What’s Up with Italian Wine in the U.S. Market?

docItalian wine has a lot going for it in the U.S. market. Wines from Italy are by far the largest category of imported wines. Recent Nielsen figures (reported in Wine Business Monthly) show almost $1.2 billion in 52-week sales of Italian wines in the channels that Nielsen surveys — that is almost a third of all spending on wine imports and far more than #2 Australia ($720 million) and #3 New Zealand  ($496 million). France is #4 at $462 million.

Tariffs? Que Bello? Pazzo!

Italy has benefited from the hot market for sparkling wines in general and Prosecco in particular. And it gained an unexpected advantage over its European neighbors due to the peculiarities of the recently-imposed U.S. tariffs on European wines. Imports of many wines from France, Germany, Spain, and the U.K. are subject to a 25% tax.  What’s the tax on Italian wine imports? Zero. Zippo. Niente. Que bello!

(See Suzanne Mustacich’s excellent Wine Spectator article on the wine trade war for more details.)

How did Italy dodge the tariff bullet? I don’t think there is an official explanation or obvious economic rationale.  Pazzo! Must be politics, don’t you think? Maybe it has something to do with the high-level Trump administration officials with Italian-sounding names? Or maybe Italy’s not so closely associated with subsidies to Airbus, which provoked the WTO rulings and subsequent tariffs. Strange, but good for Italian producers trying to get their foot in the U.S. door (or working to open the door a little wider).

It would be a mistake to take these advantages for granted and the Italians are working hard to consolidate their market base and move forward. Or at least that’s what we think after attending the Seattle stop on the “Simply Italian Great Wines US Tour 2019.” We spent the day attending seminars sponsored by the European Union and wine region groups and meeting producers (many of whom were seeking local distribution) at a walk-around tasting.

[Two favorites from the walk-around tasting were Societa Agricola Sturm from Collio — fantastic Ribolla Gialla — and Cannonau di Sardegna from Sardina’s Cantina Giampietro Puggioni.]

Out of the Shadow

The Seattle event reminded us of how much we love the wines of Italy. But it also highlighted some of the challenges that Italy faces.

Italy is a complex mosaic of wine regions, styles, and brands. Although an amazing array of Italian wines can be found in the U.S. market, there are a few names that dominate the conversation: Chianti, for example, and Prosecco. It is easy for other wines from other regions to be over-shadowed. Sue and I saw the shadow effect when we stopped at a nearby Total Wine, which has a big selection of Italian wines. We were looking for wines from Friuli and we found just a hand-full  — mainly Pinot Grigio. The big regions crowd out the smaller ones on store shelves.

This is the challenge facing Vino Nobile di Montepulciano DOCG, for example.  Vino Nobile is a small and distinctive appellation located about 65 km south-east of Siena. The four wines we tasted at the seminar were terrific and made me think about this region as a sort of Tuscan Stags Leap District — one of my favorite U.S. wine appellations.

But excellent wines are not necessarily enough when you need to compete with famous Chianti Classico. You need to get glasses in consumer hands and give the wine and region a distinct identity. Tourism (and not simply wine tourism) is one way to do this. Come for the history, food, and culture and learn about the wonderful wines. This seems to be part of Vino Nobile’s strategy to get out from under the shadow of its more famous neighbor and to tell a distinctive story about the region and the wines.

Italians love to drink sparkling wines and they make some terrific ones. And although my friends in Conegliano hate to hear me say it, it is a shame that the only Italian sparkler that most Americans can name is Prosecco.

I wish they’d give more attention to Francicorta DOCG, which faces a similar challenge to Vino Nobile. Franciacorta is often said to be the “Champagne” of Italy. It is made using the classic method from mainly but not exclusively the traditional Chardonnay and Pinot Noir grapes . The comparison to Champagne is understandable and the wines stand up well compared to their French cousins.

But it is not always helpful to think of Franciacorta this way because if you want Champagne you want Champagne and not necessarily something else. Franciacorta needs to more clearly develop a distinctly Italian identity that positions it apart from French wines and also Prosecco. The two Franciacorta DOCG wines were tasted were delicious — and I don’t think the skilled presenter ever called them Italy’s Champagne. I know producers are working hard to build their market category because the current interest in sparkling wines presents a great opportunity.

A Grape or a Region?

