Category Archives: brands

The Road to Wine Wars II (and a 30% Discount Offer)

June 28, 2022 By in book reviews, brands, Shameless Self-Promotion, wine, wine markets 6 Comments

My new book Wine Wars II will be released in just a few days on July 1, 2022, and so. in the spirit of shameless self-promotion, let me remind you that you can order Wine Wars II in paperback or e-book format from Rowman & Littlefield, Amazon.com, and other online and bricks-and-mortar book sellers.

Rowman & Littlefield is offering a 30% discount on Wine Wars II publisher-direct purchases for a limited time. Scroll down to the bottom of this page for details.

Tantor Media will release the audio-book version of Wine Wars II (read by Jonathan Yen) on July 19, 2002. It will be available everywhere audio books are sold. Ten hours of fascinating stories about where global wine is going and how it got there.

A Tale of Two Glasses

Paperback, e-book, audio. Wine Wars II is everywhere!

Wine Wars II updates and extends the most important arguments I made in the original Wine Wars and then adds a new set of chapters on Wine’s Triple Crisis. Each “flight” or set of chapters ends with suggested wine tasting so you can consider the arguments using all your senses. What fun!

Here is a brief excerpt from chapter 1 “A Tale of Two Glasses” for your reading pleasure. It talks about the origins of Wine Wars and the development of Wine Wars II. I think it is interesting that the road to Wine Wars II began with a winery visit about forty years ago, when the problems facing the wine business and the economy more generally were a lot like those we confront today.

HOW I STUMBLED INTO THE WINE WARS

People often ask me how I became a wine economist, an economist who studies the global wine markets. The answer is rooted in a particular time and place. Sue and I were still newlyweds, taking a low-budget vacation in the Napa Valley back in the day when that was still possible. We were headed north on the
Silverado Trail late on our last day, pointed toward our economy motel in Santa Rosa, when we decided to stop for one last tasting.

The winery name was very familiar, and I had high hopes for our tasting. If I had known more about wine back then, I would have recognized this as one of the wineries that kicked French butt in the 1976 Judgment of Paris wine tasting. We pulled off the road and went in to find just the winemaker and a cellar rat at work. No fancy tasting room back then, just boards and barrels to form a makeshift bar. They stopped what they were doing and brought out a couple of glasses. If I knew more about wine back then, I would have been in awe of the guy pouring the wine, but I was pretty much in the dark. So we tasted and talked.

I started asking my amateur questions about the wine, but pretty soon the conversation turned around. The winemaker found out that I was an economics professor. Suddenly he was very interested in talking with me. What’s going to happen to interest rates? Inflation? Tax reform? He had a lot of concerns about the economy because his prestigious winery was also a business and what was happening out there in the financial markets (especially interest rates and bank credit, as I remember) had a big impact on what he could or would do in the cellar. Wineries, especially those that specialize in fine red wines, have a lot of
financial issues.

In addition to the initial investment in vineyards, winery facilities, equipment, and so forth, each year’s production ages for two or three years, quietly soaking up implicit or explicit interest cost as it waits to be released from barrel to bottle to marketplace. The wine changes as it ages, but the economy changes, too. It’s impossible to know at crush what market conditions will be like when the first bottle is sold. Wine economics is a serious concern. Few winemakers are completely insulated from the business side, and sometimes the economy can have a huge effect on what winemakers get to make (if they have the resources to stick with their vision) or have to make (if they don’t).

And so a famous winemaker taught me to think about wine in economic terms and to consider that supply and demand sometimes matter as much as climate and soil when it comes to what’s in my wineglass. I should have known.

Although my interest in wine and economics merged on that Napa day, it sat on its lees for a long time, as I waited for an opportunity to link my personal passion with my professional research agenda. The two naturally converged a few years ago when I began writing what turned out to be a four-volume series
on the global economy. My 2005 book Globaloney: Unraveling the Myths of Globalization includes a chapter called “Globalization versus Terroir,” my first attempt to write about wine economics for a general audience. Globaloney argues that complex global processes shouldn’t be reduced to a few simple
images. Globalization and food are more than just McDonald’s, for example, and globalization of wine isn’t just McWine.

The wine chapter in Globaloney gave me confidence that I had more to say about money, wine, and globalization, so I launched a website called The Wine Economist (WineEconomist.com), where I could work out my ideas in public, make connections, and develop a wine voice. After several years and nearly
200,000 words of blog posts, The Wine Economist evolved into the first edition of this book.

THE ROAD TO WINE WARS II

I wasn’t sure if anyone would want to read about the business of wine, but I was wrong. Wine Wars was warmly received by both critics and readers. It turns out that while wine is good, wine and a story is even better, and stories about the business side of wine can be very interesting. A number of wine industry readers have said that Wine Wars helped them connect the dots and see things more clearly. Consumers, who have no particular business connection, say they just like knowing the backstory of their favorite drink.

I’ve spent the last decade on the wine road speaking at wine industry conferences around the world and learning more about wine and the people who make it. It is a tough job, but someone has to do it, and apparently I am that lucky someone! I have recorded my impressions and experiences in hundreds of columns on The Wine Economist.

Wine Wars has been joined by three other books that continue my analysis of global wine: Extreme Wine (2013); Money, Taste, and Wine (2015); and Around the World in Eighty Wines (2017). Wine Wars celebrated its tenth birthday in 2021, and that occasion made me stop and think (as round-number birthdays sometimes do).

The powerful forces that I identify in Wine Wars are still important, but they’ve changed in ways both big and small. Environmental and demographic shifts, for example, re now much more clearly understood as wine industry challenges. There is a lot to think about and to write about. And so I have written this new book, Wine Wars II, which updates the first edition and extends its argument to address wine’s global crisis.

In a way, this journey has brought me back to that dark cellar on the Silverado Trail in Napa Valley, the great wines we sampled that day, and my “aha!” moment when I realized that wine and economics are a perfect pairing. I’ve learned much more about wine and wine economics, and I appreciate now more than ever the many challenges that the world of wine faces. But I remain an optimist, as I show in this book. I still have grape expectations.

 

VinoVip al Forte: Money, Taste, & the Future of the Italian Wine Industry

July 10, 2018 By in brands, wine, wine exports, wine markets, wine price 3 Comments

What’s holding back the Italian wine industry and how can it change to be more successful in the hyper-competitive global market environment? These questions brought us to a Tuscan seaside resort last month. Read on to see what we discovered.

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vinovip1The icons of Italian wine gather in Cortina D’Ampezzo for a few days every other summer to spend some time thinking, talking (and, inevitably, eating and drinking) in contemplation and celebration of their wines. The event, VinoVIP Cortina,  has always focused on taste, wine, and the inspirations and sacrifices that winemaking entails.

What Do We Talk About?

This year the event moved to the Tuscan coast, the famous resort town of Forte dei Marmi. The focus of VinoVIP al Forte shifted, too, from taste and wine to money and wine. We always talk about taste, someone told me, now we need to discuss the business side of wine with equal passion, candor, and serious purpose.

Alessandro Torcoli, editor of Civiltà del Bere, which organizes VinoVIP, invited me to lead off the program, inspired (or maybe provoked) by my book Money, Taste, and Wine: It’s Complicated. I was honored to be on the roster, which included Angelo Gaja, Prof. Attilio Scienza, Allegra Antinori, and Piero Mastroberardino and other notables.  Quite a line up!

My presentation analyzed key trends in the global wine markets and one of the points I made concerned brands. Brands are a powerful tool for wine marketing, I argued, because consumers find them so useful. It can be easier for a consumer to understand (and remember) a brand in a crowded retail setting. Trustworthy brands encourage consumers to open their wallets and pull more corks. If you approach the topic of money and wine from the consumer’s point of view, it is impossible to ignore the importance the brand.

