Restaurant Australia: Re-Branding Australia (and Australian Wine)

Click on the image to see a “Restaurant Australia” video.

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I’m back from Australia, where I spoke at Savour Australia 2013 (click here to view my presentation). The purpose of Savour Australia was to re-launch Brand Australia wine on the global market by bringing together about 700 domestic and international delegates and rolling out an integrated marketing plan that combined Australian food, wine and tourism.

Savour Australia was quite an intense and impressive global gathering and I am still trying to process all my experiences both at the conference and in independent travels (scroll down to see a brief list of extreme wine moments). I’ll be analyzing what I think I’ve learned over the next several weeks.

Food Stars, Porn Stars, Rock Stars

“Restaurant Australia” is the proposed new brand and you can perhaps best appreciate how its elements connect by clicking on the image above and watching the short video that appears. The basic idea is that food and wine have become much more important tourism drivers. Nature (think Grand Canyon) and culture (think Italian Renaissance art and architecture) are still important draws, but increasingly travelers seek out fine wines, great restaurants and cult foodie experiences. Then they become brand ambassadors, spreading the word across the internet and around the world.

This sea change should not come as a surprise. As I wrote in Wine Wars, this is an effect of the growing popularity of foodie television shows and networks, like the insanely popular international Top Chef and Master Chef series and the rise of foodie celebrities such as Jamie Oliver, Nigella Lawson, Anthony Bourdain and so on. Seriously, food stars get more exposure than porn stars and are sometimes more popular than rock stars (“rock star” being the gold standard for pop culture status).

The food’s the thing, don’t you know? The Australians are smart to realize this and to try to recast their image around it.

Shrimp on the Barbie

But they don’t start the process of re-branding with a clean slate (or clean plate, I suppose). For many people here in the United States, Australian cuisine is defined by Crocodile Dundee and Outback Steakhouse. Paul Hogan, the actor who portrayed the famous Crocodile Dundee character in the films, was featured some years ago in an Australian tourist campaign that generated the memorable line “throw another shrimp on the barbie.” Australian food (and culture generally) is warm and generous, if not particularly sophisticated according to this approach. A good image then (and Australians sure are warm and generous), but not especially useful now. The game’s changed.

For better or worse, Outback Steakhouse’s popularity has reinforced this idea of Australian food culture. Outback is a meat and potatoes kind of place, although I see they now also feature grilled chicken “on the barbie.” It’s signature menu item is a “bloomin” deep fried onion appetizer. Tasty, I bet,  but not really haute cuisine.

So the Australians have their work cut out for them and the videos we saw at Savour Australia (and the great food and wine we enjoyed there) suggest that they have both great raw materials to work with and a sophisticated understanding of the story-telling necessary to make their strategy work. Click here to view videos from Savour Australia, including four stunning chef-centered  “Restaurant Australia” themed videos.

Terroirist Revenge Strategy

I’m a big fan of this approach, as I told my Adelaide audience, because it fits very well into the analysis I presented in Wine Wars. I didn’t have Australia in mind when I wrote that book, but its argument fits the great land down under very well. Australian wine has experienced the double-edged sword of globalization and the problems of over-simplified marketing messages (these are the “Curse of the Blue Nun” and the “Miracle of Two Buck Chuck” of the book’s subtitle).

Now, I think, they need to channel their inner terroirists and tell a more sophisticated story that draws upon, to use a catch phrase of the Restaurant Australia campaign, the people, places and produce of their land. (People, place and produce is not a bad definition of terroir).

Will it work? Will “Restaurant Australia” be able to launch Australian wine on a new path? Come back next week for more analysis.

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Australia 2013: Memorable Moments

Herewith a few memorable moments from our trip, some of this will be featured in future Wine Economist columns.

