The Three Ages of Wine Cork Production: A Visit to Corticeira Amorim

June 14, 2016 By Mike Veseth in cork vs screwcap, globalization, Portuguese wine, sustainability, wine Leave a comment

corf_forests

It is impossible to drive through the Alentejo region of Portugal without seeing the dark trees that dot the landscape. Pretty soon you notice the lines on the trunks where the bark has been harvested and then you know for sure that you are in a cork oak (Quercus suber) forest, the densest concentration of these trees in the world (see map above).

Cork’s Medieval Roots

Planting a cork oak tree is a statement of faith in the future. The first harvest must wait for 15 years and then the cork will be of low quality, unsuitable for natural cork closures. The second and better harvest that yields more usable cork comes 9 years later. Only 9 years after that (and every 9 years into the future) can the highest quality cork be taken. Few other things in the world of wine (producing 40-year old Tawny Port, for example) can compare to cork in terms of optimistic forward thinking.

Sue and I visited both Porto and Alentejo during our recent trip to Portugal and Antonio Amorim and Carlos de Jesus of Corticeira Amorim, the world leader in cork closures, invited us to visit their factories in these two regions to see first-hand what I am calling the Three Ages of cork.

Cork is an ancient product — the Greeks, Egyptians and Romans all sealed their wine jars with cork. The harvesting of it is laborious hand work since each tree has its own configuration. Photos of modern cork harvests could easily be mistaken for medieval paintings. Cork1

Industrial Revolution

Stepping into the Amorim factory in Coruche, you get an initial sense of moving forward in time to the industrial revolution. There is still a lot of hand work here. Sorting the processed cork bark pieces, for example, still requires human judgement as they are inspected and graded for quality one at a time. The key to making a profit in cork is to waste nothing, so each cork piece must go to its best use and the waste at each step recycled into a lower-priced product.

Almost nothing is thrown away. One item that was headed for the power-supplying waste burner was a piece of cork that was badly infected with TCA, the source of cork taint. What a horrible smell! Until a machine can consistently detect all the potential problems with cork including TCA, cracking, insect damage and so on, these workers’ jobs are very secure.

The factory was loud with the clamber of industrial machinery as every task that could be mechanized was mechanized. It gave me a sense of what those 19th century British textile mills must have been like.

Interestingly, the finest corks closures made from the best quality raw material are hand-punched by skilled craftsmen (see photo above). These corks need to be as close to perfect as possible and so far nothing can replace the human eye for seeing just where the cork’s sweet spot is (and what parts should be recycled down the line for other products).

NDtech: Cork for the 21st Century

It would be easy to think of cork just this way — a medieval product made using industrial revolution technology — but this viewpoint misses a lot as we learned when we visited Amorim’s second factory near Porto.

Here we saw many of the same processes as in the south, but the focus was different because Carlos and Antonio wanted us to see the progress that has been made at improving cork closures and addressing the issues that allowed synthetic stoppers and screw cap technology to make dramatic inroads in this market.

Innovative new production processes and seriously obsessive attention to detail have now all but eliminated the incidence of detectable TCA contamination in Amorim corks throughout the product line, which is a big deal and came only after intense and expensive research and process innovation. But that was not good enough and so earlier this year Amorim unveiled its latest innovation, NDtech corks.

Amorim scientists guided us into the controlled environment that you see in the video above and we saw the NDtech (think non-detectible TCA levels) process at work. ndTech really does individually-inspect each and every cork that goes through the process and guarantees then all to be TCA-free at human sensory threshold levels.

Amorim is convinced that the process works and we saw persuasive data about these and other Amorim cork closures. Now the challenge is to scale up to meet the demand for these, the very best corks that can be made.

Three Ages in One Product

I find it interesting that cork is so many things at once. It is a natural product, of course, but one that is necessarily harvested and then processed by hand and manufactured using machines and processes from a variety of periods. It is also increasingly a technological product.

Making excellent cork closures is complicated as we saw at the Amorim factories and doing so profitably is even more complicated. We were impressed with the way that every scrap and bit of cork is put to use in closures and other cork products and every ounce of value realized. Environmental and economic sustainability go hand-in-hand.

Meeting the challenge of synthetic and screw-cap closures has not been easy for cork producers, who saw a some of their market share disappear. Hard work, expensive research and technical innovation has turned this around, however, and now many consumers and wineries who moved away from cork in the past are taking a new look.

Someone once accused the economist John Maynard Keynes of expressing a view that was inconsistent with his previous statements.” When the facts change,” Keynes replied, “I change my opinion. What do you do?” The facts about cork — especially the TCA situation — have changed in the past few years. No wonder many people in the industry have revised their views on cork.

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Many thanks to Antonio Amorim and Carlos de Jesus for he opportunity to see the three ages of cork with our own eyes and learn about the scientific progress from the experts. This concludes the short series of past-present-future stories from the Alentejo. Come back next week for a look at some unexpected wine tourism opportunities we found in Portugal.