Branded Wine and Its Discontents

But there is a risk. Branding can go too far in making wine user-friendly, I argued, citing what I have called Einstein’s Theory of Brands (Einstein said that everything should be as simple as possible, but no simpler — can you see how this could apply to wine?). Brands are back as a key wine marketing element, I said, although they are evolving along with wine buying consumers.

Italian wine features some iconic brands, including Gaja, Antinori, and Mastroberardino, of course. But the single most powerful Italian wine brand based upon volume of sales in the U.S. market is actually Riunite Lambrusco, a sweetish sparkling red wine made by a cooperative winery in Emilia Romagna and imported into the U.S. market by marketing powerhouse Banfi. It is the best-selling imported wine in U.S. history.

Brands and their power were on the minds of other speakers as well and formed one interesting theme of the conference.

Italian Wines at French Prices

gajaAngelo Gaja is famous for the high prices he asked for wines early in his career. People thought he was crazy and some, he told the audience, were even angry with him for asking French prices for his Italian wines. French  wines benefited from a reputation for higher quality. Italian wines, even excellent ones like Gaja made, were thought to be in a different, lower class.

No one is shocked by Gaja prices now — he has proved his wines to be worth what he asks — but, he said,  the same status upgrade cannot be said about Italian wine more generally.

Gaja stressed the importance of raising average bottle price of Italian wine exports and building stronger brands is part of that process. Cooperative wineries, he proposed as an example, should focus less on producing anonymous private label wines for foreign retailers and invest more in building their own brands so as to increase average bottle price and raise margins.

This was the first time that I have heard Angelo Gaja speak and I can report that he is a powerful orator who is not shy about stating his opinions. He presented a to-do list of things that the Italian wine industry needs to change, and quickly. Quite an experience!

Beyond “Small is Beautiful”

Piero Mastroberardino’s brief concluding presentation was much different in style from Gaja’s (much more professorial — in a good way), but no less of a challenge to the status quo. Mastroberardino’s topic was the Italian wine system — the industrial organization of the wine sector– which is made up primarily of cooperatives and small family firms. Indeed, it is not too much of an oversimplification to say that the family vineyard or cellar is the fundamental economic unit of the wine industry.

Family ownership presents a trade-off, Mastroberardino noted. As I discussed in Around the World in Eighty Wines, family wine firms have many advantages over corporate structures, which is why the wine sector generally has more family firms (some of them quite large — think Gallo) than other global industries.

But there are disadvantages, too, which was Mastroberardino’s point here. Scale can be limited and the strength of the brand affected by the fact that it is so closely associated with the founding family. In a world where scale and strong brands are important, family firm limitations sometimes get in the way. It is time, Mastroberardino said, to move beyond the “small is beautiful” idea of the Italian wine sector.

Mastroberardino called for more attention to building scale and strengthening brands to increase the competitiveness of the Italian wine sector and there was some evidence during the conference that others appreciate this point. Allegra Antinori, for example, spoke about how the Antinori family have adopted a new ownership structure in order to strengthen the firm’s long-term financial sustainability. A trust locks up ownership for a 90 year period, giving the firm stability and accumulating resources for future needs.

Theory & Practice

Sue and I spoke with Gianluca Bisol about Bisol’s partnership with Lunelli, which was initiated in 2014 in order in part to give family-owned Bisol the leverage it needed to expand forcefully into global markets. Bisol’s Prosecco and Lunelli-owned Ferrari Trento’s sparkling wines may sometimes compete with each other for shelf space, but they mainly work strategically to open market doors. It’s the sort of initiative the Mastroberardino’s analysis suggests is a necessary next step.

Gianluca expressed great satisfaction with the partnership and early indications are that the winery’s recent rebranding efforts, which stress history and terroir, are enjoying success.

The conference ended with a grand tasting at La Capannina di Franceschi, a famous disco located right on the beach. What a blast! Based on this sample of Italian wines, which featured many white and sparkling wines because of the summer seaside location, the Italian wine sector has no trouble with taste and wine. It is important that they now give more attention to money and wine and we are glad to have made a small contribution to the emerging conversation.

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Thanks to Alessandro Torcoli and everyone at VinoVIP for their hospitality during the conference. Special thanks to Sylvia Conti and Maria Gilli of the Italian Trade Agency for their help and support. Sue and I clearly enjoyed ourselves and learned a lot from everyone we met! Here’s a photo of the two of us taken by Megumi Nishida at the post-conference lunch.

vinovip2

Craft Wine? Craft Beer’s Innovation Edge (and What Wine Can Do About It)

March 29, 2016 By in brands, extreme wine, wine, wine markets 15 Comments

battlePeople in the wine business tend to look at each other and see rivals like in the old Mad Magazine Spy vs Spy comic strip. In the battle for shelf space, consumer attention or critical praise, it usually seems like it is wine versus wine.

But hardly anyone lives by wine alone and these days the biggest competition is often less from other wineries (or wine regions) than from other products like craft beer, craft cider and craft spirits that have captured consumer imaginations. The battle for shelf space is real, but its not the only battle.

Keys to Craft Beer’s Success

Craft beer in particular has enjoyed great success in recent years and many of us see the unexpected fall in demand for wines priced at $8 per bottle and below here in the United States as one consequence of the craft beer boom.

Craft beer has many advantages. The margins can be great, for example, and you are not limited to one vintage per year. You can crank out new batches every week or so and it is possible and even desirable to experiment with seasonal recipes or riffs on classic styles from around the world.

Innovation is hot on the craft beer aisle, with literally dozens of different styles, blends and mixes that are constantly rotating in and out of the market. It is kind of fascinating. Wine comes in a world of assorted grapes and styles, too, but innovation tends to take the form of unusual wine brands or packaging, for example, more than experimental products.

Rocky Wine: Don’t try this at home!

Jamie Goode wrote about the time that Randall Grahm experimented with adding “minerality” to his wine by tossing some rocks to the barrels. There was an interesting effect, Grahm said. The stones added “far more complexity and greater persistence on the palate.” But the health department shut the operation down.

Winemakers are like brew-masters in that both groups are constantly experimenting and trying new things, although not all of them are as extreme as Randall Grahm’s rocky vintage. The brew industry seems to be more open to the commercialization of these products.

Maybe wine can bring more of these experiments to market in small or large lots to add another layer of complexity and interest?  Well, what about the barrels themselves? Barrels come in many types and are used in a variety of ways in wine.There is a history of product and process innovation both with barrels (think Gaia in Piemonte) and without them (the current popularity of unoaked Chardonnay).

Barrels are a source of innovative inspiration in other parts of the beverage market. I have seen oak-aged ales and ciders and I have seen spirits that were aged in sherry barrels, for example. Working with barrels has always been a legitimate if sometimes controversial variation on wine tradition. Maybe we can do more with them?

Jacob’s Creek Experimentscab

Jacob’s Creek, the Australian winery that is part of the Pernod Ricard empire, has released two new wines that explore this notion. They are called Double Barrel Cabernet Sauvignon and Double Barrel Shiraz. The wines are first aged in traditional oak and then they get a relatively brief second aging in used spirits barrels — Irish whiskey for the Cab and Scotch whisky for the Shiraz.

The idea isn’t to make the wine taste like booze — if you want to taste whiskey (or whisky) the obvious thing to do is to taste whiskey (or whisky) — but as with  oak barrels in general, you use them to see what subtle influences they bring to the finished product.

