Wine Wars Update: Wine Spectator Feature & Wine Book Award
Wine Wars is featured in the year-end collection of book reviews in Wine Spectator magazine’s ”Top 100″ issue, which will hit newsstands in a few days. You can’t miss it — it’s the first book reviewed and there’s a big color image of the book cover. Thanks for your support, Wine Spectator!
Two of the featured books were also reviewed here at The Wine Economist: Katherine Cole’s Voodoo Vintners and Authentic Wine by Jamie Goode and Sam Harrop. Ian Mount’s history of Argentina wine, The Vineyard at the End of the World is also included in this WS article — look for a review here in early January, just before the book’s official publication date.
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I also want to thank the folks at the Gourmand International Wine Book Awards. According to the email I received earlier this week they’ve named Wine Wars the best American wine book of 2011 in the history category. It will now enter the competition for the global wine book awards. The full list of winners will be revealed in Paris in March 2012. Merci beaucoup for the honor!
BTW the Wine Wars World Tour is picking up steam. Click here to see the book event schedule.
Occupy Napa (and Sonoma and Burgundy and Bordeaux)
One of my loyal readers, perhaps inspired by Wine Economist posts about bargain wines and Martians versus Wagnerians, writes to suggest that I organize an “Occupy the Vineyards” movement. The purpose? To protest that part of the wine world that focuses on iconic wines for elites. What about the rest of us, he says? What about the other 99% of wine drinkers who are looking for good, affordable quotidian wines and don’t really care about impossibly expensive 100-point wines?
Not Wine Porn
It is a very Wagnerian idea (the reference here is to Philip Wagner, who promoted a democratic notion of wine here in the U.S., not the more famous aristocratic composer) and I am very sympathetic towards it. Wagnerian wines don’t have to be cheap cheap cheap, they just need to be good drinkable, affordable wines Wine food, not wine porn, if you know what I mean. A sensible idea.
So I started fooling around on the internet, searching for titles like “Occupy Napa” and “Occupy Bordeaux.” I figured that a catchy name would help make the point.
But they’re already taken — by groups affiliated with the “Occupy Wall Street” movement. Occupy Napa leads weekend protests at a Napa, California town square. Occupy Bordeaux seems to be part of the broader Occupy France movement. (I thought France was already occupied …)
A CafePress website sells Occupy Bordeaux souvenirs including T-shirts, water bottles and the neat 20 ounce drinking glass pictured here, but I don’t think it is directly affiliated with the group in France. The Occupy Together website has a cool interactive map that shows “Occupy” movements around the world and lists their websites if you are interested in seeing how this movement has evolved.
The Occupy Principle
I like the idea of promoting a more casual idea of wine, but I guess I won’t be using the “Occupy” trademark, since it would be too easy to confuse the wine group with the larger transnational advocacy movement. But I think that what I am calling the “occupy principle” probably applies to both.
Usually we think that movements need to stand for something quite specific — to have an clear agreed agenda — and in the long run I think this is very important. But in the short run sometimes it helps if a movement is a little ambiguous, with a flexible identity that can lend it self to several different purposes and attract a good many followers. I think this ambiguity helped the Occupy Wall Street movement to gain initial attention and to spread as it has done.
The Occupiers I have read about resent and oppose unequal wealth and power (the gap between the 1% and the rest), but differ in many other respects. It will be interesting to see if a clearly focused agenda emerges and, if it does, what specific goals are adopted. Perhaps, of course, the protest itself and the consciousness-raising it provokes are sufficient as a first step.
Conspicuous Non-Consumption?
A wine movement for the 99% would surely bring together the wine world equivalent of “strange bedfellows,” too. Some supporters are just cheap (or thrifty, if you will) and want a little respect for their self-restraint. Others may be against an elitist idea of wine or oppose conspicuous consumption (which in the case of trophy wines often takes the rather bizarre form of conspicuous non-consumption — costly “collector” wines to look at and talk about, not necessarily to drink).
The reader who originally suggested the Occupy Wine idea has a more basic approach: wine doesn’t have to be a mystery (and most wine isn’t) and it shouldn’t cost an arm and a leg (most wine doesn’t). There’s no reason that perfectly decent, relatively affordable wine can’t be a part of almost everyone’s daily life. That’s a Wagnerian attitude through and through and I can see why he wantd to see it given more attention in the wine world.
The Commanding Heights
So if there were to be an Occupy Wine protest, where would we gather and what would we do? That’s a bit of a problem since the places that sell the most wine (including supermarkets and wine shops) often have a lot of choices for the 99 percent — not much to oppose there. Costco is the largest wine retailer in the U.S. and although it does sell some icon wines, most of the products are more affordable. Most 99-percenters probably view Costco as friendly territory because of its policy of marking up wine only 15% for most bottles and 17% for house brand Kirkland Signature wines.