One of the sessions focused on DOC Pinot Grigo delle Venezie. Pinot Grigio is one of white wine’s big success stories in the U.S. market. Pinot Grigio/Pinot Gris is the second largest selling white wine category in the U.S. market, according to Nielsen figures, far behind #1 Chardonnay but well ahead of #3 Sauvignon Blanc.

Some of the Italians I have met like to imagine that all the Pinot Grigio sold in the U.S. comes from Italy — and Italy might have dominated this category a few years ago — but now Pinot Grigio is grown just about everywhere. I made risotto a few nights ago with a nice little Pinot Grigio from Washington state. That is the problem with the “signature wine grape variety” strategy. The category may start associated with a particular place, but often the place fades and it is just about the grape and then it is anyone’s game.

Italian producers hope to stake a territorial claim to the Pinot Grigio market with DOC Pinot Grigio delle Venezie — Pinot Grigio from a specific region subject to DOC rules and regulations. The consorzio logo above is meant to establish the identity. Italy first — can you miss the green-white-red stripes? And then Venice and Venezie as symbolized by the stylized prow of a Venetian gondola. Italy, Venice, Gondolas. Get it? That’s Pinot Grigio.

It is easy to be a little skeptical about the effort to re-brand Pinot Grigio this way since Americans generally know little about DOC and DOCG designations, but in this case there is reason for cautious optimism because many of the DOC Pinot Grigio wines have big marketing and distribution muscle behind them. The list of wines that were tasted in Seattle, for example, includes DOC wines from Lumina by Ruffino (Constellation Brands), Prophecy by Cantine di Mezzacorona (Gallo), Montresor (Total Wine & More), and Cupcake (The Wine Group).

Pinot Grigio won’t stop being a grape variety that could come from anywhere, but with some effort it can  also be a regional wine of Italy once again.

Italian wine makers are luckier than most. They face challenges, some of which are the product of their own success, but there is a tremendous reservoir of good will and affection for Italy and its wines.  The struggle for market attention is therefore not easy but still possible.  The Seattle event has inspired us to look more closely at the Italian wine mosaic and to try to appreciate a bit more its many shapes, colors, and styles.

What’s Really in your Glass? Transparency, Accountability & Wine

stellaAre you the sort of person who looks at every new garment to see where it’s made (and of what material) and studies the nutritional information on the back labels of the groceries that you buy? Me, too, although I don’t claim to be consistent in these investigations and I am sure that I miss a lot.

FDA Meets TTB

Many people take an intense interest in the products they buy, especially food and drink since they go into our bodies.  Calories per serving, along with sodium, carbohydrates, and protein, are important to many people.

It is interesting – and maybe a problem – that wine and other alcoholic beverages are for the most part exempt from nutritional reporting. Wine labels must tell consumers alcohol by volume and warn them of health dangers, but not display ingredients, calories, or other factors that are required for juices, sodas, milk, and other beverages.

This label from a bottle of Stella Rosa wine is an exception to the current rule — calories, carbs, and so forth are clearly listed. Why? As I understand it the reason is that because  Stella’s alcohol is just 5% abv (below a 7% regulatory threshold) it is regulated by the FDA as food (nutritional facts) as well as by the TTB as alcohol (government health warning). (Note that the product is described as “partially fermented grape must!”)

Label of the Future?

I  am not sure that anyone buys Stella Rosa because of the nutrition information (it is one of the hottest wine brands today), but maybe the lack of such information is already affecting sales of wines in some market spaces.  Consumers purchase a lot of different products and they don’t really need to buy anything that doesn’t take responsibility and own its list of ingredients and nutritional profile.

I believe that wine, beer, and spirits will eventually be required to list their ingredients and nutritional data. I wonder what would happen if wine were to take a voluntary step and be more transparent now as a way to shape the narrative? I know there are some who think transparency would backfire – consumers would turn away if they knew what a bottle of wine really contains or how many calories are in a serving a Chardonnay.  But look at Stella’s sales …

White Claw, the ridiculously popular alcoholic seltzer product, has a nutrition label, too, and it is clear that it uses this to its advantage by exactly hitting the critical “100 calories per serving” number.

