Harvard business professor Michael Porter famously conceived of a “cluster” theory of “competitive advantage.” It isn’t one thing that makes a regional industry successful, he said, but rather it involves the dynamic interaction of a network of forces and factors that, when they come together, create an environment where all are successful.
Porter’s “diamond” analysis can be applied to many regions and industries, even wine. In fact. Nick Velluzzi of the Walla Walla Community College has applied it to his region’s wine sector (click here to read about his research). If you are interested in wine clusters or Walla Walla you should check out his work.
I am interested in how and why Walla Walla has risen to the top tier of American wine region, but this week I want to talk in terms of human networks not Porter’s approach, which focuses on networks of market institutions. It seems to me that one aspect of Walla Walla’s success has been the dynamic interaction of wine industry people, who I will divide into four loose groups: the Pioneers, the Next Generation, the Foreign Legion and the Millennials.
Let me start with a group that I will call the Pioneers, who got things started in the early days which, since this is the New World, was really just a few years ago. Although I don’t want to name too many names for fear of forgetting someone, this group would certainly include Marty Clubb and the Ferguson family (L’Ecole No 41), Rick Small and Darcy Fugman-Small (Woodward Canyon) and Gary Figgins (Leonetti Cellar) plus Norm McKibben (Pepper Bridge) who came on the wine scene a little bit later after a successful career in construction, and Gordy Venneri and Myles Anderson at Walla Walla Vintners.
Apparently nobody told the Pioneers that this was wheat country (maybe they just didn’t listen). Or maybe the noticed the hillside apple orchards and the small planting of grapes left by the early Italian immigrants (more about this in a future column) and connected the dots. In any case, they and others like them were the leaders in establishing the vineyards and cellars and the reputation of the wines as well. Walla Walla today would not exist without the contributions of the Pioneers.
The Next Generation
It seems to me that the next step was growth, with a new generation of wine people entering the scene, ēand what is significant is that the original insiders and the newcomers found ways to work together rather butt heads. I count my former student Chuck Reininger in this group, although his eponymous winery has deep local roots through his wife Tracy Tucker Reininger’s family.
One of the ways that the Pioneers and the Next Generation worked together was in developing the vineyards. Although there are estate wineries in Walla Walla, much of the local industry is organized along an American agriculture model, which means that the farming and the processing are often organized as separate business but obviously related functions, not always part of a vertically integrated unit.
Partnerships were formed to develop the key vineyard sites that supplied high quality grapes to the Pioneers and the Next Generation, too, which allowed the industry to grow much faster than if each little winery had its own small plot of land.
International influence within the human network has been valuable for Walla Walla. French and Italian settlers are part of the Walla Walla story (Lowden, where L’Ecole and Woodward Canyon make home today, was called “Frenchtown”) A number of talented Europeans were part of the next wave of wine and the synergy continued. Prime among the Foreign Legionnaires are Giles Nicault (Long Shadows), Marie-Eve Gilla (Forgeron), Jean-François Pellet (Pepper Bridge) and Christophe Baron (Cayuse).
Allen Shoup, who was instrumental in forming partnerships with the Antinori and Loosen wineries when he headed Chateau Ste Michelle, continued to attract international talent, investment and attention with his Long Shadows project. John Duval, Michel Rolland and many other international wine stars each make a wine with Washington grapes at Long Shadows.
Several waves of new wine people have arrived since the dawn of the 21st century — I’ll call these the Millennials. I count my former student Michael Corliss of Corliss and Tranche along with fellow University of Puget Sound alumnus Randall Hopkins (Corvus Cellars) in this large and expanding group.
The Corliss winery fills an impressively renovated former bakery building near the center of town. Hopkins’ Corvus Cellars is located out at the airport, in a winery incubator complex organized specifically to make new entry into the local industry possible. They are very different in scale and scope, but both intensely focused on the vineyard — and both produce superior wines (I am unbiased in this, I assure you!).
Reaching a Critical Mass
They are part of a movement , which includes wineries and vineyards large and small, that has created a critical mass of fine wineries that attract critical attention to the region, new talent to the local industry, wine tourists to fill the hotel beds and restaurant tables and provide the basis for the industry’s future growth. (A critical mass to support competitive associated and supporting sectors is part of the Porter model of success.)
I’ve only scratched the surface of this human network analysis, but I hope you get my point. The characteristics of the human networks that evolve are important in every wine region. They are particularly obvious in Walla Walla because of the region’s short history, small scale and the continuing synergies between and among the groups I have identified here.
How do these different groups and overlapping generations fit together to form a powerful human network? In a lot of little ways and one big way that is a key to Walla Walla’s future. Come back next week see what I’m talking about.