Author Archives: Mike Veseth

Chinese Wine: Challenges & Opportunities

March 21, 2010 By in China wine, emerging wine regions, Supply and Demand, wine distibution, wine markets 2 Comments

Harvest time at Grace Vineyards.

Wine in China is getting a lot of attention just now. Jancis Robinson is back from Beijing and Shanghai, where she celebrated the release of a Chinese edition of her indispensable Oxford Companion to Wine with wine dinners and tastings. Recent issues of Decanter (April 2010) and the Wall Street Journal (March 20, 2010) feature big stories about Chinese wine. One of my senior thesis students is even doing research on the potential market for Washington State wine in China.

Coffee Grounds and Ashtray

I’ve written about China’s wine market on several occasions. I discussed the challenges facing their industry in “The China Syndrome” in January 2008 and the difficulties of penetrating the Chinese market in October 2009. I even reported a London wine merchant’s forecast that China would eventually overtake France as the world’s greatest wine nation.

Challenges and opportunities: those seem to be the recurring themes.

The challenge is easy to appreciate if you taste Chinese wine. At present this is difficult (unless you travel to China) because import supplies are very limited. The Morrisons supermarket chain apparently carries some Chinese wine in Great Britain. So far I haven’t seen Chinese wine for sale in the U.S., but I think it’s here somewhere so I’ll keep looking. There is obviously a large potential ethnic market (at Asian food stores like Uwajimaya and at the tens of thousands of Chinese restaurants that dot the country) in addition to curious wine enthusiasts like me.

I have tasted two Chinese wines, thanks to a former student who schlepped them back from Beijing for me. The first, tasted with a group of students a year ago, showed the murky past of Chinese wine. It was a 1999 Changyu Cabernet Sauvignon — a recent release mass market product by China’s oldest winemaker. Tasting notes I found on the internet warned about coffee grounds and ashtray with a hint of urinal cake. Right on the money, unfortunately. Drinkable (hard to believe, I know), and weirdly fascinating, but really only interesting as a novelty.

The Grape Vine Supply Chain

The basic problems, as I have pointed out in the past, are the undemanding domestic consumer base and the badly broken supply chain.

Wine is only as good as the grapes that go into it, or so growers tell me, and the grape supply situation in China is difficult. Most of the wine grapes are grown by families that lease about an acre of land from their local agricultural commune. That acre is typically divided into four or five small plots that are planted with different crops so as to minimize risk. One or perhaps two of the plots may be wine grapes in the vineyard regions. So vineyard scale is impossibly small — smaller even than in the south of France.

These small growers insist on calling the shots, which is natural since they are so dependent upon the success of their tiny farms. The wine producers have no control over what these hundreds of thousands of micro-vineyards produce, how they are cropped, and when the grapes are picked. Researchers suggest that the grapes are chosen and grown to maximize quantity not quality and that the grapes are picked as soon as possible to minimize risk of poor weather than could destroy the crop. So small crops of flavorful fully ripe grapes — the winemaker’s dream — that’s not going to happen in a typical Chinese vineyard. One study I found suggested that the grapes sell for as little as $80 a ton.

There is not much incentive for individual growers to sacrifice quantity for quality because their grapes are sold by weight to agents who lump together fruit from dozens or hundreds of individual growers. Good fruit would quickly get mixed with inferior fruit, so why pay more? The local agents often then resell the fruit to regional agents who sell again to the large winemakers. You can just imagine the condition of the fruit by the time it finally gets to the winemaking facility having passed through so many hands. This system is worse than the European cooperatives I have read about (and I didn’t think anything could be worse than that).

China’s Hopeful Future

Recently a group of us tasted the hopeful future of Chinese fine wine, a bottle of 2003 Grace Vineyards Tasya’s Reserve Cabernet Franc.  Grace Vineyards is often cited as the most promising winemaker in China and the contrast between this bottle and the Changyu was night and day. The attention to detail in the winemaking was evident and the use of estate grapes (rather than the unreliable supply chain cited above) was apparent, too.

The contrast between the two wines was stunning, mainly because the Changyu was so very bad, of course. The Grace Vineyards Cab Franc was a solid effort but nothing special– a bit light compared to our Washington State Cab Franc wines, for example, with the distinctive  “green”  taste I associate with wine made from under-ripe Cab Franc grapes.

[Update 3/24/10: A reader suggests that the “green” flavor may be intentional — he has heard that this flavor is familiar to Chinese consumers and that some Chinese wineries may harvest grapes in a less than fully ripe state in order to achieve it. Interesting and understandable if true. Thanks to Bob Calvert for this insight.]

This points to another challenge and one that will be hard to overcome.  China is a pretty difficult place to grow and properly ripen  vinifera grapes. The combination of  very cold winters and hot and humid summers in the principal grape growing regions makes winegrowing particularly tricky. (The Decanter article does a good job explaining this.) Some reports indicate that white varietals like Riesling can be grown with success, but wine’s first duty in China is to be red and ripening the preferred Bordeaux varietals is a significant long term problem.

Seventy-Two Buck Chuck

The Wall Street Journal article by Stan Sesser included tasting notes by a panel of local experts.  The nonvintage Changyu Cabernet Sauvignon they sampled sold for the equivalent of $5.40 and reminded them of dirty sweat socks and cleaning fluid — possibly a step up from the one I tasted.