Natural Cork vs Alternative Closure Wars: Race to the [Wine Bottle] Top

June 23, 2015 By Mike Veseth in cork vs screwcap, wine markets, wine research, wine science 7 Comments

At the end of my review of To Cork or Not to Cork, George Taber’s informative 2007 survey of the wine bottle closure wars, I vented some frustration. Not with the book, which is great, but with the closures themselves. Taber taught me that no wine bottle closure was perfect, although he had high hopes that competition among closure producers would make the future brighter. Here’s the conclusion of my 2007 column.

[Taber writes that] … finding a solution to the wine closure dilemma is a worldwide problem and global market competition is forcing the stopper makers to innovate and make better and better closures and forcing winemakers to get better, too, since they can no longer automatically blame any flaws in their wines on bad corks. “Unfettered competition,” he writes, “remains a powerful driving force for good.”

I think Taber is right, but for now I’m just standing here in the basement, looking with suspicion at the wine in my little cellar, trying to guess what is going on beneath the lids. Having read Taber’s book, I now know enough to be anxious about each and every bottle!

A Wealth of Closure Choices

Eight years have passed and the closure wars continue. Perhaps the single most-asked question when I speak to consumer groups is about what’s at the top of the bottle, not the contents. “What do you think of screw-caps?” Well, what should I think?

The question continues to haunt the wine industry. Recently two U.S. wine industry monthlies featured cover stories on the closure wars. “Alternative Closures Go Upscale” was the headline on the May 2015 issue of Wine & Vines. while the June issue of Wine Business Monthly featured their 2015 “Closure Survey Report.”

Jane Firstenfeld’s Wines & Vines article “Unconventional Toppers for Top-Shelf Wines” takes the form of a series of brief interviews with premium winemakers who report their use of screw-cap closures (including Van Duzer, Chehalem, Meoimi, Silverado and Sonoma-Cutrer) or synthetic closures (Schug and Eberle).

The article gives a sense of the great variety of alternative closures available (gone are the days of one-size fits all) and the research and trials necessary to assure the best possible fit between wine, winemaker and closure. It’s a good piece of reporting if you have a dog in this fight!

Natural Cork is #1. So are Synthetic Closures. Discuss.

Curtis Phillips presents the results of the Wine Business Monthly survey of winery closure use in his article “Natural Closures Rated Highest.” One colorful graph caught my eye — it showed the results of the survey for five years where respondents were asked which closures they used for their $14-$25 red wines? Options (more than one choice allowed) started with natural cork and moved on to technical cork, synthetic closures, screw caps and an “other,” category that includes Zork and Vino-Seal.

The graph suggests that natural cork is used by about 50% of the wineries surveyed, down from nearly 70% a few years ago. Technical cork is shown rising from about 20% to 30%, while ynthetic closures are roughly stable at a little more than 10% and screw caps are shown rising from about 10% to 30%.

The devil is in the details in surveys like this and to their credit WBM provides details that clarify the picture. The unit of analysis for the survey is the winery whether it is big or small, which changes up the conclusions you might otherwise draw.

Many more wineries use natural cork, but many more bottles of wine here in the U.S. are sealed by synthetic closures. The 10% of wineries that use the synthetics such as Nomacorc include some boutiques (Oregon’s Ken Wright Cellars, for example) and some giants (Gallo), so that about half of all wine bottled in the U.S. comes with a synthetic closure even though only about 10% of wineries surveyed use it.

There is more to the WBM story than this, of course. Winery respondents were asked to give their ratings of closure alternatives and the result is a rising tide — all of the closures were rated higher than they were a few years ago. When it comes to quality in wine closures, the trend seems to be up and up.

Creative Destruction in the Closure World

This did not surprise me because closure manufacturers keep me well-supplied with press releases about their newest innovations and I have been impressed with the way that they have responded to criticisms and invested in improved technology giving wineries higher quality and greater choice. There has also been something of a shakeout taking place over the years, with some producers dropping out of the market, increasing the scale of the others, which further increases the return to new investment.

The race to the top is true for natural cork, as Antonio Amorim and Carlos de Jesus made sure I appreciated when I met with them in Porto last year. Natural cork producers made a terrible mistake when they did not recognize problems in past years, and they paid a high price in lost market share as a result, Amorim told me.

But better consistency, higher technical quality and strong consumer acceptance makes natural cork a competitor in every market, he said. And of course better natural corks force the other closure makers to raise their game, too. Winemakers and wine consumers certainly gain.

If there’s one area where cork closures would seem to have an unavoidable disadvantage over screw-caps, however, it would be convenience. Screw caps are just easier to handle and, with rising technical quality, that would seem to give it a big advantage in some markets at least. Even wine guru Hugh Johnson thinks so. His May 2015 column in Decanter magazine proclaimed that “I am faintly irritated now when I come to open a bottle of wine and find I need a corkscrew.” Gosh! The screw-cap is “incomparably better” than natural cork, he says.

Do the Twist — Like This!

