I have been thinking a lot recently about how much things have changed since the 1990s and what the future might look like in this light. The event that has provoked this unexpected thoughtfulness is the upcoming Unified Wine & Grape Symposium, which will be the 30th edition of what has become North America’s largest wine industry gathering.
A Golden Age?
Looking back at the program for the first Unified, it is clear that the American wine industry was worried about the future. It must have seemed like obstacles and headwinds were all around. Problems in the vineyards. Rising foreign competition. And concerns about both government regulation and uncertain consumer demand. One session was titled “Who Isn’t Drinking Wine and Why.” That’s a question we are asking again today.
Looking back it is easy to appreciate these concerns (because they never really go away). What folks back then didn’t realize, however, is that they were in some ways at the start of a wine industry golden age. Baby boomers were entering peak wine-buying years. The economy was growing, fueling the rising interest in wine. The “French paradox” infused popular culture with the idea that wine (especially red wine) was actually good for you because of its role in the healthful Mediterranean diet. Wine made you feel good, it was good for you, and you could afford to drink it. What could be better?
Things have changed a lot since the 1990s and some of those changes contribute to the challenges that the industry confronts today (and that we will strive to address at Unified 2024).
The Globalization Effect
This makes me think about other ways the world (and the wine world) have changed over these 30 years. Globalization was gaining speed in the 1990s, for example. It was controversial (think NAFTA debates and the Seattle WTO meeting riots), but eventually (when China joined the WTO, for example) it was seen by many as an inevitable tide, an irresistible force.
No one thinks globalization is inevitable anymore. The Global Financial Crisis made investors aware of the risks of international market contagion. The supply-chain disruptions of the COVID era made “nearshoring” an awkward but understandable concept. And now political tensions and uncertainties have driven “friendshoring” trends.
Economic globalization hasn’t collapsed. But it is different. Globalization was a powerful force in wine in the 1990s, too, as patterns of production and consumption around the world shifted and international wine trade volumes rose. They kept rising, too, as the graph above (taken from the most recent OIV global wine report) shows, until about 15 years ago, when the volume of wine exchanged across borders reached a plateau. (Click here for a pdf of the OIV report).
The value of the international wine trade has continued to rise, as the graph below shows, due to the general premiumization trend. The pattern of global wine trade has changed, too, both in terms of shipping patterns (think the sharp Australia-China shifts) and the commodity composition of shipments (packaged goods versus bulk wine, for example).
The End of History Effect
One of the forces that powered economic globalization was the collapse of Communism, which opened up a world of trading and investment opportunities. We called it “The End of History” after the famous book by Francis Fukuyama. History was ideological conflict, Fukuyama argued, which was all over. The liberal order was the only story left to tell.
Wine had its own “End of History” in the 1990s, although it understandably got less attention. The history of wine was defined, more or less, by Old World notions of appellations and terroir. Burgundy was Burgundy and Pinot Noir made anywhere else wasn’t the same. Ditto for Bordeaux and Cabernet Sauvignon. New World producers might purloin Old World titles to market their wines (remember Gallo Hearty Burgundy?), but no one was fooled.
Jancis Robinson’s 1995 BBC television wine series was an important part of the movement to rewrite wine history. She didn’t organize her tour of world wine as you might expect — Burgundy, Bordeaux, the Rhone, the Loire. She sorted things by grape variety — Pinot Noir, Cabernet, Syrah/Shiraz, Sauvignon Blanc — and featured New World wines and producers alongside familiar Old World names.
Not everyone was convinced that the new history was valid. My favorite scene was where Robinson poured a glass of New World Pinot Noir and asked a famous Burgundy producer what she thought. The winemaker scowled at her glass and proclaimed that Oregon shouldn’t make something like this. They should find their own terroir, she said, invoking that mystical French phrase almost like a curse. Oregon on the same stage as Burgundy? It’s like the end of history. What next?
However, the curse was cast in the opposite direction. Not for the most famous names of Burgundy and Bordeaux, but for producers with less well-known names from less-recognized appellations. The fact that they were defined by their place turned out to be a disadvantage in the global wine world where grape variety was the new lingua franca. ( I am smiling at the irony of this phrase even as I type it.)
The baby boomer consumers that everyone was chasing didn’t grow up understanding appellations, but they rather quickly came to understand grape variety and to define their wine world that way. Thus the wines of emerging global powers New Zealand and Argentina became known for their signature grape varieties more than the particular regions that grew them. No one asked if France or Italy had a signature grape variety (a good thing, because they obviously don’t). But other regions asked the question themselves and decided that the lack of a grape of their own was all that was holding them back.
The End of History in terms of ideological conflict hasn’t exactly worked out. Old divisions have reemerged and new ones have arisen. There is plenty of conflict to go around and history endures.
History has returned to the wine world, too. Wine defined by grape variety was the great leveler and helped open up the world to wine. But today, with the market at a plateau, product differentiation is the name of the game, and claiming terroir is one strategy. AVAs are popping up all over in response.
Golden Age Worries
The golden age of the 1990s didn’t last for wine, but that’s how golden ages work. What’s interesting is that the golden age was already upon us before we realized it (and ended before we knew it, too).
I wonder what’s ahead for wine? My friend Kenneth Boulding used to say that history doesn’t repeat itself, but sometimes it stutters. Something to think about! Another golden age? Hard to see how the stars could align to make that happen. But I don’t think many people saw that golden age on the horizon either.