  • A festive wine dinner with Australia’s First Families of Wine, an association of Australian producers who are doing their level best to change the way the world sees Australian wines.
  • A fabulous tasting of Australian wines from the Yalumba Wine Museum (I guarantee you will be jealous when you hear about the wines we sampled).
  • Wine writer and broadcaster Michael Hince and his wife Amanda  invited us to a dinner in Melbourne where they showed off wines from Victoria. It was a really spectacular demonstration. Wow! You can read Michael’s account of the wines and the dinner here.
  • Great hospitality during our time in the Barossa Valley, with memorable visits to Rockford, Torbreck, Hentley Farms and Charles Melton.
  • My wine economics colleague Kym Anderson gave us a memorable tour of his Adelaide Hills region (highlights: Ashton Hills Vineyards for the Rieslings and Pinot Noir and Hahndorf  Hill Winery for Gruner Veltliner and Blaufrankisch) and sent us to Seppeltsfield winery in Barossa, where we happily immersed ourselves in Australian wine history.
  • Tasting and talking with Peter Althaus at his Domaine A winery near historic Richmond, Tasmania (and staying at Tara’s Richmond Farmstay).
  • The fabulous family-style long-table winemaker lunches at Savour Australia. Outstanding food, wine and conversation.
  • Working (not just attending) the Wednesday “Grand Tasting”. Prue and Stephen Henschke let me pour their fabulous wines (including Hill of Grace)  for about 90 minutes so that I could see the conference and the delegates from the other side of the table.  What a treat!

The Economic Origins of the Kosher Wine Conundrum

Wine Economist reader Rob Meltzer has been searching for drinkable kosher wines (and trying to understand why he wasn’t finding them)  and he has been kind enough to share his observations with me along the way. I found his methods rigorous and his analysis fascinating, so I asked him to summarize his research for publication here. Thanks to Rob for sharing his results with other Wine Economist readers!

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During the past year or so, I’ve tasted nearly 90 kosher wines priced between $20-$120 from the United States, Italy, Spain, Chile and Israel. My goal has not been to find the best kosher wines, but rather to determine whether kosher wines exist which could replace non-kosher fine wines in my cellar. From my days living in Northern California, I retain my passion for California reds, but I would prefer to keep exclusively kosher wines. Equally, I wanted to determine which kosher wines I could, with clear conscience, serve to guests in my home.

There are two primary determinants of kosher wines. First, the winemaker must be Jewish. Second, all kosher wines that are served in restaurants and catered events must be “mevushal,” which means that the wine has been boiled before being bottled. If you look at a bottle of kosher wine, you will see “mevushal” specifically referenced. Fine kosher wines exclusive for home consumption can be “non-mevushal.” The “P” next to the kosher symbol denotes that the wine may also be consumed during Passover.

The Search

The methodology of comparison was this: first, my friends and I tasted kosher wines within specific grape types to find the best within each category of grape for red and white. Most of the tastings were “blind.” Food pairings were always the same and the food was always kosher. The “best” kosher wine in each category was then compared to a non-kosher wine in the same category. By way of example, we tasted about ten kosher sauvignon blanc wines from various countries and in various price levels, and determined that Covenant’s 2012 Red C was really most drinkable.  Curiously, both the Red C and the runner-up were non-mevushal. (Red C seems to be going for a “hip” level of quasi-kosher; the label read “non-mev” instead of the usual “non-mevushal” statement.)

Red C was then compared to Honig’s Napa Valley 2012 Sauvignon Blanc. However, as drinkable as Red C was, it also did not compare well with the Honig, or other sauvignon blancs we tasted that day. (The tasting also included Domaine Serge Laloue Sancerre (France), Cloudy Bay (New Zealand) and Buitenverwachting (South Africa). The Chilean sauvignon blanc we tasted was so unremarkable it didn’t even make it to the tasting notes.

I also went to a number of public wine tastings of kosher wines. I quickly grew tired of having sub-standard product shoved at me, while the philanthropic donors who sponsored most of these events for charity rolled their eyes in ecstasy over glasses of brownish sludgy merlot at $120/bottle that would never be confused with a 2007 Duckhorn.

Failure and Success

I never did find a kosher red wine that seemed satisfactory in terms of both quality and price for the quality received. We had particularly poor luck with Israeli maker Barkan. Its Cabernet Sauvignon was an entirely undrinkable product. We tried everything from allowing it to breathe uncorked, to decanting, to the magical blender-aeration method, without any success. In fact, several of my tasters told me that Barkan normally tastes like that, and they couldn’t understand my complaint. If they are to be believed, they were regularly drinking something without complaint that tasted like vinegar. Poor quality vinegar, at that.