I suppose that we could protest in front of high end restaurants that sell superstar wines at super-nova prices. But I think restaurant wine mark ups are an issue of their own. And besides, the smell coming out of the kitchen would probably make me crazy. We could meet at Trader Joe’s to acknowledge the Two Buck Chuck phenomenon, but it wouldn’t be the same.
No, we would need to occupy the “commanding heights” — which in the case of wine means the wine media, where the 1 percent wines are praised and raised to an often unreachable altar. But there are flaws in the plan to Occupy Wine Spectator, too. First, all the popular wine magazines are making efforts to reach price-sensitive “99%” buyers just now, even if they also run stories about one percent wines. Even Wine Advocate identifies good values and I have seen box wines and house brands included in some wine magazine reviews.
Fait Accompli?
The other problem is that I am not sure that there is a market for an alternative Occupy Wine magazine that would focus on everyday wine values and ordinary wine lifestyles. The target audience probably wouldn’t buy it — they’d rather spend their money on wine than wine literature. And in any case there are several wine blogs that cater to the good value audience.
Maybe … and this is only speculation … maybe we have already occupied wine and we just don’t realize it? The wines are there and so are we, the 99 percent.
Occupy Wine is a fait accompli? Who knew! Spread the word.
The Big and Hot (and Not) Wine List
It’s time to update the “Big and Hot” list that I published last November. The list is pretty simple — what segments of the wine market are the biggest (measured by revenue) and which are the fastest growing? What’s big isn’t always hot and what’s hot isn’t always big. Here is my report, which also includes some notes on what’s not so hot.
But first a few disclaimers. The list is based upon published data found in the December 2011 issue of Wine Business Monthly. The data are from Nielsen surveys of table wine sales made through the off-premises food/drug/liquor store channels, not including convenience stores. These data measure an important slice of wine sales, but not the whole thing (see the comments section of last year’s post for a good exchange on the strengths and limitations of Nielsen data).
Finally, data are for the 52 weeks ending 8/20/2011. Sorry for these limitations, but you know what they say about data: you want it good, fresh (or fast) and cheap but you can only have two at a time. These numbers are pretty good (if you understand their limitations) and relatively cheap, but not so fresh. Not ideal, but it’s worth a look, especially if you haven’t checked on these trends in a while.
|
Category |
$ millions in 52 weeks to 8/20/11 |
% change from previous year |
| Total Nielsen survey table wine |
9,637 |
4.5% |
| Domestic table wine |
6,924 |
6.2 |
| Imported table wine |
2,713 |
0.6 |
| 750 ml |
6,584 |
6.1 |
| 1.5 l |
1,977 |
1.1 |
| 3 l |
323 |
3.3 |
| 4 l |
111 |
-6.9 |
| 5 l |
382 |
-0.9 |
| Red table wine |
4,797 |
4.3 |
| White table wine |
4,234 |
6.5 |
| Chardonnay |
2.050 |
1.8 |
| Cabernet Sauvignon |
1,444 |
6.6 |
| Merlot |
871 |
-4.6 |
| Pinot Gris/Grigio |
790 |
7.5 |
| Italy import |
831 |
3.2 |
| Australia import |
751 |
-7.1 |
| Chile import |
240 |
-2.1 |
| France import |
224 |
-4.4 |
| Argentina import |
222 |
20.2 |
| New Zealand import |
156 |
24.2 |
| Syrah/Shiraz |
240 |
-13.3 |
| White Zinfandel |
405 |
-6.0 |
|
Source: Wine Business Monthly 12/2011 |
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Start with good news: the wine market measured here grew by 4.5% in these 52 weeks, which is up from 3.2% growth in the previous year. The growth was concentrated in domestic wine versus imports. Domestic wine is both big (in $ revenues) and relatively hot (growing faster than the overall market). Imported wine? Not so hot as a broad category.
Wine in 750ml bottles is both big and hot. 1.5l bottles are big but not very hot. One liter containers are growing quickly (+14.8%), but from a small $18 million base. Interestingly, the 3l, 4l and 5l box wine formats grew more slowly than the overall market. Perhaps the box wine boomlet is fading?
Pinot Gris/Grigio is overtaking Merlot for the #3 spot on the “varietal wine” list. PG is hot and Merlot is cold in these data.
Australia continues to be big in terms of sales — it is far ahead of Chile for the #2 spot among wine imports. The gap is so huge that even though Australia wine sales are “cold,” falling 7% in the measured period, it would take years for them to fall to Chile’s level.
In the meantime, Argentina and New Zealand continue to be red hot, with 20+ percent sales gains on the year. In fact, it looks like Argentina will overtake France on this list, which is quite an achievement. But remember that this data excludes on-trade sales, where France may have an advantage.
