Wine & Coronavirus: Assessing the Risks

March 10, 2020 By Mike Veseth in China wine, coronavirus, health, recession, wine, wine markets 14 Comments

Concern about the health impacts and economic effects of the novel coronavirus continues to grow. Although the health impacts are obviously most important, since lives are at risk, it is natural to also be concerned about how this potential pandemic might affect the global economy in general and the wine industry in particular.

I have been following the situation closely focusing for personal reasons on the U.S. (we live about 40 miles from the coronavirus infection epicenter near Seattle) and northern Italy (we lived in Bologna when I taught at the Johns Hopkins center there).

The Italian experience so far is noteworthy: some whole towns were initially locked down to contain the virus or slow its transmission, all schools and universities closed as a precautionary measure, and scenes of empty piazzas and tourist thoroughfares in Venice and Milan. Large areas of northern Italy, including Lombardy and its capital Milan, were later put under quarantine, which has now been extended to the whole country.

Closer to home, some schools and colleges, including the University of Washington campuses, have canceled physical classes in favor of on-line instruction. Several major employers, including Amazon, are encouraging workers to tele-commute if possible. Concern is likely to rise as additional testing kits arrive and the true picture of the epidemic emerges.

I’ve also been making some notes on wine and the coronavirus in order to try to think more clearly about the potential economic risks to the industry. I thought I would share them here even though they are necessarily incomplete and change daily — just like everything else about the coronavirus.

Here is a quick analysis of several areas of concern, starting with the most general and then narrowing. Use the comments section below to point out issues I have neglected or gotten wrong.

Recession Risk

Japan, Italy, and Germany were already teetering on the edge of recessions before the coronavirus outbreak, so it is not unreasonable to think that they will be sucked into economic downturn, potentially taking other countries with them through the sort of economic contagion that face masks and hand sanitizer are powerless to control. This is a serious problem since there are also worries about slowing economic growth in China, the United States, and the United Kingdom. Chinese exports were down 17% due to supply-side factors for the most recent period, which bodes ill for their economic situation.

Central banks have pledged to counter the economic impacts of coronavirus although they have so far stopped short of pledging coordinated action, which would be most effective. The U.S. Federal Reserve cut its key interest rate target by a half percentage point last week, but the financial market response was weak in part because this action had already been factored into investor expectations according to some observers. In any case interest rates are a blunt tool when faced with a specific problem such as coronavirus.

With interest rates already so low (and in some cases negative), the concern is that preemptive central bank strikes against coronavirus will use up all the ammunition left to deal with recession and economic contagion. The risk of a global recession, probably smaller than the global financial crisis of a decade ago and certainly different from it, is thus magnified by coronavirus.

The possibility of a recession with its impacts on income and employment both broadly and in the wine industry is thus a very serious concern. Recession risk: medium to high and probably rising.

Supply Chain Disruption

One impact of coronavirus has been to make us more aware of the inherent risks in international and global supply chains and associated just-in-time production strategies. Bottlenecks anywhere along the chain can potentially impact final production.

Some factories in China were either closed because of the coronavirus threat or slow to re-open after the Lunar New Year holiday, which has created parts shortages and headaches in many industries as well as reducing international trade flows. International shipping schedules and container availability have both been disrupted on some routes.

Wine is certainly affected by supply chain issues related to the coronavirus, although not as much as some other industries such as automobiles and electronics. Glass imports from China are one important concern and I am sure there are others. Wine exports, which are of growing importance because of the domestic surplus, may also be disrupted.

How have supply chain issues affected your wine business? Please leave comments below. Current events seem likely to cause many firms to reconsider their supply chain strategies, shifting closer to home in some cases and relying less on “just in time” supplies in others.

Supply chain disruption risk: significant and rising as the virus spreads.

Travel and Tourism

Travel and tourism are down dramatically in many regions as people avoid airports and crowded situations in general where contagion might take place. Soccer matches have been cancelled or postponed in Italy, for example, and a few games played to empty stadiums. It is unclear how this summer’s Olympic Games in Japan might be affected.

