Category Archives: Argentina

Kind of Malbec: Mendoza Wine + Business Collaboration

April 9, 2024 By in Argentina, wine, wine brands, wine markets 3 Comments

“Kind of Blue” is one of my favorite jazz albums and, although we usually think of it as a Miles Davis work, it is really a collaboration of talented artists at the height of their powers.  Recorded in 1959, it features John Coltrane, Cannonball Adderly, and Bill Evans among others (who can forget Paul Chambers’ bass on the title track?). A timeless classic.

Wine is like jazz in many ways, including the power of ensemble work. Although we often give credit for a wine to the head winemaker, there is usually a team involved. The collaboration can take many forms. Recently, for example, Sue and I have sampled the wines of Ventisquero made by Chilean Felipe Tosso and Australian John Duval (of Penfolds Grange fame). Their “Obliqua” Carmenere, the result of a 20-year collaboration, was probably the best version of this wine we have tasted. The two winemakers harmonize well indeed!

Here in Washington State, the Long Shadows winery is organized like an album of duets. Allen Shoup, who founded the project, invited renowned winemakers from around the world (including John Duval, as it happens) to work with his team to make their version of Washington wines. The idea was to showcase what Washington can produce (and it has done that successfully) and give the international winemakers a new melody to riff on.

Miles Ahead: Marcelo Pelleriti

We were recently introduced to the wines of Pelleriti Priore, which are the result of a different sort of collaboration that makes complete sense. Marcelo Pelleriti is kind of the Miles Davis of the team. He is a rockstar (to mix musical genres) winemaker who has worked in both his native Mendoza and in France. An associate of Michel Rolland, Pelleriti has made famous wines in both hemispheres. His focus today, however, is Argentina, which is a great place to grow wine, but a difficult place to grow a wine business because of its many economic problems.

If Pelleriti is Miles Davis, then Miguel Priore is more like Bill Evans on the piano, driving the project forward and creating the foundation for Pelleriti to riff. Priore, also a Mendoza native, knows the region’s terroir, too, but especially contributes his understanding of the business side of wine to the partnership. Pelleriti makes great wine, Priore makes the great wine business possible. Together with other members of the Pelleriti Priore team, they are a tight ensemble.

The Business Side: Miguel Priore

The business side is very serious and I can see how it empowers Pelleriti. They insist on owning their vineyards, which is a very considerable investment. They have also invested to ensure effective distribution of their winery’s 50,000 case annual production both in the United States and in Europe. Looking to the long run, they have prioritized wine quality and providing their clients quality service over other factors.

I had to ask Miguel Priore about the problems of doing business in Argentina, with its high inflation and uncertain future given new President Milei’s bold policies and strong opposition. Priore acknowledged the challenges, but business in Argentina is accustomed to headwinds and his intent is to provide Pelleriti with a firm economic foundation for winegrowing and to insulate buyers from the economic changes, too. This is the right approach, but not easy to do. Makes me appreciate how important both parts of this duet are to the final product.

Kind of Malbec

In vino veritas, they say, and this was one of those times when the wines sang in harmony with their reputation. Sue and I tried two Malbecs from the Flagship line, a Marcelo Pelleriti Signature Malbec made from old vines and the 1853 Selected Parcel Malbec made from very old (more than 100 years!) vines. The year 1853 is significant for Argentina; it was when the first Malbec vines arrived from France.

Sue and I are now working our way through the next level of Marcelo Pelleriti and 1853 wines   Last night we opened an Altamira Malbec they call Terroir Expressions “Hostage.” Why “hostage?” Because once they tasted the fruit from this “old little vineyard,” they felt themselvews held hostage to its charms. It is a real pleasure to experience the complex harmony. Powerful. Elegant. Unique.

Kinda reminds me of “Kind of Blue.” Another timeless classic?

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P.S. Although he is best known for rock and roll, I don’t think Marcelo Pelleriti will object to the jazz references in this article. When Sue and I interviewed the two protagonists via Zoom I noticed that Pelleriti was wearing a vintage Ramones t-shirt under his jacket.

Argentina Wine, Economy, and the Chimera Effect

January 9, 2024 By in Argentina, economic crisis 2 Comments

Sue and I spent a pleasant week last month tasting our way through a group of very interesting wines provided by  Wines of Argentina (see the wine menu below). We scheduled the last of the wines, the Achaval Ferrer Quimera to taste with a meal of smoked brisket and roast vegetables on December 13. We were looking forward to the wine because of our great memories of visiting the winery on our first trip to Mendoza.

We awoke on December 13 to find that the Quimera tasting had taken on a broader meeting. After the markets closed the previous night, Argentina’s new president, Javier Milei, had taken a dramatic first step in his “shock therapy” treatment of the Argentine economy, cutting the official value of the peso in half over-night and doubling, in effect, the cost of any imported goods priced in dollars.

The Chimera Effect

Chimera (or Quimera in Spanish) has more than one meeting. Chimera can be a mythical creature that combines parts of several different animals in unexpected ways  (Americans might think jackalope, I suppose). Or it can refer to a mystical illusion of some sort, which hides a different reality. Mythical? Or mystical? That’s the Chimera effect.

Achaval Ferrer’s Quimera wine was inspired by mythical beasts. It’s a blend of wines from three very different vineyard places. Terroir, we learned on that trip, is very important in Argentina wine, especially the difference between higher- and lower-elevation sites. It is probably just my imagination, but seem to believe that this effect is magnified when older vines are involved. Probably a Chimera!

First, we tasted the barrel samples of the wines from each of the three different vineyards and they were very different indeed! And then we re-created the final blend and finally the finished bottled wine. It was quite an experience to have the Quimera wine come together in our glasses.

Economic Illusion

The economic policies of the new President, the  “anarcho-capitalist” economist Javier Milei, seem to be a combination of the two ideas of chimera, mythical and mystical. The terrible state of the Argentine economy is neither, however. Inflation is out of control, poverty is high and rising, and social tensions are even higher. The fact of the outsider Milei’s election is evidence of the political divisions that overwhelm the nation. Or at least this is how it looks from my long-distance vantage point.