The best whites were non-mevushal. For what it’s worth, if I were interested in stocking only kosher wines, I wouldn’t buy non-mevushal wines, leading some to question the inclusion of non-mevushal wines in this survey. Surprisingly, the mevushal white table wines which scored consistently high in terms of quality and price-appropriateness came from Italian wine maker Bartenura.  Bartenura wines aren’t great, and they won’t be replacing my Napa and Sonoma bottles any time soon. Nonetheless, since they aren’t expensive, they could easily fill out the low end of the cellar quite nicely as a sort of kosher two-buck Chuck. Several of the Spanish cavas were equally good (try En Fuego, as an example of a drinkable Spanish Cava).

An Economic Vicious Cycle

I have several observations from all this. First, boiling wine is never going to be good for the product. Red wines seem particularly vulnerable to damage. The best reds and the best whites were not boiled. Second, the hindrance to a good kosher wine industry seems to be a marketing and economics problem; the percentage of people who drink kosher wines exclusively is very, very small. If you don’t or haven’t compared kosher wines to non-kosher fine wines, you probably don’t know what you are missing and you are unlikely to demand better product. Third, since the available offerings are small, people who really want kosher wine will buy and drink what is offered. Many times, the pricier red wines were found improperly racked at wine stores, and covered with dust. I suspect that the combination of wine-making methods and poor or improper storage explains the poor table experience. I’m also assuming that the boiling precludes proper aging after bottling.

One of the challenges being confronted by kosher wine makers is to find a way to make kosher wines mevushal by some other acceptable heating method that does not damage the wine. While I think this will ultimately solve the problem, the real issue is one of economics. Rather than make a wine that will satisfy the very small market of kosher wine drinkers, the wineries should focus on making fine wines for the broader market, while incidentally achieving the kosher designation. Just as kosher food products are mixed in to the non-kosher product at supermarkets, the day needs to come when Red C is found in the California whites section, not a kosher section. If you don’t keep kosher, you don’t go to that aisle and you would never see or try the product. I have yet to meet anyone who doesn’t keep kosher who heads to the kosher wine section first. Enlarging the market should naturally create the capital necessary for experimentation of new methods. There is no reason why a kosher wine should not be outstanding. While the industry is moving toward that grail, it’s not there yet.

Beyond the Budometer: Tim Hanni’s Vinotype Analysis

Tim Hanni, Why You Like the Wines You Like2013.

Writing about the problems of “misunderstood” Riesling earlier this summer (and why people are so hung up on the dry-sweet thing), I was struck by a distant memory of … the Budometer! I recalled reading an article some years ago about a wine expert who had taken the qualitative differences in personal wine perception and taken them to the next level by quantifying them through painstaking experimentation.

The result was the Budometer which was not a measurement of how many Budweiser beers a person could drink (although that would be interesting, too), but a way to determine what types of wines an individual consumer might prefer, with the seemingly inevitable trial and error  phase eliminated. Budometer and is taste buds if you see what I mean.

It seemed like a great idea when I read about it, however I admit that I didn’t do much with it at the time.  But it was easy enough to find that old Wall Street Journal interview online and so I set about to retrace my steps.

From Budometer to Vinotype

I have bad news to report. The Budometer is no more. But don’t despair because it’s been replaced by something better, the Vinotype. And the wine expert who got all this started is still at it, too. His name is Tim Hanni and he’s a famous person in American wine history. He and Joel Butler were the first Americans to pass the devilishly difficult Master of Wine exam. Fewer than 400 people in the world have survived the rigorous process that gives them the right to wear the initials M.W. next to their names.

I’ve never met Hanni but he seems like an unusually interesting person. Although he knows pretty much all there is to know about wine he doesn’t drink the stuff (or any alcohol) any more. His mission now is to help others enjoy the beverage that he no longer imbibes.

Hanni’s research indicates that wine drinkers hardwired into four basic groups or Vinotypes, which he calls sweet, hypersensitive, sensitive and tolerant. It you want to know all about Hanni’s system you should probably read his 2013 book, Why You Like the Wines You Like or visit his websites www.timhanni.com and www.myVinotype.com. I’ll provide a quick summary here, but I risk over-simplifying. You should seek out the more complete reports available in the book on the websites.

Sweet to Hypersensitive

Prefers Brown Sugar … Probably a Sweet.