Wine tourism is likely to be a victim of the general decline in domestic and international travel, although it is too soon to guess how great the impact will be on tasting room visits and sales. Direct sales to visitors have become a very important economic factor for many U.S. wineries, so any decrease in wine-related travel would be important.

Airlines and cruise ships are also good wine markets for those who can secure their business and the sudden decline in flying and interest in cruising will necessarily affect those sales, too, as well as threaten the financial health of the air and cruise businesses themselves.

Business travel is affected along with vacation trips. Several large international wine gatherings have been canceled or postponed including ProWien in Germany, for example, and Taste Washington here in the U.S. Many people are asking themselves “is this trip really necessary?” when health risks are involved. The cancelled meetings are expensive both in terms of direct costs and potential lost business. The impacts continue to spread.

Travel- and tourism-related risks: High.

On-Trade and Off-Trade Impacts

China is one of the most important wine markets, especially for French and Australian wineries, and its wine demand has fallen significantly in recent weeks according to early reports as consumers have hesitated to gather in restaurants and other venues out of concern for the coronavirus. How long this situation will last and how much wine demand will rebound when the health scare has passed are open questions.

Restaurant wine sales are important outside China, too, of course, and so this is an important market to watch. News reports suggest that those who are concerned about contagion sometimes turn to home delivery of meals or groceries in order to avoid crowds. This is not advantageous for wine sales in many areas, including the U.S., where wine under-performs in home delivery sales relative to other products.

Wine market risks: Significant with a good deal of uncertainty.

The Bottom Line

The bottom line so far is that the coronavirus has many effects that are detrimental to the economy in general and the economy of wine in particular. Anyone in the wine business would be wise to ask themselves a series of questions that starts with “how well prepared is my company for a recession?” and continues down the list to supply chain disruptions, swings in consumer demand, altered trade patterns, tasting room strategies and policies, and so on. It is already too late to anticipate some impacts, but not too soon to think through others.

That said, the most important questions are probably the ones I haven’t asked here. The research I did in my other life as an international economics professor probing financial crises suggests that contagion doesn’t always stay in its lane.

We saw this on Monday when coronavirus-driven falling demand for petroleum sparked a price war that drove oil prices down dramatically. Some oil investors dumped equity holdings to cover their oil losses, sparking a global sell-off there, too. Corporate junk bonds — and there is a mountain of them out there — could be next in line. If they start to fall central banks will need all the resources they can muster to keep liquidity flowing.

Sometimes the Best Wine is a (Non-Alcoholic) Beer

February 25, 2020 By Mike Veseth in alcohol, health, wine, wine research 6 Comments

win “Sometimes the best wine is a beer” is the title of a chapter in my book Money, Taste, and Wine: It’s Complicated. The chapter begins with a situtation that most wine drinkers have experienced. Stranded at a charity reception with only tasteless donated wine to drink, I long for the craft beer that others seem to be enjoying so much.

At really low price points (and sometimes at higher price levels, too), I am afraid that the best wine probably is a beer, at least if you care what you’re drinking.

Recently I’ve had an opportunity to explore another situation where wine fares poorly compared to beer: when you need to avoid alcohol for one reason or another.

Non-alcoholic wines are available but they are not really much of a thing here in the U.S. — at least not yet — although they are getting more attention in Europe. Sue and I learned about Matarromera Group’s innovative “Win” alcohol-free wines during our visit to Spain, for example. Matarrommera sees potential in the non-alcohlic wine market and has made significant investment in production and marketing.

Non-alcoholic wine is a narrow category here in the U.S. I am not sure I would even think to ask for non-alcoholic wine at a bar or restaurant. On-trade people — what is your experience? Do customers request non-alcoholic wine?

Non-Alcoholic Choices Everywhere

But beer is another matter. Every bar and restaurant I surveyed during my dry week offered a non-alcoholic beer option — most at the 0.5 % abv level that qualifies as non-alcoholic (that’s about the same abv as orange juice, for example). And some had 0.0 % options, too. A Whole Foods store we visited had seven different choices, including two 0.0% options.