At the other extreme, a 1998 Cab from Great Wall was apparently really quite good — “deep colored, full bodied, tannic, but with a lot of fruit.” Price? The equivalent of $72. Yikes!

I have to think that Chinese wine will benefit in the long run from all the attention it is receiving at home and abroad. It will be interesting to see how the challenges and opportunities develop over the next few years.

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Note: Anyone interested in the Chinese wine market should read Grape Wall of China, a terrific blog.

Oregon Pinot Noir: Peaks & Valleys

March 15, 2010 By in economic crisis, Jancis Robinson, Oregon wine, Supply and Demand, wine markets, wine price 5 Comments

A quick getaway to Portland provokes a post about Oregon wine’s highs and lows.

Cheers for All the [Peak] Years

I was browsing through the wine books at Powell’s, Portland’s famous bookstore, when I came across a used copy of  Vintage Timelines, a 1989 book by Jancis Robinson. The idea of the book was to select a group of the world’s greatest wines and examine how different vintages have evolved (and would be expected to continue to evolve) over time.  The research required Jancis to taste trough verticals of each great wine (research is such a drag!) and compare notes from previous years to create complex and quite fascinating graphical timelines.

It’s a great book for wine lovers (despite its 1989 date) and valuable to me because of the particular wines Jancis selected for the study.  No New Zealand or South African wines, for example. The recent history of their great wines was too brief in 1989 to permit long-term analysis.  Just five Australian wines made the cut (led by Penfolds Grange Hermitage, of course).  Seven California wines are listed and just one from the rest of the U.S. — David Lett’s Eyrie Vineyards Pinot Noir Reserve, the wine that put Oregon on the world wine map.

JR's Vintage Timeline for the Eyrie Pinot Noir Reserve

There is an inscription in the book. “To Nick — Cheers for all the years — past & future. Dave Lett, Christmas 1989.”  Needless to say, I bought the book as both a research tool and a personal souvenir. It’s a good reminder of Oregon Pinot Noir’s humble origins and the high peaks it has climbed. Oregon’s wine industry is just a little over 40 years old, yet is is often  mentioned in the same breath with Burgundy because of the quality of its best Pinot Noir wines, like David Lett’s Eyrie Reserve.

Whole Foods Letdown

So I was feeling pretty good about the Oregon wine industry when I stopped off at Whole Foods, about a block away, to survey their selection of Oregon wines.  As I entered the store, however, I ran smack into a display of Oregon Pinot Noir priced at … wait for it … $9.99.  That’s about ten dollars less than the usual price for an entry level Oregon Pinot. The wine was produced by Underwood Cellars, a second label of Union Wine Company, which also makes King’s Ridge. The fruit was sourced mainly from Southern Oregon — the Umpqua and Rogue Valleys — not the Willamette Valley where Eyrie and most of the other famous Oregon Pinots are made.  The bargain price was a real shocker.

Oregon is a high cost wine production area. Even higher than  Burgundy, I think, because many of the vineyards there  have been in family hands for years and land costs are often not explicitly considered in calculating cost (an economic mistake, of course, as any Econ 101 student will tell you). That’s not the case is Oregon, where it is hard to ignore the cost of capital.

A study using 1999 data put the average cost of Willamette Valley Pinot Noir at $12.79 per bottle (see Oregon Viticulture edited by Edward H. Hellman for the details) and more recent proprietary data I have seen puts cost in the same range or higher. $9.99 might or might not be a sustainable price for a wine made from Umpqua Valley fruit, but  it certainly isn’t a  sustainable price point for Willamette Valley wine.  If the price of entry level Willamette Valley Pinot  were to reset from $20-$30 down to $10-$15 … well I think the Willamette River would bleed red ink. Click here to read a recent article from Wines & Vines about the Oregon situation.

Boom and Bust

The quality of Oregon Pinot Noir is higher than ever, I believe, but the industry’s economic health may be falling. Oregon (and New Zealand) rode the Sideways Pinot boom for several years, expanding vineyard plantings repeatedly because it seemed like the demand for this wine would never be satisfied.

Now the recession is here, Malbec is  hot, the new Pinot vineyards in Oregon, New Zealand, Chile and elsewhere are all coming into production at the same time and prices are tumbling. Bargain Pinot Noir is a fact of life for now. It will be interesting to see where the market resets when supply and demand eventually find their new balance.

In the meantime, I guess there’s only one thing to do. Drink more Pinot Noir!

Desperately Seeking Somewhere

March 8, 2010 By in globalization, Hedges Cellars 4 Comments

I gave the after dinner talk for a group of 36 visiting college counselors on Sunday. Since I didn’t want to give them indigestion, I spoke about wine instead of the economy. We tasted an after dinner wine made by one of our alumni winemakers (see below) and wrote a collective tasting note to commemorate the experience.  It was a lot of fun and very serious at the same time. Here’s the short “45 rpm” version of what I had to say.

Nowhere Man

It seems to me that the world is increasingly stretched and fragmented, processed and globalized.  Many elements of our everyday lives are efficient, impersonal and shallow. The things we buy and use could come from anywhere and end up anywhere. Anywhereness is the same as nowhereness in my book, the lack of real personality or a distinctive sense of time and place.

