Fiasco Flashbacks? Rediscovering Chianti Classico

November 28, 2023 By in Italian wine, wine, wine brands, wine history, wine markets Leave a comment

It is called a fiasco.

Fiasco? Yes, I know what you are thinking, but you’re wrong. I’m not talking about what happening in Congress with the debt ceiling. And I am not talking about the bonehead moves your favorite sports team’s coach always seems to make.

A fiasco is a type of bottle. It is bulb-shaped and wrapped in straw that both protects the glass from breakage and keeps the rounded-bottom vessel from tipping over. Back in the day, if you spotted a fiasco you knew instantly what was inside: a tasty medium-bodied Italian wine that probably wouldn’t break the bank when you hit the check-out counter.

Fiasco meant Chianti, which along with Lambrusco and Valpolicella, was the easily recognizable popular face of Italian red wine here in the U.S. The Chianti fiasco was popular with me and my young friends years ago because you got the wine itself and a decorative candle holder (the straw-wrapped bottle) all for the same price. What could be better? The traditional Chianti fiasco still exists, although I don’t see them very often (you can buy empty bottles on eBay if you are into retro decorating).

Sue and I discovered a 1.5-liter fiasco of “red Chianti wine” at Trader Joe’s as this column was being prepared for publication. The fiasco endures!

Chianti Identity Crisis?

I suppose that the move away from the distinctive fiasco was a bit of an identity crisis for Chianti, but it might not have been the only or most important one as Bill Nesto MW and Frances Di Savino explained in their 2016 book  Chianti Classico: The Search for Tuscany’s Noblest Wine.

Nesto and Di Savino argue that Chianti’s historical roots are in a relatively well-defined area that we now associate with Chianti Classico. As Chianti wine became more popular around the world, the Chianti zone expanded and the wine inevitably lost of some its distinctive character. Not all of it represented the original idea of Chianti very well. That’s a more serious identity crisis, especially at a time when there is more and more competition from within Tuscany, within Italy, and around the world.

Product Differentiation

The task for Chianti Classico producers, as it is for quality producers everywhere, is what economists call product differentiation. They need to make consumers aware of the difference between Chianti and Chianti Classico and then, because this is the age of premiumization, to further differentiate the best wines they produce.

The first task – Chianti versus Chianti Classico — is easy from a visual standpoint. Chianti Classico stands out on the shelf with its distinctive black rooster logo. But the wine needs to be distinctive in the glass, too, which has not been as clear in the past when both Chianti and Chianti Classico could be found with quality that varied from excellent down to just fair.

Climbing the Cecchi Chianti Classico Pyramid

The Cecchi family of wine producers invited us to sample their wines and taste the difference and it was an eye-opening experience. The Cecchi winery dates to 1893. Andrea Cecchi, who guided our tasting, is the fourth generation of the family in the business. The family’s home vineyard is Villa Cerna, which they acquired in 1962. The Villa Rosa vineyard was acquired in 2015. Both are complex mosaics of elevation, soil type, and aspect.

We started with their Chianti Classico Storia di Famiglia, which makes up about 60 percent of Chianti Classico production. It is made from 90 percent Sangiovese and 10 percent other grape varieties. Sue took one sip and said “Wow!” This wasn’t like any other Chianti that she tasted recently, she said. Bright, intense, and persistent in the glass. She was immediately taken by the wine’s style and substance. Product differentiation goal #1? Check!

We moved on to Cecchi’s Chianti Classico Riserva wine, Riserva di Famiglia, which is 90 percent Sangiovese and 10 percent Cabernet Sauvignon. Riserva wines are about 35 percent of production. Sue appreciated this wine but didn’t find it as exciting as the first, perhaps because the Riserva might be an attempt to balance the traditional wine identity with the power that the international market sometimes prefers. An excellent wine. And I think Sue’s reaction might have been different if she had tasted it first.

We reached the top of the pyramid with Valore di Famiglia, the Cecchi Chianti Classico Gran Selection wine. Gran Selection accounts for just 5 percent of production. The grapes are 100 percent old-vine Sangiovese from the Villa Rosa vineyard. The wine ages in both oak and concrete. The goal is elegance, limiting intervention so that the identity of the vineyards is not obscured. Goal achieved! A wine of many layers and nuances. Memorable.

Is Chianti Classico a Terroir Wine?

The premise of Chianti Classico is that terroir makes a difference. If it doesn’t, then wines from the larger Chianti appellation (and indeed wines from all over Tuscany) that are made in the same way with the same basic grape varieties should be just as good.

To test the terroir hypothesis we were invited to compare two of the Cecchi Chianti Classico wines that are sourced from two very different vineyard sites.  Primocelle (first hill) Villa Cerna is a particular part of the Villa Cerna vineyard while the Ribaldoni Villa Rosa is from a vineyard of that name with the youngest vines on the estate. The differences showed themselves clearly both on the nose and in the mouth. I enjoyed the violet and iris notes of the Primocolle. Sue was attracted to the elegance and sleek style of the Ribaldoni.

Rediscovering Chianti Classico

Sue says that she enjoyed all the Chianti Classico wines we have tasted recently (and looks forward to a couple of others we have in reserve). Excellent wines are all very different from one another. But she couldn’t forget that first glass of the Cecchi Storia di Famiglia. The purity and clarity stood out. And the surprise punctuated the experience.

I think that we are not the only ones to be rediscovering Chianti Classico. I see that there are seven Chianti Classico wines (including Sue’s favorite from Cecchi) on this year’s Wine Spectator Top 100 list. That’s a strong showing for what is a relatively small region. Congratulations to Cecchi and the other producers for this timely recognition.

Bottle Shocks: Unexpected Wine Bottle Trends

November 21, 2023 By in wine, wine markets 6 Comments

The movement to address climate change challenges is one of those glass half-full or half-empty situations. Bold initiatives are often followed by foot-dragging or back-sliding. Two steps forward then one step back.

Take the electric vehicle (EV) industry, for example. Bold initiatives such as targets to stop sales of gasoline-fueled cars are weakened and deadlines postponed (the situation in the UK). Meanwhile, the wind seems to have gone out of the sails of EV sales in the U.S., leaving auto producers wondering if their bold plans to transform their fleets are premature. Maybe most people who want an EV already have one? Maybe plug-in hybrid vehicles make more sense right now given resource limits, battery technology, and charging infrastructure?

Green Wine Agenda

The wine industry is working to reduce its carbon footprint, too, with attention to the weight of glass bottles particularly noteworthy and easy to understand. Sparkling wine bottles need to be fairly heavy to withstand internal pressure (indeed, the origins of Champagne are linked to innovations in glass bottle technology). But still, wines don’t really need heavy bottles in most situations. So thoughtfully reducing bottle weight has been on the green wine agenda for some time.

Progress is being made both to adopt lighter-weight bottles and to develop systems to recycle and reuse bottles. I have been following an innovative project that aims to re-invent the wine bottle to make it both lighter and more effectively recycled. Verre Vert Bottle, which I understand is at the advanced testing stage, ticks all the boxes with the potential to save energy, lower costs, and reduce carbon emissions.  I am looking forward to seeing how this project develops.

The Heavyweight Champ

But not all the news is good. Sue and I habitually consider wine bottle weight in our work, although we haven’t started keeping detailed records yet. We note when we find an unusually light bottle, for example, and when one seems heavier than we expect given the type of wine.