Limiting Label Clutter

There are several areas where wine could improve its transparency and I’ve been learning how technology can help. QR codes have the potential to lead consumers to sites where they can satisfy their thirst for more information, for example. I think everyone has a QR code reader on their smartphone, although I am not sure how many people use it.

The Treasury Wine brand 19 Crimes has had success with its special augmented reality app that consumers focus on the labels to animate the 19 criminals, so we know that consumers will use apps to get more content about wine in some cases. Perhaps this is a way to be more transparent and accountable without filling the back label with even more boilerplate.

Giving consumers access to useful information doesn’t have to be very intrusive. For example, Italian DOCG wines and South African Integrity & Sustainability Certified wines feature simple codes that allow individual bottles to be traced back to the producer.

Ferret Out the Fakes

Blockchain technology has the potential to improve transparency and accountability in ways that can be important to the wine industry in the long run. People always think of Bitcoin when I mention blockchain, but it is important to understand that Bitcoin is an application of blockchain, not the technology itself.

It is an oversimplification, but I like to compare blockchain to those tracking codes we use for package delivery. Everyone who touches the package scans in information, which is attached to the package record you view on line. You can see where the package is at any particular moment and — hopefully — track it down if there is a mistake.  Airlines use this technology now to track checked bags and I am always relieved to know that my suitcase full of wine is safely in the hold of my jet as we take off.

The difference with blockchain is that it isn’t just about location. All sorts of information can be attached to the record, which can be analyzed in many ways.

Thus a simple but very useful application of blockchain is to verify the authenticity and provenance of the sort of fine wines that are sold at auction — and to help ferret out the many fakes. A company called Everledger, for example, developed a system to use blockchain to verify the provenance and authenticity of diamonds and colored gem stones and is applying it to wine as the video above shows.

To Authenticity … and Beyond!

Everledger and others who are working in this space use blockchain and other sophisticated technologies to assure the authenticity of wine and other applications in wine are sure to be found because the blockchain blocks can record many types of information.

In response to the Porto Protocol and other initiatives, for example, many wine companies are working to reduce their environmental impact. Blockchain technology can collect this information all along the wine product chain, potentially allowing interested consumers to quickly assess the climate change impacts of their wine choices.

And that’s just the start. I have argued that wine companies need to own their supply chains when it comes to climate change and sustainability. Many companies focus on their own actions plus those of their grape suppliers. But wine’s product chains are pretty long in this day of efficient bulk wine shipments and Made-in-China glass.

This Changes Everything?

I can imagine a blockchain ledger that tracks useful information all along wine’s complex product chain and programs that would allow consumers and others to analyze and evaluate it. And, of course, wine is just one product where such a system would be welcome.

I’m not saying the blockchain and other technologies will change everything, but I will say this: transparency and accountability are only going to become more important in wine as consumer expectations evolve and wine is held to the same standard as other consumer goods.

We might think wine is special — and it is in many ways — but we shouldn’t assume that it is immune to the forces that are making transparency, accountability, and technology more important every day.

Wine Book Launch Today: Discover Hungarian Wine

Our good friends, Charine Tan and Matthew Horkey of Exotic Wine Travel, are launching their fourth wine book today: Discover Hungarian Wine: A Visitor-Friendly Guide, available for pre-order via their Kickstarter website.

Sue and I have crossed paths with Matt and Charine in typically exotic places — Tbilisi, Georgia; Iasi, Romania; Carcassonne, France — and we have come to value their judgement and to admire their creativity, energy, and commitment. They bring these qualities to their wine guides, which are written to help independent travelers (and travel dreamers, too) get the most out of their experiences.

Hungary is a great choice for their latest book. Hungarian wines were once celebrated as among the best in the world. Then a perfect storm of crises changed everything. Phylloxera, war, depression, war, communism, post-communism struggles, and emergence into an increasingly competitive wine world. It is amazing that Hungarian wine survived. But it did.

More and more visitors are coming to Hungary (many on those ridiculously popular river cruises) to discover the culture, history, music, and food of this unique land. And they are discovering the wines, too. But this is unknown territory for most visitors (and most wine consumers generally), so they need a sympathetic guide to get the most out of their experiences and that’s where Matt and Charine come in.

“The book will offer practical information that help visitors to learn about Hungarian wine, shop for Hungarian wine, enjoy Hungarian wine, and most of all, feel empowered to explore Hungarian wine,” said Matthew Horkey.