Finally, I note that Syrah/Shiraz continues to shrink along with White Zinfandel and the whole blush wine category. In the case of White Zin, I suspect that it is a victim of the current trend towards Moscato and sweetish red wines. But these wine types don’t appear on the Nielsen list.
Let’s toast the good news of the growing wine market and hope that it continues!
Bottoms Up: The Bargain Wine Revolution
George M Taber, A Toast to Bargain Wines: How innovators, iconoclasts, and winemaking revolutionaries are changing the way the world drinks. Scribner, 2011.
George Taber knows something about how seemingly small events can sometimes turn the world of wine upside down. He was the Time magazine reporter who covered the famous 1976 “Judgment of Paris” tasting where top French wines were matched against California Cabs and Chardonnays in blind tastings evaluated by famous French critics. The New World wines held their own and even took the top prizes in both red and white categories. Thus was a fermenting revolution recognized and encouraged.
Now the issue isn’t so much Old versus New as it is Expensive versus Cheap and Elites versus Masses. Taber sides with a democratic vision of wine and this book is a celebration of the fact that there are more drinkable bargain (less than $10) wines in the world now than ever before. The glass is more than half full. Drink up!
What to Drink (for $10 or Less)
Taber’s celebration comes in two parts. The second half of the book is a bargain wine buyer’s guide. Taber provides top 10 lists of his favorite “$10 and less” wines and wine brands sorted by grape variety and region. He also recommends a couple of splurge wines in each category for good measure.
My, what a lot of inexpensive wine George Taber must consumed to write these recommendations. Bottoms up, indeed!
Here’s what I mean. The section on blush wines highlights 10 wines including a $3 Oak Leaf White Zinfandel (from Wal-Mart) and a $6 Riunite Strawberry White Merlot. I assume that Taber tasted the big selling Sutter Home White Zin and found it wanting since it does not appear on the list, but he doesn’t list all the wines he tried in each category, only the best ones, nor (and this would be particularly useful) the really really bad ones to steer clear of.
Revolution from Below
The first half of the book makes the case that maybe you should take bargain wines more seriously (and not just because of the current economic situation). Taber sets out to undermine the conventional wisdom about wine. Maybe wine judges are as confused as the rest of us. Maybe taste is so subjective that your opinion really is all that matters. Maybe (gasp!) bottles and corks are a pointless anachronism when it comes to everyday wines and you should reconsider your prejudice against “box wines,” which have changed a lot since you tried them in college.
My favorite chapters are the profiles of the iconoclasts who are leading the wine revolution. Taber’s reporting skills are put to good use in telling the tales of Fred Franzia (the godfather of Two Buck Chuck) and John Casella (the father of Yellow Tail wine). Both wines changed the world in important ways and it is interesting to have their stories told so effectively and to be able to see these two phenomena side-by-side.
The final chapter (before the buyer’s guide) examines China. Will it too change the wine world? Maybe – that’s the answer here. China is still a work in progress and perhaps it is too soon to draw many conclusions. Taber does a good job pulling together different trends and facts.
What’s a Bargain?
One of the ironies of this book comes from the fact that Taber needs to define what he means by “bargain wine” and value (like taste) is pretty subjective. He draws the line at $10, which is a good thing I believe since this allows him room to include a lot of pretty good wines in his lists and not just focus on extreme values. Ironically, however, a $10 wine is classified as “premium” and sometimes “super-premium” here in America. The majority of American wine drinkers think of a $10 wine as a splurge.
I have friends who are afraid to try a $10 wine because they fear that they will be able to taste the difference and be forced to turn their backs on the $6 wines they’ve been enjoying for years.
I wonder if wine snobs will be annoyed by George Taber’s book? After all, with this book Taber seems to suggest that democratic wines deserve the same respect as those Judgment of Paris aristocrats. Me? I’m just grateful that he’s done the dirty work of tasting and sorting all those really inexpensive wines so that I don’t have to! Bottoms up!
A Tale of Two Initiatives
Last year Washington voters went to the polls and defeated a Costco-sponsored initiative to liberalize the state’s wine, beer and spirits markets. The vote was 46.5% Yes and 53.4% No. Initiative 1100 mustered a majority in only four counties — Mason, Kitsap, Island and Douglas — and lost in the Pierce-King-Snohomish urban corridor.
What a difference a year makes! Initiative 1183, also sponsored by Costco, passed handily with nearly 60% of the state-wide vote. Significantly, only four counties voted against the ballot issue this time and all the major population centers were in the Yes column. What happened? Herewith some observations.
