Category Archives: Washington wine

Wine Spectator 100: North and South

December 2, 2009 By in Argentina, Chateau Ste. Michelle, Paul Gregutt, Supply and Demand, Washington wine, wine awards, wine bargains, Wine Competitions, wine critics, wine markets, wine price, wine ratings, wine spectator 2 Comments

The lists of the Top 100 wines have started to appear — just in time for holiday buying. Wine Spectator released their Top 100 last week and now Wine Enthusiast has followed suit. Other lists are showing up, too, such as Paul Gregutt’s list of the 100 best Washington wines.  Fun and informative, these lists provide wine lovers with endless opportunities to discuss, debate and of course pull corks. Gotta love ’em.

But you’ve gotta hate ’em, too. Top 100 lists are a mixed blessing on the supply side of the market. Although they do promote wine and wine drinking generally, they necessarily privilege some wines over others and this is always problematic given the thousands and thousands of good wines that are produced each year. Why this wine and not that one? It’s an inevitable question that matters because wines on the list get more attention than the wines that don’t for some reason make the cut.

Dancing in the Streets

Top 100 lists slice up the market in many ways and this year my email inbox has revealed a North-South divide. Here in Washington State we are very happy with the 2009 Wine Spectator league table. Nine Washington wines made the list — more than any previous year — including the #1 spot, which went to the 2005 Columbia Crest Reserve Cabernet Sauvignon (95 points, $27 dollars). Two Oregon wines were also listed, so altogether this was a banner year for the Pacific Northwest.

While they are dancing in the streets in Woodinville and Walla Walla, the mood is more sober down south in Mendoza.  Two Argentinian wines appear on the WS100, which is welcome recognition of course, but that’s down from four last year. This is really Argentina’s year to shine in the U.S. wine market, with overall sales surging by more than 40% in dollar value according to Nielsen ScanTrack data. But only half as many WS100 wines! You can’t blame members of the Argentinian industry for kinda hoping to see their success more enthusiastically celebrated in the Top 100 lists. Hmmm. Maybe next year.

A Nobel Prize for Wine?

It seems to me that these top 100 wine lists are a little bit like the Nobel Peace Prize. Highly publicized awards like the Nobel and the Top 100  end up being both reflections of excellence and opportunities for the judges to send a message (political, economic or otherwise). There are many worthy nominees for each award so the final choice is always arbitrary — and the opportunity to send a message is irresistible. Or at least I wouldn’t be able to resist it.

There are obviously many factors that go into a Top 100 wine list and a wine’s objective quality  is just one of them. This is easy to see if you take numerical ratings seriously. The WS100 #1 wine this year earned a 95 score, for example, but the #2 wine received a higher score (96) and the #8 wine’s score was even higher (99). A 100-point wine was placed in the 21st spot last year. This is a numbers game but not just a numbers game.

Don’t Cry for Argentina

Wine Spectator uses four criteria in making their list: quality (the score), value (the price), availability (the volume) and excitement (the X-factor). The Columbia Crest wines (both the Reserve that won this year and their other wines) generally do very well on the first three factors year in and year out. The X-factor this year, I believe, was the recession and the desire to inspire some excitement among American buyers by giving them a #1 wine they could find and afford. That $27 Columbia Crest wine says that American wine drinkers can enjoy truly excellent wines at relatively affordable prices. Time to start pulling those corks! A good message to send in this economic climate.

What about Argentina? Well, I understand their situation. No problem with quality, volume or availability. But I think the market excitement is already there and doesn’t need any help from the wine lists at this point (as much as the Argentinian makers would love to have it). The U.S. industry (like President Obama?) could use some encouragement right now, which may be a good enough reason to draw attention to its outstanding, good value wines like the Columbia Crest Reserve.

Note: Congratulations to Juan Manuel Muñoz Oca, the 34-year old Argentinian winemaker who made the #1 Columbia Crest Washington State wine. What a great North-South connection!

Wine as a Liberal Art

November 1, 2009 By in Chateau Ste. Michelle, Riesling, Washington wine, washington wines, wine markets, wine research Leave a comment
csm

David Rosenthal at Chateau Ste Michelle

I  teach a class called “The Idea of Wine” at the University of Puget Sound. It isn’t your typical wine class. It’s an examination of wine in the context of geography, history, science, business, politics, culture and globalization and how these various forces create different and sometimes conflicting “ideas of wine.”

I guess it is really about my idea of wine – that wine is a liberal art and a fascinating social mirror. The fact that it tastes so good is a wonderful bonus.

Wine isn’t usually included in the liberal arts curriculum, reflecting  America’s prejudice against anything that contains alcohol. But there is historical precedent. Symposium, in the original Greek useage, was a discussion over wine! Wine, as I think about it anyway, is certainly in the liberal arts tradition.

Chateau Warehouse sur Industrial Park

Part of my course involves fieldwork. In 2008 I took  the class to experience two ideas of wine that they wouldn’t get on a typical winery visit. Ken Avedisian at Cordon Selections wine distributors gave us a tour of his warehouse and explained how the distribution business works. We learned how Ken successfully balances his deep love for wine with the need to make a living selling it. Most of all, I think, we came away with an understanding that wine business is really a people business and that Ken is successful because he never forgets this fact.

Then we visited owner/winemaker Tim Narby at Nota Bene Cellars, where he makes spectacularly good red wines in an anonymous South Seattle industrial park. No fancy chateau here, just focused winemaking using exceptional fruit. We were fortunate to be there during crush, so my students got a clear sense of how wine develops by tasting at many stages from fresh juice to fermentation bin to barrel to finished product. The field trip popped some romantic visions of wine by revealing the reality of how it is made and marketed.