Sue and I were invited to participate in an experiment with these wines and so we received bottles of the two Double Barrel wines plus samples of each wine before the whiskey barrel treatment. We sampled the wines last week with Jacob’s Creek winemaker Ben Bryant via video link-up.

It was interesting to compare the “before” and “after” wines. The “after” Cab (made from grapes sourced from Coonawarra) was richer on the palate than the “before” wine  — the biggest difference was more texture than flavor. The delicious Barossa Shiraz was more dramatically transformed and our clear favorite of the two (I think the Cab simply needs to age a bit longer and both wines were probably still a bit shaken up from shipping).  I thought I could detect a subtle Scotch whisky influence in the Shiraz, but I suspect that was the power of suggestion. In any case it was an interesting experience.shiraz

“I thought this might be just a gimmick,” Sue remarked when we were finished with the tasting. But she concluded that the whiskey/whisky barrel aging did make the wines more interesting and different without fundamentally altering their identities. Something new — which is just what many (but not all) wine consumers are looking for.

The Next Big Thing?

So are whiskey barrels the next big thing in wine? Should you rush to try to corner the market on used Bourbon barrels just in case? (Too late — Fetzer makes a Bourbon barrel-aged Zinfandel called 1000 Stories.)

No. But these wines are an interesting addition to the menu, don’t you think? I see them as a thoughtful attempt to experiment within the tradition of wine much as the craft beer producers have been doing in their space.

Winemakers have long experimented in the privacy of their cellars and labs. Barrel tasting with a winemaker never fails to uncover something out of the ordinary. It would be interesting to see more of these products reach the market for us to try and to provide wine with an even more dynamic presence.

I guess I am calling for the broader commercialization of what you might call “craft wine.” Fresh ideas, small lots, variations on the traditional themes but with some added flair. Not for everyone, that’s for sure, but the craft beer and spirits boom shows that there are many consumers who are interested in a more dynamic concept and some of them are being drawn away from wine.

Beer has made an effort to learn some of the secrets of wine’s strong appeal. I think those of us on planet wine should return the compliment. Done thoughtfully, innovations like Jacob’s Creek Double Barrel can help wine compete with beer for the palates and pocketbooks of today’s consumers — and do it without undermining the fundamental idea of wine.

Craft Beer Raises the Stakes: PicoBrew

There is even more competition coming from the craft beer world! Earlier on the same day as the Double Barrel tasting I attended a presentation by Bill Mitchell, the CEO of a start-up company called PicoBrew, and angel investor Karl Leaverton.gfc_pico_productimage_1

PicoBrew uses advanced technology to allow home brew-masters to create their own professional-quality craft beers, either using their own recipes or those provided by other users or famous craft breweries. Quality, precision and control are selling points, but so is convenience — the magic happens in a sleek web-enabled counter-top brewing appliance. Wow.

But making distinctive beer is only part of the attraction. PicoBrew uses the web and social media tools to allow home brewers to share their discoveries and their stories. Seems to me that the sort of person who would have a geeky interest in fine wine might fall in love with the advanced DIY possibilities of this product.

Beer has made big strides from the bad old days of the 1970s. Cider has surged and craft spirits are very hot. Wine, as I have written before, needs to up its game to compete in this dynamic market environment, but do it without sacrificing the fundamentals that make wine so special.

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Thanks to Jacobs Creek and Vanessa Dones at the thomas collective for inviting us to participate in this web wine tasting event.

St Supéry Winery Sale: From Algeria to California & from Skalli to Chanel

November 10, 2015 By in brands, wine, wine history 5 Comments

I was surprised to learn a couple of weeks ago that Robert Skalli, founder of the St Supéry winery in Rutherford, was selling his family’s iconic winery and vineyards to Chanel, the French luxury goods producer.  Press coverage such as an article in Decanter was pretty limited — not much more than the press release version of things — lots of unanswered questions in my mind.

Sue and I visited St Supéry in September (we loved the wines and the people we met) and we were told many times how committed the Skalli family was to the project, so I was caught off guard by the change in ownership. It is natural to keep quiet about a business deal until it is finally done of course, but the quick change got my attention.

All in the Families

The facts of the sale are these. Chanel owners Alain and Gérard Wertheimer,  who are said to be worth €16.6bn, have reached an agreement to pay an undisclosed sum for the winery on Highway 29 in Rutherford, the 35-acre vineyard there and the magnificent 1500-acre Dollarhide Vineyard up north in the hills.

No reason was given for the sale, although Skalli is quoted saying he happy that his winery will be run by a firm that shares his values. The Wertheimers own two wineries in Bordeaux, Château Rauzan-Ségla and Château Canon, but there is no indication that they plan to build a luxury winery portfolio. Lots of questions — why, how much, and so forth — but winery sales happen all the time and details are not always fully revealed. So why am I so curious to find out more?

I first got interested in St Supéry when I was working on my 2011 book Wine Wars. I was examining the tensions between New World and Old World ideas about wine and I came across the fascinating story of the Skalli family wine empire.

Rise and Fall of Skalli Wine Empire

Robert Skalli is the founder of the Skalli Group, a holding company that was until 2011 one of the largest producers of wines in the Languedoc.  The Skalli conglomerate made branded varietal wines  and sold them in France and around the world. Skalli sold almost all its wine interests to Boisset in 2011. Almost all? They  held on to St Supéry.

Robert Skalli’s grandparents were pied noirs, French migrants to Algeria.  Many pied noirs emigrated to Algeria starting in the 1870s, when phylloxera wiped out vineyards and grower incomes in the Languedoc. The Skallis left France in the 1930s, presumably in search of greater opportunity in Northern Africa – and they found it.

Robert-Elle Skalli, Robert Skalli’s grandfather, built an empire on grain and wine. By the time that Francis Skalli took over from his father after World War II, the family business included a huge grain operation, Rivoire et Carré with a mill in Marseilles, the number two pasta company in France, Lustucru, a vineyard in Corsica, a rice producer, Taureau Aile, and of course vineyards in Algeria.

By 1964 the Skalli vineyards in Algeria spread over 600,000 acres, which is nearly as large as all the vineyards in Languedoc today (700,000 acres, which is much less than a few years ago). This was the wine that the French négociants blended with the weaker Langudoc product to make industrial strength vin du jour and they made vast quantities of it.

Like many other pied noirs families, the Skalli eventually fled to France as a result of the Algerian war and its independence in 1962.  They settled in the Languedoc and went about rebuilding their business.  Robert Skalli entered his father’s and grandfather’s business in the 1970s and, as part of his education, studied and worked (as  a “flying intern”) with winemakers in Australia and the United States.

California Inspiration

Significantly, according to the official company history, he worked with Robert Mondavi, who introduced him to the idea of branded varietals and opened his eyes to a different vision of the wine business, one based not on the condition of supply (and the traditional practices and regulations governing production) but on demand and the development of vineyard, cellar and marketing techniques that would provide buyers with wine that they could understand, appreciate and that they would buy.

Skalli returned to France and began to organize a business to make the clean, consistent, mid-range varietal wines that he saw in California and Australia. He established partnerships with growers and cooperatives in the Languedoc, providing financing for the process of pulling out their tough old vines and replanting with market-friendly varietals like Merlot and Chardonnay. Replanting is expensive, both in direct outlays and in lost production while the vines mature.  I suppose having the backing of the profitable Skalli grain business was useful in this transformation process.

