Monthly Archives: September 2011

On Champagne: Keynes or Adam Smith?

September 28, 2011 By in wine education, wine price 5 Comments

John Maynard Keynes loved Champagne. When asked if he had any regrets in life he admitted to only one. I regret that I did not drink more Champagne, he said.

He even applied economic analysis to Champagne. Looking for ways to increase revenue from the bar at the Cambridge theatre where his ballerina wife Lydia Lopokova often danced (Keynes subsidized the theatre, so he had an interest in its “liquidty”), he studied the cross elasticity of demand between ordinary and premium Champagnes and proposes a novel plan to increase total expenditures by altering prices.

Raising the relative price of the cheaper stuff would make the more expensive tipple seem a better deal, he said, and increase total revenues. I don’t know if the author of Essays in Persuasion was able to persuade the bar manager to go along with the experiment.

Adam Smith, Terroirist

There is no indication that Adam Smith was fond of Champagne or even gave it much thought. Perhaps this was because of the difference in time and place relative to Keynes, but I think it might be because Smith was a terroirist. He believed in the idea of terroir and wrote in the Wealth of Nations that the wine grape was particularly sensitive to local growing conditions. He noted that certain famous Bordeaux wines earned a terroir premium in the marketplace.

If Smith was in fact a terroirist he might shy away from Champagne because most of the Champagne wines in the market place are relatively terroir-free.  Yes, of course, they represent that terroir of the Champagne appelation. But the wines that come from the big houses are blends that come from hundreds of growers and several different vintages. The wines are made in the cellar (through the highly manipulative methode champegnoise) at least as much as they are made in the vineyard. They can be excellent luxury products to be sure, but consistency is generally valued more than terroirst local or vintage variation.

Grower Champagnes are different; Smith and Keynes would both love them. They combine all the luxury and sensuality that Keynes appreciated with Smith’s intellectual focus on local conditions. Grower Champagnes are made in teeny tiny quantities by individual Champagne winegrowers from estate fruit. They are cult wines sold by specialists like Terry Theise, who also champions high terroir Rieslings from Germany and Austria.

Popping a Fat Cork

Is there a market for luxury terroir wines like grower Champagne? This question led us to a Seattle door marked “Fat Cork” where owner Bryan Maletis imports an exclusive list of grower Champagnes and sells them directly to small but growing local and national network of Keynesian-Smith and Smithian-Keynes buyers.

Bryan is well placed to take on the grower Champagne business. He has deep experience in the wine business, most recently as brand manager for Champagne Laurent-Perrier at Winebow, the big distributor. His connection to the grower networks and understanding of the market and distributional issues are valuable assets.

Bryan led us through a terroir tasting of three grower Champagnes (see the list at the end of this post) and the differences in wine were readily apparent to me and my Champagne research unit, which includes Sue, Joyce, Bonnie, Barry and Richard. Joyce revealed herself to have both a fine palate and an exceptional ability to express herself when it comes to Champagne and it was interesting to watch Bryan and his wife Abigail analyze the particular qualities of the wines in their portfolio in order to select the perfect wine for Joyce.

I asked Bryan about the challenges that his business faces, expecting him to start with shipping problems. But he told me that shipping isn’t an important barrier for him at this point. He has created innovative shipping containers that allow him to safely ship wine even in the hottest weather.  So check that important box. And he simply complies with all the interstate laws as best he can, accepting the constraints and pushing on.

University of Champagne

The real problem is that sparkling wine is a small part of the wine market and grower Champagne is a small part of that. People don’t drink Champagne every day, but save it for special occasions. Bryan would like to change that. And even people who have a Keynesian view of Champagne don’t necessarily know about grower Champagne, but may stick for the most part with the heavily-promoted brand names of the major houses.

It’s a marketing problem, he said, although I think it is also an educational problem (which probably makes it even worse). People won’t seek out grower Champagnes until they understand them. Once they taste them, however, I think many will be intrigued and want to probe the Champagne terroir as terroirists do for other wines.

Am I saying that, with a little education, Keynesians can embrace Adam Smith? I guess so! At least when it comes to Champagne.

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Here are the three grower Champagnes we tasted with Bryan and Abigail. Special thanks to Sue, Bonnie & Richard and Joyce & Barry for their assistance in analyzing the market for grower Champagnes. And thanks to Richard, of course, for sharing his business model with us and popping a few fat corks.