The Big and the Small of It

This year we headed to Woodinville, Washington, which is home to four or five dozen wineries that range from tiny family operations to the large and magnificent Chateau Ste. Michelle. The fruit comes from Eastern Washington, but the wines themselves are made and sold here, close to the market in a classic “cluster” of inter-related businesses. Our agenda was to compare and contrast big and small winemakers to see what we could learn from the experience.

We started the day at JM Cellars, a family winery that has in just a few years  expanded from a couple of barrels to 5000 case annual production. The setting is so spectacular – perched an a hillside next to a wetlands – that Wine Advocate praises the view almost as much as the wine.

Owner/winemaker John Bigelow took us through both the cozy winery and the hands-on production process (it was crush time once again) and I think everyone learned a lot about the art, craft and science of winemaking. It was easy to see that John enjoyed the opportunity to talk with a group that really wanted to learn about wine, not just swirl, sip, spit and move on. It was a great experience.

After an alcohol-free lunch at the Red Hook Brewery pub (I think this made some of my beer-loving students want to cry!) we headed to Chateau Ste. Michelle, which is Washington’s largest wine producer by a big margin. CSM and its sister wineries like Columbia Crest produce about three-quarters of all Washington wines. The beautiful Woodinville chateau-style facility makes nearly 2 million cases of white wine each year. The reds are made in Eastern Washington.

Enologist David Rosenthal took time out from the rush of crush to show us how a big winery works. Tanker trucks were arriving every few hours from the Eastern Washington vineyards full of fresh Riesling juice. We were able to taste the fresh juice and at several stages of the fermentation produces, with David drawing wine from the giant stainless steel fermentation tanks. Quite a difference in scale compared to JM!

The Little Winery Inside the Big One

One of the most interesting parts of the visit, for me at least, was to learn the extent to which CSM’s winemakers keep the lots of wine separate through fermentation and aging and, in the case of Chardonnay, make a point of experimenting with many different oak treatments. Instead of just making one big volume wine they actually make dozens and dozens of smaller lots, which can then be assembled in different ways that both reflect different geographic and geologic terroirs, different market ideas of wine (price points and so on, since CSM is in the wine business) and different aesthetic concepts of wine as well.

I’m impressed with CSM’s commitment to keeping wine small while making it big – I don’t know if there are many other wineries that pull off this trick quite so well. Maybe this is why Ted Baseler, CSM’s CEO, was recently name Wine Enthusiast’s Man of the Year. The citation reads

Ted Baseler is President/CEO of Ste. Michelle Wine Estates, the most prominent wine company in Washington State. Under his leadership, it has evolved into a high performance organization known for its top quality, world-class wines; for its strategic partnerships with leading wine producers in Italy and Germany; and for collaborating with fellow members of Washington’s wine industry to help raise the region’s profile, worldwide. For his vision, leadership, brand-building, team-building, and region-building accomplishments, Ted Baseler is Wine Enthusiast’s Man of the Year.

Sounds like Chateau Ste Michelle thinks big and global while acting small and local. Sounds like a contradiction, but it is an appealing idea of wine.

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Special thanks to Ken, Tim, John and David (and to Marci Clevenger at JM Cellars) for making time in their busy schedules for my students and several parents who came along on the trip. Thanks, as well, to the anonymous donor who established the Robert G. Albertson Professorship at the University of Puget Sound, which makes my class and this educational fieldwork possible.

Wine Recession: Winners & Losers

August 30, 2009 By in Argentina, Australian wine, Barefoot wine, economic crisis, Economic impact, Hedges Cellars, Supply and Demand, Washington wine, wine bargains, wine markets, wine price 2 Comments

Some people think that the long hard winter of the economic crisis is coming to an end and “green shoots” are emerging. It is too soon to tell if this view is correct, but not too early to begin to assess which parts of the wine economy have been hardest hit by the recession and which have actually benefited. Herewith a brief analysis of winners and losers.

Wine Market Breakdown

There are several ways to break down the winners and losers in the wine market. The first and most obvious is by price segment. Distributors are finding wines in the $25 and up category difficult to move through normal retail or “off premises”  sales channels. This doesn’t mean that everyone is buying Two Buck Chuck, however. The “super-premium” $10-$15 segment continues to grow, for example, although the trading down effect is still significant. The woman who was willing to pay $20 two years ago now aims to spend $15 or less, with similar changes further down the line.

Some wine brands have been particularly well positioned to attract value-seeking buyers. Gallo’s Barefoot wines, for example, have gained market share among the “fighting varietals” and the CMS by Hedges red and white blends have done well in the $10-$12 category, as have many others.

Since most Wine Walls are arranged with the most expensive wines on the top shelf and the cheapest at the bottom, it is almost as if the top shelf has been eliminated and all the other wines moved up one rank. Whether this is a temporary or a permanent shift remains an open question. I explicitly do not assume that everything will reset back to “normal” once the recession’s game of musical chairs has come to an end.

On-premise sales have declined, too, as restaurants have felt the recession’s sting. It has been especially interesting to watch as restaurants adjust by switching to lower cost wines from beyond the “usual suspect” regions. Reds from Spain and whites from Oregon, for example, can be sold profitably at lower price points than the better known French and Californian alternatives. Because buyers may not be as familiar with these wines they can enjoy the adventurous experience of “switching over” rather than simply “trading down.” Restaurants can maintain their margins at lower prices.

Wine Geography

Inevitable the recession has had uneven effects on different regions and countries. The news from Northern California is not good, for example, with many reports of surplus grapes, some that will not find a buyer this year. Cost is a big factor. Napa and Sonoma are high cost growing regions. The rule of thumb is that $2000/ton grapes produce $20/bottle wine — that’s how it pencils out when all the costs and mark-ups are accounted for. It is difficult to know who will buy wine made with $3000/ton grapes in the present market if, as we are told, the $25+ segment is a “dead zone.”