What did they taste like? Well, the first non-alcoholic beer I tried was an old school O’Douls and it was just like I remembered it. No offense, but I’d rather drink warm tap water.

But at dinner at a French restaurant one night and then an Italian place the next night I was introduced to a couple of German import brands and they were terrific, with the aroma, body and flavor of real beer. I guess the Germans take beer seriously and that attention extends to non-alcholic products.

beer

I really didn’t miss the alcohol and I appreciated the fact that, because they were priced like bottles of beer, these products were considerably less expensive than many of the by-the-glass wine offerings.

Hey Gallo!

I’d still rather have the wine, but I didn’t suffer with the non-alcoholic beers. It is clear that that the non-alcohol beverage market is growing and that some producers are making significant investments in both product development and marketing.

Is there space for a decent non-alcoholic wine in a single-serve container? Yes, I think so. But someone’s going to have to make the investment to establish the market. Hey, Gallo — why don’t you give this a try? You are already expanding your Barefoot brand to include hard selzer in cans. Why not take the next step with a non-alcoholic wine in a single serve can? Barefoot 0.0!

As the week was ending I found an affordable six-pack of Clausthaler Dry Hopped non-alcholic beer imported from Germany. Complex with a rich nose, amber-colored, made with Cascade hops, it seems ideal for a craft beer consumer who wants or needs to avoid alcohol.

And the perfect choice for those times when the best wine is an alcohol-free beer.

Wine and the Dry January Syndrome

January 7, 2020 By Mike Veseth in alcohol, health, wine 4 Comments

It is easy to dismiss Dry January (going alcohol-free for the first month of the year) along with Veganuary as typical well-intended New Year resolutions on lists that might also include pledges to quit smoking, keep a daily diary, make better use of that gym membership, and spend less time fiddling with your phone.

Resolutions are an optimistic impulse. They signal that we think we still have the ability to improve, which is important. There is also an element of penance in some resolutions. Had too much food, drink, fun, etc. over the holidays (and maybe spent too much money, too). Time to settle up.

A Toast to Your Health?

But there is more to Dry January and similar impulses these days. Health has risen in the hierarchy of needs for a growing segment of the population especially, we are told, younger people, and reducing consumption of beverage alcohol (wine, beer, spirits) is part of that movement. Young people in many countries now start drinking later than previous generations and then choose to drink less once they begin.

Slavea Chankova, health-care correspondent for the Economist newspaper, recently identified the health-driven pivot away from alcohol consumption as one of the key trends for 2020 and beyond. Drinking is going out of style, she argues. She notes that …

Big alcohol companies can see the writing on the keg. They are expanding their low- and no-alcohol offerings of beer, wine and spirits. Innovation in such drinks is booming. Many are now indistinguishable in taste from the real thing. Nearly 50 of Heineken’s brands, for example, have an alcohol-free version. In most Western countries such alternatives are still a novelty, but sales are growing fast. In Germany and the Netherlands, both early adopters, they make up about 10% of beer sales.

It’s Complicated

baxter Wine’s relationship to health is complicated and can be confusing. It seems like there are new studies every week, often with contradictory conclusions. A new book, Wine and Health: making sense of the new science and what it means for wine lovers by Richard Baxter M.D. surveys and analyzes the scientific data and makes the case for moderate wine consumption as part of a healthy, happy life. It’s an interesting and useful book that I recommend highly.

If you accept the premise that wine can be part of a healthy life, there is still the question whether people actually behave this way. An article in the Economist newspaper’s October 19, 2019 edition argues that “Alcohol firms promote moderate drinking, but it would ruin them.” The article cites research based on a study (see reference below) of British consumers in 2013 and concludes that the beverage alcohol industry in Britain is heavily dependent on unhealthy behaviors by their customers.

Drink, Drank, Drunk?