“The Exotic Wine Travel’s guidebooks are always written and designed with one goal in mind: to help wine lovers and travelers save time and money by helping them to skip or shorten the trial-and-error process of finding the wines they like. We always aim to produce a guidebook that we wished we had when we first visited a wine country,” said Charine Tan.

A book launch is like a grape harvest — it sets in motion the process that eventually fills our glass with delight. Looking forward to a great Hungarian wine vintage from Matt and Charine. Cheers!

The Future of Wine on “The Rocks”

mfrocks2The Rocks District of Milton-Freewater is a distinctive wine region. Small in size, it is defined, more or less by an alluvial fan. The rocks go very deep and draw vine roots down with them. To provide perspective To Kalon, the famous Napa Valley vineyard that is the source of many cult wines including Opus One, is also an alluvial fan. Terroirist territory to be sure.

Rock Power

Early settlers to the Walla Walla region and those who followed planted fruit trees in the rocks. Grape vines? Some for sure (see Kevin Pogue’s comment below — and a few of the Cinsault vines are still there), but things really took off when Christophe Baron of Cayuse Vineyards came along and drew attention to the area’s potential. Cayuse, Horsepower (another Baron project), Reynvaan Family Vineyards and others made the rocky region a focus of intense interest among wine-makers and wine lovers.

The wines can be amazing. Sue and I visited Cayuse a few years ago and I was prepared to be disappointed. Clearly the wines themselves could not live up to the hype that surrounded them. But I was wrong. Powerful, aromatic, elegant. Terrific. The Horsepower wines, which come from some of the most densely-planted vineyards I have ever seen, are powerful, too, and intimidate me a bit.

Rocky Finesse

rockA recent visit with the Reynvaan family reinforced our enthusiasm for the wines from this area. The Reynvaans purchased the land for their “In the Rocks” vineyard from Baron and started making wine with his help. Now Matt Reynvaan makes the wines and his sister Amanda (who was my student at the University of Puget Sound) handles operations.  Rich, elegant — that’s what my notes say for Syrah co-fermented with Viognier. A classic Cabernet blend from the “In the Rocks” vineyard blew my mind with its finesse and surprised me because I tend to think of the rocky vineyards here in terms of Rhone grape varieties. Think again.

Cayuse and Reynvaan command Napa-style attention and critics’ praise, but if you are thinking Napa Valley when you visit Milton-Freewater to see the rocks, you will be very disappointed. Although it is part of the Walla Walla AVA, The Rocks District sub-appellation is over the border in Oregon, away from the fine-dining restaurants and tasting rooms of Main Street Walla Walla. Milton-Freewater is what it has long been, a real agriculture town that serves the needs of farmers and workers more than tourists.

We visited Watermill Winery, which has one of the few tasting rooms on the Oregon side of the border. You almost can’t miss the big Watermill Building, which once stored fruit from the owners’ orchards and now houses cider production (and associated tasting room) and the winery, too.  Watermill’s owners are fortunate to have considerable acreage in The Rocks District and are intent on expanding wine production in the next few years. The wines are excellent — Sue is especially fond of the “Hallowed Stones” Cabernet Franc — and they are more available and affordable than cult wines.

Far From Napa

stonesThe small footprint of The Rocks District limits wine production in the long run,  but many new vineyards are in the works today. Water is an issue, of course, and so is profitability. High quality tree fruit from The Rocks District exported to Asian luxury markets can be more profitable than wine grapes at this time according to one source.

Land prices and grape prices here are far below Napa levels. $45,000 buys an acre of vineyard land with secure water rights, we were told. How much prime vineyard land do you think $45,000 buys in Napa these days?

Driving through the rocky area presents a different scene from Napa, too. Orchards, vineyards, a few residential houses, and open fields.  I wonder what it will look like in twenty years? Very different, I think!

The Milton-Freewater local leaders want to encourage wine-fueled economic development in order to capture value-added beyond grape production. So, in partnership with Willamette Valley Vineyards, who have vineyard interests in the area, the city is working to develop a shared-use wine production facility and high-end tasting room.

If You Build It They Will Come

The tasting room is intended to draw wine tourists across the border with the hope that they bring some cash with them. The shared-use concept, where several wine “studios” exist under the same roof,  takes advantage of a quirk in wine regulations that currently limits the number of wines that can use “The Rocks District of Milton-Freewater AVA” designation.