“Sweet” wine tasters are very sensitive to anything that assaults their senses (not just in wine, according to Hanni). Bitterness and alcohol in wine must be covered up with a blanket of sweetness.  Women (about one in five) are three times more likely to be Sweet Vinotypes. White Zinfandel is their kind of wine. It isn’t a lack of sophistication (White Zin drinkers get a bad rap in wine circles), it’s just the way they are built.

A little more than a third of both men and women in Hanni’s surveys are Hypersensative Vinotypes. They have intense sensory experiences as the name suggests. Hanni says they love fragrances and “revel” in aromatic memories. Rather than cover up offending flavors with sweetness, however, they instead seek out delicate wines that are dry or off-dry, aromatic (obviously) and very smooth. They avoid big red wines with lots of oak (or any wine with overt oak treatment). Sparkling wines, drier Rieslings and Sauvignon Blanc wines fit this profile very well along with lighter reds like Pinot Noir.

Are You Sensitive or Tolerant?

“Sensitive” vnotypes make up about a quarter of the wine drinking population and Hanni says they are the most adventurous drinkers (and eaters, too). They like to try new things. Accordingly they enjoy a broad range of red and white wines while leaning towards the drier side of the sweetness spectrum.

“Tolerant” Vinotypes are less sensitive when it comes to harsh, bitter sensations such as you might find it rugged, high alcohol red wines.  Given a choice, Hanni says, Tolerant Vinotypes head for the big reds like Cabernet Sauvignon and are not daunted by high alcohol levels because the smack of the alcohol is mitigated by a deceptive sweetness that they perceive even in a completely dry wine.

You won’t be surprised to learn that men outnumber women two to one among Tolerant Vinotypes. The next time you see a couple drinking in opposite directions – he with a big, bold Aussie Shiraz and she sipping a delicate Oregon Pinot Gris, don’t shake your head, just appreciate that you’ve stumbled onto a “mixed marriage,” Tolerant male and Sensitive female.

You Are What  You Drink

The key to the Hanni’s Vinotype analysis is that people are very different from each other and their wine preferences are not just about wine – they reflect a person’s sensibilities more generally. Thus in one incident reported in his book, Hanni pressed an apparent Hypersensitive vintoype all the way and asked if by chance he sometimes wore his underware inside out (to avoid the relative harshness of the interior seams). “How did you know!” came the response.

I hope you take Hanni’s test and find out your Vinotype. It’s fun and also useful to think seriously about your habits, attitudes and sensory experiences. What will you learn when you are finished? Well apart from Hanni’s cool list of suggested wines,  I hope this helps you accept that people really are different when it comes to wine and other things in life. There is no reason why you should like everything your friends like in wine (and indeed there are good reasons why you might disagree). If you are a Sweet Vintotype you are never going to enjoy that Napa Cabernet and the Cab lover is never going to understand your passion for White Zinfandel.

The Riesling Question

Hanni has gone far beyond the Vinotype in his research and I encourage you to check out his work because there is a lot that might stimulate your imagination (if you are a Sensitive type) or challenge your firmly held habits and beliefs (if you are on the Sweet side and unwilling to break out of your comfortable routine).

For me, thinking about the Riesling problem, there were several key points. The sweetness scale that the International Riesling Foundation promotes is probably more important than I thought since both Sweets and Hypersensitives might look at Riesling wines, but they will be looking for very particular styles.  Senstitives might find something interesting in all Riesling styles, but Tolerants will want nothing to do with the wine.

This is a problem, according to some research that Hanni reports, because Tolerants buy wine much more frequently than Sweets. Getting Sweets to drink more Riesling could be problematic because they just don’t drink it very often in the first place.

Food for thought, don’t you think?

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In other news … the Kindle version of Extreme Wine has been released!

Pawn Star Wine


It’s been a busy week so far. My new book Extreme Wine has just been released. Sue and I traveled to Portland, Oregon for the Pacific Northwest Booksellers Association trade show where I autographed 75 copies of Extreme Wine in 75 minutes before we ran out of books.

And now Wine-Searcher.com has published my latest column on fine wine investment. Click here to read the article, which is called “Pawn Shop Solutions for Wine Investors.”

My column has an unexpected “hook:” a 2010 episode of the U.S. television show “Pawn Stars” that featured a bottle of 1921 Dom Perignon. You’ll have to read the article to get the whole story, but basically I use this example as a way to talk about how investing in wine is different, in terms of financial economics, from other types of investments. It’s an unlikely approach, but I think it works.