The study found that 25% of the British population consume hazardous (average 24 drink units per week) or dangerous (average 73 units per week) levels of alcohol. Together they drink 78% of total alcohol and account for 68% of revenues. Moderate drinkers (average 4 units per week within a range of 1 to 14) are 59% of the adult population, but drink just 23% of alcohol and generate 32% of revenues. (Non drinkers make up 16% of the British population according to the report.)

If all alcohol drinkers consumed at healthy moderate levels, the study concludes, the demand for beverage alcohol would fall dramatically. The data reported by the Economist does not break out wine from beer and spirits. I could be wrong, but I doubt that wine is as dependent on binge drinking and excessive consumption as beer or spirits, at least in the U.S.

Studies of the U.S. wine market, however, show that consumption is similarly concentrated in a relatively small proportion of the population. These frequent wine drinkers (who consume wine several times a month or more) are key to wine market success.

No Wine = 56% in U.S.

Wine drinkers are a minority in the U.S. A 2014 Wine Market Council study found that 35% of U.S. adults drank no alcohol and another 21% consumed alcohol, but not wine. High-frequency wine drinkers made up just 15% of the adult population. An even smaller group — 30% of the 15% of high-frequency wine drinkers — accounted for 90% of spending on $20+ wine and 40% of all purchases of $10-$20 wine.

Dry January and related health concerns are something that the U.S. wine industry needs to take seriously since its consumer base is so relatively narrow. If the small group of high-frequency wine drinkers reduces consumption for reasons of health, it will make a difference.

Obviously the point is not to promote high levels of alcohol consumption like those found in the British study, but to encourage healthy consumption patterns of wine as an element of a sustainable lifestyle, much as Wine in Moderation has done is many countries. Health is important and wine needs to address the concerns.

This isn’t the answer to the problems facing wine today, but it might be part of a strategy to make wine more relevant and appealing to today’s evolving consumer base.

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Sources for the Economist article: “Drug harms in the UK: a multicriteria decision analysis” by D. Nutt et al., The Lancet; “How dependent is the alcohol industry on heavy drinking in England?” by A. Bhattacharya et al., Addiction; Centre for Responsive Politics; NHS.

Book Review: Drinkers Guide to Healthy Living

November 6, 2014 By Mike Veseth in book reviews, health Leave a comment

Irving Fisher, one of the greatest American economists of the 20th century, was interested in both the world of money and interest and the world of health. After facing and overcoming some personal health challenges, he devoted great energy to understanding how the body functions and how best to regulate its activities to be healthy, happy and productive.

Fisher even wrote (with Eugene L. Fisk) a best-selling book — How to Live: Rules for Healthful Living Based on Modern Science — to share his insights with others. The Foreword was written by William Howard Taft. That’s a pretty strong recommendation.

Gerald D. Facciani is one of the most prominent American actuaries of his time and he seems to be interested in both the world of risk and expected value and the world of health. After facing and overcoming some personal health challenges he has devoted great energy to understanding how the body functions and how best to regulate its activities to be healthy, happy and productive.

Facciani has even written a new book — The Drinkers Guide to Healthy Living — to share his insights with others. The Foreword is written by Robert M. Parker, Jr. That’s a pretty strong recommendation here in the world of wine.

Facciani’s book, like Fisher’s, provides both a great deal of useful objective information and aims to persuade the reader to adopt a particular strategy for a healthier lifestyle based upon the evidence provided. Both are deeply rooted in personal experience (Facciani even provides his own medical test results just in case you have any doubts about the efficacy of his program).

The big difference, as you have already guessed, is that Facciani’s quest is to to live long and well and to enjoy wine in the process. Fisher, on the other hand and like many others in the Prohibitionist era (How to Live was published in 1915), put wine in a category with other unhealthy products. “The best rule for those who wish to attain the highest physical and mental efficiency,” he writes, “is total abstinence from all substances which contain poisons, including spirits, wine, beer, tobacco, many much-advertised patent drinks served at soda-water fountains, most patent medicines, and even coffee and tea.”

