Forty Years of Domaine Chandon

June 25, 2013 By Mike Veseth in wine history 3 Comments

I’d like to raise a glass to toast Domaine Chandon on the occasion of its 40th year. Domaine Chandon was a bold idea back in 1973 and it has grown to become both an iconic producer of sparkling wines in Napa Valley and an important element of the American wine industry.

According to Wine Business Monthly, Domaine Chandon is the 25th largest wine company in the U.S., producing 625,000 cases in 2012.

Humble Beginnings? Global Reach!

I’d like to say that there were humble beginnings back in 1973, when the winery began, and I’m sure there were, but it is a hard case to make. Honestly, they had audacious ambitions right from the start.

Domaine Chandon was part of Möet & Chandon’s early strategy to dominate the global market for sparkling wine by both promoting their signature Champagne and simultaneously establishing wineries in the most important regions including Australia, South America, and the United States. If someone was going to make and sell “champagne” around the world, why not the Champenoise themselves? The master plan continues today — Chandon has recently broken ground on a major winery in Ningxia, China.

It is difficult to over-state the importance of Domaine Chandon at the time of its founding, which was only a few years after one important milestone — the opening of the Robert Mondavi winery — and three years before another — the famous “Judgement of Paris” wine tasting. Chandon was the first French-owned sparkling wine producer in the U.S. and a strong statement about both the potential of California to make quality wines (at a time when many Americans still doubted this) and the confidence of the French that Americans would drink them!

Soup and Dessert

One of the reasons for Chandon’s big impact is that the winery was conceived as something more than just a production facility. A destination winery was constructed to allow the story of the wines and their makers to be told effectively (more than 250,000 visitors now come to the Yountville facility each year).

Wines, wine-making, history — all that was needed to complete the experience was great food and this was provided by étoile Restaurant, the first (and so far still the only) fine dining restaurant located within a Napa Valley winery.

No wonder people came by the droves and then came back and back again as lifelong ambassadors for both Chandon and for Napa Valley.

Sue and I have great memories of our early visits to Chandon in the late 1970s and early 1980s. I hate to admit this, but although we loved the wine it was really the restaurant that kept us coming back — especially for chef Philippe Jeanty‘s famous puff-pastry-crowned cream of tomato soup (which you can still enjoy at Bistro Jeanty in Yountville) and the luscious chocolate desserts.

Fred’s Friends

Fred: Count Frederic Chandon

One of my favorite memories of Domaine Chandon involves a mystery that I uncovered back in the 1980s. I was rummaging through the wine bins at our local Safeway and I came across a colorfully decorated bottle of a still wine — Rosé of Pinot Noir — by a producer identified as Fred’s Friends.

I was a bit suspicious because the price was so low ($1.99), but I bought a bottle and took it home only to discover that it was delicious both as an aperitif and paired with salmon. Yum. We shared our discovery with friends Michael and Nancy and together I think together we bought every bottle that the local Safeway stores had in stock. It was our perfect summer wine.

We were happy to enjoythe wine, but who was Fred and were we his designated friends (and why was he “dumping” this nice wine under a made-up label at a bargain price)?

I guessed the wine’s real maker because the fictional winery’s location was Yountville. Who in Yountville would have enough Pinot Noir around to make a pink wine like this and then be able to sell it for such a bargain basement price? Only one possible answer: Domaine Chandon. Sure enough I was right.

I found a crude black and white image of the original label (see above — probably made from a faxed document) on a trade-mark registration website and I uncovered more details about the origin of the still wine in oral history archives at Berkeley.

Our first couple of years when we started, we were making wine at Trefethen. Our deuxieme taille, the last cut on our press, we’d never use for sparkling wine. Yet when you get to that last cut, as a still wine you have the appearance in the mouth of a little bit more body because there’s more tannin in the wine, and the acids are a little less so it’s a bit softer.

We thought, “Gee, this is really pretty nice wine just to drink as it is .” I forget now why, but we decided we wouldn’t just put it on the bulk market, which is what we do today. I think it was partly because we were making sparkling wine, but it was going to take three years or so before it was ready to drink, so we thought, “Let’s have a wine that we could enjoy ourselves.” So we bottled some of that- -a thousand cases or so.

