Wine Tourism in Mendoza: Rethinking Best-Practices with the UNWTO

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The Wine Economist will take a break for the next two weeks while Sue and I travel to Mendoza, Argentina for the second Global Wine Tourism conference organized by the United Nations World Tourism Organization and hosted by the Argentina Ministry of Tourism. It will be great to return to Mendoza and to have a chance to discuss wine tourism strategies with both old friends and new ones.

Asking Questions, Rethinking Answers

Good conferences succeed because they work on several levels at once. Keynote speakers, for example, are most useful if they stimulate discussion among conference participants to allow them to shape and share their own thinking.

My keynote is about “Wine Tourism for Sustainable Development: Opportunities, Strategies, Pitfalls” and my goal is not to tell people what to think and do but instead challenge them ask new questions and rethink the answers to old ones.

The UNWTO welcomes this kind of thinking and rethinking. The organization recently adopted the UNWTO Framework Convention on Tourism Ethics, for example., reflecting the fact that global tourism is now big business and its significant economic, social and cultural impacts must be fully considered.

Thinking and then acting — that’s what it’s about. Other speakers will share their experiences from around the world, giving us all a lot to think about!

The UNWTO has developed a wine tourism framework or prototype. Yolanda Perdomo, Director of the UNWTO Affiliate Members Program, will present the prototype and Gabriela Testa, President of Ente Mendoza Turismo, will discuss how it is being implemented in the Mendoza region.

Mendoza has enormous potential for wine tourism as I explained in my 2013 book Extreme Wine. I highlighted two very different wineries for their tourist experience: Tempus Alba and Salentein.

Situated close to Mendoza city, Tempus Alba hosts many young wine tourists who visit on bicycle. They enjoy the wines and food at the restaurant, of course, and receive an education about Malbec and the vineyard.  The vibe is casual and fun, but the approach is seriously thoughtful. I’m a big fan of what Aldo Biondolillo and his family are doing at Tempus Alba.

11120_killkaBodegas Salentein is located high in the Uco Valley and I don’t think many people bike there from Mendoza. It was the first destination winery in this now-booming wine region and features an art gallery, a stunning barrel room dubbed the “wine cathedral” and fine dining, too. As is the case of many Mendoza wineries, the architecture rivals and reinforces the dramatic Andes mountain scenery. Fantastic.

Theory and Practice

The UNWTO conference balances the theory and practice by including a number of local wine tourist experiences in the afternoon sessions. These winery visits will be a lot of fun, of course, but they will be most useful if participants give serious and critical consideration to what works (and why) and what could work better (and how can this be achieved). And then the trick is try to apply those sharpened critical skills to wine tourism offerings, strategies, and policies back home.

I will paste below the tentative list of wineries and experiences that will be available to the UNWTO conference participants and, by the way, to adventurous wine tourists generally when they visit Mendoza. The list gives a concrete sense of the diversity of wine tourism offerings available in this beautiful part of the world.

Come back in two weeks for more Wine Economist! Cheers (and adios!).

