Money, Power, Memory, Taste and Wine

A review of Liquid Memory: Why Wine Matters by Jonathan Nossiter (FSG, 2009). Original French edition published in 2007 as Le Goût et le Pouvoir (Taste and Power).

Jonathan Nossiter is famous for his 2004 film Mondovino. Love it or hate it (or love to hate it), Mondovino has given Nossiter standing in the world of wine and he takes advantage of this fact in Liquid Memory: Why Wine Matters.

Remembrance of Terroir Past

Although it is not intended to be a supplement to or continuation of Mondovino, I certainly learned quite a bit about the making of the film and its characters and about Nossiter, too. Indeed, the book is really about Nossiter and how wine inspires his memories and provokes his emotions just as a small cake, a madeleine, famously provoked Marcel Proust. It’s not my favorite book because I guess I’m not that interested in Nossiter’s memories, or at least not as interested as he is, but I did find things to like in it.

In one of my favorite scenes from the book, Nossiter and a film-making colleague are driving back from a day of Mondovino pre-shoot research in Burgundy and they talk about why they are so attracted to terroir. Members of a somewhat rootless transnational artistic class, they recognize that perhaps terroir is so precious to them because it is something they feel they have lost. Nossiter, the American raised in Paris, now lives in Brazil, well you can see how he would feel nostalgic for the authentic home terroir he maybe never had. That’s an emotion many of us can appreciate.

The Bland Taste of Peace?

Another passage subtly probes this same feeling in a different context. Why is terroir and regional identity so important now? Because sharp divisions have caused so much pain and hardship in the past (think Europe and the two World Wars).  Suppressing differences and rounding off sharp corners to create a more peaceful whole has been the agenda of the last 50 years.

Now we find that universalism has gone pretty far, creating the terroir-free transnational world of the European Union and we start to value what we have lost. Sharp edges seem pretty desirable now that we’ve lost them, even if they  sometimes bruise or cut.

I tasted both sides of this problem when we visited Friuli in the Italian Northeast a few years ago. We stayed outside of Cormons with the Venica family at their winery estate and the Sirk family at La Subida.

The land and people of this area where brutalized by the two Great Wars and so, when postwar peace appeared, they gathered grape varieties from around the world and planted them all together in one serene vineyard. The wine from these grapes, Vino della Pace (wine of peace) isn’t especially distinctive on the palate as I recall, but is memorable nonetheless for its optimistic symbolism.

We longed for the taste of peace when we didn’t have it. Now that we do, we find it a little bland. So we seek out terroir, even if it threatens to divide us once again.  Interesting, isn’t it?  Even in Friuli it is the intensely distinctive local wine of long memory – Pignolo, Schioppettino, Ribolla Gialla – that attracts our attention today, not the wine of peace.

Wine and Money

Although this is a book about cultural politics (if you believe the French title) and social philosophy (if you consider the American one), it seems to me that a great deal of space is actually given over to wine economics. The business of wine with its commercial pressures, and especially the ethics of wine pricing get a great deal of space.

“It occurs to me,” Nossiter writes, “that it is impossible to talk about wine without talking about money” and I think he is right. “Wine is inextricably linked to money like all objects of desire in a capital-driven world.”

Though a given bottle’s price varies even more peculiarly than the price of fine arts, a given bottle’s price is supposed to be a reflection of its intrinsic values. Whether it is the producer who sets the initial price, or the importer, distributor, or end seller, each time the price of the wine is set an ethical decision has been made in relation to the wine’s origins and contents.

Nossiter is disgusted by the religion of money, but in this passage he seems instead to be seduced by it, to accept the premise that market prices are moral judgments even as he protests their verdict. I think the premise is wrong and that intrinsic worth is measured by a different scale.

But that’s just the economist in me talking, I suppose.

A review of

The Future of Wine & Globalization

My life is about to get a lot more complicated, but  in a good way. And that’s not Globaloney.

Readers of this blog know that I’m working on a book that I call The Future of Wine: Globalization, Two Buck Chuck and the Revenge of the Terroiristes.The argument is that the future of wine will be different from its past and that difference will be shaped by three powerful forces, globalization (new producers, new consumers, new values, new opportunities, new pressures), Two Buck Chuck (mass market commercialization and changing wine distribution channels) and the Revenge of the Terroiristes (the inevitable reaction to these radical forces of change).