Desperate measures have been employed in the past to try to hold things together. The most obvious symptom of this, to someone familiar with international finance, is the existence of multiple exchange rates. High inflation tends to push down a country’s currency value, which protects exports but increases the cost of imports. To try to avoid the higher import costs, which further fuel domestic inflation, Argentina’s previous government artificially propped up the peso (at high cost), creating a multiple exchange rate system. There was the official rate and then the unofficial rate, which was nearly half the dollar amount,

Exchange Rate Illusions

Then the government resorted to special limited-condition exchange rates to encourage specific activities or to  please particular interest groups. An exchange rate for agricultural goods, to encourage exports, for example. Another exchange rate for foreign tourists is to keep that industry going.  A very special exchange rate, I am told, for Argentines who traveled to see their national team win the FIFA World Cup last year! And finally, of course, a special exchange rate for wine exports, the Malbec peso. What was the peso worth? The answer was all of these exchange rates and none of them. What a chimera!

Multiple exchange rates, which are a Chimera in the mythical beat sense, give the illusion of competitiveness (the other kind of Chimera), but in general, they tend to create inefficiencies and uncertainty. No one who can avoid it is likely to use the peso under these circumstances. So Milei’s “radical” devaluation as noted in the headline above is more conventional than it might seem, lifting the veil and revealing reality.

When Sue and I first visited Argentina a dozen years ago, 100 pesos would buy about 5 U.S. dollars. Now 100 pesos buys about 12 U.S. cents at the official rate, and even less on the unofficial market even after the “shock therapy” evaluation.

Elementary, My Dear Watson

So what should we think about Argentina’s prospects? I am reminded of a comment from the fictional detective Sherlock Holmes. In solving a problem, he said, test each logical theory and eliminate them one by one. When you are done whatever answer you have left, no matter how unlikely, is the solution. Logic and illogic combined — a chimera theory, don’t you think?

It seems to me that Argentina has explored all the possible solutions to its problems and opted, at this point, for the illogical remaining possibility. President Milei combines radical rhetoric and outrageous behavior (he wielded a chainsaw at rallies) with remarkably conventional economic policies (the basic outline of his radical economic plan can be found in the IMF playbook).

It is not clear what will happen now. Milei wone the election, so he was a popular candidate, but his political base as president is questionable and there is strong resistance and opposition. A general strike to protest his programs is planned for later this month.

I am not a fan of President Milei, but perhaps this is the only remaining way forward. Fingers crossed that the short-term pain and disruption lead to longer-term stability and growth.

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Here are the Argentina wines we tasted for this report. We were attracted to these wines because, while they all feature Malbec, Argentina’s signature grape variety, each takes the wine in a different direction. All the wines were excellent, and a common thread of lifted acidity was easy to appreciate, but there was no cookie-cutter effect. Very interesting!
A blend of 50% Cabernet Franc, 45% Malbec, and 5% Casavecchia, a grape variety from Southern Italy that I didn’t know was grown in Argentina.  The balance of Cab Franc and Malbec plus the influence of high-elevation vineyards made this an elegant wine and at an affordable price point.
A blend of 45% Malbec + 18% Cabernet Franc + 18% Merlot + 19% Cabernet Sauvignon from three different vineyards. Grace and power are well balanced here. The Cab Franc and Merlot thoughtfully frame the Malbec and bring out bright notes.
A wine of place. One hundred percent Malbec from the Uco Valley vineyard. Pure Malbec intensity here. A different animal from the other wines.
A blend of 85% Malbec with 10% Cabernet Sauvignon and 5% Merlot. You can sense the BDX sensibility here.

Argentina Reconsidered: Malbec Red, Malbec White, & Exploring the Limits

October 10, 2023 By in Argentina, wine, wine magazines 3 Comments

A highlight of our first trip to Argentina in 2011 was a special lunch where we sampled wine after wine (paired with exquisite local cuisine), but none of the wines (until the very end) were Malbecs.

Our host, Andrés Rosberg, then President of the Association of Argentinean Sommeliers and a judge for the Decanter World Wine Awards, wanted to make a point. Argentina may be identified with Malbec wine. Malbec may be its signature wine grape variety. But Malbec doesn’t define Argentina.

I will paste the 2011 tasting menu at the bottom of this page so that you get a sense of the experience.

Argentina’s Many Faces

Sue and I have carried this lesson with us and we make every effort to spread the word when we can, highlighting the diversity of Argentina wines beyond Malbec and also the diversity of different Malbec wines, particularly the differences between higher- and lower-elevantion wines.

It would be impossible to recreate our experience in Buenos Aires, but we were able to reconsider stereotypes of Argentina wines recently thanks to sample wines from Grupo AVINEA , a leading Argentina producer. Grupo Avenia is probably best known here in the U.S. market for its popular-priced Bodega Argento Malbec, but in fact the group, like Argentina, has lots more to offer.

Our research extended over two evenings.  We make a point of tasting wine with meals because it is so much more realistic and, to us, revealing than the “sip, spit, and score” ritual of wine competitions.  Research assistants Bonnie and Richard joined us on the first evening for a series of three very surprising wines.

The first wine was the Artesano de Argento Organic White Malbec shown above. White Malbec? I think we were all afraid that it might be a sweetish blush wine like some White Zinfandels found on the market. But it was completely different. The grapes were picked early and the skins separated from the juice very quickly, resulting in a completely color-free wine that was crisp and refreshing.  The bottle was quickly drained. A hit!

Way South of the Border

The next two wines were from Grupo Avenia’s Bodega Otronia winery, which sources grapes from what is possibly the southern-most vineyard in the world at 45º 33′ S latitude. These are really extreme vineyards situated in the cold desert beside Lake Musters, in Chubut, Patagonia.

The 45 Rugientes Corte de Blancs was a fascinating blend of Gewurtztraminer, Pinot Gris, and Chardonnay, with layers of bright flavor and savory herbs. Sue and I have had blends like this from Northern Italy and they can be fantastic. A lot of attention was given to this wine. Hand harvested, fermented in concrete eggs and tanks, aged in a combination of oak and concrete. I really enjoyed it, but Richard prefered the White Malbec. Two very distinctive and unexpected white wines!