1. Times Have Changed
Times have changed? Yes, obviously, although this doesn’t really explain such a large apparent one-year shift in voter behavior. Still it is worth considering how much times have changed if only to gauge how anachronistic Washington’s liquor control regulations seem today.
Obviously the most important factor is our continuing recovery from Prohibition’s hangover — attitudes and beliefs about alcohol consumption have changed much more and faster than the relevant legal institutions. A second factor may be the changing demographic profile of the state, which once featured a stronger Scandinavian-American influence that was sympathetic to what I have called “the Swedish Solution” to liquor sales. More current Washington residents come from or have lived in non-control states and see no harm in private liquor sales.
Finally, market power has shifted, with large retailers embracing alcohol as a high margin product segment. Even Wal-Mart sells wine — who would have guessed? Increasingly these firms want to be freed of regulations (apart from obvious legal age restrictions) that reduce business efficiency.
2. Political Gridlock
Most people believe that public policy should be the realm of elected officials and that private businesses should not have too much influence on the laws that regulate them. We know that special interests have more clout in practice than the civics textbooks say they should have in theory, but there are limits and they should be respected. For Costco to write its own laws was seen by some voters as crossing the line. Better to vote No and let the legislature handle privatization.
But political gridlock is the name of the game today and it seems to have gotten worse in the last year as indicated by the continuing federal budget impasse fiasco. Politicians are frustrated with their inability to take decisive action and the voters are fed up. Washington voters are usually suspicious of initiatives, but in this political environment some ballot issues are seen as a lesser evil to grid-locked legislation.
(The exchange between Sean Sullivan and Rand Sealey in the Comments section of this Washington Wine Report post is particularly instructive in this regard.)
3. Voter’s Remorse
A lot of voters wanted to end the state’s monopoly on liquor sales last year (changing times), but they were unhappy with their choices and confused by the process. There were three different campaigns in 2010 — Costco’s pro 1100 push, a campaign for an alternative law (Initiative 1105, sponsored in part by distributors threatened by 1100′s attack on the three-tier system) and an anti-everything effort (ironically also financed by distributors but also including other groups).
Picky voters cast a No vote — they wanted liquor market reform, but not this way. This time around, their standards were a bit lower. They no longer expected to have really good choices (see item 2 above), so many people held their noses and voted Yes. This isn’t the way to make state laws, but it is the best choice we have, they said.
4. Divide and Conquer
Finally, the architects of I-1183 crafted their proposal to weaken opposition to it. Last year’s I-1100 was designed to create a nearly perfect market environment for large retailers like Costco. Lots of vested interests were threatened and they reacted with vigor.
There was less opposition to this year’s proposal. In particular, while spirits sales will be privatized and the wine market liberalized, I don’t think there is much direct impact on beer. So beer distributors sensibly stayed out of the fight this time. And I-1183 made a point to increase government revenues from alcohol sales, too, eliminating another potential concern.
So whereas in 2010 it was Costco and other big retailers versus distributors battling for voter attention, this time Costco was opposed by a less effective coalition of anti-alcohol groups, state liquor store operators and employees and some Washington wine producers who fear that they will suffer in the new market environment. The opposition was divided … and conquered.
What’s Next?
It is too soon to know what is going to happen when all of I-1183′s new rules go into effect. Certainly the biggest effects will be on spirit sales. The wine impacts will be smaller (but still significant) and quite diverse. Some wine producers are better prepared than others to compete on price through volume discounts, for example.
Some retailers will no doubt reduce wine shelf space (at least in the short term) in order to make room for spirits. Others may expand the space allocated to wine and spirits at the expense lower-margin items. And big box liquor retailers like Total Wine and BevMo are likely to enter the market, too.
It will be interesting to see how the wine market evolves in Washington as it adjusts to this new environment — more to come on this question. It will also be interesting to see if politicians get the message that some voters put into the election bottle.
In the meantime, I plan to encourage my students to study these election results at a micro level to pick out and try to explain more clearly the key electoral shifts that have ushered in this new alcoholic beverage regime.
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Click here to view an interactive 2011 election map provided by the Washington State Secretary of State’s office. Click here to see the county-by-county results for Initiative 1100 in the 2010 general election. Click on the map above to see the Wine & Vines article where it appears.
Kudos to Sean Sullivan and his Washington Wine Report blog for his thorough analysis of the initiatives in both 2010 and 2011. Sean opposed I-1183 because of its potential negative impact on the Washington wine industry, but correctly predicted that the measure would pass.
Wine Wars World Tour Continues
I’m on the road today, headed to Pasco to give the keynote at a Washington Association of Wine Grape Growers meeting. Here’s the Wine Wars World Tour schedule for the next couple of months. Hope to see you at one of these events!