Recently we’ve run into several heavy bottles weighing about 700-900 grams when Sue puts them on her electronic scale. Not as heavy as our current heavyweight champion, a bottle of wine that our friends Pierre and Cynthia brought back from China that weighs in at 1218 grams (that’s 2.69 pounds!), but pretty heavy nonetheless.

Bottle Shape Differentiation

But that’s not the end of the story. My friend Jonathan Rodwell has brought another wine bottle trend to my attention, Rodwell is a vineyard and winemaking consultant who divides his time between Italy and the UK. He scans supermarket and wine shop shelves wherever he goes to try to keep up with the changing retail scene. Recently he has noted an increase in the use of custom bottles and bottle decorations on the wine wall. I guess a distinctive label is no longer enough to differentiate a wine on crowded retail shelves. The bottle itself needs to be different enough to catch the eye.

Rodwell looked around the noticed that the bottled water shelves had already taken the bottle shape step to the next level. If you look at the water wall you’ll see that major brands have distinctive color and shape bottles. In many cases, you can pretty well guess what water someone is drinking from across the room without seeing the label.

Is this where wine is headed? Product differentiation through specialized bottle shape is not new. Some of the most popular imported wines in U.S. wine history have distinctive bottles. Those rafia-covered Chianti bottles of the past were easy to spot, for example, but I am thinking of brands like Blue Nun (the bottle is bright blue), Black Tower, and Lancers Rose (ceramic bottles), and, of course, Mateus Rose with a bottle shaped like a WWI water flask.

The Bottle’s the Thing …

Mass-market wines like Mateus Rose are not the whole story. Sue and I are no longer surprised when we meet regional wine officials who are convinced that all that’s holding their local industry back is the decision to change the bottle color or shape.

There is no particular reason why the trend toward custom bottles should conflict with the lighter-bottle movement. A blue bottle doesn’t need to weigh more than a brown one. But some of the custom bottles we have seen, with embossed logos or textured surfaces, are heavier than average. And I doubt that they are cheaper than standard glass.

I am not advocating regulation to force everyone in wine to adopt strict glass bottle standards. My point is that wine industry choices are complicated. Even the seemingly simple decision to use lighter glass faces many obstacles. It is important to keep pushing forward — don’t you agree? — if only because the forces pushing back are strong.

In the meantime, I think wine bottles are on a path toward sustainability, even if it doesn’t always take the most direct route.

>>><<<

Thanks to Jonathan Rodwell for the photo of the water display highlighting the unique bottle designs of each producer.

A Guide to Over-Thinking Thanksgiving Wine

November 14, 2023 By in wine 7 Comments

Sue and I always give some thought to what wines to serve with our Thanksgiving feast and over the years I have reported on our deliberations here on The Wine Economist. Our thinking has evolved over the years. Although we are often “wine first” diners, who choose the wine first and then pick pairings that will complement, we’ve more or less decided that Thanksgiving should be an exception to our rule.

Thanksgiving isn’t really about wine, is it? And it is not actually about food, either, although a lot of attention is pointed in that direction. (I acknowledge that Thanksgiving is about football to some people, but that’s another story.) Thanksgiving is about the relationships that bring us together over the food and wine (and football, I guess). Honoring and deepening those relationships is the thing.

So it is important not to over-think Thanksgiving wine. Wine should make everything better, but it should not be the star. If all you can remember is that glass of wine, the holiday hasn’t fulfilled its potential.

So we pledge not to over-think Thanksgiving wine, but that doesn’t mean we can’t think about it at all. Here is a brief history of our experiments and how our thinking has evolved this year. In each case, we paired wines with a meal that evoked the spirit and flavors of Thanksgiving without cooking  a whole turkey each time.

Test #1 Joseph Phelps Freestone Sonoma Coast Pinot Noir.

We love Joseph Phelps Cabernet Sauvignon wines, but we hadn’t really explored the other varieties in their lineup, so jumped at this opportunity to test out this Sonoma Coast Pinot Noir. It was restrained, elegant, and deftly balanced. And it paired very well with the poultry (seasoned roast chicken) on our test plate. We have often served Pinot Noir at Thanksgiving and this would be a great choice.

But Sue started thinking (danger! danger!). The Pinot Noir was perfect with the bird, and that’s generally the centerpiece of Thanksgiving tables, but what about the side dishes? When you ask people what part of the Thanksgiving meal they could not do without, it usually isn’t the turkey that they name. It is always a traditional (or not-so-traditional) side dish. Maybe, Sue said, we should be focusing on the side dishes in our tests.

Test #2 Joseph Phelps Napa Valley Sauvignon Blanc.

White wine makes lots of sense for pairing with the classic Thanksgiving side dishes, many of which are rich and cry out for something with a little acidity. Sauvignon Blanc is the hottest white varietal wine at the moment and this Napa Valley was an excellent choice.

If you’ve grown accustomed to the stereotypical Marlborough Sauvignon Blanc style, the Joseph Phelps Sauvignon Blanc will come as a bit of a surprise. It is elegant and restrained (the Phelps house style at work?). It didn’t try to take over the show but did exactly the job we were looking for as an ensemble player.

Sauvignon Blanc is a great Thanksgiving choice, but it comes in so many styles that you’ll need to think about which one you choose (without over-thinking it, of course).  That Marlborough style might work depending on the side dishes, but it could be too dominant in some cases. Ditto with a heavily oaked fumé style. Think. But not too much. That’s really hard!

Test #3 Chateau Ste Michelle Indian Wells Yakima Valley Riesling.

Sue and I recently attended a German wine dinner at Ricardo’s Kitchen and Bar in Lacey, Washington and it was such a treat that we’ve been thinking a lot about Riesling wines. Those wines went so well with the robust German cuisine we were served that it makes sense that they would play well with Thanksgiving sides.

We chose the Indian Wells Yakima Valley Riesling from Chateau Ste Michelle. The Chateau is the world’s largest maker of Riesling wines and a lot of the focus is on the entry-level Columbia Valley Riesling, which is one of the great American wine bargains. There is a reason that you see it so often on restaurant by-the-glass lists. It over-delivers on flavor at a price point that works for both buyer and seller.

But there is a lot more to Ste Michelle Riesling than the entry wines, so we were interested in how the Indian Wells wine would work for our Thanksgiving test. The wine was elegant, restrained, and well-balanced. Sue said it would be an excellent role player with the holiday meal. I think it might be fun to try the entire Ste Michelle Riesling range throughout the long Thanksgiving weekend, from the entry-level Columbia Valley wine all the way through the iconic Eroica.

Side notes:  Glad to see winemaker David Rosenthal’s name on the front label because he made so much great white wine at the Chateau before moving to his current work with Partnership Wine Consulting. I am also happy to see that the wine lists the Yakima Valley appellation, which doesn’t always get the respect it deserves for the wonderful wines that are grown there.

Test #4 Zonin Orange-Cran Riviera Spritz.

I did not expect that our experiments would take us in this direction, but once I learned about Zonin’s Orange-Cranberry Riviera Spritz I could not resist. Orange-Cranberry. Those are real Thanksgiving flavors at our house. Sue makes a dynamite orange-cranberry sauce and its tart-sweet brightness really works alongside the savory roast vegetables and, of course, classic green bean casserole. How would those flavors work in a wine?