There is better news here in Washington state, on the other hand. Sales of Washington wine are rising at a 9% rate according to recent data. This makes sense because so much of Washington’s wine is positioned in the $15 and under category. About three quarters of all Washington wine is produced by Ste Michelle Wine Estates’s brands such as Chateau Ste Michelle and Columbia Crest that provide good quality and good value.

Argentina is another winner. Much like Washington State, Argentina produces good value wines at every price point and has increased sales across the board, although I suspect that Malbec at $10-$12 leads the way. While the overall US wine market has grown by 4.8% over the last year according to the most recent Nielsen Scantrack numbers, sales of Argentinian wines have risen by 46.8% — a tremendous if unsustainable rate of growth. By comparison Chilean wines sales have risen by 12.7%.

New Zealand’s wine industry is heading toward a crisis, as I have written before, but this seems less about the recession than a simply matter of demand and supply. You cannot double and redouble vineyard acreage forever and expect the export market to absorb every drop.

Australia is suffering, too, but like New Zealand I think the recession is a secondary “tipping point” factor. Wine imports from Australia are down 2.5 % for the last 52 weeks and Syrah/Shiraz sales are off 5.2% for the same period. Australia is facing all sorts of problems — drought, fire, recession and so forth — but the biggest problem maybe that “brand Australia” has gone out of sytle, taking the whole Syrah/Shiraz category with it. Even unfashionable Merlot has done better, with 0.8% growth.

The French Connection

I think France is the big loser from the recession, especially the segments that previously earned a “prestige premium,” particularly Bordeaux and Champagne. There is enough Champagne squirreled away in producer cellars to supply the market for several years. I think the big houses would pass on making any new wine this year if they could.

Even the famous chateaux are cutting price in Bordeaux this year, so I can only imagine what things are like for the producers of ordinary bottlings and bulk wine. French wine is a drag on the market even in Britain, where South African wines are surging ahead. Brand France, like Brand Australia, is in steep decline, although for different reasons.

There is a lot to be learned from a close study of the wine recession. The most important, at this point, is that it is more than a decline in demand. There are hints of more profound structural changes taking place. The more things change, the French say, the more they stay the same. I wonder if that will be true this time as the recession’s grip slowly weakens?

8/31/2009 update: An article in today’s Times of London suggests how severe the crisis is in Champagne. (Click on the link to read the rest of the story.)

Hopes of a glut of cheap champagne are set to be dashed when vineyards meet next week to agree on a big cut in production to prop up prices.

With sales falling, producers may be ordered to leave up to half their grapes to wither on the vine in an attempt to squeeze the market.

Merchants are pushing for an historic reduction in yield as they seek to ensure that champagne remains an expensive luxury. “Everyone agrees that production has to be cut because no one here wants to see prices fall,” an industry insider said. “The only disagreement is on the scale of the cut.”

The backdrop to the debate is a slump in sales for champagne makers, from 338 million bottles in 2007 to 322 million last year and a predicted 270 million this year. The fall stems in part from a slide in demand, estimated at about 10 per cent, and in part from destocking by distributors, notably in Britain and the United States.

9/3/2009 update:  A great article in today’s Wall Street Journal on the crisis in Champagne. Check it out!

Wine, Recession and Argentina

April 30, 2009 By in Argentina, Australian wine, brands, Chateau Ste. Michelle, economic crisis, exchange rates, globalization, Marlborough Sauvignon Blanc, New Zealand, Supply and Demand, Washington wine, wine brands, wine markets, wine price Leave a comment

The global economic crisis has been bad news for Argentina, but good news so far for Argentinian wine. Will the wine part of the story have a happy ending or, like so many Argentinian economic booms, turn eventually to bust?

Bad News and Good

The Economist Intelligence Unit reports that Argentina’s economy has been hard hit by the economic crisis. The economic forecast is gloomy (see below) with the only good news being that inflation, while still high, is falling.

Given rapidly declining business and consumer confidence, the government’s fiscal stimulus measures will have a limited effect, and we expect the economy to contract by 3% in 2009, before only a mild recovery in 2010.

Unofficially measured inflation will ease to 10-15% in 2009, as private demand falls. The official rate will end 2009 at 6.8%, with a similar rate in 2010.

The peso will continue to depreciate in 2009 owing to weaker foreign-exchange inflows, before the pace of depreciation slows in 2010. The current-account position will weaken in 2009-10.

The Argentinian wine economy situation is sunnier.  The May 2009 issue of Wine Business Monthly includes two reports that paint a bright picture of Argentinian wine trends.

The first story is a competitive analysis of Argentina wine in the United States market.  It reports that U.S. imports of Argentinian wine have risen dramatically in recent years, from 2.6 million cases in 2006 to 4.3 million in 2008.  The total value of Argentinian wine in the U.S. rose from $75 million to $146 million in this period.

It is important to put this increase in perspective, however. Total Argentinian imports are roughly equal to the annual output of a single US winemaker, Washington State’s Chateau Ste. Michelle. So the Argentinian presence is rising, but from a modest base.

Molto Malbec

Unsurprisingly, Malbec is Argentina’s calling card in the U.S. market. Malbec’s share of Argentinian wine imports increased from 35% to 48% over 2006-2008 measured by volume and from 44% to 55% measured by dollar value. I was interested to learn that Argentina wine sales are rising at all price points, not just in the value brand segment as you might imagine.  But value is still important.  Argentinian wine prices are rising, but still relatively low.  The article reports that the average FOB price has increased from $29 to $33 per standard 9-liter case.

In the same issue the results of the Nielsen company wine market survey for the period ending 2/7/2009 are reported.  Argentinian table wine imports were up 40% by dollar value for most recent year.  This compares to a 10 percent increase for Chile, one percent for Italy and a one percent decline for Australia.  Overall growth in imported wines was 2.4 percent by dollar value for the most recent year.

