Category Archives: wine brands

Wine Vision Takeaway Messages

December 2, 2014 By in Supply and Demand, wine brands, wine markets 1 Comment

Click on the image above to view my interview with BeverageDaily.com editor Ben Bouckley at Wine Vision 2014.

I’m back from Wine Vision 2014 and reviewing my notes in search of the most important takeaway messages. Not an easy task in this case, because the content stream was so rich and varied. Not sure whether the best ideas came from the formal program or casual conversations. That’s a sign that the organizers did their job of assembling a critical mass of thinkers and doers from inside and outside the global wine trade.

Many of the points that participants found particularly useful focused on new or emerging trends. Lots of discussion of new consumers (millennials, for example), new marketing opportunities (direct-to-consumer both generally and via in-home “meet the winemaker” type events), and new competitors within the alcoholic beverage category, some of which are so “innovative” that they seem poised to “jump the shark” into oblivion.

We were informed and entertained by presentations on what to do and — more critically — what not to do in social media relations (lots of cringing at the dumb things that smart people can do on Twitter and Facebook). And we were introduced to packaging and label innovations, including my first experience with Amorim’s new “twist off” Helix cork stopper/bottle package. Something for everyone at this conference.

 Big Bang Theory

My presentation probed four powerful forces that have shaped the wine world of today — the “big bang” of global wine production that has redrawn the world wine map, the new “lingual franca” of wine, which now defines the competitive landscape, the forces of disintermediation that have changed the game from monopoly to monopsony, and the “new wine wars”realignment of interests within the wine business.

Reading through press coverage and Twitter comments, I find that different people focused on different elements of my presentation, which is probably as it should be. In the video above, for example, BeverageDaily.com editor Ben Bouckley drills in on the importance of authenticity and the new wine wars and, in response to a question, I highlight LVMH wine chief Jean-Guillaume Prats‘ comments about sustainability. Lots of interesting ideas in the air.

UK Wine Trade at the Crossroads?

Wine Vision disappointed me in only one respect — not what was said but what wasn’t. In the run-up to the event I suggested that this was the perfect time and place for an open discussion of power dynamics in UK supplier-retailer relations. The Tescogate financial scandal seems to have nothing to do with the wine trade, I wrote, but it has created an opening where a discussion of power in the UK wine world might be usefully and openly engaged. As a recovering liberal arts college professor, open discussion is in my blood, so naturally I wanted to see it happen here.

But it didn’t happen and perhaps it never will. I tried to open the door in my presentation, drawing a parallel between UK wine retailers and Amazon.com in terms of power dynamics. But no one really jumped at the opportunity and in any case I was whisked off the stage before anyone could comment or ask a question. Time was up, I guess.

Pernod Ricard UK chief Denis O’Flynn attempted to suggest that supplier-retailer relations were at a “crossroads,” but without any more success than I had.  A panel on supplier-retailer relations managed to almost entirely avoid the topic. Interesting! It felt like a “Voldemort” moment (“he who must not be named,” for those of you who are not Harry Potter fans).

Race to the Bottom?

Maybe, as a friend suggests, it was just British politeness — must not say anything that might make someone uncomfortable. Or maybe it was, as the wise Adrian Bridge suggested, simply that nothing was going to change. Might be better to invest energy in areas where progress is possible. He’s probably right and I’m probably wrong.

But I really think that something has to change.  Retailers cut price to increase market share (in the process training consumers to think of wine as just another 3-for-£10 commodity). Then they push suppliers for lower costs to restore margins before another round of price cuts kicks in. The fact that the UK Treasury’s excise tax share of the transaction has increased so much only makes matters worse, eroding margins and accelerating the downward spiral spin.

The UK wine business is caught in a dangerous race-to-the-bottom cycle and it isn’t going to turn around unless and until something changes. Is it impolite to talk about this? Denial, as I like to say, isn’t just a river in Egypt.

I’m on the “State of the Industry” panel again in January at the Unified Wine & Grape Symposium in Sacramento. Look for further commentary there.

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The issue of supplier-retailer relations isn’t just about Tesco, but the fact of Tescogate puts that firm, the world’s largest wine retailer — in the spotlight. Dan Jago, the head of Tesco’s wine department, was originally scheduled to speak at Wine Vision, but withdrew when he, along with other department heads, was suspended pending the investigation. (It is now rumored that Jago will leave the company.) Laura Jewel MW, the head of Tesco’s wine development program, stepped in to replace him but  a week after the conference she seem poised to leave Tesco to take a position as UK and Europe director of Wine Australia. As Jancis Robinson said on Twitter, “Who’s left at Tesco?” Good question. Maybe some of the UK insiders at the conference knew about these upcoming changes and so avoided any situation where they might have to comment? Pure speculation.

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Thanks to Wine Vision for inviting me to speak! It’s a  well-organized and very successful event — worth the long flight from Seattle to London. Thanks to participants and fellow speakers for making this such an interesting and worthwhile conference.

A Field Guide to Prosecco’s Many Faces

October 21, 2014 By in Italian wine, wine brands, wine markets, wine price Leave a comment

P1090234Prosecco sales here in the U.S. are surging — up 34% in the first half of 2014 according to one report. At 1.27 million cases, the U.S. is now the #3 export market for Prosecco trailing only the UK and Germany.

Quantity is one thing, but quality is often something else entirely. Last week’s column talked about Prosecco’s upmarket move and the premiumization pyramid that lies at the heart of the strategy.  Is premium Prosecco real or just a marketing gimmick?

Mionetto’s Impressive Line-up

We tasted the wines from three producers during our quick business trip to the Veneto and if there is truth in wine, then premium Prosecco is real.

Our first stop was at Mionetto, a large producer that is the U.S. market leader with their popularly priced, crown capped “IL” Prosecco line of wines. “IL” is great fun and has attractive packaging — we like it a lot — but it doesn’t especially strive for upmarket status. But wait, there is more …

We tasted through several Mionetto wines that showed the true potential for premium Prosecco wines. We started with Prosecco made from organic grapes — the idea came from the growers not the marketing department — that was perhaps the most effective presentation of an organic wine that I have seen. This wine should appeal both to enthusiasts seeking something different and to dedicated green wine fans. The wine, the messaging, the packaging — they all come together in a very impressive way.

Opulence and a German Bet

We then moved up the pyramid to a single vineyard “Rive di Santo Stefano” DOCG Prosecco and into the “Luxury” series of wines, then reaching the summit with the Mionetto Luxury Cartizze DOCG. The luxury wines really were opulent both in the glass and to the eye. Very impressive. Will wines like this some day challenge Champagne? No future tense needed — I think they already do so, providing that memorable feeling (isn’t that what Champagne is really all about for most people?) at a more attractive price point. Here is a list of the Mionetto wines we tasted with links to more information about them.

An interesting sidebar to the Mionetto story is that the Italian firm was purchased a few years ago by Henkell, the German sparking wine producer, and everyone worried that the usual layoffs and cost-cutting measures were in store. Instead the new parent company kept all hands on board and hired more workers while investing in plant modernization and expansion. They are betting on the premium future of Prosecco and based on the “cards” we tasted it seems they have a winning hand.

