Regular readers of The Wine Economist know that I get a lot of insights from my students and former students.  Marina Balleria, one of my current students at the University of Puget Sound, studied in Chile in Fall 2010 and, knowing of her interest in wine and society, I invited her to write an essay for publication on The Wine Economist website.

Her article is inspired by a visit to a biodynamic winery, but Marina uses it as a springboard to comment on broader social issues. Use a wineglass as a lens to view society? Where could she get an idea like that? You can read her article, which I’ve titled “Biodynamic Wine in Chile: Who Benefits?” by scrolling to the bottom of this post.

Marina’s essay raises a number of important questions about the nature of Chile’s economic development. I’d like to use this post to address two different but related issues.

Good and Cheap: A Vicious Cycle?

The first concerns Chile’s continuing difficulty breaking out of the bargain basement of the world wine market. Chile has long been know as a country where “Prices are very low and quality is very high — the ideal arrangement from everyone’s point of view except the Chilean farmer,” according to Hugh Johnson writing 40 years ago in an early edition of his book, Wine. I think he might say the same thing about Chilean wine today.

Chile has long been cursed with a reputation for bargain wines and pressures to keep export prices low have continued and intensified even as the average quality has soared even higher. A good deal, as Johnson noted …  for everyone else! No wonder Chileans are willing to try new things, as Marina notes in her essay, since old things seem part of an endless cycle.

Organic and biodynamic wines are a rather natural thing to try. Having escaped the curse of phylloxeria, Chile can grow wine grapes on their own rootstocks. Combine this with chemical free viticultural techniques and gentle cellar practices and there is an opportunity for a nearly unique product in the world of wine.  You can’t blame the Chileans for thinking that perhaps this is a way to escape the bargain basement trap!

The question is, are wine consumers willing to pay more for these wines? Or will they see them as just Chilean wines — very good, but no need to pay a premium for them? That’s the first big question.

Biodynamics: Voo-Doo Viticulture?

Marina’s essay also raises questions about biodynamic viticulture. Biodynamics is one of the most controversial topics in wine these days and you can see why people would be skeptical that it is only a gimmick. We live in an age of science and technology and the processes of biodynamic viticulture have a medieval feel — more like alchemy than rocket science. And the results are qualitative, which is inconvenient in a quantitative age. Voo-doo viticulture? You be the judge.

And yet I know a number of very hard-headed wine makers who have embraced biodynamics, some openly and others on the sly. Caution is warranted because consumer reaction to biodynamics is still unclear. Many wine enthusiasts still don’t know what it is and some seem to have it backwards — associatiing biodynamics with GMO vines — Franken-wines!

Not Mr. Know-It-All

I admit that I am cautious about embracing biodynamics, but I try to have an open mind. It is easy to believe that we know everything there is to know about growing grapes and making wine. After all, how difficult can it be?

We have centuries of experience and tons of scientific research. If biodynamics really worked, doesn’t it make sense that we would know it by now, have irrefutable proof and everyone would be doing it? If it isn’t a proven process by now it must be hokem.

And then I remember malolactic fermentation.

Winemakers observed the process of malolactic fermentation for centuries without understanding it.  The actual scientific process is a relatively recent discovery. Before Emile Peynaud figured it out back in the 1950s and 60s, malo was kind of a voo-doo dance in the wine barrel. “Malolatic fermentation happens in the wine in the spring by sympathy with the sap rising in the vines” — that was the pre-Peynaud view according to Benjamin Lewin’s book, Wine Myths & Realities. It took several decades to tease out out what was really going on in the post-alcoholic fermentation juice and I think winemakers are still experimenting to discover the when, where, how and why of controlling it.

Just Sayin’

So I’m just saying that if it took so long to really understand malolactic fermentation, maybe it will take a little longer to figure out what’s happening (or not happening) with biodynamics (and why)  and I’m not in a hurry to make up my mind. Wine is a big world and it can probably accommodate many different religions and beliefs. Even voo doo is welcome here (or should be), if that’s what it turns out to be.

In the meantime, I can appreciate why the Chileans might even resort to voo doo to break out of their good-but-cheap-wine cycle. And I hope it works for them!