The 40 % annual rise is spectacular, but  Argentinian wines account for just 1.4 percent of U.S. domestic wine volume compared with two percent for Chile, nine percent for Australia, almost 10 percent for Italy. This shows that Argentina either has a lot of room to grow in the U.S. market, as optimists will perceive, or a lot of work to do to escape niche player status.

American Exceptionalism

I think the Argentina producers were wise to focus on the U.S. wine market for their export surge.  Although the European Union is more important to Argentina in other major export sectors, the U.S. is the target wine market, and that’s a good thing in this economic environment.  EU wine consumption has long been in decline because of demographic and market shifts, for example, while wine sales have been rising in the U.S.

The recession is likely to depress wine sales growth in both the U.S. and the EU, but the impact will be less in the U.S., I believe, if only because I think the recession will be shorter here. My current thinking is that the U.S. economy will benefit from greater short term fiscal and monetary stimulus, compared with the EU, and more effective medium term structural adjustment.  That said, the recession is and will be very severe.

Early U.S. evidence suggests that wine sales have actually continued to rise during in the first year of the recession, when measured by case volume, although the dollar value of those sales has declined as consumers trade down.

Opportunities and Threats

Reading the latest articles on WineSur, a noteworthy Argentinian industry website,  it pretty clear that Argentina producers appreciate both the opportunities and threats inherent in the current situation.  The opportunities — to establish a market presence built around good value and the rising popularity of Malbec — are significant. But I think it must be hard for Argentinians to see silver linings without looking around for associated dark clouds — their country has suffered repeatedly from the global market booms and busts.

Some of the threats are strictly economic. Argentinian producers are currently benefiting from a falling peso value relative to the US dollar, for example, which helps their wine hit market-friendly price points in the US.  But the falling currency is in part a reflection of high domestic inflation rates, which ultimately lead to higher production costs. A lot will depend upon how the inflation (cost) and exchange rate (export price) factors balance out in the future.

Some of the threats relate more to the fickle nature of the wine market itself.  Malbec and Argentina are nearly synonymous today, but this could change as other wine regions adopt their signature varietal. A recent visit to the Walla Walla AVA, for example, found many producers experimenting (successfully, I think) with Malbec.  Argentina has the first mover advantage in Malbec and must capitalize on this because it will face more competition in the future.  This happened to New Zealand (Sauvignon Blanc) and Australia (Shiraz) and I do not think Argentina will be different.

In exploiting its Malbec lead Argentina will need to strike another difficult balance, between establishing a useful “house style” that will build market identity and letting this deteriorate into a stylistic “monoculture” that soon bores consumers.  It seems to me that Australian Shiraz is currently suffering from the “monoculture” curse, perhaps unfairly, while New Zealand still benefits from a popular “house style,” although I’m not sure how much longer it can ride the gooseberry wave, especially given the vast quantities of Sauvignon Blanc that need to be sold.

Argentina is at a crossroads at a critical moment and moving in the right direction.  Count me cautiously optimistic regarding the future of Argentinian wine.

Update: Just hours after I posted this piece about Argentina the following item appeared on the Decanter.com website.

Argentine wine harvest down 25%

May 1, 2009  / Jimmy Langman

Due to climatic conditions, this year’s wine harvest in Argentina will be down 25% as compared to last year.

According to Argentina’s National Wine Institute, hail in some provinces, and overall higher temperatures in February and March, are factors in the lower production output this year.

The lower production this year has occurred despite Argentina having a 12% increase in land under cultivation for wine grapes.

Guillermo Garcia, president of the National Wine Institute, said: ‘If there had not been an international crisis, we would not have been able to provide wine to countries with developed markets.’

Garcia added that Argentine wine companies need to begin keeping more than three months of stock on hand to make up for such production shortfalls.

Exequiel Barros of the Mendoza-based Caucasia Wine Thinking consultancy told decanter.com that many Argentine wineries are worried about their ability to supply medium-priced wines but added: ‘We need to see how the international outlook develops this year before we can dare to make any projections.’

In Chile, wine growing areas that are not irrigated, such as Cauquenes in the Maule Valley, are predicting a similarly low harvest, with an estimated drop in production from 30 to 40% because of higher temperatures and low rainfall.

Most wineries in Chile, however, are reporting a good harvest. ‘The lack of rain has been good for this year’s harvest. But wineries in the far south, such as in the Bio Bio, may experience changes to quality because of the higher temperatures,’ said Edmundo Bordeu, professor of oenology at Chile’s Catholic University.

Santa Margherita Syndrome

March 13, 2009 By in Economic impact, Italian wine, Supply and Demand, Wall Street Journal, Washington wine, wine bargains, wine markets, wine price 1 Comment

Many articles have appeared recently advising wine consumers on “trading down” strategies for the recession — where to find the best values and bargains as the market slump continues. (Thanks to my crack team of research assistants — Michael, David and Tom — for your tips on this topic.)

One of the best pieces I’ve read comes from Dorothy J. Gaiter and John Brecher at the Wall Street Journal: 10 ways to save money ordering wine at restaurants. All their advice is timely, but rule #6 really caught my eye:

6. Never order Santa Margherita Pinot Grigio. We don’t mean to pick on Santa Margherita. We know many people like it and that’s fine. But because so many people like it, it is routinely one of the most outrageously priced wines on the list.

Nothing personal, Dottie and John said, it’s just supply and demand plus a certain bandwagon effect that seems to afflict wine drinkers when confronted with a complicated and uncertain set of choices.

We note it here only as a classic example of this: If you stay within your comfort zone, ordering only wines you already know, you will be punished for it, price-wise. In addition, no wine is going to seem like a good value to you when you know you could buy it at a local store for half the price or less. That’s why it’s so important to focus on labels or kinds of wines that you wouldn’t otherwise see. …  Remember: There is value in tasting something new.

