mountain both for its proximity to Charlottesville and for its ambitious stance.

The Cases are big fans of all things Virginia and saw in the bankrupt Sweely Estate winery an opportunity to contribute to the wine industry here. The Sweelys built an impressive facility — a 20,000 case winery and a separate spectacular hospitality and event center, but they were apparently better at making wine than selling it for profit.

Early Mountain (named for the famously hospitable Early family who lived in these hills in Revolutionary War times) rose from these financial ashes in 2011 with the double mission to add to the chorus of Virginia wineries and also help the whole industry open a new era.

Best of Virginia

The most obvious evidence of this broader purpose is the Best of Virginia wine program at Early Mountain. The winery has partnered with the nine wineries shown above and promotes their products along with its own. This is done mainly through a series of tasting flights, only one of which is based on Early Mountain wines alone.

The rest feature a mix of products from the ten different producers carefully selected by Michelle Gueydan, a sommelier employed specifically for the Best of Virginia program. The flights are changed up periodically to both broaden the range of wines so promoted and to encourage visitors to return repeatedly to see what’s new.

I understand that there are also plans to eventually channel winery profits to promote Virginia wines in line with Case’s Revolution concept of social entrepreneurship. Profits seem a long way off, based on my back-of-the-envelope calculations of revenues and costs, but a patient capital philosophy rules.

Early Days for Wine Identity

We enjoyed platters of local cheeses and meats, which paired very well with an Early Mountain Pinot Gris. The focus on local producers was both clear and delicious.We then turned our attention to a red wine flight that showcased four wineries and four grape varieties or blends. The Barboursville Sangiovese (they are owned by the Italian Zonin family) and the ’08 Early Mountain Merlot were Gert’s favorites among the reds we tasted. I was attracted to a distinctive Petite Verdot.

I’m optimistic about this project (as I am about the future of Virginia wine more generally), but I think everyone agrees that it is still early days. Early Mountain is still building up its wine portfolio, which necessarily takes a few years to accomplish. (If you were starting from scratch you would wait for the wines before opening the hospitality center but the desire to seize the opportunity caused the cart to be put ahead of the horse for now).

My perspective is that the components for success are coming into place and need to be lined up effectively into an identity for the winery and a message for the industry. I think the Early Mountain project is about Virginia hospitality and while that is clear in a sensual way when you step into the big open room, it could be communicated more explicitly in other ways.

The Early Mountain wines themselves don’t seem to have an identity yet, but that is perhaps natural since they are still works in progress. But they will need to be more clearly defined at some point, too, and that is not a trivial problem. The most successful wineries know who they are and express this identity consistently from first greeting through the wines and the wine experience on down to the product design and promotion materials and throughout every member of the staff.

An American [Wine] Dream

The Best of Virginia idea is a good one, but at this point the wines more or less speak for themselves and while visitors might find individual wines that they enjoy from around the state, I would like to see a better developed educational element to draw them progressively into Virginia wine in a way that includes the varieties and styles, the wineries, the AVAs and the terroir and of course a cultural element that connects to local history and cuisine.

An educated consumer is more than just a buyer — she can be an ambassador for Virginia wines and that’s where the real pay-off comes. It might seem like I am demanding a lot — and I am — but this is a rare opportunity due to the resources and commitment of the Case family and it would be great if it succeeded on all fronts.

This is not just Early Mountain’s problem, of course, but an issue that the Virginia industry needs to wrap its head around. Right now it seems to this outsider that the Virginians, like wine producers in many regions, are working through the debate about the need for a signature grape variety. Viognier? Cabernet Franc? Petite Verdot? It seems to me that this is an unproductive debate (or maybe a counter-productive one).

Virginia makes lots of different wines (Barboursville apparently makes a helluva Nebbiolo – who would have guessed?) from many grapes varieties in many styles (something the Early Mountain flights demonstrate). Defining the region by one grape or two wouldn’t do justice to this diversity.

Virginia also makes some disappointing wines, as is the case with most developing wine regions, and the store shelves feature many sweet wines and fruit wines, too, which may be very good but certainly provide a mixed message. Perhaps  a focus on more consistently high quality (and not signature grape) is the road ahead? I think that’s part of the Best of Virginia plan — to draw attention to high quality and try to raise the bar for everyone.