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A Different Prosecco: Sorelle Bronca

Sorelle Bronca is a very different enterprise that illustrates Prosecco’s many dimensions. A small firm run by two sisters, all its wines are organic. Total production is much smaller than Mionetto, but the wines are perhaps equally diverse in the experiences they present the curious wine enthusiast.

We tasted through several excellent organic DOCG Proseccos and some still wines, too, including a white blend featuring the Manzoni Bianco grape and a Colli di Conegliano DOCG Riserva “Ser Bele” red blend of Cabernet Franc, Cab Sauvignon and Merlot (Bordeaux grape varieties have long been planted in the Veneto) that received Gambero Rosso’s  top “3 glasses” rating. Red wine from Prosecco-ville? Maybe. Really great red wine?  Apparently yes. I didn’t see that coming.

The “normal” Proseccos we tasted here were delicious as was the Sorelle Bronca Valdobbiadene Prosecco Superiore DOCG Particella 68  made from grapes from a specific vineyard bloc. But the hit of the tasting was Sorrele Bronca Valdobbiadene Prosecco DOCG “Difetto Perfetto” Sur Lie. Difetto Perfetto? Defective and perfect at the same time? Well, yes. This cloudy wine (see photo) had its secondary fermentation in the bottle not the pressurized tank as is typical for Prosecco. Then it was left on the lees for a period and then not disgourged, so the lees were still there.

Cloudy, a bit like a hefeweizen beer. I think “foggy” is the best word — look at the photo. Unfiltered, but not Difetto in my opinion. The first taste was just the wine, taking care not to disturb the lees at the bottom of the bottle. Good! Then we shook up the bottle and tasted it all together. Wow! Even better, Sue and I agreed.  Champagne-like but still clearly Prosecco without the strong leesy taste you might expect because the sur lie period was so short.  And quite an interesting mouth-feel. A Prosecco to surprise and delight. What fun!P1090311

A Bisol Mosaic at Venissa

We spent the night in Venice and set out the next day to visit Venissa, the ambitious vineyard project of the Bisol family that is located on an island in the Venetian Lagoon (see next week’s column for a full report). The Bisol Prosecco house is behind Venissa and as part of our visit Matteo Bisol arranged for us to taste several of his family’s wines along with dinner at the restaurant.

Usually, Matteo said, he would serve just one Bisol wine as part of a multi-course / multi-wine tasting menu, but he decided to use the opportunity to show us many difference faces of Bisol and Prosecco. It was quite an experience.

We started with the classic Bisol “Crede” Prosecco DOCG  2013  (“Crede” refers to the marine limestone subsoil of the growing area) that we have tasted before here in the U.S. A premium and traditional DOCG Prosecco.  Next, in a silver-clad bottle, was Bisol noSO2 Prosecco Extra Brut 2012 . NoSo2 — no sulfites — in the “natural wine” style.

Bisol Relio Extra Brut 2009  came next, made from the Glera grape commonly used in Prosecco but using the classic method (secondary fermentation in bottle not tank). Different from the Sorelle Bronco sur lie wine — the Champagne style yeastiness more pronounced.

The Dry and the Sweet

Following this we were served Bisol “Eliseo Bisol Cuvee del Fondatore” Millesimato 2001 — Pinot Noir, Pinot Blanc, Chardonnay grapes, classic method. Italian Champagne, you might say (if such language were permitted) with Pinot Blanc taking the place of Pinot Meunier in the grape blend.  Note the vintage date! Quite spectacular.

The last sparkling wine of the evening was the opulent Bisol Cru Cartizze DOCG –– from the prime Cartizze zone. I felt fortunate to taste wine from Cartizze both here and at Mionetto. A friend had warned me that Cartizze would be too sweet but I found both wines dry and well balanced. Prosecco, like Champagne, can be and is made in different degrees of dry and sweet and some styles are more popular than others in particular markets.

The final wine was sweeter but still very well balanced and it came as a complete surprise. It was Bisol Duca de Dolle Prosecco Passita — dessert wine made  with air-dried grapes like a white Recioto, but aged in a modiied solera system you find with some Sherries. A unique experience — different from any of the other wines from this region we tried and not exactly like any other sweet wine, either. Matteo wanted to show us the variety of Prosecco expressions and he certainly succeeded.

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Final thoughts? The Prosecco mosaic caught me by surprise — Prosecco is not one thing, but many things and hopefully consumers who start with cheerful wines like the Mionetto “IL” bottlings can be persuaded to move up the Prosecco Pyramid to the DOCG and Rive wines and perhaps even summit with Cartizze and beyond to some of the truly unique wines we were fortunate to be able to sample. Thanks to the everyone who hosted us and to the Conegliano Valdobbiadene Consortium for arranging the winery visits. Next time: the story of Venissa.

Anatomy of Australia’s New Wine Strategy

October 29, 2013 By in Australian wine, Italian wine, popular culture, wine brands 3 Comments

Click on the image to view one of the Restaurant Australia videos.

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In my last column I talked about Australian wine’s plans to re-brand itself on the global market through an integrated food-wine-tourism campaign called “Restaurant Australia.”  Delegates to Savour Australia were treated to four specially produced videos  (click on the image above to see one of them) that introduced the concept and, not coincidentally, also introduced the chefs and purveyors who would be providing some of our (delicious) meals over the next few days.

Beyond Sensory Overload

The audience seemed to pause, slightly stunned, after each video. At first I thought that it was just sensory overload. And it was. The stunning images presented on the big screen with rich surround sound was an intense experience, to be sure. The fact that we experienced it all again later, meeting the chefs, tasting the produce– that was intense too.

But now that I am back home and reflecting on the experience, I think that perhaps we also paused for a different reason. The whole purpose of our gathering was wine. We had journeyed long miles to Adelaide to see and hear Australia tell its wine story. But where’s the wine?

Yes, wine and a winemaker appeared in each video, but they seemed a bit of an add-on rather than the featured element of the message. What would happen if you left out the wine ? Nothing much else would change. Is that the way we want people to think about Australian wine — an afterthought in the grand “Restaurant Australia” concept?

Now There’s Your Problem

Obviously not — and it would be a mistake to judge the marketing campaign by a few introductory videos. But, as I thought about it, I began to recognize that it was related to a bigger problem.

One of the chapters in Extreme Wine is about wine and modern media — I call it Extreme Wine Goes to the Movies — and it concludes in part that wine’s inherent sensuousness seems to be difficult to translate to video. Yes, wine famously unlocks all the physical senses and a few of the mental ones, too. But it is an experience good. Like fly fishing and some other things you might be able to think of, its more fun to do than to watch someone else do.

That’s why there are surprisingly few films where wine plays a really central role. There are a few excellent ones (Sideways fans please put down your pitchforks!) but you’d really expect there to be far more than I found in my research. Food, on the other hand, seems to be something that video can capture very well. Does watching someone drink wine in a movie make you thirsty? Maybe. Does watching a celebrity chef eat a delicious dish make you hungry? You bet it does!