The main Skalli brand, Fortant de France, was established in 1983 to produce and market these wines both in France and in 25 foreign countries.  The Cabernet Sauvignon sold  for about six dollars a bottle back when I was doing my Wine Wars research. There was a cheaper brand, Couleurs Du Sud, sold mainly in European hypermarkets and also a kosher wine line.

Mondavi Again

The Skalli family eventually decided to concentrate on wine – the grain and pasta businesses were sold or spun off.  They had wine interests in Languedoc, the Rhone Valley, in Corsica, where they owned the largest private vineyard, and in California.   Skalli credits Mondavi with helping him make the St Supéry investment.

And in return Skalli supported Mondavi’s aborted attempt to invest in the Languedoc on the logic, I believe, that anything that Mondavi did would draw favorable attention to the Languedoc, which would benefit both family businesses.

In 2011 the Skalli family sold off their wine interests to Boisset but, significantly, retained St Supéry. This surprised me at the time and I figured that it must either signal a new direction or a special fondness for the Napa project. Now I am not sure what to think.

But it seems like the winery is probably in good hands if Chanel gives the excellent local team that Skalli developed some autonomy. Luxury goods companies are sometimes more focused on managing brands than making wine. Skalli seemed to be good at both and perhaps Chanel will take the winery to the next level. Fingers crossed for a bright future at St Supéry.

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The decade from about 1975 to 1985 featured a surprising number of European wine investments in California. Sue and I have made a point to visit many of them over the last few years to find out how they have changed or developed. How have those ambitious Euopean investments of 30-40 years ago turned out?  Tune in next week for some thoughts.

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The Wall Street Journal published an interesting article about Chateau Canon, one of Chanel’s French investment on November 11, 2015.  Unclear if this is  St Supéry’s future.

The “Big & Hot” Guide to Best-selling U.S. Wine Brands

August 18, 2015 By in brands, Supply and Demand, wine, wine brands, wine markets 1 Comment

wv082015The August 2015 issue of Wines & Vines magazine is full of interesting and useful information as usual. One article that caught my eye provides IRI off-premise wine sales data for the top 20 U.S. wine brands. What are the best-selling off-premise brands? What’s hot (and what’s not)?

Bigfoot Barefoot?

The best-selling brand in the IRI league table is Gallo’s Barefoot, which accounted for an incredible $622 million in sales in the 52 weeks ending on June 14, 2015. That’s 5% more than the previous year in value terms and a 7% increase in volume. Congratulations to Gallo on their great success with this popular-priced ($5.64 average) wine. It is commonplace to say today that the sub-$9 wine category is in a slump, but Barefoot is the obvious exception to the rule

Sutter Home from Trinchero Family Estates is #2, but a long way back at $356 million sales. The rule does apply here — value is down 2% on the year and volume is down 3%. The Wine Group’s Franzia Box is just behind with $325 million in sales on the year, flat in value terms and down 5% in volume.  Franzia’s average price per 750 ml equivalent is up 11 cents to $2.17 compared with Sutter Home’s $5.25.

Who are the other big players? Here are the remaining members of the top ten listed in  order: #4 Woodbridge by Robert Mondavi (Constellation), #5 Yellow Tail, #6 Kendall Jackson, #7 Beringer (Treasury), #8  Chateau Ste Michelle, #9 Cupcake (The Wine Group), and #10 Mènage à Trois (Trinchero).

The next ten largest brands includes four Gallo product lines (Gallo Family Vineyards, Apothic, Carlo Rossi and Livingston Cellars), four from Constellation Brands (Black Box, Clos Du Bois, Robert Mondavi Private Selection and Rex Goliath) plus 14 Hands from Ste Michelle and Bogle Vineyards.

Clearly the Big Three companies (Gallo, Constellation and The Wine Group) dominate the list, but note how Trinchero and Ste Michelle punch above their weight. Kudos to Bogle for their success, too.

Hot N Cold Brands

The biggest wine brands are not always the hottest brands and the IRI data reported in Wines & Vines bears this out. As noted above, many of the top brands are experiencing slower sales in value terms including Sutter Home (-2%), Yellow Tail (-5%), Gallo Family Vineyards (-2%), Carlo Rossi (-3%), Clos Du Bois (-2%), Mondavi Private Selection (-4%), Livingston Cellars (-5%) and Rex Goliath (-4%).

These declines are matched by some spectacular gains elsewhere on the wine wall, often at much higher price points. Mènage à Trois tops the Hot List with 24% growth in value and 23% increase in volume, continuing its incredible market run. Black Box is right behind with 23% value growth. Gallo’s Apothic is next 21% value growth.

Continuing down the Hot List (among the 20 largest brands) is 14 Hands (+17%), Bogle (+15%) and Chateau Ste Michelle (12% value growth).

When you’re hot you’re hot, I guess. While Beringer and Clos Du Bois  have experienced falling average prices according to IRI (-11 cents per bottle equivalent for Beringer and -27 cents for Clos Du Bois), Mènage à Trois has seen its average price rise by 10 cents while Apothic’s average price holds steady at $9.58.

Remember that these are data for off-premise sales only and all data sources have limitations, so draw conclusions cautiously. Thanks to Wines & Vines for publishing this interesting snapshot of the U.S. wine market in transition. What will the final picture look like? Stay tuned to find out.

Speaking of Hot N Cold …

Wine Innovation: Lessons from Portugal

April 29, 2014 By in brands, popular culture, Portuguese wine, wine markets 1 Comment

Innovation is a hot topic in the wine industry these days. While some wine brands can depend upon their traditional markets, messages and products, many producers find themselves under increasing attack from “the crafts” — craft beer, craft cider and craft spirits.

One advantage that these alcoholic alternatives seem to possess is the heightened ability to adapt, evolve and excite — to innovate in various ways that keep customers coming back to see what’s new.

How wine got in this situation is a long story that I will tell another time and whether wine should even enter the innovation wars is something that is hotly debated. Some new wine products have been criticized as “pop wines” that debase and therefore threaten the whole product category — not a view that I endorse, but I can understand the concern behind it.

So I was very interested in looking at innovation during my visit to Portugal and I found it in many different forms. I thought you might be interested in a little of what I discovered.

Port: No Wine Before Its Time

Port, which is arguably Portugal’s signature wine, is an example of a wine category that is both timeless and highly innovative.  Timeless in the sense that Port wines have in many ways remained much the same for several centuries. White Ports, Ruby Ports, Tawny Ports — in fundamental respects these are the same today as they were 100 or 200 years ago. Almost nothing is as traditional as Port, with its stenciled bottles and historic brands.

This is a plus and also a minus. The plus of course is brand recognition — only Champagne was a stronger brand than Port from a name recognition standpoint. But it’s a minus, too, because that brand, like Sherry, is wrongly associated with one-note sweet wines. Like Rodney Dangerfield, they sometimes don’t get the respect they deserve.

And it is a minus because the traditional Port wine styles are exercises in patience in a very impatient world. Tawny Ports must be held by the maker until they are mature in 10, 20 or even 40 years. That’s a lot of time to wait with the investment time clock running. Vintage Ports need time, too, but this time the buyer is expected to patiently wait for the wine to mature.

Time is Port’s friend because of what they do together in terms of the quality of the final product but, from an economic and market standpoint, time is also an inconvenient enemy and seemed to limit Port’s potential in the postwar years.

The answer to the time problem was an innovation that appeared in 1970, when Taylor Fladgate released their  1965 Late Bottled Vintage (LBV) Port.  LBV has the character of Vintage Port but is ready to drink when released, not 20 years later. It was not quite the Chateau Cash Flow killer app of the wine world, but it certainly breathed new life into the Port market at a moment when this was especially welcome. Some say that LBV saved the Port industry and I think this might be true.