Then came the 45 Rugientes Pinot Noir, which was also delicious and unexpected. It was intense, with nice acidity and had a personality of its own, not Burgundy or Oregon or even Tasmania. Maybe it was the whole cluster fermentation that brought out extra fruit. Another hit.

There is actually quite of lot of Pinot Noir grown in Argentina, which might explain why Moët Chandon established its first New World sparkling wine outpost in Mendoza more than 60 years ago.

And Don’t Forget Malbec!

Later in the week Sue and I completed the project by pulling the cork on a bottle of Argento Malbec, but not the popular supermarket bottling. It was an Argento Single Vineyard Malbec from Finca Altamira. The wine was distinctive for its freshness and tart fruit, which in general sets apart our favorite Malbecs.

The bottom line from this research project? Argentina Malbec has a lot to offer and Argentina itself has much to offer beyond Malbec. Kinda makes you thirsty, doesn’t it? Thirsty to discover what’s next!

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2011 Tasting Menu

Breaded veal tongue stuffed with brie cheese & sundried tomatoes and piquillo peppers sauce paired with Chandon Cuvée Reserve Pinot Noir

Baby squid & pickled vegetables salad
Rutini Gewürztraminer 2009

Rabbit liver & spinach ravioli with mushroom stock
Ricardo Santos Sémillon 2010

White salmon with ajoblanco, almonds, roasted tomatoes, zucchinis & bean pods
Miguel Escorihuela Gascón Pequeñas Producciones Chardonnay 2009

Iced lullo, litchis, caramelized pumpkin seeds & yogurt foam
Rutini Vin Doux Naturel (Sémillon – Verdicchio) 2007

Allspice philo pastry, chocolate cream, apple, saffron ice cream & cardamom milk
Rutini Vino Dulce Encabezado de Malbec 2007

 

Charting Chile & Argentina Wine Strategy for the U.S. Market

April 12, 2022 By in Argentina, Chile, wine, wine markets Leave a comment

These are challenging times for the U.S. wine market. NielsenIQ data reported in the April 2022 issues of Wine Business Monthly shows the wine market declining overall in value and volume terms. The picture isn’t perfectly clear, of course, because NielsenIQ numbers miss some sales vectors and it is hard to know what base to pay attention to given covid sales channel distortions. But there is plenty of cause for concern about U.S. wine market growth.

The situation is even worse for wine imports, because they face most of the headwinds of domestic producers but also have to deal with unfavorable international logistics issues and significant exchange rate and trade policy uncertainty.

But cloudy skies over the U.S. wine market landscape contain some welcome sun breaks — market segments where growth opportunities can be found — even for imported wines. Sue and I recently sampled wines from Chile and Argentina that illustrate this strategy.

Sauvignon Blanc to the Rescue

Where you search for growth depends on how you look at the market. In terms of grape varieties, for example, the clear target these days is Sauvignon Blanc. Sales of both domestic and imported Sauvignon Blanc have done very well in the last year.

For a long time Sauvignon Blanc has been all about New Zealand, which has sold out of this wine year after year. The rising SB tide seems to be raising all ships these days, which is good news for growers in California and elsewhere.

Chile has a long history of Sauvignon Blanc production with quality rising year after year. Sauvignon Blanc is the second most-planted grape variety and Chile is the world’s third largest SB producer. But the marketing focus has often been on that other Sauvignon, Cabernet Sauvignon. Until now. Concha y Toro sent us three wines that will compete very well in this dynamic market segment.

  • 2021 Concha y Toro Gran Reserva Sauvignon Blanc | D.O. Litueche, Colchagua Valley | $15 | 100% Sauvignon Blanc | 12.5% ABV | 1.5 g/L RS.  Sourced from our estate Ucúquer Vineyard, located in the arid hillsides of the Rapel River in Colchagua Valley, 10 miles from the Pacific Ocean.
  • 2021 Cono Sur Organico Sauvignon Blanc | Chile | $11 | 100% Sauvignon Blanc | 12.5% ABV | 3.1 g/L RS | Made with organic grapes | Vegan.  Fruit from coastal San Antonio DO’s Campo Lindo Estate and Bío Bío provide an ideal mixture of sand and red clay for this Sauvignon Blanc expression.
  • 2020 Concha y Toro Casillero del Diablo Reserva Sauvignon Blanc | Chile | $12 | 100% Sauvignon Blanc | 12.9% ABV | 2.44 g/L RS.  Fruit from Aconcagua—which stretches inland from the coast above San Antonio—Valle Central, and Región de Coquimbo compose the final blend.

As you can see from these wine profiles, the three wines present three distinctively different representations of Sauvignon Blanc from different Chilean wine regions. What they have in common — beyond grape variety — is their remarkably good value-for-money proposition.  This is especially true for the Gran Riserva. It is not often that you can find a wine like this for such a reasonable price. Distinctive and intense, you won’t mistake it for France, New Zealand, or California. Definitely worthy trying.

Raising the Bar for Malbec and More

Wines of Argentina sent us a little “mystery box” to sample and I wondered what would be in it? What message would they want to broadcast? How would they attempt to navigate the swirling U.S. wine market currents? The answers to these questions were clear as soon as we opened the package.

Message #`1: Argentina is Malbec, as everyone knows, but not just Malbec (just as Chile is not just Cabernet Sauvignon). Our mystery case included both a cool climate Wapisa Pinot Noir from Patagonia and a Trapiche Broquel selected barrel Cabernet Sauvignon, hand-picked from 30-year old vines.

Sue and I learned about the great diversity of Argentina wine on our first visit there in 2011. Our friend Andrés Rosberg arranged a tasting menu that featured wonderful wines not named Malbec until, at the very end, when a Rutini Vino Dulce Encabezado de Malbec 2007 appeared with dessert. Argentina is more than Malbec. Message received!