Sue was very suspicious of the Zonin spritz and accepted her glass reluctantly. I thought it might look and taste something like an Aperol spritz, but I was wrong. The color was bright rosy pink and the aromas and flavors very cranberry and orange, especially on the second day, with a pleasant orange leading the way. Very refreshing!  It would be a great sparkler to serve with Thanksgiving desserts and I think anyone would smile if you gave them a glass of this spritz as they walked through the door because they would know at once that they were going to have fun.

Sue declared herself a fan of the  Zonin Orange-Cranberry Spritz before that first glass was empty. What a surprise!

Thinking About Overthinking

Sue and I have learned a lot through these experiments, which will continue through the Thanksgiving weekend and beyond. Thinking about Thanksgiving wine in terms of the ensemble of flavors on your plate has merit, even if some combinations may work better than others.

Once she started thinking about wine and the side dishes, Sue quickly moved on to other questions. Pairing wines for particular guests? Maybe different wines for leftovers? Because leftovers (like turkey on rye with cream cheese and cranberry sauce) are the highlight for some of us. Next question: what wine to serve with turkey soup?

Wait! Are we starting to over-think this? Nah. That would never happen. So what do you think? Use the comments section to tell us what you are planning for Thanksgiving wine.

Crisis & Change for Washington Wine

November 7, 2023 By in economic crisis, Washington wine, wine, wine markets 2 Comments

Is the Washington State wine industry in a crisis? How you answer this question depends on where in the industry you sit and how you define a crisis. Certainly the news this year, as reported at The Wine Economist and elsewhere, is not good news. About 10,000 acres of the 60,000+ acres under vine appear to be surplus to requirements. Serious adjustments on both the supply and demand sides of the market are necessary. Change is in the wind.

Crisis and change has been a recurring theme to my economic research starting with my 1990 Oxford University Press book Mountains of Debt. Vested interests, structural rigidities, and simple momentum often lock nations, industries, and people into particular paths while the conditions around them evolve. Sometimes the only thing that can break the pattern is a crisis.

So let’s put the Washington situation in context and think about the future. Herewith several brief points to stimulate thinking.

Crisis is a durable feature of global wine.

The history of wine is a history of crises, mostly local or regional but some (think phylloxera) both global and transformational. University of Adelaide wine economist Kym Anderson’s history of the Australian wine industry, for example, is told in terms of five cycles of boom and bust. If he were to revise his history today, Prof. Anderson would have to add a sixth crisis to the list: the collapse of much of the Aussie industry due to the loss of its biggest export market, China.

Prohibition created crisis in the United States and many other countries a century ago and it took decades for the wine industry to really recover. As I wrote in a chapter of my book Wine Wars II, wine consumption actually increased during the Prohibition period in the United States as consumers exploited a loophole in the law that allowed for home production of up to 200 gallons of wine a year for household use. The quality of much of the wine was very low and alcoholic strength was valued above all.

The legal wine market that emerged when Prohibition was lifted leaned toward sweet, high-proof wines; it took years (until the 1960s in many places) for production of conventional table wines to become the norm. This was as true in Washington as elsewhere, where wines like the NAWICO Port shown here were the popular choice.

Washington’s current wine crisis is part of a global problem.

Washington’s wine crisis hasn’t happened in isolation. It is best scen in the context of a global wine glut, which has been the focus of several recent Wine Economist columns. As global wine consumption first stalled and then declined after several decades of steady growth the market shifts mean there is too much wine produced and too many vineyards growing grapes. It happened slowly and then suddenly and it happened almost everywhere. In Washington and California. In Bordeaux and Rioja. A friend reports driving by abandoned vineyards in Tuscany.

Like Tolstoy’s unhappy families, the story of each afflicted wine region is different, but they all happen in the context of global over-supply. Exporting  your way out of a wine surplus is harder when so many others are trying to do the same.

Washington’s Wine Crises: California Wine Bill

Washington is no stranger to wine crisis, as I have written on The Wine Economist, and it is interesting to review two cases in particular: the California Wine Bill of 1969 and the Langguth wine bust of the 1980s. Both situations were damaging at the time, but proved useful in the longer-term evoluations of the industry.

Wine sales became legal with the end of Prohibition but the market in Washington was not completely open. Washington producers gained a measure of protection from out-of-state (that is, California) producers because they could work directly with distributors whereas “foreign” wine had to go through the state liquor agency.

The California Wine Bill of 1969 (I have heard it called the “Gallo Bill”) leveled the playing field and took away the home-state advantage. Washington producers could not compete with the inexpensive wines that flooded in from California and so they were forced to turn up-market for sales. A quality wine indsutry emerged since that was the only kind that made sense.

As The Wine Economist reported, the Washington industry’s long-term decline as a protected industry reversed course and the modern wine sector emerged. The transition was far from painless and some producers disappeared. But Chateau Ste Michelle, Washington’s leading wine producer, can trace its roots back to the NAWICO and Pommerelle wines that the California Wine Bill crisis helped erase from store shelves.

Langguth Boom and Bust

The successful German wine giant F.W. Langguth boasts a brand portfolio that includes the famous Blue Nun brand. Langguth was attracted to Washington state by the success of Chateau Ste Michelle’s Riesling wines (which are still today, I think, one of the most popular on-premise by-the-glass wine selections).  Seeking to ride Riesling’s rising tide, they became the first important international investors in the Washington wine industry when they entered the market in the early 1980s.

Vineyards and a winery were required and soon appeared. The owners of Sagemoor Farms agreed to develop the 221-acre Weinbau vineyard on the previously vine-free Wahluke Slope. A state-of-the-art $5 million winery was constructed near Mattawa, far away form Chateau Ste Michelle’s big facility near Seattle.

Five million dollars doesn’t seem like a lot of money for a winery today, but back then it was big bucks (Ste Michelle’s big complex in Woodinville, built just a few years earlier, cost about $7 million). To build such a big winery out in the middle of nowhere on speculation of future market growth must have seemed crazy.

And, in fact, the project collapsed in just a few years and the Langguth family pullled out of Washington state. The history of the project makes good reading. Opinions vary about what caused the collapse. Maybe the project was ahead of its time (dry Riesling, for example, when sweeter wines were the market sweet spot). Maybe the project was poorly managed, with too much distance between those pulling the strings and those actually doing the work.

In any case, the Langguth label disappeared. The Weinbau Vineyard became a key element of a growing Wahluke Slope vineyard scene. The shiny new production facility was sold to Snoqualmie Vineyards, which was then an important producer and is now a value label in the Ste Michelle portfolio. Mattawa might still be pretty much out in the middle of nowhere, but now there are several shiny facilities producing lots of wine.

Creative Destruction

This brief account of wine industry crises in Washington and around the world has only scratched the surface of the topic. What are the lessons we can learn from this history? The first, which is where this column started, is that crises are a durable feature of the wine industry and once a given crisis is over the best thing to do is to beging preparing for the next one! Some of the crises from a century or more ago (think phylloxera and Prohibition) cast a long shadow that still affects us today in some respects.

But there is another lesson here, which was suggested to me when I talked with Seattle Times writer Erik Lacitis, whose report on Washington wine appeared in the Seattle Times’s Pacific NW Magazine over the weekend. Lacitis didn’t write about wineries closing their doors, although some have done so. Instead, he focused on winery start-ups and the many new folks who enter this business every year.