Facciani’s book presents a survey of the scientific research linking alcohol consumption with both health and lack of it. Since new studies seem to appear every week, this list of studies was obviously dated as soon as the book went to press, but reading through the quick summaries of scientific results is still very useful for the layman. I may not now know all there is to know about alcohol and health, but after reading this I have a better view of the landscape and appreciation of the complex issues. A good foundation for further research for the serious reader.

Much of the book is devoted to the conventional topics of diet and nutrition, exercise and wellness. Facciani sincerely wants his readers to live a good and healthy life and argues his points passionately, especially in the case of a program developed by Dr. Steven Gundry. Fisher’s scope was equally encompassing although his advice somewhat different. A century after Fisher’s book, I guess we still need help learning how to live.

I was surprised by Fisher’s book when I first encountered it years ago and although I certainly haven’t followed all of his advice over the years I must admit that some parts of it stuck. I suppose it is that economist’s way of thinking that we have in common. I have a feeling that Facciani’s book will have something of the same good effect on my life.

Concerned about wine and your health? Maybe this is the book for you.

Sniff, Swirl & Soak? Hanoi’s Healthful Red Wine Baths

June 3, 2014 By Mike Veseth in health 2 Comments

It seems like the news is full of reports about the health effects of wine consumption and, given the impact that 60 Minutes’s broadcast of “The French Paradox” segment (see below) had back in 1991, I think we need to take them seriously, both from a pure health standpoint and because of their possible economic impacts.

Heart Disease, Tooth Decay

There have been a number of recent studies that seem to contradict the finding that red wine consumption has clear health benefits — bad news for wine drinkers.

But then a Spanish-Swiss team found that red wine discourages tooth decay, which pushes the need back toward the plus side for wine.

And now this. Ali Hoover, The Wine Economist’s chief Hanoi correspondent, has discovered that wine is not just good for you when you drink it, it is even beneficial when you just sit in a tub of it.

Clinical Trials?

Or at least that’s the claim made by this Vietnamese spa, which features a red wine bath treatment along with its other services. Ali has not tried the wine bath yet, but I suppose it is just a matter of time before she takes the plunge. Check out the list of health benefits she found on the spa’s menu. Fight cancer, stroke, diabetes and high cholesterol and get long life and beautiful skin in the process. Who could resist and the price is right at about $20 for an hour’s soak.

Ali verified that the wine is the local Vang Dalat, which I suppose adds to the authenticity of the experience. No tasting notes so far, or sitting notes either. I have tried the Vang Dalat white wine, but I only drank it and didn’t sit in it. No experience with the red wine at all. I’m not sure if all the health claims are supported by scientific evidence. Early days in this important research. We’ll keep you informed! Who knows — could be the next big thing!

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Special thanks to Ali for this discovery. Readers: please comment with details if you’ve taken a wine bath!

The BRICs: Russian Wine Market Report

January 5, 2011 By Mike Veseth in BRICs, health, Russia wine market, wine fraud, wine markets 5 Comments

This is the third in a series on wine in the BRICs – Brazil, Russia, India and China.

Just Say Nyet!

The BRIC nations used to be characterized as “emerging” or “transition” economies and in the case of Russian wine these terms still apply, but in a complicated way. Russia is an important wine country (the vineyards are down south, on the Black and Caspian Seas); it produced about 7.3 million hl of wine in 2007 according to OIV statistics, which puts it just behind Chile and ahead of Portugal in the world wine league table. But the domestic industry today is just a shadow of what it was 30 years ago.

Gorbachev’s 1980s anti-alcohol campaign (which included propaganda posters like this one) targeted wine along with spirits and both production and consumption of wine declined dramatically. The Global Wine Statistical Compendium indicates that per capita wine consumption in Russia more than doubled from 6.2 liters in the early 1960s to about 15 liters in 1970s (consumption of other forms of alcohol also rose — wine makes up less than 10% of Russia’s total alcohol intake) then fell dramatically as Gorby’s program gained traction.

