The Beginning of the End of the Old World Appellation System?

“Some New World regions are adopting European-style AOC rules,” the Italian journalist I met in Sardinia explained, “Do you think this is an important trend?”

“No. Just the opposite. I think the Old World appellation system is under attack and will need to change to survive.”

He looked at me like I had dropped down from Mars. This was clearly not the answer he was looking for, but I think it is true. I wasn’t able to explain my logic very well in the rush of the interview, so let me try to explain here.

We Have Met the Enemy …

New World wine appellations are geographical indicators that specify a wine’s origin and help differentiate a region’s products. Some of these designations are very valuable (Napa and Sonoma, for example) in terms of price premium. Others are of little economic value, but can sometimes be useful in other ways that I don’t have time to explain here.

The Old World appellation system starts with designation of origin and adds to that a system of rules that restrict grape choices, blend components and ratios, viticultural practices, and other factors. AOC rules can literally fill a book as Jancis Robinson shows us in the classic video above.

AOCs (and Italian DOCs, Spanish DOs, etc.) evolved as essentially protective structures based on the experience in Champagne, which was the model for the current system. (I wrote about this in my book Money, Taste, and Wine). The first goal was to protect regional reproducers from fraud by outsiders passing off their imitation wines as the real thing.

The second goal (and the reason for such detailed regulation) was to protect quality producers in the region from neighbors inside the region who might cut corners and sacrifice quality to increase profit while benefiting from the regional “brand”.

Very high yields, for example, might increase a particular winery’s profit, but the lower quality dilutes the value of the appellation to all others. It is a cut-throat situation. “We have met the enemy and he is us” describes this element of the AOC program.

So AOCs seek to defend the regional brand from threats from the unscrupulous both outside and inside the region. Today, however, there are two powerful forces that threaten this system and will force it to change. Indeed it is already changing.

Shifting Center of Gravity

The first force is the global market, where the fastest-growing segments and categories are not closely aligned with the AOC system and where the premiumization syndrome is strongest. American consumers have shifted their market’s center of gravity to higher price points, but not higher prices for the same products. They will pay more than before but the product has to be differentiated and appealing. So innovation, which is not a strong point of the AOC system, is increasingly important.

Sue and I saw this when we visited the Valpolicella region a few years ago. The AOC system basically provides opportunities for Valpolicella wines, Ripasso, and Amarone in ascending order of retail price (I am leaving out details to simply, but you get my drift).

We met producer after producer who responded to this situation by creating proprietary blends of grapes that were “downgraded” to IGT status (because the blends don’t strictly adhere to the rule book), but upgraded in terms of price because of their effective branding and high quality. These new IGT wines were designed to fit price points created by premiumization that were not easily attainable with existing AOC products.

There is nothing new about the IGT movement — remember when super-Tuscans were controversial, which feels like a very long time ago? But the IGT trend, which basically slips out of the AOC handcuffs, has gathered unstoppable momentum. We see these wines everywhere now — France, Italy, Spain, everywhere. And some of them of fantastic. AOC? We don’t need no stinkin’ AOC?

In a sense the rise of these “super-” wines represents a shift in mentality that is worth noting. If the AOC system if defensive at its core, the IGT movement is entrepreneurial, seeking out new opportunities and breaking rules to get them.

Climate Change Challenges

The AOC system can withstand these market forces, although some regions will find it in their interests to adapt as Chianti did in the face of super-Tuscan success. But a second force is harder to ignore and will be even more threatening in the long run: climate change.

AOC rules are often promoted as an evolutionary pinnacle. We’ve had hundreds of years to figure out what grapes and blends are the very best for our terroir and here they are laid out in the rule book! Best of the best. You cannot improve upon the AOC rules.

It is a nice argument, but what happens when the terroir changes due to new climate patterns? The answer is that the wines need to adapt and evolve to remain at the peak, which is hard to do if the rule book doesn’t change. AOC standards need to evolve with the climate or become irrelevant or, worse, counter-productive.

Bordeaux Adapts

Some Old World regions already see the writing on the wall, as Jane Anson reported in Decanter earlier this year. Bordeaux and Bordeaux Superieur producers now are able to experiment with “accessory grape” varieties that may better withstand climate change than the traditional (and designated) grape varieties such as Cabernet Sauvignon and Merlot.

“The red grapes for trial,” Anson reports, “will be Marselan, Syrah, Zinfandel and Arinarnoa. In white, Liliorila, Chardonnay, Petit Manseng Blanc and Chenin Blanc will be tested.” A recent VinePair article called this “a small revolution,” but I see it as something bigger and this is just the start.