It is not a completely original idea (have you seen Mondovino?), but I think it is a very useful one.  It’s a framework that will let me tell an important story in a way that a lot of people will find interesting.

But my work on the wine book was recently interrupted by a call from my publisher. Would I be interested in revising my last book (Globaloney: Unraveling the Myths of Globalization) to take into account the continuing financial and economic crisis?  Wow, what an opportunity.  I had to jump at it.  The impact of the economic crisis on global relations is so obviously interesting and important. The chance to rethink globalization in this context is too tempting to refuse.  So tomorrow I start work on Globaloney 2: The World Economic Crisis and the Future of Globalization.

You can read all about the new book at Globaloney2.com.

You’ll notice that “The Future of ” features in the titles of both the wine book and the new Globaloney edition and that’s not an accident. Thinking about the future of wine has affected the way I think about the economy. The conventional wisdom is to consider the wine world and the global economy as fundamentally stable, suffering inevitable booms and busts (globalization) or vintage variations (wine) within a relatively stable and predictable overall environment.

But we know that this isn’t always true with wine.  Wine’s history is full of structural shocks that have transformed established relations. Phylloxera, the rise of Australia, and  prospect of global climate change are just three examples that come to mind.

And we know that the global economy doesn’t always bounce back to the old path, either.  There is no reason to think that globalization after the crash will take the same form as globalization before it. Ask anyone at Lehman Brothers or General Motors if they think the road ahead and the one in the rearview mirror are the same and see what they have to say.

There are times when the “givens” give way and fundamental change occurs.  My working hypothesis for both books is that these are such times and that both wine and globalization are being deeply transformed. I may be wrong about this, but I know from experience that you never see the the big changes unless you look for them. I’m willing to risk seeing change that isn’t there in order to avoid missing it if it is.

So that’s how I’ll be spending the next few months — hoping that my understanding of wine will help me think clearly about globalization and that what I learn about the global economy will help me write more effectively about the future of wine.  It should be a wild ride. Watch this space for frequent updates.

Note: Ken Bernsohn reports that in Canada it is illegal to predict the future on a fraudulent basis.  He recommends that I add a disclaimer to this post and my “future of” work just in case.  Good idea.  Here is Ken’s suggested general purpose disclaimer:

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Wine Economist Top 100

This is the Wine Economist‘s 100th post.  The idea of a Wine Economist Top 100 — my 100 best blog posts — is therefore kinda ridiculous.

But my wine enthusiast friends hungrily devour Top 50 and Top 100 wine lists even though the idea that it is possible to identify and rank the Top X [fill in the number] wines is kinda ridiculous, too, although in a different way. This provokes a digression on wine rankings and a brief report on what I’ve learned so far from writing this blog.

Supply and Demand

Ranking wines from 1 to 100 is certainly not an exact science; there are literally  thousands of wines on the market, so narrowing down the list to 100 and then actually ranking them from bottom to top (with no ties) is necessarily a problematic exercise when examined closely.

Individual tastes differ significantly and consumers are not uniformly able to detect even objective qualities in wine (much less make comparable subjective judgments), so it is hard to see why so many people take these ratings so very seriously. But they do.  It’s a matter of demand and supply.

Consumers demand wine rankings.  They use Top X lists as guides to shopping (or investing) and sometimes as a means to establish status or credibility with other wine enthusiasts.  This makes top wine lists a really useful tool for wine merchants and distributors, who supply what consumers demand (and sometimes try to help the demand along a little, too).

Wine critics must feel some pressure to supply what buyers and merchants want.   The Top X lists get so much attention that any critic who fails to issue a ranking must be a little bit concerned about the effect of this action in the crowded wine opinion marketplace. If I ranked wines, which I don’t, I’d sure want to publish a Top X list of some sort if only to draw attention to my other work. Everyone has an interest in these lists, so it’s no wonder they are so popular.