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Here is Marina’s article:

“Biodynamic Wine in Chile: Who Benefits?”

Editor’s Note: Marina Balleria, one of my students at the University of Puget Sound, studied in Chile in Fall 2010 and, knowing of her interest in wine and society, I invited her to craft an essay for publication on The Wine Economist website, which you will find below.

The essay is inspired by a visit to a biodynamic winery, but Marina uses it as a springboard to comment on broader issues. Use a wineglass as a lens to view society? Where could she get an idea like that?

Marina is studying in Morocco now — I wonder what stories wine will reveal to her there? Thanks, Marina, for this contribution to The Wine Economist.

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“Biodynamic Wine in Chile: Who Benefits?”

As you drive through the Casablanca Valley, nestled in between Santiago and the coast of Chile, you could be in Northern California. The valley is an irrigated green underneath hills of sparse shrubs and cactus. You pass a vineyard, an olive oil plant, another vineyard, and then “Emiliana Organic and Biodynamic Wine”.

The phrase “biodynamic wine” is usually met with blank stares in Chile. Perusing the supermarket aisles or the shelves of the botillerias, where most Chileans buy their wine, biodynamic is absent from the labels. In fact, most of the more conscientious wine options such as “fair-trade” and “organic” are not available to the average Chilean wine customer.

The only Chilean outside of the wine industry that I encountered who knew about the topic was Carolina Cabezas, a fiercely opinionated nurse who turned her country home into a biodynamic farm. She deemed it a heretic sect of biodynamism because wine is a poison to the body and the unholy combination is nothing but a fad. When I asked American citizen and long-time Chilean resident Glenn Aldrich, he succinctly encapsulated the Chilean business model in a single phrase: “I don’t know a thing about it, but I know that Chileans always like to do what is new and different especially if it has good marketing.”

THE BIODYNAMIC SENSATION THAT IS SWEEPING THE NATIONS

Biodynamic wine does have that. This viticulture first made a stir because of its unconventional farming practices based on the teaching of Rudolf Steiner, the founder of anthroposophy and of Waldorf School-fame. These include lunar calendars that decide harvest dates, “preparations” concocted of red deer bladders and yarrow and homeopathic treatments used for pest control and dispensed according to the zodiac calendar. All this is meant to create farms that are self-sustaining yet interconnected systems.

Outside of the biodynamic community, these practices are met with skepticism, as scientific proof is shoddy at best. According to a six-year study from Washington State University, biodynamic and organic grapes differed in no substantial way for any of the “physical, chemical and biological parameters tested”, upending claims to the contrary. However, biodynamic wines are being given excellent scores by testers and some recognize it as a way to preserve terroir. What it seems to come down to is that wine growers willing to meticulously grow grapes according to the lunar calendar tend to be equally detail-oriented in other aspects of wine production, resulting in finely, if bizarrely, crafted wines. In any case, biodynamic wine has received premium billing in many wine shops across the globe. Back in Chile, the wine producers have taken notice.

A GUIDED TOUR

As you take the tour in Emiliana’s Casablanca winery all of the hallmarks of biodynamic farming are carefully on display.

The tour guide gives you the standard lines about a concern for the environment and points with pride to the portable chicken coop, used for pest control. He glosses over the grittier parts of biodynamic farming, calling it “the next level of organic” and Steiner is only briefly mentioned. He does affirm that it is “actually a science” and contends that the only proof necessary is in the bottle. We pass by the deer bladders hanging out to dry and duck into the cellar where the preparations absorb the cosmic energies. Apparently, it is common for guests to burst into laughter during this portion of the tour.

Next is the social responsibility component—the community garden in which the rows belong to different workers, allowing the workers to harvest their own biodynamic food and sell the chickens’ eggs. Emiliana also produces olive oil and honey so the workers have employment year round. It is later revealed after gentle probing that this plan benefits about 35 workers out of the 200 or so that are employed during harvest season. The harvesters are not higher paid than at neighboring vineyards. Emiliana is a higher coveted employer however, because as with organic farming, it provides a pesticide-free workplace.

BIG BACKING, BIG EXIT

“This isn’t something we are allowed to say, but we wouldn’t exist without Concha y Toro,” our tour guide tells us after we ease into our chairs for the wine tasting.