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  • Bodega Norton: Restaurant La Vid, Chef Patricia Suárez Roggerone Experience: Winery bicycle tour
  • Bodega Renacer: Restaurant Renacer, Chef Sebastian Weingand Experience: Virtual reality and winery visit by an oenologist, The Appassimento
  • Susana Balbo Wines: Restaurant Osadía de Crear, Chef Marianela Pizzonia Experience: Blending competitions
  • Bodega Terraza de los Andes: Restaurant Residencia Terrazas de los Andes, Chef Noelia Scquizziatto Experience: Tasting from barrels and cooking class, deserts
  • Bodega Lagarde: Restaurant El Fogón, Chef Lucas Olcese Experience: Historic winery tour, which is DOC MALBEC certified and was the first denomination controlled by
    America
  • Entrecielos Luxury Wines & Spa: Restaurant Katharina, Chef Federico Castro Experience: Limited Edition Vineyard Loft & Spa Hammam, traditional Turkish relaxation and leansing methods
  • Bodega Trivento: Restaurant Espacio de Arte, Chef Sebastián Flores Experience: Art & Wine; Delhez family wine exposition; Bicycle tasting tour in Finca Los Vientos through its sustainable irrigation system
  • Bodega Trapiche Restaurant Espacio Trapiche, Chef Lucas Busto Historic winery and the arrival of the railway. Re-creation of two programs that are part of the Wine Tourism Events Calendar: “Wine and Cinema” and “Tango in the Vineyards”
  • Casa Vigil: Restaurant Casa Vigil, Chefs Santiago Maestre and Federico Petit Experience: Dante Alighieri’s The Divine Comedy in the heart of Chachingo, The Inferno, The Purgatorio, and The Paradiso from Alejandro Vigil’s point of view
  • Bodega Vistalba: Restaurant Vistalba, Chef Jesus Cahiza Experience: Royal Staircase to Calicata and tasting of exotic varieties
  • Bodega A16: Restaurant Finca Papa Francisco, Chef Felipe Bakos Experience: Art exposition at Plaza de Esculturas, “Augure Stone” by local artist Alfredo Ceverino and Cooking Class, Regional Argentinian Cuisine
  • Bodega Chandon: Bistró Chandon, Chef Maitas Gil Experience: Travel through the paths of Chandon, the first subsidiary of Moet Chandon outside of France
  • Bodega Ruca Malen: Restaurant Ruca Malen, Chef Juan Garcia Ventureyra Experience: Brush & Bottle, Wine Cathedral
  • Bodega Nieto Senetiner: Restaurant Nieto Senetiner, Chefs Daiana Farías, Jorge Cardozo and Gabriela Barrientos Experience: Wine scents experience
  • Bodega Tierras Altas: Restaurant Juana María, Chefs Blanca Espinosa and Lucca Evangelista Experience: Malbec blind tasting
  • Bodega Los Toneles, an urban heritage winery.
  • Bodega Monteviejo: Restaurant Monteviejo, Chef Nadia Haron
  • Bodega Solo Contigo: Wine village, visit Solo Contigo WTC
  • Bodega Corazón del Sol: Wine village, visit ¨Tasting the Willows¨, wines of the Revana family
  • Salentein: Restaurant Killka, the Wine Cathedral
  • Bodega Andeluna: Restaurant Andeluna, High altitude wines from Valle de Uco
  • Bodega Piedra Infinita: Restaurant Piedra Infinita
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50, 83, 41, 44: There’s a Lot to Celebrate This Year at Chateau Ste Michelle

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Washington State’s Chateau Ste Michelle is celebrating its birthday this year and there is a lot to celebrate, as I will explain below, even if the exact number of candles on the cake is open to debate.

Happy Birthday to The Chateau

The Chateau, as we call Chateau Ste Michelle in these parts, goes for 50 candles — and I think that’s fine. It was 50 years ago, in 1967, that the first varietal wines were released by a little-bitty operation called Ste Michelle Vineyards. The Chateau has released special edition wines that pay tribute to that first label.

The wines, sourced from Yakima vineyards according to the original label, were apparently very good. Howard Simon made them with help from California wine legend André Tchelistcheff, an early proponent of Washington’s wine potential.

Fifty is a good round number, but there are other birthdays we might also celebrate, as I learned by consulting 51na5ps55pl-_sx312_bo1204203200_The Wine Project: Washington State’s Winemaking History by Ronald Irvine with Walter J. Clore (Sketch Publications, 1977).

A Lot of Candles!

Eighty-three candles are hard to blow out in one breath, but that’s the number you would need if you go all the way back to 1934. The end of Prohibition in the United States encouraged the National Wine Company (Nawico) and Pommerelle winery to start up in Washington State. They made mainly sweet wines, as was common in the United States on up into the 1960s.

The two companies merged in 1954 to form the American Wine Company, which eventually created the Ste Michelle Vineyards label for varietal wines as a supplement to the main sweet wine business.

Woodinville Wine Cluster

A Seattle financial executive named Wally Opdycke became very interested in the opportunities that dry wines presented in Washington State and eventually Opdycke and his partners purchased American Wine Company in 1972 and set out to take wine in a new path (even, according to Irvine, as they worked to sell off the sweet wine inventory that they had inherited from the previous owners).

ste-michelle-vineyards-50th-anniversary-columbia-cabernet__31896-1307476275-1280-1280Opdycke and company needed capital for the vineyards and winery facilities they envisioned and in due course two interested parties appeared. The first was Labatt’s Brewery from Toronto, who recognized the potential that the region’s wines presented. The second was a U.S. company — U.S. Tobacco of Connecticut.

The offers were much the same financially, according to Irvine, but Opdycke and partners opted for the UST deal (Altria subsequently acquired UST and is now The Chateau’s owner).

U.S. Tobacco provided the investment capital that was needed and in the process attracted talented viticulturalists and noteworthy winemakers who eventually left The Chateau to work on their own projects. Local farmers planted vineyards to help fill the tanks of The Chateau and then the many other wineries that followed. Thus was the Washington wine industry that we know today born and The Chateau played a leading role.

One of the biggest investments came online 41 years ago — the imposing winery in Woodinville, Washington just a short drive from Seattle. The winery, styled after a French chateau, sits on the beautiful grounds of the Stimson estate and draws so many visitors to the neighborhood that dozens of other wineries and tasting rooms have joined it in Woodinville, creating a dynamic wine cluster.