Anson’s article continues,

Veronique Barthe of Chateau la Freynelle, who is working on the project with the Bordeaux and Bordeaux Superieur Union, told decanter.com this was not a form of sacrilege.

‘We are not trying to make 100% Syrah in Bordeaux, but to test which grapes work best on which terroir in the region with the intention of introducing them only if they offer real quality,’ she said.

This sounds like exactly what a winemaker should be doing, don’t you think? “When the facts change, I change my opinion. What do you do?” according to Keynes. When the climate changes, what will the AOCs do?

So the AOC system is under attack from the inside by IGT wines and from the outside by climate change. The system will adapt, but it won’t be the same. We can debate whether this is a good thing or not (I’m on the good thing side), but it is going to happen. And that’s what I wish I had time to explain to that Italian wine journalist.

Small is Beautiful? Scratching the Surface of Pennsylvania Wine

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Pennsylvania wine? Do they make wine in Pennsylvania? Is that even a thing?

These were the sort of comments we often heard when Sue and I told friends and family that we were going to try to learn a little bit about Pennsylvania wine while we were in the Valley Forge area for our nephew’s wedding. Even some of the Pennsylvania natives we met were caught by surprise.

A Wagnerian Vision

Most people equate U.S. wine with California, which makes some sense because that state has the most wineries (more than 4500 according to the January 2019 issue of Wine Business Monthly) and makes about 90% of the nation’s wine. But there are actually more than 10,000 wineries in the U.S., so there are more wineries outside of California than in it. There are wineries in every single state and the District of Columbia, too (urban wineries are also a thing).

Wine’s wide domain is a triumph of the vision of Philip Wagner, the founder of Maryland’s Boordy Vineyards, which I wrote about in my book Wine Wars  in a chapter called Martians and Wagnerians.  Wagner imagined  America as a country where wine was made everywhere and consumed everywhere and while his vision hasn’t been fully realized the raw materials are there to see for anyone with a little curiosity.

Pennsylvania, for example, has 285 wineries, which puts it in 6th place in the U.S. wine league table based on number of wineries (not volume of wine) after California (of course), Oregon, Washington, New York, Texas, and Virginia.

1683 And All That

There are at least two ways to look at the history of Pennsylvania wine and both are revealing. Jancis Robinson and Linda Murphy highlight the date 1968 in their excellent survey, American Wine.  That was the year that the Pennsylvania legislature passed the Limited Winery Act, which gave wineries the right to sell directly to consumers and through a limited number of retailers, avoiding the requirement to use wholesalers and the Pennsylvania Liquor Control Board’s monopoly stores.

Pennsylvania wineries would be relatively small and use only Pennsylvania grapes, but they could be economically sustainable because of their favorable market access. Pennsylvania already had grapes — it was the #4 table grape producing state. Now a wine industry could begin to emerge.

Robinson and Murphy only briefly reference Pennsylvania’s much longer wine history, which is discussed in greater depth in Thomas Pinney’s A History of Wine in America (Vol. 1, From the Beginnings to Prohibition). Here 1683 is the critical date. That’s when Andrew Doz planted a vineyard for William Penn. The European vines soon died, alas, but not before creating a natural hybrid with a native variety, which was named Alexander and became the basis of America’s first commercial wine production. Benjamin Franklin was an enthusiastic proponent of the Pennsylvania industry both here and abroad. Wine runs deep in Pennsylvania.

Finding Wine at Penns Woodspennswoods3

We only had time to visit one winery (now that really just scratches the surface), but a well-informed friend helped us choose a target that she thought would tell us something about Pennsylvania wine’s past, present, and future potential. So we pointed our rental Hyundai Santa Fe toward Chadds Ford and Penns Woods Winery.

Italian wine importer Gino Razzi decided he wanted to make wine, not just sell it. He started in 1997 with Symposium, a Montepulciano d’Abruzzo, which received 95 points from Wine Spectator. This success prompted a search for the ideal Pennsylvania location — not too far from his business in Philadelphia — and in 2000 he purchased and re-named the Smithbridge Winery in Chadds Ford. An additional vineyard was developed 20 miles northwest near Coatesville. The first Penns Woods wines appeared in 2004.

Penns Woods produces 4000-4500 cases per year depending upon Mother Nature’s generosity, selling most of it directly at the historic country house tasting room and to wine club members. About 20 percent is allocated to on-premise and retail accounts, where there is strong demand.