Colorful Port

Red and white are the traditional colors of Port, but recently some makers have innovated to try to get the attention of younger consumers who have as little interest in their notion of grandfather’s Port as they do in their stereotype of granny’s Cream Sherry. Croft Pink Port and Quinta de Noval Black Port are examples of this innovative trend.

Pink Port is made in a Rosé style, with less skin contact and therefore fewer grippy tannins than Ruby Port. The Croft website is fully of cocktail ideas so perhaps this is a Pink Martini killer wine? Richard Hemmings, writing on the JancisRobinson.com website, makes the wine sound like an excellent option for the many Moscato lovers in your life.

97g/l RS, 4.2g/l TA. Raspberry juice, bubblegum, pink apples and fresh strawberries. Sweet and full on the palate, good concentration. Well balanced and smooth, creamy texture with a mouth-watering burst of fruit on the finish. Very good, not massively complex but a worthy product. (RH)

Noval Black is more traditional in style and color, with more of the tannins than the Pink. Less complex than my favorite LBVs, but interesting. I agree with the website’s chocolate pairing suggestions, although I haven’t tried any of the cocktail-type recipes. Here is Hemmings’ take on Noval Black:

Ruby reserve in style, with an average age of 2-3 years old. Aimed at younger consumers, as the flashy website attests! Fruity, jammy, figs and dates. Sweet and supple, with a glacé cherry flavour and a simple, satisfying style. (RH)

Product versus Process Innovation

So far I have focused on product innovation but I haven’t mentioned process innovation and that is a mistake ,as I learned from a winemaker during my stay in Porto.

George Sandeman of the famous Port & Sherry family invited me to taste through the Ferreira line of wines and Ports and of course the Sandeman Ports. How could I resist? Even better, we would be joined by Luis Sottomayor, Porto Ferreira’s award-winning winemaker.

The bottles and glassware filled the big table as we began to taste through the Casa Ferreirinha wines then the Ferreira and Sandeman Ports. The wines were eye-opening. From the most basic wines selling for just a few Euro on up to the super-premium products they were well-balance, distinctive and delicious. Not all the Portuguese wines that make it to the US market have these qualities.

I have a star in my notebook next to the entry for the Casa Ferreirinha Vinha Grande Red 2010, for example. A blend of classic Portuguese grape varieties from two Douro regions, it spent twelve months in second the third use oak. Easy drinking, soft tannins, nice finish, classy, well-made. Cost? About Euro 10. in the home market or $19.99 in the US.

“Delicious” I wrote next to the note for the Casa Ferreirinha Quita Da Leda Red, which comes from an estate vineyard just 1 kilometer from the Spanish border. It is the product of a small winery located within the company’s larger facility. Spectacular wine, special terroir, I wrote. US price is $64.99 and worth it.

As we tasted through the Ports I started to talk about innovation — Pink, Black and so on. Sottomayor stopped me in my tracks. If you want to really understand innovation in Portugal, he said, you have to look beyond new products to the work that is being done to improve the process in the vineyard and the cellar. This is where the real gains are, as seen in the table wines I had just tasted and the Ports I was about to sample.

Taste this LBV, Sottomayor said. The LBVs we make today are of the same quality as the Vintage Ports we made 15 years ago. And the Vintage Ports are that much better, too.  New products are part of the story of Portuguese wine innovation, but improved winegrowing and winemaking are just as important now and probably more important in the long run. Lesson learned!

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I came away from the tasting described above both richer and poorer. Richer because Sottomayor’s lesson about innovation will save me some money — as much as I enjoy Vintage Port and will continue to buy it, I now have LBV centered on my radar screen and it sells for a good deal less.

And poorer? Well, Sandeman and Sottomayor set up a little experiment for me, first letting me taste their 10-year old Tawny Ports and then the 20-year-olds. We like the 20s, George Sandeman said, because you can taste where they’ve been (the 10-year old wines) and also where they are going  (the 40-year old Tawny that I tasted next). The tension between youth and old age makes the 20-year old Tawny particularly interesting, he said.

And I am sad to say that I could taste exactly what he was describing. Sad? Yes, because 20-year old Tawny costs a good deal more than the 10 and for the rest of my life I am going to be paying that extra sum!

Congratulations to George and Luis on the great ratings that their 2011 Vintage Ports have received! And thanks to them and to Joana Pais for their help and hospitality.

Chilean Wine at the Crossroads

December 13, 2011 By in Australian wine, brands, Chilean wines, emerging wine regions, Oz Clarke, wine exports, wine price, wine research 7 Comments


When Oz Clarke spoke at the Wines of Chile Awards seminar earlier this year, his theme was simple and clear: Chilean wine is at a crossroads and it was up to the people in that room to decide which direction to go. Would they make the same mistakes as winemakers in Australia, for example, or choose another path? Oz, who was a stage and film actor in a previous life, is a dramatic speaker, but if you watch the video I think you will agree with me that his message is even more powerful than the delivery.

Preaching to the Choir

Oz Clarke is not alone in this view and to a certain extent I’m sure he was “preaching to the choir.” Wines of Chile released its ambitious  Strategic Plan 2020  about a year ago (you can download a pdf of the full report here). The plans calls for Chile to become the #1 New World producer of “sustainable and diverse” premium wines by 2020.

The carefully devised Plan projects an average annual growth rate of 9.2% and is based on strengthening the recognition and appreciation of  “Wines of Chile” as a world-class appellation, which will in turn increase the average price, sales, and added value for all Chilean wine industry stakeholders, including small and large growers, suppliers, wineries, and exporters.

The plan focuses on four messages to drive the transformation:

  • Diversity and Quality. Chile has much to offer with respect to quality, diversity, and wines that over-deliver at every price point.
  • Sustainability. Sustainable Chile: Clean, efficient, and responsible.
  • Country Image. Chile is good for you.
  • Innovation. Chile: Moving above and beyond.

The plan’s ten year time horizon speaks to the sense of “Chile at the Crossroads” immediacy while the four “strategic pillars” indicate how much needs to be done in terms of recasting Chile’s image. Chile’s reputation as a producer of bargain Cabernet Sauvignon, Chardonnay and Sauvignon Blanc needs to be reshaped in terms of both wine types and price points. And the image of Chile itself must be updated or redefined, according to the plan’s analysis, so that the country sells the wine  (as Italy’s image obvious does for Italian wine) and not the other way around. (Whether a campaign built around the slogan “Chile is Good For You” can accomplish this is debatable.)

Audacious Goals?

Exports are key for Chile since domestic consumers drink up only about 30% of total production.  The idea that revenues might grow by 9.2% in the next decade is not as ridiculous as it might sound, given the current economic climate, although it is certainly an audacious goal.

Chile’s wine exports grew by a yearly average of 33% in the 1990s (according to data in the Wines of Chile report) and by 11% per year between 2000-2009. But whereas growth came through both increased price (7%) and quantity (25%) in the 1990s, the 11% revenue growth in the 2000s was due to volume growth (12%) offsetting 0.1% average price declines. The new strategic plan calls for a radical change, with rising price not higher production driving revenue growth.  Good idea, but easier said than done.

So (and this is the “crossroads” theme again), Chile needs to turn things around in a fundamental sense and this may be difficult in today’s market environment as an excellent interview with  with Rabobank’s Stephen Rannekleiv in a special September 2011 Chile Report  issue of The Drinks Business makes clear. Rannekleiv is an optimist about Chile’s wines, but very cautious about its wine industry’s ability to meet the 2020 goal.