Message #2: Argentina makes wines that can compete successfully in the key growth segment of the U.S. wine market when we analyze it by price point — the ultra-premium $20-$25 range. A Salentein Reserve Malbec from high elevation vineyards in the Uco Valley and Luigi Bosca “De Sangre” limited edition Malbec from select vineyard parcels in the Altamira district.  I understand the average vine age is 90 years — remarkable!

During the Malbec boom of a few years ago Argentina became stereotyped as the source of simple Malbec wines at bargain prices.  Slowly — and now more quickly — Argentine producers have worked to show that they have more to offer and distinctive wines of higher quality, too, for those who are willing to reach up to a higher shelf on the wine wall.

Follow the Money

Follow the money. That’s what Deep Throat famously advised and it is something to consider in today’s U.S. wine market. If you break down market trends you’ll find a number of categories where growth opportunities exist. These Chilean and Argentinian producers demonstrate the strategy of focusing on key categories with wines of quality and value. Good lessons for us all to consider.

Lessons from Catena & the Argentina Wine Miracle

February 15, 2022 By in Argentina, economic crisis, wine, wine awards, wine history, wine markets 4 Comments

The press release begins this way:

MENDOZA, Argentina – February 8, 2022 – Dr. Nicolás Catena Zapata of Catena Zapata winery received the Lifetime Achievement Award at the 22nd Annual Wine Enthusiast Wine Star Awards held last night at the Eden Roc Hotel in Miami. This prestigious industry event recognizes individuals and companies for their exceptional contributions to the success of the wine and beverage alcohol industry.

Dr. Catena’s life in wine is indeed worth celebrating. He was a leading protagonist in what I call the Argentina wine miracle. An economist by training, Dr. Catena was a visiting professor at UC Berkeley in the early 1980s when he was inspired by what he saw happening in California. These were the exciting days that followed the 1976 Judgement of Paris, so there was energy and confidence in the air.

California Lessons in Argentina

Catena took this vision back to Argentina, where he exchanged academic tweeds for vineyard and winery clothes. The family firm, Bodega Catena Zapata, and Argentina’s wine industry in general, faced a dire crisis.

Sue and I visited the Catena Zapa “Pyramid” winery a few years ago and, because I am an economist like Dr. Catena, we were ushered into his personal library. I recognized many of the books because they were the same ones that I was studying in the 1970s and 1980s, when stagflation was a global problem, and the debt crisis was on everyone’s minds.

These were more than academic issues for the wine business in Argentina at the time. Having evolved in the “old world” style to make inexpensive commodity wine for the domestic market, Argentina wineries were caught in a squeeze when inflation pumped up costs at the same time that domestic recession caused demand to slump. Could the surplus wine be diverted to export? Not likely, because the quality of much of the wine was below international standards. Argentina’s economic crisis was a wine crisis, too.

That Argentina wine found the energy and confidence to turn the corner, to make wines of constantly rising quality in the face of daunting headwinds, is noteworthy indeed and Dr. Catena more than deserves his lifetime achievement award for his role in making Argentina a world-class wine producing nation. A miracle? I don’t think it is wrong to apply this term to Argentina’s dramatic transformation.

I think it is important to keep these past achievements in our minds today because the challenges that wine faces, while different from the past, are not so different that important lessons cannot be gleaned. History may not repeat itself but sometimes, as Mark Twain observed, it rhymes.

Dividends from the Argentina Wine Miracle

Argentina is experiencing economic crisis again today, overwhelmed by external debt and internal inflation. Perhaps the single best indicator of the depth of the crisis is this graph of the Argentina peso against the US dollar for the decade 2011 to 2021. Fewer than 5 pesos were needed to purchase a dollar in 2011. The rate was about 15 pesos per dollar when we visited five years later in 2016 — that’s a very substantial decrease in the currency’s value in such a short period of time.

But the exchange rate today is much worse — it takes more than 100 pesos to buy a dollar now. And that’s the official exchange rate. I’m guessing that the peso is much cheaper on the unofficial market. This is what an (official) inflation rate of over 50% a year (even higher than inflation in Turkey!) will do.

Although Argentina’s economy is bouncing back from its covid-induced decline, domestic economic conditions are very challenging — not as bad as in the 1980s perhaps, but difficult indeed.  The uncertainty about what policies will be result from continuing debt negotiations with the IMF cloud the horizon. Argentina wine is not immune to these problems, but it is much better positioned today to ride out the storm. Exports were up in 2021. The miracle continues to pay dividends.

Lessons for the U.S. and Beyond

But the lessons don’t end there. I think it is important for wine business leaders in the United States and elsewhere to study Argentina’s wine history and remember that sometimes it is necessary to radically re-think arrangements to adapt to changing circumstances. “They say that time changes things,” according to one of my favorite maxims, “but sometimes you have to change them yourself.”

In the US, for example, inflation has returned as an economic concern and, for the wine industry, the fact of stagnant demand cannot be ignored. There is no debt crisis at present, but with gross debt levels at record highs and rising interest rates on the horizon, it is foolish to think that cracks in debt markets will not eventually appear. Small increases in interest rates can translate into trillions of dollars of additional interest obligation very quickly with so much public and private debt in play at high levels of risk.

Foreign debt is especially vulnerable because so much of it is denominated in dollars and the dollar is likely to appreciate as U.S. interest rates rise. That’s double jeopardy.

For the wine industry, stagnant demand is a problem that is on the minds of many, just as it was in Argentina four decades ago. The Argentina miracle was to shift from low- to high-quality to escape a race-to-the-bottom scenario. For the U.S., the challenge may well be to produce good quality but more affordable wines to appeal to potential consumers who are put off by wine’s relatively high price compared with other beverages.

I note without comment that Wall Street Journal wine columnist Lettie Teague’s recent column on good $10 wines did not include any U.S. product recommendation. “Sadly,” Teague writes, “I couldn’t find any wines made in the U.S. that fit all my criteria.” That’s pretty much the flip side of Argentina back in the day.

I believe in miracles and in wine’s ability to transform itself without losing its soul. And so I offer a toast to Dr. Nicolás Catena Zapata, the economics professor who became a transformational winemaker and whose miracle offers lessons that are relevant today.