Well, Amorim doesn’t want to lose Hugh Johnson’s business (or anyone else’s) so last year they released a screw-cork closure called Helix. That’s right — screw-cork (see the image above). The cork and specially-made bottle are designed so that the cork screws into (and out of) the bottle slick as can be.

Screw-cork? Amazing.Probably not as important in the grand scheme of things as the technical improvements in cork production at Amorim, but still a great example of how innovation occurs even in centuries-old industries like cork closures. Is this an example of Taber’s idea that unfettered competition is a driving force for for good? When it comes to closures, it sure seems to be true. Here’s to the race to the top!

Wine’s Future: It’s in the Bag (in the Box)

October 4, 2009 By Mike Veseth in cork vs screwcap, restaurant wine, sustainability, wine bargains, wine brands, wine research, wine spectator 16 Comments

One of my favorite globalization books is The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger by Marc Levinson. It is the story of how the invention of the standard shipping container (those 20-foot steel boxes you see on ships, rail cars and truck beds) made international trade much cheaper, more efficient and more secure. Now it looks like another kind of box is about to shake up the wine world.

Cheap and Nasty

I’m talking about box wines or bag-in-box (BIB) wines (the Australians call them cask wines) that feature an airtight wine-filled plastic bladder inside a cardboard box. You use a built-in spigot to get to the wine. They can be found on the bottom shelf of the wine wall and behind the bar and out of sight at your local restaurant. They come in several sizes — 3 liter and 5 liter containers are the most common.

Box wines have a bad reputation. They first appeared in the 1970s and were filled with generic bulk wines. They were one step down from the popular 1.5 liter “magnum” bottles of “Burgundy,” “Chabils” and the notorious “Rhine” wine. Box wine was cheap, nasty stuff that acquired a frequently deserved bad reputation.

[Re]-Thinking Inside the Box

It’s time to reconsider box wine. Screw caps had a bad reputation, too, until quite recently. We associated them with low grade swill until fine wines appeared under screw cap (the New Zealand producers were in the vanguard) and we began to appreciate that that screw caps have many advantages. Now screw caps are actually associated with quality for some types of wine, especially youthful whites, and no one expects to pay less or get less because of the screw-top closure.

The technology of box wine is very solid. The airtight bladder is a neutral container that is well suited to holding wine for relatively short periods of time. (Don’t cellar box wine — consume within a year of production — check out the “drink by” date on the box.) The bladder and spigot do in fact protect the wine from oxygen in the short run, so it will last longer once opened (especially if the box is stored in the fridge) than similar leftover wine in bottles.

Bladders are so good at the particular thing that they do that they have become an industry standard technology for bulk imported wines, which are shipped in huge bladders inside steel shipping containers (big bag in big box) and then bottled in the import market. So you may already be drinking box wine and not know it.

The Box Also Rises

The most recent Nielsen retail wine sales figures (reported in the October 2009 issues of Wine Business Monthly) suggest that box wine sales are growing. Wine sold in 3, 4 and 5 liter containers (most of it is box wine, I think) accounts for just under 10 percent of US supermarket wine sales, according to the Nielsen data (compared to 65% for standard bottles with the remainder in 1.5 liter and other formats). Sales are rising in this category, with 3 liter packages up 8.7% in the last year on a dollar basis, for example, and 5 liter packages are up 9.3% by value.

The total market for box wines rises if we include on-premises sales. Recent data (see previous posts) indicate that box wines (served to customers in carafes and by the glass) are strong sellers in casual dining establishments.

The rise of box wine is part of the trading down effect, clearly, since most box wines fall into the two price categories that are experiencing the highest growth. Sales of wines that are less than $3 per 750ml bottle equivalent have risen 7.1 percent according to Nielsen and by 10% for wines between $3 and $5.99. Supermarket sales of $20+ wines, on the other hand, have fallen by 3.4%.

Nasty, Brutish and Short?

Does this mean that Americans have traded down all the way to the bottom, back to the nasty box wines of the 1970s? The answer, incredibly, is no. Or at least not necessarily, according to the October 15 issue of Wine Spectator. You can’t miss this issue on the newsstand — it features a cover story on “500 Values for $20 or Less” and includes a set of box wine reviews that make interesting reading.

Wine Spectator purchased 39 box wines in packages that ranged from 1 liter to 5 liters. Twenty seven wines were rated as “good” (a score of 80-84) and ten “very good” (85-89). The names of the 2 wines that scored below 80 were not reported.

The top box wine, going by the rating numbers, is a white: Wine Cube California Chardonnay, which sells in Target Stores for $17 per 3 liter box, which is $4.25 per standard bottle equivalent. It earned a very respectable 88 points. Wine Cube is a partnership between Target and Trinchero, the maker of a wide range of wines including Sutter Home.

The best red wine (at 87 points) is the Black Box Cabernet Sauvignon Paso Robles 2006, which costs $20 for 3 liters or $5 per standard bottle equivalent. Black Box is a widely distributed Constellation Brands product.

Good and Cheap?