Winner-Take-All

It is interesting to consider how Top X lists and the attention they receive  may have invisibly shaped the wine world. Cornell economist Robert H. Frank has written two books that are worth reading in this regard.  The Winner-Take-All Society (co-authored by Philip J. Cook, 1995) looks at what happens when market attention is focused on a few top-rated products.  The result, not surprisingly, is that everyone wants the best (or what is rated the best) and the nearly-as-good and really-quite-pleasant are left behind. Who wants to drink pretty good Chardonnay when you can get a 90+ bottle for the same price (even if you cannot really taste the difference yourself)?

The book’s subtitle tells you where the argument goes: “How more and more Americans compete for fewer and bigger prizes, encouraging economic waste, income inequality and an impoverished cultural life.” If you’ve seen Mondovino, you know what Frank and Cook are talking about.

Frank’s 1999 book Luxury Fever continues the argument, looking more deeply at the impact of a world where status, identity and satisfaction are linked to money and the purchase of top-rated products.  Frank talks about the high price that some consumers will pay for goods that are just a little bit better or harder to get.  He calls it the “charm premium.”  Unsurprisingly, he cites the “charm premium” that highly rated ultra-premium wines receive as an important example (pp. 29-30).

Elite winemakers can mine the charm premium effect by offering increasing expensive variations on their main product: regular bottling, reserve, single-vineyard and so on. Each increase in perceived quality (or decrease in general availability) produces a disproportionate increase in price.  Or at least that’s how it is supposed to work.

Some wine merchants and producers see the charm premium in a different light.  Wines that get 95+ points sell out immediately — they essentially don’t exist.  Ultra-premium wines that receive less than 90 points are hard to sell, because no one wants a merely very good wine when they can get an apparently excellent one.  (I understand that there is at least one wine store that automatically discounts any wine that is cursed with an otherwise unsellable 89-point rating.) That just leaves the 90-94 point wines and large charm premiums are sometimes paid for what must be impossibly small absolute quality differences within this range.

Wine buyers are a diverse group and so it is dangerous to generalize, but a lot of them search not just for good wine, but for the best wine (or the best wine value).  For better or worse, Top 100 lists have evolved to satisfy that demand and have therefore helped spread luxury fever and create the winner-take-all wine market segments we see today.

Lessons Learned

I’ve been writing this blog for about a year and a half and it has been a great experience — I’ve met a lot of thoughtful, interesting people and had some great wine conversations.  Because my posts are a bit longer than most — about 900 words on average — the total 100-post output is equivalent to a short book.  What have I learned from this process?  Well, I know a little more about what internet wine readers are looking for.

The most popular Wine Economist article in its 100-post history is my piece on Decanter magazine (The World’s Best Wine Magazine?), part of an occasional series on wine critics.  This post gets a lot of hits because the web is crawling with people searching for “best wine,” “best wine magazine” and “world’s best wine.”  The winner-take-all dynamic this represents shows up everywhere, even in my blog stats.

Almost as many readers are searching for the best wine value, which   explains why my posts on[Yellow Tail] Tales and Costco and Global Wine are the second and third most read articles on this blog.

Wine industry readers are worried about the future, as most of us are in this economic environment.  This helps explain why How will the Economic Crisis affect Wine? and Big Trouble Down Under: Crisis in Australian Wine receive so many hits.

Finally, many readers come here looking to unlock the mysteries of the wine buying experience.  What do the ratings mean?  Who are the most credible wine authorities?   This search leads them to posts onWine by the Numbers and Masters of Wine (and Economics), which get dozens of hits each week.

Thanks for reading The Wine Economist.  I’ll give an update on trends in reader interests and concerns in a few months, when I published the Wine Economist Top 150.

Flying Winemakers and the Glocalization of Wine

Glocal is one of my least-favorite words – it’s part of the standard vocabulary in the globalization literature, which is where I spend my time when I’m not working on wine.  Glocal is a combination of global and local and is meant to describe the exchange between global flows and powerful local influences.  It hurts me to say it, but wine is increasingly glocal and the flying winemaker phenomenon is a good illustration of how it works.

Aero Merlot?

Flying winemakers are winemakers and consultants with clients and interests on several continents.  They are the part of a longstanding global exchange of human capital in the wine industry. It is very common, for example, for young people in the wine business to take jobs in several regions or countries, building up a portfolio of experiences, expertise and network connections before settling in to work back home.