Sensible advice, although not always easy advice to follow in practice given the high cost of restaurant wine. Everyone wants to find that delightful unexpected bargain, but no one really likes paying the bill for a wine experiment that disappoints.  So restaurants and wine consumers alike seem to find themselves drawn to a small set of “usual suspects.”

Demand and Supply

Wine & Spirits magazine surveys restaurants each year to try to discover  trends both in general and in specific segments of the market. This year’s poll (see the April 2009 issue) provides early data on how the recession is affecting wine sales and some of the strategies that restaurants are trying to deal with this increasingly serious problem.

W&S provides a lot of information about what successful restaurants are doing to cope with the weak economy.  One unexpected implication of the survey seems to be this: 

Always try to sell customers Santa Margherita Pinto Grigio.

The W&S editors do not advise this, of course (they are very careful in this regard — they just report the findings); it just seems to be restaurant conventional wisdom.

W&S asks restaurants to identify the wines that they offer by the bottle or serve by the glass and then publishes the names of the most-reported products.  The most listed wine-by-the-glass, for example, is Sonoma-Cutrer Russian River Chardonnay (11.1 responses per 100 restaurant replies), which sold for an average price of $12.67 per glass in 2008.  Santa Margherita Pinot Grigio was #6 on the list (number six again … spooky), reported by 6.7 per 100 restaurants.  It sold for an average price of $14.40 per glass in 2008.

A quick internet search reveals that Santa Margherita often sells for around $20 per bottle retail, which suggests a wholesale price of $14-$15 — suspiciously close to the $14.40 average per glass tariff.  You can begin to see why it would be a popular restaurant choice.  And why Dottie and John’s number one rule is …

1. Skip wine by the glass. Restaurateurs like to make enough on a single glass to pay for a whole bottle, which is great for them but not so great for you.

W&S lists Santa Margherita as the number one wine in both the Pinot Gris/Pinot Grigio and the Italian wine categories.  The average per bottle restaurant price was $52, which indicates a somewhat higher mark up over wholesale than the usual restaurant rule of thumb.  All of which makes me think that wine consumers need to become a bit better educated about wine economics because it is pretty plain that restaurants have been hitting the books on how to use demand and supply to preserve profit in these unsettled economic times.

What Should I Order?

So where are the values on restaurant wine lists?  The simple answer is that there is no simple  answer (apart from Dottie and John’s good advice).  The W&S poll asked restaurants to list wines under $25 per bottle and the most frequent response was Cooperidge White Zin and Chardonnay, $24 average price.  Cooperidge is a Gallo restaurant brand.  Interestingly, it appeared in just 1.9 per 100 responses.

The number two and three bargain wines were both Ste Michelle Wine Estate products from Washington State — Chateau Ste Michelle Riesling ($24 / 0.7 responses per 100) and 14 Hands Columbia Valley Cabernet Sauvignon ($21.50 / 0.7 responses per 100).

No very strong conclusions can be drawn from this data but they do suggest that (1) there is no one wine or brand that restaurants consistently go to for the value-seeking customers, so you will have to explore the wine list carefully to find what you are looking for, but (2) it might be smart to include Washington State wines in your treasure hunt.

How Many AVAs are Enough?

January 31, 2009 By in Supply and Demand, Washington wine, wine brands, wine markets 3 Comments

“How can you govern a country with 246 cheeses?” Charles De Gaulle.

The US Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB)  recently approved the Snipe’s Mountain American Viticultural Area (AVA) designation — the tenth AVA in Washington State. There are nearly 200 AVAs in the US (click here to see the list), most of them in California. Not as many AVAs as French cheeses, but we are gaining on them.

This news provokes some thoughts on the meaning of AVAs and the obvious question, how many AVAs are enough?

Staking a Claim

AVAs are geographic designations — they tell us something about where a wine comes from. They “stake a claim” as the old prospectors used to say, in a particular patch of dirt (although it might be a pretty big patch, as the map indicates).  Prior to the introduction of AVAs, American wines mainly were labeled by state — California Zinfandel, New York Riesling.   These very broad designations are still used for wines made from grapes sourced from several different regions within a state.

A Zinfandel made from equal amounts of grapes grown in Sonoma, Mendocino and Lodi (three different AVAs) must wear the generic California designation rather than a more specific geographic indicator. At least 85% of the grapes must come from a particular AVA for its name to be used. Wines that blend grapes from different states are simply American and I’ve seen this designation from time to time — most recently on a California-Oregon blend.

The evolution of American AVAs is complicated, but I think it is fair to say that they generally began with relatively broad classifications and have in recent years become increasingly specific.  In Washington, for example, the first AVA was Yakima Valley (1983), followed the next year by a much broader designation (Columbia Valley — see map above) that encompasses most of the state’s major vineyard areas and essentially replaced the “Washington” designation plus a second relatively narrow one (Walla Walla).  Both the Columbia Valley and Walla Walla AVAs span the Washington-Oregon border, showing the vines and state lines don’t always align.

The Yakima Valley AVA has been partitioned by subsequent AVA claims and now includes three sub-regions: Red Mountain, Rattlesnake Hills and the new Snipe’s Mountain AVA.  There are now seven AVAs within the Columbia Valley appellation, with an eighth (Lake Chelan) on the horizon.  If Washington’s AVAs are this complicated, with AVAs and sub-AVAs, you can only imagine what the California map must look like.

Appellation Wars: AVA versus AOC

In America we talk about AVAs while the French and others speak of AOCs (or their equivalents) and you might assume that the concepts are the same even if the names are not.  But you’d be wrong.

AOC stands for Appelation D’origine Contrôlée, a system that began as a simple geographic designation like America’s AVAs, but has developed into something more complicated and, well, more French.  Originally AOCs were all about fraud prevention — protecting the reputation of honest Champagne winegrowers, for example, by making it illegal to put the Champagne label on a wine made mainly from grapes grown in other regions. This assurance, it was believed would give the Champagne regional “brand” greater value.