Some box wine, apparently, is both pretty good and pretty cheap. Perhaps just to show that they really do rate wines blind, Wine Spectator gave a pretty good 84-point score to a non-vintage Carlo Rossi Cabernet Sauvignon California “Reserve” wine. Five liters for $13, in case you are interested, That’s $1.97 per standard bottle equivalent.

How can decent wine be this cheap? One answer, of course, is that you can choose to make the wine itself less expensive by economizing in the cellar in many ways (less oak or none at all for red wines, for example). But to a considerable degree the box itself is responsible for the savings.

The bag in box container costs less than $1, according to the Wine Spectator article, which automatically saves $4 to $8 compared with a similar quantity of wine in standard glass bottles and the box they come in. Shipping costs are also less since the boxes weigh much less than glass bottles for the same quantity of wine and are less likely to be damaged in transit. There are environmental benefits too, especially in areas where glass bottle recycling is problematic because the sour economy has undermined the market for recycled glass.

Is box wine the future of wine? No. The wine market is too complex to be dominated by any single trend. But with better wine in better boxes (and with consumers embracing a more relaxed idea of wine) box wine deserves to play a bigger role in the future of wine. Another triumph for The Box!

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November 1, 2009: I was recently interviewed about box wines by Simon Morton of Radio New Zealand’s This Way Up . Click on the link to listen to the interview.

Decanter’s Wine Power List

July 14, 2009 By Mike Veseth in British wine market, Constellation Brands, cork vs screwcap, Costco, critics, decanter, Economic impact, EU wine reforms, globalization, Tesco, wine brands, wine critics, wine distibution, wine magazines, wine markets, wine ratings Leave a comment

Decanter, the self-proclaimed “World’s Best Wine Magazine,” takes its rankings very seriously. Wine rankings, of course, and, in the July 2009 issue, Power rankings. Who are the most powerful people in the world of wine and what does the power list tell us? Let’s see if we can find the message in this bottle.

The Power List

The names on the power list are very interesting but the story that they tell about wine today is perhaps more important. Here are the first ten (top ten) people on the list.

Richard Sands, USA, Chairman, Constellation Brands
Robert Parker, USA, wine critic
Mariann Fischer Boel, Denmark, EU Commissioner for Agriculture
Mel Dick, USA, Southern Wine & Spirits (wine distributor)
Annette Alvarez-Peters, USA, Costco wine director
Dan Jago, UK, Tesco wine director
Jean-Christophe Deslarzes, Canada, President of Alcan Packaging
Jancis Robinson, UK, wine critic, author and journalist
Nicolas Sarkozy, France, President of France
Pierre Pringuet, France, Pernod Ricard

Since Decanter is a British magazine with very small US distribution you might be surprised that three of the top ten positions (and both of the top spots) are held my Americans, but don’t be. Constellation Brands is the largest wine company in the world and accounts for one out of eight bottles of wine sold in the UK. And Robert Parker is best known for his ratings of French wine, not Napa bottlings, which is important to British buyers and merchants. The presence of Sands and Parker at the top of the list does not reflect any sort of US-centrism, just the realities of the global marketplace. It really is a global list. Or at least, like those famous New Yorker cover illustrations, the globe as seen from London.

I won’t list the second ten names (out of 50 in total), but the I think they illustrate the global reach of the wine market today: America, China, Chile, Australia, Spain and so on. Even India, an emerging wine market, makes the top 50 ranking.

The list is complete and up-to-date (Gary Vaynerchuck, the US internet wine guru, shows up at number #40), but there are some interesting gaps. Fred Franzia, the godfather of Two Buck Chuck, is nowhere to be found, for example, despite his obvious influence on the US market, while Judy Leissner of Grace Vineyard in China, who perhaps represents the future of Chinese fine wine, makes the “Ones to Watch” list.

No wine economists make the list, alas. Greg Jones, the respected Southern Oregon University wine climatologist, is the only professor (#33). Maybe next year …

The Story

It is fun to see who makes the list and who doesn’t (why Jancis and not Oz?), but the ranking is more interesting if you strip out the personalities and consider what market forces they represent. Herewith my version of this story.

The world of wine is very unsettled. Although wine is one of the most fragmented global industries (much less concentrated than beer or spirits, for example), size matters more and more as consolidation continues. [Hence the power of Constellation Brands, Pernod Ricard and Southern Wine & Spirits.] Reputation matters, of course [Parker and Robinson], but the world is changing and everything is up for grabs from how and where wine is sold [Costco and Tesco] to how the bottle is sealed [Alcan].

Although change is generally associated with New World wine, this is no longer the case. The biggest threats to “business as usual” for Old World wine come from inside the European Union itself. On one hand, the new EU wine regime [Mariann Fischer Boel] will pressure Old World wine to compete with the New World head-on and without continuing EU support. On the other hand we have an unexpected prohibitionist movement [symbolized by Sarkozy] that seeks to regulate wine like the Americans do (even as some parts of America are changing) — as a dangerous controlled substance. It is thus imperative for Old World wine to master the tricks of the New World industry — tricks that Constellation and Southern and Costco symbolize.