Given the prevalence of nowhere, it is not a surprise we desperately seek somewhere to fill the empty places in our lives. This is what makes wine especially appealing to so many people today. Wine has the ability to express somewhereness, the intangible quality we often call terroir. More than most products, we know (or can find out) who made a particular wine and how, in what place at what time. Wine somehow manages to hold all these messages together and to show us through its variations the influence of personality, the impact of nature, time and place.

Fixing a Hole

Wine is more likely than most products to be a shared experience, too, consumed in a social setting, the subject of conversation and perhaps some conversational introspection (like our collective tasting note). Music once filled these gaps (and still does to some extent) because we typically listened to it in the company of others. Now the iPod has made music an efficient but more solitary experience. Thank God there is no equivalent iWine (at least not yet).

I told the counselors all this because I think the search for somewhereness that draws people to wine is also what leads students and their families to seek out the intimacy and somewhereness of liberal arts colleges like the University of Puget Sound. Students can efficiently acquire a pretty good education at universities constructed on an industrial model (do you see the similarity with wine here?), but something is sacrificed in the process, something that makes the experience complete and the person whole.

Desperately seeking somewhere — that’s who and what we are. My talk covered more than this, of course, but you get the idea.

Somewhere, Man

The wine we tasted together was a somewhere wine: Hedges Family Estates Red Mountain Fortified Wine. It is a wine made using traditional Port wine grape varietals and methods but it isn’t Port because Port can only come from Portugal. It’s a non-vintage blend of wines from several harvests of Hedges estate fruit, bottled in 2004 and drinking pretty well right now.  Here’s a recent tasting note:

The wine is so dark and rich it is nearly a blue-black color. The nose is full of dark fruits, orange zest, tobacco, herbs, and violets. The flavors of the sweet brandy hit your tongue first, followed by orange, chocolate, and cherries. At 21.6% alcohol, and 5.6% residual sugar, this is pretty smooth stuff.

This wine captured the essence of my talk quite well, I think.  It’s a personal wine (just 206 cases produced) that uses the style of Port wine to express the particular terroir of Washington’s Red Mountain AVA. It’s a somewhere wine if I ever tasted one and a good reminder of the power of wine to bring people together and remind us of life’s deeper purposes.

Open That Bottle Night 2010

February 26, 2010 By in critics, history, popular culture, wine critics 3 Comments

Cam watches Ken nurse the cork out of a bottle of 1960 Taylor Vintage Port.

The last Saturday of February is a holiday for wine lovers: Open That Bottle Night (OTBN). It’s the evening when wine enthusiasts come together to share wine and stories.

Although the wines are the official reason for these gatherings, the people and their stories are what it is really all about.

This year Sue and I will be getting together with Bonnie & Richard, Ron & Mary and Michael & Lauri at Ken & Rosemary’s house in Seattle. Everyone’s bringing wine and a story about the wine and Rosemary is making another of her spectacular meals. I’ll report the specifics in a note at the bottom of this post.

Vino Exceptionalism

The premise of OTBN is that wine is different — or maybe that we are different when it comes to wine.  Americans are famously interested in instant gratification — we want what we want when we want it. That’s one reason the U.S. saving rate is sometimes a negative number. Can’t wait — gotta have it now. That’s our typical consumption profile.

Isn’t it interesting, then, that we sometimes behave in exactly the opposite way when it comes to wine. Yes, I know that 70% of wine is consumed within a few hours of its purchase. That is unexceptional.

No, what I’m talking about is our counter-stereotype tendency to tuck special bottles away and save them for … for what? For the right occasion, I suppose. For the moment when they will mean more than they do just now.  Sometimes it is about proper aging of the wine, but usually there is an intangible component that transcends the bottle’s contents. For whatever reason, it seems we need to be reminded once a year to get these wines out and enjoy them!

Frequently (in my case, at least) we hold them too long so that when the cork is finally pulled the wine within is a shadow of its former self.

Liquid Memory

The interesting thing is that it usually doesn’t matter that the wine has faded away. Turns out it was the story that mattered most. Liquid memory!

Dottie & John

John Brecher and Dorothy Gaiter invented OTBN in 2000 as a way to celebrate wine by releasing its pent up stories. Dottie and John wrote the weekly wine column for the Wall Street Journal until quite recently and each year they invited readers to send them accounts of their experiences, some of which appeared in post-OTBN columns.

It was quite an experience reading what other people were inspired to say by the wines they opened that night. Kind of a peek into their souls. I think that was the point, however. As Dottie and John wrote in their final column on January 26, 2010.

Wine isn’t a spectator sport. It’s utterly intimate. Don’t let anyone tell you what you should like, including us. Try wines broadly—there have never been so many good ones, at all prices, on shelves—and keep raising your personal bar for what is truly memorable, so that you are always looking for the next wine that will touch your soul and make you feel you’ve gone someplace you’ve never been before. It’s not about delicious wines. It’s about delicious experiences. May your life be filled with them.

Two Buck Chuck to Chateau LaTour

Dottie and John didn’t explain why they left the WSJ — word on the wine blogger street is that it was a simple cost-cutting move by Journal management — but many of us are interested to learn what will happen next.  The old WSJ wine column took a very broad view of wine, with reports that ranged from inexpensive bottlings like Two Buck Chuck to icons like Chateau LaTour.

John and Dottie were not very traditional or pretentious — they constantly pushed readers to try new wines, re-visit old favorites and think for themselves. I hope to see them reemerge on the wine scene soon. (Perhaps on cable TV?)