Hungry?

No doubt about it. Wine’s magic is difficult to capture on the silver screen (or that little screen on your tablet or smartphone). That’s why we have Master Chef but not Master Enologist.  There are rock stars in wine, but they don’t generally transcend the wine category the way the foodie celebrities increasingly do.

Wine Porn versus Food Porn

My foodie friends are always taking X-rated “food porn” photos of the the plates they are served at fancy restaurants. But my wino buddies generally don’t bother to snap “wine porn” images of their glasses (although I admit to some G-rated bottle/label shots myself).

Assume that I’m correct about this for a moment (or, better yet, grab a copy of Extreme Wine and read a more detailed account, which uses Sideways to show why really powerful wine films are so rare). Given video’s undeniable importance in communications today, what is wine to do? Well, one answer is to do what Australia wine seems to be doing, which is use what works (the foodie side of the campaign) to drive the message.  They call it “Restaurant Australia,” but I have a better name.

Strongest Brand in the World?

I call it The Italian Way. What region has the strongest generic wine brand? Well, here in the United States I would say that it is Italy (although France can make a claim because of Champagne’s powerful brand). Americans love everything about Italy — the food, the people, the art, the scenery, the food again, and now with the new Fiat 500, even the cars.

Americans love Italian (or sometimes Italian-style) coffee. And they love Italian wine. Just the fact that it’s from Italy gives it an automatic advantage at supermarkets, restaurants and wine shops.

It seems to me that “Restaurant Australia” aims to get Americans to love warm, friendly Australia in the same way that they have always loved warm, friendly Italy. A good idea? Yes. But not easy to do. If it was easy to achieve Italy’s reputation, everyone would do it. But it is worth trying. Australia has authenticity in its favor — it really is warm and friendly and the food and wine you can find there really are great– and that’s worth a lot.

Is it the only way to re-brand Australian wine? No — tune in next week for my report on another approach to this problem.

Restaurant Australia: Re-Branding Australia (and Australian Wine)

October 22, 2013 By in Australian wine, globalization, popular culture, wine brands 1 Comment

Click on the image to see a “Restaurant Australia” video.

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I’m back from Australia, where I spoke at Savour Australia 2013 (click here to view my presentation). The purpose of Savour Australia was to re-launch Brand Australia wine on the global market by bringing together about 700 domestic and international delegates and rolling out an integrated marketing plan that combined Australian food, wine and tourism.

Savour Australia was quite an intense and impressive global gathering and I am still trying to process all my experiences both at the conference and in independent travels (scroll down to see a brief list of extreme wine moments). I’ll be analyzing what I think I’ve learned over the next several weeks.

Food Stars, Porn Stars, Rock Stars

“Restaurant Australia” is the proposed new brand and you can perhaps best appreciate how its elements connect by clicking on the image above and watching the short video that appears. The basic idea is that food and wine have become much more important tourism drivers. Nature (think Grand Canyon) and culture (think Italian Renaissance art and architecture) are still important draws, but increasingly travelers seek out fine wines, great restaurants and cult foodie experiences. Then they become brand ambassadors, spreading the word across the internet and around the world.

This sea change should not come as a surprise. As I wrote in Wine Wars, this is an effect of the growing popularity of foodie television shows and networks, like the insanely popular international Top Chef and Master Chef series and the rise of foodie celebrities such as Jamie Oliver, Nigella Lawson, Anthony Bourdain and so on. Seriously, food stars get more exposure than porn stars and are sometimes more popular than rock stars (“rock star” being the gold standard for pop culture status).

The food’s the thing, don’t you know? The Australians are smart to realize this and to try to recast their image around it.

Shrimp on the Barbie

But they don’t start the process of re-branding with a clean slate (or clean plate, I suppose). For many people here in the United States, Australian cuisine is defined by Crocodile Dundee and Outback Steakhouse. Paul Hogan, the actor who portrayed the famous Crocodile Dundee character in the films, was featured some years ago in an Australian tourist campaign that generated the memorable line “throw another shrimp on the barbie.” Australian food (and culture generally) is warm and generous, if not particularly sophisticated according to this approach. A good image then (and Australians sure are warm and generous), but not especially useful now. The game’s changed.

For better or worse, Outback Steakhouse’s popularity has reinforced this idea of Australian food culture. Outback is a meat and potatoes kind of place, although I see they now also feature grilled chicken “on the barbie.” It’s signature menu item is a “bloomin” deep fried onion appetizer. Tasty, I bet,  but not really haute cuisine.

So the Australians have their work cut out for them and the videos we saw at Savour Australia (and the great food and wine we enjoyed there) suggest that they have both great raw materials to work with and a sophisticated understanding of the story-telling necessary to make their strategy work. Click here to view videos from Savour Australia, including four stunning chef-centered  “Restaurant Australia” themed videos.

Terroirist Revenge Strategy

I’m a big fan of this approach, as I told my Adelaide audience, because it fits very well into the analysis I presented in Wine Wars. I didn’t have Australia in mind when I wrote that book, but its argument fits the great land down under very well. Australian wine has experienced the double-edged sword of globalization and the problems of over-simplified marketing messages (these are the “Curse of the Blue Nun” and the “Miracle of Two Buck Chuck” of the book’s subtitle).

Now, I think, they need to channel their inner terroirists and tell a more sophisticated story that draws upon, to use a catch phrase of the Restaurant Australia campaign, the people, places and produce of their land. (People, place and produce is not a bad definition of terroir).

Will it work? Will “Restaurant Australia” be able to launch Australian wine on a new path? Come back next week for more analysis.

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Australia 2013: Memorable Moments

Herewith a few memorable moments from our trip, some of this will be featured in future Wine Economist columns.

  • A festive wine dinner with Australia’s First Families of Wine, an association of Australian producers who are doing their level best to change the way the world sees Australian wines.
  • A fabulous tasting of Australian wines from the Yalumba Wine Museum (I guarantee you will be jealous when you hear about the wines we sampled).
  • Wine writer and broadcaster Michael Hince and his wife Amanda  invited us to a dinner in Melbourne where they showed off wines from Victoria. It was a really spectacular demonstration. Wow! You can read Michael’s account of the wines and the dinner here.
  • Great hospitality during our time in the Barossa Valley, with memorable visits to Rockford, Torbreck, Hentley Farms and Charles Melton.
  • My wine economics colleague Kym Anderson gave us a memorable tour of his Adelaide Hills region (highlights: Ashton Hills Vineyards for the Rieslings and Pinot Noir and Hahndorf  Hill Winery for Gruner Veltliner and Blaufrankisch) and sent us to Seppeltsfield winery in Barossa, where we happily immersed ourselves in Australian wine history.
  • Tasting and talking with Peter Althaus at his Domaine A winery near historic Richmond, Tasmania (and staying at Tara’s Richmond Farmstay).
  • The fabulous family-style long-table winemaker lunches at Savour Australia. Outstanding food, wine and conversation.
  • Working (not just attending) the Wednesday “Grand Tasting”. Prue and Stephen Henschke let me pour their fabulous wines (including Hill of Grace)  for about 90 minutes so that I could see the conference and the delegates from the other side of the table.  What a treat!