We visited on what started out as a sleepy Saturday morning, but things soon heated up. Seated tastings took place on the covered patio, where small groups can learn all they want about the wines and the winery. A bride party suddenly arrived and headed to a long table out in the meadow where concerts and other events take place. These guests purchase wine by the bottle or glass without the guided formal tasting. The bride and her friends seemed to be having a wonderful time and we had a great time, too.

Penns Woods make a large range of wines and wine styles from dry to sweeter and from the European grape varieties that William Penn struck out with to hybrid varieties that were once the only game in town hereabouts. So, for example,  we tasted Pinot Noir (a recent experiment that showed nice spice and good potential) and also Chambourcin, a French-American hybrid that we learned was a favorite of Carley Razzi Mack, Gino’s daughter and business partner.

We were especially fond of a distinctive 2016 Gruner Veltliner from a Bucks County vineyard and a 2015 Cabernet Franc Reserve from 30+ year old vines.

Small is Beautiful

Penns Woods impresses us on many levels. First, the people we met at Penns Woods know who they are and what they want to be. That means a strong focus on quality in all the winery’s products and operations. They are also firmly rooted in their region and they appear to want to nurture relationships with their customers as much as they nurture the vines themselves. Penns Woods represents Pennsylvania very well.77541

What’s the future? Well, I think the adage that “small is beautiful” might apply here and perhaps to Pennsylvania more generally because of the way that the wine laws steer the market.  Success isn’t measured only by scale but also by the quality of the wines, the quality of the relationships the wines help build, and the satisfaction that these things bring.

We have only scratched the surface of Pennsylvania — lots more to taste and learn. American wine is nothing if not diverse and I am sure this is true of Pennsylvania. Impossible to generalize based on just a couple of wines and wineries. But this much I can say:

Penns Woods and other Pennsylvania wineries are helping fulfill Philip Wagner’s dream of a healthy, civilized America covered with vines, filled with wineries, and populated by wine-loving citizens.  Isn’t it about time you made a visit to a Wagnerian winery near you? Cheers!

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Thanks to Rachel Kuehn, sales manager at Penns Woods Winery, for taking time to answer all our questions. Special thanks to Denise Gardner for her good advice.

Congratulations and thanks to Anna and Jeffrey, who exchanged vows on a rainy day in Valley Forge. Your celebration gave us an excuse to scratch the surface of Pennsylvania wine!

Ten Years of Open That Bottle Night

Photo OTBN2009By Sue Veseth, Contributing Editor

In 2009, a group of people with a love of wine and connections to the University of Puget Sound decided to celebrate Open That Bottle Night. Our wines on that February evening included a sparkling wine and a Cabernet Sauvignon from Washington State, a classic Bordeaux, a Chateauneuf du Pape, a California port-style wine, and a Sauternes. The only “rule” of our gathering was that each participant had to bring a story with his or her wine.

At that first OTBN dinner, we knew we were on to something exciting. Open That Bottle Night was an opportunity for our core group — Mike and Sue, Ken and Rosemary, Ron and Mary, Richard and Bonnie — to get together to share wine, food, and, stories.

OTBN logoOver the years, our OTBN celebrations have included additional friends. A few times, one or two people from the core were unable to attend because of work or family needs. Some years, we met at someone’s home for an elegant dinner. Other years, we met at restaurants (with our own wine, of course). We even held potluck dinners for OTBN.

We have toured the world on OTBN, with wines from Washington State, Oregon, California, Arizona, Okanagan Valley in Canada, France, Italy, Spain, Germany, Portugal, Hungary, China, and South Africa.

The rule of wine-and-a-story is still the centerpiece of our OTBN. As expected, most of the wine stories have included special people: My mentor (or parent or boss or friend) gave me this. This was my engagement (or wedding) wine. This wine is from the birth year of my child. We visited with the winemaker at this winery. A wine merchant we trust recommended this wine.