November 2011
- World Affairs Council of Seattle. Thursday, November 3, 2011. 6:30 to 8:30 pm, Erickson Theater, 1524 Harvard Ave, Seattle, WA.
- Washington Association of Wine Grape Growers. Thursday, November 17, 2011. Red Lion Hotel, Pasco, WA.
- Urban Enoteca Holiday Open House and book signing. Saturday, November 26, 2011. 4130 First Ave. South, Seattle, WA. I’ll be there to chat and sign books from 2-5pm, with a book talk at 3pm.
- Mercer Island Chamber of Commerce Luncheon. Thursday, December 1, 2011. Noon.
- Retired Teachers Association of Tacoma. Saturday, December 3, 2011.
- World Affairs Council of Oregon. Thursday, December 8, 2011. Portland, Oregon. Time and place tba.
- Metropolitan Market wine tasting and book signing. Friday, December 9, 2011 from 4-7 pm. 25th & Proctor Street, Tacoma, WA. (This is the store featured in chapter 3 of Wine Wars). I’ll be chatting and signing books at the kiosk in the deli section.
- Transportation Club of Seattle. Wednesday, January 4, 2012. Details tba.
- Olympia, Washington Alumni Event, Thursday, January 19, 2012. Details tba.
- Unified Wine & Grape Symposium, Sacramento, California. Wednesday, January 25, 2012. I will be moderating the “State of the Industry” session and leading an afternoon break-out on global wine supply issues.
Grape Transformations: Oregon Origins
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I had a hidden agenda when I visited McMinnville, Oregon a few weeks ago. Ostensibly I was there to talk about my new book at Linfield College and to the local Rotary Club. Those events were great but I would not have been happy if I hadn’t done one more thing: return a minor piece of Oregon’s wine history to its rightful home.
“To Nick, Cheers for all the years — past & future. David Lett, Christmas 1989.”
That is the inscription I found in a second-hand bookstore copy of Vintage Timelines, a neglected classic book that Jancis Robinson wrote over twenty years ago. The idea of the book was to select a group of the world’s greatest wines and examine how different vintages have evolved (and would be expected to continue to evolve) over time. The research required Jancis to taste trough verticals of each great wine (research is such a drag!) and compare notes from previous years to create complex and quite fascinating graphical timelines.
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Darn few American wines were good enough (in terms of their ageing potential) to make the cut and only one wine outside of California — the Eyrie Pinot Noir Reserve made by David Lett. Lett planted the first Pinot Noir vines in the Willamette Valley and he, along with the group they call “the Pioneers,” set Oregon wine on its present course.
Nick’s Back Room
The Nick in the inscription is almost certainly Nick Peirano of Nick’s Italian Cafe. Lett’s audacious egg was incubated and eventually hatched by the Pioneers and others over countless discussions in Nick’s back room. I’ve loved owning the book, but felt it didn’t belong to me. I needed to take it home and give it back. But to whom?
My first thought was my friend Scott Chambers, a professor at Linfield College and a friend of both Nick and the Lett family. He’d love to have the book, I thought, but it didn’t really belong to him any more than me. Maybe Jason Lett, David’s winemaking son who is carrying on the Eyrie tradition and building upon it? Yes, that would make sense.
But then I learned about the Oregon Wine History Project at Linfield College and that sealed the deal. They were pleased to add my copy of Vintage Timelines to their archive as a document chronicling the Eyrie Reserve’s early international recognition as well as the role of Nick’s back room in the region’s early development. Jeff Peterson, Director of the Linfield Center for the Northwest, accepted the book and both Scott and Jason supported the decision.
A Remarkable Story: David Lett (and the Pioneers)
David Lett is one of my heros and I am including him in my “Grape Transformations” list of people who have changed the way people think about wine or wine regions. He was certainly instrumental in the transformation of Oregon from a place known for fruit and nuts rather than grapes to a region frequently mentioned in the same breath with Burgundy.
Lett’s story is remarkable. Trained at UC/Davis, he came north looking for terroir where he could make Pinot in the Burgundian style. The first Pinot vines were planted in 1965; 1970 was the first Eyrie Pinot vintage. After one or two false starts he hit paydirt. Great wine.
But from Oregon? Rainy old Oregon probably seemed like the last place on earth to make world class wine in the 1970s.
Olympic Gold
Then came the Wine Olympics of 1979. This was a competition, sponsored by the French food and wine magazine Gault Millau, that featured 330 wines from 33 countries tasted blind by 62 judges. The 1975 Eyrie Pinot Noir Reserve attracted attention by placing 10th among Pinots. A stunning achievement for a wine from a previously unknown wine region.