Most of the local wineries are located on the Washington side of the border, but the grapes are in Oregon. A Washington winery can use Walla Walla Valley to designate its wines from The Rocks District because the WW appellation spans the border, but the wines actually need to be produced in Oregon to use “The Rocks District” designation.

Most wines that come from “The Rocks District” today therefore cannot say they are from The Rocks District of Milton-Freewater appellation, which limits the AVA brand’s value. Investors in The Rocks District are caught in a sort of Catch 22 situation and Milton-Freewater hopes to break the deadlock by attracting a critical mass of producers, who can use the AVA name by producing at the new facility.  It’s kind of a “if you build it they will come” business strategy and marketing studies are in progress to see if the idea as promising as proponents believe. 

Force Majeure has built production facilities on the Oregon side and Rotie Cellars, which is known for its Rhone Blends, is just finishing a production and tasting room facility. Everyone we met is watching these projects closely to see how they are received along with a handful of other serious projects currently in process.

Steve Robertson, President of the Rocks District Winegrowers, is an enthusiastic advocate of the AVA he helped create. He writes that

As you know, there are only 340 prox. planted acres today within the AVA, and most of that is controlled by estates. Additionally, today’s modest volume of Rocks District wines are highly sought after in the marketplace….many of which are allocated. This will all begin to change over the next handful of years. New vineyard development will push planted acres to over 500 within this time frame. And a majority of those planned-to-be-planted acres will be delivered by new entities to WW Valley. Indeed, a couple hundred of those acres wine grapes will be available to other producers. A transition is surely in the making!

Robertson sees a critical mass of vineyards, wine grapes, and wineries using The Rocks District appellation on the horizon. Certainly there is a lot of excitement and interest. And the wines we have tasted merit the attention they receive.

Wine on “The  Rocks” District? I’ll drink to that!

“Around the World in 80 Wines” on List of 56 All-Time Best Wine Books

9781442257368BookAuthority.org has included my book Around the World in Eighty Wines on its list of the 56 “Best Wine Books of All Time.” You can find it at #22, behind Wine Folly and Wine Bible (#1 and #2) along with wine books by some pretty talented wine writers. I’m flattered (and a bit surprised, to be honest) to be included on the list.

Here’s how this “Best Wine Book” list was made. BookAuthority uses an algorithm to rate the popularity and influence of hundreds of thousands of books in many categories. According to the website:

Every day, our site scans the web for notable books on various topics.

It then collects dozens of different signals about each book (such as public mentions, recommendations, ratings, sentiment and sales history) and uses a proprietary algorithm to rate each book. Only the very best books are featured in BookAuthority’s lists.

To keep our site objective and unbiased, ratings are calculated based purely on data. We do not accept authors’ requests to feature a book, nor do we charge any money to be featured.

There are thousands of wine books available according to Amazon.com, so I guess it is unusual to get the sort of attention that the algorithm looks for. I’m just happy that people read my books and find them useful. Awards are the icing on the cake.

I would like to thank BookAuthority (especially whoever wrote their algorithm) and all the people who made 80 Wines a success. Look for a paperback edition of 80 Wines in a few months and maybe another translated edition, too. Cheers!

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(Basketball fans might remember that 22 was Elgin Baylor‘s number — a good omen!)

What’s Up in Walla Walla? Wine Tourism

downtownwallawallaWalla Walla has become an important wine center and an exciting place to visit, but it wasn’t always that way. When Sue and I first came here years ago you could count the wineries on one hand and Main Street, which really was the main street of the town, was strictly for locals and their everyday needs. If there was a destination address on Main Street it might have been Brights Candies or the historic theater across the street.

Walla Walla’s business was agriculture back them –wheat, peas, and the famous sweet onions — and the banks and suppliers that farmers need to get along.  A state prison and prestigious Whitman College — an unlikely combination — were the urban anchor bookends.

The farms are still there and still very important and so are the prison and the college, but what draws thousands of tourists to Walla Walla today are wineries and vineyards.  Sue and I paid a quick visit to the valley in the middle of the week shortly after Labor Day and here’s what we found.