Photo OTBN2019By coincidence, but not by design, our wine selections and stories have complemented each other. This year, with a decade of OTBN experience, a theme of “firsts and lasts” developed with our wines:

  • Sorelle Bronca Brut Prosecco — Mike thought this was the last bottle in his stash of this beautiful Prosecco, but there may be another one or two.
  • La Grande Dame Champagne Brut 1989 — For Ken, the Champagne “was the last of a four bottles I bought from a London wine merchant soon after moving there in 1992. They were the most expensive bottles of anything we had bought up to that point but as you know, I was always on the lookout for the 1989 vintage because Rosemary and I were married that year. Of course, I wish now that we had bought more.”
  • Ramsay Mouvedre 1995 Napa — For Ron, this wine “represents the last bottle of booty Mary and I brought home from our twice annual trips to Napa from 1991-2002. We always brought home to Connecticut some of our favorite tastings from these trips, and this bottle is the last of those souvenirs.”
  • DiStefano Cabernet Sauvignon 1999 Columbia Valley — This was the last bottle from the first full case of wine that Bonnie and Richard purchased. “I think we were all surprised that a Washington Cabernet had held up so well,” Richard said. “That bodes well for our collections!”
  • Andrew Will Sorella 2007 Horse Heaven Hills — For Ron and Mary, this wine was a “first” because it is their favorite Andrew Will wine. It also was the last bottle in a case of Sorella they purchased when it was released.
  • Chateau de Beaucastel Chateauneuf du Pape 2014 —This was the first bottle of the first case of wine that Bonnie and Richard purchased on a futures basis. Maybe not quite ready to drink but a double-first!
  • Dow’s Vintage Port 1994 — This was the first bottle out of a case Ken bought in London. “I have been eager to try it but decided to wait until its 25th birthday to try the first bottle,” he said.
  • Armagnac Napoleon J. Dupeyron Condom c. 1955 —Sue liberated this bottle from her parents when they down-sized. Jacques-François Ryst of Ryst Dupeyron said it dates from about 1955.

“I find it uncanny and wonderful how each year a collective story emerges from our individual wine contributions,” Ron said. “In vino veritas — and narrative!”

At a time when we lament that we are glued to our devices for interaction with family, friends, and colleagues, Open That Bottle Night gives us an opportunity to gather together to share, talk, eat, and drink. The beauty of OTBN is that your event can be as over-the-top or as modest as you want; it’s yours. Even better, the evening reinforces and strengthens long-standing friendships.

Misunderstanding Romanian Wine


It is easy to misunderstand Romania and its wine industry.

Romania is a very old culture but a surprisingly young nation-state. The Great Unification of 1918 finally brought all the historical provinces together under one roof a hundred years ago, an act that Romanians celebrated on December 1, their Great Union Day.

Contemporary Romania is even younger, dating to the end of the Soviet era in 1989. It entered the European Union in 2007 — another important date. Romania is a country with deep roots and vigorous new growth. It is both very old and very new, a work in progress (like the rest of us).

It is tempting to view Romanian wine as both old and new, too. Wine has been made in Romania for six or seven thousand years and the culture both embraces wine and consumes it with gusto.

Romanian wine today is also a work in progress and Sue and I learned as much as we could about its current status and future prospects when we spent a week there last month. We participated in the International Wine Competition Bucharest (held in Iasi this year) and I gave a lecture to students and faculty at the University of Agricultural Sciences and and Veterinary Medicine.

King of Wines

73205One particular Romanian sweet wine — Grasa de Cotnari — has an important place in wine history. Grasa de Cotnari, Tokaji of Hungary, and Constantia of South Africa were once the most celebrated wines in the world. King of wines, wines of kings, they were the kings of the hill in a world where luscious sweet wines were treasured above all others. Time have changed, however, and wines like these no long rule as they once did.

The thing about Romanian wine is that just when you think you understand it, you discover that there’s another layer and you have to start over.  Sue and I wanted to taste a few Romanian wines before our trip and I hit pay dirt at a local Total Wine store where I discovered several wines made by Cramele Recas, one of Romania’s largest producers (and a Total Wine Winery Direct partner). Two were international varieties (Pinot Gris and Pinot Noir) and two were native Romanian varieties (Feteasca Negra and Feteasca Regala). All were inexpensive — typically $5.99 per bottle or $5.39 as part of a Winery Direct six-bottle purchase.

The Recas wines were clean and well made, with good acidity and varietal character. We shared some with our neighbors, who were surprised at the Pinot Noir given its price. The Recas winemaker has lots of experience producing commercial quality wine at affordable prices. He divides his time between Recas in Romania and a winery in Australia that you might have heard of. It’s called Yellowtail.

But Wait … There’s More

So Romanian wine is cheap but pretty good — a bottom shelf bargain. Is that right? Well, yes it is, but as soon as we arrived in Iasi we discovered another layer. There has been a very strong movement to higher quality since the end of the Communist era and especially since Romania joined  the European Union and opened its doors more widely to international competition.