The Gorbachev crackdown and continuing anti-alcohol efforts pushed wine consumption down to just 3.7 liters per capita by the late 1990s. It has risen since then, up to about 7 liters per capita today. Wine is only now reemerging and is still stained by its association with spirits and alcoholism.

Good Russian Wines Exist …

I have not visited Russia nor sampled any of the wines on offer there, but the reports I’ve read make it sound like I am not missing too much. There is fine wine in Russia, including some excellent domestic products as you will see below, but the good stuff is mainly imported and very expensive. And the bad stuff is really really bad.

In fact I think the theme for this post should be that classic spaghetti western, The Good, The Bad and The Ugly. The good wines are certainly there. Jancis Robinson’s tasting notes from her 2009 visit to Russia include some tempting wines. A Myskhako Organic Red Cabernet 2008 from Kuban, Russia’s warmest wine producing region, received 16+ points out of 20 with the descriptive note, “Sweet and very wild and direct. Different! Very lively. Really wild tasting. Explosive.” Sounds like something I’d like to try.

A Fanagoria Tsimlansky Black 2007 Kuban (16 points) is “Dusty, bone dry, rather interesting flavours with good round tannins and acidity and plenty of fruit weight on the palate. Very dry finish with good confidence.” I’ll have a glass of that, please!

Along with the Bad …

Bad wines, and there are many of them, reflect Russia’s sorry wine history. It seems like every country has experienced the stage where wines are simple, sweet alcohol, sometimes to cover up faults and disguise poor wine making. These bad wines still figure prominently in Russia.

Wine for the masses sells for less than $1 a liter in many cases and it seems to be sourced in bulk from whoever offers the least cost supply. Imported bulk wines from countries as varied as Spain, Ukraine, France, Argentina, Bulgaria and Brazil are shipped to factories near Moscow and St. Petersburg where they are mixed with sugar (to appeal to local tastes) and water ( to bring the alcohol level down to 10.5 percent), packaged and sent to market.

Traditionally much of the wine came from Moldova and Georgia, but these countries are on the Russian government’s political black list and Moldovan wines are currently banned, causing great hardship for a country that is very dependent upon wine for export earnings. Low quality is the official excuse — a Russian health official says of Moldovan wine “it should be used to paint fences” – but it is hard to see how Moldovan wines can be worse than the sugar water wines I just described. I think it’s politics.

But Then it Gets Ugly

The ugly wines are frauds — not even made from grapes in some cases. This video report suggests that perhaps 30% of the bottled wine on offer in Russia is counterfeit. This is bad for consumers, of course, but particularly bad for legitimate producers whose reputations suffer from unhappy experiences with fake wine.

Thinking of trying to sell your wines in Russia? Despite all that I’ve said, many people see great potential in the Russian market. Some are just interested in the “bad wine” bulk market, but others have grander plans. Russia is a BRIC, after all, one of the fastest growing major economies in the world. Russia will host the 2014 Winter Olympics and the 2018 soccer World Cup; this international exposure may accelerate changing domestic tastes. It is a major market for Champagne, with more than a million bottles purchased annually.

The Future of Wine in Russia

As Russia’s middle class expands, a larger market for quality wines can be expected to emerge. So it is not surprising that winemakers are testing the waters and negotiating joint ventures of various sorts.

There are reasons to be cautious, however. Alcoholism is still a major concern in Russia and the expanding wine sector will have to swim against a prohibitionist tide. Tastes and social attitudes will change as better quality becomes available, but the transformation will not happen overnight.

And then there’s the “oil patch” problem. Petroleum is a major driver of the Russian economy and this introduces an element of economic instability. Exporters will need to be able to ride out falling oil price effects in order to benefit from high price periods.

Finally, there is the Russian legal and administrative systems, which make it difficult to bring wines into the country and to assure payment. The fact that some in the Russian government would prefer that the wines stay away – because of the alcoholism problem – probably contributes to this problem.