Came time to sell it and we were just going to sell it to friends of the company and employees. Michaela Rodeno, who was then our v.p. of marketing and communications, came up with the idea of Fred’s Friends. I guess it was shortly after Fred Chandon had been here on a visit. He’s a very charming person. He took us all out to lunch, the whole group; we had about twenty people working then. As I recall at that time, he had promised which he later delivered on- -that after we had sold a million bottles, everybody would get a trip to France. Everybody was quite intrigued with that; I’m talking mostly about people on the bottling lines, et cetera. So Michaela just came up with the idea of calling it Fred’s Friends.

Beyond Fred’s Friends

Fred’s Friends disappeared after a while, but the idea of making fine still wines with some of the wonderful raw materials on hand did not. Chandon’s still wine program today is strong and, as the attractive label indicates, has escaped from the anonymous Fred’s Friends shadows. Sue and I met Domain Chandon’s still winemaker Joel Burt at IPNC a couple of years and visited him in Yountville earlier this year.

Barrel tasting with Joel was fantastic, sampling the Chardonnay, Pinot Noir and Pinot Meunier at different stages and with different oak treatments. The Pinot Meunier was especially interesting because the wine changes so much during its time in barrel and then bottle.

While most of the wines Joel makes are from grapes you would naturally associate with a sparkling wine house, he also makes a bit of Cabernet Sauvignon, leveraging the fact that Newton Vineyards is part of the LVMH family and so some great Cab grapes are available. Total still wine production is between 15,000 and 19,000 cases a year, mainly five different Pinot Noir bottlings (9000 cases altogether) then Pinot Meunier and Cab (about 4000 cases each) and Chardonnay (about 2100 cases).

Chandon’s still wines were an unexpected discovery. Much more serious and refined than Fred’s Friends, of course, but just as surprising .. and delicious!

Domaine Chandon has grown up to fill the big shoes that its founders envisioned. At 40 years, has it entered middle age? I don’t think so. Maybe 40 is the new 30. In any case, I sense that the dynamism is still there and the ability to surprise and delight remains as well.

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Thanks to Joel for his hospitality during our visit to Domaine Chandon. You’ll see him in this video, which showcases all the elements of the Domaine Chandon experience.

Turkish Wines Make a Statement

June 18, 2013 By Mike Veseth in emerging wine regions 4 Comments

“There is, perhaps, no country in the world where drinking a glass of wine in a public space has more political significance than in Turkey. Just now, that significance extends to a glass of Turkish wine drunk anywhere in the world.”

It’s Not [Just] About the Wine

We don’t usually think of wine in political terms, but as this quote from Andrew Jefford’s recent Decanter.com column indicates, these are unusual times in Turkey and even otherwise innocent wine is caught in the crossfire. Jefford writes that

The world watched Turkey tumble into political turmoil last week. Protests over a building project … erupted into wider discontent about what many see as PM Erdoğan’s peremptory paternalism, and the sense that Turkey’s hard-won secular traditions were being gradually eroded in a stealthily managed slide towards ‘soft Sharia’.

So how does wine fit in? The answer is law number 6487, which piles additional restrictions on the promotion and sale of alcohol, including wine. This law seems a step backwards for a county that seeks to join the European Union, where wine is nearly ubiquitous . But, Jefford explains, it’s not about the wine.

What makes life for Turkey’s wine producers so singularly wearying is that alcohol is a lightning rod for these [political and social] tensions. As Turkish journalist Sevgi Akarçeşme wrote in her blog in Today’s Zaman on May 26th, alcohol is always “more than alcohol” in Turkey. It is, she said, “an issue about which you can hardly have a reasonable public debate. … in Turkey alcohol is not simply about a personal decision to drink or not to drink.”

A recent article in The Economist (the source of the pointed illustration above) provides additional context.

Hoteliers fret that the curbs will scare off tourists. Secularists see another step to sharia rule. After a decade under AK [the ruling party] Turkey feels a lot more conservative. Islamic clerical training for middle-school pupils has come back, Koran courses have grown and finding a drink in rural Anatolia is hard.

Recommended reading if you are interested in learning more about the controversy: Elin McCoy’s report form VinExpo on the challenges and opportunities for Turkish wine.

But What About the Wine?

So wine makes a statement in Turkey and Turkish wine, according to Jefford, makes a political statement everywhere else. So what kind of statement is it — as wine, I mean, not as a political symbol? Well, I suspect that most Americans don’t really know and would be hard pressed to find a bottle of Turkish wine to satisfy their their desire to lend support to one side or the other in the Turkish protests.