Urban Wine Village

Although the buildings look the same from the outside, downtown has been transformed by wine tourism. It is possible to spend a few days enjoyably tasting wine just by meandering up and down Main Street and its tributaries, without every getting into a car or walking too far from your hotel.

Winery tasting rooms line the streets along with restaurants, cafes, tourist shops … and Brights Candies.  Strolling on a weekday afternoon watching people sitting at sidewalk tables sharing bottles of wine presents a scene that could not have been imagined twenty years ago.  As the sun went down, lights and music came up and people of all ages appeared — seniors, families with children, college students. Lots of dogs, of course. A nice mix.

With so many tasting rooms in just a few blocks, product differentiation is important. Cayuse, the ultimate local allocation-list cult wine, is famous for having a brightly painted tasting room  … that never seems to be open. How exclusive is that? Other wineries keep their doors open as much as they can because direct-to-consumer sales and wine club commitments are critical to their economic sustainability.

One tasting room featured wine slushies as a way to stand out in the crowd. Kinda like a Slurpee at 7-11, I guess, but with alcohol from the wine base. Didn’t try it but I wouldn’t entirely rule it out on a 90-degree August day. Something for everyone.

Slowly then Suddenly: Critical Mass

A successful wine tourism sector requires a critical mass of visitors, tasting rooms, accommodations, food, and drink, which have all slowly and then suddenly come together on Main Street. Or at least that’s how it feels to us, and this is backed up by a 2019 economic impact study (pdf here).

Although many of the visitors surveyed indicated that they first came to Walla Walla ten or more years ago like us, nearly a quarter only made their initial visit in the last two years  (see table II-11). And they returned because there is so much to do, see, and taste. Impressive.

Even the prison gets some love. We stopped to taste at The Walls, which is named for the prison walls that are just a short distance from the winery.  The wines were powerful but elegant — a difficult balancing act — even the “Concrete Mama” Syrah (another reference to prison walls). Sue was especially fond of a Tempranillo from The Rocks district called “Wonderful Nightmare.”

Rioja to Walla Walla

The newest wine tourism destination is south of town near the Oregon border — Valdemar Estates.  The winery facility opened just a few months ago, but it is already getting hundreds of visitors each day. The winery is the project of Jesus Martinez Bujanda Mora, the fifth generation of his Spanish winemaking family, who has planted a flag here in Walla Walla.

The winery and tasting room are stunning, with stylish contemporary Spanish flair, but I think visitors come for a unique experience. They can taste Valdemar’s Walla Walla and Red Mountain Syrahs — with additional wine offerings in the pipeline. But there’s more because Valdemar’s Spanish wines are also available. And you can taste them, comparing old world and new, in the best possible way, gazing out over vineyards with plates of tasty fresh-made tapas to pair with the wines.

Delicious tapas and fine wines — no wonder that visitors are attracted to Valdemar Estates. And the winery seems committed to becoming part of the community, advancing the region and not just their own wines and business.

Love Me Like the Rocks

It will be interesting to see how this project develops, especially as a new center of gravity develops in Walla Walla.  Wineries and tasting rooms are just about everywhere in this area — Main Street, out at the airport, near the Blue Mountains, in the vineyards south and west of town, too.  But there’s one area that hasn’t seen much development … yet.

Some  great wine comes from the rocky vineyards across the state line in Milton-Freewater, Oregon, including iconic Reynvaan and Cayuse, but not many visitors head this way. Is this the next frontier for Walla Walla wine tourism? Come back next week for our closer look at the future of The Rocks.

“Around the World in 80 Wines” Russian Translation

russian80I was pleased to receive a package in the mail with several copies of a book that I know very well, but cannot actually read.

It’s called “Вокруг света за 80 бутылок вина.” It is the new Russian translation of my book Around the World in 80 Wines!

Cool cover, don’t you think? And everyone knows you really can judge a book by its cover! My Russian publisher’s website has more about the book, including an opportunity to browse through some of the pages, download an excerpt, and purchase either the physical or electronic edition.

Even if, like me, you don’t read Russian I think you will enjoy the clever design of the book with its many maps, wine glass circles, and random drops and splotches. What fun!

russmapI’d like to thank EKSMO Publishing House for doing such a fine job with this book and my colleagues at Rowman & Littlefield for facilitating the project.

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Our cat Mooch has been browsing the new book between naps!

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