Flying winemakers are both an obvious extension of these initial connections and the logical consequence of global wine investments, which see Champagne makers, for example, producing sparkling wines in France, California, Argentina and Australia.  It makes economic sense that high level expertise would be exploited globally, especially as the winemaking seasons are reversed in the northern and southern hemispheres.

The flying winemaker process takes Michel Rolland, the most famous wine consultant, all over the globe, but it also brought Katherine Williams, who I met through my research assistants Michael and Nancy Morrell, to Tsillan Cellars in Lake Chelan, Washington.  Katherine and her husband Adrian Lockhart are Australian winemakers who, having made reputations in Oz, now work abroad.  Adrian is head of Tohu Wines, New Zealand’s Maori-owned winery.  Katherine divides her time between New Zealand and Lake Chelan. Tsillan isn’t a high volume operation and Lake Chelan is what you might call an “emerging” wine region, but it’s linked in to the global wine network and can take advantage of international winemaker resources.

The Long Shadows Experiment

I began thinking about flying winemakers at a wine tasting at a local shop on Friday evening.  The wines were from Long Shadows Vintners in Walla Walla and a roomful of happy wine enthusiasts paid a tasting fee and queued up patiently to receive tiny tastes of five wines made from Washington grapes by some of the most famous winemakers in the world.  Long Shadows, you see, is the ultimate glocal wine experiment.

Allen Shoup, former CEO of the Chateau Ste Michelle group (and a legend in Washington wine), got the idea to use flying winemakers to draw global attention to Washington’s terroir. He built a cluster of wineries, hired Gile Nicault to be resident winemaker, and arranged for esteemed figures from the world of wine to fly in to Walla Walla and make one wine each. The tasting began with Poet’s Leap Riesling, which was made under the direction of Armin Diel of Scholssgut Diel in Nahe River Valley – a German take on Washington State’s bestselling varietal wine.  Next was Pedestal, a mainly Merlot blend by Michel Rolland.  Pedestal was followed by Pirouette – a classic Bordeaux blend by Agustin Huneeus and Philippe Melka – then a 100% Cabernet Sauvignon by Randy Dunn called Feather and a Syrah named Sequel by John Duval of Penfold’s Grange fame.  All the wines were from the 2005 vintage except the Riesling.

There are two other Long Shadows products that we didn’t get to taste.  Chester Kidder Red wine is an eclectic blend make by Giles Nicault and Saggi is a supertuscan blend made by the Folonari brothers, who should know how to make such a wine.  Poet’s Leap sells for about $20 and the red wines go for $45 to $60 per bottle according to my copy of The Wine Advocate, although the winery’s website says that they are sold out.  Tasting some famous “impossible to get” wines and the chance to buy a few bottles – that’s what drew a big crowd to the shop on a July Friday evening.

Blend it like Beckham

Big name flying winemakers like Michel Rolland are controversial because they are associated with the homogenization of wine – “international styles” are said to replace distinctive local wine qualities. That’s why Rolland is cast in the role of the devil in the film Mondovino. Long Shadows, however, aims to reverse the flow, to use global wine celebrities to highlight the quality of local terroir, so it is kind of a natural experiment in glocalism.  Which feature will dominate – the global or the local, or will some synthesis emerge.

Bringing Michel Rolland to Walla Walla is a lot like hiring the soccer star David Beckham to play for the  Los Angeles Galaxy.  The idea is to draw attention to the local team and help establish its domestic and international credibility, but it doesn’t always work out that way.  You’ve got to bend fan attention around the international celebrity back to the local product so the reputation eventually transcends the famous flying foreign connection.

I am not an expert wine taster (and this was not a good tasting opportunity), so I am not drawing any strong conclusions just yet.  The Riesling and the Syrah did impressed my research assistants (Sue Veseth and Anne and David Seago) as successful glocal experiments  – distinctly Washington wines but with an appreciable stylistic twist.  The other wines? Well, it is too soon to tell, in terms of the wines themselves, but they are obviously successful in drawing attention to the region and enhancing its reputation.

Note:  I’ll have a chance to meet a number of famous flying winemakers (and explore glocalization) next week at the Riesling Rendezvous meeting in Woodinville, Washington, which will bring together Riesling makers from all over the world  Watch this space for my report.