As the recently published  American Wine by Jancis Robinson and Linda Murphy teaches us, America is full of wine and wineries — they are not just in the big states or made by the big producers. I dream of an America where wine is made everywhere and enjoyed everywhere. Early Mountain can be a part of that dream. I wish them success.

>>><<<

Thanks to Allison, Dave, Steve, Erich and Jacob at Early Mountain for their hospitality and willingness to answer all our questions. Thanks to Frank for his advice. Thanks to my most senior research assistants Mike and Gert for their able assistance and to Sue for photographs and her sharp eye and keen ear.

>>><<<

Update June 5, 2013. A nice article about Virginia wines (including a mention of the Early Mountain “Best of Virginia” partnership) has been posted on the Appellation America website. Enjoy!

.

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!

<<<>>>

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.

Juice Box globalization was one of three wine market scenarios that I proposed in a talk I gave in January 2013 at the Unified Wine and Grape Symposium in Sacramento (you can read a brief summary of my remarks here). I was inspired by the Minute Maid apple juice box pictured in the slide above.

You think of Minute Maid as an American brand and goodness knows that we grow lots of apples here, but in fact it has become a globally sourced product. The generic apple juice in that box could come from the U.S. or Argentina, Austria, Chile, China, Germany or Turkey (or any combination of them, I suppose). The brand is the thing here — country of origin is almost literally a footnote and apple variety is a complete non-issue.

Is juice box wine possible — wine pretty much stripped of variety and place of origin? Many heads nodded yes in the audience as I asked the question. Just a matter of time as global sourcing of wine becomes a key supply side factor and strong brand identity continues to grow in importance on the demand side. Juice box wine isn’t the only direction wine is headed, I suggested, but it is one possibility.

Barefoot Makes an Impression

And now it is here (although perhaps not for the first time). Gallo’s Barefoot brand has introduced a new red blend wine, Barefoot Impression, made from grapes grown on four continents, according to a recent report in the Modesto Bee. 

 Impression joins 14 still wines and seven sparkling wines, all made from California grapes, in the Barefoot portfolio. Barefoot winemaker Jennifer Wall describes the new wine as “a smooth red blend with dark fruit flavors, framed by notes of sweet vanilla and spice.” It has a suggested retail price of $6.99.

Stein’s Law seems to be simply stating the obvious, but you would be surprised how many people find a way to ignore the obvious when it is in their interest to do so.  As Upton Sinclair wrote, “It is difficult to get a man to understand something if his salary depends on his not understanding it.”

Argentina’s Inflation Problem

And so we consider the case of the Argentinean wine industry. It’s not just the wine sector, of course, it’s the whole Argentinean economy, but wine is especially affected.  Something’s going to happen according to Stein’s Law, because it can’t go on forever as it has up to now, but it is hard to know exactly what.

The problem begins with Argentina’s high inflation rate. The official statistic puts the annual increase in consumer prices at around 10%, but this number is viewed with disbelief by the international economic community. The Economist magazine quit publishing the official figure in 2012, saying “Don’t lie to me, Argentina” to the officials there. The most commonly cited estimate of the actual inflation rate is 25% per year.

Inflation is a sensitive political issue in Argentina as it is in every country that has ever experienced a hyperinflation crisis (think Germany, for example). Some in Argentina go to great lengths to deny the obvious reality of inflation.

The story (which may be true) is told about a McDonalds restaurant in Buenos Aires that displayed all the usual products on its big backlit menu board except the signature Big Mac. Where’s the Big Mac? Oh, we have that price hidden around the corner so that no one will see it — especially the people from The Economist magazine who use it to estimate the purchasing power of the peso in their Burgernomics index!

Inflationary Squeeze

As a recent article on The Drinks Business website suggests, high inflation is putting the squeeze on Argentina’s wine producers. (The squeeze is made worse,  I understand, by government policies that restrict imports of products used in wine production as part of a general policy to control foreign exchange reserves). Production costs (grapes, labor, etc.) may have doubled over the past four years, putting a squeeze on margins.

It is difficult to pass these peso costs along to consumers in the U.S., Canada, the U.K. and Brazil, the main export markets. Consumers are price sensitive and while the average export price of  varietal Cabernet and Merlot wines have risen by 7.2% and 24.8% respectively in the past year, this provides only limited relief from rising costs since Malbec takes the lion’s share of the export market and its dollar export price has risen by just 1% in the last year and by an average of only 2.8% per year since 2009.