Early Days for Virginia’s Early Mountain Vineyards

June 4, 2013 By in wine brands, wine markets 1 Comment

P1050858It is still early days for Early Mountain Vineyards, the ambitious and progressive new project that Jean Case has started along with her husband Steve (of AOL fame).

The goal (and the challenge) goes beyond establishing a destination winery in the Monticello AVA. The Cases want to help elevate the profile of Virginia’s growing wine industry generally.

That’s a worthwhile aim, but not a simple or easy one in today’s competitive market environment. As one friend put it, early days and a mountain to climb.

Virginia Wine Mosaic

We were in Virginia to visit Sue’s parents Mike and Gert who live near Richmond and came to Early Mountain on the advice Frank J. Morgan who writes the popular Drink What You Like blog, which analyzes Virginia wine.   With about  200 wineries of various sizes and foci and 15 AVAs, Virginia presents the potential wine tourist with many choices. Frank suggested several interesting winery targets and I selected Early Mountain both for its proximity to Charlottesville and for its ambitious stance.

The Cases are big fans of all things Virginia and saw in the bankrupt Sweely Estate winery an opportunity to contribute to the wine industry here. The Sweelys built an impressive facility — a 20,000 case winery and a separate spectacular hospitality and event center, but they were apparently better at making wine than selling it for profit.

Early Mountain (named for the famously hospitable Early family who lived in these hills in Revolutionary War times) rose from these financial ashes in 2011 with the double mission to add to the chorus of Virginia wineries and also help the whole industry open a new era.

Best of Virginia

The most obvious evidence of this broader purpose is the Best of Virginia wine program at Early Mountain. The winery has partnered with the nine wineries shown above and promotes their products along with its own. This is done mainly through a series of tasting flights, only one of which is based on Early Mountain wines alone.

The rest feature a mix of products from the ten different producers carefully selected by Michelle Gueydan, a sommelier employed specifically for the Best of Virginia program. The flights are changed up periodically to both broaden the range of wines so promoted and to encourage visitors to return repeatedly to see what’s new.

I understand that there are also plans to eventually channel winery profits to promote Virginia wines in line with Case’s Revolution concept of social entrepreneurship. Profits seem a long way off, based on my back-of-the-envelope calculations of revenues and costs, but a patient capital philosophy rules.

Early Days for Wine Identity

We enjoyed platters of local cheeses and meats, which paired very well with an Early Mountain Pinot Gris. The focus on local producers was both clear and delicious.We then turned our attention to a red wine flight that showcased four wineries and four grape varieties or blends. The Barboursville Sangiovese (they are owned by the Italian Zonin family) and the ’08 Early Mountain Merlot were Gert’s favorites among the reds we tasted. I was attracted to a distinctive Petite Verdot.

I’m optimistic about this project (as I am about the future of Virginia wine more generally), but I think everyone agrees that it is still early days. Early Mountain is still building up its wine portfolio, which necessarily takes a few years to accomplish. (If you were starting from scratch you would wait for the wines before opening the hospitality center but the desire to seize the opportunity caused the cart to be put ahead of the horse for now).

My perspective is that the components for success are coming into place and need to be lined up effectively into an identity for the winery and a message for the industry. I think the Early Mountain project is about Virginia hospitality and while that is clear in a sensual way when you step into the big open room, it could be communicated more explicitly in other ways.

The Early Mountain wines themselves don’t seem to have an identity yet, but that is perhaps natural since they are still works in progress. But they will need to be more clearly defined at some point, too, and that is not a trivial problem. The most successful wineries know who they are and express this identity consistently from first greeting through the wines and the wine experience on down to the product design and promotion materials and throughout every member of the staff.

An American [Wine] Dream

The Best of Virginia idea is a good one, but at this point the wines more or less speak for themselves and while visitors might find individual wines that they enjoy from around the state, I would like to see a better developed educational element to draw them progressively into Virginia wine in a way that includes the varieties and styles, the wineries, the AVAs and the terroir and of course a cultural element that connects to local history and cuisine.

An educated consumer is more than just a buyer — she can be an ambassador for Virginia wines and that’s where the real pay-off comes. It might seem like I am demanding a lot — and I am — but this is a rare opportunity due to the resources and commitment of the Case family and it would be great if it succeeded on all fronts.

This is not just Early Mountain’s problem, of course, but an issue that the Virginia industry needs to wrap its head around. Right now it seems to this outsider that the Virginians, like wine producers in many regions, are working through the debate about the need for a signature grape variety. Viognier? Cabernet Franc? Petite Verdot? It seems to me that this is an unproductive debate (or maybe a counter-productive one).

Virginia makes lots of different wines (Barboursville apparently makes a helluva Nebbiolo — who would have guessed?) from many grapes varieties in many styles (something the Early Mountain flights demonstrate). Defining the region by one grape or two wouldn’t do justice to this diversity.

Virginia also makes some disappointing wines, as is the case with most developing wine regions, and the store shelves feature many sweet wines and fruit wines, too, which may be very good but certainly provide a mixed message. Perhaps  a focus on more consistently high quality (and not signature grape) is the road ahead? I think that’s part of the Best of Virginia plan — to draw attention to high quality and try to raise the bar for everyone.

As the recently published  American Wine by Jancis Robinson and Linda Murphy teaches us, America is full of wine and wineries — they are not just in the big states or made by the big producers. I dream of an America where wine is made everywhere and enjoyed everywhere. Early Mountain can be a part of that dream. I wish them success.

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Thanks to Allison, Dave, Steve, Erich and Jacob at Early Mountain for their hospitality and willingness to answer all our questions. Thanks to Frank for his advice. Thanks to my most senior research assistants Mike and Gert for their able assistance and to Sue for photographs and her sharp eye and keen ear.

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Update June 5, 2013. A nice article about Virginia wines (including a mention of the Early Mountain “Best of Virginia” partnership) has been posted on the Appellation America website. Enjoy!

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Between Two Worlds: The Paradox of the Columbia Gorge AVA

March 26, 2013 By in Oregon wine, Washington wine, wine brands, Wine Wars 3 Comments
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Columbia Gorge: Washington on the left, Oregon on the right.

Washington State produces much more wine than Oregon, but Oregon wines are sometimes easier to find outside the Pacific Northwest. That was a paradox that I discovered as I traveled around the country last year on the Wine Wars book tour and giving alumni talks for the University of Puget Sound.

The Signature Wine Advantage

One explanation for this surprising situation is that Oregon has a “signature wine” while Washington does not. When people think of Oregon they think Pinot Noir and so retailers know what to stock — Pinot Noir at various price points. But what comes to mind when you think of Washington? Nothing, the argument goes, because Washington is many things — Cabernet, Merlot, Riesling, Chardonnay, Syrah, various blends, etc. etc. — and not any one particular thing. Lacking a signature wine variety, retailers don’t know what to stock on their shelves, so they stock less, concerned that it might not sell.