The semi-sweet wines that were a mainstay during the Soviet era remain popular. Sugar can be used to cover up a variety of wine flaws, and so sweet wines are often suspect, but we tasted some that were well-made and delicious.  Many producers make both dry and semi-sweet versions of their wines to satisfy the diverse consumer audience. I don’t think these sweetish wines will or should go away, but dry wines are clearly the future and a lot of effort is going into their production.

But which dry wines? Romania is fortunate to have a wine grape treasury that includes a number of indigenous varieties that make distinctive, delicious wines. In the right hands, Feteasca Regala (white), Feteasca Neagra (red) and Busuioaca de Bohotin (rosé) produce exciting wines, for example, and there are other promising varieties.  I admit that my prejudice is for the native grape varieties and not the international varieties that you see everywhere, but it is important to have an open mind.

davinoWe spent a day in the Delau Mare region near Bucharest, which is known for its excellent red wines. Our last stop was Davino, which was Romania’s second privately-owned winery (S.E.R.V.E. was the first). We tasted the Purpura Valahica, which is made from Feteasca Negra clones specifically selected for the local terroir. It was terrific — a wonderful example of just the sort of terroir wine I had my heart set on finding. Romanian grapes, Romanian soil, Romanian wine-maker, even Romanian oak.

But then we tasted a Cabernet Sauvignon and it was wonderful, too, and impressed me even though I was not really interested in international grape varieties. And then came the Domaine Ceptura Rouge — Cab, Merlot, and Feteasca Negra. It was a fascinating fusion. Bottom line: Romanian wine does and should focus on its native varietals, but in an open context that allows winemakers to make the best wines they can.

No One-Liners in Wine

The wine that fills Romanian glasses represents an interesting mixture of past, present, and future, dry and sweet, native and international. No wonder it is hard to pin it down. But that’s not all. Home-made wine is very important in terms of total consumption and I understand that some of this is made with the hybrid grape varieties that were introduced here after phylloxera.

The popularity of the home-made stuff is a bit of a problem, since it can be so different from commercial production using vitis vinifera grape varieties.  Convincing thrifty buyers to pay more for a very different product is a challenge.

The Romanian case reminds me a bit of the challenge that U.S. winemakers faced in the 1930s when Prohibition finally ended. Home-made wine production had surged dramatically during Prohibition, encouraged by a loophole in the law that allowed limited home wine production. The quality of the wine was, um, variable and its taste is how consumers came to think of wine, which is perhaps why they focused more attention on beer and spirits. It took decades to fully overcome that memory.

Jon Fredrikson always says that there are no one-liners in wine, so perhaps this multi-layer aspect is what makes Romania akin to other regions, not different from them. But the tendency to be misunderstood is particularly powerful in Romania based on our experience. Resist any attempt to over-simplify the country or its wines!

What lies ahead for the Romanian wine industry? The future looks bright, but there will be headwinds. Come back next week to learn more.

Have Some Madeira?

madeiraIt is in a way the most American of wines, even though it actually comes from a Portuguese island off the African coast. When it came time to toast the signing of the Declaration of Independence in Philadelphia, this is the wine that filled the Founding Fathers’ glasses.

Workers at the Liberty Hall Museum in New Jersey recently discovered three cases of the stuff dating from 1796 — too young to be the wine that Franklin, Jefferson, and Adams raised for their toast, but old enough that they might have sipped it a few years later.

Oh, Madeira!

Madeira (because you have already guessed the name of the wine I’m talking about) has a glorious history here in the United States. Once upon a time you could find it prominently displayed on the top shelf of any reputable drinks shop, it was that popular. But when I went looking for a bottle at my local upscale supermarket I had to go deep into the corner where the fortified and dessert wines are kept and then stoop down to the bottom shelf.

O, Madeira. How far you have fallen!

But looks can deceive and Madeira is alive and well even if its not as prominent as it was in 1776. Madeira was America’s wine back then in part because America didn’t make much wine of its own and imported wine often suffered badly on the long sea trip from Europe to North America.

Live Long and Prosper

Madeira’s secret was (and is) its unique production process, where the wine is both heated and oxidized. The wines used to be conditioned by sending the barrels on round-trip ocean voyages in hot cargo holds. The movement of the ship and the heat below deck did the job very well.

Now it’s done shore-side in the lodges. The wines start out with high acidity (the island soils are part of that) and end up both fresh and nearly invincible. A bottle of Madeira has an almost long half-life after its been uncorked. You’ll certainly drink it up before it goes off.