Where Are the Grapes?

This is a bit of a puzzle to some visitors because the only grape vines they see are mainly for atmosphere, not production.  The gapes come from the east side of the Cascades several hours away. The Chateau’s strategy was to locate the show winery near to the market, not the vines (white wines are made in Woodinville, but red wines are made in Eastern Washington).

The separation works and you can see tanker trucks full of freshly pressed juice arrive at The Chateau during crush along with refrigerated trucks hauling bins of fresh-picked fruit to some of the dozens of other wineries in the neighborhood.

Whichever birthday you choose, The Chateau is worth celebrating.  Under the leadership of Allen Shoup and now Ted Baseler it grew from modest origins to become by far the largest winery in Washington State and an important force in national and even international markets.

But Wait … There’s More

Chateau Michelle Wine Estates is the umbrella organization that brings together The Chateau and the wineries and partnerships that have grown from it. So here’s a final number to celebrate: 44 (and counting). That’s what you get when you add together 18 brands that Chateau Michelle Wine Estates currently operates in the Pacific Northwest, seven more in California, and 19 international partnerships (CMSE is the exclusive importer of Antinori wines, Torres wines from both Spain and Chile, Nicholas Feuillatte Champagne and Villa Maria among others).

The Chateau and the Antinori family are partners in two notable ventures: Col Solare on Red Mountain in Washington and Stag’s Leap Wine Cellars in Napa Valley. And I cannot forget Eroica, the partnership between The Chateau and Ernest Loosen of the famous Mosel Valley wine family.

The Chateau as it has evolved has somehow managed to be both big and small. Taken together these wineries form the eight largest wine company in the U.S. according to Wine Business Monthly’s annual survey. Yet the individual producers retain a good deal of autonomy, part of the company’s “string of pearls” philosophy.

There is another dichotomy that The Chateau has somehow managed to navigate. Although it has corporate ownership and necessarily is influenced by that, it seems to behave in many ways more like a family winery. This accounts in part for its ability to partner with famous wine families like Antinori, Torres, and family-owned Villa Maria.

The Chateau deserves a lot of credit and respect for what it has done to build its own business, to build a Washington wine industry, and to promote American wine at home and abroad.

Happy Birthday to The Chateau and everyone who contributed to its remarkable rise!

Flashback Friday: Can Wine Tourism Take Center Stage in Valpolicella?

Sue and I have wine tourism on our minds these days because we are getting ready for the United Nations World Tourism Organization’s global wine tourism conference in Mendoza, Argentina later this month.

We were in the Veneto at this time three years ago and wine tourism was on our minds there, too. Here is a Flashback Friday column from 2014 about wine tourism in Valpolicella.

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Valpolicella is well known for its great wines — Valpolicella Classico, Valpolicella Superiore, Ripasso della Valpolicella and of course Amarone. (It should also be known for its sweet wine, Recioto della Valpolicella, but that’s another story.)

But what about wine tourism? Sue and I were guests of the Valpolicella Consorzio earlier this month and one of our tasks was get a sense of Valpolicella as a wine tourist destination using a new wine tourism app (available as free download for Android and Apple mobile devices).  Here is a brief report.

There’s an App for That!

Whenever I asked the winemakers we met if wine tourism was an important part of their business the answer was “yes!” but I think it is fair to say that for many of the actual tourists wine is at best a secondary reason for their visit.

The fact is that most tourists come to this part of Italy for non-wine reasons — for the history, culture and opera of Verona to the east, for example, or the resorts of Lake Garda to the west. Lying between these two attractive poles, Valpolicella is the perfect “day out” diversion (especially if it is a rainy day as has too often been the case in 2014) but not always the primary destination.

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Come for Opera, Stay for Wine

Come for the beach or opera, stay for the wine! That could be Valpolicella’s wine tourism motto, but it would be selling the region short. What do dedicated wine tourists look for? Well, these days they want the complete experience — the wine and wineries, of course, plus beautiful scenery, great food, comfortable lodgings and that something extra to tell their friends back home about. Valpolicella would seem to tick each of these boxes.

The vineyard scenery is certainly spectacular — I really wasn’t prepared for the beautiful vistas.  What a stunning setting! A great opportunity for fit cyclists with a nose for good wine or anyone willing to pull off the road and take in the panorama.

The wineries we visited using the Consorzio’s app showed the great variety of experiences available, which ranged from the super-modern architecture at Monteci to the classic and traditional at Valentina Cubi (one of our favorite stops).  The sense of history was particularly strong at Santa Sofia, which is located in a villa designed by Andrea Palladio in the 16th century.  You cannot dig much deeper into the soul of the Venteo than that!