In fact, as Lacitis makes clear, the industry is remarkably resilient and each painful crisis lays the foundation, in one way or another, for future growth. The California Wine Bill, for example, destroyed part of the Washington industry but set a course for premium wine that was exactly in line with the way the market developed.

The Langguth collapse was painful, too, but left us with those production facilities near Mattawa and the vines that became the Wahluke Slope AVA, one of the state’s most important wine regions.

Is this an overly-optimistic way to think about Washington’s wine problems today? Perhaps. But I note without comments that the Langguth winery near Mattawa is now a custom crush facility, the sort of place where the next generation of Washington wineries get their start.

>>><<<

Want to dig deeper into Washington wine industry history? I recommend two classic books:

The Wine Project: Washington State’s Winemaking History by Ronald Irvine with Walter L. Clore (1997) and

Washington Wines & Wineries: The Essential Guide 2/e by Paul Gregutt (2010).

Unified Symposium XXX: Back to the Future for the Super Bowl of Wine Industry Meetings

October 31, 2023 By in Unified Wine & Grape Symposium, wine, wine history, wine markets 1 Comment

As harvest 2023 draws to a close, many of us are gearing up for the 2024 edition of the Unified Wine & Grape Symposium in Sacramento on January 23-25, 2024. The Unified is sort of the Super Bowl of North American wine industry events, so I’ve decided to follow Super Bowl practice and call this Unified XXX.

A lot has changed in the economy and the wine business since the first Unified Symposium was convened. The 1990s were a very different time. This was the era of “The End of History” as the collapse of Communism was said to close the era of ideological conflict and open a world of rising liberal democracy.

Surfing the Global Wave

The economy was expanding and markets were becoming more open and more global. Although Ross Perot claimed to hear a “giant sucking sound” of jobs being pulled to Mexico by the new NAFTA agreement, economic growth was remarkably robust. I recall that interest in university economics studies declined because there didn’t seem to be any big economic problems to solve.

As the 1990s moved ahead, the budget deficit in the United States shrank and then eventually actually achieved a surplus! The budget deficit for the last fiscal year was more than $1.5 trillion. What a difference!

The wine world was changing very rapidly in the 1990s, too. Wine surfed the globalization wave much to the benefit of Southern Hemisphere producers. This was the time when Australia, New Zealand, Argentina, and Chile wines became more widely available in the U.S. market, for example.

Wine’s Golden Age?

The U.S. wine market was growing and a Wine Business Monthly article published at the end of the decade provides useful context. “Demographic and Macroeconomic Factors Fueling Increased Wine Consumption” by research analyst Kristine Koerber identified four forces driving American wine: demographic trends, moderate wine consumption’s image as heart-healthy (think “60 Minutes” and the French Paradox story), rising wealth among consumers, and a successful generic marketing campaign (think Got Milk? but for wine).

Koerber concluded her report by saying, “We expect favorable trends to persist. The aging of the baby boomer will be the key demographic trend providing robust growth for the wine industry in the coming years. This demographic group has more disposable income and is reaching its peak spending years at 46.5 years of age, which should further facilitate the consumption of premium wines. High-quality wines with strong brand recognition such as Beringer and Mondavi are positioned to benefit from the growing premium wine market.”

Changing Times

An insightful forecast! But the situation today is pretty much the mirror image of that report. Demographic trends are widely seen to work against wine and alcoholic beverages generally today. Some consumers are wealthier but don’t necessarily feel that way because of pressure from inflation, rising interest rates, higher housing costs, and other factors such as student loan obligations.

Wine was the healthful choice in the 1990s but that tide has turned, too, with anti-alcohol initiatives gaining steam.  The wine industry’s response has been muted, creating what I call in my recent book Wine Wars II the wine identity crisis. Wine has a positive case, but consumers seem to have trouble hearing it.

Which brings me back to Unified XXX. The Unified Wine & Grape Symposium has become the place where the American wine industry comes together to think about, talk about, and form strategies regarding the challenges and opportunities of the day. (A lot of relationships are strengthened and business takes place on and off the trade show floor, too).

Unified I in Perspective

Now flash back to Unified I. That first event drew about 500 participants to the symposium sessions and to visit the 20 exhibitor tables (too small to call a trade show back then). Five hundred wine industry players is a lot and that attendance would be impressive for most meetings today. But Unified XXIX (the 2023 edition) was a lot bigger. About 12,000 people attended over three days, harvesting insights from the 96 speakers and doing business with the 879 exhibitors at the trade show. Unified XXX is on course to be bigger yet.

I have been involved with the Unified since 2012, mainly as moderator and/or speaker at the Wednesday morning State of the Industry session, the largest gathering of a three-day event. So I was interested to see what the equivalent program looked like at Unified I.

Jon Fredrikson was the lead-off speaker, giving a half-hour survey of market conditions. Knowing Jon, I’ll bet it was jam-packed with data and insights and that the audience hung on every word. Jon went on to be a featured speaker at almost every Unified meeting for the next 25 years until his retirement.

Jon’s lead-off presentation was followed by a teleconference that brought the voices of wine retailers into the room. This was not an easy thing to do in the landline era of the 1990s. Everyone wanted to know as much as they could about who was buying wine, who was selling it, and how the market looked for the future.

Globalization was obviously on everyone’s mind, too, as the next three sessions made clear, with a session on international trade effects, global perspectives, and how efforts to drain Europe’s wine lake might affect the American industry.

The Unified XXX State of the Industry lineup shows how the program has evolved to even more directly address the concerns of its wine industry audience.  Jeff Bitter and Danny Brager take deep dives into the trends and issues on the grower and consumer sides of the wine market respectively and Steve Fredricks analyzes the markets that connect them and the global market environment in which everything takes place. Susana Garcia Dolla, Director General of the Interprofesional del Vino de España, will provide an important international perspective, helping us understand how Spain’s wine sector has weathered the wine world’s storms and what lessons can be learned from their experience.

But Wait, There’s More!

There was a lot more going on at that first Unified meeting, of course. I am particularly struck by sessions titled “Monsters in the Closet: Major Issues Impacting Growers & Vintners” and “Government Landmines & Opportunities.” Monsters and landmines? Sounds like wine was a dangerous place! John Gillespie and Mike Boyd spoke on “Who’s Not Drinking Wine and Why?” — a question we are still asking today.

Unified XXX will feature a vast array of sessions (here is the complete schedule) that examine important issues in virtually every aspect of wine growing, production, distribution, regulation, and sales. Several sessions are offered in Spanish. It is quite a multi-discipline University of Wine.

A special treat this year is the Tuesday Keynote Luncheon. Karen Ross, Secretary of the California Department of Food and Agriculture, will be the featured speaker. Secretary Ross was President of the California Association of Wine Growers before taking her current job and in that role was instrumental in expanding the Unified into the impressive event it is today.

I am looking forward to hearing what Secretary Ross has to say about how the wine industry has adapted (and must continue to adapt) to the monsters and landmines that lurk around the corner. And to see everyone and learn as much as I can at Unified XXX.

Book Reviews: Wine Fraud, Klein Constantia, & Food Adventurers

October 24, 2023 By in book reviews, wine, wine fraud, wine history Leave a comment

Brief reviews of three new books that curious wine enthusiasts should consider.