Purchasing Power Inaction

The textbook remedy to this situation is for the foreign exchange value of the peso to fall to achieve what economists call Purchasing Power Parity. In a system of market determined exchange rates, according to the PPP theory, a 25% fall in the domestic purchasing power of the peso due to inflation should result in a 25% decrease in its foreign exchange value.

And indeed the peso has depreciated, but not by nearly enough to overcome the inflation difference between Argentina and the four main export markets. The peso has fallen in value by about 20% in the last two years, if we look at the official exchange rate, so each dollar of export earnings brings in more pesos,  but inflation-driven peso costs have increased by much more.  That puts a real squeeze on margins. This can’t go on forever — something has to give.

[I'm told that the black market exchange rate is 8 pesos per U.S. dollar, far below the official rate of about 5 per dollar. Such a big differential is often an indicator of crisis to come.]

Something’s Gotta Give

What happens when a country gets itself caught in a squeeze like this? Well, the conventional wisdom is there needs to be a sharp currency devaluation followed by monetary tightening to control inflation. This is a painful process and Argentina has been through it before. What if the government ignores the conventional wisdom? Internal adjustment must eventually take place to restore competitiveness if external adjustment through the exchange rate is ruled out.

A recent Wall Street Journal article about real estate prices in Buenos Aires shows one pattern of adjustment. The dollar prices of luxury apartments have tumbled as owners seek to cash out of their real estate investments and buy into the more credible U.S. currency.  The WSJ reports that

In May last year, Argentine President Christina Kirchner strictly limited access to U.S. dollars and other foreign currencies in a bid to stem capital flight. With the Argentine peso facing about 25% annual inflation (government figures, widely discredited, set the rate much lower), and an unofficial exchange rate that has effectively devalued the peso sharply, demand is high for dollars.

These days, the main feature that foreign buyers say they look for in a Buenos Aires property has nothing to do with closet space or a wide terrace. It is a seller with a bank account outside Argentina to which they can legally wire funds. This is a way to get around having to convert any dollars wired into Argentina into pesos at the official rate, after which it is nearly impossible to convert back into dollars at the official rate.

Something will have to give in the wine industry, too, if the exchange rate doesn’t adjust and the currency controls continue. In the meantime, I think every effort is being made to control costs and to keep margins out of the red. But, as Herb Stein might say, this can’t go on forever so somehow it will stop.

>>><<<

Herbert Stein may be best known today as father of Ben Stein, the actor, law professor, and columnist, but he was ever so much more famous in his day as a chairman of the president’s council of economic advisers

Little known fact: the Pabst beer company held an economics competition in 1944 (the year of the Bretton Woods conference)  for the best plan to sustain high employment in the post-war era. Herb Stein’s plan was named the winner from among the more than 36,000 entries. He was 28 years old and the prize was $25,000 — the equivalent of $330,000 today.

I’m pleased to announce that I’ll be returning to South Africa early next year to speak at VinPro Information Day on January 23, 2014. (You can read the agenda for the 2013 Information Day program here.)

VinPro, the service organization for 3600 South African wine producer members, announced yesterday that it will merge with Wine Cellars South Africa, creating a unified wine industry organization.  I’m honored to be invited to speak at the first Information Day program for the combined group and I look forward to meeting everyone and sharing what I know about global market developments while learning more about the dynamic Cape wine sector.

My previous visit to South Africa (to attend Cape Wine 2012 and give the keynote at the Nederburg Auction) was eye-opening — my only regrets were that I didn’t have more time to visit and study the different regions and that Sue wasn’t able to join me. Both of these concerns will be addressed this time as we will spend a couple of weeks touring before Information Day. Still not enough time to do justice to the Cape Winelands, but a big improvement!

We are just beginning to plan our visit. Use the comments section below or write to Mike@WineEconomist.com if you have suggestions of where we should go and what we should do.

Thanks again to VinPro for this opportunity. Looking forward to seeing old friends and making new ones at VinPro Information Day 2014.

Celebrating Celebrity Wine.