Thinking About Laura Catena’s Grand Cru Project

September 28, 2021 By in Argentina, wine, wine history 2 Comments

Laura Catena believes we need to think about the concept of Grand Cru vineyards and wines, so she organized a series of Zoom events for trade and media participants built around the idea of the Grand Cru.

Sue and I recently participated in one of the sessions and it provided food for thought as well as some delicious wine to sample — Catena Zapata and Winebow generously provided a line-up of wine samples to help us think about Grand Cru-class wines in practice as well as theory. I will paste our wine lineup at the end of this column.

The idea wasn’t to do a blind tasting (can you tell Old World from New World, recognized  Grand Cru from an ambitious pretender?)  or stage a sort of “Judgement of Tupungato” competition, but rather to appreciate some really excellent wines and use them to stimulate thought and discussion.

It took me a while to begin to figure out the point of the discussion. Why talk about Grand Cru now? According to the Oxford Companion to Wine, the concept of a Grand Cru wine is a bit of a moving target. The term, French of course, has a different meaning in Burgundy (where it applies to specific vineyards), in Alsace (where there are Grand Cru appellations), and Bordeaux (it is all about the producers).

New World Grand Crus?

Can (or should) the Grand Cru concept be applied to the New World? And if so, how and where? Much of the discussion focused on practical problems. Grand Cru is a French idea (or ideas) that would seem difficult to translate to foreign soil. Would consumers understand it? Would producers unite around the concept? And could they ever agree on a Grand Cru league table — who’s in and who’s out? Doubtful on all counts, participants suggested.

In any case, several pointed out, there is already a quality-assessing system in place and it is called the market. If you want to know the best vineyards look at grape prices (and the resulting wine prices). The Bordeaux Classification of 1855 was based on price and the market measure endures.

As an economist, I appreciate the power of price to establish hierarchies and find it interesting that the Bordeaux classification is still relevant. But I also understand that markets are very imperfect measures of quality.  It is not for nothing that Oscar Wilde complained of people who know “the price of everything and the value of nothing!”

I am more interested in the way what we say conditions how we think. Language doesn’t simply transmit thought, it also shapes it. Talking about Grand Cru means thinking about wine in a particular subjective way that reflects respect and admiration for the very best that I’d argue is different from measures such as extremely high prices or 100 point scores.

So talking Grand Cru may help us think about wine in a certain way. But American wine history suggests that as difficult as Grand Cru is to achieve, it may sometimes be even harder to maintain. I am thinking about the story of Martin Ray, which I recounted in my book 2011 Wine Wars (and also in the revised new edition that will be released next year) in the chapter titled “Martians vs Wagnerians.”

The Sad Tale of Martin Ray

Martians — a term I borrowed from wine historian Thomas Pinney — are inspired by Martin Ray’s idea of wine. Ray was upset that the standard of US wine was so low in the years following the repeal of Prohibition. He persuaded Paul Masson to sell him his once great winery in 1935 and proceeded to try to restore its quality with a personal drive that Pinney terms fanatical.

He did it, too, making wines of true distinction—wines that earned the highest prices in California at the time. His achievement was short-lived, however. A winery fire slowed Ray’s momentum and he finally sold out to Seagram’s, which used a loophole in wartime price control regulations to make a fortune from the Paul Masson brand and its premium price points, starting a trend of destructive corporate exploitation that forms a central theme in Pinney’s book on American wine history.

Ray’s history is therefore especially tragic since his attempt to take California wine to the heights through Paul Masson ended so badly. Paul Masson degenerated into an undistinguished mass-market wine brand that was sold to Constellation Brands, which eventually passed it along to The Wine Group (makers of Franzia bag-in-box wines among other products), which quietly withdrew the spent brand from the market. Paul Masson brandy still exists as part of the Gallo portfolio.

So in the end Martin Ray’s high Grand Cru values degenerated into the market prices they yielded and then degenerated again and again until nothing was left of them. How sad!

Gold in the Vineyards?

Laura Catena’s interest in Grand Cru vineyards isn’t a new thing. Her 2018 illustrated book Gold in the Vineyards surveyed the world of wine through stories of great wines, the families (and especially the women) behind them, and the great vineyards that are their source. The finally chapter is personal, focusing on Catena Zapata’s “Adrianna Vineyard: the Grand Cru of South America,” which is the source of the quote at the top of this column.

As Laura Catena tells the story, her father Nicholas Catena was determined to create a Grand Cru vineyard in Argentina. Scouring the Uco Valley countryside, he came across a cold, dry area with stony soils high up in the Andean foothills at 1500 meters elevation. The winery viticulturalist said it would be impossible to make anything except perhaps sparkling wines from vines planted in such a unfriendly site. But Catena stubbornly forged ahead with what we now call the Adrianna Vineyard, which produced four of the eight wines in our sample pack.

Re-reading Gold in the Vineyard and connecting the dots, I realized the unstated question at the heart of the Zoom events. Did Nicholas Catena and his Catena Zapata colleagues really do it? Is the Adrianna vineyard what he meant for it to be: Argentina’s Grand Cru vineyard? That’s what will be on my mind as Sue and I work our way through these wines in the coming weeks.

We’ve started with the White Stones and White Bones Chardonnay wines, which I have wanted to taste for a long time. They are fantastic — balanced, elegant, complex. The two Catena wines are very different from each other and different, too, from the Chablis wines including in the tasting, which is important since imitation may be the sincerest form of flattery, but it’s not what great wine is all about. Grand Cru? Gotta think about it some more before I make up my mind. World-class? Absolutely!

The question of what does Grand Cru mean today is thought-provoking and considering what it might mean in a New World context provokes debate. For me, the idea of the Grand Cru is worth holding on to and using as a source of inspiration — I am on board with Laura Catena’s project — even if the practical realities are messy and problematic.

In the meantime, perhaps it would help if you poured yourself a glass of wine from  your favorite maker or region and pondered  the notion of the Grand Cru.