We were fortunate to be given the opportunity to sample a number of otherwise hard-to-find Turkish last week when Olga and her team at Vinorai (who are just breaking into the wine import business) invited us to sample some wines being considered for the U.S. market. The Turkish Commercial Attaché was there to give his blessing — wine may be controversial within Turkey but wine exports apparently are not.

The wines represented a wine range of grape varieties, wine styles and price points. We found much to like even if we liked some better than others as would be the case in any tasting. Although there were credible wines made from international grape varieties such as Cabernet Sauvignon, Merlot and Shiraz, Sue and I were drawn to the indigenous grape varieties, especially white wines made from Narince and Emir and juicy, fruit-forward red wines made from Öküzgözü.

A Rose is a Rose

Narince and Emir are unfamiliar names to most U.S. wine drinkers, but they are not especially intimidating ones and there is no particular reason why consumers who have only recently learned to say “Torrontes” should not embrace them. If you see one of these wines in a shop or on a menu, try it. Very refreshing.

Öküzgözü is another matter of course with its Scrabble-master spelling and abundant diacritical adornment — it really looks like a Turkish name, doesn’t it?. I suppose the name alone might stop some consumers in their tracks, which is a shame because we tasted some delicious interpretations of the grape. The literal translation is “bull’s eye” or “ox eye” because the grapes are as large and dark as a farm animal’s pupil and perhaps a clever marketer can exploit that fact to entice consumers to lean in.

(Hungary’s “Bull’s Blood” wines are popular and most people who buy them probably don’t concern themselves that the wine is a blend featuring the Kadarka grape, which is thought to have been brought from Turkey!)

So how do you get consumers to try Turkish wines? Well, I’m not sure you have to get people to try them because, as Olga noted, so many Americans have vacationed in Turkey and tried and enjoyed the wines there (even if they might not have made notes about which particular varieties they liked best). It may only be necessary to reintroduce these former visitors to the wines by inviting them to relive their experiences enjoying Turkish food, culture, and of course its wine.

Beyond Politics: Wine, Food and Culture

The wine taken completely by itself may be a hard sell, I admit, because the market is so crowded and the competition is so fierce, but the key is to present the wines as part of an integrated Turkish cultural package that draws on happy memories and associations and promises to extend them. Italian wines (even those from unfamiliar regions made from hard-to-remember indigenous grapes) have always benefited from this cultural strategy. And while Turkey doesn’t have Italy’s prime place in American hearts and minds, there are plenty of positive associations to draw upon.

Culture, not politics, is key when it comes to selling Turkish wines in America. Andrew Jefford is probably right that raising a glass of Turkish wine makes a statement just now, but when it comes to expanding the market for the wines, it may be best to keep divisive politics out of it and let the warm and welcoming side of the Turkish people themselves lead the way.

Mike and Olga with Recep Demir, Turkish Commercial Attaché

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Thanks to Olga and her Vinorai team for inviting us to sample these Turkish wines. Thanks to Sue for her tasting expertise and the photos shown here.

Australian Wine Outlook: Modified Rapture

June 11, 2013 By Mike Veseth in Australian wine, Economic impact Leave a comment

“Modified rapture” is a line from Gilbert and Sullivan’s comic opera The Mikado. The dialogue as originally written was “Rapture!” but the actor who played Nanki-Poo was apparently a little too enthusiastic about it during rehearsals and Gilbert kept unsuccessfully asking him to tone it down. (You will understand why the rapture was incomplete if you view the YouTube video above.)

Finally, in complete frustration, Gilbert barked, “Modified rapture!” as a stage direction. And that’s exactly what the actor said, taking it literally as a text revision. Modified rapture, indeed! And it became a permanent part of this entertaining scene.

Dutch Disease Dilemna

Modified rapture – that’s my reaction to the good news about the Australian dollar (AUD). The Australian wine industry has suffered mightily from the “Dutch Disease,” which is what happens when a boom in one sector of the economy causes an over-valued currency that makes other sectors less competitive.

Exports to China, especially mineral exports, have been the boom sector and they have pushed the Australian dollar to incredible highs relative to the U.S. dollar. This has created a dilemma – pass the foreign exchange costs along to foreign buyers and you risk losing sales. Absorb the foreign exchange impact and margins shrink and sometimes dip into the red.

Rapture: the short term view

The over-valued Aussie dollar has affected all segments of the Australian wine industry, but bulk wine sales have been perhaps the most impacted because international competition is so fierce for commodity wines. Bulk wine sales account for about 45% of New World wine exports, so lots of business (and grower incomes) hang in the balance when the exchange rate shifts by even a penny or two.