Robert Drouhin of Maison Joseph Drouhin, a Burgundy negociant and producer, was fascinated and sponsored a further competition where the Eyrie wine came close second behind Drouhin’s own 1959 Chambolle-Musigny. Thus was Eyrie’s reputation set (and Oregon’s, too). It wasn’t long before Domaine Drouhin Oregon (DDO) was built in the same Dundee Hills as Eyrie’s vineyards — a strong endorsement of the terroir and recognition of the achievement.
The Pioneers founded the Oregon wine industry, but now the torch has been passed to a group that you might call the Sons [and Daughters] of the Pioneers. Some of them appear in the video at the top of this post (don’t be discouraged by the poor audio at the start — it gets better quickly). I’ll have something to say about this group in an upcoming post.
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Special thanks to Scott Chambers and Jason Lett for their hospitality during our stay in McMinnville.
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Update 11/16/2011: You might be interested in Katherine Cole’s recent piece on the 50th anniversary of wine in Oregon — it includes a nice annotated chronology of the wine industry.
Chinese Wine [Uncorked]
Li Zhengping, Chinese Wine 3/e (translated by Shanghai Ego — really!). Cambridge University Press, 2011.
Many of my conversations with wine makers and wine sellers this year have looped back around to the question of China. China seems to be the Great Hope for people who see it as a vital future market and also a Great Mystery for those who haven’t yet figured out how to uncork it.
Great Wine Wall of China
Uncertainty is the Grape Wall of China to those who wish to penetrate its market borders. The known knowns are few and the unknown unknowns many, or so I am told. Talk about assymetric information inefficiencies! So everyone’s interested in learning more about wine in China.
Hence my interest in this slim (146 page) book from Cambridge University Press. It is part of the “Introduction to Chinese Culture” series of brief guides that includes ten published volumes (Chinese Clothing, Chinese Furniture, Chinese Music and more) with additional volumes (Chinese Gardens, Chinese Jade, Chinese Food, Chinese Tea and so on) set for publication in 2012.
The back cover description of this book reads.
This illustrated introduction to Chinese wine explores the history of wine production in China, the legends and customs that surround it and its place in China today. Traditionally, Chinese wine and spirits were made from grain, and had three important uses: to perform rituals, to dispel one’s worries and to heal. Today, wine is still believed to have a therapeutic benefit, but the Chinese beverage industry has expanded on a large scale and now includes famous brands of beer and, increasingly, vineyards producing red and white wine for global consumption. Chinese Wine is indispensable reading for both wine-lovers and all those with an interest in the transition from traditional to modern Chinese culture.
The book delivers on this promise with clear direct prose and beautiful illustrations. But it would be a mistake to read more into this description than there is.
Lost in Translation
The term “wine” can easily get lost in the translation. Wine here in the U.S. is grape wine for the most part, but wine in China is a much broader concept including fermented fruits and grains. Chinese Wine examines grain wine, beer, distilled spirits and Chinese-made grape wine. Changyu, Great Wall and Yanjing brand wines receive special attention.
Grain wine, especially rice wine, is much more important than grape wine in this narrative. Why? The author explains that “Grape wine is easier to produce than rice wine. However, as grapes are seasonal and cannot retain their freshness for long compared to grain, grape wine-making technology was not adopted extensively in China.”
Whereas grape wine is made when the grapes are harvested, rice wine (like beer) can be made year round from stored rice — a practical advantage. But grape wine was favored in times when it was necessary to conserve grain stocks.
The cultures and traditions associated with Chinese wine are superficially very different from ours. Wine is if anything much more important in China (if I have read this book correctly) than it is here, but the social rituals of wine drinking seem to be the point, not the beverage itself. Maybe this is not so different after all? Chinese Wine is making reconsider what I thought I knew about grape wine’s social function in the world of vitis vinifera.
An Afterthought?
Chinese Wine treats us to discussions of the origins of Chinese wine, the varieties of Chinese alcohol, rituals and traditions, legends (a very interesting group of tales) and finally, towards the end, a bit about imported wine and its growing popularity. Seriously, imported wine takes up just a couple of pages if you don’t count the photos, and the most important brand name mentioned is Gallo’s Carlo Rossi red (which is credited with boldly entering the Chinese market in 1992).
Is that it? Is imported wine in China just an afterthought? Probably not, although it is good to put things in perspective. I suspect that the author was chosen because of expertise in Chinese cultural history and so the book reflects this (and goes lightly on China’s recent fascinating with Bordeaux). Certainly everything I read suggest that market for grape wines in China is growing and maturing rapidly.
But it doesn’t hurt to remember that wine exports to China to do enter a sort of market tabla rasa. Just because there are few European-style wine traditions in China doesn’t mean there are no wine traditions at all. And the importance of grain wine should not be ignored.