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WINES

  • Alain Chavy Puligny-Montrachet Les Folatières Premier Cru 2018

Catena Zapata Adrianna Vineyard White Stones Chardonnay 2018

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Louis Moreau Les Clos 2017

Catena Zapata Adrianna Vineyard White Bones Chardonnay 2018

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Lingua Franca The Plow Pinot Noir 2019

Catena Zapata Adrianna Vineyard Fortuna Terrae Malbec 2017

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Grattamacco Bolgheri Superiore 2016

Nicolás Catena Zapata 2017

Kiwi Malbec? Signature Wines & the Dutch Disease Effect

February 16, 2021 By in Argentina, emerging wine regions, globalization, New Zealand, wine, wine markets 3 Comments

Some people like to define wine regions by their signature grape varieties. New Zealand = Sauvignon Blanc. Argentina = Malbec.  You know what I am talking about. So what should you think of a Kiwi Malbec like the one shown here? Read on to find out.

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What do you think of when I say Malbec? Well, there are lots of things that could come to your mind, but I expect that Argentina or Mendoza are at or near the top of your mental list for this term. Malbec is Mendoza’s signature wine grape and it tends to dominate the region’s image.

Signature Wines & the Dutch Disease

This is convenient from a marketing standpoint — it is good to stand for something in the world’s congested wine markets. Here in my home state of Washington, for example, we make great wines from many different wine grapes and we sometimes yearn to have a defining variety like Argentina or our neighbor Oregon with its famous Pinot Noir.

But signature wines have a downside, which I have compared to an economic condition called the Dutch Disease. Sometimes when one sector of an economy becomes particularly successful the result isn’t a tide that lifts all boats, but rather a sort of whirlpool that drags the other sectors down.

Thus Argentine Malbec’s great success makes it more difficult for other interesting wines to get attention. Personally,  I always look for Argentine Cabernet, Semillion, Cab Franc, and Syrah, for example, and there are some wonderful Chardonnays and high-elevation Torrontes, too. But I imagine they are tougher to sell than good old Malbec. The signature wine rises high, but can cast a deep shadow.

New Zealand and the Dutch Disease

Now consider New Zealand wine. What comes to your mind? Chances are that Marlborough Sauvignon Blanc comes first, with Pinot Noir from Central Otago on the list for many. I’m a big fan of these wines, but the Dutch Disease dilemma applies here, too. Other wines and other regions don’t get the attention (Rodney Dangerfield would say they don’t get the respect) they deserve because of the signature wine phenomenon.

So what would you think about a Hawke’s Bay Sauvignon Blanc or a Gimblett Gravels Malbec? Well, I hope your interest would be piqued at the very least. Sue and I visited the Hawke’s Bay area (think Napier on New Zealand’s north island) several years ago, where we were fortunate to meet with Steve Smith MW of Craggy Range. He helped us understand this interesting region and introduced us to the Gimblett Gravels’ rocky dry river bed terrain that makes me think of alluvial fan terroirs such as To Kalon in Napa Valley or The Rocks District of Milton-Freewater in Oregon. Hawke’s Bay is warm enough to make great wines from Bordeaux grape varieties (of which Malbec is one), which are unexpected for those who haven’t fully explored New Zealand’s varied wine scene. The Gimblett Gravels is a special case within that special case. Fascinating.

Now Hear This!

Which brings us to some wines we’ve been for fortunate to be able to sample during this pandemic period. Daniel Brennan is an American who came to New Zealand in 2007 with the intent to focus on Pinot Noir. But somehow the people and terroir of the Hawke’s Bay region captured his attention, which is something Sue and I can appreciate. We stayed with a modest grower/winemaker family in the Esk Valley during our visit and got a deep sense of the people and place.

Brennan makes 11 different wines under the Decible and Giunta labels (including a Pinot Noir from Martinborough). We had the opportunity to sample three of them: the 2019 Decibel Crowethorpe Vineyard Hawke’s Bay Sauvignon Blanc, 2020 Giunta Malbec Nouveau, and 2017 Decibel Gimblett Gravels Malbec.

The Sauvignon Blanc broke through some of the stereotypes about Kiwi Sauv Blanc, with more savory notes than you might expect. The Malbec  Nouveau was just what you want from a young wine like this: fruity, juicy, easy to drink and enjoy. The Gimblett Gravels Malbec featured a line bright acidity that tied together fruit and tannins in ways that evolved in the glass over time. The acidity made it different from most of the Argentina Malbecs we’ve tried.

Brennan makes a number of wines that run counter to the signature wine stereotype, but his passion for Pinot Noir is undiminished. He hosts a popular podcast called Vintage Stories that spreads the word about Kiwi Pinot and the people who craft it.

I’m a Pinot fan, too — and I hope to taste Brennan’s Martinborough wine at some point — but I enjoy these Hawke’s Bay wines because they are distinctive and because they challenge the signature wine stereotype and the Dutch Disease that can go with it. The Gimblett Gravels Malbec forces you to re-think the conventional wisdom about New Zealand … and about Argentina, too, I hope.

Flashback: Malbec & Maradona

December 1, 2020 By in Argentina, book reviews, popular culture, wine Leave a comment


Diego Maradona was more than just a great football player, the best of his generation by many accounts — the best ever according to some. He and his complicated life meant a great deal more to people in Argentina and around the world, so his recent death at age 60 had greater meaning, too.

This book review from 2012, which links Malbec, Argentina’s signature grape variety, with Diego Maradona, has been getting renewed attention among Wine Economist readers, so I thought I’d re-publish it as a “flashback” column today.

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Ian Mount, The Vineyard at the End of the World: Maverick Winemakers and the Rebirth of Malbec. Norton: 2011.

Malbec and Maradona

One of the most stunningly creative student papers I’ve received in more than 30 years as a college professor was written by a first year student enrolled in my introductory International Political Economy class. We were studying Argentina’s latest financial crisis and she analyzed the situation not just through facts and figures but rather by telling the story of Diego Maradona, the legendary soccer player who achieved great success on the global stage but succumbed to the pressures, stresses and temptations that came with it.