  • Perrot-Batteaux et Filles Cuvée Helix Blanc de Blancs (Bergeres-les-Vertus, Cote des Blancs)
  • Pascal Redon Brut Tradition (Trepail, Montagne de Riems)
  • Didier-Ducos Fils Brut (St. Martin d’Ablois, Valee de la Marne)

Wine Wars World Tour Begins

September 24, 2011 By in Shameless Self-Promotion 1 Comment

The fall season of Wine Wars book events (which I am modestly calling The Wine Wars World Tour) kicked off last week with a well-attended talk at the University of Puget Sound. My calendar is starting to fill up so I think it’s time to post a schedule for September and October. I have created a World Tour page (click on the link) that I’ll update whenever a new event is added to the list.

Hope to see you somewhere down the road at a Wine Wars World Tour book talk or signing!

September 2011

  • “The Miracle of Two Buck Chuck and the Revenge of the Terroirists.” Saturday September 17 2011  11:00 am in McIntyre Hall 103, University of Puget Sound.
  • ”Wine Wars: A Tale of Curses, Miracles and Revenge.” Thursday September 29 2011. 7:30 pm Linfield College, McMinnville, Oregon.
  • “Wine Wars: A Tale of Curses, Miracles and Revenge.” Friday September 30 2011.  McMinnville Rotary Club, McMinnville, Oregon.

October 2011

November 2011
December 2011
  • Retired Teachers Association of Tacoma. Saturday, December 3, 2011. Details tba.
January 2012
  • Transportation Club of Seattle. Wednesday, January 4, 2012. Details tba.
  • Olympia, Washington Alumni Event, Thursday, January 19, 2012. Details tba.
  • Unified Wine & Grape Symposium, Sacramento, California. Wednesday, January 25, 2012. Details tba.
  • Book talk at an historical Napa Valley winery. January 27 or 28, 2012. Details tba.
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Please contact me if you are interested in hosting a Wine Wars book event.

Grape Transformations: Piemonte’s Twin Tornados

September 20, 2011 By in grape transformations, Italian wine, wine brands, wine history, wine markets, wine price, wine research 1 Comment

This is the second in a series on people who have revolutionized the way the world thinks about wine or a particular wine region. This post takes us to Italy’s Piemonte region, famous for its Barolo and Barbaresco wines.

Two winemakers stand out here. Many of you have probably already guessed the first name: Angelo Gaja, who is associated with the transformation of Barbaresco. The second name? I’ll leave you in suspense for a few paragraphs. See if you can figure it out.

Gaga for Gaja

Angelo Gaja changed the way the world thinks about Piemonte wine (and to some extent Italian wine in general). Joe Bastianich (writing in his book Grandi Vini) says that Gaja is “the most famous Italian wine producer in the world” (this may come as news to the Antinori and Frescobaldi families, but I’m sure Joe knows what he is talking about). Barbaresco was seen as the plain little sister of sexy Barolo until Gaja changed everything.

Exactly what Gaja changed and how is a matter of opinion, although the achievement is clear. Bastianich looks to the vineyard, the development of particular vineyard sites and the production of “cru” single vineyard “terroir” wines. He also praises Gaja’s efforts to travel the world promoting his wines and the other wines of the region. The power of Gaja’s personality is clearly part of the story here.

Matt Kramer, writing in his book Making Sense of Italian Wine, tells a different story. For him Gaja’s contribution was in the cellar even more than the vineyard, where he introducing an international style to the wine by using small French oak barrels (Gaja also controversially introduced international grape varieties to the family’s vineyards).

Gaja’s second and perhaps even greater achievement, Kramer suggests, was to charge outrageous prices for his wines. “While few people know about wine, everybody’s an expert on money: Could this Gaja … really be worth that much money? The sheer chutzpah was captivating and so, too, it turned out, were the wines.”

Gaja became a role model for Piemonte and perhaps for aspiring winemakers throughout Italy.

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Barbera, Bologna, “Braida”

As much as I admire Angelo Gaja, enjoy his wines and respect his innovations, he is not alone on the Piemonte “grape transformations” podium. The second “tornado” is someone who did for democratic Barbera what Gaja did for aristocratic Nebbiolo. The achievement may be even greater.

Nebbiolo, the noble grape that is responsible for the great Barolo, Barbaresco and Langhe Rosso wines, is far from the most planted Piemonte grape. It has the best reputation, but perhaps because it ripens so late and requires specific site characteristics to excel, it is not as widely planted as you might imagine. There is 15 times more Barbera than Nebbiolo in Piemonte.

Barbera! Making this humble everyday wine respected  and even fashionable today is a signal achievement. This is the claim to fame of the late Giacomo Bologna of “Braida” winery in Rocchetta Tanaro, just a few miles from Asti.