There’s not a lot of Madeira wine produced, which is one reason you don’t see oceans of it in the shops.  Vineyard land is not plentiful on Madeira — about 500 hectares in total cling to the steep mountainsides. Just enough to provide raw material to eight producers.1928

France is the number one market for Madeira wine, where it is a popular aperitif (France is the top market for Port wines, too, for the same reason). Tourists visiting Madeira enjoy enough of the wine there to make it the number two market followed by Germany, the UK, Japan, and the United States. U.S. demand has been slowly ratcheting up in recent years, now accounting for about seven percent of total production.

You Don’t Know What You’re Missing

Sue and I traveled to Madeira about a year ago and learned a lot by visiting Blandy’s and Justino’s, two of the most important producers. We were fortunate to be invited to refresh our memories last month at a seminar and trade tasting in Seattle. We tasted the range of Madeira wine types including the one pictured here from 1928. Here are some impressions from that experience.

If you haven’t tasted Madeira in a while, you need to get to work. Chances are you’ve forgotten the balance and lifting acidity that characterize the wines. These aren’t  sticky sweet fruitcake wines, (although there is such a thing as a Madeira cake,  which is meant to be eaten with a glass of Madeira.)

You can make Madeira as simple or complicated as you like — it is up to you. By far the majority of the wines are sweet or semi-sweet 3-year-old blends. Sweetish or drier — those are your basic choices. Drier Madeira, like Fino sherry, is pretty versatile and might surprise you.

Only small amounts of aged Madeira is made from white grape varieties like the Sercial in the photo and these wines have very distinctive characteristics that anyone who wants to take a deeper dive would appreciate. Because the wines basically last forever once opened, you can pull the cork on several different ones and enjoy the kind of comparative tasting that we experienced in Seattle without being anxious about finishing up the bottles before they goes off. On-trade readers take note!

1776 and All That

I am glad we attended the seminar and tasting, but having said all these positive things about Madeira wines, I have to report that Sue and I came away a little bit disappointed. Not with the excellent presentation. And not with the wines themselves.

We were hoping for something more in the way of a hook to draw consumers into the world of Madeira wines and we couldn’t find one. The history is great and even important, which is why I used it as the hook for this column, but is it enough to make an significant impact in the crowded wine marketplace?

Madeira was once the Big Thing in American wine. Is it The Next Big Thing today? No — can’t be. There’s not enough of it to go around. But it is a unique wine of time and place that deserves a closer look.

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Special thanks to Bartholomew Broadbent for his help with this column.

 

 

The Cabernet Boom and Its Discontents

Our recent trip to the Napa Valley provokes two columns: this one about the Cabernet Sauvignon boom and next’s week’s about Zinfandel’s uncertain future.

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What winegrape variety comes to mind when I say “Napa Valley …”? There are lots of possibilities. Chardonnay. Merlot. Sauvignon Blanc, of course! Hey, Larkmead makes a tasty Tocai Friuliano.

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But I’ll bet that your “fill in the blank” answer was Cabernet Sauvignon and there are several good reasons for this. Cabernet is a noble grape and many of the world’s great wines are made from it or with it. American consumers are in love with this winegrape variety. Cabernet Sauvignon has recently overtaken Chardonnay as America’s #1 favorite.

Cabernet is #1

According to recent Nielsen data taken from the August 2018 issue of Wine Business Monthly, sales of Cab wines totaled more than $201 million in the most recent 4-week period, up 3.9% from the previous year. That compares with $190 million and 0.5% growth for Chardonnay, which has for years topped the league table.  Next in line but far behind, is Pinot Gris/Grigio ($96 million / 1.3% growth) and Pinot Noir ($82 million / 2.6%). The fastest-growing category is Rosé, as you might have guessed, with 67% growth on a relatively small $22 million sales base.

Consumers love Cabernet Sauvignon and growers love it, too, because they see it as a potential solution to the their financial squeeze. The costs of land, labor, equipment, and supplies keep rising, but the prices of many grape varieties have been stagnant, putting pressure on profits and, in some cases, generating rivers of red ink.

The Cabernet grape price premium can be substantial according to the 2017 California Grape Crush Report. Cabernet grapes fetched $700 per ton on average in Lodi, for example, compared with $552 for Merlot and Chardonnay. A ton of Cabernet sold for $2209 on average in Mendocino county, $2352 in Lake Country, and about $3000 in Sonoma County.