It is easy to be very pessimistic about wine in Russia given its current state and recent history, but I believe that cautious optimism is warranted for the long run. There are many cases of countries that have opened up their wine markets with positive results and perhaps Russia will follow this path. In the meantime, it looks like a difficult project.

What [Wine] Women Want

January 10, 2010 By Mike Veseth in health, popular culture, wine brands, wine research 1 Comment

I’m always interested in the questions my students ask about wine and so I look forward to their final papers, where they have pretty much free rein to pick the questions and search for answers. My Fall 2008 class seemed to be particularly concerned about what I think of as ethical questions – wine and the environment, for example, and fair trade wine. I wrote about their papers here.

My Fall 2009 group was very different in terms of their interests and “wine personalities” — and they were disproportionately female — and their choice of paper topics reflected these facts.

All in the Family

Three questions attracted more than one student’s interest and so are worth noting here. Marc and Isabelle both wrote on the future of family wineries. They are both business majors and interested in the fact that an unusual number of wineries, including very large ones like Gallo, Boisset and Yellow Tail, are family firms not private partnerships (The Wine Group) or public corporations (Constellation Brands).

Their papers examined the problems and limitations of family-owned businesses and what industry-specific advantages might account for the success of family wineries.

Wine, Women and their Health

Two students, Kelly and Libbie, decided to use their backgrounds in science to probe questions about wine and health in more detail than is typically seen. Kelly wrote on the chemistry of the “red wine paradox” while Libbie examined the question of whether pregnant women should drink wine. The conventional wisdom, of course, is that moderate wine consumption (2-3 glasses per day, especially red wine and especially with meals) provides positive health benefits except for pregnant women, who are specifically told to avoid any alcohol on government-mandated warning labels.

The research papers showed that the health issue is more complex than is generally appreciated and provided a surprising answer to the question, should expectant mothers drink wine? Although there are obvious problems with excessive alcohol consumption, research studies indicate that very modest wine consumption (in the range of one glass a couple of times a week, as I recall) can provide health benefits to both mother and baby.

It is obviously a delicate balance, however, and the fact of rising alcohol levels in wine (which I wrote about here) makes getting the balance right increasingly problematic.

What Do [Young] Women Really Want?

Two of my favorite papers were written by young women who wanted to know more about how wine companies tailor their marketing to their particular demographic. Elyse examined marketing to the so-called Millennial generation and Anna focused on wine brands designed to appeal to young women like herself. Women purchase more wine than men and young women are the key wine buyers of the future, so it makes sense that wine companies would try to target and develop this market.

Anna identified the wine brand pictured above as an example of marketing to young women. She noted that brand name, the choice of colors and several other factors made Bitch wine particularly attractive to young women wine buyers, especially those who are new to wine. Take a close look at the label and I think you’ll see what Anna is talking about. Pink label, sewing (female stereotype) imagery, Bitch rhymes with stitch, even the little hearts and crosses that suggest needlepoint.

Bitch Bitch Bitch

She called particular attention to the back label. Some wines use the back label to provide production details or tasting notes. Bitch wine, however, just says “Bitch bitch bitch bitch …” and so on.

Would Anna buy Bitch wine? Probably not. She found the packaging appealing, but the lack of more detailed information about the wine itself was a real negative. She might have tried it a few months ago, she said, but after taking our class she knew too much about wine (and asked too many questions) to respond positively to this marketing scheme even though the imagery attracted her.

Bitch seems to be wine for women who are beginners in wine, she said, and Anna isn’t a beginner any more.

The Elephant in the Room: Alcohol

December 31, 2009 By Mike Veseth in alcohol, health 2 Comments

I’m writing this post on New Year’s Eve, the night when many folks go out to celebrate, have a little too much to drink and end up “seeing pink elephants,” as the saying goes. It’s a good moment to think about alcohol in wine.