Kayla asked to review Celebrity Vineyards: From Napa to Tuscany in Search of Great Wine by Nick Wise. This is an attractive volume, beautifully illustrated and printed on high quality stock. The book’s sixteen chapters provide detailed case studies of wineries associated with the A (for Mario Andretti and Dan Aykroyd) almost to Z  (Formula One driver Jarno Trulli and football coach Dick Vermeil) of international wine celebrity. (I wish soccer star Zinedine Zidane would start a winery just to make the celebrity wine alphabet complete!)  A nice mix of current stars along with  figures from the past such as Fess Parker and even Thomas Jefferson.

Here is Kayla’s tasting note for the volume.

This book exhibits an easy-going style of writing that gets down to the core of why these select individuals are involved with wine. His sense of story is sure to appeal to wine enthusiasts as well as those interested in the wines simply due to the fame of their financiers. Wise organized this book in a way that would make it perfectly suitable for those who want to read one section at a time or just place it on the coffee table for guests to peruse. All in all, I found the stories both appealing and well written. Wise brings these iconic figures down to earth with their relate-able passion for one of the world’s most amazing and diverse beverages.

The French Connection

Kelsey wanted to read  Into Wine by Olivier Magny and I couldn’t wait to see her “tasting note.” I gave Magny’s earlier book Stuff Parisians Like a very favorable review on The Wine Economist. As I read the first book I kept waiting for him to talk about wines that Parisians like. After all, Paris is the capital of France and France is the capital of wine, so how could Parisians not like wine? But I was wrong.

“It is very easy to spot tourists in a Parisian cafe,” Magny wrote, “They are the ones drinking wine.”  Having a glass of wine gives the tourists pleasure. Not drinking wine is what Parisians like to do.

Magny, with obvious frustration since he runs a wine school there, enumerated all the reasons wine has fallen from grace in Paris. Once it was the default choice, he says, but now young people especially understand that they have many choices, most of which are easier to comprehend and have better marketing behind them. Water, beer and spirits — these are the go-to beverages of Paris now.

Parisians may like not like wine, but Magny hasn’t let this discourage him. Into Wine starts with Magny’s introduction to the world of wine as an occupation and then veers off into a number of interesting issues. Here is Kelsey’s note:

In his book “Into Wine”, Olivier Magny introduces the reader to the concept of terroir and highlights its importance throughout the wine-making process— from the vineyard to its consumption. At times, however, it seems like the book was less “into wine” and more into promoting organic lifestyles. It is clear from the outset that Magny is a terroirist, but his account of wine is definitely an eye-opener to the perils and shortcomings of the modern agriculture and wine industries.

The book made me rethink where my wine and food are coming from, what goes into their production, and the negative consequences of modern wine-making and agricultural processes. If you want to know more about what terroir is all about and why it is important, this is a good read. His footnotes (though excessive and sometimes distracting) are entertaining and even once poked fun at the modern-day “hipster”.

Overall, Magny is witty and his book definitely has something to offer those unfamiliar with the concept of terroir and its role in today’s wine industry.

The Color of Wine

Erin picked The Wine Lover’s Coloring Book by Louise Wilson.  Her tasting note reads.

The Wine Lover’s Coloring Book by Louise Wilson makes learning about the world’s wine regions appealing and fun for wine enthusiasts and budding professionals alike! Wilson’s book is full to the brim with colorful diagrams and vital information, and the hands-on learning approach is particularly well suited to visual learners. This interactive book is the perfect blend of accessibility and educational content.

I liked the idea of this book quite a lot, but after paging through it twice I decided that I wanted more — more in the art or more in the text.  Could the diagrams do more to illustrate the terroir (as opposed to basic geographic lines of wine regions)? Could more be done with the wines themselves? And is it possible to do more while still keeping to the appealing coloring book format? I dunno — maybe not.

But the author is plainly very creative (and a fine artist, too), so perhaps she will think of a visual way to take her readers to the next level in a future volume. In the meantime, as Erin’s note makes clear, this is a welcome addition to the wine education bookshelf.

>>><<<

Thanks to Erin, Kelsey and Kayla for their tasting notes. Thanks to the authors and publishers for providing the books.

>>><<<

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.

>>><<<

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.

Blake, Eben and Ali at the Chilean Cabernet tasting.

>>><<<

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.