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I called this entry [Uncorked] because none of the traditional wine vessels illustrated in the book looks remotely like anything that you could stop up with a cork, highlighting the differences between Chinese and European-style wines. The urns and pots are often beautiful. A feast for the eyes!
Boom Boom! On Money and Wine
I’m just back from the San Francisco Treasury Symposium where I gave the luncheon keynote speech on “Wine Boom and Bust — With Lessons for Finance in the 21st Century.” You might well ask what business a wine economist has speaking to a group of treasury executives (I asked that question myself!), and the answer has two parts.
First, I actually know a little bit about global finance from my day job as a university professor. I’ve written frequently about global financial flows and especially the periodic crises that seem to plague them.
The other reason is that the conference organizers thought it would be interesting and different to hear someone talk wine, but in a way that would still be relevant to their treasury executive audience. So that was my challenge.
Money into Wine? Easy! Wine into Money … Not So Much
Money and wine are closely tied, although it is an asymmetrical relationship. It is pretty easy to convert money into wine, for example. In fact, it may be a little too easy to do this. Some of my friends report that the whole “money into wine” thing has gotten way out of hand for them. You probably know the problem from personal experience if your cellar has grown bigger than your bank account.
It is harder to convert wine into money, especially if you are in the wine business. The best way to make a small fortune in wine, people tell me, is to start with a large one. I focused on three aspects of wine economics for my talk: globalization’s opportunities and threats, the “new rules of the game” and the need to embrace (or at least accept) volatility. All these points apply to both wine and 21st Century finance.
Globalization: Opportunity and Threat
Globalization offers a world of opportunity to winemakers and financial managers alike, but it is a complex world and a very competitive one. New markets open their doors … but your market doors are open wide, too. Optimists will see the wine glass more than half full and seize the opportunities that present themselves, hopefully taking the associated costs and risks into account.
One problem with globalization is that the risks are so difficult to fully evaluate. The Australian wine industry, for example, is currently suffering from a bad case of globalization gone bad and part of the problem has nothing directly to do with wine.
Although the Crash of 2008 slowed down the global economy, China continues to surge ahead, its demand for natural resources (one of Australia’s strong sectors) growing year after year. Australian has come down with a bad case of the “Dutch Disease” where success in one sector causes chaos elsewhere. As mineral sales have increased, the strong Australian dollar has depressed the already weakened wine industry by discouraging exports. Click on the “Dutch Disease” link to see my report on this problem.
The [New] Rules of the Game
Global finance is dominated by a number of key financial centers that set the “rules of the game” for money. Wine works the same way, but the centers have shifted and the rules of the game have changed.
Producing nations (think France and Italy) once determined the rules of the game with their AOC designations. The center shifted to Great Britain, Germanyand the United States in the last 20 years and now the rules are written by those who sell wine (think Tesco, Costco and Aldi) more than by those who produce it. The most successful wine sectors so far are those that have best adjusted to the new rules.
The rules will change again soon, I suspect, as the BRIC and new BRIC nations make their wine market influence felt. I think finance will also experience shifting centers with new rules and have to adjust accordingly.
Volatility was my final point and wine markets have plenty of it. Boom and bust cycles seem to be “baked in the cake” in both money and wine. I talked about Australia’s five big wine booms and busts in the past 150 years and characterized them in terms of Hyman Minsky’s famous “seven stages” description of financial crises.
Beyond Boom and Bust
Booms and busts are bad enough, but wine markets also suffer from medium-term cycles of surplus and scarcity as illustrated by the Turrentine Brokerage “Wine Business Wheel of Fortune.” High prices today sow the seeds of low prices a few years down the road, according this analysis, which is based on the well-known “cob-web” model of lagged adjustment in agricultural markets.
Anyone who has tried to guide their 401k portfolio (much less manage corporate financial affairs) knows how volatile financial markets can be – the wine world’s bubbles and cycles must seem pretty peaceful by comparison.
Wine and money may be very different, but the problems they face bear a certain resemblance, don’t you think? What can wine teach money in these uncertain times?
One lesson, I proposed, is to “think global but drink local.” This sounds pretty simplistic, but it captures trends that I see in wine today. Economic imperatives have made both global and local markets more important than in the past. Developing direct sales vectors and developing and maintaining personal relationships is high priority today. Wine (like money) is a relationship business that needs constant attention.
Boulding’s Law
But it’s useful (and often necessary) to keep a global mindset even as you cultivate local markets. The world is getting bigger and smaller at the same time and the rules of the game continue to change.
The second lesson is what I call “Boulding’s Law” after Kenneth Boulding, the famous economist. Boulding once made a study of the history of the future. He looked at what people thought about the future at various points in time and then did a “fast forward” though the history books to see if they were right.