 Something Completely Different

Rannekleiv suggests that Chile seek out new markets to supplement but not replace the UK, its largest export market today, where margins currently are thin or even  negative and where upward price adjustment is extremely difficult. Focus must be on price and quality, Rannekleiv notes, so major supply surges must be avoided.

It is very difficult to raise price (without dramatic loss of market share) for existing product lines in today’s market, so  “Chile needs to find something different, such as marketing around new varieties that are exceptional; it also needs to continually work on improving quality.”

There is no silver bullet, Rannekleiv suggests. It will take a combination of controlled output growth, continuing quality improvements, image development and new products and markets to turn the Chilean wine industry onto the right path.

Getting the Message Out

One element of the Wines of Chile strategy is a series of blogger wine tastings that are designed to educate, inform and persuade social media representatives and their audiences of Chile’s new direction. I took part in one of these programs last year that featured Chilean Syrah and Pinot Noir, stressing the diversity of Chilean wine.

This certainly is part of the 2020 strategy’s message (and the wines told that story pretty well), but Syrah is a problematic market these days and while Pinot is popular, it is hard to break in except at the bulk level. (Although both Chile and Argentina produce Pinot Noir, for example, neither country made the cut for inclusion in Benjamin Lewin’s recent book In Search of Pinot Noir.)

Is Carmenere The Key?

Which brings us to Carmenere, the focus of the most recent blogger tasting program.  Is Carmenere the key (or one of them) to Chile’s crossroads dilemma? Carmenere is (like Malbec) a Bordeaux variety that is now better known in the New World than the Old. Can Carmenere be to Chile what Malbec has become for Argentina, a signature variety that creates a new market and that serves as a brand ambassador for the entire country?

A Carmenere boom would tick a lot of the Wines of Chile 2020 plan boxes. Is Carmenere the key? Come back next week for my answer.

Reimagining Chile’s Wine Identity

April 19, 2011 By in brands, Chile, Chilean wines, emerging wine regions, globalization, wine brands, wine exports 3 Comments

What do you think of when you think of Italian wine? Many people think first of Italy — the place, the art, the people, the culture and the food (OK, especially the food). The romantic idea of Italy sells Italian wine. Brand Italy is stronger, it is said, than any Italian wine brand and Italian winemakers have profited from this fact.

Changing Places

The relationship between country and wine image is reversed for Chile, or at least that’s the theory I found in a recent report called the Wines of Chile Strategic Plan 2020.  The wines of Chile are the nation’s ambassadors to the rest of the world, the report asserts. The wines of Chile have a more distinct image than Chile itself (although of course the two are related) and so when people think of Chile they think first of its wines.

I am not sure that I completely agree with this idea — “Chile” conjures up many images and associations for me — but I am willing to consider it for the sake of argument. Certainly how we think about the wines of Chile has some impact on our attitudes towards this country more generally. Chile’s wine identity, as important as it is to people in the wine industry, may have an even broader significance in terms of international investment, export sales, tourism and so forth.

Good and Good Value

So what is Chile’s wine identity? Well, for most of the last 50 years Chilean wine has been synonymous with “good value for the money.” As I wrote in a previous post, Chile has been trapped in a vicious cycle of rising expectations that has made it difficult for them to increase price even as the quality of their wines has continued to improve.

Is this a bad thing? Yes, I know that it is better to be known for good value than for bad value, but in today’s very competitive global market it is also good to have products that consumers are willing to pay a bit more for. The average FOB export price of Chilean wine hovers around USD 2 per liter or less than USD 20 per case. The appreciation of the Chilean peso in 2010 combined with the difficulty of raising the USD price has really put the squeeze on Chilean wine producers.

Chile is the most trade dependent of the top wine producing countries, according to the Wines of Chile report, exporting nearly 70 percent of their production.  Wine accounts for over 2.5% of Chile’s total export earnings. So enhancing the image of Chilean wine abroad by moving it upmarket is important.

There are several ways to define a country’s wine identity and this video illustrates the current theme, Wines of Chile: The Natural Choice. As you can see the theme connects the dots of factors contributing to Chile’s complex terroir and stresses the fact that that its phylloxera-free vines grow on their own rootstocks — a  nice “natural” connection.

But broad messages like this have their limitations since by definition they cannot thoroughly take into account detailed factors that may be important to understanding and promoting the wine.  The New Zealand wine tagline is “Pure Discovery,” for example, and here in Washington the motto is “The Perfect Climate for Wine.” None of these tag lines is especially stirring or sharply defining, although the key words — Natural, Pure, Perfect — have obvious appeal.

Is Carmenere the New Malbec?

Another way to think about wine identity is in terms of grape varieties, although this has limitations, too. If you think Burgundy  you think Pinot Noir and Chardonnay, for example. And Napa Valley is Cabernet Sauvignon. There is much more to the wine from these regions than type of grape, of course, but the iconic varieties are straightforward identifiers that confused New World consumers can easily understand.

Wine in Chile is really about three varieties: Cabernet Sauvignon, Sauvignon Blanc and Carmenere. Cab Sauv and Sauv Blanc together account for more than two-thirds of all wine grape plantings in Chile. These wines can be very good, but it must be said that they are cursed with that “good value” label that will be hard to shake no matter how many Wine Spectator Top 100 awards they receive.

Carmenere represents only 7 percent of vineyard plantings now, but it is seen by many as the breakthrough wine of the future, a uniquely Chilean wine that has the potential to do for Chile what Malbec has done for Argentina. The Wines of Chile report has high hopes for Carmenere both as an export product and as a tool to redefine Chile’s wine identity. But it warns against cutting corners to capture low price sales. Carmenere needs to be a premium brand if it is to serve its useful symbolic function.

Blogger Wine Tasting

Which brings us to Syrah and Pinot Noir — not grape varieties that you usually associate with Chile. They were the focus of a recent tasting organized by Wines of Chile that brought together, if that is the right phrase, a virtual group of U.S. wine bloggers including members of The Wine Economist staff. The idea was to use new media to get out the message about Chilean wine’s new directions and to help establish its wine identity among younger tech-savvy consumers. We were sent wines to sample, literature to read and provided with online access to Chilean winemakers for interactive Q&A.

Are wines like these the way forward for Chile? Syrah and Pinot Noir are high value bottled wine exports (FOB prices of $4.66 and $4.08 per liter respectively in 2009 compared with $3.37 for Cab Sauv and $2.79 for Sauv Blanc) and so they may be useful tools in this task of getting consumers to rethink the wines of Chile and what they might be willing to pay for them.

(Math note: Chile receives only about $2 per liter on average for its wine exports because lower priced bulk wine sales drag the average down while higher priced bottled wine exports try to hold it up.)

I asked the winemakers to comment on the potential for these wines on the international markets. How can Chilean Pinot Noir differentiate itself from New World Pinots from Oregon and New Zealand? And how can Chilean Syrah succeed in the U.S., where Syrah sales are slumping?

Wine Economist volunteer tasting staff: Scott, Janice, Kevin and Jeni

Their responses were not very enlightening, but I blame the online environment for that, with the group of winemakers in a boardroom in Chile trying to answer questions submitted from thousands of miles away by faceless bloggers. Anyone who has been on a conference call knows the problem. But, like conference calls, this internet session facilitated a great deal of interaction even if it wasn’t completely satisfying and so the pluses outweigh the minuses. I’ll just need to follow up, that’s all.

Tasting Notes? From the Wine Economist?

No one comes to The Wine Economist to read tasting notes, but I thought you might be interested in the team’s reactions to the wines. On the whole we liked the Pinots a bit better than the Syrahs — we just found more complexity in the glass and more to talk about. That said, I noticed that when everyone was given the opportunity to take home a partial bottle, it was the Syrahs that disappeared. Interesting.