What is it about the tension between Burgundy and Bordeaux that casts such a spell on wine enthusiasts?  I’m not really sure. They say that in Bordeaux you talk about wine and in Burgundy you drink it. Bordeaux is cerebral — you feel it above the neck according to popular opinion — while Burgundy arouses the senses down below. Maybe that’s what it’s all about.

Jean-Robert Pitte wrote a great book about the “classic rivalry” between the two wine cultures and Master of Wine Benjamin Lewin seems bitten by the bug, too.

That’s So Typical!

Lewin (a renowned scientist — he was the founding editor of the journal Cell), has written a lot about wine in a short time. He began with What Price Bordeaux?  (2009) followed by Wine Myths & Realities (2011), which I use in my university class.  In Search of Pinot Noir appeared last year and now this book on Cabernet Sauvignon.  What prodigious output. Amazing.

Lewin values typicity in wine, so it is not an insult for me to say that Claret & Cabs is typical of his work. Extraordinarily well researched and written, the facts and insights jump off the page in a way that draws the reader deeper and deeper into geography, geology, history, economics, viticulture and so on through all the senses that wine embodies.  The discussion of clones that appears early in the book is a good example. It taught me so much in just a few pages — outstanding.

And I like the way that Lewin tells part of his story through the voices of the dozens of winemakers he interviewed on his fieldwork travels. As always, I appreciate that he doesn’t hesitate to take on difficult questions, weigh the evidence, and reach a bold conclusion.

The books on Pinot Noir and Cabernet are as different as, well, Burgundy and Bordeaux.  The conventional wisdom (at least on Route Nationale 74)  is that Burgundy is Burgundy and everything else is [merely] Pinot Noir, so  Lewin scoured the globe for the Holy Grail — a Pinot Noir made somewhere else in the world that could match the highest Burgundian standard, especially in terms of ability to age. He discovered a lot of great wine in the process, but the verdict he reached is that Burgundy reigns supreme, at least for now.

A Different Premise

Claret & Cabs starts with a starkly different premise.  It’s not really clear that Bordeaux is now or ever was the uniquely best place in the world to grow Cabernet Sauvignon. The center of the Cab world may well be California’s Napa Valley — or perhaps Bordeaux and Napa should uncomfortably share the global spotlight in the same way that Burgundy and Bordeaux compete for attention  in France.

The book divides itself in various ways.  There are about 300 pages of generously illustrated text followed by 200 pages of detailed tasting notes. Napa and Bordeaux are the main foci, although the analyses of the other important producer areas — Washington State, the Mediterranean arc that reaches from the Languedoc to Tuscany, Chile, Argentina, Australia, New Zealand and South Africa — are very thorough.

I haven’t done a formal page count, but I’d guess that Bordeaux and Napa get about equal space in the book (including the fascinating closing chapter on “Cults and Icons”.) But I think that that Lewin leans in on the Napa side of the debate just a bit, infusing it with a palpable (to me) electricity and excitement.

A Burgundian Bias?

Maybe it is Lewin’s Burgundian bias creeping in? Yes, I think that’s it, but not in a the way you might expect. Every Burgundy fan that I have ever known has had a detailed map on a wall somewhere in their house that shows the famous vineyards and climats and so forth. The complexity of Burgundian terroir is reflected in the wines — the best wines, at least — and is an almost irresistible muse.

The Napa Valley is a complicated place from a geologic standpoint. Pressures from three tectonic plates shape the landscape and expose a variety of different different soil types from gravel to clay to volcanic residue and different specific characteristics including the alluvial fans that apparently account for some of the qualities of my favorite wines from Rutherford and Oakville.

If you love the diversity of terroir, as Burgundians do, then I guess you have to love Napa — isn’t that an unexpected thought! And although Cabernet is not generally classified as a “terroir wine” (Riesling and Pinot Noir are usually cited as the defining “terroir wine” varieties), you can tell that Lewin believes that in Napa it really is (or can be in the right hands).

Lewin puts Napa on a pedestal at least as high as Bordeaux’s but — significantly — he doesn’t deny the possibility that Cabernet wines from other regions might rise just as high in their own particular way.

Claret & Cabs is a great read and I think will prove its worth down the road (“age well”) as a reference, too. Bravo!

>>><<<

Did you know that the British nickname for Bordeaux blend wines — Claret — comes from the fact that they originally were light (clair or clear), low in tannins and light in alcohol (less than 10%)? Nothing at all like the image of Claret today!