And it did, but this led to a different kind of fraud.  Some producers cut corners, over-cropped and so forth, making cheaper, poorer wine that could legally wear the geographic designation because of the grape’s origins.  The only way to protect the region’s reputation (and the value of its brand) was to regulate both  where the grapes were grown and how the wines were made.  And so the contemporary AOC system was born.

AOC regulations start with a defined geography and add detailed rules regarding wine making.  They are meant to assure that the wines are made to a particular recognizable standard and are typical, in both type and quality, of the region.

(As we know from the Super-Tuscan controversy, winemakers don’t always agree believe that the AOC standard wine is the best wine that can be made — typical is not necessary superior.  Super-Tuscans are wines, frequently excellent ones, that do not satisfy the AOC rules because they use non-standard grapes and non-standard winemaking techniques.)

AOC in USA: Coro Mendocino

There is only one AOC in the US as far as I know. A voluntary association of  Mendocino, California wineries have created a wine standard they call Coro Mendocino.   Coro means chorus in both Italian and Spanish and refers to both the harmonious group of winemakers behind this program and, I suppose the designated blending of grapes.  You can read the production protocol here. The SipMendocino.com website explains that

  • Coro wines must be made exclusively from Mendocino fruit
  • Zinfandel is the dominant varietal and represents 40-70% of the final blend.
  • Second tier varietals may not exceed Zinfandel as a majority component and are limited to Syrah, Petite Sirah, Carignane, Sangiovese, Grenache, Dolcetto, Charbono, Barbera and Primitivo.
  • A “free play” of up to 10% of any vinifera source may be used for fine tuning if desired.

Coro Mendocino is a typically American solution to the problem of setting a standard.  It is a voluntary association built around a shared commerciall  brand — the labels of wines from different makers all employ a standard design so that they are recognized first as Coro Mendocino and only secondarily as the product of a particular winery.  Coro Mendocino reminds me of the better known and quite successful  Gimblett Gravels initiative in New Zealand, which is essentially a privately-sanctioned AVA within the Hawkes Bay region.

Too Much Information?  Or Too Little?

Appellations are controversial at every level of analysis.  In Europe, for example, the existence of hundreds of tiny regional subdivisions is seen by some as a roadblock to effective wine marketing.  The wine market is being rationalized by the new EU initiatives and simplicity is the order of the day.  Local winemakers are outraged, however, because they fear the consequence when their local appellation “brand” is merged into a less distinctive (but perhaps more marketable) regional appellation.

On a local level, I have heard many winegrowers grouse about whether a new AVA really has a distinctive  terroir or if it just had enough money and political clout to get its designation.  And of course the drawing of lines is controversial, since who is in and who is out can be pretty arbitrary at times.

From the consumer standpoint the existence of AVAs does potentially provide information.  Theorists say that information is any news or data that reduces uncertainty.  In wine, information would reduce the buyer’s uncertainty about what’s in the bottle and so increase confidence in the buying decision.  Sometimes AVA or AOC designations do this, but not always.  Buyers need to know what the appellations mean and this can be problematic if the regions are very large and diverse in a geographic sense and if the producers make wines in very different styles.

And, of course, too many AVAs can produce a sort of ungovernable confusion of the sort that De Gaulle bemoaned in France. Uncertainty increases with the number of AVAs at some point.

I will be interested to see how the reputation of the Snipe’s Mountain AVA develops.  It certainly is a distinct geologic feature of the Yakima Valley (check out this map), but the reports that I have read stress its historical importance more than its terroir. Snipe’s Mountain was the site of one of the first important plantings of vitis vinifera grapes in Washington State.

Wade Wolfe, who knows Yakima Valley maybe better than anyone, has made wine from Snipe’s Mountain fruit and thinks it could have a bright future with the additional attention the AVA designation draws.  If so, then one more AVA is will not be one too many.

Bargain Wine and the Big Mac Index

August 5, 2008 By in emerging wine regions, globalization, Supply and Demand, Washington wine, wine price Leave a comment

These are interesting times for a wine economist!  I’ve recently been interviewed by a national newspaper (wearing my international economist hat)  about the presidential candidates’ policies and then by a popular supermarket cooking magazine (in my wine economist role) about exchange rates and rising wine prices.

The Dollar and the Wineglass

The dollar hit a new low against the Euro earlier this summer and although it has rallied a bit of late, Euro-zone imports are still very expensive.  This affects the wine market in a number of way.

Old World wine import prices are being pushed up as the strong Euro works its way through the distribution system. Producers and distributors have tried to postpone price increases, but I think they have run out of wiggle room, especially with high energy costs pushing up transportation costs, too.

There is pressure to raise domestic wine price, too.  Increased exports (the benefit of a weak dollar) have drained some of the domestic surplus.  Those surpluses were a reason for low wine prices earlier in this decade, but they will soon be gone as we move through the Turrentine boom and bust wine cycle. (Unexpectedly large 2008 harvests in Australia and New Zealand, however, will moderate price pressures a bit in some market segments).

The cheap dollar is probably also at least partly responsible for soft Euro prices of French en primeur wines and the recent sale of the iconic California producer Chateau Montelena (of 1976 Paris tasting fame) to a French buyer.  The Euro’s high cost has discouraged U.S demand for wine contracts (although indications of a weak vintage are also a factor) while the cheap dollar makes U.S. wine assets a relative bargain for foreign investors.

Exchange rates affect all international businesses and wine is no different.  This is one reason why large wine companies go global,  sourcing products and managing brands from many regions. Troubles in one area can be offset by opportunities elsewhere.

The McWine Index

Wine prices in the U.S. appear to be heading up – what’s a bargain-seeking shopper to do?  That’s the question I was asked by the wine and spirits editor of a major cooking magazine.  The answer is to try to make the exchange rate work for you, not against you.  The Economist magazine’s Big Mac Index can help.