This argument is over-simplified for sure and probably over-sold, too, but the signature variety issue does seems to give Oregon a bit of an advantage over Washington and has caused much  hand-wringing on the north side of the Columbia River over the years.

Lucky Oregon — they’re Pinot Noir. Everyone knows who they are. Poor Washington — we’re [almost] everything, but how do we communicate that? I want to look at both sides of this dilemma over the next few weeks and see if I can shed any light on the question of how wine regions define themselves and the challenges and opportunities of the different strategies.

The Other Oregons

So let’s talk about Oregon. It is rightly known for its fine Pinot Noir wines and it highlights this fact each year at the International Pinot Noir Celebration in McMinnville.  The IPNC gathers Pinot-makers and Pinot-lovers from all around the world, drawing attention to the Oregon industry. It’s an intense experience — so intense that I use it as the focal point for the chapter on “Extreme Wine People” in my forthcoming book Extreme Wine.

But Oregon is not really a one note samba — it is more than Pinot Noir and more than the Willamette Valley, too. And that’s a bit of a problem, because while signature varieties like Oregon Pinot open doors to a wider market, they can also erect barriers to public recognition of other wines and regions. The wine world is very complicated and I wonder if consumers and retailers who think they finally understand Oregon (or Washington or Chile, etc. etc.) are interested in having that understanding challenged, even if the result would benefit them?

I’m exploring how this question plays out in the “other Oregons” in two stages. We’ve just returned from a weekend of research in the Columbia Gorge AVA, to see one example of Oregon beyond Pinot Noir, and we plan to visit Southern Oregon later in the year for a different take on the situation.

Absolutely Gorgeous

The Columbia Gorge AVA, established in 2004, is a beautiful region with many excellent wines, but it is sort of trapped between two worlds. It starts near the town of Hood River, about an hour east of Portland on Interstate 84, and extends up to The Dalles. The AVA runs along both sides of the Columbia River, embracing vineyards and wineries on both the Washington and Oregon shores. Is it a Washington AVA or an Oregon AVA? Both, I think, but that’s part of the “two worlds” confusion.

Vineyard

A typically complicated Columbia Gorge terroir.

The western end of the AVA is very much classic Oregon on both sides of the river. Like the Willamette Valley, the climate is rainy (36 inches a year on average, but as much as 50 inches at the famous Celilo Vineyard) and cooler climate grapes like Pinot Noir, Chardonnay, Riesling and Gewurztraminer do well here.  The Chardonnays and Pinots we tasted at Phelps Creek Vineyards were distinctly and intentionally Burgundian in style, for example, and Rich Cushman’s Rieslings at Viento Wines are works of the Riesling-maker’s art. Nice wines!

Oregon to the West, Washington to the East

So the Gorge is Oregon on the west end (and on both sides of the river), but as you drive east things begin to change. By the time you reach The Dalles you’ve experienced a rain shadow effect and the average rainfall is just 10 inches! Cabernet and Merlot (Washington wine grape varieties) do really well here as do Syrah and even Zinfandel. (Watch for a future post about the 120 year-old Zinfandel vines we found!).

Washington or Oregon? It’s not so much which side of the river as which end of the AVA. But it gets even more confusing (for anyone seeking a simple identity for the wine region), because elevation and aspect are key factors, too. Winegrower Lonnie Wright (the curator of those old Zin vines), drove us to a hilltop where rows of Zinfandel vines cascaded down the south-facing slope while Pinot Noir vines streamed down the north-facing side, the Zin benefiting from the advantageous aspect while the Pinot prospered because of the elevation.

It’s Complicated

The Gorge is divided in other ways, too. While you and I might think of it in terms of wine, other crops are probably bigger business for the local landowners. You can’t imagine the acres of apples, pears and cherries we drove through on our way to the hillside vineyards. And tourism just might be a  bigger industry in the long run. Fortunately these three sides of the Gorge economy mainly reinforce each other in a happy way except of course when they don’t (water rights in drier areas, for example).

Washington or Oregon? Well, as I said, both, but not a region that clearly fits into the stereotype of either state’s wine industry. Some of the wine people I met were happy to have the Oregon association since that is so clearly defined (and works quite well for the quantities of Pinot Noir grapes grown here, which often end up in Oregon appellation wines from Willamette Valley makers). But obviously it cannot encompass the great variety of terroirs, climates and grape varieties found in the Gorge.

Wine is just too darn complicated to be reduced to a single thing. Even in Oregon. Or Washington. Or wherever the Columbia Gorge is!

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The paradox of the Columbia Gorge AVA is just one aspect of the increasing interwoven nature of the the Washington and Oregon wine industries (and the fact that the Columbia River actually unites these regions more than it divides them). The Walla Walla AVA also crosses the state line, of course, and many “Oregon” wineries have grapes trucked down along the river from Washington AVAs such as Horse Heaven Hills to wineries in the Gorge and the Willamette valley, where they make “Washington wines” in “Oregon” wineries — a good thing for everyone involved in my book even if it adds to the wine region identity crisis just a bit.

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Thanks to Lonnie Wright (The Pines 1852) and Rich Cushman (Viento Wines) for showing us their sides of the Gorge — look for more about their projects in future posts. Thanks to Bob and Becky Morus for making our visit to Phelps Creek possible.  Thanks to research assistants Bonnie Main and Richard Pichler for their expertise and enthusiasm.  Thanks to contributing editor Sue Veseth for research assistance and the photos shown here.

Busting the Big Tank Myth: Durbanville Hills

January 22, 2013 By in South Africa, wine brands, wine markets 6 Comments

dhwThere are easier ways to get to Durbanville Hills Winery than aboard a snorkel-equipped Land Rover, but I don’t think there’s a better way to go.

They brought out the 4×4 vehicles (snorkel-equipped — who knew? — so the engines can breathe even in deep water crossings) so that we could experience and appreciate the hills, the vineyards and the rugged terrain even before we came to the winery itself and the braai lunch that was planned for us there.

My visit to Durbanville Hills Winery started as adventure and became a learning experience about the diverse nature of wine in South Africa. Now it is also Exhibit A in the case against the One Big Tank myth that I wrote about last week.

The Big Tank theory is that giant wine and drinks companies with dozens of brands in their portfolios offer consumers the illusion of choice, not real choice. It’s as if all the different wines came out of one big tank.  Although there is a grain of truth in this idea, I think it is fundamentally bogus and Durbanville Hills is a case in point.

From Oom Tas to Nederberg Noble

Durbanville Hills Winery is part of the Distell drinks empire. As I wrote last week, Distell is South Africa’s largest wine and spirits producer and is a global power in several beverage categories. They superficially fit the Big Tank stereotype, but within their range of brands you will find choices over a wide range starting with very basic wines such as Oom Tas (described as “an inexpensive, dry, golden, unsophisticated wine of constantly good quality and taste”) and Kellerprinz (” an unpretentious, fun wine, its quality is nevertheless good and consistent, offering value for money”) and moving on up the ladder to the rather special Nederberg Noble Late Harvest wine I wrote about last year.