Concha y Toro, one of the biggest producers of wine in Latin America put out a wide array of wines, some occupy the bottom shelves of Chilean liquor stores and others come with hundred-dollar price tags. Names include Casillero del Diablo, Amelia and Don Melchor. Emiliana, named for the wife of the founder, is the brand used for their sustainable lines. Emiliana went organic in 1986 and biodynamic in 1997, going through the costly certification processes for both. They proudly announce that they have the distinction of being one of the first in Latin America to do so, a testament to the not-so-friendly rivalry between Southern Cone wine producers. Concha y Toro can quietly put up the capital for ventures such as Emiliana Organic and Biodynamic wine but the both try to avoid association. Emiliana is made with eyes for the international market as 90% of its products are sold abroad with some lines produced exclusively for export. This is not uncommon for fine wines.

According to my tour guide, the grand exodus of wine from Chile is because of a lack of an endemic Chilean wine culture. Basically, there is not a sufficient domestic demand to keep luxury brand wines in the country.

I beg to differ. Here, wine is a requisite at any meal and the bottle is invariably Chilean. However, cheap wine is decent wine and incomes are limited. It is budgeting that keeps the Chileans from buying more expensive wine, not cultural disregard. Likewise, for the producers there is more to be gained by selling abroad. It is simple economics.

IN THE GRAND SCHEME OF THINGS

Taken as a whole, the Chilean wine industry demonstrates a larger truth of the Chilean economy.  The country’s economy is largely export-based, with a current account balance of $4.2 billion (29^th in the world). Many of these exports are commodities, with the top five highest-valued export commodities being copper, fruit, fish products, paper and pulp, chemicals and, of course, wine. Winemaking is not only lucrative but can become more so as Chile’s finer wines are established, making it a sustainable industry with growth potential. To try realize this goal, Chileans are adhering to the maxim that Glen Aldrich laid out: do what is new, different and marketable.

The resulting marketing campaigns, however, depicts a Chile far removed from reality and sometimes downright contradictory. One only has to look at the certified biodynamic winery that is by definition a self-sustaining system but is employed to ship the bottles, which are not found in the home country. This is true across exported commodities. The majority of the copper of Chile is extracted by multinationals and little of the revenue goes back to the country. Only fruit deemed not fit for export is sold in Chilean supermarkets. The more left-leaning Chileans are constantly bemoaning the theft of their natural resources by evil corporations, or worse, the United States. On the other side, it is seen as a boon for the Chilean economy, which is growing at a much faster pace than

Herein lies a debate familiar to most International Political Economy students: does this time of export-driven growth create irreversible dependency on other countries and represent little more than exploitation? Or, does is this introduction into the global market economy that allows them to grow in ways that would be impossible otherwise and is only a stage in its development? I, like any indecisive student, choose option C: it depends. If Chile invests this income in the right way with education, technology and research, it could be a benefit to all. If not, the more pessimistic option could become true.

Biodynamic wine provides a test case of how Chile is pursuing its growth, with an eye for the tastes of the outside markets and little regard for what happens at home. Whether this development model is successful, sustainable and spreads throughout the social strata remains to be seen. A good indicator to watch may be what kinds of wine are served with dinner.

Sources:

The tour of Emiliana Organic and Biodynamic winery in the Casablanca Valley took place on December 27^th, 2010. More information can be found at: http://www.emiliana.cl/

Interviews were conducted informally by yours truly.

Scientific research about biodynamic wine vs. organic comes to me by way of The Skeptical Inquier’s article titled “Biodynamics in the Wine Bottle” by Douglass Smith and Jesús Barquin, originally published December/November 2007. It can be accessed at http://www.csicop.org/si/show/biodynamics_in_the_wine_bottle/.

The citation for the journal article is as follows:

Moulton, G.A., and J. King. 2005. Growing wine grapes in maritime western Washington. Washington State University Extension Bulletin. WSU-NWREC, 16650 S.R. 536. Available at: http://cru.cahe.wsu.edu/CEPublications/eb2001/eb2001.pdf

Statistics on Chile’s economy are from the CIA World Fact Book, accessed January 18, 2011.