Rebecca Gibb, Vintage Crime: A Short History of Wine Fraud (University of California Press). Reviewed by Sue Veseth.

As long as there had been wine, there has been fraud.  If there is money to be made, someone will figure out how to make it — and then how to make a little more, legitimately or not. Or, as Rebecca Gibb, MW, writes, “A splash of narcissism blended with greed makes for a toxic combination.” Gibb engagingly covers centuries of narcissism, greed, and wine fraud from ancient Greece and Rome to recent history, and efforts to root out and address fraud at all levels of the chain.

Gibb’s writing style reminded me in some ways of the style of another author and journalist I admire: Sarah Vowell. Gibb’s writing is light, breezy, and full of interesting content with contemporary references.

I started noting particular phrases from Gibb’s book that tickled me: a reference to Thomas Jefferson’s “inner wine nerd,” for example, and, in discussing Jefferson’s efforts to recover from a broken wrist, “… so he decided to do what we would all do when we are in pain: cross the Alps on the back of  a mule.” Another treat: using Bart Simpson to tell the story of Austria’s mid-1980s scandal involving diethylene glycol added to wine.

Make no mistake, however: behind the writing style is serious research, scholarship, and analysis. She digs into the numbers, sequences of events, historical context, and principal players. The chapter on the 1911 riots in Champagne — the subject of Gibb’s MW thesis —is particularly deep and wide.

No doubt, people will continue to commit wine crimes, likely with new technological tools, such as artificial intelligence. But, in the end, it all seems to come down to greed. The lesson from the 1983 movie Scarface may apply, as the character Frank Lopez (Robert Loggia) said, “Lesson  number one: don’t underestimate the other guy’s greed.”

>><<<

Joanne Gibson and Malu Lambert, Klein Constantia: The Home of Vin de Constance. (First Press Editions, distributed by Academie du Vin Library). Reviewed by Mike Veseth.

Wine is good, but wine and a story is better, so wineries everywhere love to tell their stories, often in the form of lavishly illustrated books. Sue and I have a love-hate relationship with winery books. We love to read them and look at the beautiful illustrations, but when we are on the road we fear that our winery hosts will give us copies of their books, which are typically large format, heavy from the glossy stock they are printed on, and nearly impossible to pack.

This new book about South Africa’s most famous winery conveniently arrived in the mail from the Academie du Vin Libaray and we were very happy to receive it. It is beautiful, of course, and tells this winery’s fascinating story with panache. Joanne Gibson focuses on the winery’s rich history while co-author Malu Lambert brings things up-to-date, showing the winery’s recent transformation into both a world-class producer and a wine tourism destination. A final chapter provided by the winery itself looks at the road ahead.

In a way Klein Constantia has grown into the reputation that its wines first established in the 17th century and that persisted through centuries. Once upon a time this signature wine was held in great esteem as one of the most desired wines in the world (and priced accordingly). The Constantia name rings in literature to signify opoulence, taste, luxury.

But, like South African wine in general, Klein Constania suffered from deep decline before rising again in the last 30 years. I was especially pleased to see the contributions of Duggie Jooste, who essentially resserected the winery and put it on the path back to prominence, and viticulturalist Ernst le Roux and winemaker Ross Gower who worked so closely with him. I had the pleasure of meeting Duggie’s son Lowell Jooste and Adam Mason, the winemaker who continued Gower’s work, on my first visit to South Africa. Both are prominently mentioned here.

Duggie Jooste and his team are the heroes of this fascinating story of rise, fall, and eventual rebirth spanning more than three centuries. Eventually the Jooste family realized they lacked the capital to take the winery to the next level and sold to the current owners, who have indeed taken that step and given us a wine, a place, and now this beautiful book that warmly honors its unique history.

>>><<<

Daniel E Bender, The Food Adventurers: How around-the-world travel changed the way we eat (Reaktion Books).  Reviewed by Mike Veseth.

I am pre-disposed to like books that take a global perspective (I guess that’s why I wrote Around the World in 80 Wines!) and I enjoy thinking outside the box, and trying to learn about wine by studying related fields.

So I could not resist Daniel E. Bender’s new book that looks at how around-the-world travel (think Jules Verne) changed the way we think about food. If travel could change food, maybe it could change wine? I was curious to start the adventure.

At first glance, the story is a bit discouraging. You want to hear that, if travel is broadening, then global travel is positively enlightening. But many of the early tourist circumnavigators, whether traveling over land or by ship, seem to become more parochial as the miles accumulate. Foreign food? Disgusting and sometimes even dangerous (don’t drink the water).

There are exceptions to the general rule that global travel tends to reinforce local prejudices about food in these pages. Ristafel, the Dutch-Indonesian colonial feast, always got high marks from travellers, we learn, although more for the elaborate service than for the food itself. And, zooming ahead to the jet age, the fake Polynesian experience of Trader Vic’s restaurants in Hilton hotel around the worlds was both ridiculous and ridiculously popular.  Both the ristafel and Trader Vic’s get full-chapter treatment.

Travel and exposure to foreign food, according to the accounts that form the base of Bender’s book, both open minds and palates and shut them tightly closed, which nicely illustrates Thomas Friedman’s theory that globalization is “everything and its opposite.”

Bender focuses on how these global tourists encounter foreign food, but wine appears frequently in the travel accounts. Not foreign wine, but the familiar European wines (and spirits) that the travelers brought with them. Indeed, alcohol seems to have fueled the commercial around-the-world travel industry. The Franconia, a tourist steamer with 356 passengers, typically left home port with 4000 bottles of whiskey, 4000 bottles of wine, 2800 bottles of Champagne, and 49,000 bottles of beer to be consumed during the circumnavigation.

I suppose the Franconia’s passengers were as suspicious of foreign drinks as they were of the disgusting, dangerous foods they encountered. No wonder they hurried back on board the ship each evening to eat and drink the familiar foods of home (as many cruise ship passengers do today!).

My reading of Bender’s book is that travel hasn’t made as much of a difference in food and drink as I might have hoped. Perhaps travel is too much of a surface phenomenon in most cases? Maybe migration is the more significant source of change?

It seems that the spread of food and wine cultures depends on personal experiences and relationships; the deeper those connections, the more significant the effects. Worth reflecting upon this as you contemplate your next foreign adventure.

Bolgheri and the Native vs Traditional Grape Variety Debate

October 17, 2023 By in Italian wine, wine, wine history, wine markets 3 Comments

There are hundreds of native grape varietals around the world. Italy has enough for Ian D’Agata to fill two substantial volumes:  Italy’s Native Wine Grape Terroirs and Native Wine Grapes of Italy.  Sometimes I think you could spend a lifetime enjoying just Italy’s native grape wines and never reach the end of the list.

Native grape varieties are almost everywhere threatened by invaders. “International” grape varieties such as Chardonnay, Cabernet Sauvignon, and Sauvignon Blanc, are thought to be easier to sell than native varieties with unfamiliar names. We tend to side with the underdogs in this fight, favoring native varieties that might otherwise fade from the scene. What a loss!

But that doesn’t mean that native grapes are the end of the story. Even in Friuli, home to so many indigenous grapes, there is a third category that are often called “traditional” grape varieties, such as Sauvignon Blanc and Cabernet Franc, which make excellent and even distinctive wines and have been planted locally for decades. Not native, to be sure, but no longer foreign, either.