Maradona is always measured against Pele, the Brazilian star who is often proclaimed the greatest soccer player in history, and every talented young Argentinean forward is compared to  him (Messi is only the latest “next Maradona”). But an air of tragedy is unmistakable despite Maradona’s heroic achievements. This same air, my student wrote, hangs over Argentina’s politics and economy, and then she proceeded to analyze Argentina’s political economy history in detail in  terms of the Maradona story. It was, in both conception and execution, a brilliant analysis.

Ian Mount’s new book on Argentinean wine, The Vineyard at the End of the World, is also brilliant and in much the same way. Like my student’s paper, it can be read at several levels. It is, first and foremost, a history of the Argentinean wine industry from its roots with the Spanish explorers to its current spectacular flowering.

Although Argentina has been a major wine producer for literally centuries, it has only arrived on the global stage in the last ten years. Within Argentina its long history is heavy baggage that sometimes weighs it down. For the rest of the world, however, Argentina is a new discovery and the lack of prior experience of and attitudes toward its wines has arguably been an advantage.

Mount fills us in on the history and serious readers will appreciate the added depth this gives to the appreciation of the wines themselves. It also provides an interesting contrast to neighboring Chile and its wines, whose history is perhaps better known. But that’s only the beginning.ce1509cd596b49b050639487b3d03dcc

 Lucky Survivors

Malbec is a second theme, which is understandable because Malbec is king in Argentina right now. Malbec from Argentina has been one of the hottest product categories in the U.S. wine market is the past few years. But today’s Malbec (like Maradona) is a lucky survivor of Argentina’s booms and busts – a lot of Malbec was grubbed up during the market swings and swirls. It makes me appreciate wines (like one of our favorites, Mendel Malbec) that are made from the surviving old vine blocks.

More than anything, however, this is a history of Argentina itself told through wine, making this a book that deserves a very broad readership. Based on my previous research, I knew that Argentina’s politics and economics were reflected in the wine industry, but I didn’t know how much. Come for the Malbec, stay for the politics, economics and personal stories of those who succeeded or failed (or did both) and try to understand the country and people of Argentina.

Significantly, the book ends with a sort of Maradona moment. In terms of wine, Argentina has won the World Cup with Malbec, although the country must share the glory with international consultants (like Paul Hobbs and Michel Rolland) and foreign investors and partners (too numerous to mention). But for all its strengths the industry is still somewhat fragile, struggling to overcome the problems of the domestic wine market that it still depends upon and the domestic economy in which it is embedded.

After decades of “crisis and glory,” Mount sees a  bright future for both Malbec and Argentina. Let’s hope he’s right and the Maradona moment passes.e91c4e409ca6d78d656bc85a82fa6422

Ian Mount’s new book is a valuable addition to any wine enthusiast’s library. Mount provides a strong sense of the land and people of Argentina and the flow of history that connects them. Argentina is unique, as Mount notes early on, in that it is an Old World wine country (in terms of the nature of its wine culture) set in the New World, so that its history is broadly relevant and deeply interesting.

I studied the Argentina industry before going there last year, but Mount taught me things I didn’t know in every chapter. I love Laura Catena’s Vino Argentino for its account of the history of wine in Argentina told through the Catena family story and now I’m glad to also have The Vineyard at the End of the World for its broad sweep and detailed analysis. They are must reading for anyone with an interest in Argentina and its wines.

Wine Book Review: Laura Catena’s Gold in the Vineyards

June 2, 2020 By in Argentina, book reviews, wine, wine history Leave a comment

catenaLaura Catena, Gold in the Vineyards: Illustrated Stories of the World’s Most Celebrated Vineyards (Catapulta Editores). Illustrated by Fernando Adorneti (Caveman).

Nicholas Catena had to make a choice. His chosen career as an economics professor? Or the family wine business,  Bodega Catena Zapata, which was threatened, along with the rest of Argentina’s wine sector, by shifting and unstable economic currents?

Prof. Catena met Robert Mondavi during a spell as a visiting professor at UC Berkeley and then made his choice. He gave up the academic life and went back to Argentina inspired by Mondavi’s determination to make New World wines as good as the best the Old World could offer.

I suppose that Prof. Catena’s daughter Laura must have faced a career choice, too, at some point. Pursue a career as a medical doctor in the United States, where she studied at Harvard and Stanford and raised a family? Or return to Argentina to advance her family’s vision of wine excellence and help guide the business through more turbulent times? Tough choice. Impossible to do both. But both is what she does. Amazing.

She is an author, too, and a good one.  Sue and I enjoyed her 2010 book Vino Argentino and took it with us on our first trip to Mendoza. We learned a lot about the development of the Argentina wine industry from this book and it helped us meet people, too, when Sue would ask winemakers to autograph the sections of the book where they appeared. Big smiles! There are even a few recipes — Dr. Catena’s chimichurri  often features (along with Mendoza Malbec) on steak night.

616jvwlqdml._ss500_Dr. Catena’s new book, Gold in the Vineyards, is very different from Vino Argentino. At first glance you wonder if it is for adults or children? The answer (typical, I suppose, for Laura Catena) is probably both. The reason this question comes up is that the book is lavishly illustrated with colorful drawings and cartoons that make it look a bit like a children’s book. And Dr. Catena tells us that she was actually inspired by the illustrated books she loved as a child.

I think this book might be a good way to introduce young people to the world of wine, but adults are the main audience and they will find plenty to enjoy (and learn) here. Each of the 12 chapters tells the story of a famous wine producer, starting with Chateau Lafite Rothschild and Tuscany’s Antinori and ending with Catena Zapata, with stops along the way that include California (Harlan Estate) and Australia (Henschke’s Hill of Grace) along with other global icons.

Each chapter tells a story in words and pictures and includes interesting infographics, too.  What do the chapters have in common? What is the moral of the story (books, especially children’s books, need to convey a message)?

Looking back through the chapters I find three threads that run through the text. The first is the power of place. Dr. Catena is a terroirist, as you will know especially from her discussion of Catena Zapata’s Adrianna Vineyard. The second thread is the power of family, because the wineries that appear here all drew strength from their family bonds.