The Journal hasn’t given up on wine. The wine page has been filled by a variety of writers and topics since the first of the year. I suspect this is a short term measure until a permanent replacement is found.

Wine for Davos Man

It seems to me that the WSJ is very ambitious and is trying quite hard to become the Financial Times, rated by many as the world’s best business newspaper. The FT features a weekly column by Jancis Robinson, rated by some as the world’s most influential wine critic.  I expect Rupert Murdoch, the Journal‘s owner, to seek out someone of similar stature to anchor the Weekend Journal section (and attract wine-enthusiast readers).

Dr. Vino reports that the new columnist will be Jay McInerney, novelist and former wine columnist for House & Garden magazine. It will be interesting to see what direction McInerney (or whoever gets the job) takes at the WSJ. It is one of the world’s great “bully pulpits” when it comes to wine.

Jancis Robinson uses her position at the FT to promote fine wine in a global context to her audience of “Davos Man” global elites. She has been very effective at raising wine’s profile around the world.

Dottie and John embraced wine and globalization, too, but in a very American way for a broad American audience. They were effective, too, in the American context.

It will be interesting to see what direction the Wall Street Journal chooses, what idea of wine they embrace and what audience they hope to serve. In the meantime, it’s time to open that bottle.

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Update 3/26/10

This report just in from the New York Times dining blog:

The Wall Street Journal has confirmed rumors that Jay McInerney will be a wine columnist for the paper, but it throws in an unexpected curveball: his column will alternate, Saturday to Saturday, with one written by Lettie Teague.

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We had great wine, spectacular food and fascinating stories on Open That Bottle Night 2010. By the numbers: five and a half hours, ten people, thirteen wines, 75 wine glasses. Here are the food and wine menus — you will have to imagine the stories. Special thanks to Rosemary and Ken for hosting. And thanks to Dottie and John for inventing OTBN.

Wine Menu (listed by vintage year, not the order tasted)

Solter Rheingau Riesling Brut Sekt 2006

Casanova di Neri Brunello di Montalcino Tenuta Nuova 2004

Callaghan Vineyards Sonoita (Arizona) Padres 2003

Shanxi Grace Vineyards (China) Tasya’s Reserve Cabernet Franc 2003

Racines Les Cailloux du Paradis (Loire) 2003

Chateau Haut Brion Blanc 1998

BV Georges de Latour Private Reserve Cabernet Sauvignon (magnum) 1997

Champagne Charles Ellner Brut 1996

Chateau d’Yquem 1996

Paul Jaboulet Hermitage La Chapelle 1990

Chateau Figeac St-Emilion Premier Grand Cru 1967

Chateau Cheval Blanc 1961

Taylor Vintage Port 1960

Dinner menu

Rosemary Flatbread with Artichoke and Green Olive Spread

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Wild American Shrimp and Fennel Salad

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Roasted Tenderloin of “Wild Idea” Buffalo

Polenta with Cremini and Porcini Mushrooms and Mascarpone

Green Beans with Sautéed Shallots

Cranberries and Cherries in Madeira sauce

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“The Cheese Cellar” Cheeses

Gorgonzola Hand Picked by Luigi Guffanti

Piave High Mountain Cow Cheese

Sottocenere with Truffles, Clove and Cinnamon Rub with Ash Rind

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Panna Cotta with Blueberry Compote

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Chocolate Biscotti

Soft Amoretti Cookies Sandwiched with Chocolate Ganache or Raspberry Jam

Curse of the Blue Nun

February 21, 2010 By in brands, popular culture, Supply and Demand, wine brands, wine markets 9 Comments

Writing about Riesling got me to thinking about great  German Rieslings and, because I am a Dismal Scientist after all,  I also started thinking about the not-so-great German wines that define that country for wine drinkers of a certain age.  And so, inevitably, my thoughts strayed to memories of Blue Nun.

I haven’t thought of Blue Nun wine in years. I remember it from the 1970s as an unsophisticated Liebfraumilch wine in a tall thin blue bottle with a blue and white-clad nun on the label. She reminded me a bit of the “Flying Nun” television show (starring Sally Fields) that ran from 1967 to 1970. The wine was about as serious as the TV series, but apparently it sold hundreds of thousands of cases to aspiring wine drinkers like me.

I didn’t know that it was still around until I spotted it on a BBC television show about wine. It was a miniseries featuring Oz Clarke, notable British wine guru, and James May, co-host of the popular automobile series “Top Gear.” Oz and James were touring California with wine expert Oz trying to teach neophyte James a bit about wine. James resisted, put off by wine’s snobbish elitist ways.

Terrible. Disgusting. Must be European.

Blue Nun appeared in a sequence where James bet Oz $100 that he couldn’t identify an ordinary everyday wine in a blind tasting (from a plastic beer cup, as it turned out). Oz sniffed and swirled and made a bad face. Terrible, he said. Disgusting. So bad that it couldn’t be from America – market-savvy Americans would never make a wine this bad. This could only come from the Old World.

“Blue Nun!” he shouted, winning the bet, although I suspect that colored bottle gave him an unfair clue. Here is a taste of the show. The Blue Nun episode is not available online, but this will give you a good sense of what the show is like.

I’m not sure that Blue Nun is really that bad, but Oz Clarke’s revolting reaction is telling.  Blue Nun and brands like it established Germany’s place on the lower tier of the World Wine Wall in the 1970s. The wines may not have been as cheap and nasty as memory suggests, but they were not expensive and sophisticated, either. They were the face of German wine abroad and that face, like the Blue Nun herself, was more or less a colorful cartoon version of the great wines of Germany.