Should we favor the native grape varieties because many of them are found only in a single place? Or is that unfair to the traditional grape varieties, which may have been planted locally for generations?

(I think I remember reading that there are a few wine regions in Europe where French-American hybrid grapes, which were introduced more than 100 years ago during the Phylloxera plague, are considered part of the traditional wine culture.)

A Waste of Time?

The native versus traditional grape variety question flared up a few months ago when Sue and I met up with a press group near Lake Garda in Northern Italy. All was quiet when we visited Lugana DOC wineries. Their distinctive wines were all made from Turbiana, a local variant of the native Trebbiano grape. But then we stopped at a couple of wineries in the Garda DOC, where several traditional “international” grape varieties are approved, and things changed a bit.

“This is a waste of time,” a journalist from Northern Europe proclaimed as he stared into his glass, which contained a very nice Chardonnay. My readers don’t care about Italian Chardonnay, he said, they only want to know about what is unique to this place, the native grapes.

I didn’t think it was a waste of time because learning about nice wines is almost always a good thing, but I admit I sometimes fall into a less extreme variant of this point of view, favoring native over traditional or international much of the time. But his strong reaction made me think. The vines for this wine had been planted by the winemaker’s grandfather and had helped support three generations of his family.  That seems pretty well rooted in terroir, don’t you think?

Bordeaux in Bolgheri

I am reconsidering this question right now because Sue and I have been sampling some red wines from Bolgheri. Bolgheri is located on the Tuscan coast in the under-appreciated Maremma region. The wines are the San Felice Bell’Aja Bolgheri Superiore and Podere Sapaio Volpolo Bolgheri. Coming from Tuscany, you would imagine red wines to be Sangiovese or even a “super Tuscan” Sangiovese blend.  But the Bell’Aja is 95 percent Merlot and 5 percent Cabernet Sauvignon. The Volpolo is 70 percent Cabernet Sauvignon and 15 percent each Petit Verdot and Merlot.

The wines were very different from each other (just look at the blends!) but the threads that connected them were intensity and elegance from bright acidity. If you are not familiar with Bolgheri wines, these blends will come as a surprise. How did this happen? And what should we make of them? (I won’t ask what my European journalist friend would have said!)

Bordeaux grape varieties came to the Maremma region on the Tuscan coast in the 1930s, according to Joe Bastianich’s account in his book Grandi Vini. That was about the same time that the swamps and marshes thereabouts were drained to fight malaria. Marchese Mario Incisa della Rocchetta saw similarities with Graves in Bordeaux in terms of maritime climactic influence and rocky soil, so a small amount of Cabernet was planted. The wines were meant for family and friends only, but word spread about a unique wine from a vineyard called Sassicia.

The family finally offered a small amount of the wine for sale in 1968 and Sassicia proclaimed the first “Super Tuscan,” which took the world by storm, inspiring winemakers in Tuscany and beyond to both raise standards and experiment with exciting new blends.

What is Tradition?

Sassicia was designated a simple vino da tavola because no appellation existed in Maremma for a wine with Bordeaux grape varieties. Indeed, when a Bolgheri DOC was first established in 1983 it designated white and rosé wines only. Red wines remained vino da tavola until 1994 when the DOC was amended to accommodate the sort of wines that define it today.

Bolgheri and its Bordeaux-blend wines are famous today and the best of them are treasured and collected.  I am not sure anyone would tell Bolgheri producers that it was a mistake to embrace Cabernet when the native Sangiovese was available.

Obviously, these wines don’t rely upon native grapes, but would you call Cabernet and Merlot “traditional” grape varieties here, or is it too soon? The first wines were planted about 90 years ago, the first commercial wines were made a little over 50 years ago, and a DOC was enacted for them less than 30 years ago. Italy is a land of long tradition. Bolgheri is young by comparison. Bolgheri’s timeline in this regard is more New World than Old World.

Perhaps, as Hobsbawm argued, tradition isn’t something that exists on its own. Maybe it is something we create to suit our needs.

Argentina Reconsidered: Malbec Red, Malbec White, & Exploring the Limits

October 10, 2023 By in Argentina, wine, wine magazines 3 Comments

A highlight of our first trip to Argentina in 2011 was a special lunch where we sampled wine after wine (paired with exquisite local cuisine), but none of the wines (until the very end) were Malbecs.

Our host, Andrés Rosberg, then President of the Association of Argentinean Sommeliers and a judge for the Decanter World Wine Awards, wanted to make a point. Argentina may be identified with Malbec wine. Malbec may be its signature wine grape variety. But Malbec doesn’t define Argentina.

I will paste the 2011 tasting menu at the bottom of this page so that you get a sense of the experience.

Argentina’s Many Faces

Sue and I have carried this lesson with us and we make every effort to spread the word when we can, highlighting the diversity of Argentina wines beyond Malbec and also the diversity of different Malbec wines, particularly the differences between higher- and lower-elevantion wines.

It would be impossible to recreate our experience in Buenos Aires, but we were able to reconsider stereotypes of Argentina wines recently thanks to sample wines from Grupo AVINEA , a leading Argentina producer. Grupo Avenia is probably best known here in the U.S. market for its popular-priced Bodega Argento Malbec, but in fact the group, like Argentina, has lots more to offer.

Our research extended over two evenings.  We make a point of tasting wine with meals because it is so much more realistic and, to us, revealing than the “sip, spit, and score” ritual of wine competitions.  Research assistants Bonnie and Richard joined us on the first evening for a series of three very surprising wines.

The first wine was the Artesano de Argento Organic White Malbec shown above. White Malbec? I think we were all afraid that it might be a sweetish blush wine like some White Zinfandels found on the market. But it was completely different. The grapes were picked early and the skins separated from the juice very quickly, resulting in a completely color-free wine that was crisp and refreshing.  The bottle was quickly drained. A hit!

Way South of the Border

The next two wines were from Grupo Avenia’s Bodega Otronia winery, which sources grapes from what is possibly the southern-most vineyard in the world at 45º 33′ S latitude. These are really extreme vineyards situated in the cold desert beside Lake Musters, in Chubut, Patagonia.

The 45 Rugientes Corte de Blancs was a fascinating blend of Gewurtztraminer, Pinot Gris, and Chardonnay, with layers of bright flavor and savory herbs. Sue and I have had blends like this from Northern Italy and they can be fantastic. A lot of attention was given to this wine. Hand harvested, fermented in concrete eggs and tanks, aged in a combination of oak and concrete. I really enjoyed it, but Richard prefered the White Malbec. Two very distinctive and unexpected white wines!

Then came the 45 Rugientes Pinot Noir, which was also delicious and unexpected. It was intense, with nice acidity and had a personality of its own, not Burgundy or Oregon or even Tasmania. Maybe it was the whole cluster fermentation that brought out extra fruit. Another hit.

There is actually quite of lot of Pinot Noir grown in Argentina, which might explain why Moët Chandon established its first New World sparkling wine outpost in Mendoza more than 60 years ago.

And Don’t Forget Malbec!

Later in the week Sue and I completed the project by pulling the cork on a bottle of Argento Malbec, but not the popular supermarket bottling. It was an Argento Single Vineyard Malbec from Finca Altamira. The wine was distinctive for its freshness and tart fruit, which in general sets apart our favorite Malbecs.