Barbera is not finicky like Nebbiolo — it will grow pretty much wherever you plant it in Piemonte, both where it produces outstanding grapes and where quality is not so high. There was not much of a premium for quality grapes in the early postwar era when wholesalers would buy indiscriminately and lump them all together. Giacomo Bologna thought he could do better and set out to achieve excellence beginning in the 1960s, when Gaja was also picking up steam.

The old Barbera was nothing special, but focusing on specific sites with old vines and low productivity, engaging in aggressive cap management and aging the wines in small French oak, Bologna was able to create both a new Barbera wine and a new image of Barbera wine. The top wines, including the famous Bricco dell’Uccellone, redefined the region and jumpstarted the quality wine movement.

Another “Braida” Revolution?

We visited Braida in June when were in Italy for the wine economics conference in Bolzano. Nadine Weihgold led us on a tour of the winery, pointing out the many ways that Giacomo Bologna’s vision and plans have been fulfilled since his untimely death by his wife Anna and his two children Raffaella and Giuseppe (both of whom are enologists).

We tasting the single vineyard wines and then Ai Suma, an extreme version of Bologna’s idea of Barbera that is only produced in special years. These are wines of distinction and reputation and so popular in Italy that a surprisingly small amount leaks out to the rest of the world.

Giuseppe Bologna happened to pass through on his way to the barrel room and, hearing the wine economics conversation, sat down to join us. “Is there anything else you’d like to taste?” Nadine asked? Embarrassed and apologetic, I confessed I wanted to follow these great wines with their vivacious but less prestigious little sister — La Monella, the frizzante Barbera that was the company’s first success. A simple wine, but with style and quality.  Were they offended? No, just the opposite. Grinning with obvious pleasure, Giuseppe went to work, corks started to fly and soon were we chatting away in mixed Italian and English.

Ai Suma might be literally the summit of Giacomo Bologna’s mountain, but his son Giuseppe has his own dreams and plans — and they include Pinot Noir. Pinot is a blending grape in this part of Italy, but Giuseppe has hopes that it might some day learn to stand on its own as Barbera has. He called for a barrel sample and the wine was very interesting — not an imitation of Burgundy, Oregon or New Zealand, but something different, still developing, full of potential.

Pinot Noir in Barolo-ville? Giuseppe Bologna must be nuts. But then they probably said that about Giacomo Bologna and Angelo Gaja back in the day.

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This video has nice images of Giacomo Bologna and family and tells the winery’s history very well (I think you can catch the gist even if your Italian is a little rusty). The first video features Angelo Gaja telling his own story. Cheers!

Grape Transformations: Mondavi and Catena

September 13, 2011 By in Argentina, grape transformations, Mondavi, wine history, wine research 3 Comments

Karl Polanyi’s classic 1944 book, The Great Transformation presented a theory of how the Industrial Revolution transformed much the world. Polanyi proposed a complex paradigm of acting (economy and technology) and reacting (politics and social movements) forces that combined to shape history.  It is a must read (but not always an easy one) if you are  looking for Big Ideas in an era of disruptive change.

This Changes Everything

I’m working on my own theory of  “Grape Transformations,” which will be an occasional series here at The Wine Economist. I’m not interested in fads and trends. I want to understand instances where a person or small group fundamentally changed the nature of wine or the way that a type of wine or wine region is perceived.

Jesus is at the top of my list, of course, since he changed water into wine, the ultimate grape transformation. And there is a reason that we call think of this as a miracle. As the always insightful Ken Bernsohn reminds me, inertia is a very strong force in the world of wine (and elsewhere). This is obviously true in the vineyard itself, where years are required to “turn the supertanker” from one grape variety to another. It is also true in the marketplace, where a visible iceberg of wine drinkers interested in trying new things sits atop an invisible bulk of consumers with preferences and habits that are frozen in place (most of them drink no wine at all).

So it really is a miracle (although not in the “fishes and loaves” class) when wine makes a big turn. What are some important examples for my Grape Transformations file?

The Julia Child of Wine

Julia and the Mondavis at the Smithsonian

Let me begin with Robert Mondavi, if only because I discuss his case at some length in Wine Wars. Here’s how the section on Mondavi begins …

I like to say that Robert Mondavi tried to do for American wine what Julia Child (public television’s “French Chef”) tried to do for American cuisine: revolutionize it by convincing Americans that they could not just imitate the French but maybe better them at their own game.

Julia Child succeeded, although not by herself of course. American cuisine was transformed by her books and The French Chef, which aired from 1963 to 1973. She changed the idea of food in America. American ingredients, French techniques. Bring them together and cooks could be chefs.