Premium Prices

Napa county topped the list with an average Cab price of $7,421 per ton. That average translates into a $70+ bottle price using the one-percent rule of thumb. And that’s the average. The very best Napa Cab grapes from exceptional sites sold for $10,000 per ton and more. Lesser Cab grapes sold for less, of course, but still generally for more than other grape varieties. Cab Rules.

And it’s not just a California thing. Cabernet is now the most-planted winegrape variety in Washington state, too, with 62,200 tons harvested in 2017 compated with #2 Chardonnay’s 39,300 tons.  The overall average price of Washington winegrapes was $1200 per ton, with Cabernet selling at a significant premium at $1500-$1600 per ton.

No wonder more and more Cabernet is being planted wherever it might possibly grow successfully. Jeff Bitter, recently appointed President of Allied Grape Growers, presented the results of the 2017 California Nursery Report at the Unified Wine & Grape Symposium meetings in January. Bottom line: Cabernet is big and getting bigger.

The Nursery Report provides insights about what grape varieties are being planted or grafted, which foretells shifts in winegrape production a few years from now when the vines are productive. The 2017 report showed that 72% of new vines were red varieties with only 28% white. Cabernet vines accounted for an incredible 37.4% of all new vines followed by 19.5% for Pinot Noir and 16.7% for Chardonnay.

Cab Pipeline is Full

If you combine Cabernet with other varieties that are often blended with it (such as Merlot, Malbec, Cabernet Franc, and Petit Verdot), they account for over 42 percent of all new California vines. I am not sure what the composition is of the vines they may have replaced, but I suspect the disproportionate emphasis on Cab and Cab blending grapes represents a significant net increase in future production.

Cabernet’s dominance is noteworthy, but the upward trend in Cab plantings is part of the long term trend that Benjamin Lewin MW described in his 2013 book Claret & Cabs: The Story of Cabernet Sauvignon. Zinfandel, not Cabernet, was the most-planted winegrape variety in the Napa Valley in the decades following Prohibition.

Zin was thought to  make the best Claret, according to Lewin, which of course is interesting because Claret is the name the British gave to Cab- and Merlot-based Bordeaux wines. Ridge made a “Claret”  in 1981, for example, from Zinfandel, Petite Sirah and Carignan and I’ll bet it was delicious!claret

Cabernet Sauvignon was a minor player on Napa’s wine scene, Lewin notes, although it made some historic wines including the great Beringer Cabs of the 1930s and the Beaulieu Georges de Latour Private Reserve wines that André Tchelistcheff made between 1938 and 1973.

The Napa Cab boom really picked up speed in the 1970s as new quality-driven wineries (think Robert Mondavi) focused on Cabernet. The Judgement of Paris in 1976 put Napa Cab firmly on the wine world’s radar.

No wonder new investment flooded into Napa Valley and Cabernet plantings expanded rapidly, both in Napa and California generally. Now the steady rise has accelerated, taking on some boom-time characteristics. The cycle of higher Cab prices, higher vineyard valuations, and increased Cabernet plantings continues.

Stein’s Law

Cycles and booms are a common characteristic of agricultural and financial markets, both of which I have studied. There are two things I have learned about the booms. First, they are driven by internal logic that seems bullet-proof from inside the cycle.  People (like me) who try to call turns often end up looking like Chicken Little fools. So don’t expect me to forecast a Cabernet bust!

The other thing I have learned is that Stein’s Law always applies in the long run. Named for the famous economist Herb Stein, Stein’s Law is says that if something cannot go on forever … it will end. And I think that Cabernet prices cannot go on going up forever (especially with new plantings on the rise) any more than housing prices could defy gravity forever a dozen years ago, no matter how how much rising prices might seem baked in the cake at any particular moment.

That doesn’t mean that the boom must inevitably be followed by a bust — there are many possible adjustment patterns as Kym Anderson’s analysis of Australia’s winegrape cycles shows. In the meantime, Cabernet is crowding out other grape varieties, including those Zinfandel vines that were once the pride of Napa Valley winemakers. That’s where we are going in the next column.

Sue and I came to the Napa Valley with Zinfandel on our minds. Circle back next week to find out what we learned.

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The Boom Varietal image above comes from a 2011 Sky Pinnick documentary of the same name about Malbec, which is sort of the Cabernet Sauvignon of Argentina. I was pleased to be part of the cast for this award-winning film. The film talks about the rise of Malbec in Argentina and the understandable concern that the boom could go bust (Argentina has a history of boom and bust).