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Zymé, Celestino Gaspari’s  ambitious winery in Pietro in Carlano  deftly balanced the very old and the very new. The winery building features cutting edge architecture — see the photo taken looking out from the structure towards the nearby hillside vineyards. Wow!

The Zymé  cellar and caves are carved into the hillside and touring them gives a sense of both history and nature. One of the best surprises was in the cavern than has become the working part of the winery. A spring that was discovered during construction was incorporated into the design and you can actually look down dozens of feet into the crevasse that the water has carved out over the years. A stunning sensory experience (and great for the humidity needed for barrel storage).

Beyond the Wine

Wine tourists need a place to stay and there seem to be many attractive options (this part of the Consorzio  app is still under development). Although we stayed in a basic business hotel on this trip, we encountered a number of options, including very appealing apartments at Valentina Cubi.

If you want luxury, well there seem to be a number of five star experiences available. SalvaTerra’s beautiful estate includes vineyards, the winery, a small hotel and what must be a fine restaurant (judging from the number of chefs we saw working the kitchen as we passed by).

We have no doubt about the food at Villa Cordevigo  since we were fortunate to have dinner at this estate that includes the Villabella winery, its vineyards, a fantastic hotel and spa and the sorts of amenities that make you want to linger forever. Or at least that’s how it seemed to us as we looked out over a garden to the pool and the vineyards jvust beyond with a full moon in the distance.

It’s the Food, Dummy

People talk about coming to Italy for the art and architecture, but let me tell you the truth. It’s the food! And we were fortunate to sample many typical dishes of the regional cuisine and they are worth the effort to seek out. Typical is an interesting word in this context — you see it everywhere in Italy and that’s a good thing. Here in the U.S. “typical” is sometimes a term of derision — Big Macs are “typical” fast food, for example. Ordinary. Unexceptional. Nothing to write home about. That’s typical for us.

In Italy, however, typical means “true to type” or authentic. And that’s why we Americans go gaga over Italian food — the authenticity just blows us away. And the authentic or typical dishes of Valpolicella, many prepared with the wines themselves, are enough to make any foodie go gaga. We enjoyed great meals at the Villa Cordevigo,  Ristorante La Divina  (overlooking Garda from high on a hill), Locanda 800 and the Enoteca Della Valpolicella.

We also appreciated the lunches that several wineries put together for us including a wonderful (typical!) meal of local meats and cheeses with polenta  at Scriani, a satisfying buffet at Santa Sofia and a rather elaborate multi-course feast of typical dishes at the Cantina Valpolicella Negrar.  All the food was wonderful — the meats and cheeses at Cesari  and the completely addictive “crumb cake” we had with Recioto at Secondo Marco. Foodie paradise? You be the judge. And great wines, too.

That Something Extra

Valpolicella seems to have all the elements of a great wine tourism experience and I think the Consorzio’s  app ties things together into a functional package.  It will be even more useful when it has time to fill out with more wineries, restaurants and hotels.

Is the app alone enough to bring Valpolicella to center stage? Of course not. Some of the wineries obviously embrace wine tourism more completely than others, for example. It is important that three or four true “destination” wineries emerge that will make it easy for wine tourists to see that a two-day or longer visit can be fashioned that will sustain their interest and enthusiasm —  with dozens of other wineries providing rich diversity (and reasons to return again and again) as happens in Napa, for example. And finally there must be even closer ties among the elements of the hospitality sector — wine, food, tourism and lodgings — which is not always easy to achieve.

It takes a village to build a wine route. But all the pieces are there and the app is a good way to bring them together.

But what about that “something extra” I mentioned earlier.  What does Valpolicella offer that will push it over the top? Well, the towns and villages have the churches, squares, museums and villas that Italian wine tourists expect — it takes only a little effort to seek them out and I must confess that I actually enjoy the “small moments”  more than the three-star attractions, so this suits me very well.

But maybe I am making this too hard. What’s that something special? Maybe it’s the chance to tack an evening in Verona or a day on Lake Garda on to your Valpolicella wine tour experience?  Perhaps its time for the wine tail to wag the Veneto  tourist dog and not the other way around! (Gosh, I wonder how that will sound in Italian?) Food for thought!

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Here’s a musical tribute to the merry band of wine bloggers on our Valpolicella tour.

Mauro Fermariello has created a beautiful video of our Valpolicella wine blogger tour, which can be found in his website, www.winestories.it .

 

What in the World is Charles Smith Up to Now? A Visit to Jet City Winery

jet cityCharles Smith’s Jet City Winery is located across the street from historic Boeing Field in Seattle’s gritty but hip Georgetown neighborhood.

The building started life as a Dr. Pepper bottling plant. The public spaces reflect both the structure’s mid-century roots and Charles Smith’s signature aesthetic, with lots of glass, metal, and recycled wood. The cellar is sleek, efficient, and spotlessly clean.