Robert Mondavi did the same thing for wine. He was convinced that American grapes and Old World techniques could produced world-class wines. And he was right. When the Robert Mondavi Winery opened in Oakville in 1966, it was the first major new investment in Napa Valley in decades and it changed everything (not by itself, of course) and paved the way for a distinctly American vision of fine wine that coexists today along with a Gallo-tinted image of mass-market wines.

Mondavi wasn’t alone and he didn’t do it by himself, but I think it is fair to associate Robert Mondavi with the Grape Transformation of American wine. Quite an accomplishment.

The Mondavi of Mendoza

I think of Nicolas Catena as the Robert Mondavi of Mendoza, although I admit that the similarities only go so far. Catena transformation of Argentina’s wine industry is perhaps even more significant because previous winemaking baseline was so low.  Laura Catena tells the story in a very personal way in her excellent book, Vino Argentino. She explains how and why Argentinean wine changed in terms of her family history.

A broader and more detailed account is due for publication in a few months — Ian Mount’s brilliant The Vineyard at the End of the World (I’ve just finished reading an advance copy — watch for a review here nearer the publication date). Placing Nicolas Catena’s accomplishments in a broader context, as Mount does, changes the Catena story a bit and raises new questions, but does not alter our view of the transformative force he helped launch.

I admit to prejudice in this matter because of the courtesy we were shown when we visited Mendoza and visited with Catena and Luca (Laura Catena’s project) winemakers. Nicolas Catena has a PhD in economics and was a visiting professor at UC Berkeley when visits to Napa winemakers (and a meeting with Mondavi) transformed his idea of what New World wine could be. It was a special treat when, during our winery visit, I was given the opportunity to browse for just a moment through Catena’s personal collection of economics texts.

No Plan B

Accept for the sake of argument that Mondavi and Catena belong on the Grape Transformations list. What can we learn generally from their two specific cases? Something, I think, but n=2 is a small sample size so we shouldn’t press too hard. Robert Mondavi and Nicolas Catena have little in common in terms of personality from what I have read. Catena seems be as pensive as Mondavi was outgoing. Both were driven, I suppose, and perhaps that’s the critical factor.

Both took big risks and that seems like an important characteristic. And I think that they both felt that they had little choice but to take risks, although for different reasons and from different perspectives. Mondavi left the family business and forged out on his own relatively late in life. He didn’t have a Plan B — his new winery had to succeed.

Nicolas Catena, on the other hand, unexpectedly ended up with the family business (ruining his plans for an academic career). But Argentina’s wine markets were in a funk — export was the only route open and he (and those who worked for and with him) had no choice but to remake the wine and the business if they were to avoid collapse. No Plan B here, either.

Finally, it is interesting that family is such as powerful theme in both stories, too, and this is something I will try to explore a bit more in future posts. In both cases the transformations that they led began as internal revolutions, dramatic changes within the family way of doing business, and rapidly spread outward.

The family theme continues today. Laura Catena is now the face of the family business even though she still maintains her “day job” as an ER doctor in the San Francisco area where her family lives.  The Mondavi sons carry on the family business tradition, but not of course the actually family business — Constellation Brands purchased the Robert Mondavi brand back in 2005.

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I have a couple of “Grape Transformation” stories in mind that I will share in future posts. In the meantime, I hope my readers will use the Comments link to give their thought on this idea and suggest names for the list of people who changed the idea of wine.

Authentic Wine: Terroirist Manifesto and DIY Guide

September 7, 2011 By in biodynamic wine, book reviews, technology, wine research, wine science 2 Comments

Jamie Goode and Sam Harrop MW,  Authentic Wine: toward natural and sustainable winemaking. University of California Press, 2011.

“The wine industry is at a crossroads,” write Jamie Goode and Sam Harrop in the concluding chapter of their fine new book, Authentic Wine. “Wine is a wonderful natural, authentic product. Do we emphasize this naturalness, celebrate the diversity of wine, and put our house in order by steering away from unneeded additions and manipulations? Or do we allow wine to become simply another manufactured beverage whose flavours are manipulated to match perceived consumer preferences?”

Thus do Goode and Harrop state what I have come to call the Terroirist Manifesto. It is pretty clear, when you put it this way, that our only choice is to take up arms in defense of natural, authentic wine. Going down the other road is unthinkable (and perhaps undrinkable).

Terroirist Sympathies Disclosed

Let me say up front that I am very sympathetic to the Terroirist Manifesto. Indeed, I argue in Wine Wars that “the revenge of the terroirists” is a necessary feature of the future of wine. We need terroirists to keep us (and our wine) honest.