These changes take place, of course within the context of the expanding global market, global climate change and a continuing global economic crisis (that’s where a wine economist would have been a useful inclusion).

I won’t pretend that the Decanter Power List is a scientific ranking (Decanter doesn’t claim this in any case), but it is an interesting peek into how wine insiders view their industry. I’ll be curious to see how the names and the story lines change when the next Power List appears.

No Wine Before Its Time

February 10, 2009 By Mike Veseth in cork vs screwcap, Wall Street Journal, wine critics, wine markets 1 Comment

“We will sell no wine before its time.” That was the slogan of a famous Paul Masson winery advertising campaign. (See note at the end of this post.) But a lot of wine is sold before it has reached its peak.

What Time is It?

And that’s a problem for both consumers and producers. Immature wine is sort of like the flat-pack furniture they sell at Ikea — all the pieces are there, it is up to the consumer to take them home and complete assembly. Wine buyers are supposed to take immature but age-worthy wine home, stash it under the stairs or in a climate-controlled wine storage appliance, and remember to bring it out when the time is right.

(By the way, if you have any of the pry-top Paul Masson carafes pictured here aging under the stairs … well, you might not want to wait any longer to pop the lid …)

Unfortunately there are a lot of differences between fine wine and a flat-pack antique finish Ikea Aspelund bedside table. I suspect that most people knock together their Ikea products soon after purchase, so they know pretty quickly if all the pieces fit. Disappointment, if there is any, is soon realized and resolved.

Wine is a different situation completely. You can’t tell if a bottle of wine is sound (uncorked, untainted) just be looking at it. Every type of closure system has its flaws, as George Taber has explained. So aging wine is a kind of crap shoot. Even a professional can’t be sure that the wine cellar is full of good wine getting better or bad wine fading to oblivion. Each bottle is a mystery until opened.

Now maybe you know all about aging wine, but I’m really an amateur and I have no confidence in my ability to store wine properly and pull it from the cellar at its peak. I am not at all sure that I can tell when “it’s time.” More often than not I find that I have waited too long to open those “special bottles.”

Not that this always matters: most wine produced in the world today isn’t really designed with cellar aging in mind.

Time is Money

Why do wineries sell immature wine and leave it to amateurs like me to age it? Why don’t they store it properly and release it at or near its peak? The answer, of course, is that time is money. Few wineries can completely ignore the economic cost of holding their wines in bottle or barrel until they are mature. The incentive to market what I have called Chateau Cash Flow is very strong.

The result is that most wineries intentionally produce wines that are ready to drink when still quite young. I find nothing wrong with this when done well. Others sell their wine before its time and cross their fingers — hoping (often in vain) that consumers will delay consumption until the wine has more fully matured.

One consequence of this practice is the frequent disappointment consumers experience with fine wines, especially in restaurants. Some restaurants can afford to age rare and unusual wines and serve them at their peak. Most, however, find it necessary to sell them quickly, to produce that cash flow, with sometimes unfortunate results. It isn’t that these wines are bad, it is only that they are expensive (because of restaurant mark-ups) and often disappointing (because they years away from full maturity).

The cost of money is often the root of the problem — wineries and restaurants find it too expensive to properly age fine wines. Money is nearly free today, however — if you can get it. It is the limited availability of credit that is the current constraint. I suspect that we will see lots of product pushed into the wine value chain, using cash flow to compensate for the lack of available credit. This fact promises opportunity for the few and likely disappointment for the many.

Open That Bottle Night

Amateurs like me tend to be too patient (imagine that!) and let fine wine sit in the cellar too long. How can we avoid the curse of letting our best wines creep over the hill? Dorothy J. Gaiter and John Brecher, the wine critics at the Wall Street Journal, have an answer. For the last ten years they have been promoting Open That Bottle Night (it’s on Saturday 28 February this year).

OTBN is an excuse to break out those special bottles and drink them before they fade away. It isn’t a systematic solution to the problem of time and money, but it is a reasonable personal response. I encourage my readers to celebrate OTBN this year. Wineries may sell wine before its time — and many of us may drink them either way too soon or well past their prime — but there is no reason not to try to break this pattern.

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Here is one of the original Paul Masson “sell no wine” commercials, featuring celebrity spokesman Orson Wells.

Here is an out-take, with an obviously inebriated Wells reading the lines.

Asking the Right Questions about Wine

December 19, 2008 By Mike Veseth in biodynamic wine, brands, Changyu, China wine, climate change, cork vs screwcap, wine auctions, wine brands, wine markets, wine price, wine research 3 Comments

It’s finals week at the University of Puget Sound, so I’m thinking about the question, what wine goes best with final exams and term papers? A sweet wine, to capture the sweet taste of success? Some bubbles to celebrate finishing one set of tasks and moving on? Or maybe a bitter sweet wine, because moving on inevitably means leaving some people and relationships behind? Hard to figure how best to match a wine with all these emotions. It’s a difficult question.