The First Global Wine Brand

Blue Nun was by some accounts the first truly global mass market wine brand, an unexpected distinction for a German wine. Its story therefore has some bearing on the globalization of wine. Blue Nun’s roots go back to 1857 when Hermann Sichel started a wine business in Mainz. I know little about the early days of Sichel’s firm except that it managed to survive the political and economic chaos of the ensuing years, which in retrospect seems like a considerable achievement.

The real story begins with the 1921 vintage, said to be one of the best. Sichel sought to export these wines, especially to Great Britain, and the Blue Nun label was invented to facilitate sales abroad. One source holds that the nun on the label was originally clad in standard issue brown robes, but a printer’s error turned them blue and thus a brand was born.

The brand and the famous vintage it represented found a market in England, selling more than 1000 cases a year in the 1930s (quite a lot for a single brand of wine at that time) according to the official company history.  The volumes increased after World War II, rising to 3.5 million bottles a year in the UK in the 1970s before sales collapse back to 800,000 in the 1980s.  The quantity quality trade-off finally came back to haunt Blue Nun, it seems, and the fashion for red wine started by the famous French Paradox discovery did not help either.

Blue Nun, it seems was the original victim of the Curse of the Blue Nun: the simple, sweetish wines that make you will also break you. As tastes changed and wine drinkers sought to move up-market, Blue Nun wine petered out (although 800,000 bottles is hardly a trickle). Passé to some, a joke (as with Oz and James) to others, that was and to some extent is Blue Nun.

It is an over generalization to say that the whole of German wine suffered the Curse of the Blue Nun, but there is some truth in it. Great wines continued to be produced, of course, and snatched up by the educated wine elites (although not at the high prices they once earned), but Brand Germany was Blue Nun, Black Tower and their Liebfraumilch shelfmates. German wine hit its lowest point.

Blue Nun and the New Globalization

I am an optimist about globalization and wine (that’s why next book is called Grape Expectations) and this attitude extends to German wine. The bad news of the crisis of quality is matched by the good news that German wines have changed, even the big brands. Black Tower has moved upmarket into affordable quality wines, not just Liebfraumilch and not just white wines, either. It is the top German brand today.

Sichel sold the Blue Nun brand to Langguth, another German maker, who also upgraded the wines. Blue Nun is once again a major brand, selling 5 million bottles in Britain alone in 2005. It is a German brand but, significantly, reflecting the current wave of globalization, not just a German wine.

Popular wines from around the world are imported to Germany where they are bottled under the Blue Nun label. There are Languedoc Merlot and Cabernet Sauvignon, California Zinfandel, Australian Shiraz, Chardonnay from Chile, and a Rosé from Spain, for example. There’s even a Pinot Grigio from Germany, although its unlikely origin is not easy to learn from the front label.[i]

Blue Nun Light is low alcohol (0,5%), low calorie (27 calories per 100 ml glass). Tastes great, less filling.

My personal favorite (perhaps because I’ve never tried it) is Blue Nun Sparkling Gold Edition shown here. It’s a light fizzy wine infused with flakes of 22 carat gold leaf that glitter in the glass.

Young women seem to be Blue Nun’s target market according to both published sources and the look of the advertising copy. Women buy more wine than men, so this is not a crazy strategy, and young women are the market of the future, although the assumption that they are especially attracted to shiny floaty things like these gold flakes is sad if true. The idea that the attractive female image of the Blue Nun might particularly appeal to women never occurred to me … until now.

German wine is back, but it has changed. Quality has improved – even the mass market brands offer some good wines – but the reputation lingers, the legacy of the Curse of the Blue Nun.

[i] The ad copy says it is from the “sunny Palantine region,” which sounds Italian but isn’t. The geographical designation is Pfalz, Germany. I’m sure it is quite good as Pinot Grigio goes.

Riesling: How Sweet It Is?

February 16, 2010 By in Chateau Ste. Michelle, Riesling, Supply and Demand, wine brands, wine markets 14 Comments

There is no doubt about it: Riesling is one of the world’s great wines. I think my students were slightly stunned by the eight Riesling wines (ranging from very dry to an ice wine) that they sampled at a recent tasting I organized for them.

Riesling drinkers know “how sweet it is!” (to borrow Jackie Gleason’s signature phrase). The wines are good and good value, too. Some of the best American Rieslings (wines like Poet’s Leap or Chateau Ste Michelle’s Eroica) sell for  only about $20. What a deal!

But the reason these great wines are great bargains is that the demand for them, while on the rise, is really not so great. Consumers by and large are afraid to buy Riesling. They don’t know how sweet they will taste or if they will like them. The “how sweet is it?” question and the “how sweet it is” exclamation (of those who know the answer) are thus  inextricably linked.

Asymmetric Information Strikes Back

Students of economics will recognize this as a problem of asymmetric information.  The people who make wine know its flavor profile and the people who buy it presumably know what they like (although winemakers tell me that people tend to say they like dry Riesling, but end up buying sweeter products). But they don’t know what’s in the bottle and can only find out by trying it.

Experimentation typically leads to confusion and disappointment as bottles that say “Riesling” produce glasses with much different taste. At some point, for many buyers, the disappointment factor is just too big. Lots of other wines out there. Why beat your head against the wall?  Riesling sits on the shelf.