We so often hear about the benefits of wine investments or the problems with it in only a very general way. I’m interested in doing more serious comparative analysis, while keeping the mood light. If you’ve seen the show “Pawn Stars” you know that you can actually learn a lot of history through its often funny “reality TV” stories. My column also comments and reports on some recent trends in wine investment.

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Hope you’ll check out my column. Here’s a photo from the Portland book event. Great to see all of independent booksellers (God bless them!), publishers, authors and volunteers (bless them, too) in Portland.

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Twenty Dollar Bill Wines

My new book Extreme Wine is now officially available and Wine-Searcher.com has just published an excerpt, so you can get a sense of the book’s style and content, both of which will be familiar to regular Wine Economist readers.

The editors at Wine-Searcher picked part of Chapter 4, which is titled “The Invisible Wine” and deals with wines that are for various reasons so scarce (or in some cases so ubiquitous) that they are nearly invisible. I probe a number of extremes in this chapter, but the editors asked to reprint the section on “Twenty Dollar Bill Wines.”  Here’s how the piece begins …

Twenty-dollar-bill wines don’t really cost twenty dollars, so you can put your wallet away. The name comes from a joke that is popular among economists and therefore essentially unknown to the rest of the world. The joke goes like this.

A non-economist walks into a bar and says excitedly to the bartender (who is an economist). ‘Wow, this is my lucky day! I just found a twenty-dollar bill on the sidewalk in front of your bar!’ The bartender takes a long look at the fellow, who is waving the bill in the air. ‘No, you didn’t,’ he says. ‘Yes, I did!’ replies the customer. ‘See, it’s right here!’ ‘Can’t be—you’re wrong,’ the economist-bartender coolly replies. ‘You’re ignoring rational economic theory. If there had been a twenty-dollar bill on the sidewalk, someone would have already picked it up. So it is logically impossible that you could have found one.’

‘But look—here it is!’ the customer exclaims. ‘Look, buddy,’ the bartender says, turning away, ‘What do you think I’m going to believe—your bill or my theory?’

The joke of course (sorry, but economists always explain jokes, even the obvious ones) is that economists tend to believe their theories even when they can clearly see refuting evidence with their own eyes. You would think that this makes economists different from regular folks, but in the case of rare wines, we are all pretty much the same.

There are many ‘cult’ wines that are famous for being impossible to buy. They are so scarce, the story goes, that they are all invisibly absorbed by the lucky few folks who years ago gained access to the wine-club distribution list. No one else ever gets a shot. They are as rare as rare can be. I call these the twenty-dollar-bill wines because if you saw one (at a wine shop or on a restaurant wine list), you would probably rub your eyes. Impossible! How could that be? Must be a mistake (or maybe a fake!). If they really had that wine for sale, they would already have sold it.

Now the dirty little secret of these wines is that they are sometimes quite reasonably available, but the myth of impossible scarcity is maintained because that’s how myths work and because no one can believe their eyes. …

Click here to go to Wine-Searcher.com to read the rest of the selection.

By the way, if you still think of Wine-Searcher only as a website that provides information on particular wines, their ratings, prices and availability (see this search for Opus One, for example), then you need to think again because the editors have created a really exciting website with news, features and a wide range of other wine enthusiast information.

There’s more to Wine-Searcher than the searcher part, so you should check it out. (And, yes, they do also publish my column on wine investment, so I have filed this post under “Shameless Self-Promotion.)

Thanks to Wine-Searcher for publishing the Twenty Dollar Bill wine excerpt. Enjoy!

No Snifferati or Spitterati: Extreme Wine Countdown

I’m counting the days and hours until the October 7 official release day for my new book Extreme Wine.  But I have a secret: I think some of the online retailers are already selling and shipping it. Check it out.

One of the fun things you get to do in the final stages of producing a book is to ask a few people to read your work and, if they choose, to write a “book blurb” for the back cover.

After all the hours hunched over a keyboard, it is great to finally hear what people think! We managed to squeeze in six blurbs from extreme wine people on five continents.  Hey, I guess that bit in the subtitle about “searching the world” isn’t just a marketing line!