Durbanville Hills Winery is a relatively new addition to the Distell group.  The winery is beautiful in a modern way that does not seem out of place for its setting. The public spaces are welcoming, the restaurant gets good marks and you can’t beat the views looking out over the vineyards or on to the city. It looks like Distell has put a lot of time and money into the operation and the result is impressive.

Even Lettie Likes It

The wines are impressive, too. I especially liked the Sauvignon Blanc, which seems to do especially well in these hills. And the Pinotage is good enough to get a nod from self-confessed Pinotage-hater Lettie Teague, wine critic for the Wall Street Journal.

Durbanville Hills’ wines are distinctive (which runs counter to the Big Tank myth), but in fact the whole operation is unusual and not what you would expect from a “drinks company” winery at all.

Durbanville Hills was founded in 1999 as a partnership between Distell and seven wine farms in this region and the first wines were released in 2001. This area has a long history of wine growing — the youngest of the farms was founded in 1714 according to the winery website.

Triple Bottom Line

Distell’s representatives sit on the winery board, as I understand it, along with the farmer partners plus a workers’ representative. The wine farm workers have a 5% equity stake in the business that is administered through a trust that provides a number of social and economic benefits to workers and their families. Durbanville Hills was one of the first wineries to be accredited by the Wine Industry Ethical Trade Association. 

Cellar master Martin Moore is an enthusiastic promoter of a particular brand of sustainability that is sometimes called the “triple bottom line” approach (although he never used this term when talking with me). Businesses need profits to sustain themselves in the long run, of course, but economic sustainability doesn’t mean much if the environment is sacrificed (true for all business, but especially for wine), so you have to add that factor into the equation. And what are planet and profit without people? Communities must be sustained along with business and the environment. So true sustainability is the intersection of the three spheres of life taken together.

To quite intentionally organize a wine company around these values is a long term commitment and not the sort of thing that you associate with a corporation nervous about quarterly earnings reports. But it seems to me that everyone at Durbanville Hills is in this for the long run and the structure of the business is meant to keep it that way. It’s an impressive achievement and it makes a glass of Durbanville Hills wine a particularly satisfying drink.

Not Free Range

Clearly there are values and principles beyond a simple short-term profit motive behind the Durbanville Hills project, but they are usefully balanced with a sense of realism — you have to be pragmatic to make the triple bottom line work because this idea of business  isn’t about avoiding trade-offs, it’s about confronting them and making effective choices.

I saw this in a sort of sustainability manifesto that Martin Moore gave me at the end of my visit. Moore writes that, “We farm responsibly … not organic, not biodynamic … but sustainably.”  I think his point is that it is difficult to balance all three bottom lines if you swear off potentially important tools. “I would not even claim that we have free range vines,” he jokes, “as most of it is stuck in a trellis system.”

But I do believe that if we continue improving strengthening our 3 pillars of sustainable farming Durbanville Hills, our producers, our farm workers and community will hand over a successful business to the future generation without having to apologize.P1040576

Myth and Reality

Clearly Durbanville Hills Winery doesn’t fit the Big Tank theory and I think it is an indication that Distell and other giant wine and drinks companies are capable of offering wine consumers real choice — choice in both the wines themselves (which is the point after all) and in the entire wine experience.

It would be easy to make the case that Distell and Durbanville Hills are special cases. South Africa has a unique wine history that stretches back for hundreds of years and a unique social history, too, which motivates many there to address directly issues of race and inequality.

And then there is the Rupert family’s influence on Distell. If anyone understands the the benefits of product differentiation and avoiding a Big Tank syndrome, it is probably the Ruperts, whose broad holdings control many luxury brands including Cartier. They would certainly appreciate the business value of distinctive products compared with Big Tank uniformity.

Distell is a unique wine company in many ways, but I don’t see it as unique in terms of the Big Tank myth.  While I don’t deny that there are a few Big Tanks out there, in general I believe that even giant wine companies have strong business incentives to provide consumers with diverse choices (and even in some cases to take seriously the triple bottom line).

It is a sad fact that some of the great potential diversity of wine production does get filtered out by the logic of distribution and retail economics, and the vast scale and scope of the wine giants indirectly contributes to that problem. But, as I said in my last post, it takes a village to raise a child and it takes an entire supply chain to deliver diverse wine choices … or not. But it’s not just a Big Tank problem.

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I realize that one example, even a really good one like Durbanville Hills, isn’t enough to bust a myth (n=1 is a pretty small sample size). But there are lots of examples if you only take off the “Big Tank” glasses and look around.

Thanks to Cellar master Martin Moore and Managing Director Albert Gerber for taking the time to answer all my questions at Durbanville Hills and Cape Wine 2012. The images up top are from the winery’s website.

The “One Big Tank” Myth

January 15, 2013 By in South Africa, wine brands, wine markets, wine price 1 Comment

My recent post about How Much Choice Do Wine Drinkers Really Have? made the point that true diversity in wine choice is complicated. Although there are constellations of wine brands that are theoretically available, from a practical standpoint the choice available to you depends on your price point “comfort zone,” how you shop (on-line or wine club versus bricks and mortar stores), where you shop (local shop versus national chain store), where you live (state regulations vary enormously) and many other factors.

It takes a village to raise a child, they say, and it takes an entire product chain to raise up a diverse selection of wine … or not!

The Illusion of Choice?

A persistent concern is the influence of giant wine companies with dozens of wine brands in their portfolios. The conventional wisdom seems to be that these big firms merely create the illusion of choice, not choice itself. I guess the idea is that all of these different wine brands actually pour out of the spigot of one giant wine tank. If they all come from Gallo (or Constellation Brands or Treasury Wine Estates, etc.) then they must all be the same — or so similar as to make choice irrelevant.  I call this the “One Big Tank” theory and I think it’s a myth, although like all myths it contains a grain of truth.

The reality is that giant wine companies can and often do produce distinctive wines. And smaller operations sometimes pump out quantities of relatively terroir-free negociant wine to pay the bills. Size matters in wine, but it’s not the only thing. My motto is still “think global, drink local,” so I am not arguing against small terroir-driven producers, but I think at least some of the big wine companies have an undeserved poor reputation from the wine choice standpoint.

Giant wine companies have many advantages: access to capital, technology and vineyards, for example, and economies of scale in purchasing, distribution  and some aspects of production. What matters from the consumer choice standpoint is how these advantages are employed. You can aim to fill that one big tank as cheaply as possible or you can leverage the large scale advantages to create real quality and diversity.

Big Tank Stereotypes

A good example of how the myth unravels at least some of the time comes from my visit to South Africa. I was a guest of Distell for part of my visit (Distell owns Nederberg and I gave the keynote at the Nederberg Auction) and this gave me an opportunity to learn about the company, which is South Africa’s largest wine and spirits producer.