The bottom line from this research project? Argentina Malbec has a lot to offer and Argentina itself has much to offer beyond Malbec. Kinda makes you thirsty, doesn’t it? Thirsty to discover what’s next!

>><<<

2011 Tasting Menu

Breaded veal tongue stuffed with brie cheese & sundried tomatoes and piquillo peppers sauce paired with Chandon Cuvée Reserve Pinot Noir

Baby squid & pickled vegetables salad
Rutini Gewürztraminer 2009

Rabbit liver & spinach ravioli with mushroom stock
Ricardo Santos Sémillon 2010

White salmon with ajoblanco, almonds, roasted tomatoes, zucchinis & bean pods
Miguel Escorihuela Gascón Pequeñas Producciones Chardonnay 2009

Iced lullo, litchis, caramelized pumpkin seeds & yogurt foam
Rutini Vin Doux Naturel (Sémillon – Verdicchio) 2007

Allspice philo pastry, chocolate cream, apple, saffron ice cream & cardamom milk
Rutini Vino Dulce Encabezado de Malbec 2007

 

Will Success Spoil Marlborough Sauvignon Blanc?

October 3, 2023 By in New Zealand, wine, wine brands, wine markets 4 Comments

Will success spoil Marlborough Sauvignon Blanc? That is the question that haunts the 50+ winery members of Appellation Marlborough Wine (AMW). Sauvignon Blanc, as everyone knows, is New Zealand’s signature wine variety and Marlborough is world-famous for the distinctive wines made there. Marlborough Sauvignon Blanc is one of the most powerful brands in the world of wine.

I have friends who don’t claim to know much about wine, but they know what they like. And what they like, they will tell you, is Marlborough Sauvignon Blanc. No wonder exports of the wine grow year after year (except when short harvests intervene). Here in the United States, it is one of the few bright spots in the market and its success has invigorated the whole Sauvignon Blanc category.

Kiwi World Domination?

Marlborough Sauvignon Blanc isn’t the next big thing. It is the big thing right now and has been for some time. I charted the rise of this distinctive wine more than ten years ago in the first edition of my book Wine Wars and even hallucinated (that’s what they call it when an artificial intelligence robot makes stuff up) about Kiwi SB world domination in Wine Wars II, which came out last year.

World domination? No, not really. But it is quite a success story and, ironically, therefore a cause for nervousness for some Kiwi producers. That was already apparent way back in 2004 when Sue and I first visited New Zealand. Some winemakers were trying to diversify their sales away from such a heavy reliance on Sauvignon Blanc while others doubled down on their cash cow, even going so far as to question plantings of Pinot Noir for fear that it might dilute Brand NZ.

There is concern today about New Zealand’s great Sauvignon Blanc success, but it is a bit different than in the past. The focus is on control of the very valuable Marlborough Sauvignon brand. You might think that the issue is foreign control because so many important Kiwi wineries are owned by international wine companies, but the issue is a bit different.

New Zealand’s Global Reach

France’s LVMH owns icon Cloudy Bay, for example. And Pernod Ricard has Brancott Estate, Church Road, Deutz NZ, and Stoneleigh in its portfolio. Treasury Wine Estates owns Matua. Gallo owns Nobilo and part of Whitehaven according to my sources. Kim Crawford, Monkey Bay, and Selaks all belong to U.S.-based Constellation. International investment has driven the wine industry’s expansion and provided built-in global distribution systems. As I argued in my books, the New Zealand wine industry is a product of globalization.

I can’t imagine such a degree of foreign ownership anywhere else in the wine world, but that’s not the main issue. No, the problem, as I understand it, is that so much Marlborough Sauvignon Blanc is exported in bulk, in those huge shipping container tanks. The wine is bottled in the receiving market. Much of it goes into private-label products that may or may not have the quality Kiwi producers desire. Some producers have written to me over the years that they feel they are losing control of their brand.

A case can certainly be made that bulk shipping makes sense for New Zealand wine. The carbon footprint of the wine is already there because of the long distance from the vineyard to the final buyer and this factor grows if the product is bottled in New Zealand before shipping. However, NZ bottling would be one way for local producers to better control the product chain and protect their brand.

Appellation Marlborough Wine

Appellation Marlborough Wine (AMW) is an association of Marlborough producers that was formed in 2018 “to safeguard Marlborough Wine, initially focused on Sauvignon Blanc, whose purity and flavour intensity has earned it a phenomenal global reputation,” according to the group website.

“With this global demand, comes the proliferation of players and a range of quality expectations, which can put this hard-earned reputation at risk. AMW has been established to safeguard Marlborough wine for future generations to enjoy and provide assurance to consumers who seek wines of provenance, authenticity and integrity.”

There are currently 53 AWM member wineries, including several of the “internationals” mentioned above such as Cloudy Bay and Whitehaven plus Clos Henri, Framingham, and others. It is an impressive list. The intent is to establish the AMW logo as an indicator of quality and authenticity that extends beyond the “Marlborough” geographic designation.

The criteria for the AMW designation include 100% Marlborough grapes, sustainability certification, and the requirement that the wines be bottled in New Zealand, which excludes the bulk-shipped, foreign-bottled wines discussed above, including private label products.

As I understand it, the concern is that the popular bulk-shipped products will define Brand Marlborough Sauvignon Blanc in a way that is detrimental to its long-term sustainability. This kind of threat always exists when a region is associated with a single “signature varietal,” and you can appreciate how the bulk shipping element adds to producer concerns.

A Tale of Four Bottles

I wonder if the AMW designation will catch on. The back labels on wine bottles are often very crowded with logos and certifications and a good deal of education effort is needed to make a new one like this an effective tool. This could be a hard sell. That said, I think Sue and I will be checking out the back labels of Marlborough Sauvignon Blanc wines in the future because a recent research tasting persuaded us that there might be something to learn here.

Sue and I were joined by research assistants David and Terri for a dinner and tasting featuring the four wines shown in the photo above. Three of the wines — Lawson Dry Creek Sauvignon Blanc, Mahi Sauvignon Blanc, and Astrolabe Sauvignon Blanc — were provided by AMW as examples of member products. I added a fourth wine to the mix: Kirkland Signature Ti Point Marlborough Sauvignon Blanc, which sells for about $7.49 at Costco. It is an example of the sort of private-label wine that AMW is a reaction to. I have heard that it is Costco’s best-selling private-label wine. In any case, it probably defines Marlborough Sauvignon Blanc for many consumers.

What did we learn at our tasting? The Kirkland Signature was a bit less punchy than I remembered, but otherwise, it pretty well fit the popular notion of a Marlborough Sauvignon Blanc. The three AMW wines, which sold for about three times the Costco price, were very different and very different from each other. There was subtlety and elegance and, to be honest, if you defined Marlborough Sauvignon Blanc by the characteristics of the private label wines (or the big brands like Kim Crawford), you might not have guessed they were the same grape variety or came from the same place at all!

A Plausible Hypothesis

Obviously, three wines cannot represent the more than four dozen member wineries and the Costco wine cannot represent all the different bulk-shipped products. So nothing was proved here, but I think we learned something. Certainly, there is a stereotype of Marlborough Sauvignon Blanc that the big-volume brands embody. But there is more to Marlborough than that. More different grape varieties. More different styles of Sauvignon Blanc.