Sue and I met up with veteran Wine Economist research assistants Bonnie and Richard a few weeks ago at Sisters and Brothers, a hip little restaurant that makes delicious Nashville hot chicken, fried green tomatoes, and other memorable southern fare just steps from the winery. The food was great, but that wasn’t why we were there. Our mission, following up on last week’s column, was to learn what Charles Smith and his team are up to  now and where they are headed in the future.

Technical Innovations

I became curious about Jet City Winery a year ago when I read an article about it in Wines & Vines that focused on the technical aspects of the winery. The author, Andrew Adams, interviewed Brennon Leighton, director of winemaking, and reported on many of the innovations and special features of the Jet City facility.

One innovation that especially caught my attention was a set of design features that minimized some of the “heavy lifting” aspects of cellar jobs so that women would not be disadvantaged relative to men. “It’s a pretty male-dominated world on the cellar floor,” Leighton told Adams, “and a lot of that has to do with lots of fairly vigorous, high-labor jobs. I really wanted to cut that labor down so anyone could do any job at any time.”
Our team found that this is just one example of the extreme attention to detail that is everywhere at Jet City.

brennanBrennon Leighton is one of Washington’s most respected winemakers. He was in charge of making the white wines (including some spectacular Eroica bottlings) at Chateau St. Michelle before moving to rising star boutique Efeste.  Charles Smith lured Leighton away, first as consultant and then as director of winemaking and viticulture, responsible for a dynamic array of wines. It was a successful move judging by the results.

It is a good thing that Leighton has a lot of energy, because his workload is pretty fierce. Although Constellation Brands has purchased the Charles Smith Wines portfolio that includes Kung Fu Girl Riesling and Boom Boom Syrah, for example, Smith, Leighton and the team are still hands-on involved and will help Constellation scale up production while maintaining quality.

A Winery with a Lot of Wines

There is a lot going on here (and lots of wines to taste at Jet City). The current Charles Smith lineup ranges from the Vino line of “modernist” wines made with Washington-grown Italian grape varieties on up to the iconic and collectible K Vinters single-vineyard wines.

It seems like Charles Smith is always up to something new and with the sleek Jet City Winery facility the pace of innovation seems to have accelerated. We found ourselves especially intrigued by three relatively new wine labels: Sixto, B.Leighton, and Wines of Substance.

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The Sixto wines are in part a response to the criticism that Washington has not produced very many great Chardonnays. Sixto Chardonnays highlight great fruit from a handful of carefully managed sites along with precision winemaking to produce surprising and distinctive wines.

B.Leighton is Brennon Leighton’s distinctive personal wine line.  Bonnie and Richard were charmed by Gratitude, which is inspired by the wines of Bandol,  and a Petit Verdot that we tasted from barrel (Richard left with a magnum).

The Wines of Substanace caught me a bit off guard. Charles Smith has sold wines brands before (House Wine to Precept, Kung Fu Girl and the others to Constellation), but this is the only brand he has ever purchased. Leighton explained how it is developing into something special. He casually suggested that we try to Sauvignon Blanc from the Sunsent Vineyard in Ancient Lakes and … wow! … what a great wine. More France than Washington. Unique.

A Lot of Wine in the Wines

Then he poured the Cabernet Sauvignon, which sells for $17 at the winery (I saw it for less at Costco) but tastes like a lot more. He talked about the special efforts that are made in the vineyard and the careful cellar work, too. A lot of time and trouble for a $17 bottle of wine but, Leighton explained, a lot of people can’t afford to spend $50 or $100 on a bottle of wine. They ought to be able to get a really good bottle of wine at a relatively affordable price.

Not everyone can afford to pay $17, of course, but if they can then this is the real deal. Or as Leighton commented, “There’s a lot of wine in our wines.”

Winemakers (like artists and authors) often have big egos, and while Brennan Leighton has strong ideas, there is an appealing humility to the way he operates. His idea of wine is to work diligently in the vineyard and then let the wines express themselves in the cellar. His success with both large production projects like Kung Fu Girl and small lot wines like Sixto and B.Leighton speaks for itself.Wines of Substance-Landing-Page

So what’s ahead for Charles Smith’s wine universe? We’ve got new projects in the works, Leighton told us. But I can’t tell you what they are. So I was only a little surprised when, a couple of weeks after our visit,  Charles Smith announced a major re-branding. “Wines of Substance” is now the name of the umbrella company that includes K Vinters, Sixto, Vino Casasmith, Substance, B.Leighton, and Charles & Charles.

Is this the new direction that you couldn’t tell us about, I asked Brennon, or just part of it? “Part of it,” he said, without offering any hints. Hmmm. It will be interesting to see what is revealed when the next Charles Smith shoe drops!