Good News: A Short Sharp Shock

So the recent fall in the Australian dollar as shown above must be greeted with joy by Australian growers and producers. Although it was expected that the AUD would depreciate eventually, I’m not sure anyone would have predicted such a “short sharp shock” (to use another Gilbert and Sullivan line).

What caused the change? Well, Australians might say that it hardly matters – good news is good news. But good news doesn’t always last as the graph below indicates. This isn’t the first time that the AUD has tumbled and we can’t be entirely sure that it will not rebound (hence my “modified” description). And although the recent trend is welcome it must be noted that the AUD is a long way from its value back in early 2009, when it was even cheaper relative to the dollar than the 85-cent valuation that one analysis has predicted.

Modified rapture: the longer view

The AUD Trifecta

As I see it, the sudden shift is the result of a trifecta of effects. The first and most important is the slowing of the Chinese economy, with the resultant decrease in demand for Australian minerals. That’s one. The second is the shift in Japanese monetary policy. Abenomics, as it is called, is pumping up Japan’s money supply in an attempt to jump-start the economy.

This has driven down the yen’s value, which encourages some investors to repatriate funds previously placed abroad to take advantage of the fact that each host country Australian dollar (for example) now yields a larger home country yen profit. A good time to cash in your chips and bring your money home.

Finally, the U.S. Federal Reserve has announced that it is “tapering” its expansionary monetary policy, which has boosted U.S. interest rates and perhaps caused some “carry trade” international investment to shift to the U.S. from other countries (like Australia, for example).

So the result is good news and I think it might last, but it is important to realize that the trend could be reversed if China’s growth rate picks up (as most people hope it will) or if U.S. and Japanese monetary polices change dramatically. Fingers crossed — there is a lot on the line!

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Foreign exchange historical tables are from Oanda.com.

I couldn’t resist adding this classic Mikado video — the “short sharp shock” appears at about the two minute mark. Enjoy.

Christiane Amanpour and Chinese Wine: The Wine Economist Interview

June 6, 2013 By Mike Veseth in China wine, Shameless Self-Promotion 2 Comments

I was pleased to be interviewed the award-winning journalist Christiane Amanpour earlier this week for her “Around the World with Christiane Amanpour” report on ABC.com. The original topic was set to be last week’s French wine auction, where odd lots and “too-expensive-to-serve” bottles from the Elysee Palace cellars were sold off to pay for more modestly priced wines to serve at state events (with a bit left over to pay down the French national debt).

The auction was a success (buyers snapped up wines that became famous by the publicity surrounding the auction), but Ms. Amanpour, perhaps sensing that this had already become old news, shifted the conversation to another wine topic. Click on the image below to view the interview.

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Thanks to Mary-Rose, David and of course Christiane Amanpour for their work on this interview.

Early Days for Virginia’s Early Mountain Vineyards

June 4, 2013 By Mike Veseth in wine brands, wine markets 1 Comment

It is still early days for Early Mountain Vineyards, the ambitious and progressive new project that Jean Case has started along with her husband Steve (of AOL fame).

The goal (and the challenge) goes beyond establishing a destination winery in the Monticello AVA. The Cases want to help elevate the profile of Virginia’s growing wine industry generally.

That’s a worthwhile aim, but not a simple or easy one in today’s competitive market environment. As one friend put it, early days and a mountain to climb.

Virginia Wine Mosaic

We were in Virginia to visit Sue’s parents Mike and Gert who live near Richmond and came to Early Mountain on the advice Frank J. Morgan who writes the popular Drink What You Like blog, which analyzes Virginia wine. With about 200 wineries of various sizes and foci and 15 AVAs, Virginia presents the potential wine tourist with many choices. Frank suggested several interesting winery targets and I selected Early Mountain both for its proximity to Charlottesville and for its ambitious stance.

The Cases are big fans of all things Virginia and saw in the bankrupt Sweely Estate winery an opportunity to contribute to the wine industry here. The Sweelys built an impressive facility — a 20,000 case winery and a separate spectacular hospitality and event center, but they were apparently better at making wine than selling it for profit.

Early Mountain (named for the famously hospitable Early family who lived in these hills in Revolutionary War times) rose from these financial ashes in 2011 with the double mission to add to the chorus of Virginia wineries and also help the whole industry open a new era.