The Big Mac Index, which appears in the July 26, 2008 issue of the magazine,  is a simple indicator of whether a currency is over-valued or under-valued relative to the U.S. dollar based on the price of the ubiquitous fast food entrée. The Euro, for example, is estimated to be overvalued by about 50 percent.  A $3.57 Big Mac costs the equivalent of $5.34 (50 percent more) when purchased at Euro-zone prices at the prevailing exchange rate.  European Big Macs are overpriced for dollar-holding buyers by this measure and so is just about everything else, including European wine. (The worst place to buy a Big Mac, according to the index, is Norway, where it costs the equivalent of $7.88 – ouch!).

The Big Mac index is a crude way of measuring the relative purchasing power of different currencies (to do this properly is a very complicated process), but the burgernomic indicator is generally surprisingly robust. It is pretty closely reflects the perceptions of tourists and traders and is often consistent with the more scientific  results of detailed academic studies.  Who knew that hamburgers could be so useful?

Bargain Wine Hunt

Where are most favorable exchange rates in the wine world for dollar buyers?  The Big Mac index points to Argentina, Chile, Uruguay and especially South Africa.  The South African Rand is undervalued by 37 percent according to the Big Mac index – that $3.57 hamburger sells for the equivalent of just $2.24 in Capetown.  The cheaper Rand results in cheaper South African wines, even taking into account high transportation costs. That is helping these wines break into the U.S.market, although there is more than exchange rates involved in this process (watch this space for an upcoming report).

But Southern Hemisphere wines aren’t the only bargains. Washington State wines are exceptional values at every quality level and I included them in my cooking magazine recommendation list. Washington wines don’t benefit from an undervalued currency. Instead they suffer somewhat from an undervalued reputation, which results in relatively lower prices for the quality. There is so much focus on high profile California wines in the U.S. that great wines from other regions don’t get the attention they deserve.  This condition, like today’s exchange rates, won’t last forever, so take advantage of it now.

Flying Winemakers and the Glocalization of Wine

July 20, 2008 By in emerging wine regions, Flying Winemakers, globalization, Mondovino, Washington wine 3 Comments

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.

Tyranny of the 100 Point Wine Scale

May 27, 2008 By in book reviews, critics, Paul Gregutt, Washington wine, wine critics, wine ratings Leave a comment

Wine rating systems are like the weather — everyone complains about them but no one does anything. Paul Gregutt thinks he knows why.

Wine by the Numbers

There are many ways to rate or rank different wines and consumers are very interested in trying to understand what they mean and how to use them. That’s why my column on wine rating systems, Wine by the Numbers, is one of the most popular posts in this blog’s brief history.

Twenty-point rating systems are popular in Europe in part, I understand, because that is how papers are graded in French high schools. Here in the United States the 100 point system that Robert Parker popularized and many others use dominates in part, I suppose, because that’s how our papers were graded in school. Any simple wine scoring system is problematic, however, since a good deal of information is necessarily lost when the attributes of a multidimensional product like wine are reduced to a single number. Wine isn’t like gasoline, where the critical components can be captured, like octane, in a single number.

But there are other problems, too. Paul Gregutt (PG), wine critic for the Seattle Times and Wine Enthusiast magazine, explained the limitations of the 100 point scale and the tendency toward “grade inflation” in his recent book, Washington Wines & Wineries:

This practice of promoting wine, a multi-faceted, subjective sensory experience, simply by broadcasting numbers has gradually devalued the numbers while shrinking the original 100-point scale. At first blush, such a rating system sounds generous, allowing room for a lot of subtlety in the grading curve. But in actual practice it’s not a hundred point scale at all, nor even close.

It has become a ten point scale. Wines rated under 85 are ignored completely. Wines rated 85 to 89 must be marketed as value wines – those numbers only work for wines priced at the low end of the scale. If your wine is going to sell for $15 or more, it must hit 90 points at least. One prominent retailer even makes a point of selling (at discount) wines that have scored the “dreaded” 89. Once a wine moves up the ladder from there, it becomes increasingly rare and expensive. As a result, wines scoring 95 or above are virtually unobtainable for the average consumer.

Although the ratings are “devalued” in terms of their utility, they are also “inflated” in terms of their commercial importance. It would seem that consumers might be better served if someone would re-center the scale so that it uses more of the 100 point range and is therefore potentially (and only potentially) a more accurate guide to quality. This would obviously lower the average score, however. Who is going to be the first to break the pattern and give merely good wines average scores, 70 or 75 instead of 85 so that 85 (B+) means something?

Revising the 100-Point Scale

PG decided to try in his book on Washignton wine. Instead of rating individual wines, he rated the wineries themselves in terms of a modified 100-point scale that gives marks for style (30 points), consistency (30 points), value (30 points) and the winery’s contribution to the development and improvement of the Washington wine industry (10 points).

How did the wineries rate? Quilceda Creek, with its perfect 100 Robert Parker point Cabernet Sauvignon, also got a perfect PG score (30/30/30/10). Leonetti ranked second with 98 points (30/28/30/10). So far so good. The trouble comes further down the list where some prominent wineries get scores in the 70s, 60s, and 50s. The scores make sense when you break them down into the four factors that PG evaluates, but the raw numbers are sort of shocking when you see them for the first time or out of context. (My university students know this feeling, I suspect. It happens when they get their first college papers back after several years of high school grade inflation.)

PG writes about the reaction to his winery rating on his website in a column titled “Time to Dump my 100 Point System?”

Comments from readers and reviewers have been largely positive. Some have embraced my scoring; others have simply accepted it and moved on to the book’s other assets. But within the ranks of the industry itself – wineries and distributors in particular – there has been an awkward silence.