The AMW initiative is thus worthwhile. Will it succeed? It won’t be easy to persuade consumers to look for the AMW logo on the back label. I suspect consumers will be converted one glass at a time.

Global Wine Glut: The Return of Crisis Distillation

September 26, 2023 By in economic crisis, wine, wine history, wine markets 1 Comment

Crisis distillation is back in the news. For those unfamiliar with this wine business term, crisis distillation refers to government programs that buy surplus wine and distill it into industrial alcohol. The point isn’t to increase industrial alcohol supplies but to support prices and incomes in the wine sector by taking excess supply off the market.

Crisis distillation has a long history in the European Union. You might remember that some countries authorized crisis distillation just a few years ago during the COVID-19 pandemic. Public health restrictions hit on-trade wine very hard in some places where producers rely heavily on bar and restaurant sales (a more significant factor in Europe than here in the U.S.). The crisis was short-lived, but distillation was a significant factor while it lasted.

Distillation was a persistent feature twenty years ago, however. EU price support programs encouraged the production of low-quality wines that were poorly suited to highly competitive market conditions. Distillation programs bought the surplus wine that resulted. It was an expensive way to stabilize wine-grower income and, for a while at least, it seemed like it would go on forever, getting more and more costly each year.

It was reported at the time that Britain’s Prince (now King) Charles had his Aston Martin configured to run on a grape alcohol-rich fuel blend. Plonk power! I wonder what other uses they found for the enormous quantity of distilled wine that was produced?

The distillation policy was changing when The Wine Economist first appeared back in 2007. I have inserted a column below that was first posted on Christmas Eve of that year, which I think you might find useful to read for perspective on the current situation. The combination of supply adjustment and demand-based policy reforms did in fact address the critical issues and crisis distillation slowly disappeared from the wine business lexicon.

Distillation is back, but things are very different today. This wine glut today is caused more by stagnant and falling demand than by high supply, for example. And the quality issue is different, too. Back in the 2000s, the issue was poor quality wines that were hard to sell at any price. As you can read below, one part of the solution was an effort to eliminate these wines and raise quality and marketability. These efforts (magnified by the market premiumization trend) have been relatively successful. Now Sue and I routinely encounter excellent wines from regions that only a short while ago were better known for plonk.

What was important about the policies I discussed back in 2007 was that they addressed the causes of the problems that the EU wine industry faced. Crisis distillation today treats the impact of today’s issues in terms of surplus wine, but the causes (and therefore, I suppose, the cures) have not yet been directly addressed.

Distillation buys time. Spend it wisely. Here’s that 2007 column.

>>><<<

Draining Europe’s Wine Lake

Wine Economist / December 24, 2007

Europe is afloat in a sea of bad wine and the European Union agriculture ministers agreed last week to do something about it. But is it too little and too late?

Marian Fischer Boel, the EU Agriculture Minister, proposed a number of fairly radical reforms in 2006 and these were the basis of the discussion. She wanted an immediate end to distillation subsidies and a vast program to encourage small winegrowers to pull up their vines — one million acres — replacing them with other crops or, in some cases, with more marketable grape varieties. Perhaps predictably, the policies agreed last week are much weaker than the original proposals. Distillation subsidies will be phased out over five years and as many as 400,000 acres of vines will be “grubbed up.” Four hundred thousand acres seems like a lot, but given the size of the problem is it, as Wine Spectator reported, just “a good start?”

Current EU policies are as useless as the old wine barrels shown above. At the top end of the market, national and EU policies tend to stifle innovation and prevent effective market adjustment (the counter argument is that they preserve tradition and prevent destructive commercialization). I have read any number of stories about high end European winemakers who have expanded abroad in part to escape regulations on what they can produce, where, and how they can market it.

In the mid-market, where current attention is focused, EU and national regulations seem to prevent winemakers from achieving the transparency that an increasing global market requires. It is hard enough to know what’s in a bottle of wine without the complicated rules that government European wine labeling. French wines are typically “branded” by place of origin, not grape varietal, for example. Buyers who are not confident about their French geographical knowledge and the relationship between place, grape variety and wine style, are likely to choose New World wines with more easily understood characteristics. Australian wines sell well in France partly for this reason.

At the low end of the market, EU policies designed to support farm incomes have produced the famous “wine lake.” Each year the EU spends about $2 billion to buy up unsold wines and turn them into industrial alcohol. This vast reliable market for poor quality wine keeps thousands of small scale producers in business. The distillation subsidy insulates low-end producers from market forces with the result that the vineyards remain uneconomically small, the practices favor quantity over quality, and the wine, while it may reflect local tradition, finds few buyers in the marketplace. Cheap New World wine is preferred to bad Old World plonk.

The new EU policies are designed to drain the wine lake by making the wine sector more responsive to market forces. Label laws and regulations will be reformed so that European wines can be sold by regional and grape varietal just like New World wines. The distillation subsidy will be phased out over four years, with some of the subsidy funds returned to regional groups to be used in wine marketing and promotion efforts. And up to 400,000 acres of vineyards will be included in the new “vine-pull scheme.” New plantings will be allowed over time, but they will be market-driven not subsidy-driven.

The top end of the market is unlikely to be affected very much by these policies, since by definition they already have established brands and distribution channels. New label laws and subsidy reductions will have few direct effects on these producers, although they may be able to gain indirectly as vineyard consolidation takes place and Australian-style brands grow in importance. I predict that the most visible early effect of the new rules will be expansion of European brands both at home and in export markets.

The clear gainers are the mid-market producers — the wines that sell for about $12. There is great potential profit in this part of the market, which is expanding rapidly in the New World. Freed from the constraints of tradition, European winemakers should be able to compete in this market quite well. It is, however, a hotly contested market segment. European producers will need to use their new freedom well to succeed and those who choose not to adjust may suffer as the European market realigns itself.

The real problem is at the bottom of the market. Losing the distillation subsidies will hurt many producers and I don’t know how enough about the cost-benefit of the vine-pulling schemes to comment. Pulling 400,000 acres out of wine production should help stabilize the market by reducing the annual surplus, but I don’t know if it is enough and I don’t know if the incentives provided are strong enough.

Four hundred thousand acres — how big is that? Huge if you are thinking New World — Australia had just 388,000 acres of vineyards altogether in 2003 according to my Oxford Companion. But tiny if you think Old World — and of course this is an Old World problem. Italy and France had more than 2 million acres of vines each in 2003. (The Languedoc region in the south of France has 528,000 acres by itself.) Taking 400,000 acres out of production in Europe is like removing Moldova and Switzerland from the market. The effect on the regions where the vines are grubbed up will be large, but the impact on the global market is likely to be quite small — reducing the global surplus, but not eliminating it. I don’t know if it will be enough.

Will it work? Much of the discussion that I have read focuses on the size of the vine-pull scheme — 400,000 acres versus the million acres that Marian Fischer Boel proposed two years ago. Although I think the size of the grubbing up program is important, I believe that the market-driven reforms and the elimination of distillation subsidies are more important. The 1988 vine-pull scheme took over a million acres out of production but, as we see today, didn’t eliminate the surplus because of the difficulty of selling the good wines and the incentives to keep make bad ones.