One answer to the asymmetric information trap is signaling: tell the buyers what they need to know to make a purchase with confidence. It sounds pretty simple, but Riesling makers have until recently resisted it.

Of the seven Riesling table wines at my tasting, only two of them used the front label to signal something about the relative sweetness of the wine. The Pewsey Vale was labeled a “Dry Riesling” (and it was pretty dry, too) while the Pacific Rim bottling billed itself as a “Sweet Riesling” and was medium sweet and very tasty.

Some of the other wines offered descriptors on the back label, but I think it’s fair to say that a typical buyer would have been in the dark trying to figure out how sweet or dry most of them  were. The Pacific Rim wine was interesting because it was the first one I’ve seen that uses the International Riesling Foundation‘s new Riesling Tasting Profile Scale.  About a million cases of Riesling will be released this year by U.S. wineries that are participating in this program. Pacific Rim, a Washington Riesling specialist, has used the scale since 2008, according to a recent article on Decanter.com

How Dry Am I?

I first learned about this initiative at the 2008 Riesling Rendezvous conference, sponsored by Chateau Ste Michelle (Washington State) and Dr. Loosen (Mosel, Germany). An international group of Riesling producers decided to confront the asymmetric information problem head on by developing a simple way to communicate useful information about their wines.

Here is an example of the scale they have come up with taken from a limited edition Chateau Ste Michelle product. As you can see, it is pretty simple — just four descriptors ranging from Dry, Medium Dry, Medium Sweet to Sweet with +/- variation. This wine is “Dry +” — between Dry and Medium Dry.

This would seem like a very small step were it not for the fact that the current state of bottle information is so very limited and uneven. I suspect that this small step will help a lot of wine drinkers take a positive step towards enjoying Riesling.

Simplicity Is Complicated

As is often the case, getting something simple like this tasting scale is a very complicated process. As you may imagine, not all producers see the situation in the same light (there is much more to wine, even Riesling, than sweetness — a valid point). And tastes differ, of course, so what is medium dry to you might be medium sweet to me. (Some of my students thought the Pewsey Vale Riesling was quite sweet, for example.)

How do you define  sweetness in wine? Well, of course, it is a matter of balance between sugar and acid — with the right balance even a dessert wine with a high residual sugar level can avoid having a sticky sweet taste. Translating the chemistry into a taste profile, however, is a complicated matter.

Here is how the IRF handled the problem. As you can see, the standard begins with a simple sugar to acid ratio test (a relative calculation of grams per liter of acid and sugar). It then takes into account the absolute pH, which can push the rating up or down one level of perceived sweetness. Click on the table to enlarge it and see a more detailed explanation of the methodology.

I am going to have to pull a few corks (or twist some ‘caps) to see if I agree with the scale and if there really is the desired consistency across makers. But I am optimistic that this is a step forward. If it works, how sweet it will be!

Note: I am looking forward to attending the 2010 Riesling Rendezvous and getting an update on progress on this and other Riesling industry issues.

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Update 2/17/2010

My friend David Rosenthal, a winemaker at Chateau Ste Michelle, provides this useful news:

I wanted to let you know that all of the 2009 Rieslings from CSM will have the IRF scale on the back.  That includes:

Columbia Valley Riesling
Dry Riesling
Waussie Riesling
Harvest Select Riesling
Cold Creek Vineyard Riesling

We are jumping in with both feet on this one to try and educate people as much as possible at the point of sale.

Digital [Wine] Dreams

February 12, 2010 By in technology, Tesco, wine distibution, wine markets 5 Comments

It is probably no surprise that the wine industry has become very interested in figuring out how to use electronic media to draw consumers into the wine market and intensify the relationship. Much of the focus so far has been on social media vectors such as Facebook and Twitter, which connect consumers and producers and facilitate conversations of various sorts.

For what it’s worth, insiders believe that CellarTracker, the online wine community and cellar management program, has had the biggest impact so far. Click here to read Jancis Robinson’s analysis from today’s Financial Times.

Wine’s digital dreams go beyond social media, however. I’m impressed with Tesco’s smart phone wine app, which I have written about before. My college class was awed when I showed them this video of the wine app in action.

Now Microsoft has developed its own touchscreen tabletop wine program for restaurants and bars to help consumers get more involved in their wine-by-the-glass choices (and to keep them entertained until their wine arrives, I suspect).

(I remember when tables like this held quarter-eating video games like PacMan. Back to the future!)

Leave it to the French, however, to really think outside the bottle and box. Here is their vision of the digital [wine] dream.

(I wonder what Sarkozy thinks of this! He seems to want to make wine less — not more — accessible.)

I think we are in the early stages of understanding which of these digital wine ideas will catch on as a way to educate and inform consumers and create a more personally satisfying and commercially successful wine experience. My guess is that we will have to explore many blind alleys before we find the right approach.

So keep your eyes open for new ideas — and pass me that little USB spigot. I want to download some Brunello.

Book Review: From Demon to Darling

February 7, 2010 By in wine history, wine law, wine markets, wine research Leave a comment

Richard Mendelson, From Demon to Darling: A Legal History of Wine in America. University of California Press, 2009.