Dump Bucket Drills

But I know one wine that doesn’t match up very well. My class on “The Idea of Wine” organized an informal tasting on Monday to celebrate finishing their term papers. The main project was a blind tasting of inexpensive (some were very inexpensive) Merlots. I was impressed with the students’ serious efforts to evaluate and score the wine and their recently acquired (and, for college students, somewhat unnatural) propensity to use the dump bucket.

We tasted other wines including a Chinese wine that Brian West personally hauled back from Beijing a few years ago. It was a 1999 Changyu Cabernet Sauvignon. Changyu is China’s oldest winery and a good example of a mid-market Chinese wine (I wrote about Changyu and the Chinese wine industry in The China Wine Syndrome).

I found a video review of this wine on the web (click here to view it, but be forewarned that there is some harsh language used by the reviewer) that described the wine as being all about ashtray and coffee ground flavors with aromas of urinal crust. Hard to imagine. Until you taste it, that is. The description is right on the money.

I’ve read many optimistic reports on the Chinese wine industry, mostly based on high potential production volumes and not so much on quality. The quality wasn’t there in 1999, based on this wine, but there is reason to believe that things are changing. I sure hope they are! The dump bucket got good use on this one.

Hard Heads, Soft Hearts

I’m reading my students’ final papers now – they are quite good, by the way – and I thought you might be interested in their topics. I gave them great freedom to choose topics that interested them or related to their academic majors. You can find a list of the paper titles at the end of this post.

Most people think education is about learning the right answers, and this is certainly important, but I think the more valuable skill is learning to ask the right questions, and this is true about wine. I was impressed by the creativity of the questions my students asked.

One student, a Finance major, asked why Treasury bill auctions and wine auctions have different structures and what the impacts might be? A very interesting theoretical treatment. Another student did fieldwork in three wine retailers to try to understand the actions and interactions of wine buyers and wine sellers. The result was a revealing first person account of wine consumer behavior. An economics student who grew up in Napa Valley examined issues relating to migrant labor there, combining economic theory, empirical data and personal observation very effectively.

All the papers were very interesting. My favorite title: “How corks are being screwed over” (an analysis of the cork versus screw cap debate). Imagine, I get paid to read this!

Looking at the list of paper titles, I’m struck by how many students were drawn to issues of sustainable or ethical production and consumption: organic wine, climate change, biodynamic wine, fair trade wine and so forth. In general their analysis was thorough, pointed and objective. They have “soft hearts” and “hard heads,” as Princeton Economist Alan Blinder would say. They care about social issues, but think about them critically. Blinder says (and I agree) that’s better than the other possible combinations: soft head/hard heart, soft heart/soft head or hard head and heart.

Comparative analysis of changes in Treasury auctions versus global wine auctions
An ethnographic study of wine consumer trends
Hispanic workers in California’s wine industry
Climate Change: what it means for Spanish vineyards.
Climate change and the wine industry
TetraPaks and cans: the alternative packaging of wine
Movement from niche markets to mainstream: prospects and challenges for ethical consumption in the wine market
The terroir of equality: fair trade wine
Organic wine: the beginning of redefining fine wine
Oak in Wine: an exploration into differences.
Green wine: ideas and details of sustainable wine
Wine’s historical and modern role in religion
Of vines and witchcraft: biodynamic wine
India’s wine prospects
Old world crash: wine’s changing face in the globalized market
What makes that bottle so expensive?
How corks are being screwed over
Aging wines: from barrels to bottles
Drowning in the wine lake
Wine brands: friend or foe?
Wine tourism and economic development
Bordeaux versus Burgundy: why the rivalry matters
Transitioning wine industries: assessing development strategies in the wine industry

The French Have a Word For It

December 12, 2008 By Mike Veseth in cork vs screwcap, French Rabbit, wine awards, wine markets Leave a comment

Old Europe is afraid of change, afraid to take chances. That’s what President Bush is supposed to have said a few years ago in a conversation almost certainly not about wine. Why the French, he said, they don’t even have a word for entrepreneur!

Innovator of the Year

But apparently they do. Or at least that is the impression of the editors of Wine Enthusiast magazine. They recently announced the winners of their Wine Star 2008 awards and the Innovator of the Year is French, Jean-Charles Boisset, President of Boisset Family Estates. The citation reads:

Tetra-Paks, aluminum and PET plastic bottles are all part of Boisset Family Estate’s drive to reduce their carbon footprint. The launch this November of Mommessin and Bouchard Aîné Beaujolais Nouveau in PET bottles has not only created a stir in the traditional wine industry, but has also continued a serious commitment. Jean-Charles Boisset, president of Boisset Family Estates, whose headquarters are in Nuits-Saint-Georges, Burgundy, France, launched Tetra-Paks of French Rabbit wine in 2005. Infinitely recyclable, the aluminum packs weigh less than half the weight of a conventional bottle. For his contribution to the environment through his company’s innovative use of packaging, Jean-Charles Boisset has been awarded Wine Enthusiast’s first Wine Star Award for Innovation.