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Thanks to Brennon and everyone at Jet City Winery for your help and hospitality. Special thanks to Bonnie and Richard for their incisive questions and analysis.

Here’s a video where Charles Smith talks about his Jet City Winery project.

The Genius of Charles Smith and the Land versus Brand Wine Wars

What do you know about Charles Smith? He’s a marketing genius! Where does he get his ideas? Do you know what he is going to do next?1029780x

We were in a restaurant in Yountville, the heart of the Napa Valley, talking with one of the valley’s best winemakers. There was a lot to discuss, but our friend was pretty focused. He was fascinated by Charles Smith.

And that’s not really a surprise. Charles Smith has a reputation as a premier brand builder, a marketing genius. That’s not the whole Charles Smith story, but it is how some people think of what he is and does, especially after the 2016 sale of his Charles Smith Wine (CSW) brand lineup to Constellation Brands for a cool $120 million.

Smith came to Walla Walla to make terroir-driven wines. His first vintage was 330 cases of the 1999 K Syrah made from grapes grown in The Rocks vineyard area supplied by Cayuse winemaker Christophe Baron. The wine was so good, according to an excellent Wine Spectator profile, that it convinced local bankers to help finance the operation. Bankable wine? Quite an accomplishment.

House Wine to Kung Fu Girl

K Syrah is a clever, memorable wine brand (think “Que Sera Sera”), but the commercial branding story really starts in 2003-2004, when a killing frost hit Walla Walla and winemakers like Smith had to scramble to get grapes or bulk wine from other parts of Washington to give them something to sell to pay the bills.

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Smith seized the moment to launch the Magnificent Wine Company and its House Wine lineup. The popularly-priced negociant wines with the fun labels sold out. Everyone needs a house wine — House Red, House White, and so on. Sales quickly scaled.

Precept Brands invested in House Wine in 2006 and purchased the brand outright in 2011. The current lineup includes House Red, House White, Steak House, Fish House, and other House wines packaged in bottles, boxes, and cans.

Charles Smith Wines came next — continuing the House Wine philosophy of giving people what they want in a simple but stylish way, but a step or two up the wine market ladder. Boom Boom Syrah, Velvet Devil Merlot, Eve Chardonnay, Chateau Smith Cabernet Sauvignon and who can forget Kung Fu Girl Riesling — each wine had its own personality and offered buyers lots of quality per dollar.

These CSW wines have two things in common. First, they have distinctive graphic design elements provided by the talented Rikke Korff, who has handled all the design work for Charles Smith since the beginning. The labels are instantly recognizable and always make me smile. Nothing like the staid chateau drawings or cute critter images that many wines feature.

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The second common feature is that the wines are good and good value. Kung Fu Girl Riesling, the best-selling wine in the line and a frequent recipient of “Top 100” wine awards, sources grapes from the exceptional Evergreen Vineyard. It’s the real deal.

The Modernist Wine Project

There are a lot of ways to think about the CSW wine program, but the winery website likes to call it part of a “modernist” project. The idea seems to be to look at consumers as they really are and then give them a product that satisfies their needs. This means wines that are ready to drink upon release, that are balanced and taste good with food or without it, and that are affordable and carried to market on a relatively simple message relayed through exciting graphical design.

The genius of Charles Smith was to put all of this together — the wines, the message, the design, the marketing — and to get the project rolling in 2006,  just before the Great Recession hit the United States. The CSW wines offered recession-shocked buyers an opportunity to trade over to a more casual idea of wine, not just to trade down to something a bit cheaper. Mix all this with a lot of hard work in the vineyard, cellar and on marketing and it is no wonder the wines were so successful.

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It is well known that I admire this sort of genius. The subtitle of my 2011 book Wine Wars referenced the “Miracle of Two Buck Chuck.” It was indeed a miracle that Fred Franzia and his team at Bronco Wine and the smart folks at Trader Joe’s markets could give millions of Americans the confidence they previously lacked to try and enjoy wine. Charles Smith built upon this foundation with great success and in a particular “modernist” way, first with House Wine and then the CSW brands.

The modernist project continues. Smith will consult with Constellation Brands on the CSW portfolio to help it scale up successfully. And then there is Vino, which was not part of the Constellation Brands deal, a tasty lineup of Washington-grown Italian-varietal wines that are instantly recognizable as a Charles Smith product by their label design and offer an unexpectedly sincere homage to the Italian origins of their grapes.

The Pinot Grigio, for example, has minerality you won’t find in a lot of other wines of this type and the Moscato will remind you a bit of a nice Moscato d’Asti. These wines probably don’t have to be this good to sell at their price points. But they are.