The Syrahs were better with food, which in our case included tasty empanadas purchased from Pampeana Empanadas here in Tacoma and bruschetta with Fontina and  Huerto Azul Myrtleberry Chutney with Merken, a Chilean product that was provided by Wines of Chile along with the wines and is available from puro-gourmet.com.

I was especially interested in how college students Jeni and Kevin reacted to the tasting since young consumers are a key wine marketing target and new media initiatives like this are often organized with them in mind. Jeni said that she had never purchased a bottle of wine from Chile — her image of Chilean wine was pretty much a blank canvas —  but that the tasting put Chile on the wine map for her and she was more likely to try these wines in the future. Jeni’s image of Chilean wine changed from invisible to positive — a good sign.

Kevin had tasted Chilean Pinots before — he comes from the Willamette Valley in Oregon and is friends with many winemaker families. In Oregon, the aim is to be Burgundian, he said, and he was surprised by a couple of these Chilean Pinots. They weren’t exactly what he was expecting, which made him want to taste more to try to understand the Casablanca Valley terroir and the winemaker styles a bit better. Another good sign

Overall I would say it was a successful tasting that answered some questions and raised many more. The question of the future of Chile’s wine identity remains to be answered, however, so I’ll come back to it in an upcoming post.

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Thanks to Wines of Chile for inviting us to participate in the blogger tasting and to Amber Gallaty of the thomas collective for making the arrangements. Special thanks to Sue Veseth, Janice Brevik, Scott Hogman, Jeni Oppenheimer and Kevin Chambers for their insights on the wines and the virtual tasting process. The photos are by Sue and Scott.

Here are the wines featured in the April 2011 blogger tasting

Is Malbec Washington’s Next Big Thing?

April 11, 2011 By in Argentina, AVAs, brands, emerging wine regions, Riesling, Washington wine, wine brands, wine education, wine markets 3 Comments

Celebrate! April 17 is Malbec World Day

Every year Seattle magazine publishes a list of Washington’s top wines and wineries and identifies an “emerging” wine variety to highlight and promote. This year it was Grenache and there are some great Grenache and Southern Rhone-style Grenache-blend wines made in Washington state, so I think this was a good choice. The wines we sampled at the Taste Washington Grenache seminar were delicious (see list at the end of the post).

The Big Freeze

But Grenache, as good as it can be here, is probably pretty far down the list in the search for The Next Big Thing in Washington wine. There is only a tiny bit of it planted and I don’t think there are any “old vines” left (old vine Grenache is said to produce more complex wines). Grenache was more widely planted in Washington wine’s early days, but the vines didn’t survive the hard winters that strike the Columbia Valley every few years. Now, with greater attention to vineyard location and management practices, Grenache is making a welcome comeback.

Grenache is an up-and-comer and there are great wines being made already,  but as it is probably best viewed as the Next Next or Next Next Next Big Thing until more and older vines are on line.

But what about Malbec?

When you say Malbec everyone thinks Argentina and, since I’ve recently returned from doing fieldwork in Mendoza, naturally so do I. But what about Washington Malbec? Seattle magazine named it their hot wine variety in 2009 and so I decided to use this year’s Taste Washington event to evaluate the Malbec status quo. (Click here to view a video of last year’s Taste Washington Malbec seminar.)

Mendoza del Norte?

Argentina makes distinctive Malbec wine and there is good reason to think Malbec might do well here in Washington, too. Mendoza and the Columbia Valley are both basically deserts (the Andes and Cascade mountains respectively provide rain shadow effects) where irrigation is a necessity. Both areas get plenty of sunlight although I think vineyard elevations are higher down south.

There are many patches of Malbec planted in AVAs from Lake Chelan to Yakima Valley to Snipes Mountain, Red Mountain and Walla Walla. Statistically Malbec is the fifth most-planted black grape variety after Cabernet Sauvignon, Merlot, Syrah and Cab Franc and ahead of Sangiovese, Pinot Noir and Lemberger (according to Washington Wine Commission data).

The vines are relatively young, reflecting Washington’s comparative youth as a quality wine producer. Most of the wines I tasted were made with grapes from roughly 10 year old vines, but I know there have been recent plantings that should begin to appear in forthcoming wine releases.  Argentina has some old vine Malbec (80 years and more) in Luján de Cujo, but a lot of the vineyards (especially those in the Uco Valley) are about the same age as Washington’s.

When I ask Washington winemakers why they started making varietal Malbec they usually say that it was because the wine was too good to hide in a blend and, while I don’t dispute this, I suspect Argentinean Malbec’s market success did not unnoticed.

Malbec was originally planted here to use as a blending grape — Malbec is one of the five classic Bordeaux varietals along with Cabernet Sauvignon, Merlot, Cab Franc and Petit Verdot. Seven Hills released a what I think was the first varietal Malbec (from very young vines) in 2001, but most other makers restricted it to blends until more recently.

Price and Cost Differences

If Washington and Argentina share certain aspects of geography, they differ tremendously in terms of production cost and retail price. There are precious few Washington Malbecs below the $20 price point. The most frequently observed Malbec price at Taste Washington was $28 and many more were priced above than below this figure. Reininger’s 2007 Walla Walla bottling was the highest priced Malbec on the published listing at $51 and I think that the Eliseo Silva was the cheapest at a listed $10.

Argentinean Malbecs can be found at all price points from about $10 up, but they are biggest in the sub-$20 arena. In other words, Washington and Mendoza compete in the Malbec market, but exactly not head-to-head.

Cost differences account for some of the price difference. Malbec is in short supply at the moment in Washington (only 1100 tons were crushed in 2010 compared with 31,900 of Cab Sauv). Malbec is Washington’s most expensive wine grape according to USDA average price data. Malbec cost $1,540 per ton on average in 2010, putting it ahead of Cab Franc ($1,325) and Cabernet Sauvignon ($1,297).

Malbec is in short supply in Argentina, too, but land and labor costs are a lot less there. High quality Malbec costs 5-6 pesos per kilo in Argentina these days and good quality costs 4 pesos (both figures have risen significantly in the last two years).  At an exchange rate of 4 pesos per dollar and figuring 5 pesos per kilo, that converts to about $1100+ per ton, a lot less than in Washington.

Taste Washington Malbec

There was a lot of Malbec at Taste Washington, mostly from small producers.  Nineteen wineries listed Malbec on the program but I think there may be nearly 100 different Malbecs made in this state by the 700+ large and small registered wineries.

I am not an expert wine taster (which is why you won’t find wine ratings on this website), but I sampled enough quality Malbec in Argentina to begin to understand it a little. In general I found the Malbecs at Taste Washington to be very good representations of the varietal, with well integrated oak in most cases, and able to reflect the different vineyard terroirs. I think they compete very well with the Mendoza wines in the same price ranges, which is a high complement.

My favorites, for what it is worth, were from Fidelitas, Gamache, Hamilton Cellars, Nefarious, Reininger, Saviah and William Church. Special marks go to Hamilton Cellars for making Malbec in three styles: Rose, straight Malbec and a Malbec-heavy Bordeaux blend.

So is Malbec Washington’s Next Big Thing? Not yet — not until there are more vines on line and Chateau Ste. Michelle or  Columbia Crest get into the market and help develop it. Interestingly, Columbia Crest’s newly-appointed chief winemaker, Juan Muñoz Oca,  is Argentinean and Columbia Crest recently released it’s first Malbec — maybe that’s a sign! I’m looking forward to finding out.