If you go strictly on stereotypes, Distell has got to be one of those “big tank” operations because it has most of the defining characteristics. It is, first of all, a “drinks company” and not a “wine company,” to use a distinction I first heard from a New Zealand winemaker (who worked for a “wine company,” of course). Here’s how the wine vs drinks dichotomy works.

Wine companies make wine (and only wine) and are often family owned. Drinks companies, on the other hand, manufacture all sorts of alcoholic beverages and are usually public corporations.  Whereas wine companies think tradition and  terroir, the story goes, drinks companies think marketing and product positioning.  Wine companies sometimes stay in the founding family’s control for generations. Drinks companies often get acquired, merged and traded back and forth like properties on a Monopoly board.

Distell fits the drinks company profile pretty well. It dominates the market for brandy in South Africa and is the leading wine producer, too. It is the world’s #2 producer of cider, another “drinks” category. Distell has strong international interests and owns  both a French Cognac house (Bisquit) and an Asian distributor. It has over 30 spirits brands in its portfolio and an even larger number of wines, wine apertifs, ciders and “ready to drink” beverages.

Distell is probaby best known in the U.S. for its Two Oceans and Fleur du Cap wine brands, but its hottest product is a cream liqueur called Amarula, “the Spirit of Africa.” It is the #2 best-selling cream liqueur in the world according to the company’s 2012 annual report.

Circumstantial Evidence

Distell also has a complicated business history.¹ The current firm was created in 2000 with the merger of Stellenbosch Farmers’ Winery and Distillers Corporation, but the history stretches back a ways. Key players include the South African billionaire Rupert family, which controls a diversified multinational business portfolio (they own the  Richemont  group of luxury goods companies, for example), the South African wine giant KWV and the big beer player SAB (think SABMiller — SAB stands for South African Breweries).

So, Distell fits the big tank  stereotype pretty well and some of its products have the classic “drinks company” profile, too. But the evidence that wine choice at Distell is an illusion is what Perry Mason would call “circumstantial.”  Can a “drinks company” like Distell offer consumers wines that give then a real choice and not just an illusion of choice?

Inside the big drinks company I found a good deal of counter evidence to the big tank theory. Join me in my next post as I climb into a snorkel-equipped Land Rover 4×4 and visit Distell’s Durbanville Hills Winery.

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The top image is an historic example of a great big tank: the famous Heidelberg Tun, made in 1751, with a reported capacity of 220,000 liters. Here’s what Mark Twain had to say about it in A Tramp Abroad (1880). 

Everybody has heard of the great Heidelberg Tun, and most people have seen it, no doubt. It is a wine-cask as big as a cottage, and some traditions say it holds eighteen hundred thousand bottles, and other traditions say it holds eighteen hundred million barrels. I think it likely that one of these statements is a mistake, and the other is a lie. However, the mere matter of capacity is a thing of no sort of consequence, since the cask is empty, and indeed has always been empty, history says. An empty cask the size of a cathedral could excite but little emotion in me. I do not see any wisdom in building a monster cask to hoard up emptiness in, when you can get a better quality, outside, any day, free of expense.

¹ Most of what I think I know about Distell’s business history I learned from the company’s investor website and from Nick Vink, Gavin Williams and Johann Kirsten, “South Africa” in Kym Anderson (editor), The World’s Wine Markets: Globalization at Work (Edward Elgar, 2004).

How Much Choice Do Wine Drinkers Really Have?

January 8, 2013 By in wine brands, wine distibution, wine markets 7 Comments

galaxy2*

How much choice do U.S. wine drinkers really have? The answer to this question, according to a study by a group of Michigan State University scholars, is that it depends on how you look at the question and where you seek your answer.

The study is called “Concentration in the U.S. Wine Industry” by Phil Howard, Terra Bogart, Alix Grabowski, Rebecca Mino, Nick Molen and Steve Schultze and it follows up on previous research on concentration in the U.S. beer and soft drinks industries. (Click on the link to read the whole report and select the tabs you will find there to view the beer and soft drinks information.)

A Question of Perspective

If you look at the question in terms of the number of different wine brands on the market and varieties within each brand, then the answer is clear. U.S. consumers have a galaxy of choices when it comes to wine. I use the term “galaxy” because I’ve taken one of the key info-graphics from the report and doctored it up to look like an image of the stars in the night sky.  More wines than than there are stars in the universe — or at least it seems that way some of the time.

But click on that galaxy image above and you will open a window that shows how those wine stars are aligned. And I am sure that you won’t be surprised to see that there are several huge business “solar systems” with dozens of brands each: Gallo, the Wine Group and Constellation Brands among the producers, for example, and Deutsch and Winebow among the importers.

mktshare

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The wine world has its share of Mega and Mini businesses and some of the Megas are very large indeed, although the degree of market concentration is much less in wine than in beer or soft drinks.  So if you look at wine compared to beer, for example (and I suspect that this would hold true for spirits, too), there is a very low level of concentration — lots of different choices even taking the biggest firms into account. And if you look at it in terms of number of individual wines for sale you get the same sort of answer. But if you look at the number of wine firms and the amount of the total wine market they fill, the choice seems a lot narrower.

As the graphic above suggests, the top 5 firms account for more than half of U.S. wine sales, which is a lot even if it is less than the corresponding figure for beer or soft drinks. Although the study does not provide any international comparisons, I believe the the U.S. wine market is much more concentrated than France, Italy or the U.K., for example,  but less so than Australia. (In the UK the critical concentration factor is at the retailer rather than the producer level since the big retail chains are so influential there.)

The degree of concentration also differs depending upon whether you look at all wine as this study does or segment the market according to price, which is the analysis I prefer. The market for wines selling for less than $5 per bottle equivalent is much more concentrated than the $20+ segment, for example. Most consumers make most of their purchases within a relatively narrow price range and it’s the diversity in that segment that matters most to them.

Location, Location, Location

The Michigan State team found that the nature of your choice also depends upon where you shop. Some of the supermarkets and wine shops that they surveyed in Michigan sourced their wine from dozens of different suppliers, providing that galaxy of choices that the vast potential selection promises. But other stores — national-chain convenience or drug stores, for example — can (and frequently do) quite easily fill a 100-item wine wall with products from just two or maybe three suppliers. The Megas can easily provide foreign and domestic selections of all the main varieties at every relevant price point. So choice is both smaller and different, if you know what I mean.

This has an impact on wines produced or imported by smaller firms, of course, and also (according to an interesting study by Rebecca  Mino) on local wineries.  Mino found that Michigan wines were far more likely to be available in Michigan-only retailers than at the Michigan affiliates of national retail chains.

These studies are very interesting and fun, too  — I admit that I played with the “galaxy” graphic for quite a while because I enjoyed seeing the business connections within the different wine portfolios. It is just fascinating — if you haven’t clicked on that “galaxy” image at the top of the page already you’ve got to do it now.

What’s the Right Way to Think About Choice in Wine?