There are many ways to tell the story of wine in America. Wine is a people story (Gallo and Mondavi, Parker and Vaynerchuck), a story of nature and terroir and even, at times, a tale of popular culture as indicated by Sideways, Bottle Shock and the rise of celebrity winemakers. Readers of this blog will know that I think wine is very much an economics story, too.

Richard Mendelson believes that wine is also a legal story and I think he makes a good case. Especially in America, I don’t think you can understand wine without an appreciation of its legal history. This is therefore a very timely and useful volume.

Wine, Bad Wine, and More of It

Changing social attitudes toward alcohol in general and wine in particular obvious affects the legal environment in which wine is made, sold and consumed. The law story is therefore also a social and political story with many unexpected twists and turns. I found many useful nuggets of history as I followed Mendelson’s historical narrative.

The discussion of wine during Prohibition is particularly memorable. Did you know that wine consumption in the United States increased during Prohibition? Commercial wine sales were restricted, of course, limited to a few categories such as medical wine and wine for use in religious ceremonies.  But households were allowed to make up to 200 gallons of “bathtub” wine each year for their own use, a significant loophole.

Vast quantities of poor quality homemade wine more than replaced the  better quality but now illegal commercial products. Winegrowers shifted from quality grapes to varieties that could best survive the long train ride to market. Supply and demand both deteriorated in terms of quality, but quantity actually improved.

Please, Sir. May I have More?

I guess I knew the basics of federal wine regulation and the AVA geographic designation system before I read this book, but I found the legal history very revealing. Now I understand why the early AVAs were so crude in terms of defining terroir — they were based, more or less, on the borders of local telephone services and aligned very poorly with winegrowing realities. No wonder there has been continuing pressure to expand, refine and redefine AVAs ever since.

I wish that Mendelson had gone into greater detail regarding today‘s legal wine sale environment, the resulting patterns of wine regimes in the various states and the three-tier system that services them. His basic outline of the current situation is fine, but I’d appreciate more details and state-by-state breakdowns. But maybe that’s beyond the scope of this book.

One test of a good wine is that you want more of it. Who knew that a book on wine law would leave me begging for more? Highly recommended!

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NB: More and more books are being published without full reference “backmatter” to save printing costs, a practice that makes them less useful as research tools even if it does make them more accessible to cash-strapped readers. Joe Stiglitz’s new book on the economic crisis, Freefall: America, Free Markets and the Sinking of the World Economy, for example, has endnotes aplenty, but no bibliography and no index.

No index! Sure hope you caught all the important points the first time through because it will be hard to track them down again.

In this light, I want to commend the University of California Press for keeping up scholarly standards. This book has 190 pages of text followed by 68 pages of notes, ten pages of bibliography and a usefully detailed index.

Who Sells the Most Wine?

February 2, 2010 By in Supply and Demand, Tesco, wine distibution, wine markets 6 Comments

Who is the #1 retailer in the wine world?  The answer is Tesco, the British-based supermarket company.

Tesco sells more than 320 million bottles of wine each year in Britain alone (one of four bottles in this important market). It is a wine selling machine, using every available mechanism to market wine and build the brand.

Tesco stores feature attractive Wine Walls, for example, tailored according to the demographics of individual stores. Wine displays are strategically positioned near the fish, meat and cheese counters as you will appreciate from your own experience. Wine tastings and wine-related events are organized by the no-fee Tesco Wine Club, which boasts hundreds of thousands of members.

Wine, wine – everywhere.

Tesco takes the everywhere seriously, so their quest to sell wine doesn’t stop whey you leave the store. Internet wine sales are an important retail vector in Britain since nation-wide shipping and delivery is not a problem as it is in the United States, where jurisdictional issues complicate every aspect of interstate wine sales. The Tesco Wine by the Case website provides  consumers with a rather stunning array of wine selections that range from a heavily discounted mixed case of “mellow reds” for £28 to a Vosne Romanee Domaine Hidelot Noellat 2006 Red Burgundy for about the same price, but for just one bottle. Tesco has captured about a quarter of all internet wine sales in Britain.

Buyers earn Tesco ClubCard points both online and in the stores. The loyalty card system carefully tracks the purchases of each customer (and notes non-purchases, too, I suppose), providing data to guide store strategy and the opportunity to produce individualized checkout coupons to encourage wine drinkers to buy more or better wines or perhaps to try something different. Tesco was an early pioneer in loyalty cards and is thought to use this data very effectively.

By Land, Sea and even Phone

Tesco has goes to great lengths to reach British consumers whenever and wherever the urge to buy wine might hit them. Tesco and its UK competitors have established substantial wine stores in Calais, France just minutes from Hovercraft ferry and Eurostar train stations. British consumers have long crossed the English Channel in search of duty-free bargains and British duties still make the trip an attractive excursion for some. Wine can cost about 25 percent less in Tesco’s Calais store and online ordering makes stocking up quick and easy.

Tesco’s latest (as of this writing) innovation is a smart phone app for wine lovers. Enjoying a nice bottle of Chianti at your favorite Italian restaurant? Want to know where to buy it? Well launch the app and use your phone to take a photo of the label on the bottle in front of you. High tech label recognition software will identify the wine, provide maker information and tasting notes and even search through the Tesco online inventory so that you can order a case right now for immediate delivery. Tesco and wine are with you anytime, anywhere.