The Battle of Land Versus Brand

It would be easy to typecast Charles Smith as a brand guy in the battle of Land versus Brand. The fact of the Constellation Brands purchase offers some evidence. After all, Constellation is famous these days for paying big bucks for brands that have no vineyards or wineries attached to them.  The Meomi brand was purchased for $315 million and The Prisoner for $285 million, for example.k_syrah_beautiful

Viewed in this perspective, Charles Smith’s experience with House Wine and then the CSW brands seems to typecast him as a very successful brand-spinner — a genius at the game as my Napa Valley winemaker friend pointed out. And what you would expect from Smith is more of the same.

But there is more to Charles Smith than brand-building. The K Vintners wine that started it all back in Walla Walla has evolved into a rather interesting collectiomn of single-vineyard wines (Land not just cool Brand), exploring the possibilities of Syrah and Viognier with side-trips to Sangiovese, Tempranillo and Malbec. An all-Chardonnay line called Sixto offers single-vineyard wines plus a multi-vineyard blend.

Washington’s Randall Grahm?

And so the question must be asked, is Charles Smith Land or Brand? The answer seems to be both, which makes him a complicated person (and maybe more of a genius than my Napa friend realized). Is Charles Smith Washington wine’s answer to California’s Randall Grahm? I dunno. What do you think?

To find out what Charles Smith is up to these days and maybe learn about what comes next we paid a visit a few weeks ago to his Jet City Winery near Boeing Field in Seattle to learn about a particular vision of Land and Brand. Come back next week to see what we discovered.

Coming Up: Second UNWTO Global Conference on Wine Tourism in Mendoza

unwtoThe second United Nations World Tourism Organization (UNWTO) Global Conference on Wine Tourism is coming to Mendoza, Argentina on September 28-30, 2017. You can view the preliminary program here).

Sue and I had the pleasure to participate in the first UNWTO global wine tourism conference in the Republic of Georgia in 2016 and are excited to take part in the Mendoza conference. I am scheduled to give one of the keynote speeches. My topic will be “Wine Tourism for Sustainable Development: Opportunities, Strategies, Pitfalls.”

The UNWTO has declared 2017 “The Year of Sustainable Tourism for Development,” explicitly linking tourism to the United Nations’ 17 sustainable development goals.  Tourism is a big global business with great potential to contribute to sustainable development if thoughtfully approached and carefully managed. Wine tourism can and does play a role, here, too.

2017

The UNWTO explains it this way:

Tourism is an important driver of economic growth, inclusive development  and environmental sustainability. It can make a huge contribution to the global efforts to deliver on the 17 Sustainable Development Goals agreed upon by 193 nations to reduce poverty and foster sustainable development worldwide.

2017 is the International Year of Sustainable Tourism for Development (IYSTD), an invaluable opportunity to broadcast to a global, high-level audience the potential of our sector to deliver on these universal Goals.

I am looking forward to the opportunity to discuss wine tourism as a path to sustainable development with the elite group who will gather in Mendoza. Mendoza offers fantastic opportunities for wine tourism, of course, but it is important that its benefits are broadly shared to contribute to economic and social development.

One problem with sustainability is that it can be approached in a way that is so vague that everyone agrees that it is important but no one does much to actually achieve it. I think the conference will present an opportunity to drill down into useful specifics and to share concrete examples of success and failure.

Hope to see some of you in Mendoza next month!

Big & Hot Wine: Cab Boom, Napa Bubble, Think Pink, Back to the Future?

Last week’s Wine Economist column featured a very basic “Big and Hot” analysis of recent U.S. wine market data, focusing on which parts of the market are the most interesting in terms of “big” total expenditures versus the fastest growing “hot” categories. (If you haven’t read the first column, click here to check it out.)

This week I invite you to give some thought to the implications of that information. Here are a few observations to get you started.

Cabernet Boom, Napa Bubble?hqdefault

Cabernet Sauvignon is both Big and Hot these days. Cab will soon eclipse Chardonnay as the best-selling varietal wine in the U.S. market.

When you combine this fact with the general up-market trend, where the fastest growing parts of the wine market are in the super-premium and luxury segments, it is easy to understand how and why the California wine industry is being transformed by a movement toward quality, with Cabernet Sauvignon in the lead.

The Cab Boom is at its fiercest in the Napa Valley, where sky-high grape prices translate into stratospheric land prices. According to the most recent Allied Grape Growers newsletter (see pdf here),  The average price of Cab grapes in the Napa district was over $6800 a ton. And that’s just the average. The best grapes? If you have to ask how much they cost, you probably can’t afford them.

Cabernet seems to be good as gold generally, especially in Napa.

samuelson

Fool’s Gold?