The final thread is the power of women in wine — Dr. Catena dedicates the book to the women in her family from her great-grandmother Nicasia to her daughter Nicola. Although women do not feature prominently in the first chapter on Lafite, they are inescapable throughout the remainder of the book. Women have often struggled to gain authority and recognition in the wine industry, so this empowering message is welcome and important.

Gold in the Vineyards entertains, informs, encourages and inspires. Highly recommended for young and old alike.

Book Review: Intriguing Variations on a Wine Globalization Theme

March 13, 2018 By in Argentina, book reviews, globalization, wine, wine history, wine markets 5 Comments

9781107192928Wine Globalization: A New Comparative History edited by Kym Anderson and Vicente Pinilla, Cambridge University Press, 2018. (See also The World’s Wine Markets: Globalization at Work edited by Kym Anderson, Edward Elgar, 2004.)

The fact that wine is such a global business was one of factors that motivated me to study it seriously in the first place. My 2005 book Globaloney (named a Best Business Book of that year by Library Journal) included a chapter that examined the evolution of global wine markets and that got me hooked.

Globalization’s Terroir

Globaloney was a heart a series of case studies that together argued that  globalization is not an  unstoppable tsunami that sweeps away all before it, but rather a complex set of forces that play out differently in different industries. Fast food globalization, for example, is different from slow food globalization. And while high fashion and used clothing are both traded in global markets and acted upon by some of the same general forces, their specific patterns and impacts are very different.

Globalization reflects its terroir, I used to tell audiences at book talks, and the volume that Kym Anderson, Vincente Pinilla, and their talented team of authors have assembled take this idea one step further. The core of the book is a collection of historical case studies of how national wine industries have developed in both the old and new wine worlds in the context of global markets.

Two things struck me as I read the studies. First, I was excited by how detailed and interesting this research is. Fascinating. Irresistible. I couldn’t wait to turn the page to read more.

The second striking feature was how much wine globalization really does reflect its terroir. Although there are some common themes (the impact of phylloxera and the Great Depression, for example), the fact is that wine has developed and evolved in distinctly different ways in different parts of the wine world. Globalization has been an important factor in many cases, but not in the same way everywhere.

Argentina’s Unique History

Let me use the excellent chapter on Argentina by Steve Stein and Ana Maria Mateu as an example. Argentina’s wine history has been shaped by a series of strong internal and external forces. Let’s start with the grapes. Spanish missionaries from the Canary Islands brought high-yielding low-quality Criolla grapes with them and this set the tone for wine-making and drinking for much of the country’s history.

French wine authority Michel Aimé Pouget was lured away from his work in Chile to improve wine quality and he brought higher quality grapevines, including especially Malbec. Alas, the authors tell us, Malbec was frequently valued less for the quality of its wines than the fact that they were dark and strong and could therefore successfully be diluted with water without completely losing their identity as wine. Low standards like this defined the domestic market for decades.

British influence, in the form of the railroads that they financed and helped to build, had a profound impact on Argentina wine. Prior to the railroads that connected Mendoza and San Juan with bustling Buenos Aires, the domestic wine industry was quite small.

Mendoza and environs made wine for local consumption. Buenos Aires residents (more and more of them immigrants from Spain and Italy) filled their glasses with imported wine. Lower land transportation costs changed everything  when the train line was completed, expanding the internal market and fostering a wine boom.

Anticipating the impact of the railroads, Mendoza officials sent recruiters to Europe to bring back experienced Spanish and Italian wine-growers and wine-makers who expanded the industry. With phylloxera spreading at home and hard times all around, the difficult decision to uproot and replant families and businesses to immigrant-hungry Argentina was easy to  make.

Peso Problems

The list of international and global forces and effects in Argentina is a long one and I  only scratch the surface here. In recent decades, for example, the government’s strong-peso policy of the 1990s (the peso was linked to the U.S. dollar) made imports of wine-making equipment and technology artificially cheap and wineries were quickly upgraded. The collapse of this monetary system and the peso crisis that followed made the output of those wineries artificially cheap to foreign buyers, a factor in the country’s wine export boom.

Rapid domestic inflation combined with an unyielding exchange rate earlier this decade made the peso over-valued again and the wine export boom fizzled. Policies are changing now. Perhaps the export boom will return, albeit in a different form. Too soon to tell at this point.

Argentina’s wine history and its experience with international and global forces is fascinating and other chapters in the book are equally interesting. Wine’s story is a complicated one, with each nation developing and responding in a different way depending on many factors including history, culture, institutional structure, timing, and government policy.

This book is a great resource for anyone interested in understanding the wine world today and how we got here. The volume concludes with “Projecting Global Wine Markets to 2025” by Kym Anderson and his colleague Glyn Wittwer, a set of forecasts and analyses based upon their econometric model of global wine markets.

Economists Know the Price of Everything …

Wine Globalization has many strengths that recommend it to a broad readership and one obvious weakness that will discourage some who would otherwise benefit from studying it: the price. If you are not familiar with the academic book market, the price of this volume will take your breath away: $139.50 for the hardback and $124 for the Kindle on Amazon.com.

This is how books are often priced by academic publishers, who need to spread high fixed costs over small expected press runs.  If you have a son or daughter in college (or are in college yourself), you already know what textbooks cost these days. Incredible.

But all the news about price is not so discouraging. Kym Anderson and his colleagues at the Wine Economics Research Center at the University of Adelaide provide an enormous array of useful and interesting global wine market data (some of which informs the Wine Globalization volume) for the attractive price of … free. Free!  Here are some of the data sets you might want to explore. (You can find even more data here.)

Anderson, K., S. Nelgen and V. Pinilla, Database of Global Wine Markets: A Statistical Compendium, 1860 to 2016 (November 2017)

Anderson, K., S. Nelgen and V. Pinilla (with the assistance of A.J. Holmes), Annual Database of Global Wine Markets, 1835 to 2016 (November 2017)

Holmes, A.J. and K. Anderson (2017). Annual Database of National Beverage Consumption Volumes and Expenditures, 1950 to 2015 (July 2017)

Wine Globalization is a valuable contribution to our understanding of world wine markets. Highly recommended. And that’s not globaloney!