There is little doubt that this book’s sales have been seriously impacted by 1) the decision not to include 3/4 of this state’s wineries and 2) the scoring system itself. One winery veteran, after some prompting, took the trouble to explain why his winery wouldn’t sell or promote the book, even though I had given them one my highest scores.

“Our problem with promoting your book,” the winemaker said, “is that, in spite of the wonderful written praise, we’d spend all out time explaining our B+ grade.” PG is trying to decide if he should scrap his ratings for the next edition of his book (if you have an opinion you can contact Paul through his website PaulGregutt.com).

The First Mover Disadvantage

It is hard to know what to say about this. On one hand I admit that my first reaction to PG’s winery rating scale was neutral to negative, but then with some encouragement from Karen Wade I looked at it more closely and decided that it was actually pretty useful to me as a consumer — so I guess I am the source of some of the positive feedback PG received. On the other hand, I understand that no winemaker is going to take out an ad that boasts “Rated 72 by Critics!” — even if that’s a very good and appropriate rating by the scale being used.

I think we have to admit that re-centering the 100 point scale is a hopeless task and move on. The first mover in point reform will suffer the sort of criticism that PG reports. The only way to do it would be for everyone to switch scales at once. I don’t see that happening.

So what should we do about the ratings? For my part I’m going to try to get my students, who are very much into wine ratings by the time they come to me, to use the UC Davis 20-point scale. I think it might work because (1) they aren’t used to thinking in terms of 20 points and so they will have more open minds about what scores mean and (2) I like the way it breaks down elements of sensory perception: 4 points for appearance, 6 points for smell, 8 points for taste and 2 for overall harmony, according to my copy of The Taste of Wine by Emile Peynaud. Using the Davis scale will encourage them to make up their own minds about what they see, smell and taste. That’s a good thing.

In the meantime I think Paul Gregutt’s experience suggests both why the 100 point system should die and why it probably never will. My advice to Paul: keep the analysis in your book, which is terrific, but kiss the 100-point ratings goodbye.

Chateau Cash Flow

May 14, 2008 By in Economic impact, Jancis Robinson, Washington wine, wine tourism Leave a comment

Everyone knows that wine is a big business in the United States, but how big is it and where does the money flow? I’ve spent the last couple of days reading studies of the economic impact of the wine industry to try to get answers to these questions. Here’s a brief summary of what I have found out (follow the links for more details).

Economic Impact Studies

Let’s start with grapes. Grapes were the sixth most valuable agricultural crop in the U.S. in 2005 (and the #1 fruit crop) worth nearly $3.5 billion, according to a 2007 economic impact study by MKF Research LLC, a leading wine economics research consultancy based in St. Helena, California. California accounted for about 6.1 million of the 6.9 million tons of total U.S. grape production in 2005 followed by Washington (415,000 tons), New York (178,000 tons) and Michigan (100,000 tons).  A ton of grapes yields 50-60 cases of wine according to published sources.

Roughly half the grape crop ends up in wine. The other half becomes raisins (30%), table grapes (11%) and grape juice (9%). Raisins and table grapes come mainly from California while Washington is an important player in the juice market (juice grape production actually exceeds wine grape production in Washington!). Juice grapes, mainly native Concords, sell for about $150 per ton (Washington data). Wine grapes sell for much more depending upon varietal type, quality and provenance.

There are about 5000 bonded (commercial) wineries in the U.S., according to the study. Nearly half of these are located in California, as you would expect, with Washington (about 500 wineries), Oregon (about 300) and New York (about 250) trailing far behind.

There are bonded wineries in every state including Alaska . I visited one in Anchorage that blended local huckleberry juice with grape must from Washington State to make Alaskan wine. The study indicates that Puerto Rico’s sole commercial winery closed in 2003, suggesting that the Caribbean wine boom has peaked. 🙂

Follow the Money

One of the things I have learned in studying wine economics is that the wine business is more than wine. Wine (its production, distribution and sale) is important to the wine economy, but there are a lot of associated businesses that are sometimes as important as wine itself. I have seen some small, scenic wineries, for example, that use wine strategically to create an attractive venue for other more profitable activities, such as restaurant sales and money-earning events such as weddings and parties. Wine is important because of the opportunities it creates for other activities.

The economic impact study gives some sense of this. Winery sales totaled about $11.3 billion in 2005, for example, while wine tourism expenditures were reported at $3.5 billion (about 30% of wine sales). Other related industries include wine labs and consulting ($11 million), winery research and education ($31 million) and the value of charitable contributions (goods and services, $128 million).

The economic impact studies I studied are very complete, but they don’t provide data for some interested wine-related businesses. Wine publishing (books and magazines) is a business that is growing as more consumers seek out knowledge and advice. Wine critics may indeed be parasites, as Jancis Robinson recently asserted, but they do generate cash flow even when they add little value.

I am also interested in the growing wine lifestyle industry. Some people build satisfying lifestyles around wine and the material goods that are associated with it and I think that the total economic impact may be quite large. It starts with wine, of course, and glasses, corkscrews, and storage units of various sorts. Wine tourism (eno-tourism according to a European email correspondent) comes next, followed by wine collecting and investing, which can be expensive indeed.

Then finally there is the urge to own a winery or at least live a winegrower lifestyle. There are a number of winery properties for sale today, according to the Wine Business Monthly real estate listings. Some of these are working operations but others are tailored for lifestyle investors. Recently I have become aware of the growth of gated winery communities like this one in Mendoza, Argentina, which offer the benefits of a luxury villa in a planned and managed (but romantic) vineyard setting. I know of several vineyard estate projects like this being developed in the United States.

Wine consumption is rising in the United States, but I think the economic impact of wine is growing faster as wine tourism and lifestyle investments grow. It will be interesting to see if this trend can be sustained or if some aspects of the wine economy prove to be bubbles.