His conclusion? When the future came around people were usually surprised. It wasn’t what they expected at all (even if it was exactly what they predicted years before!).
Hence Boulding’s Law: The best way to prepare for the future … is to prepare to be surprised. That holds for wine, I think, and for money, too.
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Thanks to the San Francisco Treasury Management Association for inviting me to speak at their symposium. Special thanks to Jim Lindsay and Larry Goldman.
In Search of Pinot Noir
Benjamin Lewin MW, In Search of Pinot Noir. Vendage Press, 2011.
Burgundy makes Burgundy, Benjamin Lewin reports (quoting a local producer). All the rest make [merely] Pinot Noir.
What should we make of Burgundy’s self-proclaimed status as king of the Pinot Noir hill? Lewin circled the globe to find out and this fascinating book is his report. I recommend it with enthusiasm.
To the Summit
Burgundy dominates the book, as one would suspect, both for its wines and because it is the standard of reference, and in the final pages Lewin reveals his conclusion: Burgundy does indeed stand at the summit based in part upon its superiority ability to age and develop in the bottle (with DRC and Domaine Leroy at the peak of the peak).
But Lewin’s search for Pinot, which takes him to Germany, Switzerland, Italy, Oregon, California, South Africa, New Zealand and Australia, reveals a number of near-rivals and raises many questions. The Pinot world may not be very big (compared with Cabernet and Chardonnay, for example), but it is a bigger world than Burgundians might like to think. And it is changing fast.
Dr. Lewin’s Lab Notebooks
Pinot Noir (along with Riesling) is thought to be the ultimate “terroir” wine, so the wines themselves should tell the story. In vino veritas as they say. This line in inquiry takes us into the detailed tasting notes that are appended to most chapters. These are Lewin’s lab reports (he is a famous scientist — a cell biologist — so it is unsurprising that he would evaluate claims empirically). At best the tasting notes are insightful observations of the ways that wine changes as time and place are varied. Sometimes, I have to admit, they are a bit like wine porn, read to vicariously share Lewin’s delicious work.
Do the wines of Burgundy live up to the myth of Burgundian terroir? Sometimes is Lewin’s answer. Burgundy at its best reveals its terroirist magic, but it doesn’t always turn out that way; caution and care are warranted. Winegrowing and winemaking practices can highlight terroir or disguise it. It just depends.
And climate change threatens to make Burgundy more like everyone else’s Pinot Noir by fundamentally altering growing conditions. Indeed, the book’s final pages ask whether Burgundy will be able to maintain its subtle complexity in the face of climate change and other challenges.
New World Challengers
I received my copy of In Search of Pinot Noir just as I was leaving to give some talks in Oregon Pinot country and I reported Lewin’s conclusions to my audience, which including many wine industry people. If you taste wines from different Oregon AVAs made by the same producer, Lewin writes, you can taste the terroir — just like in Burgundy. But when you taste wine from different producers in the same AVA, no strong common terroir thread emerges. Terroir is a weak force in the New World, it seems. Why? Lewin has an answer.
If you taste the best available Burgundies against the best available Pinots from Oregon and California, Lewin writes, the French wines “blow away” the competition. But it’s a biased comparison since the very best wines from New World producers never see the marketplace. They are tiny production single vineyard wines that disappear into allocation list buyers’ cellars. Ironically, they have no impact on the regions’ reputations and cannot define a signature terroir style.
The best available wines are more comparable to Burgundian village wines than the grand crus, according to Lewin. No wonder they suffer by comparison to the best of the best Burgundy has to offer. No wonder that Burgundy is Burgundy and the rest are not. Interesting.
Much to Like [and to Learn]
In Search of Pinot Noir, like Lewin’s earlier books (What Price Bordeaux? and Wine Myths and Realities) is big and bold, filled with colorful (and informative) charts, maps and photos. The depth and breadth of Lewin’s analysis is impressive as he breaks down each Pinot Noir region into the historical, cultural, economic and natural forces that shaped it in the past and continues to influence it today. A great wine economist read. A great read period for anyone with a serious interest in Pinot Noir.
I think I learned something new on almost every page. But the most interesting parts of the book for me are the questions, not the answers. Almost every chapter ends with a question about the future of Pinot Noir. Sometimes they seem to be leading questions (where you are pretty sure how Lewin would answer them) but others are very much more open.
I sense that the search for Pinot Noir is open, too. Market forces and climate change mean that the future is up in the air. Will Pinot Noir retain its special status as the ultimate terroir wine? Or will it become just another “international variety” with subtle differences slowly lost as styles converge on a rich, ripe “international style?”
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What make’s Pinot Noir different? Here’s the famous scene from Sideways where Miles makes the case for Pinot Exceptionalism. Enjoy! (Click here to watch the video if it does not appear above)