Boisset Family Estates is a multinational wine company with roots in Burgundy and interests in Italy (Batasiolo) and California (several properties including DeLoach and Lyeth). I follow Boisset because it seems to me that they are real entrepreneurs — moving in many directions at once, reflecting the many forces at work in wine world today.

The Wine Star 2008 award highlights sustainability-driven innovations, for example, but Boisset is also moving seriously toward biodynamic viticulture (at DeLoach, for example) and experimenting with new marketing models. It’s easy to be cynical about wine innovations, but it is pretty clear that new ideas can prevail in the wine market if they are very good ideas. And if the time is right. This is the lesson the screw cap’s success. Maybe more environmentally friendly “bottles” will be next.

The 70-70-70 Rule

Jean-Charles Boisset argues that using traditional glass containers with cork closures makes little sense — either environmentally or economically — for most of the wine sold today. He observes that at least 70 percent of wine retails for $12-$10 or less (probably much more than 70 percent, I suspect) and 70 percent is consumed within three hours of purchase. Finally, 70 percent of the production cost of these low price wines is in the packaging, not the wine itself.

These wines are quotidian pleasures, purchased for quick consumption. Heavy, expensive “traditional” packaging makes little sense for 70-70-70 wines. Producers, consumers and their environment would all likely benefit if these wines were packaged and sold in ways that reflect their real consumer product function, not a false elite identity. Wine will have come of age, some argue, when it no longer needs the borrowed prestige of the heavy bottle or a faux-tradition label.

False Dichotomy

What I most appreciate about Boisset is the fact that it is difficult to put the company in a box. Is it an Old World winery? Well, yes of course, based on geography. Is it New World? Well, yes but not just because it owns properties in California. Its marketing innovations have a distinct New World flavor and its entrepreneurial spirit would make Adam Smith smile.

There is nothing particular Old World about quality and terroir or New World about innovation. It’s all part of the blend and always has been — even in France. No wonder they have a word for it.

[Note: In case you missed the irony of the opening paragraph, entrepreneur is a French term.]

Screwed not Corked

July 26, 2008 By Mike Veseth in cork vs screwcap, decanter, French Rabbit, sustainability, wine markets 5 Comments

“The rumors of my death” Mark Twain wrote, “are exaggerated.” I wonder if the same is true about wine bottles and the corks that seal them?

Screwed!

Fine wine comes in a bottle and is sealed with a cork – this long been a given of the world of wine, but things are changing very rapidly. I wonder what the Wine Wall at your supermarket will look like in ten or fifteen years? Will there still be bottles and corks? Or is the death of wine tradition over-stated.

Corks seem headed for the endangered species list for all but the most precious age-worthy wines. Non-cork closures including screwcaps were nearly invisible just 10 years ago (with perhaps 1 percent of the bottled wine market), but this is changing quickly. A report in Meininger’s Wine Business Monthly suggests that about 35 percent of wine bottles– over 2.5 billion units — had non-cork closures in 2007, including about 90 percent of New Zealand’s wine production.

Screwcaps have long been associated with inexpensive wine, but this too is changing. The August 2008 issue of Decanter magazine features an article titled “50 Reasons to Love Screwcaps.” Ten wine critics including Steven Spurrier and Linda Murphy recommend wines for summer drinking and comment on both the products and their screw tops. “The screwcap closure is one of the best things to have happened to wine in my lifetime,” according to Spurrier (the organizer of the famous Judgement of Paris tasting.

“Given the choice of the same wine with screwcap or a cork, I’d choose the screwcap every time,” writes Joanna Simon, The Sunday Times wine writer. It’s a pretty enthusiastic endorsement, especially coming from Decanter. Economics is behind the move away from cork. Screwcaps are not remarkably cheaper than cork, but they avoid the loss of good wine to cork taint, generally estimated to affect about three percent of cork-closed wines. That’s a cost that winemakers would like to avoid. But it can get much worse than three percent in individual cases George Taber wrote about a much worse situation in his great book To Cork or Not to Cork. A shipment of tainted cork almost ruined the David Bruce winery some years ago and destroyed forever the reputation of its Chardonnay wines. It had to rebuild (successfully) as a Pinot Noir maker.

Big Bag, Big Box

Don’t throw away your corkscrews yet – bottle and cork won’t disappear over night. But the screwcap is replacing cork and the familiar glass bottle, well it’s under attack, too. As much as 30 percent of the 20 billion liters of wine sold this year will come in a non-bottle package – a bag-in-box “cask,” TetraPak “juice box” or something else. Economics is driving this change, as well.

Bag-in-box casks are cheap and efficient, and so we have come to expect very inexpesive wines to be sold this way, in 3-liter or 5-liter containers. Think Franzia and Peter Vella. The bag-in-box system is even used in international wine trade, but on a bigger scale. Bulk wine shipments increasingly arrive in 20-foot shipping containers that hold 24,000 liters of wine in a single seamless bladder called a Flexitank. Wow, that’s really bag in box!