Pink Elephants

Alcohol is the [red, white or pink] elephant in the room for many wine enthusiasts. We know that wine contains alcohol and that alcohol levels having been rising in recent years (more about this later). We know that alcohol has lots of negative social and health effects. We know that anti-alcohol sentiments are rising around the world, even in France, where wine is deeply embedded in the national culture. But, like the metaphorical pachyderm, we pretend we don’t see these facts and try to ignore them.

But maybe it’s time to sober up. Wine enthusiasts have for a long time been comforted by the French Paradox finding that moderate consumption (defined by health experts as 2-3 glasses a day) of red wine is beneficial to your health. We need to remember that the finding that wine can be good for you is actually the result of a delicate balancing act. The alcohol in wine has few positive and many negative health consequences. The resveratrol in wine and its antioxidant compounds generally have positive effects, especially when wine is consumed with food.

So it’s really a balancing act of pluses and minuses in terms of your health. And balance is the key, too, regarding wine’s social effects. Excess consumption of wine as for any alcoholic beverage is a real concern. Wine’s reputation as the drink of moderation has given us comfort in this regard. Wine drinkers aren’t as likely to go overboard as those who consume beer or spirits, we tell ourselves. Thus do we convince ourselves that wine doesn’t have an alcohol problem.

Zinfandel Rising

But maybe that is changing, both in terms of social attitudes towards wine (see France) and in terms of the wine itself.

Alcohol levels in wine, especially red wine, have been creeping up for many years. Twenty years ago the Zinfandels I bought averaged about 12 – 12.5 percent alcohol. Try to find one with less than 14 percent alcohol today. There are some out there, but most are 14.5 and even 15+ percent, which is about a 20 percent increase.

If you take the health issue seriously, this reduces your “moderate” consumption rate from 2-3 glasses to maybe 1-2 per day.

It also obviously affects the taste and texture of the wine and not always in a good way. The problem used to be that grapes were harvested too soon, so some European AOC rules provided more prestigious designations for wines with higher alcohol levels. Wines have to have at least 12 percent alcohol to gain the Chianti designation, for example, and 12.5 percent for Riserva. It isn’t the alcohol itself that is being encouraged here, but the higher quality riper grapes that produce it.

The 18.3 Percent Solution

This doesn’t seem to be as much of a problem today. By the time the grapes in many regions have fully developed flavors it seems that they have over-developed sugar levels that produce a lot of alcohol.

This fact struck me while I was reading Dr. Jay Miller’s review of 2008 Australian wines in the new issue of Wine Advocate. Australia had an awful year in 2008, with wildfires (that left some wines with smoke taint) and a heat wave — day after day of 100 degree plus weather that baked the vineyards and pushed sugar levels over the top.

The amount of alcohol that resulted is stunning (both figuratively and maybe literally, too). Dr. Miller reports that some reds from well regarded Marquis Phillips came in as high as 17.6% (for a Grenache) and even 18.3% (a Shiraz). Eighteen percent is fortified wine territory (and would be regulated as such in many U.S. states), but these are dry table wines. This pushes the limit for wine in all respects, don’t you think?

Adding Jesus Units

Interestingly, rising alcohol levels have appeared despite winemaker efforts to keep them low. The dirty little secret of California wine is that a great deal of it goes through some form of de-alcoholization, where at least part of each vintage has alcohol removed to bring down the overall level.

Another approach is to “just add water” to the fermenting must to literally water down the potential alcohol. A friend calls this technique “adding Jesus units” because water is turned into wine instantly; he says that it is a common practice, if not one that anybody admits using.

I think we might be at the tipping point in terms of alcohol in wine. Winemakers are surely aware of this fact and consumers need to sober up about it, too.

Wine critics have so far resisted reporting alcohol levels in their ratings and tasting notes except in exceptional cases. Maybe it’s time to change this practice so that we can begin to appreciate just how big our alcohol elephant has become.

Note: The “Elephants on Parade” sequence is from the 1941 Disney animated film Dumbo. It’s my New Year’s gift to all Wine Economist readers.