Or is it fool’s gold? In particular, is the Cab-driven Napa vineyard value boom sustainable or is it a bubble that will someday burst? I think the possibility must be considered.

Agricultural markets in general are subject to what my Econ 101 professor called a “cobweb” model of price dynamics, where today’s high price leads to over-investment, which causes next year’s collapse, which leads to under-production, which brings on a future price spike and so on.

You can see the cobweb graph in this photo of Nobel Prize economist Paul Samuelson. Some cobwebs converge to an equilibrium. Some, like the one that Samuelson drew here, explode.

Wine is different from the standard agricultural commodity that was the inspiration for the cobweb model. Its longer production cycle actually makes the potential for price swings worse than for corn or wheat.

Maybe the current boom isn’t a bubble and I am just doing that Chicken Little thing that I sometimes do.  But it seems to me that you have to take the possibility of a bubble seriously unless you have a very good answer (which I do not yet have) to the question, what exactly makes this time different? 

Rise of the Red Blends

The rise of the red blends, which I discussed last week, is an interesting trend that has persisted long enough to be taken seriously. I admit that I have changed my opinion about red blends over time. Initially I saw Hot red blends as a response to Cold market conditions for Merlot and Syrah/Shriaz. Merlot fell out of favor after Sideways and negative reaction to simple Aussie Shiraz wines somehow turned contagious, infecting Syrah generally.

Consumers, it seemed, didn’t want to buy Merlot and Syrah. But they actually liked to drink them! So surplus Merlot and Syrah, plus a few other varietals, were mixed into market friendly Red Blend. Voilà!  You can be a Merlot or Syrah snob and enjoy drinking it, too. What could be better?

Back to the Future?

But then red blends seemed to change, with different grape varieties in the mix, and attention turned to the surge in sweet red blend wines. The focus was on what the higher residual sugar said about the changing wine market generally.

Now I’m more interested in the fact that many of the most popular red blends are intentional creations aimed specifically at the Hot super-premium market segment. Some of the common characteristics of these wines are that they have strong brand identities that are not linked to particular wine-growing regions (hence California appellation) or specific grape varietal (proprietary blends).

The flexibility that this affords the makers of these wines is very useful as they can alter the blend within reason both in terms of grape varieties and grape source depending upon demand scale and supply conditions.  Customers are buying the brand, not the particular recipe.

In a way these two parts of the red blend phenomenon (sweeter wines and stronger focus on brands over regions or varieties) strike me as a “Back to the Future” trend, a throwback to the 60s and 70s, especially since some of the largest wine producers are responsible for many of the new successful brands that have emerged.  What’s different is that we have moved up dramatically on the price ladder.

Is this the end of varietal wines? No, but it is a reorganization of the market. Varietals were seen to be a step up over generic jug wines. Now some of the proprietary blends are positioning themselves above the varietals. Interesting!

Think Pink

The recent popularity of Rosé wine caught most observers (including me) off guard. Why should pink wines (and even relatively expensive pink wines) suddenly be in fashion? A new documentary is about to be released called “La Révolution du Rosé” — can’t wait to see how the Rosé rise is explained in this timely film.

Is Rosé a thing? The biggest skeptics I have met have been the European wine producers who, ironically, have the most to gain from this trend since they have a lot of good pink wines to sell. They have been burned before and hesitate to make big investments until they are convinced that pink wines is not just another short-term fad.

I have heard many theories about the Pink explosion. Here’s one that’s inspired by last week’s Big and Hot analysis. The Red Blend boom seems to be real. What about the White Blend boom? Well, it didn’t happen. Personally, there are many white wine blends that I love, but there has been no real movement in white wine blends to mirror the changes in red wine blends. Unless, that is, you Think Pink.

Rosé wines have a lot in common with the red blends.  They can be and are made from many different wine grape varieties and are sourced from dozens of countries and regions. Some consumers may be nerdy about which grapes, which regions, and (especially) which particular shade of pink they like best. But many more consumers are open to all sorts of possibilities, judging the wines on their qualities more than pedigree.mateus

Sue and I have been on a bit of a Pink wine binge recently drinking pink Cinsault from Lebanon, pink Cabernet Sauvignon from South Africa, and a variety of different pink blends from various regions in the South of France. They were all delicious and refreshing.

Pink wines are often dry, but they can sometimes be sweeter, too, which fits well with the Red Blend comparison. Maybe we are missing the white wine boom because we haven’t learned how to Think Pink?

So are Pink wines the Next Big Thing. No … but I only say that so that I can finish this column on another Back to the Future note. Pink wine is actually an old thing that has come full circle here in the United States. Don’t forget that one of America’s all-time top-selling Big and Hot imported wines was Proudly Pink.

Can you name it? Yes, I am talking about Mateus Rosé! Think Pink!

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