But does it boil down to a simple choice — this way or that way? Despite my stated sympathies, I say no. Wine is not a single thing, it is many things and I think it that monolithic thinking is the wrong approach. Wine travels many roads and I don’t really see the harm if some wines are industrialized so long as that doesn’t stop other wines from taking a more arts and crafts approach. It is up to us, the consumers, to understand the difference so that the wines of the type that Goode and Harrop champion will endure and prosper.

So it would seem that I disagree with the authors, but that’s not really true. What makes this a really interesting book (and one that I recommend enthusiastically) is that Goode and Harrop argue strongly for the principle of authentic wine and then carefully instruct on the practical matter of how to get there, focusing on choices in the vineyard, the cellar and the marketplace and taking account the real world differences between high volume commercial products and small lot craft wines.

In other words, I think Goode and Harrop are really telling winemakers that they don’t have to make a big choice — wine is not really at a crossroads — because there are practical sensible ways to achieve their goals without debasing the idea of wine as a unique element of society. The key is keep the idea of authenticity in the forefront.

Natural versus Authentic Wine

So what is authentic wine? Well, even after reading the book I don’t think I can give you a precise definition. This may be by design. Apparently Goode and Harrop originally wanted to title their book Natural Wine, but then the “natural wine” movement appeared, advocating extremely limited intervention in wine making. Although its advocates argue that this is the only way to make “real wines” (remember the English “real ale” movement of a few years ago), others say that it is just a fad or an excuse for the flawed wines that result from this extreme approach.

Goode and Harrop were probably wise to duck this controversy. Although their goals may align pretty well with those of the most vocal natural wine advocates, their strategies and tactics do not. They are far too practical (a good thing in my book) and understand that no one is going to risk making a million gallons on flawed wine because they are wedded to the most extreme versions of the natural wine principle.

Goode’s fingerprints are readily recognized on many pages. A scientist, he is also author of The Science of Wine, a book that I have read from cover to cover twice and consult very frequently. The combination of emotional manifesto and reasoned analysis works very well.

VooDoo Viticulture?

So what do the authors think of biodynamic wine (the topic of last week’s post)? Biodynamics is an interesting test — a sort of enological shibboleth. You would think that biodynamics would be the ultimate natural wine, but the question is more complicated in practice. Although biodynamic wine is pretty consistent with natural wine practices in the vineyard, I think biodynamic rules actually allow some winemaking practices (sulfites, for example) that the “natural wine” proponents forbid. So biodynamic wine may be authentic, but not natural. Very strange.

Goode and Harrop devote an entire chapter to biodynamic viticulture and they offer a very readable summary of the  limited academic literature on the subject. The bottom line: there doesn’t seem to be any objective evidence that biodynamics has positive effects that go beyond those available through standard organic viticulture. The cosmic “voodoo” elements may be just that and, the authors warn, they may even have negative impacts to the extent that they divert the focus from organic practices.

So biodynamics is a hoax? Well, not so fast, the authors say. The limits of the test studies are examined, as they should be, and then the chapter finishes with a set of profiles of winemakers around the world and their biodynamic biographies (this, interestingly, a thumbnail version of the approach Katherine Cole takes in her book about biodynamics in Oregon, Voodoo Vintners). Maybe it really is doodoo voodoo yoga (as I reported in my last post) after all!

Goode and Harrop can’t prove that biodynamics works, but they don’t want to dismiss it. They are sympathetic (as am I) perhaps for philosophic reasons or perhaps it is political — every movement needs a few fundamentalists to keep the party line from straying too far.

Authentic Wine: A Fork in the Road?

At the end of the day it is pretty hard to argue with the idea of Authentic Wine as presented here. This is partly because Goode and Harrop make such a strong case, but it is also because in “authentic wine” they have created a flexible concept that is narrow when they want it to be and loose when that’s what’s needed — along with a map for  consumers and producers to follow so they can enjoy the benefits of authenticity without tears or fears.

Go to the fork in the road … and take it! I think it’s a step in the right direction.

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In case it isn’t clear above, I recommend Authentic Wine enthusiastically. I read it in the galley stage and wrote a “blurb” that you’ll find on the back cover. I saw one critic refer to this as an “academic book” and I suppose it is — it’s published by the University of California Press. But that doesn’t mean that it is tedious and full of charts and graphs. It is actually full of people, which is a great way to tell a story. It is a serious book, but you wouldn’t be reading The Wine Economist if you didn’t already have a serious interest in wine.