But the main thing I appreciate about this research is the question that it raises: how should we think about choice when it comes to wine? Does that fact that some of the Megas have dozens of brands diminish choice? Certainly not if the brands have considerable autonomy when it comes to winemaking (like the “string of pearls” model that Ste Michelle Wine Estates follows).  Sometimes the vast perceived choice is real.

But that doesn’t mean that that there aren’t any effects of industrial concentration in wine, as the national chain store part of the study indicates. Some of the national retail chains treat wine as they do other products and attempt to minimize the number of suppliers while maintaining choice. Choice is diminished when the availability of “Mini” products and especially locally-produced wines is taken into account and  this would be a problem if these stores are the only choice for wine (as they may be in some areas). Apparently we need a mix of different retail suppliers to assure that the true diversity of wine is represented on the shelves.

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Thanks to Phillip H. Howard for sharing his results and giving me permission to reprint some of the graphics.  Speaking of “it depends on how you look at it” questions, here is one of my favorite science videos — “Powers of Ten” from the Office of Charles and Ray Eames (1977). Enjoy.

Extreme Wine South Africa: The International Connection

November 6, 2012 By in globalization, South Africa, wine brands Leave a comment

One of the issues I wanted to explore during my visit to South Africa was the nature of international investment, partnerships and strategic alliances in that country.  There is so much about South African wine that is very old and traditional that I wondered how it was  dealing with the new and global. Here’s some of what I found out.

[This is part of a series of posts reflecting on my recent visit to South Africa.  Click here to see all the posts in this series.]

The International Connection

I am interested in international economic connections in particular because they have proved to be so important elsewhere in the Southern Hemisphere wine world. The modern wine boom in New Zealand really took off when the international wine trade was opened up, for example, along with opportunities for inward investment. Now the export-focused NZ wine business is largely foreign owned,  part of the Faustian bargain that generated New Zealand’s great success.

International investment, partnerships and strategic alliances have been important in Argentina, too, with European, American and Chilean relationships exerting strong influence.  Chile and Australia also have important stories to tell in this regard, too, but as they say on Facebook “it’s complicated” for these two countries — too complicated to be included here.

The Screaming Eagle Connection

What’s the story in South Africa, I wondered as I walked into CapeWine 2012? I didn’t have to wait long to find out. The opening general session featured remarks by Charles Banks, former managing partner of California cult winery Screaming Eagle,  and Troy Christensen, CEO of Accolade Wines, which is the phoenix that has risen from the ashes left behind when Constellation Brands offloaded their wine assets in Australia and Europe. Banks and Christensen were seen as leading indicators of international interest in the South African wine industry.

Banks received special attention, which probably isn’t surprising given his Screaming Eagle background. He is CEO of Terroir Capital, an investment group whose international holdings now include Mulderbosch Vineyard and Fable Wines in South Africa. He is very positive about South Africa’s wine future and obviously purchased assets there with an eye towards taking them to the next level.

Mulderbosch was already a global brand, he told the international audience, and he saw potential to increase quality and expand scale. With Fable Wines Banks intends to take a highly-regarded existing South African winery (Tulbagh Mountain Vineyard) and rename (to make it more pronounceable, Banks said), rebrand and re-position it in international markets. The focus is on old bush vine Chenin Blanc and red Rhone varietal wines.

So clearly South Africa is on the wine investment radar, I concluded, despite what American investor Bill Foley told Lettie Teague in a recent Wall Street Journal article. But how deep does the interest go?

A Half Dozen Answers

I got my answer and more at a seminar the next day that was organized and led by Mike Ratcliffe, the managing director of Warwick Wine Estate. Mike wanted to showcase international investment in the South African industry and he decided to do it through a tasting of the six wines shown in the photo at the top of this post and listed below. Each wine had a different international story to tell and together I think they give an idea of the variety of actors, interests and motivation.

 # Wine & Vintage
1 Waterkloof Circle of Life White 2011
2 Delaire Graff Botmaskop 2009
3 Glenelley Lady May 2009
4 Anwilka 2008
5 Fable Bobbejaan 2010
6 Vilafonte Series M 2009

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Waterkloof  Wines is the creation of UK wine executive Paul Boutinot, whose title is listed as “Custodian” on the website, which suggests that he is in this for the long run.  Boutinot, his UK business, is an ambitious and successful enterprise that produces, imports and sells wine; it was named Sommelier Wine Awards “Wine Merchant of the Year” four years in a row. The South African winery is a personal investment that reflects Boutinot’s passion for wine and sincere interest in terroir. I expect it will also benefit from his business background and distribution experience.

Delaire Graff Estate is the project of Englishman Laurence Graff, Chairman of Graff Diamonds International and I think you can see the luxury lifestyle influence in the video and on the website. The intention was to create more than a winery — Delaire is a destination resort that includes the winery of course, but also luxury lodges, a “destination Spa,” and two restaurants in an atmosphere filled with art and natural beauty.


Madame May de Lencqauesaing is the proprietor of Glenelley Estate and you are correct if you guess that she is French. She was born in Bordeaux and managed her family estate Chateau Pichon Longueville Comtesse de Lalande until its sale to the Roederer Champagne house in 2007.  Since then she’s focused on her South African estate, which makes “South African wine with a French Touch” according to the website.

Anwilka is a multinational partnership between South Africa’s Lowell Jooste of Klein Constantia, Hubert de Bouard, co-owner of Chateau Angelus in Bordeaux and Bruno Prats, former owner of another Bordeaux property, Chateau Clos d’Estournel. The bulk of Anwilka’s production of its Syrah-Cab-Merlot blend is exported, according to a Wine Advocate note, and sold through the Bordeaux marketplace.

The fifth wine was the Bobbejaan from Fable Wines , which I’ve already discussed. It added an American name to the mix and was the perfect prelude to the final glass.

Mike Ratcliffe saved his own project for the last act, but it was worth waiting for. Vilafonté  is an ambitious collaboration between South Africa, represented by Ratcliffe, and America in the form of head winemaker Zelma Long and head winegrower Dr. Phillip Freese. Long is legendary in California for her work at Robert Mondavi, Simi and her own family winery, Long Vineyards. Freese was head of winegrowing for Mondavi for 13 years and designed the first Opus One vineyards.  He has consulted with several South African wineries including Warwick. Like the other wines in the tasting, Vilafonté was a South African wine made to international standards and positioned for export.

These wines will be good ambassadors for South Africa, I believe, and represent intelligent (and generally delicious) international initiatives and collaborations. Each international investment brings something useful to the South African wine table while highlighting the best of what’s already here.

I know that there are other international investments in South Africa (Donald Hess’s investment in Glen Carlou springs to mind)  and I know that all of them have not worked out as well as the ones showcased here (I won’t name names). It’s too soon to tell how the story will turn out in the end, but on balance it seems to be a healthy collaboration so far.

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This is the last post in my series on South African wine, but look for the topic to come up again in other contexts. Thanks to Mike Ratcliffe for organizing the seminar and encouraging me to attend.

I hope you don’t mind the videos that I’ve inserted in the post. I found them on YouTube and I think they add something to the story.