Extreme Wine Blurbs

This book is not for the snifferati and spitterati. It is an incredible and balanced study of the extremities of the wine world and wines of the world. Veseth even found our 600 bottles of extreme wine made in South Africa.
— Emil Den Dulk, owner, De Toren Private Cellar, South Africa

Extreme Wine is a must-read for wine lovers and people in the wine industry. It helps me to look at the industry from various unique angles. I found myself jotting down idea after idea while reading the book—of which many are now part of my plan for promoting Grace Vineyard in China. Highly recommended!
— Judy Leissner, CEO, Grace Vineyard, China

Congratulations to Mike Veseth for his outstanding book on the global wine world. It takes a very creative mind and a keen eye to see the center from the ‘extreme’ edges without distorting reality. It is a book that grabs you from the very beginning and once you start reading, you can hardly leave it before reaching its end.
— Aldo Biondolillo, Tempus Alba, Argentina

A provocative, engaging, and seriously entertaining journey covering all the vineyards under the sun. Mike Veseth provides a delightful sensory experience that will greatly increase the reader’s enjoyment of wine.
— Cobus Joubert, Maison Joubert, South Africa

Extreme Wine is as broad as it is fascinating, with Mike Veseth’s always perceptive insights into what makes the world of wine tick. His book is a must read for all of us who eat, sleep, and breath the rich and wonderful life of wine, and it opens its hidden extremes to the novice who might otherwise wonder why we find it so immensely rewarding.
— Bartholomew Broadbent, CEO, Broadbent Selections, United States

Thanks to Mike Veseth, readers will discover and understand the philosophy that leads each producer to create his or her own wines. All our family is very proud to be considered ‘extreme wine’ people!
— Giuseppe and Rafaella Bologna, owners, Braida Winery (maker of Bricco dell’Uccellone), Italy

Positive Early Reviews!

A couple of early reviews are already in. Click here to read Ken Umbach’s comprehensive Amazon.com reader review. Booklist and Library Journal have also published favorable reviews, which I will copy below. Thanks to everyone who takes the time to write a review or leave a comment!

No wine-making or wine-selling professional can afford to ignore Veseth’s blog, which illuminates wine’s often murky economics. Here he expounds on wine’s outliers, revealing those wines that have unusual histories, are particularly expensive or cheap, or are made under the most difficult conditions. Taking what could be an esoteric subject and making it compelling for any wine drinker, Veseth probes the best and worst that the world’s vineyards produce. He chronicles booms and busts, relating how Prohibition actually became a boon for vineyards as home winemakers of the era snapped up grapes by the case for cross-country shipment. Explaining the impact of international currency markets, he documents how Australia’s strong dollar has dampened exports. Veseth also details why the cheapest wines aren’t necessarily the worst nor the most expensive the best. Surprisingly, celebrities’ involvement in winemaking has produced some bottlings that transcend the media status of the vineyards’ owners. Not just for geeky wine snobs.
— Booklist

Veseth (Wine Wars), who blogs at the Wine Economist, takes readers on a whirlwind tour of the world’s wines in the titular superlatives. Readers may be familiar with French wines, but get ready to explore Canada’s Icewine (made from grapes frozen to 17 degrees Fahrenheit). These highly concentrated wines (popular in Asia) sell for prices ranging from $50 to $500. Veseth discusses how Prohibition (1920–33) impacted the wine industry (most wineries went out of business) as well as loopholes in the Volstead Act that allowed four million gallons of wine to be legally produced in 1925. The most expensive wine should be no surprise to readers: Bordeaux 2009. What’s the worst wine? Veseth writes, “That’s easy: look down!” Wines can be judged by their prices, with the cheaper wines located at the bottom of the wine shelves. Veseth asserts that celebrity wines such as those made by Yao Ming, Martha Stewart, and Paul Newman don’t necessarily harm the “real wine” industry and, in fact, encourage wine drinkers to try new varieties. VERDICT History buffs and adventurous wine drinkers are sure to find interesting tidbits about the industry and encounter new wines to hunt down. Highly recommended.
— Library Journal

 

Developing a Market for Chinese Wine: Tourism and Education

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

Developing a Market for Chinese Wine: Tourism and Education

by Cynthia HowsonPierre Ly and Jeff Begun

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

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

An Insatiable Market? Developing a Taste for Wine

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

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

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

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

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

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

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