Taste and Power

Jonathan Nossiter’s new book inspires a research project.

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Taste and Power — that’s what the wine business is all about. Or at least that is the thesis of the new book (Le goût et le pouvoir) by Mondovino director Jonathan Nossiter. Those with power can influence taste or even dictate it. The English translation will appear later this year. For now I am working my way through the original French. I’ll post a review when I finish.

A recent conversation with Tyler Colman, a.k.a. Dr. Vino, started me thinking about the influence of wine critics and how globalization is increasing their importance. Think about the number of wines you have to choose from. My local upscale supermarket stocks more than 1500 different wines from at least 15 different countries. This is an enormous and complex choice space that ranges from the familiar to the exotic and from inexpensive to near investment-grade. And the number of choices is unexceptional. A local farm store, with acres of space to fill, actually stocks more than 3500 wines from more than 25 countries.

 

An Embarassment of Riches

The simple fact of this embarrassment of riches makes wine critics useful and influential. How can you make an intelligent choice from among so many different wines? It is difficult to know what’s in the bottle without tasting and there are too many to taste. Wine critics are middlemen who do the tasting for us and arbitrage that information, reducing the uncertainty that is both the joy of wine and its curse. (Wine brands are another way to reduce uncertainty and increase sales, as I have discussed in earlier posts).

Wine critics and their descriptions and ratings would be useful if you have only 100 wines to choose from. With thousands of wines available, they become practically indispensable. The global expansion of wine trade increases choice and uncertainty and magnifies the value (and power?) of wine critics.

 

Wine critics are important for other reasons, too. Wine can be an investment as well as a consumable product and wine critics provide information to this forward-looking market. The question here is not what wine tastes like today, but what it will taste like in several years and, most importantly, what a buyer will pay for it in the future. Here, because there are so many unknowns, wine critics can have great influence. Some wines probably have investment value because the critics say they do, so much is the market driven by critic-inspired perceptions of value.

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Critics are also important because wine is increasingly an identity investment, not just a financial investment. Individuals invest in both wines and in specialized knowledge about wine both for their own pleasure and to make a statement about their identities. To be very knowledgeable about wine is to display a specialized cultural sophistication. It isn’t the same as owning a Ferrari or a Renoir (it might be more expensive than owning a Ferrari or Renoir) but it makes a statement in the same way. The very best wine, not just good wine, can be an object of obsession, hence the outrageous prices that are paid. Wine critics both enable and encourage the quest.

Wine Critics and Wine Markets

The influence of wine critics are everywhere in the wine market, from budget buyers seeking good value to elite wine collectors. You can complain about their power and dispute their taste, as critics of Robert Parker frequently do, but they are here to stay. So I think we need to learn more about them.

Hence my current project. I’ve collected a number of wine publications (click on the photo above to see them) that evaluate and rate wines as well as provide other information about wine, including investment reports, wine tourism guides, winemaker biographies, food and wine pairing tips and so on. Rather than criticize their numerical ranking scales or bemoan their philistine tastes, I want to compare and contrast them, to try to figure out what wines they are rating, how, why and for whom? My working hypothesis is that wine critics are simultaneously influenced by the market segments they inhabit and shape them, too. If I’m right, then these publications should be very different, even when the wines they evaluate are the same.

The publications I’m studying are Wine Spectator, the best-selling American wine magazine and Robert Parkers Wine Advocate, which is said to be the most influential. I am also examining two other national publications, The Wine Enthusiast and Wine & Spirits, Wine Press Northwest, a regional publication, and two very important foreign journals, Decanter (Great Britain) and Gambero Rosso (Italy). Watch this space for upcoming reports!

Old World meets New World in Oregon

The debate about wine is often framed as Old World (Europe) versus New World (California, Australia, New Zealand, South Africa, South America) but I am suspicious of such simple dichotomies. I suspect that the issues don’t break cleanly along these lines, so I always find it interesting to explore the blurry edges where Old meets New to see what I can learn.

The film Mondovino examined l’affaire Mondavi – Robert Mondavi’s unsuccessful attempt to build a winery in the south of France. That’s a pretty easy (is oversimplified) story to tell: Americanization, McDonaldization, Disneyfication. You know what I mean.