 

Discovering the “Invisible” Cooperative Wineries of Languedoc and Roussillion

caramanyThey say that there is strength in numbers, which may explain why wine cooperatives tend to emerge during periods of crisis, when individual winegrowers are practically powerless to defend themselves and only collective action holds hope.

The cooperative in Caramany, the Vignerons de Caramany, was founded in 1924 in response to the Phylloxera crisis. It experienced ups and downs in the century that followed and seems to be thriving today — a good sign for Caramany and for French cooperatives generally.

Strength in Numbers

Caramany is a village of 150 inhabitants in the Pyrénées-Orientales scenic L’Agly valley in Roussillon. It has its own appellation:  Côtes du Roussillon Village Caramany. The cooperative has 50 members, some of them quite small holders,  growing mainly Carignan, Grenache and Syrah.

We were in Caramany to learn about its cooperative and its wines during our recent press tour to Languedoc, Roussillon, and the Loire Valley. Cooperatives were on our radar because they are very important in all these regions as they are in Europe generally. Cooperatives produce about 70% of all wine in Languedoc, for example, making their success critically important to the wine industry.

You sometimes have to look closely at a wine label to know that a cooperative has made the wine — seeing Caves Coopérative for a French wine or Cantina Sociale Cooperativa for an Italian one is a sure indicator, but sometimes the link isn’t clear, especially if the wine is sold through a negociant or, as is increasingly the case, made for a private label customer such as a supermarket.

Invisible but Important

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According to the latest edition of the Oxford Companion to Wine, cooperatives probably account for more than half of all the wine produced in the big three Old World wine countries: France, Italy, and Spain. These “invisible wineries,” as I have called them, are one of the most under-appreciated elements of the global wine market despite the commercial success of some of the wines. One of the top-selling Prosecco wines on today’s market — La Marca — is produced by a second-level cooperative — a cooperative of cooperatives.

Some Italian cooperatives — I am thinking Alto Adige and Piemonte in particular — are know for their high quality. But cooperatives in the south of France have the opposite reputation, which they continue to battle to change. It is easier to produce new, better wines that a new reputation.

The Vignerons of Caramany impressed us with their commitment to making delicious, market-friendly wines, which we sampled while eating a Catalan barbeque lunch that included snails grilled over live coals, grilled meats (including delicious blood sausage), and a variety of salads. One wine (see top photo) was a tribute to the past, but others looked to the future.

tremoineThe Reserve Rouge Carmin, for example, is a blend of Grenache, Syrah, and Carignan (the Carignan was vinified with carbonic maceration while the Grenache and Syrah use conventional methods) that was one of my favorites. Delicious with the food we were served and impressive generally. Its packaging is modern and appealing and it sells for a premium price — about 8 to 10  euro, as I recall, which is impressive for a wine from this region.

There were wines from other cooperatives at the lunch and they were also noteworthy. The Rivesaltes Ambré from the Vignerons de Trémoine is a terrific sweet wine that I could sip  all day.

Sleep No More

So what has changed to make these cooperatives (and many others that we learned about) so different from the stereotype of sleepy, inefficient (and sometimes not very clean) cooperative cellars? Well, it isn’t that the cooperatives have simply become stronger — more strength through more numbers — because that’s not the recent trend. Cooperatives seem to be under attack to a certain extent, with the next generation of winegrowers looking beyond old practices to new market opportunities. An association of independent producers has been formed in Languedoc, providing a different sort of strength in numbers through collective marketing not production investment.

Some of the new independent projects are inspired, I was told, by Department 66, a wine project initiated by Dave Phinney and located in the Maury appellation of Roussillon. Its Grenache, Syrah, Carignan blend D66 wine sells for $38, which is a super-premium price for this region. A special old vines Grenache-Syrah blend received a 95-point score from Robert Parker and retails for $175. That would sure get my attention.

More than anything I think it has been competition that has stirred French cooperatives to raise their game — competition in the retail market and also competition between and among the cooperatives for the declining group of potential grower-members. Competition is disruptive but has obviously been a good thing and the results are clear when you consider the achievements of a relatively small cooperative in a tiny appellation such as the Vignerons de Caramany.

If other cooperatives are moving in the same direction as the ones we learned about on this trip. then the future of the “invisible wineries” is bright.

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Thanks to everyone we met on our trip to France and to the wine regions of Languedoc, Roussillon, and the Loire for hosting us.

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