But it’s not just the cost of the container itself that is at work here. Bottles are heavy to ship and costly to recycle. Rising transportation costs and increasing concern about carbon footprint are pushing the industry to look very closely at alternative packaging systems.

A French company is leading the way on this front, and I am not sure whether to be surprised or not. France is generally associated with resistance to innovation and change – picture the rebel José Bové torching a McDonalds in protest of its encroachment on French life and cuisine. On the other hand the France is home to many of the most dynamic multinational corporations – including two of the world’s five largest wine companies – and the country has a huge interest in the wine business, given that it is still the largest producer. So perhaps it just makes sense that they are innovators in this field.

What’s French for Entrepreneur?

The producer I’m talking about is Boisset Family Estates, which makes fine wines such as Louis Bernard in France and DeLoach here in the United States. Boisset seems to be pushing the envelope, selling a €150 screwcapped Chambertin as well as affordable TetraPak French Rabbit wines. I wrote about French Rabbit in my earlier post, Red, White and Green All Over.

I think we will be seeing more and more wine in non-traditional packages — screwcaps, casks, plastic bottles and so forth. Cost, quality and environmental concerns are all pointing in the same direction for wines that are sold for everyday consumption. Hmmm. Maybe the days of the wine cork really are numbered. Great — my cork collection may finally be worth something!

Put a Cork in It?

October 7, 2007 By Mike Veseth in book reviews, cork vs screwcap 2 Comments

To Cork or Not to Cork: Tradition, Romance, Science and the Battle for the Wine Bottle by George M. Taber. Simon & Schuster, 2007.

Former Time writer and editor George Taber was the only reporter present at the famous 1976 Paris wine tasting where California wines showed that they could compete with the great wines of France. He wrote about this event and its implications is his wonderful 2005 book The Judgment of Paris, which was named best wine book of the year by Decanter magazine.

The 1976 tasting is one of those defining moments, when a great many forces, issues and personalities came together to change the way we think about the world of wine,. This book is about another defining moment, but a completely quotidian one: the moment when you open the bottle. It’s something we do every day. That moment also connects us with some powerful personalities and a complex set of scientific, economic and psychological issues, which Taber explains in a way that makes this a wine-nerd book that will be read and enjoyed by a wider audience than just people like you and me. (Admit it, you must be a bit of a wine nerd to be reading this blog.)

There are all sorts of ways to keep wine in and air out of a container: natural corks, composite cork stoppers, screw caps with tin liners, screw caps with plastic liners, plastic corks of many types, elegant glass stoppers and practical soda pop crown caps. And this is only for wine in glass bottles: you can also package wine in aluminum cans, juice boxes, plastic soda bottles and bag-in-box “casks.” Sealing the 20 billion bottles of wine that will be produced this year is a $4 billion business.

I learned a lot from this book. There is no best way to seal wine, there are only better ways under different circumstances with different trade-offs. Natural cork-sealed wines age and develop in the bottle, can be “corked” or suffer from TCA contamination. Plastic corks usually won’t contaminate the wine, but they don’t always seal tightly over time, so the wine can be oxidized after a couple of years. Screw caps are TCA-free, but they, can seal too tightly, with the result that the wine can suffer sulfur reduction, which gives it a rubbery or rotten egg smell, and screw cap wine can fail to develop as it ages. No matter what stopper winemakers use, they can never be sure that the wine they put in will be the wine that you pour out.

You might think that global wine market competition would have produced a “best practice” solution for wine closures, but the market is too complicated and diverse for that. The science may be universal, but the people (both producers and consumers the the middlemen in between) have their own quirks. In France, for example, it is hard to sell a screw top wine, at least for now, because of the strong attachment to tradition. I can appreciate this. I have friends who get great pleasure from the ritual use of elaborate corkscrews. Screwcaps leave them cold.

In Great Britain, on the other hand, it is apparently getting somewhat harder to find a natural cork in a popularly-priced wine because the supermarket buyers, who wield such market power, are strongly biased in favor of plastic and screw top closures. Like many in the business, they have been burned too many times by problems they associate with bad corks. Here in the United States there is some evidence of the market bifurcating, with plastic and screw tops for wines bought for early consumption (under $20) and high quality corks for expensive and age-worthy bottles.

Taber ends his book with an indirect commentary on wine globalization, which is worth noting here given this blog’s theme. Finding a solution to the wine closure dilemma is a worldwide problem and the global market competition is forcing the stopper makers to innovate and make better and better closures and forcing winemakers to get better, too, since they can no longer automatically blame any flaws in their wines on bad corks. “Unfettered competition,” he writes, “remains a powerful driving force for good.”

I think Taber is right but for now I’m just standing here in the basement, looking with suspicion at the wine in my little cellar, trying to guess what is going on beneath the lids. Having read Taber’s book, I now know enough to be anxious about each and every bottle!