Tesco and the other British supermarkets use wine to make money and to change the way at least some British shoppers think about grocery stores and even how they think about themselves. In the process, of course, these retailers have acquired a certain amount of power. Indeed, Decanter’s 2009 “Power List” of the most influential people in the world of wine ranks Tesco’s wine director Dan Jago at number six – a few places behind Robert Sands, head of the world’s largest wine company, Constellation Brands, and wine critic Robert Parker but ahead of French President Nicholas Sarkozy and E&J Gallo President Joseph Gallo. This power is put to a surprising number of uses.

That Tesco would use its market muscle to reduced wine costs in not unexpected. Volume purchasing has always been an excuse to press for lower prices. Tesco goes further, however. The New World wines in the Tesco lineup are shipped to Britain in bulk, is 20-foot shipping containers that contain giant plastic bladders holding thousands of liters of wine. The bulk wine is bottled once it reaches Britain, eliminating the cost of hauling fragile bottles half way around the world. Tesco has even started moving the bulk wine to its bottling plant using Britain’s historic system of canals, saving the expense of tanker truck shipment and lower the wine’s carbon footprint.

New Bottles for New Wine

Tesco is very focused on innovation and uses its power to achieve it. Tesco has pressed its suppliers to switch from cork closures to screw caps, for example, in order to eliminate the three to five percent loss that is commonly experienced due to TCA cork taint. Anyone who wants to get wines into the Tesco pipe had better not show up with a corkscrew (iconic brands excepted, of course).

Recently, Tesco has introduced the world’s lightest wine bottle in an attempt to further reduce production and shipping costs and reduce environmental impacts. The new 300g bottles are 30 percent lighter than Tesco’s previous lightweight bottle  and much lighter, of course, than some of the heavyweight containers that one sometimes finds on the Wine Wall. Structural concerns require that the new bottle have a new shape – somewhere between the high shoulders of the classic Bordeaux and the soft silhouette of a Syrah or Burgundy. Tesco estimates that use of this special bottle will have 560 metric tons of glass that it uses to bottle the more than 10 million liters of wine that it imports each year and sells under its own label.

You don’t think of supermarkets as being especially innovative, but it is pretty clear that Tesco is using its market power to encourage innovation in the world of wine. Whether or not you shop at Tesco (or at its U.S. arm — the Fresh & Easy Neighborhood Markets in the American southwest) you are probably affected its activist wine policies.

Book Review: In Search of Bacchus

January 22, 2010 By in book reviews, wine tourism 1 Comment

George M. Taber, In Search of Bacchus: Wanderings in the Wonderful World of Wine Tourism. Scribner, 2009.

While the Japanese are trying to wake up Bacchus through the Kami No Shizuku phenomenon I wrote about last week George M. Taber has been circling the globe tracking down the Roman god of wine. He reports on his adventures in this interesting new book, the third in a series that includes The Judgement of Paris (2005)and To Cork or Not to Cork? (2007).

Taber appears to be one of the luckiest wine enthusiasts on earth. He travels the world tasting wines, visiting wineries and then tells us all about it. It is understandable if we are a bit jealous and this book only makes matters worse.

The subtitle says that this is a book about wine tourism and I suppose it is. But sending a journalist like George Taber to study wine tourism is a bit like sending Alexis de Toqueville to study American prisons. You end up with a lot more than you expected (in de Toqueville’s case, of course, if was Democracy in America).

Taber spent the better half of a year traveling the world, visiting the most important wine-producing countries, talking with wine makers and doing some of the things that wine tourists do. He had to be selective in writing about his experiences, so he picked just one wine region in each country.

Chapters are devoted to Napa (but not Sonoma) Valley, California; Stellenbosch, South Africa; Mendoza, Argentina; Margaret River (but not Barossa), Australia; Central Otago (not Hawkes Bay or Marlborough), New Zealand; Rioja, Spain; Douro Valley, Portugal; Tuscany, Italy; Bordeaux (not Burgundy), France; Rheingau and Middle Mosel, Germany and Kakheti, Georgia.

Tourism is hard work, of course, and research is even harder, but Taber seems to have found ways to relax by reporting on typical wine tourist adventures in each spot. Thus he takes a cooking class in Tuscany, bikes along the Mosel, walks through Burgundy, goes wild game watching in South Africa, bungee jumping in New Zealand and so on.

Getting jealous? Yes, so am I. It seems like George Taber has stumbled upon the ultimate wine lover boondoggle.  He goes to great places, drinks good wine, does fun things –and we pay him to write about them!

But there’s more to this book than George Taber’s vacation slides, which is why I can recommend it enthusiastically.  Taber the hedonistic vacationer cannot shake off Taber the inquisitive journalist. Each chapter reveals some interesting and unexpected aspect of the wine, wine business or wine history of each region. The payoff goes much beyond wine tourism. Indeed, I think for me the wine tourism element is quite secondary.

I found the chapters on Georgia and Central Otago the most interesting. I know relatively little about Georgia’s wine industry and so every well-described detail about their practices is appreciated, especially since the traditional methods still in use are so completely different from anything I have encountered before. I know quite a bit about New Zealand wine, on the other hand, but I’ve never visiting Central Otago, so Taber’s history and report on the current status of the industry there usefully connected a lot of dots for me and in a very enjoyable way.

This book isn’t the last word on wine tourism and no one should view it as a textbook on wine tourism economics, but it is a very interesting examination of the wine world through a particular tourist’s sharp eyes. I’m looking forward to Taber’s next book to see where his search for Bacchus will take him next.