I’m interested in the reverse flow, Old World winemakers who invest in the New World, how and why do they do it and what are the results? Sometimes Old World firms enter into partnerships with New World winemakers. Opus One is probably the most famous such venture, a partnership between Robert Mondavi and the Rothschild family of France. Col Solare is another good example, an alliance Ste. Michelle Wine Estates of Washington and the Italian Antinori family.

Direct investment is another strategy – Old World wineries buy land, plant vineyards, build wineries, bring in their winemakers, and make wine. What kind of wine? Old World wine in the New World? New World wine? That’s a question worth exploring.

Some examples of Old World winery investment in the New World include the Domaine Chandon in California (owned by the French Champagne house), Barboursville winery in Virginia (owned by the Italian Zonin family), the St. Supery winery in Napa Valley (owned by the French Skalli family) and Domaine Drouhin Oregon (DDO), which is owned by the French Joseph Drouhin firm. I visited DDO recently, accompanied by my wife Sue (photo right) and our friends Michael and Nancy Morrell (photo left below), who are sailors (they have circumnavigated the globe in their Norseman 447) and aspiring wine research assistants. Here’s what we learned.

Maison Joseph Drouhin is a famous Burgundian winemaking firm. They began as negociants in the 1880s, aging, blending and marketing wine made by others and eventually acquired some exceptional vineyards of their own. Oregon appeared on their radar nearly 30 years ago when Robert Drouhin presided over a blind tasting of Old and New World Pinot Noirs in 1979, which was won, to everyone’s great surprise, by an Oregon wine from Eyrie Vineyards. What followed is a long story that involved many visits to Oregon. Robert’s daughter Véronique, who was studying winemaking at Dijon, interned at several Oregon wineries. Having learned all they could, the Drouhins took the big step, bought land, planted vines, built a winery, and began making wine. The first vintage, 1988, was made in a rented facility using purchased grapes. The gravity-flow winery (the first such in Oregon) was built in 1989. Today they have 90 acres of densely-planted vines (one meter by one meter by the look of them) on a 225 acre estate. Véronique is the winemaker and her brother Philippe manages the vineyards here as well as those in France. The wines? The classic Burgundian varieties, Pinot Noir and a little Chardonnay.

Mark Bosko, the DDO tasting room manager pictured here, spent almost two hours with us, showing us the vineyards and production facility and answering all manner of questions. The tour ended with a comparative tasting of Drouhin’s French and Oregon wines. To be specific, we compared the 2005 Maison Joseph Drouhin (MJD) Chablis Premier Cru ($27) with the 2006 DDO Chardonnay Arthur ($30) and a 2004 MJD Beaune Premier Cru ($28) with the 2005 DDO Pinot Noir Willamette Valley ($45). We are not professional tasters, but we did have opinions. The group seemed to favor the Oregon Chardonnay over the French Chablis. I suspect that this is because we are more familiar with the oaked Oregon style than the more mineral classic Chablis flavor. It would be interesting to taste these two wines with consumers from France — I am sure they would make the opposite choice! It was easy to tell Old World from New World here.

We liked the French Pinot Noir better, although I am not sure if it was a completely fair comparison. I think the French wine benefited from its additional year of aging. I would like to taste the DDO again in a year to see how it has matured.

So what kind of wines are the Drouhins making in Oregon? I would say that they have some of the style of the French wines that we tasted (a family resemblance, as Mark suggested?), but they are still quite different – and this is not a surprise. Although the grape varieties are the same as are the barrels and the vineyard manager, almost everything else is different, especially the climate and the soil. If terroir matters, the wines should not be same. And the market is different, too, which makes a difference.

How do other Oregon winemakers view DDO? On one hand, I think that DDO’s investment here has given Oregon Pinot Noir credibility that would otherwise be difficult to achieve and so it has benefited the entire industry here. I think that some of the pioneer winemakers probably worked pretty hard to encourage Robert Drouhin make this investment for exactly this reason. On the other hand, of course, DDO is big-bucks, deep pocket competition for the many smaller winemakers in the valley, so you can imagine that there is some envy and even resentment of their success. But this isn’t an attitude unique to wine when it comes to direct foreign investment.