Best of Virginia

The most obvious evidence of this broader purpose is the Best of Virginia wine program at Early Mountain. The winery has partnered with the nine wineries shown above and promotes their products along with its own. This is done mainly through a series of tasting flights, only one of which is based on Early Mountain wines alone.

The rest feature a mix of products from the ten different producers carefully selected by Michelle Gueydan, a sommelier employed specifically for the Best of Virginia program. The flights are changed up periodically to both broaden the range of wines so promoted and to encourage visitors to return repeatedly to see what’s new.

I understand that there are also plans to eventually channel winery profits to promote Virginia wines in line with Case’s Revolution concept of social entrepreneurship. Profits seem a long way off, based on my back-of-the-envelope calculations of revenues and costs, but a patient capital philosophy rules.

Early Days for Wine Identity

We enjoyed platters of local cheeses and meats, which paired very well with an Early Mountain Pinot Gris. The focus on local producers was both clear and delicious.We then turned our attention to a red wine flight that showcased four wineries and four grape varieties or blends. The Barboursville Sangiovese (they are owned by the Italian Zonin family) and the ’08 Early Mountain Merlot were Gert’s favorites among the reds we tasted. I was attracted to a distinctive Petite Verdot.

I’m optimistic about this project (as I am about the future of Virginia wine more generally), but I think everyone agrees that it is still early days. Early Mountain is still building up its wine portfolio, which necessarily takes a few years to accomplish. (If you were starting from scratch you would wait for the wines before opening the hospitality center but the desire to seize the opportunity caused the cart to be put ahead of the horse for now).

My perspective is that the components for success are coming into place and need to be lined up effectively into an identity for the winery and a message for the industry. I think the Early Mountain project is about Virginia hospitality and while that is clear in a sensual way when you step into the big open room, it could be communicated more explicitly in other ways.

The Early Mountain wines themselves don’t seem to have an identity yet, but that is perhaps natural since they are still works in progress. But they will need to be more clearly defined at some point, too, and that is not a trivial problem. The most successful wineries know who they are and express this identity consistently from first greeting through the wines and the wine experience on down to the product design and promotion materials and throughout every member of the staff.

An American [Wine] Dream

The Best of Virginia idea is a good one, but at this point the wines more or less speak for themselves and while visitors might find individual wines that they enjoy from around the state, I would like to see a better developed educational element to draw them progressively into Virginia wine in a way that includes the varieties and styles, the wineries, the AVAs and the terroir and of course a cultural element that connects to local history and cuisine.

An educated consumer is more than just a buyer — she can be an ambassador for Virginia wines and that’s where the real pay-off comes. It might seem like I am demanding a lot — and I am — but this is a rare opportunity due to the resources and commitment of the Case family and it would be great if it succeeded on all fronts.

This is not just Early Mountain’s problem, of course, but an issue that the Virginia industry needs to wrap its head around. Right now it seems to this outsider that the Virginians, like wine producers in many regions, are working through the debate about the need for a signature grape variety. Viognier? Cabernet Franc? Petite Verdot? It seems to me that this is an unproductive debate (or maybe a counter-productive one).

Virginia makes lots of different wines (Barboursville apparently makes a helluva Nebbiolo — who would have guessed?) from many grapes varieties in many styles (something the Early Mountain flights demonstrate). Defining the region by one grape or two wouldn’t do justice to this diversity.

Virginia also makes some disappointing wines, as is the case with most developing wine regions, and the store shelves feature many sweet wines and fruit wines, too, which may be very good but certainly provide a mixed message. Perhaps a focus on more consistently high quality (and not signature grape) is the road ahead? I think that’s part of the Best of Virginia plan — to draw attention to high quality and try to raise the bar for everyone.

As the recently published American Wine by Jancis Robinson and Linda Murphy teaches us, America is full of wine and wineries — they are not just in the big states or made by the big producers. I dream of an America where wine is made everywhere and enjoyed everywhere. Early Mountain can be a part of that dream. I wish them success.

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Thanks to Allison, Dave, Steve, Erich and Jacob at Early Mountain for their hospitality and willingness to answer all our questions. Thanks to Frank for his advice. Thanks to my most senior research assistants Mike and Gert for their able assistance and to Sue for photographs and her sharp eye and keen ear.

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Update June 5, 2013. A nice article about Virginia wines (including a mention of the Early Mountain “Best of Virginia” partnership) has been posted on the Appellation America website. Enjoy!