Cost is still a big issue and perhaps Washington cannot compete with Argentina at the key price points. But in terms of quality? Yes, it could happen. Malbec could be Washington’s NBT.

[Thanks to Sean Sullivan and Guillermo Banfi for help tracking down Malbec grape prices in Washington and Argentina respectively.

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Taste Washington Seminars: Washington’s Emerging Varieties: Grenache Panache
Presented by Seattle Magazine

The rising popularity of this new-to-the-Washington-scene grape variety in recent times is a boon for wine drinkers.  Seattle Magazine recognizes that Washington State’s offerings with this amazing grape are truly delicious, having awarded it Best Emerging Varietal in their 2010 Best of Washington Wine Awards. Bob Betz MW, an admitted Grenache fiend, will join Seattle Mag’s wine columnist Shannon Borg and an esteemed panel as they help you discover why our region’s Grenache offerings are fast becoming some of the New World’s most distinctive and respected.

Moderator:
Bob Betz MW (Betz Family Winery)
Panelists:
Shannon Borg (Seattle Magazine)
Brian Carter (Brian Carter Cellars)
Sara Schneider (Sunset Magazine)
Sean Sullivan (Washington Wine Report)
Wines:
2008 Milbrandt Vineyards “The Estates” Grenache, WS $25
2009 Maison Bleue “La Montagnette – Upland Vineyard” Grenache, SM $35
2008 Darby Winery “Stillwater Creek Vineyard” Grenache, CV $45
2009 Betz Family Winery “Besoleil” Grenache, YV $50
2007 Brian Carter Cellars “Byzance” Red Wine, CV $30
2008 Syncline Wine Cellars “Cuvée Elena” Red Wine, Columbia Valley $35
2008 Rôtie Cellars “Southern Blend” Red Wine, WA $35

Washington Wine’s Identity Crisis

April 4, 2011 By in brands, emerging wine regions, Jancis Robinson, The Next Big Thing, Washington wine 8 Comments

The title of the seminar was provocative: “In Search Of: Washington’s Singular Style.” Moderator Bruce Schoenfeld of Travel + Leisure magazine wanted to talk about regional wine identity. What does “Washington wine” mean in the wine glass and to consumers in the marketplace?

Schoenfeld’s search for a definitive Washington wine identity was cleverly conceived (I have pasted the details of the seminar including the list of wines we tasted at the end of the post). We began by tasting wines from three regions with clear identities: Chablis, Ribera del Duero and Barolo.

An Identity Crisis?

These wine regions have strong brands, if you think of it from a business angle. Does Washington have a strong brand in this sense or does it suffer from an identity crisis that limits its market potential? Well, there are many ways to try to answer this question and Schoenfeld deftly guided the discussion to consider several of them.

Can Washington wine be defined by grape variety?  Well, not exactly. Over the years Washington has embraced and then abandoned a string of “defining wines” from the varietal standpoint. First it was Riesling, then Merlot, then on to Cabernet Sauvignon and now Syrah and soon maybe Malbec (the featured “emerging variety” at last year’s conference) or Grenache (highlighted this year).

The problem is that none of the wine identities have stuck, so Washington must seem a bit schizophrenic to outsiders who pay attention to these things. Washington Riesling, the first attempt to define the state’s wine identity,  can be great here, but it is a white wine and red wines get most of the attention in the wine world today. Young wine regions like Washington want that attention, so Riesling fell off the radar despite its high quality and strong sales.

Multiple Identities

Merlot was The Next Big Thing and Washington Merlot can be great, too. Washington makes some of the best Merlot in the world, Jancis Robsinson once wrote, sending hearts hereabouts fluttering with excitement. But, so what? she added. Merlot isn’t a serious wine, or so some  say, and the search for that defining variety continued.

Cabernet Sauvignon was next up and Washington has produced more than its share of 95+ point Cabs. But Napa Valley seems to have the Cab identity locked up. First rate Washington Cabs sometimes sell for half the price of second-tier Napa products. That Napa reputation seems to be invincible.

So now Washington wants to show off its Syrah wines, and they can be wonderful, too. But the damn Aussies have messed up the Syrah bonanza. I think it is easier to make quality Syrah in Washington today than it is to sell it. So the search for a wine identity goes on.

A Certain Style

Maybe it’s not a grape variety that defines Washington wine, Schoefeld suggested, but a style of wine. Bob Betz agreed in principle, suggesting that Washignton wines at their best combine Old World structure with New World fruit — a tag line that a lot of us in the audience liked, even if it might be difficult to communicate to consumers.

Tasting through the Washington wines (from Riesling to Merlot, Cab and Syrah), Schoenfeld asked the panel and audience, “Can you tell that this is a Washington wine — does it have the Washington style?” He certainly thought so, but I never saw more than half the hands go up.

This was a pretty serious  winemaker, consumer, trade and journalist audience. They’ve tasted a lot of wine and a lot of Washington wine. All the wines Schoenfeld selected were interesting, but did they individually or collectively outline a Washington style? I didn’t think so. I’ve tasted wines similar to these from other regions and I have tasted very good Washington wines with completely different styles from these. I don’t claim to be a skilled wine taster (which might for once be an advantage since I am on a par with many consumers in this regard), but I can’t find a definitive Washington style.

What did I conclude from this interesting (and delicious) investigation? Having a successful regional wine identity is an advantage in the marketplace, but Washington doesn’t have one. Bob Betz may be right about Old World structure and New World fruit, but I don’t think wine style is easily understood by many consumers.

No Strong Identity. No Crisis Either.

Grape variety is easy to understand and communicate, but that leaves the question which one? If I had to choose, I would select Riesling on the basis of market penetration. Chateau Ste Michelle is the largest producer of Riesling wines in the world (yes, the world!). More Riesling grapes were crushed in 2010 (33,500 tons according to USDA data) than any other Washington variety. Washington Rieslings  (including the widely distributed Eroica, Poet’s Leap and Pacific Rim wines) can hold their own with the best in the world. What more do you want in a wine identity?

But there’s that status thing (red trumps white) and many of Washington’s iconic producers don’t make Rieslings, so focusing on this variety to the exclusion of others would in some ways be counter-productive in terms of regional identity.

So where does that leave us? Washington may lack a strong wine identity but I don’t think it has an identity crisis. Better no single identity than a bad one (think Brand Australia). Better to produce many types and styles of good wine and simply celebrate that!

[Thanks to the Washington Wine Commission for inviting me to attend the Taste Washington seminars.]

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Taste Washington Seminars / March 26, 2011

In Search Of: Washington’s Singular Style

Moderator:
Bruce Schoenfeld (Travel & Leisure Magazine)
Panelists:
Bob Betz MW (Betz Family Winery)
Shayn Bjornholm MS (Washington State Wine Commission)
Sandy Block MW (Legal Seafoods)
Drew Hendricks MS (Pappas Brothers)
Wines:
2008 Louis Michel “Montée de Tonnerre” 1er Cru Chablis, FR
2004 Bodegas y Viñedos Alion, Ribera del Duero, Spain $70
2001 Cavallotto “Riserva Vignolo” Barolo, Piemonte, Italy $75
2009 Chateau Ste. Michelle/Dr. Loosen “Eroica” Riesling, CV $24
2007 Hightower Cellars Merlot, CV $28
2007 Abeja “Reserve” Cabernet Sauvignon, CV $80
2007 Cadence “Ceil du Cheval” Blend, RM $45
2008 Betz Family Winery “La Serenne” Syrah, YV $50
2008 Cayuse Vineyards “En Chamberlin” Syrah, WWV $65